ICE says Climate to dominate carbon trade
NEW YORK (Reuters) - London-based Climate Exchange Plc (CLIE.L) should dominate growing global climate trade though it will face competition from a New York-based venture that launched in March, Jeffrey Sprecher, the head of the IntercontinentalExchange, said on Wednesday.
"I think Climate Exchange is on track to become the world's largest market for carbon trade," Sprecher told the Reuters Exchanges and Trading Summit in New York.
Sprecher's ICE, a global commodities and financial exchange, partners with the European Climate Exchange (ECX), which is owned by Climate Exchange. ECX transacts about 85 percent of the volume of European exchange-traded carbon deals.
Global exchange wars to dominate carbon markets have heated up as trade builds in emissions reductions and as the United States, the world's largest energy consumer, moves closer to regulating the gases scientists blame for warming the planet.
The World Bank said Wednesday that the global carbon market more than doubled in 2007 to $64 billion, with the EU emissions trading scheme making up $50 billion of that trade.
Meanwhile, newcomer the Green Exchange -- a venture between the NYMEX Holdings Inc's NMX.N New York Mercantile Exchange and Evolution Markets, a New York-based energy and environmental markets broker -- hopes to dominate the developing U.S. carbon market.
Both exchanges offer futures contracts based on the U.N.'s certified emissions reductions (CER),which allow parties in rich countries to get credits for investments in emissions reductions in developing countries.
But Sprecher said Climate Exchange has an advantage because it also owns the Chicago Climate Exchange (CCX), a voluntary U.S. climate bourse launched in 2003.
"The amount of trading going on on ECX absolutely dwarfs what's happening at the Green Exchange right now and the amount on CCX dwarfs the Green Exchange," said Sprecher.
For its part, the Green Exchange says it offers seamless clearing and trading to NYMEX's oil and natural gas traders which will allow them to use carbon credits to hedge their bets as the market grows.
(For summit blog: summitnotebook.reuters.com/ )
(Reporting by Timothy Gardner, editing by Gerald E. McCormick)
