Carbon price included in long-term schemes

Carbon price included in long-term schemes

Although there has yet to be a consensus on the future of climate laws in the US, some energy utilities have already begun factoring in the price of carbon in their long-term contracts that can extend up to 15 years.

In California, companies are anticipating the 2012 implementation of AB32 which would require a reduction of GHGs to 1990 levels by 2020 through a cap-and-trade system.

Californian industries are anticipating a set price for carbon, which the state Public Utilities Commission estimates should be around $40 per ton before 2020.

However, until the October 29 release of the California Air Resources Board’s regulations for GHG emissions, utilities are reluctant to engage in extensive futures trading due to a lack of specific rules.

Even without set legislation some companies are taking a proactive stance regarding future carbon regulations. San Diego Gas & Electric has a strategy for renewable energy to make up 33-35% of its energy output by 2020. This early action will ease compliance with AB32 stipulations.