Thursday, February 14, 2008

More on Carbon Price, CERA Week Houston

I posted twice about pricing carbon dioxide emission recently. Here are two new developments.

In what could be a U.S. first, California’s Bay Area Air Quality Management District is proposing to charge an annual fee to businesses based on emissions, the Mercury News reports. All 10,000 “stationary sources” of air pollution that the air district regulates would be subject to the fee, 4.2 cents per metric ton of carbon dioxide, including businesses and government agencies.. The Shell oil refinery in Martinez would pay the largest fee, $186,475 a year for its 4.4 million annual metric tons of emissions. The air district’s board could take a final vote by May.

The fee seems ridiculously small. By contrast, FT reported yesterday that in evalulating investment decision US companies were planning on future legislation imposing a charge of betweeen $13 and $40 a metric ton. That's more like it, and within the $10 to $50 range suggested in my post of February 8. The report also noted that this congress had introduced 125 pieces of legislation addressing climate change.

Meanwhile, at the Cambridge Energy Reasearch Associate's conference here in Houston this week, Jim Mulva (CEO of ConocoPhillips) in a keynote address warned that the US risks the loss of geopolitical influence and "incalculable damage" to its efforts to fight terrorism and encourage trade due to its opposition to worldwide action on climate change. I would have said that had already happened.

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