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"Carbon Emissions Trading and Combined Heat and Power Strategies: Unintended Consequences"
Author: Tysseling, John C.,Vosevich, Mary,Boersma, Benjamin R.,Zumwalt, Jefferey A.,
Published In: Facilities Manager
Date: March/April 2009

Facility professionals continuously search for projects that reduce energy consumption and operating costs so as to directly benefit their bottom line. Many institutions nationwide have contemplated or made investments in combined heat and power (CHP) projects as a life-cycle strategy to minimize operating costs. However, recent sustainability and climate change initiatives have revealed another significant benefit of CHP--reduced greenhouse gas (GHG) emissions. In many regions, policies for regulating GHG emissions are being drafted for near-term implementation, with an emphasis on "cap-and-trade" mechanisms. Unless thoughtfully composed, these programs may distort and corrupt the incentives for carbon emission reductions that are realized by CHP investments. In this article, the authors demonstrate the potential economic consequences of cap-and-trade programs in a CHP environment, basing an example on the current draft of the Western Climate Initiative programs and the University of New Mexico facilities operations. This demonstration serves as an "urgent call to action" for facilities managers and administrators to participate in developing climate initiatives that recognize and facilitate the environmental benefits of combined heat and power systems. (Contains 5 figures, 1 table, and 3 notes.)

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