Climate Roundup: Researchers Say Yank Price Collar

By Published On: July 10, 2014

California greenhouse gas regulators may have to strengthen the price collar on the carbon cap-and-trade market to prevent either a collapse of emissions allowance prices or a spike into astronomical territory, warn researchers at the University of California, Berkeley. Economists at the university’s Haas Business School Energy Institute called for the California Air Resources Board to tighten the collar in a white paper issued July 7. Specifically, they warned that in the event of market manipulation, the Air Board’s reserve of emissions allowances should be larger than it is now. The Air Board maintains the reserve, like a central bank, to flood the carbon market when prices are high or acquire credits to support prices when the cost of carbon falls so low it may not be enough to incentivize emissions reductions. They also recommended the Air Board should ease its restrictions on the ability of power generators and other companies under cap-and-trade to use allowances purchased for future years to cover today’s emissions, or vice versa. * * * * * California and other states can use demand-response and smart grid technologies and programs to effectively lower carbon emissions under the federal Environmental Protection Agency’s proposed Clean Power Plan, according to Chris King, global chief regulatory officer for smart grid solutions at Siemens. During a series of presentations July 8 organized by the Association for Demand Response & Smart Grid, King said various studies have shown controls for line loss minimization, voltage optimization, load shifting, peak clipping, and engaging utility customers with intelligent technologies could potentially cut total need for power production circa 20 percent when combined. One problem the U.S. agency confronts in crediting these approaches is to tie them to reduced energy output at specific power plants with specific emissions rates, noted Allison Clements, director of the sustainable Federal Energy Regulatory Commission Project at the Natural Resources Defense Council. Dan Delurey, association executive director, said his trade group hopes to get the federal agency to specifically list demand response and smart grid strategies as options for states in complying with regulations before they are finalized next year. The draft of the rules out for public comment is silent on the strategies, though it does not preclude them, he explained. The presentations are at the association’s website. * * * * * Coal state lawmakers in Congress are seeking to reverse the Obama Administration’s administrative ban on the Export-Import Bank providing financing for coal power plants and other coal-related energy projects abroad that involve U.S. companies. The reversal is included in draft legislation to reauthorize funding for the Export-Import Bank, according to news reports from the nation’s capital. The bank’s spending authority expires Sept. 30. Obama ended the bank’s ability to finance coal projects some two years back as part of his efforts to address global warming. Now, Sen. Joe Manchin (D-WV) and Rep. Joe Campbell (R-CA) are seeking to leverage the Sept. 30 deadline for reauthorizing the bank to reverse that policy. The Export-Import Bank provides loans and loan guarantees to promote exports by U.S. companies. The California Manufacturers & Technology Association is calling on Congress to reauthorize the bank so its spending authority does not lapse. “Ex-Im is a vital tool that helps grow U.S. exports and increase American jobs,” the association said in a July 3 statement. “A lapse in Ex-Im authorization would threaten the global competitiveness of our industry in the U.S. and put thousands of manufacturers at a significant disadvantage.” Most developed nations have similar banks to promote exports.

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