Linking Australia to the European Union carbon emissions trading scheme by 2015 will undoubtedly affect the revenue gained from carbon trading. The question is, how much?
One should expect up to 50% less revenue than originally thought in 2015 (some $3 billion a year) – but there are many variables that could blow even this figure completely off-course.
The main change for Australia is that our decision to join the EU under its current rules effectively means our revenue and foreign development aid will suddenly become the result of an internal EU struggle for control over the permit system.
To set the scene, consider what we will have in the run-up to 2015. Until then, we intend to charge about 300 Australian companies a fixed price per carbon emission, increasing from the current level of $23 per tonne to $25.40 per tonne in 2014, estimated to yield around $8 billion in 2014.
In 2015, the main change is that companies no longer face a fixed price, but can choose between buying permits at auction from the Australian government or from the EU trading scheme.
Three aspects of this change will affect revenue: there will be changes around who will have to buy carbon emission rights, the number of carbon emission rights sold by the Australian government, and the price.
The price of carbon emissions is the easiest to gauge: since we would then be in a fully integrated market with the EU, the Australian carbon price would align with that.
At present this price is around $8 per tonne, although it was as high as $30 per tonne in 2006. But the key thing to know is that in 2015 it will almost entirely depend on who controls the allocations of permits in the EU then.
At present, individual European countries effectively control this allocation and with a combination of over-allocations, cheating and corruption, these countries have flooded the EU with permits leading to the current low price.
If these countries still control the allocations by 2015 – and there are some good reasons to believe they will – the price will undoubtedly still be low, leading to the obvious assumption that Australian companies will want to acquire a substantial number at that price.
One could safely expect a price of around $10 per tonne, meaning total permit revenue from Australian firms would be no higher than $3 billion – of which up to half would go the EU countries and not Australian coffers.
If, on the other hand, the European Commission wins the political fight for control over permits, then one can be quite sure that permits will be much scarcer and better policed in the EU, and one should expect the price to be closer to $30 per tonne. In which case, the Australian government will get close to 100% of the $9 billion or so that would then be raised by the sale of domestic permits.
The EU Commission has long announced it would be in control by 2013, but the reality of the EU in these years of budget crises is that climate change is a secondary concern for most countries and they will resist further Commission control.
I thus personally expect some fudge compromise to be agreed so that only very slowly the EU Commission will get control over the permits, certainly not as early as 2015.
It’s handy to bear in mind that the EU and Australian scheme has a “development aid” component to it: richer countries are allowed to buy 12.5% of their carbon rights from poor countries whose carbon emissions are growing, but with the aim of influencing the growth of those emissions in particular ways.
Those foreign carbon “Kyoto” emission rights are much cheaper ($3 per tonne at the moment) and are also almost entirely the result of politics. The question will be how many projects will be recognised by EU and UN bureaucrats, and how much money will again be paid to other countries.
But effectively Australian development aid will go up in 2015 to the probable tune of around $500 million, just on that score. In short, a nice Christmas present from Australia to the EU and other countries under the current plan.
What about the longer-term and further complicating factors? For one, by 2018 the plan to fully integrate the Australian carbon market with that of the EU mean EU internal politics will determine the rules in Australia. This includes the number of permits sold domestically, the sectors exempt from permits, and the rules on using international off-sets (via the Kyoto, EU, or UN international schemes).
The upshot would most likely be that Australia would get fewer domestic permits to sell – as we are relatively energy-intensive – and also that Australian companies would be allowed less leeway to buy international off-sets from places like India and be forced to buy the much more expensive ones from the EU. This would only get worse in the future.
Then of course there is the issue of uncertainty around exchange rates. It’s expected the Australian dollar will go down as the commodities boom comes to an end, but this may well coincide with internal EU turmoil leading to a weakening Euro.
As to the many pronouncements on revenue, risk, and planning: most are quite fallacious. For instance it is not true that Australian companies now have more certainty over the price they will pay: they have simply switched from the uncertainties in the Australian political system to those of the EU, which are at least as big.
By the same token, there is no great difficulty in pulling back from this deal at a later date for a future government, certainly not before 2018 when there are not yet any foreign companies buying off-sets from Australia (an unlikely event anyway). If a future government simply abolishes this deal, then companies having bought permits would simply sell them again in the EU.
Indeed, if companies fear abolition of Australian permits without compensation, then this would lead companies to buy EU permits, further reducing the Australian revenue.
Finally, the announcement that Treasury knows the price in the EU will be $29 in 2015 is completely fanciful: the internal politics of the EU are incredibly complex and unpredictable and Treasury is not really set up or suited to predict political events. As with almost any asset price, the best guess of the price of a permit in the EU in 2015 is roughly the price today, that is, around $10.
The silver lining is that we too can cheat and we almost undoubtedly will. In 2015 we can simply adjust the number of permits we sell domestically to whatever level needed, so our companies won’t have to buy in the EU. Given the alternative is for us to send money to the EU, the political pressure to do this would be enormous, so the EU shouldn’t bank on this sort of the Christmas present.
Also, we can buy more international “development aid” permits. Part of the deal with the EU is we can do precisely that up to 50% of our targets, though only 12.5% from the Kyoto scheme, which basically means we have agreed to send this development aid more to countries the EU likes than the countries favoured by the Kyoto scheme.
In all, the stars are aligning for a big drop in domestic revenue from carbon permits and an increase in development aid, some of it to the EU.
Comments on this article are now closed.
John Newlands
tree changer
If all permits are auctioned (not given for free), the use if offsets is limited to well under 50% (say 10%) and the CO2 cap is serious the permit price should be well above $10 even in a no growth economy. The present target of 5% emissions reduction 2000-2020 is woeful. Coupled with coal exports it should be embarrassing. Our strong population growth does admittedly make it harder, To be consistent with 80% cuts by 2050 the cut should be a serious 30% by 2020. Politicians want to bathe in the…
Read moreWilliam Bruce
Artist
And how rorted (legally & otherwise) & "political" (with special exemptions etc) and FULL of PUBLIC SERVANTS (who need to be PAID) will the issue of permits (read Money be)?
It is almost comical..what will it cost the nation in perpetuity??
Norm Stone
logged in via Facebook
I think the best chance for revenue collections is to tax poorly designed legislation. What a windfall that would be. There will be no real lowering of carbon until we stop burning fossil fuel. Carbon emissions will not be reduced by increasing taxation churn
William Bruce
Artist
Great point!!...this is the REAL issue......smoke-screened out by "Climate Change denial" and other accusations.
Why an "international" scheme...if we want to act we could act ourselves ...and, even exceed International targets.....
It is all too mad....IF this Govt. was GENUINE about the issue...it would simply very gradually tax the bad energy and create big incentives for alternative energy and other alternatives....
Where is the detail re who gets money and pays money for exactly what???
Seems nothing to do with CC it's about money. Such a tricky scheme ...Clearly fishy...LOOKS OBVIOUSLY ANOTHER MONSTER RORT.
William Bruce
Artist
This scheme is a way of making money out of the "Climate"....
It's really the "climate derivatives" scheme...
If we truly want to reduce emissions why aren't we using OUR natural gas for Vehicles, Electricity & heating.....AND CONCURRENTLY saving (read EARNING) $2 Billion a month importing oil?
We are causing ourselves to be oil dependent...it is insane.
John Newton
Author Journalist
All of the above - it doesn't appear - at least on the outside - that any of the CO2 are racing to reduce their emissions. But even worse, with the writing on the wall for coal, I don't see any news of BHP Billiton or Conzinc Rio Tinto or Twiggy or the round person investing in renewables. They're acting like spoilt children having their playground taken away from them.
Correct me if I'm wrong.
Gerard Dean
Managing Director
I will correct you Mr Newton.
You must know a wall that is well hidden because coal, far from being written off, is due for an explosion in demand. Not only are China and India planning to build over hundreds of coal fired power stations, the good old "Green" Germans are currently building up to 20 coal fired stations to replace their nuclear power plants.
Every energy outlook including The World Bank, the Energy Institute and the UN points to the expansion of coal mining.
The European ETS has been hit by scammers and manipulated by EC fatcats, who are now looking at changing the rules to lift the price.
Australia is putting it's faith in unknown, un-elected bureaucrats sitting in Brussels. Do you really think they will take our interests into account when they change the rules?
There is an old saying I just made up, "If you can't vote them out, don't take any notice of them."
Gerard Dean
John Newton
Author Journalist
Concernning your news about coal, all I can say is - oh dear, there is no hope.
Mike Hansen
Mr
"Not only are China and India planning to build over hundreds of coal fired power stations, the good old "Green" Germans are currently building up to 20 coal fired stations to replace their nuclear power plants."
Do you actually have some references to back that up?
"There is an old saying I just made up" Yes climate science denier and "pants on fire" Dean - we know. Making stuff up is what you are really good at.
While the world is a long way from phasing out coal and new coal fired power…
Read moreDavid Arthur
n/a
Mr Dean, in setting out that Germany is planning 20-odd new coal-fired power plants, have they any plans to shut down old (clapped-out) plants?
Peter Sommerville
Scientist & Technologist
Mike, I am reluctant to buy into this but what the heck. One can only sit back so long and tolerate crap.
The problem you have is that you have made up your mind before you do the research. So you cherry pick. Gerald is correct. There has been a significant move towards coal in Germany partly forced by the government's decision to close down its nuclear power stations, and partly facilitated by the madness of Europe's emission trading scheme - which is being thoroughly rorted. Some references…
Read moreMike Hansen
Mr
Still fiddling the counters I see. Pathetic.
Peter - your argument is the same as Gerards. Gerard's argument which he makes here
https://theconversation.edu.au/carbon-price-floor-axed-but-eu-market-links-a-good-substitute-8777#comment_68190
is "Never, ever, ever believe the Germans. Never"
So for all his bloviating, Gerard is left with nothing but attacks on the national character of Germans.
Your argument is largely the same plus your usual propensity to give strawment a bashing.
My…
Read morePeter Sommerville
Scientist & Technologist
Back from a lovely weekend to deal with another totally inane response.
No Mike, you and I both know that you are a counter fiddler - albeit you have been quiet of late.
As always you have totally failed to address the issue that Gerald and I raised.
The fact is Germany is moving back to coal as they recognize that without nuclear they cannot supply base load from existing "sustainable" technologies. Coal in any event is a major component of Germany's power generation. Of course more efficient…
Read morePeter Sommerville
Scientist & Technologist
The answer is "yes".
Gerard Dean
Managing Director
Hey Peter
I like your comments, but I am worried about your investments in biofuels.
Still, you have put your money where your mouth is.
Also, don' t worry about Mr Hansen, a few facts always sends him off to the Health and Wellness blogs. Actually, it is past his bedtime now.
And mine.
Good stuff
Gerard Dean
Gerard Dean
Managing Director
Yes they are shutting nuclear and some old coal plants, but that doesn't take away the fact they are building new coal fired plants.
The main reason is that they can buy cheap credits from the European ETS scheme and cheap coal from Poland.
Australia's economy is about 22% of Germany, so that means we can build 4 coal fired plants AND proclaim that we are saving the world.
Germany are doing it - why can't we?
Gerard Dean
Gerard Dean
Managing Director
And another thing.
I was bought up on a wheat farm, so you were brutally close to life - killing sheep for food, shooting rabbits, helping cows give birth, fighting fires, driving tractors and trucks from 5 years old, burying the poo in holes in the back yard and riding 12 K to primary school.
So, I learnt to keep my eyes open. When I go to Germany, I keep my eyes open and look at the size of German industry, heavy, light and high technology. I look at the ever increasing network of autobahns…
Read morePeter Sommerville
Scientist & Technologist
Gerard,
It is hard to argue that sources of liquid fuel are infinite. Quite evidently they are not. But the world relies upon liquid fuels for transport and freight. At some time we must find an alternative source of these fuels. We can defer this by investing in plants that convert coal into liquid fuels. However, there are very exciting technologies developing that utilize algae to produce liquid fuels. I personally believe these technologies are sufficiently viable to justify a personal investment. The fact is most advances are driven by individuals investing in their beliefs and risking their own money.
Governments are notoriously bad at this. Which is why I am so negative about the Federal Governments 10B investment in "green technologies". Bureaucrats are notoriously incapable of picking winners. Artificial markets waste money. Real markets deliver efficiencies simply because investors have to judge outcomes.
Peter Sommerville
Scientist & Technologist
Gerald,
I like you have a rural background. But Germany's reversion to coal power is being driven by their decision to close nuclear stations.. On this we agree.
I have been to Germany many times. They are fundamentally pragmatists - or should I say realists!
Chris Harries
Environmental consultant
This is rather like the agenda where it is being argued that the states should dispense with their climate frameworks (as weak as they are) and gear everything towards Australia's national framework.
That actually would be a tremendously sound argument in both cases except for one small snag, the larger schemes are highly deficient themselves.
Our biggest problem is hat there is no really good climate policy regime anywhere in the world to latch onto. Australia's is as good and as bad as any…
Read moreNorm Stone
logged in via Facebook
How on earth can you know what the ultimate ideal is when you acknowledge that we are hedging bets against a big unknown? I don't know of any evidence at all to suggest that the corruption and fat cat fattening will be reduced - I can, however easily believe that it will continue and increase. Why not go down the pathway of joining with the corrupt, the greedy and the climate exploiters? Do I really need to even start?
Chris Harries
Environmental consultant
Agreed Norm, how can you know?
But are we confidant that the Australian framework is so much better than the European one?
There are those in my local climate activist group who believe that the Australian climate framework is not worth a pinch of salt. In which case then it hardly matters if we hitch onto something equally lacking in integrity.
From my perspective, whether we join the European pricing regime or not is not the biggest issue in town, but there's a very slender chance it may prove to aid a global pricing regime that works. Equally, it may not.
Our only hope is that these emergent schemes may evolve into something more substantial over time, these being early days.
William Bruce
Artist
Chris Hedges says "Our biggest problem is that there is no really good climate policy regime anywhere in the world to latch onto."
Well no!...Seems the Countries that have genuinely made HUGE strides to alternatives (e.g. Germany, China. Denmark + ??....) have had policies of just "acting alone"....THe have acted INDEPENDENTLY.
Why pay middlemen & profiteers for buying & selling Carbon Credits or Certificates, or whatever else, which can easy be "dodgie" and also "rorted".
Wake up ...The Global ETS is an obvious monster rort from start to finish....WE ought keep control and act ourselves in a sensible and PRAGMATIC WAY....
We have tons of solutions which can hugely create jobs & wealth at home.
And we could even consider "a Carbon tax charge" from other Countries that are not acting sensibly vis a vie their wealth.
William Bruce
Artist
Sorry ....And we could even consider "a Carbon tax charge" ON IMPORTS from other Countries that are not acting sensibly vis a vie their wealth.
STABLE POPULATION PARTY
Written & authorised by William Bourke, Sydney
Australia’s record population growth of six million people (or 30%) from 2000 to 2020 makes the carbon emissions reduction target of 5% in the same period implausible and disingenuous.
In effect, the carbon tax is a population growth tax.
It is effectively an attempt to abate the emissions of six million extra people - and it doesn't even achieve that! We will have to spend billions buying credits from o/s!!
In the lead up to World Population Day on July 11, a review of population growth…
Read morePeter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
Paul,
I don't think it should cause too much angst to be hooking our carbon price onto something like a global market. Not a "proper market" to be sure ... the hands are all too visible ... but it allows a global response to a global problem.
It early days yet ... this carbon price set up will either do the job or it won't. My head says it probably won't.... too little too late and too gentle by half. It's only us after all - a fraction of the CO2 problem. Tackling this is a global effort... but at least we're helping and making some sort of effort at it.
But either way I reckon we should let it play out for a couple of years and then, if necessary, do something serious.
The really nice thing about linking ourselves to a global market is that the notion of "axing the tax" and abolishing the CO2 price has just sailed off into oblivion.
Norm Stone
logged in via Facebook
So the plan is to devolve this patently useless scheme into another, lager, completely corrupt scheme that we all feel will not produce any desired outcomes and then when the predicted failure comes we will "...do something serious". You might do better to plan for something comedic, I know that I am beginning to feel the need for a laugh.
Dr Graham Lovell
logged in via Twitter
Linking our carbon permit scheme to the EU scheme will not stop the Coalition from axing the scheme. Fortunately, we are still able to pass our own laws.
The Aust emission permit scheme should be axed: it is now a farce. The problem is in the design of the EU system, to which Aust has now tied itself.
When the EU decided to cut emissions, they were afraid that putting a price on carbon would not really work in the way they intended. So, like true bureacrats, instead of calculating and setting…
Read moreLennert Veerman
Senior Research Fellow, School of Population Health at University of Queensland
A gradually and predictably increasing carbon tax would be much more transparent and allow businesses to plan ahead far better...! (If only the coalition would see reason on this point, that is.)
Dr Graham Lovell
logged in via Twitter
I agree that a gradually and predictably increasing carbon tax would be a good model. The only difficulty with this model is that it increases Australian industry costs at a time of global competitiveness issues in Australia.
The remedy for this defect is to scrap the "tax," and replace it with a "fully rebateable carbon levy."
Looking just at electricity generation, under this scheme the money raised from the levy would be returned to customers as a flat per kWh rebate. This would mean that…
Read morePeter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
Graham - any mention of increased costs seems to coincide with these periods of "global competitiveness issues". In fact I suspect we are always confronting such issues given what we try and flog - all of which has a legion of alternative suppliers.
What intrigues me is this: ".... it mu(st) be said that their Direct Action proposals are likely to result in more carbon abatement than Labor's truncated ETS."
Could you elaborate on that for me.
Dr Graham Lovell
logged in via Twitter
There is only one reason "economists" argue we should be buying carbon emission permits from Europe, or from the rest of the world via Europe. That is to reduce the carbon abatement in Australia.
A properly developed carbon abatement policy could be done without economic disruption to Australia, but for some reason we keep toying with trying to export our carbon emission overseas.
For an alternative approach see: http://australiancarbonprice.blogspot.com.au/2012/05/40-carbon-levy-should-be-enough.html
Paul Moonie
PhD student, solar energy
If we're ever in the hunt for an alternative, I like this idea. It can be simple, transparent, low-cost and responsible.
It would work even better if we had less restrictions on energy options like nuclear and recognise the value of burning GHG emissions in cases such as landfill where carbon negative actions are penalised.
David Arthur
n/a
In order to plan their carbon emission reduction programmes, what companies need is price certainty. This is exactly what emission permit trading schemes AVOID.
In order to maximise their profits from the world's need to reduce its carbon emissions, what financial institutions is another widely traded derivative. This is exactly what emission trading schemes CREATE.
Philip Dowling
IT teacher
I think that this notion of linking Australian and EU into the same market is a great idea, as it will provide employment to all those merchant bankers who lost their jobs after the GFC. They have the skills to chop and dice, and repackage, and arbitrage and so set up another worthless market in an intangible product.
Peter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
Now this is curious Philip.
I had you pegged as a conservative - or at least an enthusiastic supporter of capitalism as we know it - yet here we have you running a baseless campaign against that pinnacle of contemporary capitalism - the banking system.
Should we nationalise them? Return to the gold standard? Make banking illegal like it used to be?
How do you reconcile this usual enthusiasm for things as they stand with this loathing of our financial institutions?
Or is this just another rock to throw against the carbon price?
Philip Dowling
IT teacher
Peter, I am a firm believer in the KISS principle. The more complex a scheme is, the more entities involved, the more legal systems, and the more law enforcement agencies the less likely that a system will work as it was intended.
Remember this proposal has Greece as one of it's responsible entities.
What made the GFC possible in the first place was interference in the mortgage market by a government seeking to "assist" minorities.
I have in fact been giving brief thought as to how an arbitrage may best be done using options over carbon certificates, based on a country /time difference. I then thought that the simplest approach would be to set up a virtual office in Kandahar or Mogadishu and sell carbon certificates from there.
Peter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
Excellent ... back to passbooks then. I always liked those little tin building money boxes the Commonwealth Bank of Australia used to hand out in schools.
But that was before it became ComBank.
Now Phil I know there are some ratbag Americans who reckon Bill Clinton was responsible for the GFC. That if - left to their own common-sense - the banks would never ever had issued sub-prime loans let alone wrapped them up in gilt edged triple A rated securities and flogged them as good solid debt to…
Read morePhilip Dowling
IT teacher
Peter, I indicated what had changed in recent times. There were also additional conditions necessary for the GFC. One of these that is still extant is the payment by bodies to credit rating agencies for rating their company or their products. Credit rating agencies showed that they were incompetent. This matter of governance has still not been addressed.
Read moreThe great difference between the USA and Australia in mortgages is that in the USA mortgages are non-recourse.
I know exactly how mortgage broking…
Peter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
Excellent ... Bloomberg to greet the day. Something to look forward to. Even on Sunday. Must be a religious thing.
Reminds me of a trader acquaintance who had a special programmable radio that woke him every night every two hours so he could catch each market opening. Went mad, the poor fella after his wife ran off with his boss. That and too much nose candy.
Now this business: "My argument was simply that any new system would only be effective if it was simple."
Leaving aside this idea that making an assertion is equal to making an argument for the moment, how would you "simplify" this system?
What fetters on free trade would you be proposing? What nanny-state restrictions on commerce would you suggest to make the system more "understandable" to folks that clock on to Bloomberg for breakfast? Ban derivatives? No futures? Ban trading altogether?
All sounds bit bolshevik to me.
Philip Dowling
IT teacher
I find that some students profit from being reminded of the basic points.
"My argument was simply that any new system would only be effective if it was simple."
Bloomberg is less bolshevik than the SMH and The Age. I used to subscribe to the SMH until it started using green for its environmental articles.
Peter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
No answers Philip? No suggestions?
Just this cheap easy smearing of our noble pillars of prudent finance? I am shocked.
How would you newly emerging lefties make the carbon trading system more Luddite? Insist on paper transactions scrutinised by an army of accountantants and government clerks? Demand all documents in Latin? Ban the use of phones or the interweb?
What do you mean "simple"?
Philip Dowling
IT teacher
One that avoided the issues demonstrated by the folowing article from Bloomberg.
http://www.bloomberg.com/news/2012-08-28/poor-in-india-starve-as-politicians-steal-14-5-billion-of-food.html
Peter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
Now Philip don't you go flicking hail mary passes off into the long grass, grabbing a stick and suddenly playing tennis...
Stick to your "argument" about the need for "simplicity" in modern finance.
Incidentally speaking of things Indian, here's something for folks to ponder: Road Deaths for the year 2011 - 142,000.
Philip Dowling
IT teacher
Thank you for this reference.
Of course, nobody will take the slightest notice because you didn't include a photo of two wistful looking children orphaned by their parent's death in a car crash.
Philip Dowling
IT teacher
I think that Hugo Chavez has taken your suggested approach.
Oh and did you know?
http://laht.com/article.asp?CategoryId=10717&ArticleId=363879
Peter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
What suggested approach???? What did I say? I'm quite happy to have the captains of capitalism sort out the fine print on how they want to make a quid out of this business... I trust them. I believe in them. I believe in markets.
It is you - slippery Phil - who is making vague rumblings of discontent and distrust - urging a simpler kinder world of finance...you who sees inspiration from Senor Chavez and his slavering socialists.
Now stop obfuscating - tell me how we can simplify global financial structures when it comes to carbon trading.
Norm stone
Project Manager
Ok you blokes enough is sometimes rather too much. How much carbon have you emitted with this bullshit? Markets and trading are distractions designed to amuse you while we go to hell in a hand-basket or something. Given that there is no god who the hell can issue permits to pollute? Stop relying on coal and diesel, there is a good start.
Peter Wood
Research Fellow
Frijters' claim that the low price for EU allowances is because individual European countries effectively control allocations and that "a combination of over-allocations, cheating and corruption, these countries have flooded the EU with permits". This is wrong. The prices of allowances is driven by the supply and demand conditions for EU permits up to at least 2020. From 2013-2020 the supply of allowances is determined by an EU Commission decision on caps that was made in 2010, that is consistent with an abatement target of a minus 20% reduction of emissions by 2020. The reason prices are low is that achieving this target has become far cheaper that was previously expected.
Kym Lennox
logged in via LinkedIn
The EU will do what it sees as the least worst option between them, Australia won't get a look in and so we can expect quite the debate on equity issues for our integration.
All of this is somehow avoiding what I see as the elephant in the room. The permits are priced in the domestic currencies and thus their trade represent a form of currency trading. The currency market is far more liquid and sophisticated environment that then gets a whole new way to hedge - the mere fact that the trading process…
Read more