Tuesday, 29 July 2008

As Americans sharply cut driving, highway trust fund faces multibillion dollar shortfall

The Associated Press
Published: July 28, 2008

NEW YORK: The soaring price of fuel and other strains on the U.S. economy have caused Americans to cut back sharply on driving, which jeopardizes the federal fund for building and repairing the country's highways.
The federal highway trust fund — which relies on per-gallon taxes that don't rise with price — faces a multibillion dollar shortfall next year, down from a surplus of more than $10 billion just three years ago.
According to Federal Highway Administration data released Monday, Americans drove 9.6 billion fewer miles (15.3 billion fewer kilometers) in May 2008 than in May 2007, the third-largest monthly drop in the 66 years the data has been collected.
The May decline continues a seven-month decrease in driving that has amounted to 40.5 billion fewer miles (64.8 billion fewer kilometers) traveled since November 2007 compared with the same period a year earlier.
May's drop comes during a month that traffic usually rises due to the Memorial Day holiday and the start of the summer vacation season.

Not only are Americans cutting back on their own driving. They are increasingly using fuel-efficient vehicles, carpooling and taking mass transportation.
Transportation Secretary Mary E. Peters said in a statement Monday that the drop in driving miles demonstrates that the federal gas tax is no longer sufficient to finance the nation's transportation infrastructure.
The highway trust fund gets 18.4 cents per gallon (3.8 liters) from gasoline sales and 24.4 cents per gallon from diesel sales.

South African says it will shift energy policy from coal to combat climate change

The Associated Press
Published: July 28, 2008

CAPE TOWN, South Africa: The South African government said Monday it would move away from cheap coal — long the engine of its economic growth — and embrace nuclear and renewable energy in a bid to combat climate change.
South Africa relies on its coal mines for 90 percent of its energy and has sought to attract electricity guzzling industries such as aluminum smelters as a key plank of its foreign investment policy.
But Environment Minister Marthinus van Schalkwyk said that would now change under a newly agreed Cabinet policy.
"We are saying to business and society at large that we have to move away from dirty coal as a dominant energy source," he said. Instead, the government would promote greater use of renewable energy and nuclear fuel.
"The longer we wait the more expensive it will become," he told a news conference.

Africa is the continent expected to be hardest hit by global warming. According to U.N. climate projections, the western part of South Africa faces increasing drought and declining crop yields, while the eastern part risks more torrential rain and flood-related devastation.
In the Kruger National Park, a temperature increase of 2.5-3 degrees Celsius could lead to the extinction of more than one quarter of its mammal and bird species and decimate butterfly populations. Cape Town's fruit and wine industries could become history, and its famed fynbos vegetation devastated.
Like other developing countries, South Africa is pushing the United States and other industrialized countries blamed for most of the global warming to slash their greenhouse gas emissions. Van Schalkwyk said developed countries must agree to cut emissions by 25 to 40 percent of 1990 levels by 2025 and by 85-90 percent by 2050. This has so far been resisted.
South Africa and other developing countries must also play their part, van Schalkwyk said. If the country took concerted action now, its greenhouse gas emissions should stabilize by 2025 and then decline. Without government intervention, emissions might quadruple by 2050, he said.
Van Schalkwyk said the government would come up with concrete measures by next year — including mandatory energy saving measures and a possible carbon tax.
He said the environmental benefits of the new policy would offset the economic costs, with government models predicting no net job losses in a country struggling with nearly 30 percent unemployment.
South Africa's boon days for energy ended abruptly at the start of the year when rolling blackouts brought industry to its knees. The acute energy shortage was caused by lack of planning amid sustained economic growth since the end of apartheid in 1994, including several years of 5 percent expansion.
The International Monetary Fund predicts South Africa's growth will slow to 3.8 percent this year, and possibly lower given the nation's energy crunch.
Van Schalkwyk indicated the new energy policy would have no immediate impact on national utility Eskom's plans to build a new coal-fired power station by 2013 and bring two obsolete ones back into production to offset the electricity shortage. But he said that, in the future, the government would only allow the construction of new power generators that were committed to "capturing" carbon dioxide emissions.
Even with electricity costs rising to fund Eskom's new investments, South Africa has the world's cheapest coal-fired energy at 22 cents (11 U.S. cents) per kilowatt/hour, compared with solar energy at 46 cents (7 U.S. cents) and wind energy at 57 cents (8 U.S. cents).
The government has long used this as an excuse not to invest in alternative forms of energy even though the country is sunny and with a long, windy coastline that make it ideal for solar and wind power.
The country's first wind farm came into operation this year near Cape Town, but produces only a fraction of national energy needs and uses only four wind turbines. By comparison, there are 19,000 turbines in Germany.
The government is also investing heavily in nuclear power and has asked U.S. and French companies to build a second nuclear plant alongside one near Cape Town.
Van Schalkwyk said this was part of South Africa's greenhouse gas goals, which he described as "progressive" compared with many other countries.
"This Cabinet decision is sending a very strong message that, as a government and country, we are committing ourselves to a low carbon economy," he said.
There was no immediate reaction from industry. But the World Wildlife Fund South Africa welcomed the announcement.
"This statement signals clear recognition by government as a whole that the transformational change required in response to global warming is fully consistent with addressing immediate development needs and inequality within our society," said the organization's CEO, Morne Du Plessis.

Beijing shuts all building sites and more factories to clear the smog

· Drastic steps to protect games as air quality falls · Officials pin hopes on cleansing rainstorms
Jonathan Watts in Beijing
The Guardian,
Tuesday July 29 2008

Beijing's Olympic organisers are planning new emergency measures to reduce pollution after the draconian steps introduced a week ago failed to stop a grimy haze from smothering the host city.
Air quality has failed to reach national standards for four of the seven days since the city took more than 1m cars off the roads and shut hundreds of factories.
With less than two weeks until the opening ceremony, organisers are planning more drastic steps to ensure that the "Greyjing" tag does not undermine the promise of a green Olympics and force endurance events such as the marathon, triathlon and 10km open-water swim to be postponed.
According to the China Daily, all building sites and more factories in and around Beijing may be temporarily closed if the air quality deteriorates during the games.
Further traffic restrictions could also be imposed. Controls currently allow vehicles on the roads on alternate days according to their number plates. The measures have been extended to neighbouring Tianjin.
"We will implement an emergency plan 48 hours in advance if the air quality deteriorates during the August 8-24 games," Li Xin, of the Beijing environmental protection bureau, was quoted as saying.
After a few days of clear skies following the recent traffic controls, air pollution has built up amid heavy humidity and a lack of wind.
According to the Beijing authorities, the amount of particulate matter in the air did not reach the national benchmark of 100mg a cubic metre for the past four days. Today, it rose to 113, more than double the far tougher standard of 50 set by the World Health Organisation.
This does not include ground-level ozone, which is not measured in China even though high levels can be hazardous to the respiratory system during humid summer weather.
The data highlights a typically Chinese phenomenon: compared to the past, the situation is much better. But set against international standards, the country is lagging by some distance. Beijing is proud of the environmental gains of recent years. Millions of coal-burning homes have been converted to gas and production at the biggest iron company has been cut by 73%. More than 2,000 buses and 5,000 taxis are being upgraded or replaced with cleaner models, and five new urban railways have been added to the public transport system.
Environmental groups applauded the measures, but said they were unlikely to satisfy global expectations.
"Despite the efforts of the government, Beijing air quality probably is still not what the world is expecting from an Olympic city," said Greenpeace campaign director Lo Szeping. "The athletes will be breathing 150 litres of air per minute ... So for athletes this is a particular concern."
The organisers are seeking solace from the heavens. A storm front is heading towards Beijing, with a 90% chance of rain. "This is a blessing. It could not happen at a better time.
"Help from Mother Nature is very welcome," said Jeff Ruffolo, a spokesman for the Olympic organisers. "We haven't had a good rainstorm for a couple of weeks. We could do with some of that right now."
Scattered thunder showers are forecast to last until at least Wednesday next week. If the rain persists, it could affect the opening ceremony two days later, which is due to include a spectacular firework display.
The government scrapped plans to build a roof on the stadium. According to the organisers, there is a 50-50 chance of rain on August 8, the opening day.

Beijing weighs added pollution plans for Olympics
By Jim Yardley
Published: July 29, 2008
Ducks swim past reflection of National Olympic Stadium, also known as Bird's Nest, in a man-made lake at Olympic Green on Monday. (Jason Lee / Reuters)
BEIJING: Less than two weeks before the Olympics, Beijing's skies are so murky and polluted that the authorities are considering emergency measures during the Games beyond the traffic restrictions and factory shutdowns that, so far, have failed to clear the air, state media reported on Monday.
For the past five days, Beijing has been a soupy caldron of humid, gray skies. Local pollution ratings have exceeded the national standard for acceptable air since last Thursday, despite a temporary air pollution control plan that began on July 20.
Under that plan, officials have used odd-even license plate restrictions — limiting motorists to driving on alternate days, depending on whether the last number on their license plate is odd or even — to reduce daily traffic by two million vehicles, or more than half the city's total. Production at some factories has also been curtailed in Beijing and outlying areas.
But on Monday, China's official English-language newspaper, China Daily, ran a front-page story under a boldfaced headline: "Emergency green plan for Games." The article warned that officials might force far more vehicles off city streets — possibly 90 percent of the city's total — and temporarily close more factories.
No timetable was announced, but a senior city engineer told China Daily that officials would inform the public as early as possible about the details of the plan. The Olympics' opening ceremony is on Friday of next week, Aug. 8.

Pollution has been a pressing concern for the Games. Local organizers have promised to hold a Green Olympics, despite air that often ranks among the most polluted in the world. Some Olympic teams, including that of the United States, are providing optional breathing masks for their athletes to protect them from respiratory problems.
Before Monday, Beijing officials had taken a determinedly upbeat approach to the pollution situation. At various news conferences, Beijing officials said pollution levels in July had fallen 20 percent compared with the same period a year ago. They blamed the problems on recent weeks of unusually heavy rains that left behind a humid summer haze. Even though emissions have fallen, pollution was still being trapped in the haze because of a lack of dispersing winds, they said.
"We are very confident about the effectiveness," Du Shaozhong, a deputy director of Beijing's environmental bureau, said of the traffic and industrial restrictions during a news conference on Sunday at the new Olympic media center. "We are going to ensure a good air quality during the Games."
Statistics suggest that the city's daily air pollution index has improved somewhat compared with 2007. Beijing measures four primary air pollutants through its "Blue Sky" air quality monitoring program. A system of monitoring stations calculates a daily air quality rating on a scale of 1 to 500, with 500 being the worst. The accuracy of the system has been questioned, but Beijing officials have steadfastly defended it.
Under the system, any rating under 101 is considered acceptable. The recent run of bad days began last Thursday with a rating of 113. Friday brought a 109; Saturday a 118; and Sunday a 113. Monday's rating has not yet been announced.
Even so, these numbers are better than those in the same month last year when the ratings reached as high as 151 in late July. But such statistical improvements hardly fulfill the expectations that the July pollution control plan would sweep away foul air and render Beijing a city of clear blue skies, at least for the Olympics.
When officials opened the Olympic Village over the weekend, visibility was sharply limited by clotted skies. At a news conference on Friday, a Chinese reporter asked if there were any recommendations to help Olympic visitors discern the difference between polluted skies and cloudy ones.
Zhu Tong, a professor at Peking University who is serving as an air quality adviser to the Beijing Olympics, said unfavorable weather conditions, especially a lack of wind, have prevented the usual patterns for dispersing foul air.
"Usually, stagnant air only stays for three or four days," Zhu said in a telephone interview. "But it has been here for more than a week, which means more pollution is accumulating."
He said officials were discussing more contingency measures, though no decisions had yet been made.
"The air quality is worse than we expected," he said. He said officials were continuing to examine how to reduce emissions by making the traffic flow more efficient. He also expressed optimism that the current weather pattern would break by Tuesday.
"We believe that once this weather moves out, we have a low chance to see it again," he said.
Another Chinese newspaper, Science and Technology Daily, reported on Monday that a broader emergency plan for Beijing and surrounding areas had been submitted for final review to the State Environmental Protection Administration and could be announced this week.

The street in Leeds that leads the way to greener living

A competition is showing the way to cut fuel bills by a third and carbon by a fifth
Martin Wainwright
The Guardian,
Tuesday July 29 2008

Bethany Lewis is a nippy defender for Farsley Vixens under-11 football XI, but for the past six months her sharp eyes have been fixed on a mantelpiece digital monitor at her home in Leeds.
Its flickering numbers show the cost of the household's power, minute by minute, and if it climbs up beyond a couple of pence an hour, Bethany wants to know why.
Her vigilance, matched in 63 other homes on eight streets around Britain with the word green in their name, underlies a dramatic claim that simple good housekeeping could save Britain £4.6bn in domestic fuel bills.
"When I come in from school, I check the numbers," the nine-year-old says. "If they've gone up, I go to the telly to see if it's been left on, so that the video's on standby. If it has, I'll unplug it."
Thousands of similar small acts have put the Lewises' street, Green Lane in the suburb of Cookridge, into the lead in the national Green Streets competition. Halfway through the contest, which began in January, the gently sloping double row of 1960s terraces, semis and bungalows has cut costs by 29.32%.
Its seven rivals haven't done quite as well - Manchester is bottom with only 8.56%. But the Institute for Public Policy Research (IPPR) thinktank, which is monitoring the exercise for British Gas, calculates the £4.6bn - and a 20% fall in carbon emissions - from the eight streets' average score.
Energy use is moving rapidly up the political agenda as prices rise and put pressure on household budgets. Only last week one of Britain's biggest suppliers, EDF Energy, announced that it was raising gas prices by 22% and electricity by 17%. Its five major rivals are expected to follow with similar increases in price.
Creative choices
"We need creative approaches to energy efficiency like this, if the UK is to reach its CO2 reduction targets," says Matthew Lockwood, senior fellow in the IPPR's climate team. Bethany's mother Janine, an insurance team leader, agrees - but adds that it isn't rocket science.
"We've had a new energy-efficient boiler fitted as part of the competition," she says, "but what's struck us is that it's our behaviour which really makes the difference. Just the simplest things, like drawing the curtains later at night in the summer and keeping the lights off. Not putting the children's school uniform in the washing machine every day. Not leaving things on standby."
"And swapping our electric lawnmower for a manual one," adds her husband Ian, a copytaker with the Press Association. "It's just as good and it gives me a bit of a workout."
The Lewises have saved 27% on power bills so far - a handsome figure but one that is dwarfed by the Neysari family at the top of the hill. You won't miss their house, say Ian and Janine, because it's got great solar panels on the roof. Gleaming in the July sun, they have reduced the last six months' costs by half.
"We're heading for saving £500 on gas alone this year, half our previous bill," says Rebecca Neysari, an accountant currently at home with her hands full with three-year-old Cyrus and one-year-old Kiyana. The contest, which has equipped all 64 entrants with energy-efficient technology, has also fitted the house with a new water tank and boiler and individual room valves on all central heating radiators.
Friendly competition
Child power rules here, too. "Cyrus is always telling me to turn things off," says Neysari, wading through a roomful of mostly clockwork or push-and-pull toys. Group support plays an important part too; there's friendly competition between the eight households, but much more in the way of swapping tips.
"We meet regularly to see how everyone's doing," she says, adding that the one gizmo nobody in Green Lane likes is the one-cup kettle donated by British Gas. Halfway up the lane, immersed in her garden's ranks of plump peapods and swelling onions, Shirley Carter denounces it with vim.
"Hated it, I'm afraid," she admits. "I didn't consider it was properly boiled water, just not good enough for a proper cup of tea. I persevered for a while but we've gone back to the old kettle. But I always put lids on pans now, which we didn't used to do."
She and Neysari share Bethany's fascination with the digital monitor, the smallest but most significant of all the extras fitted to the contestants' houses, from Greenway Road in Cardiff to Edinburgh's Colinton Mains Green. "It shoots up when you've got something power-hungry on," Carter says. "Off you go, to find out what it is and do something about it."
Her list of tips includes solar-powered lights in the garden - for vegetable-watering at dusk, which was previously, expensively lit by electric lamps round the Carters' ornamental pond - and a security floodlight over their conservatory. Like Neysari, who now only uses her top oven for the children's meals, Shirley is also debating the "cooking Scrooge" gambit: turning the oven off five to 10 minutes before the end of the recommended cooking period, because it maintains sufficient heat.
Halfway through the competition, the IPPR is publishing three draft recommendations. In keeping with the Bethany/Cyrus approach, the suggested reforms are simple.
The first, says Lockwood, is extending the competition, central to the Green Streets project, by offering £4m annually from the Treasury as prizes for similar inter-town energy-saving contests. Secondly, IPPR suggests recruiting a national force of energy advisers similar to the British Gas experts who have been attached to Green Streets.
"It would be impossible to replicate this competition's ratio of one adviser for eight households," says Lockwood, "but if we had one for every 20 streets, that would be 10,000 advisers."
IPPR puts the cost at £500m annually, against the £4.6bn saving on national energy costs, which currently total about £23bn.
The final reform would repeat on a national scale the £30,000 British Gas has given to the eight streets to pay for new equipment such as the Lewises' boiler and the Neysaris' solar panels. Green mini-mortgages are suggested to fund, for example, a £524 package for cavity wall and loft insulation. A three-year loan at a 7% rate of interest would be offset by £395 annual savings in fuel bills, the thinktank says.
And the whole exercise is not a return to the shivering, primitive past, according to the Leeds energy adviser, Alan Pickard. "One of the most striking things has been how cosy everyone feels because of their new insulation," he says. "You don't have to suffer by saving energy."
How to shrink your footprint
· Turn off all appliances on standby
· Use natural light as much as possible, fitting blinds for privacy
· Turn off oven five minutes before recommended cooking time
· Put lids on all pans
· Wash clothes at lower temperature, less often but with a full load
· Use dishwasher, not sink, but only full loads (stack carefully to avoid chips)
· Take fewer baths
· Use thermostats to the full and ideally lower by at least one degree celsius
· Fit valves on all radiators
· Lower hot-water temperature in summer
· Wash hair early in the evening and allow to dry naturally
· Overfill kettles
· Use a tumble dryer
· Use a hairdryer
· Let freezer frost up
· Draw curtains early and switch on lights
· Use powered equipment in small gardens
· An energy-efficient boiler
· Cavity wall, loft and underfloor insulation
· Solar panels
· Double glazing
· Draught-proofing
· Pipe-lagging
· Electronic timing

Campaigners seek an end to production of CO2-intensive 'unconventional fuels'

· Ethical investment groups try to halt tar sand projects· Oil firms to spend $125bn to exploit new sources
Terry Macalister
The Guardian,
Tuesday July 29 2008

Shell, BP and other oil companies at the centre of the tar sands revolution in Canada are facing a backlash from the Co-operative and other members of the ethical investment community determined to bring a halt to these operations for environmental reasons.
A joint report from Co-operative Investments and the wildlife charity WWF released today will be followed up in September by a meeting of the UK Social Investment Forum (UKSIF) to press for an end to this carbon-intensive activity.
The tar sands business, by which crude oil is produced through highly carbon and water-intensive extraction and treatment procedures, risks tipping the world into an irreversible process of global warming, critics claim.
The Co-op and WWF are calling for a global halt to new licensing for tar sands and similar oil operations known as "unconventional fuels".
They want the UK and other countries to prohibit the sale and distribution of any oil products with higher emissions than traditional petrol.
The move comes as Shell and other industry leaders have pledged to spend more than $125bn (£63bn) by 2015 to develop these new sources of petrol at a time of very high crude prices and fears of supply shortages.
The oil companies say the world needs these reserves, which are expensive to produce but are located in a politically stable area, unlike the traditional reserves of the Middle East or Russia. But critics say the environmental price is disastrous.
Paul Monaghan, head of social goals and sustainability at the Co-op group, said: "The current rush to invest in unconventional fossil fuels is wholly inappropriate and, due to their carbon intensity, these projects risk dangerous levels of climate change."
The new report, Unconventional Oil: Scraping the Bottom of the Barrel, will be used as the basis for discussion with the Co-op's 6.5 million customers and for garnering support from more than 200 other members of the UKSIF.
James Leaton, senior policy officer at WWF-UK, said: "Unconventional fuel sources may seem attractive in the short term but ultimately the environmental and economic costs are unthinkable.
"Companies and investors claim to recognise the need to tackle climate change and support international efforts such as Kyoto [climate change protocol]. In oil sands we have an activity that is going against this imperative and undermining Canada's Kyoto commitments, so it is time for investors to challenge this strategy."
Shell said: "The global demand for energy is growing. This will mean greater demand for oil and gas, too. Supplies of accessible, conventional oil and gas cannot keep up with the demand growth. As a result, society has little choice but to add other sources of energy including 'unconventional' fuels like oil sands."
BP said fossil fuels were still going to be needed well into the future even if there were tough restrictions on carbon dioxide emissions.
"Reserves of oil sands represent a significant untapped resource from a politically stable country. The Husky joint venture [BP is planning] will use a process known as steam-assisted gravity drainage, not mining, which produces oil in-situ with a significant reduction of both water use and overall environmental footprint," it said in a statement.
BP added that it was a "keen" supporter of mandatory market mechanisms such as cap-and-trade programmes on greenhouse gases: "We support national and international trading programmes and have factored the future costs of carbon in our analysis of the project's value."
There are estimated to be 1.1tn barrels of extractable unconventional oils in North America - Canadian tar sands and US oil shales - according to the Co-op and WWF report. In Canada alone it is hoped to produce 5m barrels a day, which would make the country one of the world's largest oil producers. The extremely energy intensive process means that if all of the reserves were exploited in the next century it would result in emissions of 980 giga-tonnes of CO2. This equates to an estimated rise in CO2 emissions of 49 and 65 parts per million when the world is already at 430ppm - 450 is considered to be a tipping point, the two organisations argue.

Scheme sets quotas for carbon dioxide production

By Fiona Harvey, Environment Correspondent
Published: July 29 2008 03:00

Companies covered by the European Union's emissions trading scheme may only produce a certain quota of carbon dioxide each year, writes Fiona Harvey .
They are given permits, each representing a tonne of the gas. Companies that need to emit more than their quota can buy spare permits from cleaner businesses.
The permits were issued free in the first phase, from 2005 to 2007, but from this year governments can auction a proportion.
Electricity companies gained hundreds of millions of pounds a year from the first phase of the scheme by passing on to customers the theoretical cost of buying the permits.
Copyright The Financial Times Limited 2008

Emission permit auctions to net £2bn

By Fiona Harvey, Environment Correspondent
Published: July 29 2008 03:42

Auctioning off the right to emit carbon dioxide is likely to net the government nearly €2.5bn (£2bn, $3.9bn) over the next four years, under plans to be announced on Tuesday.
The terms on which the emissions permits will be sold for the first time this year will be set out by the Department for Environment, Food and Rural Affairs and the Treasury.

The power sector will be most affected, as electricity generators will have to buy almost a third of their permits to produce carbon, instead of receiving them all free of charge as they have done since 2005, when the European Union’s emissions trading scheme started.
Other sectors in the scheme, such as steelmakers and cement-makers, will continue to receive all of their permits for nothing, at least until 2013.
However, the government has yet to set the date for the first annual auction to begin.
Phil Woolas, environment minister, said: “Auctioning [permits] marks an important step forwards in developing a system where market forces create financial incentives for major carbon emitters to reduce their emissions. This will help stimulate the development of green technology and British business can begin to realise the benefits of being leaders of the low carbon revolution.”
Scheme sets quotas for carbon dioxide production
Companies covered by the European Union’s emissions trading scheme may only produce a certain quota of carbon dioxide each year.
They are given permits, each representing a tonne of the gas, to do so. Companies that need to emit more than their quota can buy spare permits from cleaner businesses.
The permits were issued free in the first phase, from 2005 to 2007, but from this year governments can auction a proportion.
Electricity companies gained hundreds of millions of pounds a year from the first phase of the scheme by passing on to customers the theoretical cost of buying the permits, although they received them free. They will be the only sector forced to buy any permits at auction in the 2008-12 phase of the scheme, but this should not raise power prices as the cost of permits has already been included.
Paying for permits should not prompt power producers to raise their prices, however, as the cost of buying permits has already been factored into electricity prices since 2005.
Some 85m permits – about 7 per cent of the total number of permits allocated to UK companies in the current phase of the scheme – will be auctioned by 2012. But the government plans to “front-load” the auctions so that more are sold this year and next year than in 2011-12.
Monday’s price for this year’s permits stood at about €25, with permits for 2012 selling in the forward market at nearly €30.
At these prices, the permit auctions would yield the government between €2.1bn and €2.4bn in total by 2012.
The next phase of the scheme, from 2013, is likely to swell the government coffers by much more. Paul Klemperer, professor of economics at Oxford university, estimates that the government would gain about £2bn a year from auctioning permits if the power sector were forced to buy all its permits, as the European Commission proposes.
Under the government’s plans for the first permit auction, bidders will be given two months’ notice of the auction date. The auction will run for a few days at most, and bidders will submit their bids, detailing how many permits they want to buy and at what price, electronically. The auctions, which will be open to banks and brokers as well as companies covered by the trading scheme, will be administered by the UK Debt Management Office.
Once all the bids are in, the government will calculate a single settlement price for all the permits available. This will be done by taking the lowest price at which all the permits can be sold to the bidders.
Copyright The Financial Times Limited 2008