I've been following this stuff since the Rio Summit in '92, maybe I should write a book.
Reviewing the literature, the price required to change behavior is a minimum $200.00 per tonne of CO2. Last summer, as oil prices were approaching their historic highs we put up a few posts that converted the price of a barrel of West Texas Intermediate into the CO2 that barrel would release, for example, July 14:
The methodology and assumptions are here. WTI closed at $145.18.
RGGI carbon emissions auction raises $107 mln
Permits for the right to emit carbon dioxide from power plants in the U.S. Northeast sold for the clearing price of $3.38 per ton in the second U.S. greenhouse gas emissions auction, states in the region said on Friday.
The amount was 31 cents more than the first quarterly auction held in September and raised nearly $107 million for the 10 states which have formed a cap and trade market on the emissions called the Regional Greenhouse Gas Initiative....MORE
The only thing that price does is tax the ratepayer. What to do? Spin it! (also from Reuters):
NY:RGGI cap and trade adds under $1 to power bills
The U.S. Northeast's cap and trade market on the main greenhouse gas should cost New York residents less than $1 a month and many of them will eventually see savings, a state official said.
The program, which essentially charges power plants in the region to pollute carbon dioxide, should cost average New York residents 78 cents per month on their power bills, said Peter Iwanowicz, the director of the climate change office for New York's Department of Environmental Conservation.
New York hopes to raise funds through the cap and trade program that will lead to energy efficiency projects such as fixing drafty windows and doors in homes and other programs.
"If you are taking advantage of these things you actually have the ability to cut your bills," said Iwanowicz. He said the programs could eventually cut costs for residents by $30 per year.
New York is the largest carbon dioxide polluter in the Regional Greenhouse Gas Initiative, a group of 10 states in the U.S. Northeast and mid-Atlantic that formed the cap and trade market on the emissions. The states will begin regulating the emissions from power plants in January and have a goal of cutting output of the gas 10 percent by 2019.
RGGI is a potential model for a national greenhouse gas cap and trade program which President-elect Barack Obama and politicians want to enact.
Under the RGGI pact, power plants must hold permits for every ton of carbon dioxide they emit. Unused permits can be sold in the market, a feature that is expected to spur the companies to cut emissions. To distribute the permits, RGGI is holding quarterly auctions for power plants and speculators.
Iwanowicz said the estimate of the impact on bills was based on the permits trading for about $2 to $3 per ton, which is much less than greenhouse allowances trade for in Europe, which has been trading them since 2005....MORE