U.S. EMISSIONS TRADING MARKET FACTS

Factbox – U.S. carbon markets and projects
Peter Henderson and Ed Stoddard, August 7, 2009 (Reuters)

"…Following are some facts and figures about America's emerging carbon markets and projects [and its proposed cap&trade legislation]…

…Under a government regulated carbon "cap and trade" system, industries or companies would face caps on how much greenhouse gas they could emit but could exceed them by buying credits from firms that pollute less than their cap or from projects that sequester such gases. Europe has such a plan in place."

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"…Three regional North American groups are trading or in the process of creating carbon markets. The 10-state Regional Greenhouse Gas Initiative in the Northeast is already auctioning credits; the 11-state-and-Canadian-province Western Climate Initiative plans to start trading in 2012; and the Midwestern Greenhouse Gas Reduction Accord, which joins six states and one Canadian province, is working on a plan…[A proposed national cap&trade plan] would halt regional markets in 2012.

…The fight to stop acid rain has been called the first major success story for cap-and-trade. The Clean Air Act as amended in 1990 allowed trading of emissions credits of acid-rain causing sulfur dioxide and nitrogen dioxide."

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"…The global voluntary carbon market last year was worth $705 million, more than double its value in 2007…In anticipation of a U.S. market, many projects are in the pipeline: they range from converting cultivated fields to their natural state or reforesting land which could act as "carbon sinks" for emissions created elsewhere. Capping methane emissions from land dumps is among the more common of the mushrooming "offset projects."

…Some of these projects could, for example, see owners of woodlots and small forests in America earn income through reforestation efforts. Depending on the wording of the climate bill, they could be rewarded for "sustainable" practices such as allowing trees to grow longer before cutting them down."