by AF 0413 i3 — April 15, 2009—In its recently released 2009 edition of the U.S. Emission and Fuel Markets Outlook, ICF International, a leading energy and environmental analysis firm, projects that the electric power sector will bear most of the burden of reducing greenhouse gas emissions.
The cost and market impacts of such a program depend largely on the design of the program and the cost and availability of new technology and emission offsets, which are examined through multiple scenarios in the report.
The U.S. Emission and Fuel Markets Outlook examines the U.S. energy and environmental market dynamics of conventional air regulations and GHG emission control programs and their impacts on the power, transportation, residential, commercial and industrial sectors. It is designed to help industry and government decision-makers understand new market fundamentals in the context of increasingly complex energy markets from both supply and demand perspectives.
The study is based on the firm’s 30 years of forecasting experience and intimate knowledge of energy and power markets, as well as insights gained through use of the company’s own proprietary modeling tools.
Most congressional and industry recommendations for GHG regulation call for multi-sector cap and trade programs to achieve GHG reductions. Cap and trade programs are designed to allow companies to make emissions reductions in the most cost-effective manner while still meeting environmental goals. Over time, the legal limits become tighter, allowing fewer emissions, until reduction goals are finally met.
ICF anticipates that emissions “offsets,” emissions reductions that take place outside of the capped sectors, will play a critical role in reducing the cost to capped industries as a whole.
“Electric power providers are locked into capacity that was built long before the development of GHG regulation,” said Steve Fine, ICF vice president. “It takes time to develop, site, and build new lower emitting plants as well as retrofit existing ones. Offset reductions from both domestic and international sources are critical compliance tools but are limited by the availability of quality offsets and by the competing demand from other countries, many of which have already implemented GHG reduction requirements.”
For more information, see the IFC International Web site.
