The Republican-Proposed Carbon Tax
by Noah Kaufman A group of prominent conservative Republicansincluding former Secretary of State James Baker III, former Treasury Secretary Hank Paulson, former Secretary of State George Shultz and former Walmart Chairman Rob Waltonmet with key members of the Trump administration on Wednesday about their proposal to tax carbon dioxide emissions and return the proceeds to the American people. Such an economy-wide tax on carbon dioxide could enable the United States to achieve its international emissions targets with better economic outcomes than under a purely regulatory approach. Attributes of the Republican Carbon Tax Proposal While the details on the...
Climate Legislation: Who wins? Who loses?
Most Americans now agree that something needs to be done to reduce our greenhouse gas emissions. Hopefully most Americans now appreciate that this is not a small, but even more so, not a simple problem. I am a big believer that the playing field for our low carbon future should start level, and the market should be structured to allow our major power and energy companies a chance to lead the way, instead of simply dishing out punishment for our combined historical choices. Carrots and sticks work well together, but sticks alone are not going to solve our...
Is Energy Sourcing the Gateway Drug to Energy Efficiency?
Tom Konrad CFA I recently interviewed Richard Domaleski, CEO of World Energy Solutions (NASD:XWES). World Energy is a comprehensive energy management services firm whose core offering is extremely price competitive energy sourcing (that is, finding an energy provider to supply all of a client's energy needs at the lowest possible cost.) They achieve competitive sourcing using an electronic energy exchange designed to achieve much better price discovery in what is traditionally a very opaque market. According to Domaleski, a recent KEMA study showed that only 7% of large commercial, industrial, and government customers are sourcing their...
Plastic Recyclers Chasing Arrows
According to Plastics Europe Research Group, over 35 million tons of plastic material was produced globally in 2016, the last year for which full-year data is available. That brought total plastic production to 9 billion tons since 1950. All of those plastic materials remain in existence somewhere - still in use, landfills, junk yards, blowing around the countryside, waterways, oceans, fish stomachs. The post “Plastic Contagion’ on April 13th outline the dangers presented by plastic waste, ranging from respiratory failure from toxic emissions to reproductive interference in aquatic animals.
The building burgeoning volume of plastic waste has sent environmentalists scrambling for solutions to the plastic waste...
Some Tidbits From The World Of Emissions Trading
To be sure, the near-term prospects for carbon emissions trading are bleak. Continued decline in industrial production across the world's major manufacturing economies will inevitably lower carbon emissions. The clearest indicator of this, short of directly measuring emissions, is a sharp decline in the price of various fossil energy commodities (i.e. oil, natural gas and coal) on the back of falling demand. Another important factor for carbon emissions trading is that the commodity in play - the regulatory right to emit a unit of carbon dioxide equivalent (CO2e) - derives its legitimacy entirely from a regulatory scheme...
Carbon Finance…The Next Bonanza
Few investors outside of Europe have ever heard of the term carbon finance. What some investors might have heard, however, is that Goldman Sachs took, on September 20, 2006, a 10.1% stake in a little outfit known as Climate Exchange plc (LSE:CLE) for approximately $23 million. Admittedly, by Goldman Sachs standards, that’s peanuts. Not to be outdone, Morgan Stanley unveiled a plan on Thursday October 26 to invest a whopping $3 billion in global carbon markets over the next few years…now that’s the kind of money that gets folks talking at the water cooler, especially when it’s in something...
Has Shale Gas Reduced Carbon Emissions?
Jim Hansen Last week, I wrote that the U.S. is on course to set a new export record of coal. A few days later the EIA made similar projections and estimate that exports will reach 125 million tons for 2012. One side effect of the success of U.S. coal exports is the degree to which may they have cancelled out the carbon emissions reduction experienced in the U.S. as shale gas displaced coal in the power generation sector. This question of displacement was addressed in a study just released by researchers at the University of...
Climate change, carbon trading and America…it’s only a matter of time
Just a quick follow-up on my carbon trading post a few days ago. Thanks to GreenBiz.com for the heads up on the results of a survey that were released during MIT's seventh annual Carbon Sequestration Initiative Forum. The results show that climate change now tops the list of environmental concerns for Americans. I don't want to reveal too much here since this is a GreenBiz.com story, but it suffices to say that this provides yet more ammunition to the political backers of a framework to reduce greenhouses gases in America. Momentum is building and there will definitely be some...
Carbon Offsets Work – Will the Mainstream Media Ever Get It?
The carbon markets are an area of keen interest for me personally and professionally, so it is always frustrating that the mainstream media largely refuses to learn the details. In general, layman and media who don’t understand the details of the carbon markets attack carbon offsets in two areas, first, questioning whether the credits are for a project that would have occurred anyway (a concept known in carbon as “additionality”), and second questioning whether there are checks and balances to ensure the environmental standards are adhered to and the abatement actually happens (in carbon known as the validation...
US Presidential Election & Carbon Markets: Is The Climate Exchange Story Overdone?
An interesting piece yesterday in POLITICO on how carbon prices on the Chicago Climate Exchange (CCX) have been trending up in recent months, mostly since it's become clear that all three remaining presidential hopefuls will likely regulate CO2 emissions at the federal level. In fact, as per the chart above, prices for the right to emit a metric ton of CO2 have been on a tear, recovering from a pretty significant slump in the preceding months. Last week, the World Bank Carbon Finance Unit released its annual update on the state of global carbon market (PDF...
Biochar’s Likely Market Impacts
Biochar is still mostly a research and cottage industry, yet it has the potential to impact returns for a broad range of investors. Tom Konrad, Ph.D., CFA Biochar, or amending soil with biomass-derived carbon, shows great potential to improve the productivity of soils, as well as to increase the utilization of fertilizers by plants, while sequestering carbon to reduce the drivers of climate change. On August 10, I went to the 2009 North American Biochar Conference to look at the potential for investors. Before I went, I took a look at the publicly traded companies...
Environmental Markets: The Next Frontier in Environmental Investing?
The term environmental markets remains foreign to most investors (and environmentalists!), even though these markets represent, in my view, a very compelling investment story. Although we've discussed trading in carbon emissions in the past, I thought I would expand a bit and talk about environmental markets in general, and about good ways to play them. What's An Environmental Market? Environmental markets exist at the confluence of two movements: (a) A growing desire on the part of national and regional governments in several countries to both limit environmentally-damaging behavior and to promote the growth of alternative...
Carbon Emissions ETF
Today, while reading an article on cleantech ETFs by The Motley Fool, I found out that XShares Advisors LLC and the Chicago Climate Exchange were working on a carbon emissions-based ETF (PDF document). There is not a lot of info available on what exactly this ETF will track. We reported back in November that UBS had launched an index based on European carbon prices. As noted by Richard Kang at around the same time, this index is well-suited for something like an ETF. If any of our readers have any further insight on this, don't hesitate...
Climate Change Will Hurt The Poor Most But the Solutions Don’t Have To
The International Center for Appropriate and Sustainable Technology (iCAST) helps communities use local resources to solve their own problems. I've been a fan of iCAST's approach of teaching people how to fish (or, in this case, how to apply sustainable technologies) rather than giving away fish since I first encountered them at a conference in 2006. Last week, they took advantage of some of their own local resources (namely the fact that the DNC was in Denver) to organize a luncheon with a panel of nationally recognized speakers, any one of whom would have been enough to draw a...
Beware The Vagaries Of Government
I just came across this article on potential problems with the emerging trade in carbon credits. The piece is not technical and I wouldn't say that it is particularly well-researched, but it does raise a key point - as the market for carbon emissions grows, the need for standardization and collaboration between governments and regulators will become ever more pressing. This could create problems. The carbon market is unique in that the commodity traded derives its value primarily from its ability to meet the requirements set by an environmental regulator. There is also a market for voluntary...
A New Player In The North American Emissions Trading Sector
Over the past two weeks, a couple of announcements were made that went mostly unnoticed despite their importance to the North American carbon marketplace. Firstly, on May 30, the Montreal Exchange, a derivatives exchange, announced that it was launching an emissions trading market for CO2. The Montreal Exchange is now a unit of the TSX Group (TSXPF.PK or X.TO), the firm that runs all of Canada's exchanges. The second announcement came last week, when the premiers of Quebec and Ontario, Canada's two largest provinces and the heart of its industrial base, announced that they were moving ahead...
