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New Study Identifies Magnitude of Potential Risk Faced by Large Emitters

ICF International is introducing a new tool that enables Canadian companies to better predict the cost of complying with the government’s regulatory framework for decreasing greenhouse gas emissions under the Regulatory Framework for Air Emissions. The company will unveil the Carbon Planning Model™ during a Web-based presentation tomorrow of its Canadian Carbon Market Study that examines the implications of the proposed Canadian GHG regulatory framework mandating greenhouse gas reductions.

“The greatest concern among capped emitters today is whether or not there will be sufficient supply of offsets in the Canadian market to meet projected demand,” said ICF Vice President Skip Willis. “The Carbon Planning Model™ enables a company to more accurately predict the cost of compliance and, therefore, assess risk to the company going forward.”

Canada is a geographically large country with transportation related emissions, a cold climate with heating related emissions, a growing population with accommodation related emissions, and a resource based economy with exploration and production related emissions. This upward pressure on emissions has made target setting more challenging, but the Canadian government is committed to a 20 percent absolute reduction in emissions from a 2006 baseline by 2020. Domestic offsets will be among the most cost-effective compliance options for Canadian industry. The issue then becomes whether the system will have the liquidity necessary.

ICF’s proprietary CPM™ tool allows companies to analyze the fundamental supply and demand in the marketplace and thereby to quantify their potential compliance costs based upon user defined scenarios. Variables within CPM for manipulation by the user include:

  • Eligible offset project types
  • Volume of offset credits available for each eligible offset project type
  • Transaction costs
  • Comparative offset scenario overlay analysis

It will evaluate the impact of various offset credit availability scenarios relative to projected demand for 2015, 2020, and 2030, and project offset credit prices for each scenario.

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