Recently in Emissions Category

The gold business card -- that's gold, not gold-colored paper -- said it all about where the money is coming from for a new kind of gasification industry. The small but growing area is a fairly low-emission process that turns carbon feedstocks, mainly coal, into synthetic gas for multiple uses -- including turning power turbines -- without burning them. It is especially expected to take off in China, with that country's abundance of cash, coal and carbon dioxide emissions.

The card came out of the wallet of gasification entrepreneur Robert Walker, who said it came from a Chinese business contact.

Is it a little starter pistol signaling the start of a California carbon market rush? Impossible to know yet. But the Barclays Capital carbon allowance deal with NRG Power Marketing, announced Wednesday, reminds us that companies that have toiled to set themselves up for a lucrative US carbon market now have only California to look forward to.

Though market-optimist types think Congress sooner or later will enact a carbon trading program, they called it wrong in the case of the Congress just ending and have only the Golden State to bank on right now.

Not a great plan to start a piece with, "Back in the day ...," but two feisty statements from the Environmental Defense Fund today reminded us of some old times.

Yessir, in those days, the late 1980s and early '90s, EDF people were major, major players in developing the first cap-and-trade program, the Acid Rain Program that Congress created in the Clean Air Act Amendments of 1990 and the Environmental Protection Agency then made reality in big meetings with environmental and industry experts. EDF experts then went on to start talking with utilities, that long ago, about market programs for carbon emissions. And it has often been on a different page from other environmental groups, taking a work-with-industry approach instead of confronting.

Now EDF may be ready to shift gears.

Fresh off a value-added-tax scam involving carbon allowances and fraudulent deals that denied sales tax revenue to EU governments, the German Emissions Trading Authority discovered that computer hackers cracked codes and gained access to company EU Allowance accounts, enabling them to steal and sell EUAs into the EU Emissions Trading Scheme market.

But from another perspective, RGGI was not a success, because the 200 or so power generators covered by the program were not really incentivized by it to reduce their emissions. The program's allowance prices were far too low to do that, effectively making the program this year more like a carbon tax.

Uncertainty is a dirty word in the world of the Regional Greenhouse Gas Initiative, where 2012 carbon allowance prices have sunk over the past year as buyers and sellers wait for Congress to decide how to value them in a federal cap-and-trade scheme.

Detailing the results of the RGGI market's fifth allowance auction this month, RGGI administrators said that 2012 allowance prices were just a cent above the auction clearing price of $1.86/short ton. In comparison, the first auction of 2012 allowances, held in March, saw $3.05/st.

An entirely new agency to regulate the carbon allowance trading program, assuming there is one, would be far better than having existing US agencies deal with it, according to Suedeen Kelly, a member of the Federal Energy Regulatory Commission. The task of regulating the market would be so daunting that it would dwarf an existing agency's mission, she said today at an ICF International energy breakfast in Washington. She also said she hasn't found a taker for her suggestion.

The Waxman-Markey climate and energy bill would charge FERC with overseeing cash carbon allowance and offset markets, while a White House plan would delegate responsibility for carbon derivatives markets to an agency that stakeholders expect to be the Commodity Futures Trading Commission. But "if I were master of the universe," Kelly said, "I'd create a new entity that that would be their sole job, because I believe that is going to be a huge undertaking."

The economy-transforming investments that a carbon market could bring are much further down the road than some might think, according to remarks by Duke Energy chief executive Jim Rogers. At the World Business Summit on Climate Change in Copenhagen earlier this week, he said during a panel discussion that until a really long-term carbon price projection can be made, long-term business investments just cannot be made.