Australian enterprise invites companies to join greenhouse gas trading simulation

An Australian enterprise is inviting organisations from around the world to take part in a greenhouse gas emissions trading simulation, which, say its organisers, will give participants a unique insight into the workings and effects of a future trading regime.

Organised by the Queensland Emissions Trading Forum (QETF), this is the second in a series of online simulations to take place over the next twelve months, and will consist of five sessions to be held between 1 and 8 May 2001. Each session will last for three hours, each representing a year between 2008 and 2012, during which participants will trade in current or future carbon permits as a means of meeting hypothetical emission reduction targets, using either a hypothetical emissions profile, or their own.

“This trading simulation is a realistic internet based trading platform which gives participants a unique insight into how a future emissions trading regime might work and what the ramifications of it might be,” said Craig Windram, Convenor of QETF, who will play the role of administrator in the simulation. “At our last session more than 35 million tonnes of carbon dioxide changed hands on the trading floor. This time around we expect participation to double.”

The market takes place on a secure internet site which participants log onto on the specified trading days. Each player has to maximise their company’s profit, whilst meeting emission reduction targets set by the administrator through abatement and trading, by deciding which strategy to take in response to a variety of government and market-imposed policies. In order to reflect real life, unexpected developments and risks will also be introduced at intervals throughout the simulation.

The new simulation follows the success of the first trading session held last December, in which 16 organisations from the oil and gas, power, cement, manufacturing, mining and forestry sectors took part. Over the simulated five year commitment period, the participants reduced their combined greenhouse gas emissions by almost 8% relative to the business as usual scenario, with individual participant’s compliance being achieved through a combination of abatement and trading.

For some companies there was also a significant increase in revenues, including for one forestry company, which turned a AU$12 million (US$6 million) annual loss into a AU$29 million (US$14 million) annual profit by the end of the commitment period.

“This second simulation will give participants a greater insight into the operation of any future greenhouse gas emission trading regime, as well as the opportunity to evaluate the impact of different trading rules on a realistic business scenario,” said Peter Klose, Chair of QETF.

Up to 50 companies and NGOs can take part in the trading, with those that have already been signed up for the May simulation including the Australian Magnesium Corporation, Southern Pacific Petroleum, Tarong Energy, Queensland Cement, Ergon Energy, Greening Australia, and Anglo Coal.

The QETF is a non-profit organisation that was formed in April 2000 in order to develop and trial an internet based emissions trading simulation with a view to providing participants with a practical insight into the operation of alternative international and domestic emissions trading regimes.

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