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Adjustment of Offset & Trust Trigger Prices for Calendar Year 2008
January 31, 2008
The Massachusetts Greenhouse Gas Credit Banking and Trading regulations at 310 CMR 7.00: Appendix B(7), provides that:
"The Department shall establish an offset trigger price for 2006, 2007 and 2008. The offset trigger price for calendar year 2006 shall be $6.50 per ton of CO2e. For each calendar year after 2006, until such time as the offset trigger price is exceeded, the Department shall publish the new offset trigger price by January 31, which shall be equal to the previous year's offset trigger price adjusted up or down according to the previous year's Consumer Price Index."[310 CMR 7.00: Appendix B(7)(d)4.a.]
and
"The Department shall establish a trust trigger price for 2006, 2007 and 2008. The trust trigger price for calendar year 2006 shall be $10.00 per ton of CO2e. For each calendar year after 2006, the Department shall publish the new trust trigger price by January 31, which shall be equal to the previous year's trust trigger price adjusted up or down according to the previous year's Consumer Price Index plus 2%."[310 CMR 7.00: Appendix B(7)(d)5.a.]
The Consumer Price Index (CPI)[1] for 2007 is 220.5, up from 215.0 in 2006, an increase of 2.56%.[2] Accordingly, the Offset Trigger Price for calendar year 2008 has been determined to be $6.90.[3] The Trust Trigger Price for calendar year 2008 has been determined to be $11.04.[4]
|
Year |
CPI |
Offset Trigger Price |
Trust Trigger Price |
|
2005 |
207.5 |
N.A. |
N.A. |
|
2006 |
215.0 |
$6.50 |
$10.00 |
|
2007 |
220.5 |
$6.73 |
$10.56 |
| 2008 |
N.A. |
$6.90 |
$11.04 |
[1] For this purpose, MassDEP is using the "Consumer Price Index - All Urban Consumers, Northeast Region All Items, Not Seasonally Adjusted." Source: U.S. Bureau of Labor Statistics
[2] Calculated thus: ((220.5 - 215.0)/ 215.0) = 0.0256 = 2.56%.
[3] Calculated thus: $6.73 x (1.0000 + 0.0256) = $6.90.
[4] Calculated thus: $10.56 x (1.0000 + 0.0256 + 0.02) = $11.04. |
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