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The CO2 and other
greenhouse gas (GHG) emissions of energy and industrial
manufacturing companies are under increasing scrutiny from the
U.S. Environmental Protection Agency and other worldwide
regulatory entities. But the new constraints can be viewed as
both risk and opportunity: Major emitters, from energy producers
and refineries to utilities and manufacturers, must meet new and
growing regulatory compliance requirements. But the advent of
cap-and-trade markets also opens up a new revenue stream for
many commodity-oriented entities, including those most affected
by regulatory scrutiny.
The good news is
that emissions traders have access to the same commodity capture
and modeling capabilities as traders who handle oil or gas, with
emissions solutions that can be used as standalone,
out-of-the-box tools or integrated into the larger portfolio
management solution.
RiskAdvisory’s
energy risk solutions, either as an integrated suite or
operating as independent modules, have no limitation in modeling
any commodity type that can be properly quantified and priced.
SAS BookRunner solutions provide all the trade capture and
reporting tools needed to remain competitive and compliant in
this new arena. SAS BookRunner’s framework is particularly
suited paper trading where there is no physical commodity
exchanged, making it the ideal solution to manage CO2,
SO2, and NOx emissions-related offsets and allowances
positions.
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Financial position exposure |
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Mark-to-Market
including MtM stress testing |
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Option valuation
including the “Greeks” |
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Physical
position exposure (monthly, daily, and hourly) |
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Value-at-Risk (VaR) |
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Counterparty credit
threshold alerts |
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Current replacement
value |
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Expected cash flow |
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Potential
future exposure |
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Confirmations and
settlement |
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