Polluters To New York: We Want Carbon Credits For Free

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David Patterson, governor of New York, is under pressure from industry to give away, not auction off carbon credits. Energy companies don’t want to pay extra for carbon credits. They tell the Governor that paying extra for the credits will lead to a rise in the cost of energy for New Yorkers.

Reuters: New York was the founding member of the 10-state Regional Greenhouse Gas Initiative, which early this year became the first pact in the country to regulate emissions of the main greenhouse gas, carbon dioxide.

As part of the agreement, the states agreed to supply polluters with 188 million permits, each of which allowed the emission of one ton of the pollution over three years.

…New York gave away 1.5 million permits, but had requests from industry for more than 6 million allowances. At the price permits went for in December’s auction, giving away 6 million permits could save power plants nearly $17 million.

In the December auction, the ten states raised $107 million from permits. By giving the permits away, there is no incentive for corporations to clean up their act. This battle is a precursor tof the battle that will be flaring up on a national level if Obama tries to implement a similar system. Those that will have to pay for carbon credits say it’s like a tax. The money will increase energy costs and hurt the average consumer. Obama’s rejoinder: His plan redistributes the carbon revenue back to consumers in the form of a tax cut.