ROI has its own proprietary model of the California and Quebec emissions trading system.  The model is the most sophisticated and advanced in the market.  Its focus is not just on expected price but also on risk and variance of outcome. Sample output is show on the right (please see the blog or recent works on this site for updated results).

The model uses:

  • risk adjusted projections of offset supply and the timing of the arrival of both spot and golden spot (those offsets with two verifications),
  • demand including uncertainty on complementary measures -- energy efficiency reshuffling
  • monte carlo simulations so not only is expected delivery calculated but also the related statistics, eg standard deviation, askewness etc
  • hedging behavior on buyers and traders
  • dynamic price adjustment
  • and other risk parameters.