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Future of Carbon Markets: U.S. and Post-2012 Regime. Joe Nation, Ph.D. March 13, 2007. U.S. Move Led by State, Local Governments.
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Future of Carbon Markets:U.S. and Post-2012 Regime Joe Nation, Ph.D. March 13, 2007
U.S. Move Led by State,Local Governments • AB 32 (California) and Schwarzenegger executive orders most comprehensive, aggressive effort—1990 emissions levels by 2020—80% below 1990 levels by 2050—multi-sectoral approach—Market Advisory Committee (MAC) report due June 30, 2007—trading to begin Jan. 1, 2012—seek “linkages” with ETS, others • Numerous local governments setting targets
Other U.S. States Engaged • Regional Greenhouse Gas Initiative (RGGI) in northeast—limited to utilities • New Jersey target 1990 levels by 2020, 80 percent below 2006 levels by 2050 • Western Regional Climate Action Initiative requires regional target in 6 months • Total of more than 40 states with emissions targets or pending legislation
Federal (In)Action • 106 bills introduced on climate, emissions in last Congress • Numerous bills introduced—only Bingaman (D-NM), which contains price safety valves, likely to survive veto • Unlikely any significant federal action before 2009 • Some suggest adopting law “like” California
Action Post-2012Highly Speculative • Assume California, other states’ markets • Motivation at state level to force federal action • Climate unlikely to emerge as major issue in 2008 Presidential campaign, but new law likely during 2009-2012 period • Action limited by U.S. voter support for emissions reductions, although three in four now view climate change as “serious” issue
Observations • Voluntary market likely to grow significantly pending certainty of state, federal actions—colleges, governments, businesses taking unilateral actions • Business increasingly supportive of emissions reductions • Market, voters will lead political leaders—”pain” associated with steep reductions
Contact Information Joe Nation, Ph.D. P.O. Box 9374 San Rafael, CA 94912 USA +1 415.453.0388 Fax: + 1 415.453.0488 joe@joenation.com