Northeast carbon futures at record low

Carbon futures in the U.S. Northeast’s cap-and-trade program for power plants fell to a record low amid a surplus of the pollution rights, Bloomberg News reported.
A gap between the output of carbon dioxide from power plants and the number of pollution rights being issued by the Northeast states has created a surplus of permits. The states decided in 2005 how many permits to issue and left room for emissions to rise before trading started two years ago.
Instead, emissions fell as the economy slowed and natural gas, the cleanest-burning fossil fuel, became cheaper for power plants, said Peter Shattuck, a carbon markets policy analyst at Rockport, Maine-based advocacy group Environment Northeast. The supply of permits “is much higher than demand due to low natural gas prices and the down economy,” Shattuck said.
The failure of Congress to pass cap-and-trade legislation that would transfer the Northeast’s surplus carbon dioxide permits into a national emissions market is also dragging down prices, said Milo Sjardin, head of North American analysis for Bloomberg New Energy Finance. •