A conference sponsored by the UK Trade & Investment Council and the Greater Houston Partnership traced the development of carbon emissions trading markets in Europe. Denise Harris with the British Consulate-General office in Houston says some U.S. regions are already trading.
"The northeastern states have set up their own what's called the REGGIE--the Regional Greenhouse Gas Initiative. Seven of the states in the northeast will begin carbon trading between themselves in 2009. And California has got very, very ambitious carbon reduction targets."
Harris says carbon emissions trading allows companies to buy and sell credits.
"If you are a factory that emits a lot of greenhouse gases, you have to pay for the emissions that you make. What the scheme does is it gives you a certain number of allowances. So it doesn't say 'you're a power station, you have to pay for all the carbon you emit,' because that wouldn't be fair because we all need the power from that power station. It's trying to set, give you an allownance which will force you to reduce those emissions. If you find yourself, as that power station, unable to meet those targets, you are then able to meet your targets by buying allownaces from another utility or whatever."
Trading is accomplished in much the same way other assets are traded, according to Guy Turner with New Carbon Finance.
"The trading systems are directly analygis to any other commodity trading or financial trading system, where it's all dealt with through electronic registries. So a company or an institution will alloocated a certain amount of emission allowances. The actual emissions that they emit at the end of the year are also recorded and reported and put into that registry. And that then just serves as a platform where across which any number of trades can happen. If I trade with you, you've got an account in the registry, you, we agree to do a financial deal, the exchange of allownaces just moves from one account to the other."
Many companies headquartered in Houston are already familiar with carbon emissions trading, from their international dealings. Lindsey Bartlett is a vice consul at the UK Trade & Investment office.
"We have a number of, you know, hundreds of multinational companies that are already engaged in this with their European operations, and also exploring projects in the developing countries under the Clean Development Mechanism. I think Houston has a great shot of moving to this market quickly and becoming a huge player."
Denise Harris with the British Consulate-General says it's natural that Houston could become the center of carbon trading in the United States.
"U.S., being such a fantastic market--you're brilliant at running markets--as soon as the carbon market takes off here, we all know it's going to be run better and more efficient than anywhere else, so we as the UK are very, very keen for our climate change reasons that the U.S. has a market as soon as possible, because we know that will make a huge difference, solution of the climate change problem."
Conference speakers note that Houston has a limited window of opportunity to cash in on the more than $30 billion international market in carbon emissions trading. Ed Mayberry, Houston Public Radio News.