First CO2 emission reduction trade on Internet
A Canadian electric energy company has announced the world's first Internet trade of greenhouse gas emission reductions.
TransAlta’s trade of 18,000 tonnes of carbon dioxide reductions, was made on the newly-formed KEFI-Exchange, an Alberta Internet-based emission reduction trading exchange. The18,000 tonnes of CO2 represented in the trade is equal to the annual emissions from about 3,000 cars.
“This transaction establishes CO2 emission reductions as a standard product for commodity trading much like a bushel of barley is traded around the world today,” said Sheldon Fulton, president of the KEFI-Exchange.
“TransAlta is pleased to be the first company in the world to make this type of transaction via an electronic exchange a reality,” says Bob Page, vice president of Sustainable Development at TransAlta. “We believe it is time to stop talking about trades and to demonstrate market mechanisms can deliver cost-effective solutions with measurable reductions in greenhouse gas emissions. The fact that this exchange was set up in only six months and is testing real trades demonstrates that market-based approaches can work”.
The KEFI-Exchange was designed specifically for trading greenhouse gas emission reductions from electricity generation. The Exchange uses monthly information from the Power Pool of Alberta to determine the average CO2 produced per megawatt hour to meet electricity needs in the province. A generating unit receives certificates that represent how it contributes to reducing CO2 emissions in the province.
One KEFI represents 1,000 emissions free index points per megawatt hour, and is equal to 12 tonnes of CO2 reductions. Normally all transactions on the KEFI-Exchange are confidential, however, both parties agreed to announce their involvement in this trade.
This new emissions trade comes one week after TransAlta announced an agreement to purchase up to 2.8 million tonnes of carbon dioxide emission reduction credits from farms in the United States.
TransAlta is the North American representative on the International Emissions Trading Association (IETA) management council, which aims to establish a marketplace for buying and selling greenhouse gas emission offsets. The IETA, which is non-profit but strictly private sector association, has representatives from major industries on five continents.
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