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Comment 6 for Cap & Trade Public Meeting (cost-containment-ws) - 1st Workshop.
First Name: Bill
Last Name: Buchan
Email Address: buchan@mktpotential.com
Affiliation: Graphic Packaging International, Inc.
Subject: Use of Allowance Reserve
Comment:
GPI thinks that the allowance reserve has merit, but only as a means of borrowing allowances. Not as a credible soft price ceiling. With this approach, covered entities could borrow against the reserve for offset projects in progress. This would ensure that the reserve is repopulated. It would also decouple the timing issues associated with performing an offset project and meeting a compliance obligation, so long as we end up at the same end point anyway. GPI does not think it is necessary to include interest payments associated with this borrowing; if that was done one would have to rectify carbon prices at the time of compliance versus the completion of offset project – more complicated than it needs to be. Other speakers at the workshop noted the advantage of short term borrowing for the reserve as well.
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Date and Time Comment Was Submitted: 2010-07-12 10:30:16
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