Climate Change: Consultants to Run Initial State Carbon Auctions

By Published On: September 23, 2011

Salary? $150,000 max. Experience? At least one year. The California Air Resources Board is looking for a consultant to run its quarterly carbon emissions allowance auction program for two years. The auctions are a key task in carrying out the Air Board’s carbon cap-and-trade program under the state’s climate protection law, AB 32. The Air Board’s also looking for consultants to provide financial processing services for the auctions, monitor the transfer and holdings of allowances and offset credits, and train agency staffers on how to eventually monitor market transactions and emissions allowance balances by themselves. Regulators hope to line up contractors before the end of November and get consultants onboard by the end of the year. The agency plans to finalize its carbon cap-and-trade rules next month and hold the first carbon auction sometime next year. The agency unveiled its need for consultants this week in advance of a bidder’s conference on Sept. 20. * * * * * California’s low-carbon fuel standard is not likely to create many green jobs within the state, according to a report by Environmental Entrepreneurs. That’s because the advanced, low-carbon biofuels that California Air Resources Board rules require are being produced outside California, close to sources of feedstock. California has few available feedstocks, according to the report. Moreover, transporting the low-carbon fuels to state motorists is expected to make them more expensive in California than in other states, the report notes. The report, released last month, is expected to be discussed at an Air Board meeting on Sept. 29. * * * * * With the California Public Utilities Commission busy deciding how utilities should use the proceeds from the California Air Resources Board’s upcoming carbon emissions allowance auction under the state’s cap-and-trade program, groups have been busy lobbying in San Francisco. Among them, the Energy Producers & Users Coalition and the California Large Energy Consumers Association met jointly Sept. 6 in an ex parte meeting with CPUC president Mike Peevey’s advisor, Scott Murtishaw. In a nutshell, their message was that ratepayers are best able to decide how to spend the money raised through a carbon auction, rather than the commission or utilities deciding for them. To that end, they insisted that the commission make sure that any rate increases resulting from the greenhouse gas costs incurred by utilities are mitigated “by allocating utility allowance auction value to each ratepayer in proportion to ratepayers’ share of those costs.” In addition, they called on the commission not to divert utility auction proceeds into subsidy programs for energy efficiency and renewable energy, since, they contended, ratepayers already provide plenty for these purposes. The meeting followed a scoping memorandum in the CPUC’s proceeding by Peevey and two administrative law judges Sept. 1 saying that the commission plans to examine: – What portion, if any, of revenues should be returned directly to customers to offset greenhouse gas compliance costs versus held for other purposes; – To the degree a portion of the revenues is returned directly to customers, how should that value be returned; and – To the degree a portion of the revenues is used for other purposes, how it should be specifically used, beyond broad categories of potential use. * * * * * Virgina’s high court ruled that the insurer of a generator that owns coal plants is not on the hook for the costs of litigating global warming claims. The Virginia court Sept. 16 held that insurer Steadfast is not liable for AES Corp’s costs of defending a suit brought by Alaskan natives who claimed greenhouse gases emissions from coal-fired generating plants and other large carbon emitters raised temperatures causing sea levels to rise and inundate their village. AES also operates major natural gas-fired plants that emit greenhouse gases in California. The underlying suit was brought by the village of Kivalina. The court ruled the insurance company does not have a duty to defend AES because the carbon emissions said to be at issue did not constitute an “occurrence” or “accident” as defined by the insurance policy. The justices defined an “accident” under state law as “an event which creates an effect which is not the natural or probable consequence of the means employed and is not intended, designed, or reasonably anticipated.” In a concurring opinion, Judge Lawrence Koontz wrote that the holding in this case “is limited to the unique language of the allegations of that lawsuit and the particular definitions of an insured ‘occurrence’ contained in AES’ commercial general liability policies with Steadfast.” The case is AES Corp. v. Steadfast Insurance Co., No 1000765.

Share this story

Not a member yet?

Subscribe Now