Last week, Judge Lawrence O’Neill issued a preliminary injunction against California’s low-carbon fuel standard(LCFS). The LCFS program, which was originally ordered by former Gov. Schwarzenegger in 2007 and later approved by the California Air Resources Board(CARB) in late 2009, would cut vehicle emissions by 10 percent by 2020. Judge O’Neill believes that the LCFS ultimately discriminates against interstate commerce. His ruling reads in part, “California is attempting to stop leakage of GHG emissions by treating electricity generated outside of the state differently than electricity generated inside its border. This discriminates against interstate commerce.” CARB has said they will appeal the ruling and seek a stay on the injunction, as will other environmental groups. This is not a surprise, as the LCFS along with the state’s cap-and-trade program are two key policy initiatives for the state to reduce greenhouse gas emissions. It will be interesting to see if this ruling affects other states in their efforts to begin greenhouse gas reduction programs.
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The California Air Resources Board(CARB) held a board meeting today to review the Final Supplement to AB 32 and the AB 32 Scoping Plan Functional Equivalent Document. The ARB staff gave a presentation updating the current status of AB 32 implementation and also detailed the updated environmental analysis of alternatives to the scoping plan. The presentation reviewed the current progress of key measures already being implemented under AB 32, including: the low carbon fuel standard, SB 375, and the renewable portfolio standard.
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Australia had planned to establish a carbon market in 2010, but has announced that the program will be delayed a year due to the economy. The announcement from Prime Minister Rudd comes as Australia is experiencing its first recession in 17 years. The decision was not welcomed by renewable energy groups or carbon management firms, who see the decision to delay the process as a year of lost economic growth.
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On June 11, New Hampshire Governor John Lynch signed into law legislation making his State a part of the multi-state Regional Greenhouse Gas Initiative (RGGI). The legislation also authorizes a cap-and-trade program for CO2 emissions, following the RGGI model statute, and establishes a state energy conservation and efficiency board. Like the RGGI model cap-and-trade law, the New Hampshire statute provides for the auctioning of almost all allowances, but does allow early reduction allowances to be granted to affected CO2 sources.
Other RGGI signatories including Maine and New York have proposed or implemented all-auction trading schemes, as well.
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The Montreal Climate Exchange, a joint venture with the Chicago Climate Exchange, has been opened in Canada. It is Canada's first carbon-trading forum that has the ultimate goal of helping reduce greenhouse gas emissions. Luc Bertrand, vice-chairman of the board of the Montreal Climate Exchange, said users of the credits will be companies that need to manage "the risk associated to their obligation in reducing emissions."
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Rep. Markey (D-MA) announced today that he will be introducing global warming legislation entitled, "Investing in Climate Action and Protection Act," next week when Congress returns from the Memorial Day recess. In a statement, Rep. Markey said, "We must cap pollution, we must invest in consumers, jobs and the technology of tomorrow, and America must lead the world in solving our greatest challenges, and we must start now." The press release also details that the bill would "reduce global warming pollution according to scientific targets, reinvest any revenue back to American workers and technology, and would re-establish America as a leader in solving the globe’s greatest challenge, climate change." The emissions targets of the bill include reducing emissions to 85 percent below 2005 levels by 2050. The bill would use an auction system for carbon credits and then reinvest the revenue from the auction over the life of the bill back to the American people and "into promoting a clean energy economy."
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With the sale of 10,000 tons of "permits to pollute" from AGL Energy to Westpac, the carbon market has unofficially begun in Australia. The price per ton of carbon in this sale was $19. AGL Energy said in a statement that the sale would take place in 2012. The official emissions trading scheme is not set to begin in Australia until 2010. Dr. Beck, chairman of the information and business networking firm Asia-Pacific Emissions Trading Forum, said, "It really marks the beginning of trading directly linked to an Australian emissions trading scheme. It's demonstrating confidence that the scheme will be established." Dr. Beck said the reason behind buying and selling permits now is a way to minimize risk and establish the price of carbon.
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The Florida legislature recently approved HB 7135, a bill that focuses on clean energy. The bill designates the Florida Department of Environmental Protection to develop a program that would cap carbon emissions and develop a market where industries can buy and sell carbon credits. Once the program is developed, it would come back to the legislature for approval after January 1, 2010. The legislation also sets requirements for power to be distributed from renewable sources, such as solar, wind and biomass. The bill is awaiting the signature of Governor Crist (R).
For a copy of the bill go to: http://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?FileName=_h7135e2.xml&DocumentType=Bill&BillNumber=7135&Session=2008
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A post-2012 Carbon Credit Fund has been formed by five European Financial Institutions. The European Investment Bank (EIB) is the funds primary investor with EUR 50 million. The other four investing financial institutions are Caisse des Dépôts, Instituto de Crédito Oficial-ICO, KfW Bankengruppe and the Nordic Investment Bank-NIB. Together, all five institutions have put together EUR 125 million in funding. EIB President Philippe Maystadt said, "As the EU’s financing arm, our role is to support these efforts by promoting environmental lending and developing carbon markets. This Fund, combined with other EIB carbon and climate change initiatives, positions the Bank as a significant contributor to global climate change efforts."
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Energy and Commerce Committee Chairman John Dingell (D-MI) announced yesterday in a written statement that he was withdrawing his proposal for a carbon tax. In his statement Dingell said, "The reality is that this proposal is off the table for now." He is now shifting his focus to a cap-and-trade program that will reduce greenhouse gas emissions by 60 to 80 percent by 2050. The reason for the shift in strategy is due to the country's current economic situation.
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