With regulatory uncertainly continuing to hang over U.S. SO2 and NOx emissions trading markets, Senators Carper (D-DE) and Alexander (R-TN) are developing consensus on legislation (S. 2995) to tighten emissions limits and preserve the market-based cap and trade program. The legislation is a response to a Federal Appeals court ruling vacating the U.S. Environmental Protection Agency’s Clean Air Interstate Rule (CAIR).
The Carper-Alexander bill to amend the Clean Air Act would be a much-needed legislative fix for U.S. emissions markets, which have languished since the court ruling. Currently, Vin 2010 SO2 is trading for around $22, historic lows for the Acid Rain program, and trading volume is off sharply.
The Environmental Markets Association (EMA), which is comprised of a broad base of participants in U.S. and global environmental markets for emissions, carbon, and renewable energy, has thrown its support behind the Carper-Alexander bill. Recently, the association sent a letter to Senate Environment and Public Works Committee Chair Barbara Boxer (D-CA) encouraging her to move promptly to consider the legislation.
Paul Tesoriero, head of Evolution Markets' Emissions Markets Group and a board member of EMA, indicated the market’s support for the Carper-Alexander bill:
“The SO2 and NOx emissions trading programs have been excellent examples of how to successfully address environmental issues through a market-based approach. Unfortunately, these programs are currently weighed down by regulatory uncertainty. The Carper-Alexander bill provides for significant additional reductions in emissions and puts the programs back on track. We support EMA’s call to action and hope to see new momentum behind their legislation.”