Emissions Cap and Trade Programs On the Way

Tom Wood, principal of Stoel Rives LLP, Oregon, is an attorney who practices environmental law. He updated attendees on looming regulatory possibilities for greenhouse gas emissions (GHGs). He emphasized that regulation is inevitable and what manufacturers have to wonder is exactly how much costs will rise as a result. Companies that manufacture products directly and emit greenhouse gases will be most affected by cost increases, but energy prices will increase, which will affect all companies indirectly.

Wood listed GHGs that are or will be most likely regulated, including CO2, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. Currently, a number of outside parties have created protocols that outline methdologies used for calculating emissions. Thirty-nine states have already agreed to submit data they collect to one of those parties, The Climate Registry.

As the pressure to reduce emissions increases, cap and trade programs are likely to become more prevalent. Generally speaking, regulatory agencies implement cap and trades by limiting the total amount of emissions allowed among a given set of companies. "If you've ever played musical chairs, you know everything about cap and trade programs," Wood said.