<![CDATA[Grist - Comment Feed for Cap-and-trade: filling up the political space that should be used for real solutions]]> Grist Comment Feed en Comment #1 by Earl Killian http://www.grist.org/article/cap-and-trade-filling-up-the-political-space-that-should-be-used-for-real-s/ Mon, 01 Jun 2009 06:36:08 -0700 http://www.grist.org/article/cap-and-trade-filling-up-the-political-space-that-should-be-used-for-real-s/1 Pricing carbon should not be used to drive change; it won't do that very well. To see that, consider that improving our energy usage efficiency is one of the most important necessary-but-not-sufficient attacks upon our greenhouse pollution, and yet energy usage efficiency already yields cost savings, and yet remains undone. The market is not perfect, and never will be. However, incentives, policies, and regulations can make energy usage efficiency happen, even when cost savings are insufficient. Therefore we need more than just a price signal.

The purpose of putting a price on carbon is to close loopholes that companies might exploit until regulators get around to closing them (if they can—once a loophole is opened, it is hard to close it). For example, imagine regulations ban coal-to-liquids and oil sands as too greenhouse polluting, but then some companies discovers something new that is even dirtier; a carbon price keeps that off the table.

Closing loopholes is a pretty limited goal, though important. It consternates that Congress is making it the central strategy in the attack on greenhouse pollution.

]]> Pricing carbon should not be used to drive change; it won't do that very well. To see that, consider that improving our energy usage efficiency is one of the most important necessary-but-not-sufficient attacks upon our greenhouse pollution, and yet energy usage efficiency already yields cost savings, and yet remains undone. The market is not perfect, and never will be. However, incentives, policies, and regulations can make energy usage efficiency happen, even when cost savings are insufficient. Therefore we need more than just a price signal.

The purpose of putting a price on carbon is to close loopholes that companies might exploit until regulators get around to closing them (if they can—once a loophole is opened, it is hard to close it). For example, imagine regulations ban coal-to-liquids and oil sands as too greenhouse polluting, but then some companies discovers something new that is even dirtier; a carbon price keeps that off the table.

Closing loopholes is a pretty limited goal, though important. It consternates that Congress is making it the central strategy in the attack on greenhouse pollution.

]]> Comment #2 by Dave from Canada http://www.grist.org/article/cap-and-trade-filling-up-the-political-space-that-should-be-used-for-real-s/ Mon, 01 Jun 2009 10:46:57 -0700 http://www.grist.org/article/cap-and-trade-filling-up-the-political-space-that-should-be-used-for-real-s/2 Having an incentive that applies broadly (economy-wide or close to it) will help to reduce emissions.

 

I don't think anyone really regards cap-and-trade, or carbon pricing by taxation, as a magic bullet that will eliminate the need for anything else.  But avoiding a broad-application instrument would result in needing to put in place a million different regulations to address a million different sources.  And it wouldn't generate revenues needed for public investment in emission reductions, energy efficiency and conservation.

 

Really, the current support for cap-and-trade is high because it is a broad-based incentive that is politically possible.  Is that really so hard to understand?

]]> Having an incentive that applies broadly (economy-wide or close to it) will help to reduce emissions.

 

I don't think anyone really regards cap-and-trade, or carbon pricing by taxation, as a magic bullet that will eliminate the need for anything else.  But avoiding a broad-application instrument would result in needing to put in place a million different regulations to address a million different sources.  And it wouldn't generate revenues needed for public investment in emission reductions, energy efficiency and conservation.

 

Really, the current support for cap-and-trade is high because it is a broad-based incentive that is politically possible.  Is that really so hard to understand?

]]> Comment #3 by Gar Lipow http://www.grist.org/article/cap-and-trade-filling-up-the-political-space-that-should-be-used-for-real-s/ Mon, 01 Jun 2009 14:07:08 -0700 http://www.grist.org/article/cap-and-trade-filling-up-the-political-space-that-should-be-used-for-real-s/3 Comment #4 by Earl Killian http://www.grist.org/article/cap-and-trade-filling-up-the-political-space-that-should-be-used-for-real-s/ Tue, 02 Jun 2009 06:51:17 -0700 http://www.grist.org/article/cap-and-trade-filling-up-the-political-space-that-should-be-used-for-real-s/4 Let's compare Waxman-Markey (cap-grandfather-trade, sometimes known as "cap and trade") to another poltically feasible approach actually enacted in the 1970s: the Clean Air Act (CAA). The CAA gave the EPA the power to enact regulations to deal with air pollution. It was broad enough that the SCOTUS ruled in 2007 (Massachusetts v. EPA) that CAA required the EPA to regulate greenhouse pollution if it posed a threat to human health. That approach directs a science-based agency to find and implement solutions. IMO, it would be better if Waxman-Markey had a component like this rather putting all the effort into cap-grandfather-trade, which I expect to turn out poorly on its own.

Unfortunately the EPA doesn't have all the tools that are appropriate for fighting greenhouse pollution under the CAA, so relying on the old is not sufficient.

"A million different regulations" is clearly hyperbole, but it would require hundreds I think. I made a list of what I knew of once at http://www.killian.com/earl/editorials.html#e20081206 if you want to get an idea of the scope of things. Note that a price on carbon is on the list, but hardly the central strategy.

]]> Let's compare Waxman-Markey (cap-grandfather-trade, sometimes known as "cap and trade") to another poltically feasible approach actually enacted in the 1970s: the Clean Air Act (CAA). The CAA gave the EPA the power to enact regulations to deal with air pollution. It was broad enough that the SCOTUS ruled in 2007 (Massachusetts v. EPA) that CAA required the EPA to regulate greenhouse pollution if it posed a threat to human health. That approach directs a science-based agency to find and implement solutions. IMO, it would be better if Waxman-Markey had a component like this rather putting all the effort into cap-grandfather-trade, which I expect to turn out poorly on its own.

Unfortunately the EPA doesn't have all the tools that are appropriate for fighting greenhouse pollution under the CAA, so relying on the old is not sufficient.

"A million different regulations" is clearly hyperbole, but it would require hundreds I think. I made a list of what I knew of once at http://www.killian.com/earl/editorials.html#e20081206 if you want to get an idea of the scope of things. Note that a price on carbon is on the list, but hardly the central strategy.

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