Cap-and-Trade Can Cut Emissions Without Major Economic Hit
A cap-and-trade system can be effective in reducing greenhouse gas emissions, without having a significant negative economic impact, according to researchers at MIT’s Center for Energy and Environmental Policy Research.
The European experience confirms much of what has been learned from similar U.S. systems for other emissions, namely, that cap-and-trade systems can be constructed, that markets emerge to facilitate trading, that emissions are reduced efficiently, and that the effects on affected industries are less than predicted.
The report, Cap-and-Trade: Contributions to the Design of a U.S. Greenhouse Gas Program, found that the most controversial aspect of the European program was how to allocate the permitted emissions levels to different producers. Initial free allocation of allowances, they found, was the necessary price for gaining political acceptance, as it has been in U.S. systems. Over time, the clearly established trend in the E.U. is to phase out the free allocation of permits in favor of auctioning them.
The report also looked at mechanisms that can be used to control the costs that will be imposed on power producers as a result of implementing a cap-and-trade system. Several alternatives were analyzed, including such things as a “safety valve,” banking and borrowing of allowances, and renewable portfolio standards. Rather than a single best choice, the study found that different mechanisms work best for addressing uncertainties associated with long-term, short-term and start-up costs.
The report also examines the relationship between state and federal regulations on greenhouse gas emissions. Differences in the abatement costs among states can create economic inefficiencies that make achievement of the climate goal more costly than it need be, the report found.
This inefficiency can be avoided by either federal preemption of duplicative state programs, the authors found, or by a 'carve out' of more demanding state programs from the federal cap with linkage.
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This article has 5 comments:
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One of the middle class getting...
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1 Comment
Nov 19 08:06 PM-
scfranklin94
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54 Comments
Nov 20 10:07 AMIf we really want to change emissions in the US we should just have the Feds spend 500B to build new power plants, rather than create an expensive transfer tax system that really doesn't change anything.
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brokerinbirmingham
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16 Comments
Nov 20 10:12 AMWell said. A number of years ago, as the green movement in the US was more in it's toddler stage (beyond infancy but not yet mature) it was said that "green" is the newer-easier-to-sell/e... & obfuscate "red".
Greenies are actually "watermelons"... = green on the outside but red on the inside. Why would that be said? Ever hear Greenpeace castigating any socialist/communist countries? Nope. Ever hear them talk about China's industrial pollution? Nope. According to the Green mantra, the evil (of all kinds) of the world resides and emanates from the U.S., the most highly developed capitalist country in the world, and not inconsequentaily the one with the overwhelmingly largest middle class.
Marx wrote "the bourgeoisie must be made impossible". Notice he did not say "the poor" or "the aristocrat". It's the middle class that was and is targeted for destruction. Ever wonder why liberal Democrat (was that redundant?) tax plans NEVER favor the actual middle class? My theory is that, at heart, they too believe the middle class, the merchant class, the bourgeoisie are the problem. Enacting punative green regulation (such as Pres Elect Obama suggested to the San Francisco Chroicle earlier this year regarding coal) is one method of eroding the middle class without declaring an open class war. Very stealthy of them, and of him.
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Ferdinand E. Banks
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240 Comments
Nov 20 10:28 AMWhat about the precious work of the Center for Energy and Environment at MIT? One of their bosses was at a conference on electric deregulation that I attended in Milan, and the only thing that saved him was his American passport. However where cap-and-trade is concerned I take no prisoners. Those MIT dunces have been richly rewarded with research grants to discover that cap-and-trade is scientifically sound, and...surprise...this is the conclusion they reached. And why have they received these research grants? Answer, because the big winners in this farce are the brokers and 'middlemen', and they sell cap-and-trade and to get others to sell it..
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markj
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15 Comments
Nov 20 01:31 PM