“Safety Valve” Weighed for US GHG Cap and Trade
Adjust font size:
Manufacturing News, Source : The Manufacturer US
Published : 08 Jun 2007 21:38
Stakeholders in a potential greenhouse gas cap and trade system in the US have very different opinions of what a successful system would look like.
Questions include how stringent to make the cap, to whom it will apply, and how to allocate allowances in the system—whether to freely allocate them based on prior emissions levels or to auction them to the highest bidder, or some combination of the two. “Unlike most other commodities markets, this one is created wholly out of regulatory cloth. Its success, both in environmental and economic efficiency terms, is entirely dependent on giving adequate market signals to emitters,” says Ian Cuillerier, co-head of the derivatives group with Hunton & Williams (New York).
"Europe's experience with the first phase of the Emissions Trading Scheme (ETS) from 2005-2007 tells us that a free, over-allocation of credits may create both windfall profits and a lack of incentive to take abatement action, to say nothing of a crash in prices. This experience has led many in this country to wonder whether some form of auctioning may be more appropriate. No matter how the system is designed, we can certainly expect high price volatility in the early years while wrinkles are being ironed out and as information spreads through the market."
A heavily debated issue is whether to incorporate a "safety valve" that would limit the costs to industry. Stakeholders support various allocations and auction options and it's likely that a cap and trade system in the US would include a mix of both."
Comments on this story
click here to add a comment
You must be registered & logged in to add comments
already have an account and just want to login?
Related Content
Guest Editorial: Checklist - Seven Recommendations for Improved Profits
by Abbott A. Imberman, PhD, Professor of...
more…
FKI LOGISTEX OPENS NORTH AMERICAN TECHNOLOGY & EDUCATION CENTER (TEC)
(St. Louis, Missouri, USA: July 10, 2007) FKI...
more…
Guess selects the tradecard platformand SourceView suite to optimize global trade
NEW YORK, July 10, 2007 – TradeCard Inc., the...
more…
Kimberly-Clark Professional Crosses Final Touchless Frontier With Introduction of First Electronic Bath Tissue Dispenser
ROSWELL, Ga. (July 9, 2007) – Kimberly-Clark...
more…
Boeing Celebrates the Premiere of the 787 Dreamliner
EVERETT, Wash., July 08, 2007 -- Today, Boeing...
more…
no comments yet...