Peter Weisberg, The Climate Trust
Weekly Policy and Finance Update, As published by Carbon-Pulse – August 21, 2017
|Bottom line | The Climate Trust’s initial analysis indicates that, provided Ontario and Quebec move forward with their post-2020 cap and trade regulation, existing listed and registered offsets will supply roughly 40% of the Western Climate Initiative’s demand for out-of-state projects from 2021 through 2030.|
Given the reduced offset limits in AB 398, will there be demand for new, out-of-California offsets beyond the projects that are listed and registered today? The Climate Trust’s initial analysis indicates that existing listed and registered offsets will supply roughly 40% of the Western Climate Initiative’s demand for out-of-state projects from 2021 through 2030.
The key assumptions behind this conclusion include (but are not limited to) the following:
If already financed projects fulfill 40% of the out of state demand, is there enough market to stimulate new projects? While not the strong price signal needed to motivate the full potential of land-use emission reductions throughout the United States, we believe the Western Climate Initiative will demand roughly $3.1 billion of offset credits from outside California from 2021 through 2030. This leaves a remaining $1.9 billion that will not be satisfied by existing projects. And, as other states demand more immediate climate action, additional demand is expected. For those with a long-term outlook and patience for some policy uncertainty, long-term demand remains.
This analysis is preliminary, so please be in touch if you have comments on our assumptions or outlook. Just reply to this email.
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Image credit: Flickr/Bemep