The market still suffers from fragmentation

From the perspective of the International Conference on climate in Copenhagen, the French Association of financial markets (Amafi) today organizes a Conference on carbon finance. In a context of crisis, which has fueled criticism from advocates of international regulation and a price of carbon fixed by taxes to reduce CO2 emissions, the interest for dedicated market continues to grow. "Carbon finance has not suffered the crisis," says Bertrand Meyer, Deputy Head of the derivatives listed on "commodities" in BNP Paribas and Chairman of the Committee "commodities" of the professional association. In 2009, it has continued its strong growth: its valuation should reach for all of the carbon markets in the world 150 billion at year end.

As soon as it talks about market, there is necessarily intermediaries through which pass orders. Where the interest marked the Amafi for carbon finance. "Our Committee is interested in this topic for more than a year." "There is in France of the very active players in markets of CO2 emission rights", observed Bertrand Meyer. Since then, carbon finance has made significant strides. "Transactions in trading on the secondary market or on scholarships are considered legally financial transactions", he said. Carbon finance has become an asset class the same as the actions and obligations. She therefore interested as well as institutional investors, pension funds and "hedge funds" as industrial enterprises. But attention to the abuses. "It is not forbidden to create products on this asset class." "The passage of transactions by exchanges and clearing houses will promote the transparency of the carbon market", out Bertrand Meyer.

Fraud and fragmentation

This market is still far from perfect. The VAT fraud scandal revealed an unfortunate aspect. In August, British customs had been updated on the European market of carbon dioxide emissions a VAT fraud, estimated at 38 million pounds. Unscrupulous operators bought the rights in Britain, where VAT does not apply, for resale in other European countries where it was in force, but their not paid. The French authorities responded to this fraud detected in the spring on BlueNext in setting the VAT rate zero on emission allowances. "This development has allowed a more fluid negotiation of these products." "The maintenance term for this exemption remains, in discussion, knowing that the British tax authorities apply since the month of July one zero rate", said Bertrand Meyer.

The market still suffers from fragmentation. Certain transactions deal with cash, other term. The majority of the enterprises pass through intermediaries who delay the bulk of their orders on Exchange platforms, including BlueNext, launched in January 2008 in Paris. This does not preclude negotiations of over-the-counter (OTC). "We need a single market of carbon in Europe." We have no preference on his model. Has Bluenext of real assets, it is very advanced in the negotiation of emission rights and has agreements with China. "With respect to the compensation which would be desirable for the operations of OTC, ICE has a step ahead," says the representative of the Amafi.

And regulation "We will talk at the Conference." It is important to see the means to implement to ensure transparency in transactions. At the time, the presence of a monitoring body is necessary. "It is one of the expected results of the Copenhagen Conference," calls Bertrand Meyer, who wishes to approach common among U.S. markets, European and Asian.