Comment Log Display

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.