U.S. companies are preparing for what they think will be a booming carbon credit trading market after rules are approved, which most experts don’t see happening before 2010, The New York Times reports.
For now, trading is voluntary: 225 companies that have made promises to reduce greenhouse gases by six percent by 2010 are trading carbon credits on the Chicago Climate Exchange.
“The U.S. market will be the mother lode of carbon trading, so we want to start setting up our brand now,” said Marc Stuart, director of new business development at EcoSecurities, which has spent seven years investing in the reduction of greenhouse gases in Europe and is now setting up a New York office.
Some think that a market-based trading approach will foster innovation. “It gives an incentive to use your best technology to get well below the mandatory targets,” said Edwin L. Mongan III, director of energy and environment at DuPont.
Companies are already worrying about how Congress will establish baselines, the emission levels from which mandated reductions will be calculated. In Europe, prices for credits plunged this year because too many credits were issued, producing a glut.
“They should have auctioned off emissions allowances in Europe, not just given them away,” said Dan Bakal, director of electric power programs at Ceres, a coalition of environmentalists and investors. He predicts that an auction system will be built into any American regulatory scheme.