Tag Archives: carbon price

Paving the way for emissions reductions in California

July 1, 2014 |

 

California’s budget for the next fiscal year, signed by Governor Brown on June 20, includes $832 million in auction revenues from the Cap and Trade Program, which will go toward high-speed rail, public transportation, energy efficiency, and other projects to support low-carbon, sustainable communities. Where did that money come from? In some cases, from industrial firms like cement producers and food processors, which are responsible for 20% of statewide greenhouse gas emissions and are required to buy allowances to cover some of their emissions.

Our new study, Cap and Trade in Practice: Barriers and Opportunities for Industrial Emissions Reductions in California, explores how those industrial firms are making decisions under the Cap and Trade Program. More specifically, we wanted to know if industrial firms, given their typical decision-making processes, would invest in the emissions reductions options that are most cost-effective on paper — and if not, what are the barriers? We focus on the cement industry, which is a major player in the industrial sector and is also the largest consumer of coal in California.

The carbon price is making a difference

We find that the carbon price is making a difference in how cement firms approach business decisions about actions that would reduce emissions, such as investing in energy efficiency or switching to cleaner fuel. Firms are considering the carbon price when they make investment decisions, and our modeling shows that the carbon price significantly changes the financial attractiveness of several abatement options.

As an example, this graph shows how the carbon price adds to the value of an investment in energy efficiency. The additional savings from reducing the firm’s obligations under the Cap and Trade Program would add around 50% to the value of the investment if the carbon price is near the price floor — or could more than triple the value of the investment if the carbon price is at the top of its target range.

Cap and Trade - Lifetime Value of Energy Efficiency Investment

The Cap and Trade Program magnifies the value of an energy efficiency investment

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Introducing California Carbon Dashboard: All your questions about AB32 answered in one place

October 24, 2013 |

 

This blog was co-authored by Andrew Hobbs and Karen Laughlin.

This week CPI is pleased to launch our new beta California Carbon Dashboard—a one-stop site for information on California’s portfolio of climate policies, current carbon prices, and news aggregation.

The California Global Warming Solutions Act of 2006 (AB32) set into motion a suite of policies to reduce California’s economy-wide greenhouse gas emissions to 1990 levels by 2020—and set California, again, out in front as a climate policy test bed for the United States. AB32 established a cap and trade program for California as well as many sector-specific complementary policies to achieve the 2020 state target.

California’s climate package is leading edge, so there is plenty of information out there on AB32’s policies and processes. Locating the quick or in-depth information you want or need, however, can be a challenge. So, as we gathered information for our more in-depth analyses on California’s climate policy effectiveness, CPI decided to build a one-stop dashboard to provide policymakers, stakeholders, and the public—in California, in the U.S., and the world—a user-friendly tool to learn about how California’s climate policies fit together and to get current updates.

Let us give you a quick tour to highlight the Dashboard features that you might find useful:

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Policy Watch: Companies ask for a clear carbon price, US on track to become world’s largest oil producer, and Australia ready to back Kyoto Protocol

November 19, 2012 |

 

This week, climate policy headlines from around the world include Australia’s decision to back the Kyoto Protocol’s second phase, companies like Shell and Unilever calling for a carbon price, and a report that puts a $527 billion price tag on the U.K.’s low-carbon energy sector needs.

Uday Varadarajan and Chiara Trabacchi contributed headlines to this edition of Policy Watch.

Shell, Unilever Lead 100 Companies Calling for CO2 Price
Royal Dutch Shell Plc (RDSA) joined Unilever NV (UNA) and more than 100 companies calling for lawmakers worldwide to put a “clear” price on carbon emissions in order to contain global warming.

Companies invest trillions of dollars in energy and infrastructure projects, and, in most cases, don’t consider goals to cut greenhouse gases, the companies said today in a statement that’s due to be presented to European Commissioner for Climate Action Connie Hedegaard in Brussels.

“A clear, stable, ambitious and cost-effective policy framework is essential to underpin the investment needed to deliver substantial greenhouse gas emissions reductions by mid- century,” the companies said in the e-mailed statement. “Putting a clear, transparent and unambiguous price on carbon emissions must be a core policy objective.” Full article.

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