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Alan Durning and Eric de Place's Posts


Cantwell aims high but misses. Try again?

Cantwell’s cap-and-trade bill: almost genius

Sen. Maria Cantwel (D-Wash.)To borrow Dave Eggers' book title, the novel approach to cap and trade proposed by Sen. Maria Cantwell (D-Wash.) is a heartbreaking work of staggering genius. Genius, because it is an innovative plan to create a best-case version of cap and trade. And heartbreaking, because by design and by omission it undermines the most important feature of cap and trade: a legally binding limit on carbon emissions. It's true that Cantwell's CLEAR Act sets out ambitious reduction targets. Yet at present, it lacks detailed guidance for achieving them, especially in the near term. We want to love …


A global perspective on U.S. climate emissions

To mark the international climate negotiations in Copenhagen, I'm trotting out some maps I made a while back. This one has states labeled with the names of countries that are their greenhouse gas equivalents. In other words, Oregon is responsible for the same level of climate emissions as Ireland; Wyoming is the greenhouse gas equivalent of Vietnam, and so on. Want to see the whole thing? Bigger versions are here. And here's another slice at the same data. On the version below, regions are labelled with the names of their climate emissions equivalents. The coal belt through Appalachian country emits as much as the …


Critiquing the critique

How James Hansen gets cap-and-trade wrong

Climate scientist James Hansen has gone on the warpath against cap-and-trade. (See this op-ed in the NYT, among other recent examples.) Perhaps what's most alarming is that, for all his intelligence, Hansen doesn't appear to grasp even the basic elements of cap-and-trade systems. In a blog post last weekend, economist Paul Krugman took him to task: ... today’s op-ed article suggests that he really hasn’t made any effort to understand the economics of emissions control. And that’s not a small matter, because he’s now engaged in a misguided crusade against cap-and-trade ... What the basic economic analysis says is that an emissions …


Setting the Story Straight

Cataloguing the errors in “The Story of Cap-and-Trade”

Just colossally ignorant. That was all I could think to say on viewing the latest eco-video web sensation, "The Story of Cap-and-Trade" by Annie Leonard and Co. No one does a circular firing squad like the Left and this contribution is a potential Hall of Famer. Leonard has a disarming Every Gal schtick, but it masks a shockingly ill-informed -- or maybe outright deceptive -- "critique" of cap-and-trade. I was working myself up to rant about it, but Dave Roberts got there before I did. To give you a flavor of Dave's take-down: I hesitate to call this an “argument” in …


Market oversight in the Western Climate Initiative

Though most climate policy wonks are now focused on U.S. federal legislation or the summit in Copenhagen, the Western Climate Initiative is soldiering on -- and doing good work too. The WCI's Markets Committee recently released a white paper on carbon market oversight that is worth a read. While the paper doesn't draw many conclusions about WCI's final design, it does provide a very helpful summary of the principal regulatory options in both the U.S. and Canada. It also includes a nice overview of regulation under the E.U.'s cap-and-trade system, as well as a discussion of the regulatory options under consideration for the big …


How cap-and-trade markets work for acid rain and smog

Contrary to claims that cap-and-trade is untested or uproven, there are a half dozen or so operational cap-and-trade programs already functioning in the United States. Of these, the most significant are the Acid Rain Program and the NOx Budget Trading Program. Both have large vibrant trading markets, both have been extremely successful in achieving environmental aims, and neither has evidenced manipulation or gaming. The Acid Rain Program has been administered by the U.S. Environmental Protection Agency since 1995. It includes a cap-and-trade program for sulfur dioxide (SO2) -- and all evidence suggests that the program has functioned exceedingly well. In fact, the program achieved …


How carbon markets work in Europe

In spite of what you may have heard, Europe's carbon market is working beautifully. The E.U.'s Emissions Trading Scheme (ETS) has been operational since 2005 and we're now getting a good look at how it functions. It turns out, it's a remarkable success story, both environmentally and economically. Let's briefly review the major pieces of evidence. 1. European Environment Agency. A November 2009 report finds that the continent is well on its way to meeting its Kyoto targets thanks in large part to its cap-and-trade program. In fact, by 2007, 14 countries had already exceeded their reduction goals, including the wealthy industrial giants …


Listen and learn

How carbon markets work in the Regional Greenhouse Gas Initiative

With all the hand-wringing over the alleged risk of market manipulation in cap-and-trade, you'd almost forget that the United States already has a carbon cap-and-trade program up and running. But it does. The Regional Greenhouse Gas Initiative (RGGI), a regional program among 10 Northeast states, has been auctioning permits, allowing trading on a secondary market, and even, in a way, encouraging trading in derivatives. And guess what's happened so far? ... we find no evidence of anticompetitive conduct. Participation by a large number of firms is an encouraging sign of competitiveness and efficiency in the secondary market. That's according to a May 2009 report …


‘Subprime carbon’: Risk or hype?

On the announcement that the Clean Energy Jobs (CEJ) bill cleared a key Senate committee last week, Friends of the Earth complained: The bill’s backbone is a poorly regulated carbon trading scheme that entrusts the Wall Street bankers who brought us the current economic crisis with the responsibility to solve global warming. Sheesh. Of course, this isn’t true. It’s not even sort of true. It’s just an attempt to torpedo a bill by sowing confusion about an important and sensitive issue. (There are some legitimate critiques of the bill -- and Friends of the Earth (FoE) makes some of them …


Don't worry, be happy

Gaming cap-and-trade: Should we worry?

Worries about “gaming” or market manipulation sometimes crop up as an objection to cap-and-trade, often with reference to recent shenanigans in the financial markets. Some fear that a cap-and-trade system could be manipulated to artificially raise -- or lower -- permit prices to generate profits for a few at the expense of consumers. While distrust and concerns about scamming a carbon market are understandable, they’re not warranted. To put some of these fears to rest, it’s informative to look at existing cap-and-trade programs. Neither of the two programs regulating greenhouse gases nor a third controlling acid rain pollutants has been …