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Forecast: US and Canada Will Regulate CO2 by End of Decade
10 January 2007
A new report from CIBC World Markets, the wholesale and corporate banking arm of the Canadian Imperial Bank of Commerce (CIBC), forecasts that all jurisdictions in Canada and the US will have carbon dioxide regulations in place by the end of the decade to address global warming concerns.
The report predicts that every province and state in North America will follow the lead of California and implement not only a CO2 emissions cap but also an emissions trading system that will allow larger polluters to buy emissions credits from other firms whose emissions are less than what is allowed under the cap.
While North America has ignored implementing the Kyoto Accord, public concern about global warming is growing. I expect this will force governments to declare war on carbon emissions on their own terms. As that campaign unfolds, the economy’s largest emitters of CO2 will become increasingly dependent on the economy’s greenest firms for emissions credits.
—Jeff Rubin, Chief Strategist and Chief Economist at CIBC World Markets
The report states that the carbon abatement policies aimed at addressing climate change will have the greatest impact on the energy sector. This will have a significant impact in Canada where the sector accounts for 20% of the country’s CO2 emissions.
That percentage promises to rise steadily over the next decade as emissions-intensive oil sands production doubles and perhaps even triples, replacing depleting but less emission-intensive conventional oil production.
However, the report warns:
The real impact of climate change, and attendant carbon abatement legislation, will instead be felt on the supply curve. If planned additions to bitumen production are delayed or mothballed altogether, oil prices can only move in one direction—higher. To the extent that oil sands production cannot grow, neither can global crude supply, because, net of depletion, oil sands and deep-water wells are where the new supply will come from.
Conventional oil production has now not grown for over two years. Climate change also poses threats to production from deep-water wells. Gulf of Mexico production was spared last year the devastation it sustained in the 2005 record storm season, but most models of climate change predict increasing cyclonic activity in the region—home to 1.5 million barrels per day of crude production.
Resources:
The Carbon Wars (CIBC World Markets)
January 10, 2007 in Climate Change, Emissions, Policy | Permalink | Comments (34) | TrackBack (0)
Comments
Posted by: Engineer-Poet | January 11, 2007 at 04:03 PM
So the low income guy driving a big Chevy pickup for work pays a carbon tax which he then gets partially rebated at the end of the year so he can continue to buy fuel for his big pickup truck. These people cannot afford to buy new cars capriciously.
Energy efficiency credit might get this guy to change lifestyle energy usage AND trade in for lower footprint vehicle.
Rich - poor debates are transparently divisive.
Posted by: gr | January 11, 2007 at 06:20 PM
Frankly, your proposal seems more like a wealth redistribution scheme, which I oppose just on principle. If you're going to take the money, do something useful with it like funding R&D projects.
Cervus, policies affect supply and demand which redistributes income. The only choice is whether it is to be done overtly or covertly.
Posted by: APosterFormerlyKnownAsAndy | January 11, 2007 at 08:22 PM
The main fear is that id gas stays high too long no matter why people will simply stop traveling as much and if that happens a ton of the econ wich is based on such people buying and eating and so on will go splat.
Imagine what happens to new york if turrism to new york drops even 25% and stays there.. 505 90%? If the tax is large eough to make a n important effect its first effect will be to kill off tourist towns and yourist cties.And both sides of the politcal fense are well aware of that.
Many of these so called wonder cities soo called effiecent and cleaner then the s[awr; only pay for themsevles with tourist money and how do you exoiect that to keep up?
Posted by: wintermane | January 12, 2007 at 01:46 AM
I'm with those who say carbon taxes won't work. The only way to reduce is to ration.
Posted by: tom deplume | January 12, 2007 at 10:31 AM
The people who say "carbon taxes won't work" seem to mostly be the same people who say "gas taxes won't work" (they certainly do, look at Europe and Japan) and even "income taxes reduce the incentive to work harder", which directly contradicts their claims about the first two.
Rations can be twiddled for "people in need", and would have to be to avoid devastation when technology doesn't keep pace with falling limits. Caps also ignore the pace of change. Tradeable permits fluctutate in value, which makes it much harder for investors to justify carbon-saving changes. Carbon taxes are the one system which cannot be gamed except by outright fraud and have certainty to drive investment.
Posted by: Engineer-Poet | January 12, 2007 at 04:25 PM
Despite the difficulties in valuation, tradeable permits do tend to cost less per unit of reduction. In that way, they are better for the country/world/whatever as a whole. Some communities will fare worse than others under a trading scheme so they aren't perfect.
Posted by: APosterFormerlyKnownAsAndy | January 13, 2007 at 11:42 PM
Um one big reason h2 has garnered such a following in industry is because it sidesteps all the likely gas taxes and emmissions taxes and ghg taxes and blah blah blah.
You look at the companies serious in h2 work and you see sports cars and subs and suts and lux cars. Because those are highly profitable and because regulations could fubar them up but going h2 could unfubar em.
So what will the rich be doing? Avoiding the massive fees and taxes via h2 cars... Yes h2 itself is more expensive per unit but per mile driven specialy with ghg taxes and whatnot piled onto ven biofuels..... who knows...
And in the future it might becme IMPOSSIBLE for the car makers to make an suv if it has a traditionalmilage figure attached to it... but a hybrid fuel cell suv???
Posted by: wintermane | January 15, 2007 at 04:00 AM
There is global warming but it is not man made. Climate change is part the earth natural cycle for the past four million years. Since human beings have been around for about a million years give or take, it would seem to people that global warming is something that we are all doing.
The only upside to using CFL’s and driving hybrids is, That in time along with other alternative fuel sources and limited drilling ANWAR along nuclear power. That we will cut our dependency on oil from countries that support terrorism and help in stopping people who want to kill every man, woman, and child because the majority of the people in this country do not follow Muslim beliefs
Also, I would like to also point out that our planet is not the only plant with climate change. The seven other planets and former planet Pluto is warming up as well.
If that isn’t enough, According to data from NASA .It states that 1934 was the hottest year of the last century. What are we going to now? Have senior citizens buy carbon offsets with their Social Security and pensions.
Posted by: David Haft | August 18, 2007 at 06:11 PM
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If we can have an Earned Income Tax Credit, we can have an Energy Efficiency Tax Credit (the more efficient you are, the more of it you get to keep).