Supplement, October 2000 The Carbon Challenge - Industry, climate change and Kyoto INTRODUCTION WHY KYOTO COUNTS Years of international climate change negotiations are on the verge of presenting global industry with perhaps its biggest challenge of the new century. Some businesses are already moving to address their carbon emissions. Mark Nicholls explains why. More... RISK MANAGEMENT HEDGING AWAY EMISSIONS Companies will have to come to terms with carbon restrictions - but there will be winners as well as losers. John Palmisano explains how emissions liabilities can be hedged, and how emissions assets can be exploited. CASE STUDY: DUPONT CREDITS FOR SALE EMISSIONS TRADING TRADING AROUND THE CORNER The Kyoto Protocol's international emissions trading scheme is not scheduled to start until 2008. But emissions trading will be a reality for companies in Denmark and the UK from next year, with an EU scheme penciled in for 2005. Graham Cooper and Mark Nicholls report on the early movers. CASE STUDY: LUFTHANSA EFFICIENCY FIRST, TRADING THIRD FLEXIBLE MECHANISMS AN EASIER ROUTE TO EMISSIONS CREDITS Joint Implementation projects promise a more straightforward way for investors to obtain emissions credits than the Clean Development Mechanism. Graham Cooper and Mark Nicholls report. FLEXIBLE MECHANISMS CDM - SIMPLICITY IS THE KEY The Clean Development Mechanism is a major financial innovation that may radically alter the way developing countries and industrialised nations deal with issues of climate change. Richard Sandor explains its importance and recommends a simplified CDM process. LEGAL RISK COPING WITH KYOTO - THE LEGAL PERSPECTIVE Anyone hoping that COP6 will dot all the i's and cross the t's of the Kyoto Protocol is going to be disappointed. Nonetheless, companies are already considering investments in Kyoto-linked projects. George Meyrick looks at some of the outstanding legal issues. CASE STUDY: BP/SHELL ENERGY GIANTS LEAD THE WAY ON EMISSIONS TRADING FOR THE FULL STORY EVERY MONTH, SUBSCRIBE TO ENVIRONMENTAL FINANCE, OR CONTACT info@environmental-finance.com FOR OUR BACK ISSUES SERVICE