Seize the business opportunities in the budding US carbon market
Joseph E. Aldy, Fellow, Resources for the Future & Co-Director, Harvard Project on International Climate Agreements
What do you and your organization do in the Carbon Markets sector?
Resources for the future undertakes non-partisan, objective economic research of a variety of cap-and-trade markets and proposals, including the EU ETS, RGGI, and congressional proposals for a U.S. domestic program. RFF and the Harvard project on international climate agreements are also actively engaged in how to design the next international climate policy agreement that could include a variety of trading mechanisms to promote cost-effective emission abatement.
What do you consider to be the most interesting developments and biggest challenges in the North American Carbon Market at this time?
Many firms have prepared themselves to participate in the cap-and-trade game. Now they are waiting to learn how legislation pending in congress will define the rules of the game.
If regulated emission reductions become mandatory in the us, who stands to be most affected by this, and what would you recommend to anyone worried about impending legislation ?
Every consumer in America will bear the effect of a mandatory domestic cap-and-trade program. A well-designed policy should ensure that the costs of such policy are not especially volatile or unexpectedly high.
How do you see the North American Carbon Market looking in 5 years' time?
The North American Carbo Nmarket will be the largest, most liquid emission trading market in the world.
What do you see as key to building a truly global Carbon Market?
A truly global Carbon Market will require substantial investments in capacity in large developing countries in order for them to even consider implementing cap-and-trade policies as part of a global regime. Currently, developing countries do not have the environmental policy bureaucracies, sufficient enforcement of property rights, or experience to support a carbon cap-and-trade policy.
