Monday, July 30, 2007

Australian carbon trading online

According to news reports, the first commercial Australian emissions trading exchange went live on 23 July 2007. A government trading scheme is planned in five years time. The commercial system is the Australian Climate Exchange. This works much the same as a online based stock trading.

But mention of instructing brokers via "phone, fax or electronic mail " suggests the exchange needs to do a bit more work to provide true online facilities for clients. With a large stock exchange, the large brokers can afford to build their own web based systems to allow clients to trade online. As well as providing a better service, this reduces the cost by eliminating the need for instructions from clients to be manually transcribed. It also reduces the risk of errors. Ideally small exchanges, such as the Australian Climate Exchange, could provide a web based platform for brokers to communicate with clients, perhaps via a web interface and offline web. That would save each broker having to build a system and greatly accelerate the prospect for carbon trading:

The ACX Electronic Emissions Trading Platform (EETP) is a joint venture between the ACX and ... Australia Pacific Exchange Limited (APX). You can buy and sell Emissions Commodities using the EETP after registering with an approved Broker ...

Sell Order

Login to the ACX Registry to view your registered VERs ... instruct your Broker via phone, fax or electronic mail to "sell" ... Minimum transaction quantities on the EETP are 100 tonnes CO2e ...

Buy Order

Check that your Trust Account holds sufficient funds to cover your order and brokerage fee or that you have a line of sufficient credit arranged with your Broker. ...

In Market

Orders entered onto the Electronic Emissions Trading Platform (EETP) attain the status of ‘In Market’. The order will remain ‘In Market’ until it expires (as per the time limit) or is matched with a Buy or Sell Order. ...

Part Filled

A Part Filled Order in an order that has been partially traded. You can amend or cancel the remaining untraded part of a Part Filled Order.

Settlement Process

The selling Broker issues all valid documents necessary for the emissions commodities to be registered in the name of the buyer. ... Settlement will occur on a transaction plus 5 day basis (T+5 day basis), unless agreed otherwise. The settlement of emissions commodity transactions on the EETP will conform to the requirements of the Australian Greenhouse Office (AGO) or other body responsible for the administration of the scheme, program or statute that gives rise to the emission commodity ...

From: Electronic Emissions Trading Platform, Australian Climate Exchange, 2007

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