Carbon Costs: The Coming Battle

Deck: 

Where are prices going, and where have they been?

Fortnightly Magazine - June 2007
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With the Supreme Court’s April decision that the Environmental Protection Agency has the authority to regulate carbon dioxide as a pollutant under the Clean Air Act, momentum shifted dramatically toward a mandatory program to cap greenhouse-gas (GHG) emissions in the United States. While the ruling initially covers only emissions from mobile sources, eventually there will be huge implications for power generation.

Shifting Tactics

In the absence of federal action, states have led the charge on greenhouse-gas controls, with the Northeast’s Regional Greenhouse Gas Initiative covering 10 states due to begin in 2009 and Western states building a program around California’s developing model.

Sensing the inevitable, trade associations and U.S. industry have begun to change strategy. Rather than relying on the usual delay tactics, various groups have issued a set of criteria outlining policies they would be prepared to support. Most notably, the U.S. Climate Action Partnership, a coalition of U.S. companies and non-governmental groups including four utilities, is calling for a federal cap-and-trade program to cut GHG emissions by up to 80 percent by 2050.

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