With a nascent emissions market, U.S. companies may not be so grateful they’re out of the club.
Jennifer Alvey is associate editor at Public Utilities Fortnightly.
Domestic energy companies may have breathed a sigh of relief last March when the United States pulled out of the Kyoto Protocol. Gone was the specter of expensive compliance with emissions reduction targets set by the treaty. So long as they don't care about expanding globally or entering emerging emissions trading markets, they probably have a reason to think they've dodged the emissions bullet. For now, at least.
There is that pesky matter of multi-pollutant legislation, either in the form the Clean Power Act of 2001, S. 556, proposed by Sen. James Jeffords, or the proposal the Bush administration is expected to unveil in early 2002. Yet, even assuming passage before year's end, compliance with any new law is well over a year away. The real effect of the Kyoto treaty for U.S. utilities may turn out to be not what they must do, but what they're not allowed to do - participate in nascent worldwide emissions markets created by the international, sans-United States agreement.