Climate Change

Greenhouse Gas Market Analysis for World Bank Carbon Finance Business
Natsource conducted the four comprehensive reviews and analyses of the emerging greenhouse gas market that have been undertaken to date for the World Bank’s Prototype Carbon Fund (PCFplus) and Carbon Finance Business.  The reports include databases of all publicly known GHG emissions trades from 1996 through May 2004.  The database includes key transactional information on volumes, pricing ranges and activities that have created the reductions. All four of these reports include analysis by GHG market experts of trends in key markets, transactional characteristics and possible future developments.  Natsource is the only firm that has participated in all four of these market analyses.

Comprehensive Analysis and Comparison of National Responses to Climate Change
Natsource analyzed the impacts of 7 developed countries’, 4 developing countries’ and the EU’s responses to climate change for the National Commission on Energy Policy to provide context for future U.S. policy development.  Natsource developed a set of quantitative metrics and an analytical framework for evaluating countries’ relative performance; provided a detailed review of countries’ national responses; and applied the analytical framework to compare countries’ performance against environmental metrics, and economic and technology development performance criteria.  Natsource also assessed the National Allocation Plans of four EU countries and incorporated findings into the comparison of countries’ performance. 

Develop a Paper on the Features and Early Performance of the European Emissions Trading Scheme
Natsource developed a paper for the Electric Power Research Institute that describes the key policy elements of the European Union Emissions Trading Scheme (EU ETS) and its early performance.  The paper compares the performance of the EU market in its early stages with that of the U.S. sulfur dioxide (SO2) allowance trading program and Nitrogen Oxides (NOx) SIP call program at comparable points in time, and evaluates how the EU market may evolve based upon its features and experience in U.S. markets.  The paper also provides a lessons learned section for U.S. policy-makers who may consider developing a future program and electric utilities that may be required to reduce their GHG emissions in the future.    

Risk Assessment Analysis for Firms Confronting GHG Emissions Limitations
Natsource has worked with companies in key emitting sectors of the economy in Canada and Europe that are or likely will be regulated under trading programs to assess the economic risk imposed by such programs, and to develop strategies to manage such risk.  Using company and sector-specific emissions and production data, and the latest 
available information on preferred policy implementation approaches, Natsource estimates company- and sector-level allocations, emissions shortfalls, and associated financial exposure for the first EU ETS and Kyoto compliance periods, and for the post-2012 compliance period based upon varying assumptions regarding future policy developments.  Costs are considered both on an absolute and a per-unit-of-production basis.  Natsource has worked with the electric power, oil sands, conventional oil and gas, chemicals, steel and aluminum sectors on these issues.  Based on the results of risk assessments, Natsource also advises companies on developing policy recommendations and strategies to manage risk.

Assisting a Leading European Development Bank Develop a Carbon Fund
Natsource assisted a leading development bank in its efforts to develop a carbon fund. Natsource assisted the bank to: (1) estimate the volume of supply of project based ERs that may be available for purchase; (2) determine the prices at which such reductions may be available; (3) understand key risk categories to incorporate in an analytical framework that would allow the fund to screen and score projects for purchase and value portfolios; and (4) develop an ER acquisition strategy.

Renewable Energy

Analysis of Renewable Energy Market Developments and Pricing
Natsource completed an analysis of renewable energy policies and REC pricing in four key U.S. markets for a major power marketer.  The analysis presented estimates of renewable energy premiums in each market from 2004-2007 and from 2007-2013 based upon current policies and anticipated future developments.  Natsource’s analysis also analyzed the impacts of potential federal legislation that may affect REC pricing, including a federal renewable portfolio standard and a mandatory GHG emissions control program.

Strategic Participation in REC Markets in the United States and Europe
Natsource conducted an analysis for a major U.S. power company on present and future REC markets in the United States and Europe, and presented its views on optimal use of RECs in five different market scenarios.  The analysis was designed to help the company develop a renewable energy strategy that maximized the value of its RECs and renewable energy marketing experience.

Renewable Energy Certificate Price Curves under European Policy Scenarios
Natsource developed two sets of REC price curves in the Spanish and Italian markets for a leading multinational energy company to evaluate their investments and potential investment opportunities.  The analysis included development of base and sensitivity cases; assessment of REC price drivers; potential emissions permit values embedded in RECs under alternative regulatory scenarios; renewable energy cost and availability in regional markets; and rules governing inter-state transfer of RECs.  The company utilized this analysis to determine the value of various renewable energy projects.

Policy Options for Promoting the Development of Renewables In Canada
Natsource provided an analysis to a Canadian energy company regarding policy options for promoting the development of renewable energy in Canada.  The analysis examines precedents in U.S. SO2 and NOx trading programs for allocating allowances to non-emitting sources as a means of supporting renewable generation.  The analysis also considers the implications for thermal and renewable energy generators of alternative allocations to renewables under Canada's domestic Large Final Emitter (LFE) GHG emissions trading program that is under development, discusses the pricing of RECs in markets created by renewable portfolio standards, and considers the relative effectiveness of allocations and RPS in increasing renewable generation.  The analysis will help inform the company’s position on policy approaches to promote renewable generation. 

U.S. Conventional Air Pollutants

Scenario Development on Clean Air Regulation
Natsource recently assisted a major generator in the U.S. to develop scenarios regarding the future of clean air regulation in order to determine the firm’s potential costs to comply with future SO2 reduction requirements.  

Assist Companies in the Negotiation of Clean Air Standards in Canada
Natsource recently assisted several companies to negotiate new Clean Air Act standards in Canada that would require reductions in emissions of sulfur dioxide, nitrogen oxides and mercury.  Natsource assisted the companies to develop their negotiating strategy with respect to timing and level of emission reductions and the design of trading programs.

Assessment of Environmental Value of Ethanol and Development of Business Strategy
Natsource assessed the environmental value of a Canadian energy company’s manufacture of and its customers’ use of ethanol-blended gasoline.  The assessment was conducted as an element of the company’s negotiating strategy with the Canadian Government of its reduction target under the Large Final Emitter (LFE) trading program.  Natsource worked with the company to determine how to capture the value of its voluntary manufacturing of ethanol-blended gasoline.