comments my way on this folks
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Cap and Trade Is Dead. Long Live Cap and Trade.
2010-07-28 22:19:45.216 GMT
By FELICITY BARRINGER
July 28 (New York Times) -- Hard on the heels of the Senate
Democratic leadership's decision to put aside climate legislation
intended to cap carbon dioxide emissions, another carbon-capping
precinct was heard from this week.
On Tuesday, representatives of some of the Western Climate
Initiative, a group of seven states and four Canadian provinces,
unveiled a rough blueprint for a cap-and-trade program that would
begin operating in 2012.
A subgroup -- California, New Mexico, Ontario, Quebec and
British Columbia -- intends to move first in limiting carbon
dioxide emissions. Each is writing its own rules, but all are
working from the same template, with a shared understanding of
how to count emissions accurately and a shared value for the
allowances that emitters will be awarded in each jurisdiction.
And to prevent a utility in, say, New Mexico from buying
electricity from a coal plant in Texas to skirt the cost of
compliance with the emissions limits (in policyspeak, this is
called leakage), the emissions associated with imports of
electricity are included in the total cap for a given state or
province.
But there is one significant difference between the
emissions profile of this core group and that of the United
States as a whole. Whereas the electric power industry, with its
huge fleet of coal-fired power plants, is the biggest single
source of carbon dioxide emissions in the country over all, in
California and the three provinces, the transportation sector -
think passenger cars - creates the preponderance of emissions.
Yet planners anticipate that emissions related to
transportation fuels and fuels for home heating or commercial use
will not fall under the emissions cap until 2015, three years
into the program.
And a more tangible threat to the system is on the horizon.
Proposition 23, on the California ballot this fall, is intended
to derail the state's signature climate-change law. And
California accounts for one-third of the full Western Climate
Initiative's total emissions.
Finally, even as the Western states and Canadian provinces
announced that they can act regardless of what the United States
Congress does, the value of the emissions allowances being traded
under the auspices of a different coalition -- the Regional
Greenhouse Gas Initiative, a coalition of 10 states in New
England and the mid-Atlantic -- are dropping in the absence of a
federal law that could bolster their value.
Point Carbon, a ThomsonReuters publication that follows the
carbon market, reported on Friday that activity in the RGGI
(pronounced Reggie) market had come to a near standstill. "Fading
hopes for passage of a federal climate bill that would give value
to RGGI allowances" has also deterred financial speculators from
participating in what the creators had hoped would be an
inspiration for a nationwide carbon market, it said.
Based on their statement on Tuesday, the architects of the
Western Climate Initiative still hope to produce a model market
that could join with the smaller market on the East Coast, which
covers only the electrical sector. That is, if California is
still a leader in the group after the November election.
Copyright 2010 The New York Times Company
-0- Jul/28/2010 22:19 GMT
