Carbon credits proving to be a fail

[Bad_Daddy 2,209]

http://news.yahoo.com/eu-commission-wants-900-million-permits-withheld-boost-202406103.html

EU Commission wants 900 million permits withheld to boost CO2 market

By Barbara Lewis | Reuters – 10 hrs ago

BRUSSELS (Reuters) - The European Commission proposed postponing the auction of 900 million pollution allowances in the next phase of the EU Emissions Trading Scheme, to prop up the carbon market.

The plan would push back allowances from the first three years of the 2013-2020 phase of the ETS, a scheme meant to reduce the output of climate-changing gases.

The market has lost its effectiveness because of a glut of allowances unused in the regional economic slowdown.

"The figure of 900 million allowances has been put forward in the light of views expressed by member states and stakeholders," the Commission said in a statement on Monday.

Earlier this year, the Commission outlined its plan with options for withholding temporarily - known as back loading - 400 million, 900 million or 1.2 billion allowances.

Anticipation of Monday's announcement, which came after the market close, had driven allowances on the ETS to just above 9 euros, up nearly 9 percent from the previous close.

That is substantially up from a record low of 5.99 euros (4.8 pounds) per ton of carbon reached in April.

The Commission's plan will now be debated further by EU member states, which are expected to take a vote on December 13.

So far Poland, which is heavily dependent on carbon-intensive coal, has stood out as the main opponent of intervention to raise the carbon price.

BUSINESS DIVIDED

Some representatives of heavy industry say intervening would impose an undue burden in difficult economic times and could drive plants out of Europe.

Others, including oil majors such as Royal Dutch Shell, keen to justify investment in technology such as carbon capture and storage, and Dong Energy, have spoken in favour of action.

Apart from the short-term solution of a temporary withdrawal of permits, the European Commission is also expected to put forward proposals for more lasting solutions to the carbon market's weakness, such as permanent removal of allowances.

Details are expected in a carbon market report scheduled for publication on Wednesday.

Campaign groups said Monday's proposal marked some progress.

"It's an important first step," Sanjeev Kumar, senior associate at non-governmental organisation E3G, said. "It's crucial to move now on to the debate about cancelling allowances."

An impact assessment published together with Monday's proposal estimated the surplus of allowances on the ETS at the end of last year stood at almost 1 billion.

It said that surplus was likely to keep growing, because of economic weakness that has sapped demand from industry and utilities, as well as improved energy efficiency measures.

"Overall a surplus is expected by 2020 in the order of magnitude of 2 billion," it said.

The change to the auction timetable as proposed by the Commission does not change the overall quantity of allowances.

"Back-loading is expected to increase the carbon price, compared to the current timetable, in the short-term, but this expected to be balanced with a decrease in the price later on," the assessment of the draft law's impact said.

[Bad_Daddy 2,209]

http://www.huffingtonpost.com/2012/11/12/california-cap-and-trade_n_2118991.html?utm_hp_ref=green

California's Cap-And-Trade System To Launch With First Pollution Permits Auction

By JASON DEAREN 11/12/12 04:06 PM ET EST

SAN FRANCISCO -- California's largest greenhouse gas emitters will begin buying permits in a landmark "cap-and-trade" system designed to control emissions of heat-trapping gases and to spur investment in clean technologies.

The program is the most wide-ranging of its kind in the nation and a key part of California's 2006 climate-change law that dictates standards for cleaner-burning fuels, more efficient automobiles, and increased use of renewable energy.

Under the plan, the California Air Resources Board will auction off pollution permits on Wednesday called "allowances" to more than 350 businesses, including electric companies, food processors and refineries.

In essence, the auction will put a price on carbon emissions.

The program also places a cap on emissions spewed by individual polluters. Businesses are required to either cut emissions to the cap levels or buy allowances from other companies for each metric ton of carbon discharged over the cap each year.

Businesses can satisfy up to 8 percent of emissions reductions through the purchase of carbon credits from forestry and other certified projects.

"It is entirely in line with the notion ... that competitive economics in the 21st century is built upon clean and more efficient ways of generating energy, making products and doing business," Mary Nichols, the air board's chairman, wrote in an email.

However, some of the businesses regulated under the plan say the extra costs will result in higher electricity rates and job losses in an economy already struggling to recover. A coalition of business groups has petitioned Gov. Jerry Brown to delay the program – a request he has refused.

"The auction will take place," said Evan Westrup, a spokesman for the governor. "We will be monitoring the program very closely and the Air Resources Board will make modifications as appropriate."

For the first two years of the program, large industrial emitters will receive 90 percent of their allowances for free in a soft start meant to give companies time to reduce emissions through new technologies or other means. The cap, or number of allowances, will decline over time in an effort to drastically reduce greenhouse gas emissions by 2050.

The board has estimated that businesses will pay a total of $964 million for allowances in fiscal year 2012-2013. About 23 million allowances will be sold for 2013 emissions, and 39.5 million allowances are being pre-sold Wednesday for 2015 emissions.

The state is still unclear about how the money will be used, but California law dictates it go into a greenhouse gas reduction account, and any programs that use the funds be consistent with the goals of AB32, the climate change law.

Some groups have proposed using part of the money to help businesses regulated under the cap to buy and install energy efficient technology to help save money.

While no one believes California's cap-and-trade program alone will remedy climate change, the system is designed to show it can be done in the world's ninth-largest economy and provide a blueprint for other governments, the board said.

Officials believe the re-election of President Barack Obama, who in his acceptance speech voiced support for battling climate change, will embolden states to follow California's lead.

"With the election, we expect states that had dropped their own climate efforts to take a new look at what they can do, and some of these ideas will be adapted or adopted elsewhere," Nichols said.

Business groups say California's regulations and high taxes are already a threat to their bottom lines, and adding more costs in a bad economy is perilous to growth.

Utilities say ratepayers should expect increases.

The Modesto Irrigation District – which provides its customers with a mix of energy from traditional coal-and-natural gas-fired power plants and renewable sources – said customers will see bills increase in 2013 due to cap and trade.

"We will have on our billing a surcharge that will address cap and trade, and show ratepayers exactly how much more they will pay," said Greg Salyer, resource planning and development manager at the district.

Salyer said the district will not know exactly how much higher rates will go until after Wednesday's auction, which will set prices for each ton of carbon emissions.

Ratepayers will see a bit of relief early on because some of the auction proceeds have been earmarked for return to utility customers. The California Public Utilities Commission will ultimately decide how those rebates are handled next year.

In the end, proponents of California's ambitious new program say the increases in costs will be offset by gains in the state's clean technology sector, and by air quality improvements and other benefits of emission reductions.

That said, even supporters acknowledge that changes in the price of energy are likely to occur.

"We don't want to dismiss the idea that there will be changes to the energy price structure because of a program like this," said Timothy O'Connor of Environmental Defense Fund. "But that's not a reason to throw it out."

Edited November 13, 2012 by Bad_Daddy

[Gary and Alla 3,694]

"CO2 Market"

####### were they thinking?

[Bad_Daddy 2,209]

"CO2 Market"

####### were they thinking?

It's the latest liberal ponzi scheme.

[Brother Hesekiel 2,236]

I am all for clean air, as long as I can enjoy running my 2-stroke Saab and Lambretta scooters. I use caster oil in the gas, for that special aroma. Wouldn't want to miss it for the world. Really!

[Bad_Daddy 2,209]

http://news.yahoo.com/eu-carbon-market-needs-quick-fix-deep-reform-110348511--finance.html

EU carbon market needs quick fix and deep reform - Commission

Reuters – 24 mins ago

BRUSSELS (Reuters) - The EU carbon market must have clarity before the year-end on a short-term plan to revive a scheme that has lost its power to drive greener energy, the European Union's climate boss said on Wednesday, as she outlined plans for much deeper reform.

The Commission proposed on Monday to defer the auction of 900 million allowances that would have been sold between 2013 and 2015, the first three years of the next phase of the EU Emissions Trading Scheme (ETS).

In a process known as back loading, they would instead be auctioned at the end of the phase, in 2019-2020, to tackle a glut of allowances caused by the economic slowdown in Europe.

"Market operators must have clarity before year-end on this," European Climate Commissioner Connie Hedegaard said in a statement.

"At the same time, the Commission presents options for possible structural measures that can provide a sustainable solution to the surplus in the longer term."

The temporary solution in theory is relatively quick and easy, in line with what the Commission sees as an urgent need to reform the market.

"Our carbon market is delivering emissions reductions. But because of the oversupply in the market, the ETS is not driving energy efficiency and green technologies strongly enough," Hedegaard said. "This is bad for Europe's innovation and competitiveness."

The Commission decided on holding back 900 million allowances, even though some market participants had called for deeper cuts to address the surplus.

"Backloading 900 million allowances is expected to have a more proportional impact, temporarily leading to a better balance between supply and demand and resulting in a more gradual build-up of the structural surplus, thereby reducing the risk of market price volatility in the transition to phase 3," it said.

Phase 3 covers the period 2013-2020 for the ETS.

Deeper structural reform is considered by many to be necessary but could take years, making it unlikely to be achieved before the current European commissioners end their term in 2014.

The Commission's views on long-term change for the scheme emerged last month in a draft seen by Reuters.

[Bad_Daddy 2,209]

http://news.yahoo.com/california-takes-big-step-limiting-greenhouse-gases-080021804.html

California takes big step in limiting greenhouse gases

By Rory Carroll | Reuters – 13 hrs ago

SAN FRANCISCO (Reuters) - California is set to unveil a new weapon in its fight against global climate change on Wednesday when it holds its first sale of carbon emissions permits - a landmark experiment that it hopes will serve as a model for other U.S. states and the federal government.

The state's carbon auction is a key step in the initiation of its "cap-and-trade" program, a policy where the state sets a limit, or cap, on the amount of heat-trapping gases released by manufacturers, oil refineries, electric utilities and other large emitting businesses.

Those companies can then either reduce their emissions or purchase carbon permits, also known as "allowances," on the open market from companies that have extras - the "trade" part of cap and trade. The number of allowances in the system will decline over time.

Environmentalists have long advocated cap-and-trade as a market-based means of limiting greenhouse gas emissions. Thirty European countries have been using it since 2005, and markets are operating or in development in Australia, China, Japan, Kazakhstan, New Zealand, Quebec and South Korea.

With Superstorm Sandy drawing attention to climate change and a strong Democratic showing in last week's election, carbon emission limits could again be on the national political agenda in the United States. But past efforts to implement cap-and-trade nationally have faltered in the face of opposition from congressional Republicans and others who say it will increase energy costs.

The California Chamber of Commerce on Tuesday filed a lawsuit to stop the California auction of emissions permits, contending that the state had exceeded its authority in making the program a revenue-generator. Sale of carbon allowances is expected to generate at least $1 billion a year.

The cap-and-trade program, which initially covers 350 businesses, is a key component of AB 32, California's landmark 2006 law, which called for the state to cut its greenhouse gas emissions back to 1990 levels by 2020. That's a reduction of about 15 percent.

"The cap-and-trade auction is a huge milestone for California because it kick-starts a program that is the strongest and boldest move yet in the U.S. to protect public health and the environment from climate change," said Fred Krupp, president of the Environmental Defense Fund.

INFLUENCE

California is responsible for about 3 percent of global greenhouse gas emissions, so influencing others to follow suit and eventually link to the California market will be critical to the program's success.

"Our overall impact is small," said Mary Nichols, chairwoman of the California Air Resources Board, the agency implementing the program. "What we do will not solve the problem. But we want to demonstrate that this type of system can work."

Cap-and-trade supporters believe California's market is launching during a favorable time politically.

Environmentalists were buoyed by the re-election of state Senator Fran Pavley, the author of AB 32 who survived a tough challenge in a redrawn Southern California district. Democratic electoral gains last week, which are likely to give the party a super-majority in the state legislature, also may bolster support for the program.

The re-election of President Barack Obama ensures the federal government will not interfere with the program. And it is possible that legislation creating a carbon tax or national cap-and-trade program could be introduced in the coming years.

But California's market is still highly controversial and lawyers on all sides expect the state Air Resources Board to face challenges in court.

The companies that operate California's 13 oil refineries have been vocal opponents of the program, arguing that it could lead to the closure of five to seven refining facilities.

Oil company opposition is likely to increase when the program expands in 2015 to cover emissions from distributors of transportation and home heating fuels.

Wednesday marks an important day for the new market, but it may take years before its success or failure can be truly measured.

"It's a very long-term effort," said Richard McNeil, an attorney with Snell & Wilmer, which represents California electric utilities.

"I think you'll see some tumultuous times market-wise and I think you'll see additional legal challenges. The big question is - will we ultimately see the benefits? It will be a while before anyone can answer that."

[Mr. Big Dog 10,747]

It's the latest liberal ponzi scheme.

Yup. The market based emissions control system was first effectively introduced to address acid rain by the George H. W. Bush administration. Damn those liberals.