Template:Emissions scope comp
There is no real comparison between the three documents on scope. This is on account of their very different lineages:
ISDA
The ISDA EU Emissions Annex is crafted not as an Appendix to the 2005 ISDA Commodity Definitions — which is how it started — nor as a standalone definitions booklet, but rather as a “Part 7” to an ISDA Schedule. This explains its rather odd numbering system, and the uncomfortable fact that its main number, the 7 is square bracketed, since whether it is a 6, 7, 8 or 9 depends on whether you already have put something else as a Part 6 or 7 in your Schedule.
Seeing as the ISDA EU Emissions Annex is, in its current edition (v 7) some 38 pages long, and therefore longer than the ISDA Master Agreement in its entirety, not just the Schedule, we rather think it deserves its own booklet.
If it had its own booklet, you could integrate other similar “compliance” regimes UK Allowances, for example, and perhaps Californian ones, and you might be able to make it “master-agreement agnostic”. Just a thought.
EFET
The EFET Allowances Appendix is structured as an appendix to the EFET agreement, and you can take your pick — and it won’t matter much — whether you choose the EFET Power or Gas format.
The Annex does its work by amending terms in the EFET Master Agreement itself to be relevant to emissions trading. The terms that are not amended we have labelled green.
Power and Gas trading both involve connecting to a grid and trading a physical commodity with the attendant risks that implies: things can blow up, go off, be off-spec, and the grid needs to be balanced and so on. Emissions certificates are financial instruments and so are much easier. Much of the amendments is to overcome this difference. But some traces of the EFET’s “physical trading network” genealogy remain.
IETA
The IETA is the only dedicated Emissions trading document. This is good if you don’t want the bother of the physical energy trading bits and bobs, or if you are not a full-scale ISDA ninja — but few participants in the emissions trading market are neither energy traders or financial derivatives traders, so we suspect the IETA is probably the least commonly used of the three.