British Columbia Carbon Offset Program
Carbon offset & Carbon offset program
Carbon offsets represent emissions reduced by some offsetting activities or projects,
which are environmental beneficial, such as reforestation projects, renewable energy
projects, or hybrid heating projects. Individuals or organizations could buy carbon offsets
to support activities of reducing carbon emissions. For example, Air Canada offers its
customers the opportunity to buy carbon offset for contributing environmental beneficial
projects.
Carbon offset is considered a solution to control or reduce the GHG (greenhouse gas)
emissions. Therefore, the government of British Columbia launched a carbon offset
program in the end of 2008. The main goal of the program is to achieve carbon neutrality
within the government before 2010. A carbon neutral government means net-zero carbon
emissions in public sector. Specifically, in 2007, the government of British Columbia
passed the Greenhouse Gas Reduction Targets Act (GGRTA), which basically requires a
public sector organization must apply emission offsets in accordance with the
regulations to net those emissions to zero. Under the extent of Carbon Offset Program,
every unit of carbon emissions produced by B.C. public sector should be compensated
by carbon reduced from carbon offset projects. By supporting carbon offset projects,
public sector organizations could buy carbon offsets at the fixed price of $25 per tonne
carbon from Pacific Carbon Trust (PCT), a crown corporation which delivers B.C. based
greenhouse gas offsets.
Someone states that the carbon offset program could actually be considered as a capand
–trade program for B.C. government, where the carbon “cap” is zero because of its
carbon neutral government goal. The statement is weak because of the fixed price and
the only one supplier (PCT) in this market.
Pacific Carbon Trust (PCT)
Pacific Carbon Trust is an independent Crown corporation, which provides its clients
carbon offsets at the price of $25 per tonne. It claims its goal is to “deliver quality
B.C.- based greenhouse gas offsets to help clients meet their carbon reduction goals
and to support growth of the low-carbon economy in B.C.” Since carbon offset projects will
create carbon offsets. The PCT will directly sell those certain amount of carbon offsets
and the collected revenue will directly come back to support that carbon reducing project.
Whom the carbon offset program covers?
Not under the carbon offset program, private companies could buy carbon offsets from
other organizations, but not PCT. Companies could use this way not only compensate
their carbon emissions, but also show their environmental awareness, which helps
them build good reputation.
Under the carbon offset program, a public sector organization needs to buy offsets in
order to achieve the goal of becoming a carbon neutral government before 2010.
One thing really arises discussion is that schools, hospitals and other health authorities
are also include in “public sector”, who needs to be penalized by polluting.
The B.C. Liberal government has faced criticism from The B.C. School Trustees
Association. They questioned the government that money was transformed from publicsectors(example: schools, hospitals) to private sector via PCT. The government
responded by claiming that schools’ payment for buying offsets will actually go back to
school in an energy efficiency capital fund. However, no evidence showed that such move
has been made for schools or hospitals.
Assumptions & Cost effectiveness analysis
The carbon offset program has some basic assumptions to become a cost effective way
to control GHG.
1. Only by carbon offset, the carbon dioxide or GHG could be reduced.
2. The reduction of emissions is irreversible.
3. There exists an third party which could verify and audit the emission reductions
4. The carbon offset projects will not cause more emissions elsewhere
However, there are more uncertainties in cost effectiveness analysis because of the
stringent carbon neutral requirement and the controversial PCT. One of issues is free
riding. For example, an organization may offer a carbon offset project for PCT. Since its
project is environment beneficial and will reduce certain amount of carbon emissions, it
can require the payment reduction (negotiable price times carbon reduced) for carbon
offsets, which are bought from PCT. The problem is the reality that the negotiable price. It
could be higher than $25/tonne. If the project is actually technically beneficial for the
organization, meaning that it will be implemented anyhow, no matter whether there are
carbon offsets program or not. Therefore the additional part of price (negotiable price
minus $25/tonne) paid by PCT is actually unnecessary. In the case, the carbon offset is
not efficient anymore.
To expend this discussion, one thing needs to be mentioned :the PCT refuses to
public the prices they pay for every single carbon offset projects they offer to public
sector organizations. Doubts come out that whether PCT really cares more about
choosing a cost effective project or a politically opportune showcase projects.
Recently, B.C.’s Auditor General John Doyle concluded that the carbon neutrality
claimed by B.C. government is not accurate and those so-called carbon offset
program aren’t really offsetting carbon emissions as they are supposed to, after
examining two projects provided by PCT.
Outcome & what is expected?
The B.C. government declared that the public sector has achieved their carbon neutral
goal in 2010 and 2011. It also announced that it was the first jurisdiction in North
America to achieve carbon neutrality.However, because of many controversial issues and many other reasons. B.C. decides to transfer the carbon offset program to Climate Action Secretariat. Moreover, the controversial PCT will be eliminated and the relevant activities will continue within the government.

Furthermore, according to the Environment Minister, Mary Polak, the government is
considering not include health agencies and post-secondary institutions into public sector,
which will be penalized by polluting within the carbon offset program.

Reference

Moore, Dene.(2013,Nov 19).Pacific Carbon Trust Folded Into B.C. Government In Cost-
Cutting Move. The Canadian Press. Retrieved from
http://www.huffingtonpost.ca/2013/11/19/pacific-carbon-trust_n_4303711.html

B.C. Auditor general.(2013,Mar 27).Carbon offsets program slammed by B.C. Auditor
General. CBC News. Retrieved from
http://www.cbc.ca/news/canada/british-columbia/carbon-offsets-program-slammed-
by-b-c-auditor-general-1.1351316

Ministry of Environment.(2012).Carbon Neutral Government Overview. Retrieved from
http://www.env.gov.bc.ca/cas/reports/cnar/CNG-overview-2012.pdf

Hoekstra,Gordon. (2012,Jun 29).B.C.’s ‘controversial’ carbon trading system under
review.Vancouver Sun. Retrieved from
http://www.vancouversun.com/technology/controversial+carbon+trading+system+under+review/6858021/story.html

This week I only trade once in soybeans, luckily, I earned some, not much ,however for me it’s not a bad ending.

Trading &Portfolio

Learned

As you can see, I shorted soybeans and the system executed a limit price for me. Actually which help me earn is not very accurate and confident technical analysis, it’s the GTD limit strategy.  There are two kinds of “stop” and “limit” ways. One is GTD, which means the system can only keep your limit or stop order is that specific trading day. Another is GTC. GTC way can keep your “limit” and “stop” orders continuously until you cancel them. I think GTC order is really important for me because I am pretty sure I’m a not good predictor especially in a short term. I don’t know whether the price will reach the limit or stop points in a day and I ‘m pretty sure that I cannot change my limit or stop points just at the beginning at next trading day. So GTC order is really good thing for “busy” or “lazy” people who couldn’t adjust their strategy as soon as possible.

Moreover, I use moving average lines to forecast the soybeans price. Actually it’s really useful, five minutes moving average told me that the price would go down.  I  shorted  it and succeed.But at the end of this week ,moving average forecast tells a going up trend ,maybe I should go long in the future.

Information also helped me this week.News told me that Brazil’s export will rise which will leads me to get the conclusion of rising supply and bearish of   price. Basically the US Department of Agriculture’s Brasilia bureau pegged at a record 45.0m tonnes its forecast for the South American country’s soybean exports in 2013-14.The forecast – an increase of 2.5m tonnes year on year, according to the bureau – is 2.0m tonnes higher than the official US Department of Agriculture estimate. That’s why I shorted it and apparently this piece of news gives me a correct indication.

Summarize of six weeks

1. Do not trade too much when you are completely fresh this field.
2. It’s not like FX which I can trade almost anytime, I only trade in weekdays during specific hours. Time is definitely important for futures trading.
3. Information is really important , but also really unreliable if I just considered some piece of news as “information”
4. Be careful to use “stop”& “limit” orders, which means you cannot be too ambitious.
5. Hedge is not suitable for speculators like me. Because my goal is not controlling my loss, it is earning money even I do not have physical commodities.
6. GTC stop & limit orders are a lot sweeter than GTD stop & limit orders.

It’s the last week of this game but for sure it’s not a last week for my futures studying and maybe there will more blogs in the future but that depends !

Anyway I might still have a demo account and practice in this market, it’s  a really good learning process.

This week I only did only 2 trades. But there is something to tell

Trade

Buy November 13 soybeans, sell Jan 14 soybeans.

Portfolio  of my trade

Thoughts

1. As you can see, I did not earn some money generally. Differ from last time I try this stratagie(loss some money). The reason might be  the discrepancy of stop price and the open position price is too large . That reminds me to carefully calculate the stop price when setting it. Some times I just feel it should be a little bit more or less than my opening position price but now, I feel that I cannot be such unprofessional or I lose money.
2. This experience let me think the very purpose of “hedge”. Just like what I learned in 501, it’s a strategy to limit loss because traders (farmers, merchants) are unsure about market trend. So if it is purpose, than apparently I success this time. That reality let me feel that maybe “hedge ” is really not for fresh speculators like me . My purpose is not delivery my commodity and unsure my hard year work in field not just wasting of time, my purpose is earning money even I have nothing physical to provide for the real world.

Technical analysis

1. Bar chart

it’s actually the same as candle chart because it provides same information as candle charts.But it’s not friendly as candle .for sometimes you cannot easily get its trend(going up or down) at the first sight.

1. Some technical data

5,20,50… Moving average(Soybeans Nov13) . I think this three numbers or lines are really useful for people who have limited time and knowledge about this market,like us.Well to be honest I think such people shouldn’t show in the market but…we have to and it’s really good chance to learn.

Basically you can use the most simple way to predict prices in future period. Apparently 5 MA is moving faster than other 2. So if I am a really short term trader of several days, I would choose 5 MA to help me making decisions.For example,for Nov 13 soybeans, it really struggled at the end , longers and shorter are fighting with each other because the body of  candles are really small. However the blue 5 MA line predicted a rise in next period for me .So I might still hold my long soybeans contract. It ‘s nothing about some “physical ” news related real world production or weather , it’s all about technical so I think I should be careful.

2.I find it’s really funny that some website will give you simple suggestions about how you behave in a market. Such as follows, should I really believe, absolutely no. Could I do better on technical analysis than them, absolutely no ! I think it’s function is give you beliefs when you make a same decision as it does. The website is  Barchart .

Enjoy the weekend ~

After 4 weeks futures trading ,I ‘m glad to see that my pace of losing money is getting more and  more slowly. I also find if I do not put a lot of energy in it ,it’s really hard to earn ….for me …till now.

Portfolio

Trades

This week I go short for soybeans firstly not because soybeans always have huge changes in it’s price , also because it has good news about its harvest. Weather dents Brazil hopes in corn ,but not for soybeans. Soybeans harvest was forecasted to be 87.6m-89.7m tons, a little higher than the range of 84.7m-89.9m tons made in last month’s initial projections. I thought larger supply will drive the price down. Real prices confirmed my thoughts while I did not earn something because of a stop price, I will talk that later.

I also go short for wheat this week because I think wheat had boomed up for a long time and I predicted it will go down a little bit last week . while it did not go down but not go up for too much.

Important news

EPA says nothing final on ethanol blend; industry group cries foul.

Environmental Protection Agency on Friday sought to calm a furor over its apparent proposal to reduce ethanol use in gasoline next year, saying that no final decisions had been made about the contentious mandate.  EPA documents that showed the agency proposing an unexpected drop in the amount of corn-based ethanol that would be required for blending next year. I think it’s a really important news that will influences many prices of commodities. Firstly , corn plated area will be impact hugely .However the futures price trend will be really vague because it depends on many factors .What kind of commodity will be the substitute of those corns in certain agricultural area. When the supply of biofuel used corns decline, the demand of such corns actually decline either.  It’s really hard to say how will prices of commodities will go.

Lessons

1.Be careful of stop prices

As you can see, I predicted price correctly about soybeans while I did not earn one dollar. Because I’m really afraid of losing , so I set the stop price just 0.03 differences between the original one. And the system just closed my position when market has regular ,non-trend fluctuations. I used to make same fault when trying hedging  last week. So I guess It’s not a hard lesson ,but hard to really learn and act it.

2.Take it easy with fake trades and fake money , take advantage of chances to lose……..

Even though I lost so much and tell myself that just try to do more trades as soon as possible  because it’s all fake! I still think too much when I doing it. I should tell myself : hey , you won’t earn and won’t be rich after one night or several weeks , just be brave to lose then get lessons.

Plus, I love thanksgiving’s long weekend……sunny day ~~~

Well actually I’m satisfied with my performance this week even I’m still on the bottle…Apparently I have not learned how to earn but after the first crushed day of this week , I’ve got the lesson of not losing so much.

As a bottle , I did not lose more….from Tuesday ,maybe it’s a big success for a loser.

Portfolio

this weeks portfolio is still 

Trades of this week

1. Short corn

Lost about 1700 dollars.It’s a bad decision ,and I feel lucky that I remember to set a GTC stop price of it that I did not lose so much.Not a  huge harvest might lead price to go up for a  short term .That’s why my decision failed.

1. Short soybeans

Gain 5000 dollars.Even many news told me that China will import more soybeans which will make the price go up. I noticed that Brazil planned to plant more soybeans in the future which indicated that large supply in a long term.  Those news helped me to earn a little bit but also let me realized different viewpoints were always there. The important thing is not reading ,but choosing.

Interesting try

I did some interesting try this week, it let me lose some money but still opened another door for me .

It’s all because I have been very no confident  about my judges on futures price. I decided to  open two hedge positions at the same time and set two stop losing price at the very beginning.

The idea is if I don’t know which directions prices will go , I will open to contrary positions and two stop losing prices. Then I will at least win at one contract , and control my lose at a certain level on the other contract. I tried this strategy but it did not take me profit . I guess because I set those two stop losing prices  too narrow ,so differences between stop prices with  open positions prices, so the system will close my positions while  the market having regular fluctuation  Maybe a should try a larger discrepancy  next time.

Actually now I’m kind of not that care about my portfolio because there is nothing for me to tell about winning till now. But I think mistakes and new tries are really valuable for a trader holding fake money.

Something unexpected

At the beginning of this week, I really  saw the power of USDA monthly update report. On Monday , big prices changes happened on every item. While I think something will get more vague because the federal government shutdown. So the Oct.11 USDA report may be delayed. Because people are uncertain about the delaying , I expected there will be larger trade volume next week because of closing positions. Speculators may tend to close their positions. For example , wheat has been going up for a long time and there are so many people open long positions for it in this process. I think this trend will end because of many factors ,which I think the important one is  vague future.

Hope I can experience more in next week.

Hi guys , my this week’s blog  it’s all about telling you how to lose money in a futures market. 🙂

Portfolio

Every  time I see my portfolio, firstly I’m just ……..

then I could only accept the reality ……

…..Now I can show you how I get there and I hope you never will do.

Now as you can see, I did my first trade of week 2 on 25-Sep. Then did some trades intensively in 2 days because I wanted to cover some lost. I did make some little money on soybeans and another wheat contract but nothing can help my first trade of wheat.

Something I did and the outcomes.

1.Limits

As you can see I lost a lot on Wheat DEC-13. It does not happen in a day ,actually it’s a long process. I set limit prices several time but no a once I succeed

2.Hedge

Feeling lost on wheat’s price , I open a contrary relevant trade of wheat (Wheat Mar-14) as a kind of hedge.  It earned a little bit money for me but it was a bad news for me .Because it meaned that I lost more on first original wheat contact.

3.Soybeans

Opened a short contract of soybean, earned some.

Lessons & Info

1. Future VS Forex

1)      time

Now I feel  how important the role TIME plays in Futures market. I used to do some fx trade and that brings me some very bad habits in futures game.

When you do fx trade, it is literally an 24hours market except for Sunday. So you can check your position and do something about it anytime during a day. But when I did futures, many times I just checked my position and then found I didn’t know what to do ! Either  I was after a market closing time or in time of smaller trading volumes. I found prices changed a lot and trading volumes got larger when near the closing time. Such as Wheat DEC-13 and Wheat Jan-14

So it’s all about a good time. A good plan and organized trading or checking schedule really helps.

2)  fees

Futures has larger spreads and brokerage commissions. While fx’s spread is smaller and dependent on different brokers. For example, the fixed spread of EUR/USD is often 2.5 or 3 of different brokers. If you are interested in forex trade,here is an article   How To Pay Your Forex Broker . And if you want to open a demo forex account and have a different try,here are some comparisons of different brokers.Most of online brokers provide very detailed forex trading info from very simple and basic knowledge.I think it’s really friendly for a fresh and anyone can open a demo account just like our MFRE future trade account.  What’s more, from my personal view, I feel more technical using on forex trade and more info using on futures trade.

2.Stop& Limit

Actually I set a lot limit prices for that ugliest wheat contract but not a one succeed. Then I realized that things would get a lot better if I set a stop losing point at the very beginning. Do not always think about earning ,also think about stoping losing. I hope I ‘ve learned such a lesson.

Have a good weekend 🙂

Alex

It’s a first week of futures trading and everything seems exciting. While there are some lessons I wish I’ve learned in this exciting game.

1.If you are in this game ,you should know the basic rules.

Tuesday afternoon, I wanted to check out my Stocktrak account and may do some trading at that time. However, I found the platform closed. Then I realized it’s not like Forex trading which you can do it almost all 24h. It’s more like stock tha you need to know when to start and when to have a nap.

2.Get some tools to help you, at least you won’t feel that you are a moron about something you never touched.

If I want to trade for reasons, I need to expect its trends, right? Actually if I think if you have some softwares or tools ,you feel good and peaceful even you don’t usually use them. For futures, I need charts to help me achieving that. I found stocktrak was really NOT friendly to provide charts of current or history prices so I turn to some software.

I downloaded Futures Live Track’n Trade (2 weeks trail)http://www.trackntrade.com/.It provides chart changes info in minimum 1 minutes. I want to find one can narrow it to 5 seconds but failed ,maybe because it’s not like forex, I cannot just use some stupid commonsense to treat futures—a totally strange guy for me.

Here is a snip of this software. Also our TA provide some other tools on his Bloghttps://blogs.ubc.ca/mliew/2012/10/25/curve-flattener-spread-trade/  I think it’s kind of huge for the 1^st week.

3.Get news , information is important. Find a reliable resource

Actually it’s not a lesson I learned in first week. It’s about something I wanted to learn but kind of failed. I subscribe email news of Futures in the U.S: Weekly Future Insights  .But they never sent to me this week… So the lesson is : find a reliable info rescource.

4.Patience and don’t be so greedy.

Let me show you how greedy I was after I opened 1^st short trade. I opened it and set a limit for covering it. The limit price is…

Yes I opened a short at 6.45 and limited it at 6.20 at that time….  Now I feel only if I am a god like Warren Buffett, or I was just kidding myself.

Then I changed the limit to…6.39. The consequence is I still cannot find a chance to cover it. I thought if I set it at 6.41, I might already earn 100 dollars or something .  Then I will be a greedy person who is not confident for herself. So this lesson tells me don’t be so greedy , because if you become a greedy, it’s a lot easier for you to become a fence-sitter.

That’s my first futures week ~  Guys, happy mooncakes day. Futures always hurt you, but friends and food won’t. Enjoy the moon 🙂

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