Tightening Energy Rationing by Strategy

Many energy companies have embraced cap and trade schemes as a means to minimize the cost of reducing their carbon emissions, something that they feel under political pressure to try to do. However, they may be in for a rude surprise, as green activist groups seek to buy up emissions permits toward a very different end. As ClimateWire reports on a recent emissions credit auction:

The Clean Air Conservancy, an environmental group in Cleveland, bought 1,000 allowances in the first auction and 2,000 in the last sale. All will be retired. Michael Short, the group’s director, is surprised that other environmental groups aren’t taking advantage of the first program in the nation’s history that lets them actually reduce the amount of carbon that is released into the atmosphere.

“We want to bring down the cap. If we got $5 from a million people, we could make a severe dent in the marketplace,” Short said. “We could make the cost of emitting more expensive.”

Some utilities warned that widespread retirement of allowances could trigger electricity price spikes, or even run power plants out of business, by reducing the supply of allowances and raising the cost of doing business. To prevent that mischief, some power companies urged officials to give them a portion of the allowances for free.

Did the utilities really believe that the radical greens would leave them alone? (Paid subscription required for ClimateWire link.)