Carbon is dated. Risk Managing Carbon and Cap & Trade exit route

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Over the last decade, the Carbon trade industry has spun one of the greatest asset bubbles of the modern day, involving hundreds of genuine investors from the industry with little Knowledge of its true value.

As a permit issued under EU Emission Trading Scheme by the European Comission or EU Governments, a Free Carbon Credit was considered a document worth its value in Gold. Very few of the industry majors ever realised that "nothing comes free in a free market economy" and one day this $100 billion industry would collapse simply because it was built on percepts that have no strong foundation either economic or technological.

Carbon or Emissions are basically neither Goods nor Services. It has no intrinsic value as such. It does not add to the asset of the organisation. It does not deserve a place in the balance sheet. Carbon permits when distributed free without benchmarking for emission effiociency ( as in the EU ETS ) is nothing but a free subsidy, to Europe's emitters. Since the CDM in the Kyoto pact does not make investment in clean energy mandatory out of Carbon sales proceeds, it can't be labelled as a Green energy subsidy either. So Carbon allowances or permits are only a general energy subsidy and may be a WTO target.

Even if Carbon finds its ways in your books of accounts, as income from other sources and as a general energy subsidy, its volatility and lack of benchmark price makes it unsustainable in the long run. Over the last five years Carbon has been unable to establish a benchmark price, despite desperate propping measures by the EC
Though it crosed the 30 Euro benchmark price on two occassions between 2005 to 2010, it stayed for a very small time for investors to have any real confidence. Thereafter it has been mostly a journey below par.

The Carbon theory has been rejected by the devolping world led by China and India at Copenhagen. The 3 Billion people forum they created by adding South Africa and Brazil to the team, forced US President Obama to negotiate a seperate deal which is far away from the cap and trade days. Laws in the US Senate are afoot to stop Carbon Trading. Besides with new scams unearthed each day in the EU ETS, ( as per Europol nearly 90% of the deals in some states are bogus) controlling the Carbon econmy is becoming impossible. Under such circumstances it is better to start Risk Managing Carbon to a wind out phase, to avoid losses and embarrassment.

We have for you a new Risk Management Presentation for viewing http://bit.ly/a3I9rZ
(What is Carbon?) in our new Energy Risk Management Series