Hydropower and the Environmental Commodities Markets in the U.S
The United States is currently one of the many countries across the globe which continues to work towards implementing mechanisms focused on mitigating anthropogenic carbon emissions. In the U.S., markets and the market-like instruments which are employed within them, known most commonly as carbon offsets and renewable energy certificates (RECs), are the tools which encourage the development of renewable energy and reduce carbon emissions. These market-based incentives have the potential to significantly endorse or impede hydropower, dependent upon the potential interaction of science and politics.The implications of the voluntary and compliance markets on alternative and renewable energy affect both the future development of power plants, as well as the management of existing facilities. Case studies demonstrating the financial impacts of these markets on hydropower projects are presented, which highlight the regulatory requirements in place for hydropower and other renewable power plants. The paper concludes with a discussion of what the future may hold for the environmental commodities markets and the role of the hydropower industry within them.