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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.

Because we in the Washington media hear and write about it almost every day, perhaps we assume that the rest of the country knows exactly what we mean when we talk about a cap-and-trade system for reducing carbon emissions.

Not so much.

A new Rasmussen Reports poll shows that only 24% of registered voters ''can correctly identify the cap-and-trade proposal as something that deals with environmental issues. A slightly higher number (29%) believe the proposal has something to do with regulating Wall Street, while 17% think the term applies to health care reform. A plurality (30%) have no idea.''

The CO2 market design dance gets livelier.

House lawmakers planning to introduce a cap-and-trade bill soon are looking closely at a proposal to give some CO2 emission allowances free to regulated utilities, a congressional aide said Monday. This approach to allowances would move House policymakers much closer to utilities' position on the matter.

But also Monday, two "Blue Dog" Democrats proposed a CO2 market bill of a different stripe. Not really a cap-and-trade bill, this one would create a board of advisers to determine annually what emission credits should cost in order to achieve emissions reduction targets. The Safe Markets Development Act appears to be based on a proposal by the veteran Center for Clean Air Policy.

Interesting numbers from Deutsche Bank carbon market analyst Mark Lewis this week. At Point Carbon's Carbon Market Insights conference in Copenhagen, he said building nuclear plants in the EU would be the least expensive new-build power source if CO2 allowances are valued at 35 euros a metric ton or more between 2013 and 2020. The 35 euros is about $46 right now. EU allowances are now selling in the 11-13 euro range.

The Democratic Party-led Washington state Legislature the other day surprised many when it killed cap-and-trade legislation because of fears that voters would oppose a CO2 emission reduction scheme that might hurt the economy and might be vulnerable to "rip-offs."

In covering the story, a Seattle Times reporter dutifully spoke with all the players involved, but concluded his March 16 story with a comment from Clifford Traisman, a lobbyist for the Washington Environmental Council, a group that had strongly supported the bill. After acknowledging why the bill was defeated, Traisman said, "We're changing from a fossil-fuel dependent economy to a carbon-reduction economy. That scares people. Does anyone doubt that we have to do it?"

Peter Orszag, at least, is putting the Obama administration right out there for a battle over carbon dioxide allowances. Speaking to the House Budget Committee today, he defended the administration's proposed budgeting of 2012 revenues from an allowance market in which all allowances are auctioned. None allocated free of charge.
"If you didn't auction the permits, [it] would represent the largest corporate welfare program that's ever been enacted in the history of the United States," he said.

Even though Duke Energy's chief executive, Jim Rogers, disagrees with that view, he had conciliatory words today for the administration's proposal. "Actually, I think we'll have a more honest conversation faster as a consequence of it," said Rogers in an interview with our colleague Cathy Cash after a talk on containing costs at the US Climate Action symposium on Capitol Hill. "I think what he's done is a good thing."

For Congress' top two leaders, the effort to cap greenhouse gas emissions begins at home. Or at least at the home office.

In a letter Thursday, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid urged the acting architect of the Capitol to begin steps to convert the Capitol Power Plant from coal to natural gas. ''The switch to natural gas will allow the CPP to dramatically reduce carbon and criteria pollutant emissions, eliminating more than 95% of sulfur oxides and at least 50% of carbon monoxide,'' they wrote.