Cap-and-trade may not promote the technological innovation promised by its proponents, says a review by a Lawrence Berkeley National Laboratory analyst. Instead, cap-and-trade programs that have reduced the cost of air pollution control appear also to have diminished incentives for research and development, writes laboratory researcher Margaret Taylor in a study published March 15 in the Proceedings of the National Academy of Sciences. The study comes as California is poised to kick off its carbon cap-and-trade program this coming summer with the first greenhouse gas emissions rights auction slated for Aug. 15. \u201cThere are usually relatively cheap and easy things to do at the start of any new environmental policy program,\u201d stated Taylor. But they can diminish the drive for the type of technological change needed to stabilize the climate, she continued. Taylor examined the degree to which two emissions cap-and-trade programs promoted technological innovation--the federal sulfur dioxide trading program for coal power plants and the Northeast nitrogen oxide market under the Ozone Transport Commission. She found that emissions allowance prices turned out to be lower than expected because required emissions reductions were easier to achieve than initially thought. Once companies found this out, she said, they often canceled their clean technology investments. At the same time, technology developers became reticent to move ahead with innovative emissions control projects once they saw the low prices for emissions allowances. The net result, according to Taylor, is that patenting activity for technologies aimed at reducing the two pollutants actually dropped after the cap-and-trade programs were instituted in the 1990s. \u201cPolicymakers rarely see with perfect foresight what the appropriate emissions targets are,\u201d wrote Taylor. Usually, she noted, policymakers set emissions caps at a level they know industry can easily attain with existing technology, rather than at levels strict enough to drive innovation. * * * * * The California Energy Commission plans to halt certifying new biomethane-fueled electricity projects as eligible for renewables portfolio standard credit, in part, because their greenhouse gas reduction benefits may be questionable. Biomethane projects--according to a March 16 Energy Commission notice of proposed action--are supposed to displace in-state fossil fuel consumption, reduce air pollution within the state, and help meet California\u2019s climate change goals by cutting greenhouse gases from power generation. However, under the guidelines the Energy Commission has used to grant renewable energy credit for past projects, the agency said that it\u2019s unclear if the benefits have been achieved, particularly since biomethane produced out-of-state has been allowed. The Energy Commission notes that since the greenhouse gas reduction attributes of the biomethane can be separated from sale of the actual fuel and those attributes then used for carbon emissions reduction credits, there could be double counting without a nationwide tracking system. The Energy Commission plans to air its proposal at a March 28 workshop. The commission issued the proposal after legislators raised concerns late last month. * * * * * The California Energy Commission March 16 advised Hydrogen Energy California to line up underground injection permit applications for the carbon sequestration portion of its clean coal energy project in Kern County. Hydrogen Energy hopes to capture carbon dioxide from its planned 288 MW power plant--to be fueled by petroleum coke and coal--and sell it to Occidental Petroleum. The oil giant then plans to inject it into the ground under pressure to squeeze more oil out of declining fields in the area. First, Occidental needs to get an underground injection control permit from the state Department of Conservation, Division of Oil, Gas, and Geothermal Resources, under the federal Safe Drinking Water Act. The Act sets criteria for injecting materials into the ground in order to prevent contamination of aquifers. The Energy Commission needs to weigh the information in the underground injection control permit application in the course of its own construction license proceeding for the power plant, wrote agency project manager Robert Worl to Hydrogen Energy. The company hopes to begin building the plant in about a year.