carbon trading

A rejoinder to Environmental Defense

Can any of Environmental Defense's three main points stand up to scrutiny?

ED: A carbon tax can be gamed as easily as a carbon trading scheme.

CTC: A carbon tax may be subject to gaming, but cap-and-trade positively invites it. USCAP concedes that some allowances will be given out (not auctioned) at the outset, which means protracted, high-stakes negotiations ("a giant food fight," a leading utility executive called it) over free allowances that will be worth billions. How will these be allocated? What baseline year? Watch earth burn as the polluters jockey for the baseline giving them the most allowances! With a carbon tax, by contrast, any tax preferences or exemptions will at least be visible and locked in, and thus potentially removable. This difference is part of why former Commerce Undersecretary Robert Shapiro wrote recently that carbon taxes, compared to cap-and-trade, "are much less vulnerable to evasion and market manipulation, providing a more stable and transparent system for consumers and industry alike."

Conservative blog doesn’t read studies it writes about

As discussed last week, Planet Gore's Sterling Burnett was upset with the media for supposedly ignoring "the recent reports by MIT and the CBO [PDFs] detailing the substantial costs and regressive nature of the costs that are estimated to arise if any of the current domestic proposals restricting carbon emissions to combat global warming are enacted."

Given that the MIT report in fact concluded the exact opposite of what Sterling claimed -- and given the fact that the National Review typically doesn't complain about the regressive nature of, say, tax cuts for the wealthy -- I'm guessing you won't be surprised to learn that the CBO report also comes to a different conclusion than Sterling claims.

It runs together several distinct things

There's been a nice, coherent-if-incipient debate on cap-and-trade on this blog lately, which I've alas been too busy to reply to. But I wanted to throw in just one small thought: it just might be time to ditch the whole notion. It conflates at least three things together, and as they are all quite different, the "trading debate" as we know it is both confusing and confused.

U.S. continues to resist pressure on climate change

If I may indulge for a moment in some blogospheric vitriol and vulgarity … I really can’t wait ’til these a**holes are gone: The United States will fight climate change by funding clean energy technologies and will continue to reject emissions targets or cap and trade schemes, its chief climate negotiator Harlan Watson said on […]

Reviews are good

New Mexico governor and Democratic presidential candidate Bill Richardson gave a big speech today in which he introduced what sounds like an extremely ambitious climate and energy plan. The speech isn’t online yet, and the plan isn’t on his site yet, so all I have to go on is reactions from people who have seen […]

And if not, why not?

A journalist of some renown called me last week to ask a question: would it be possible to do both a cap-and-trade program and a carbon tax? Al Gore famously urged that approach, but this journo had heard from other (reliable) sources that it’s not possible. My instinctive answer was yeah, sure, there’s no reason […]

Oh what a relief it biz

The United States Climate Action Partnership, the group of corporations calling "on the federal government to quickly enact strong national legislation to require significant reductions of greenhouse gas emissions," just doubled in size (PDF):

With its new members, USCAP companies now have total revenues of $1.7 trillion, a collective workforce of more than 2 million and operations in all 50 states; they also have a combine market capitalization of more than $1.9 trillion.

The big news is that General Motors has joined the list:

The RFFI way

The NYT has an update on the Regional Greenhouse Gas Initiative (RGGI), the Northeast coalition of states establishing their own carbon market. It’s promising that they seem to have learned the two key lessons of the European carbon market experience, which stumbled coming out of the gate. The first lesson: don’t give away credits. Participants […]

Could the unthinkable become thinked?

Over on MyDD, Rep. Pete Stark (D-Calif.) discusses the carbon tax bill he recently introduced. My legislation, the Save Our Climate Act (H.R. 2069), would tax coal, petroleum and natural gas at a rate of $10 per ton of carbon content. Applied when these fossil fuels are initially removed from the ground, the tax would […]