|
By Timothy Gardner
NEW YORK, Feb 14 (Reuters) - Trade in the developing U.S. carbon market should hit $1 trillion by 2020 and lead to a spike in consumer energy bills -- but opening the market to international carbon-cutting projects may lower those costs, energy consultants forecast on Thursday.
The U.S. Congress is considering several bills that would cap output of planet-warming gases. The bills would also aim to spark carbon-cutting technologies by launching a cap-and-trade market that would reward industries for cutting emissions. Leading candidates in the November U.S. presidential elections also favor such markets.
The $1 trillion mark in emissions credits deals 12 years from now would more than double what trade on the European Union's Emissions Trading Scheme would be by that time, according to New Carbon Finance, a global carbon trade analysis group with offices in Britain and the United States.
In its current form, the leading U.S. climate bill would bar trade of a major volume of credits generated by international greenhouse gas offset projects, such as solar and wind farms in China and India. The legislation has been co-sponsored by Sens. John Warner, a Virginia Republican and Joe Lieberman, a Connecticut Democrat turned independent.
If the United States, the world's largest energy consumer, bars such trade of such credits, the price of greenhouse gas emissions will hit $35 to $40 per tonne as soon as 2015, according to NCF. That should boost consumer power bills 20 percent, gasoline 12 percent, and natural gas 10 percent, it said.
"Within the U.S. there's a tendency to not want to link into the international program," Milo Sjardin, the North American head of NCF, said in an telephone interview. "But I don't think a lot of people realize that will push the carbon prices and energy prices a lot higher than what it could have been," he said.
Opening up the market would cut U.S. emissions prices down to $15 a tonne and cut costs for the average American about $480 per year, he added. That's because emissions reductions associated with global clean development projects trade for much less than $40 per tonne.
Critics of such "technology transfer" deals say the prices of carbon credits generated from them are lower because their quality may not be as certain as reductions from domestic businesses like oil refineries or cement makers. It's harder to determine if emissions reductions from projects abroad are legitimate and would not have happened otherwise, they say.
Sjardin said that was certainly a concern, but "the actual validity of the emissions (of offset projects) is basically ensured within the U.N. system."
|
