Bank of America says it has decided to start factoring a cost of carbon-dioxide emissions into its decisions about whether to underwrite debt for new coal-fired plants. Specifically, the bank says it anticipates a federal cap that would require a utility to pay between $20 and $40 for every ton of CO2 its power plants emit. Today in Europe, which already has imposed caps, a permit to emit a ton of CO2 is trading at about $29.
Bank of America’s announcement comes a week after three other big banks – Citigroup, J.P. Morgan and Morgan Stanley – announced their own “Carbon Principles” – voluntary standards those banks say will make them less likely to underwrite financing on conventional coal-fired power plants.
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