Friday, September 14, 2012

California carbon market to be short of offsets: report

Short of supply plus high demand means HIGHER PRICES.  And if the price is too high and installing expensive abatement equipment is not an option, companies will walk away from CA and built elsewhere.

State regulators have so far approved four offset project types that can generate credits for the California cap-and-trade system, but they alone will not deliver a sufficient supply to meet maximum demand. "Short supply of offsets will result in a higher overall cost of the program to California companies and residents, and could overwhelm the other cost-containment mechanisms ARB (Air Resources Board) has built into the program," said the ACR. Companies can buy offset credits to meet their emission caps more cheaply than investing in new technology to limit CO2 output and buying emission allowances.

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