Wow the first carbon trade auction took place in California this week. Too cool, maybe. The process has a long way to go before it is all mainstream and fully understood. They say over 300 million dollars’ worth of credits were part of the transaction. Well now the fun can begin, does this equate to a leverage into carbon prices as they relate to project finance spreadsheets, is the overall ROI of projects now in need of a rewrite, will finance be harder or easier due to a new line item in the profit margin, where will the profit end up, will the dollars go a CARB and never be seen by the people that actually build things, or will a governmental agencies use the money for weekend trips and bonuses for retirees? Maybe not all good questions, may not enough questions, maybe I don’t’ know what I am doing?
I remember when we were doing spreadsheets we accounted for .03 cents for credits and we thought we were generous, we actually used them for charity and thought we could write off true value on the tax rolls. I am not going to tell any more in case you know who is listening. But that brings me to the next possible set of questions. Who are the validators, the commissioners, the ones that determine the credits created, the ones that say you have a credit and you get a credit, how are the credits created via technology verses policy verse actual generation verse offset verse what the environmentalist say should be evaluated?
Well if you have read any of my blogs before you will understand that my goal is not to answer a lot of question is to pose a lot of question. I do have my opinion and I feel they have merit, but you may not. There are plenty of blogs and news article that give you answers, are they right or are they wrong. You need to decide not have one of us; the blogger types, or the news types, form your opinion. It is your opinion that will make the difference in the long run. Make no mistake that the 300 million dollar swing will have an effect in the industry, you need to get interested and informed so you can be part of the next 300 million not just the policy controllers.
So, as California goes so does the nation, I have heard that before, have you. So where does this place the Western State Collation in respect to the cap and trade rolling into other states. Will we be an influencer in the other areas, will we be able to auction to other area, who will control the million dollar beast?
I think this will spawn new software and analysis tools and organizations. It may even spawn new companies that will be involved in verification and certification process. Someone will try and get hold of the cash, someone will try and get ahead of the policy path (enter lobbyist here) and someone will not be happy so if you’re in the business of print protest signs your business may have just got a boost. Embrace the new process and get a big bag ready the cash will be put in someone’s bag, maybe yours.