Isra-Mart srl:NRG carbon-trading deal is first for California

www.isra-mart.com

Isra-Mart srl news:

Barclays PLC and NRG Energy Inc., the largest U.S. independent power producer, have completed the first deal for carbon-dioxide permits under California’s planned cap-and-trade program for greenhouse gases.

Under terms of the trade announced Wednesday, permits or carbon allowances will be delivered in December 2012, said Kedin Kilgore, head of U.S. emissions trading for London-based Barclays. The state’s cap-and-trade program begins in 2012 for utilities and manufacturers and in 2015 for cars and trucks. Eventually, 85 percent of California emissions will be covered.

California is moving ahead with its program to curb global-warming gases after federal cap-and-trade legislation championed by President Obama stalled in Congress this year. Republicans and some Democrats called the plan an energy tax in disguise.

“California is the eighth-largest economy on the planet,” Kilgore said in an interview. “Trying to cover and reduce 85 percent of the emissions in California is significant.”

The carbon-trading program is authorized under California’s Global Warming Solutions Act, which requires the state to cut its greenhouse gases to 1990 levels by 2020. The California Air Resources Board, the state agency that would run the program, will meet Dec. 16 to decide whether to approve the cap-and-trade plan. If the agency rejects the plan or delays implementation until after 2013, the trade announced Wednesday would be void.

Kilgore declined to say whether NRG, of Princeton, N.J., was a buyer or seller in the deal nor the price of the permits traded.

California pollution permits for delivery in December 2012 were offered Wednesday at $11.50 a ton, according to Eric Klein, director of coal and environmental markets at broker Tradition Financial Services in New York.

“There’s a live market,” Klein said in an interview. “We’re pretty much going to go forward in California.”

The permits, each representing one metric ton of carbon dioxide, might cost $15 to $30 each by 2020, according to an analysis from the air resources board, the agency that will run the program.

“We do not believe market fundamentals will begin to support increased carbon pricing until we see the broader economy begin to improve,” Kilgore said.

This month, voters in California rejected a ballot measure backed by oil refineries that would have suspended the global-warming law signed by Republican Gov. Arnold Schwarzenegger.