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Sustainability Presentation: The California Market Analyzer: Modeling policy implications for an emerging Carbon Emissions Trading System
Friday, January 16, 2009 - 3:15pm to Friday, January 16, 2009 - 4:30pm

Date and time: Friday, January 16, 2009 3:15 PM
Room: TBA
Speaker: Tom Fielden, Portland State University

A Maseeh Mathematics & Statistics Colloquium Series

Abstract: Since the passage of California Assembly Bill 32, California has set a goal of reducing it's Greenhouse Gas emissions to 1990 level by the year 2020. The California Air Resources Board (CARB) is tasked with designing a regulatory system to reach this goal. Many companies across a range of industries will be subject to the new regulations. A "Carbon Market" is expected whereby companies in a better position to reduce their emissions can sell to other regulated entities reductions achieved below their regulated levels as "allowances" in a managed financial market. The California Market Analyzer (CAMA) is the first generation answer to the question "Among the policies that achieves the overall goal, which one is least costly to California?" There are many policy components on the table and there is a significant amount of publicly available data on the costs and availability of emissions reduction opportunities. As part of my Ph.D. work at Portland State, I worked with EcoSecurities to produce CAMA at the request of PG&E of California for use by CARB to support their policy decisions. I am also a member of the PSU team that is constructing the second generation of CAMA. As a first generation tool, CAMA assumes perfect information and uses the World War II era mathematical tool, Linear Programming, to combine policy options, costs and availability and report the least cost portfolio. Linear Programming is a well understood mathematical tool that produces, sometimes, non-intuitive results. Policy makers and well as regulators and participants benefit from the insight such a seemingly simple tool provides. In this talk I will demonstrate the California Market Analyzer tool itself and discuss Portland State's team plan for a second generation tool, incorporating contemporary mathematical techniques such as Convex Optimization, Non-parametric Statistics, and Game Theoretic modeling to address risk management and decision support.