| Felicity Barringer, The New York Times. Relevant to GSS Climate
Change, chapter 9. Excerpt: …Beginning Jan. 1, under the terms of a
groundbreaking California environmental law known as AB 32, … 350
companies statewide will begin paying for those emissions, which trap
heat and contribute to global warming. Companies ... have lobbied state
regulators to minimize the costs. In the meantime they are weighing
their options. Should they stay and adapt or move operations elsewhere?
Should they retrofit and innovate to reduce emissions? Should they
swallow the regulatory costs or pass them on to customers? … Regulators
do not want California companies to lose their competitive edge, because
that could make other state governments reluctant to adopt this
approach. …For the 200,000 metric tons of carbon dioxide emitted
annually by Morning Star’s three plants, the company is being awarded
about 192,500 free allowances the first year; the company must buy the
remainder on the open market. In the first allowance auction in
November, the allowance price settled at $10.09 a ton, meaning in the
first year Morning Star has to pay roughly $75,000 to cover its
emissions. But over the next five years, the number of free allowances
will decrease sharply to encourage further emissions cuts. At current
rates, that means Morning Star will have to buy 100,000 allowances for
both 2017 and 2018, by which time the prices may have doubled or tripled
in an open market. The company estimates the law will cost it an extra
$20 million over the next seven years. Nick Kastle, a company spokesman,
said it would almost certainly pass on the new costs to makers of
ketchup and frozen pizza, which would be likely to share the extra costs
with consumers. “People nationwide are going to be affected by AB 32,”
he said.…. Read the full article: http://www.nytimes.com/2012/12/25/business/energy-environment/california-manufacturers-weigh-costs-of-new-greenhouse-gas-rules.html?nl=todaysheadlines&emc=edit_th_20121225&_r=0 |
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