With the prospects of Congress passing any kind of carbon emissions legislation in the near future close to zero, the article in the first url below reports that the voluntary market for carbon trading in the U.S. is being wound down:
“The owner of the US's only nationwide cap-and-trade market has signalled the death of the seven-year-old industry, saying companies were no longer interested in trading carbon emissions credits in the absence of government legislation.”
In spite of initial support from a number of large corporations, the incentive to participate was tied to the prospect for meaningful legislation passing that placed a price on carbon and contained disincentives for over-use:
“Although CCX's market is voluntary, since launching in 2003 it attracted large US companies such as Ford, Bank of America, Cargill, IBM and Intel. … [Such firms] don't want to continue to trade voluntarily in the absence of any credit for their work by the current administration.”
In contrast, the article in the second url below outlines various policy initiatives being introduced by the U.K. government that are designed to create a minimum (“floor”) price for carbon:
“The Treasury has set out three potential price trajectories for the short to medium term: aiming at £20, £30, or £40 a tonne by 2020. By 2030, the goal is a carbon price of £70 a tonne.”
The government hopes that the certainty for business associated with the price floor will create the economic incentives necessary to redirect investment into capital intensive non-carbon or renewable projects and to stimulate R&D into other alternatives to fossil fuels. It will also reduce the U.K.’s total carbon emissions:
“More than £110bn is required by 2020 to replace old nuclear reactors, upgrade the electricity grid and fund renewables, and a large majority of that investment needs to come from the private sector. … The floor price is predicted to increase investment in new low carbon capacity by up to 11 gigawatts as well as significantly reduce emissions from UK electricity generation.”
Have a good weekend.
David
Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
End of US carbon trading looms
By Hal Weitzman in Chicago
393 words
1 November 2010
Financial Times
or
Carbon pricing: UK government wants floor price certainty
Energy intensive businesses face bigger bills if the UK government sets a minimum price for carbon
Jane Burston
January 24, 2011
Ethical Corporation Magazine
