EMISSIONS

Clean Air Interstate Rule

Market Overview

On March 10, 2005, the EPA issued the Clean Air Interstate Rule (CAIR), a rule that will achieve the largest reduction in air pollution in more than a decade.  CAIR will ensure that Americans continue to breathe cleaner air by dramatically reducing air pollution that moves across state boundaries.  In 2015, CAIR will provide health and environmental benefits valued at more than 25 times the cost of compliance.

CAIR will permanently cap emissions of sulfur dioxide (SO2) and oxides of nitrogen (NOx) in the eastern United States. CAIR achieves large reductions of SO2 and/or NOx emissions across 28 eastern states and the District of Columbia (http://www.epa.gov/cair/where.html). When fully implemented, CAIR will reduce SO2 emissions in these states by over 70 percent and NOx emissions by over 60 percent from 2003 levels. This will result in $85 to $100 billion in health benefits and nearly $2 billion in visibility benefits per year by 2015 and will substantially reduce premature mortality in the eastern United States. The benefits will continue to grow each year with further implementation.

BGC Environmental Brokerage Services brokers are well versed in the new CAIR rules and are happy to assist you in planning for the implementation of CAIR.  We provide vital market information to our clients through voice contact, real time market updates on our website, and daily bulletin emails.

Brokerage

BGC Environmental Brokerage Services offers a full service suite of brokerage and clearing services tailored to meet the client's individual trading needs.  Trades are confirmed by voice, however, bid and offer information is available electronically.  NOx and SO2 Transaction types include:

• Spot Trades
• Forward Settlements
  
• Options
• Swaps

These transactions can be executed using the master brokerage agreement, which enables clients to transact simply and anonymously with over 400 clients who have enacted similar agreements.  This is the preferred method of transacting, as it eliminates the need to negotiate bilateral agreements with each counter-party, thereby making the transactions quick and efficient.  

BGC also provides assistance to clients who choose to settle using a bilateral contract, most commonly used in more complicated structured transactions.
BGC also offers clearing services which provide additional security and anonymity to both counter-parties.  Both allowances and purchase monies are escrowed by BGC in order to assure performance by all parties to the transaction.

Consulting

In addition to providing a marketplace for CAIR Allowances, BGC Environmental Brokerage Services also offers emissions trading consulting services.  For industry coalitions, private companies, and government entities we offer:  

• assessment of the impacts of current and future rules and regulations.
• delivery of expert testimony.
  
• market assessments to determine the type, usability, availability, expected cost, and feasibility of transacting CAIR allowances.
• market penetration studies for clients seeking to understand how environmental credits can be leveraged to help launch or gain better market penetration for technologies that reduce pollution.
• emissions trading feasibility studies, offered to regional, foreign, and state governments to assist them in determining if environmental problems can be addressed using market based programs.
• Emission Trading Seminars -often requested by companies that have a need for a better understanding of the emissions markets pertinent to their business.  These customized seminars offer detailed information on relevant emissions markets, trading strategies, and regulatory and fiscal impacts of trading.