OLS : Record


Main Title Air pollution as a commodity regulation of the sulfur dioxide allowance market / {electronic resource} :
Author Parker, Larry
Year Published 2007
Report Number RL34235
OCLC Number 183188286
Subject Added Ent Sulfur dioxide--Economic aspects; Climatic changes--Economic aspects; Greenhouse gas mitigation--Economic aspects; Emissions trading; Air--Pollution--Economic aspects
Internet Access
Description Access URL
Library   Call Number Additional Info Location Date Modified
EJBM POD Internet only Headquarters Library/Washington,DC 12/14/2007
Collation {25} p. : digital, pdf file
Notes "October 31, 2007". Title from title screen (viewed on Dec. 10, 2007).
Contents Notes A number of congressional proposals...receiving particular attention would create market-based GHG reduction programs along the lines of the allowance trading provisions of the current acid rain reduction program established by Title IV of the 1990 Clean Air Act Amendments. Under the program, an allowance is limited authorization to emit a ton of pollutant. However, there are several important differences. For example, the scope of the greenhouse gases control program would be substantially greater than the Title IV program, involving more covered sectors and entities. This diversity multiplies as the global nature of the climate change issue is considered, along with the multiple GHGs involved. Thus, a carbon market is likely to involve far greater numbers of affected parties from diverse industries than the current Title IV program. It will also involve far greater numbers of tradeable allowances than the current Title IV program. Under the current program, about 9 million allowances are allocated to over 2,000 emission sources annually. In contrast, a greenhouse gas program that capped emissions in the electric power, transportation, and industry sectors at their 1990 levels at some point in the future would be allocating about 4.85 billion allowances annually. Trading activities under Title IV has been increasing since 2005. However, it doesn't approach the anticipated volumes that would occur if a greenhouse gas cap-and-trade program was instituted. Likewise, the economic value of a future carbon market is likely to be substantially greater than the Title IV program. Currently, the annual allocation of SO2 allowances has a market value of about $4.5 billion. Using estimates of $15 to $25 an allowance, the annual allocation of 4.85 billion allowances posited above for a greenhouse gas program would have a market value of $72.8 billion to $121.3 billion. Despite these differences in scope and magnitude, there are trends in Title IV trading that are likely to continue in a carbon market. First, there is a trend toward more diverse, non-traditional participants in the Title IV market. Like the Title IV market, the economic importance of a carbon market will likely draw in entities not directly affected by the reduction requirements, such as financial institutions. These entities' motivations may be equally diverse, including facilitating projects involving the need for allowances, portfolio balancing, intermediary fees, and trading profits. Second, as noted, there is a trend in the Title IV market toward using financial instruments to manage allowance price risk. Given the greater economic stakes involved in a carbon market, this trend toward more sophisticated financial instruments is likely to emerge early as a hedge against price uncertainty. The emergence of entities well-versed in the use of these instruments may reinforce the trend and make options, collars, strangles, and other structures as common in the allowance market as they are in other commodity markets.
Access Notes Mode of access: Internet. System requirements: Adobe Acrobat Reader.
Author Added Ent
Jickling, Mark
Corporate Au Added Ent Library of Congress. Congressional Research Service.
Series Title Traced CRS report for Congress ; RL34235
BIB Level m
Medium electronic resource
OCLC Time Stamp 20071210082857
Cataloging Source OCLC/T
Language eng
Origin OCLC
Type CAT
OCLC Rec Leader 04300nam 2200373Ia 45020