Monday, September 28, 2009

"Price Collaring" Is The New Lobbying Focus Within Cap And Trade Bills

Apparently the free market for carbon emission credits won't be entirely free, after all. Lobbyists working to influence the final climate change bill to come out of Congress are focused on the "price collar" provisions of the Waxman-Markey house measure, which are expected to be tweaked significantly in the Senate version of the legislation. The House measure establishes a price floor of $28 per allowance in 2012, and a floating price ceiling set at 60% over the three year rolling price average.

Peter Darby, chairman of Pacific Gas & Electric, says utility companies need a better defined cost containment mechanism for carbon emission credits, while Nat Keohane, the Environmental Defense Fund's director of economic policy and analysis, says a narrowly defined price collar in the legislation would undermine the environmental integrity of the legislation. Look for legislators to clamp down the price collar as legislation nears finality, in order to avoid wide utility bill fluctuations which would anger voters as Congressmen and Senators run for reelection.
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