ICF has developed the Carbon Planning Model (CPM™), a market scenario analysis tool for modeling carbon market prices based upon fluctuations in supply, with feedback loops that fluctuate demand as a function of carbon prices and marginal abatement costs. CPM™ allows companies to quantify their potential compliance costs (economic risk) based on user-defined scenarios. Variables within the CPM™ for user manipulation include eligible offset project types, volume of offset credits available for each eligible offset project type, transaction costs, and comparative offset scenario overlay analysis.
Under the Regulatory Framework for Air Emissions enacted by the Government of Canada in April 2007, companies are required to reduce their greenhouse gas emissions intensity by 18 percent for a 2006 baseline by 2010 and continue to make intensity improvements of 2 percent each year until 2015. The government is keen to see investment in carbon abatement stay in Canada. As a result, it has limited Canadian access to international credits for compliance purposes to 10 percent of the capped emitters obligation and has focused on the development of a robust domestic offsets market as the primary compliance option. Consequently, future carbon market prices in the domestic Canadian market are of significant interest to companies with Canadian operations in the capped sectors.