Case Study - PG&E―Ontario Power Generation: The Value of Third-Party Review Processes

摘要

Participation in the GHG market has been mostly voluntary to date. It is clear that market participants perceive some benefits from engaging in pre-compli-ance transactions. However, in the absence of clear rules governing trading, one should not overlook the practical challenges of realizing these benefits. Completing a pre-compliance GHG trade requires market participants to negotiate not only the traditional commercial conditions of any emissions transaction, such as price, quantity, and vintage, but also a host of other issues that would not arise in a market created through formal government rules. As the following trade between Ontario Power Generation (OPG), also a member of GEMCo, and US Gen New England (US Gen), a subsidiary of the U.S.-based PG&E National Energy Group, illustrates, resolving these issues often requires a significant investment of time and effort.