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There is no real comparison between the three documents on scope. This is on account of their very different lineages: | |||
====ISDA==== | ====ISDA==== | ||
The {{emissionsannex}} is crafted not as an Appendix to the {{commoddefs}} — which is how it started — nor as a standalone definitions booklet, but rather as a “Part 7” to an ISDA {{isdaprov|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. | The {{emissionsannex}} is crafted not as an Appendix to the {{commoddefs}} — which is how it started — nor as a standalone definitions booklet, but rather as a “Part 7” to an ISDA {{isdaprov|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. | ||
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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. | 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==== | ====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 | 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 nor financial derivatives traders. Financially regulated users will want the benefit of netting opinions — which they will have under the ISDA — and non-financial energy traders will want an agreement format they are used to, so we suspect the IETA will be the least commonly used of the three. | ||
As such {{ietama}} starts off with a “single agreement” clause. As we go on, you will notice some similarities with the {{1992ma}}. So many, in fact, that you may start to wonder why they didn’t just use a {{1992ma}}, and make this into a specific definitions booklet. Perhaps the pioneering emissions traders weren’t ISDA ninjas, didn’t want to pay ISDA membership fees, something like that? Hard to know. | |||
If you ''are'' an [[ISDA ninja]], you won’t need me to tell you that this is a [[Single Agreement|single agreement]], or what it is for. | |||