Experts say cap and trade not enough

Apr 13, 2009

A team of researchers at Carnegie Mellon University report in a new policy brief that cap and trade climate policies alone will not be sufficient to put the nation on track to achieve a 50 to 80 percent reduction in greenhouse gas emissions of carbon dioxide by mid-century.

"While a cap and trade or carbon tax policy is an important step in reducing emissions, the range of prices for carbon dioxide permits being discussed will be too low to induce the large-scale investments we need," says Constantine Samaras, a research fellow in the Engineering and Public Policy Department and a co-author of the policy brief along with five other Carnegie Mellon researchers.

Under a cap and trade policy, the number of annual permits to emit carbon dioxide are limited or "capped." The permits are allocated to companies producing fossil fuels or releasing carbon to the atmosphere. These companies can then trade any extra permits they have with companies that need more.

But while cap and trade policies use prices and market mechanisms to induce investment, climate bills in Congress typically have measures to prevent allowance prices from rising quickly. Sen. John Thune (R-S.D.) recently introduced an amendment in the U.S. Senate stating that a cap and trade policy should not increase energy prices, and it passed by a wide margin.

"The future price of carbon dioxide permits must rise to at least $50 per ton or more before electric power companies will find it cost-effective to build coal-fired power plants that will capture and sequester their emissions and other types of low-carbon power plants. Potentially higher prices might be required to foster the big changes we need in the way we make and use appliances and automobiles," Samaras said. "We should be augmenting cap and trade proposals with strong standards to induce low-carbon investments in the near-term."

The Carnegie Mellon policy brief argues for aggressive standards in the electric power, building and transportation sectors as an addition to a cap and trade program. "We believe standards that require power companies to continuously reduce the average carbon dioxide emissions of the electricity they sell over time can serve as a market signal and driver of innovation toward a low-carbon economy," said co-author M. Granger Morgan, head of Carnegie Mellon's Engineering and Public Policy Department.

The authors also argue for the promotion of strategies that separate utility profit from the amount of electricity it sells, tighter standards on buildings and appliances, and fuel efficiency standards that at least double the miles per gallon over current vehicles. Some of the provisions recommended in the policy brief are included in the draft climate bill recently offered by U.S. Rep. Henry Waxman (D-Calif.), chairman of the Energy and Commerce Committee, and U.S. Rep. Edward J. Markey (D-Mass.).

"Without decoupling electricity revenues from sales, utilities can not be expected to widely promote energy efficiency, since they are losing money by doing so,'' said co-author Ines Azevedo, a Ph.D. candidate in the Department of Engineering and Public Policy at Carnegie Mellon. "While efficiency could save consumers up to 20 percent of their electricity while saving money, market barriers often prevent this from happening. Appliance and other standards are needed to allow consumers to take advantage of such savings," Azevedo said.

The Obama administration hopes to reduce by 80 percent by 2050, and make the U.S. a leader on climate change.

"To achieve the large emissions reductions required to ensure that atmospheric concentrations of do not reach levels considered by many scientists to be disastrous, additional measures beyond cap and trade will be necessary. We need to build low-carbon power plants, give incentive to utilities to invest in efficiency, and significantly reduce the energy use of our appliances, buildings and vehicles," according to Carnegie Mellon researchers.

Source: Carnegie Mellon University (news : web)

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User comments : 8

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jonnyboy
2 / 5 (4) Apr 13, 2009
Well, kiss my grits
zevkirsh
1 / 5 (4) Apr 13, 2009
cap and trade is just another overly loose regulation that will allow companies to circumvent meaningful efforts to force them to lower their emmisions. furthermore it will shift jobs from private sector to government by generating a need for more federal regulators. if you want to tax energy, just tax it per unit of c02 that is emitted.
nuclear--almost no taxes
coal--lots of taxes
water, solar, wind, etc... full tax credits and writeoffs of
all investment.

basically, a c02 tax is most easily implemented by imposing extra coal taxes. natural gas creates c02 so you can tax it by the volume. the easiest way to regulate c02 is by taxing that which creates c02, not by taxing indirect 'emissions'
which will only creative massive , expensive, and ambiguous regulatory studies and laws.

and if you want to discourage oil use, tax gasoline more , do not tax vehicle travel or other complex nonsense. if youre worried about consumers bearing the burden of the tax, just make special taxes on the industry as well ( as the consumer do not have, nor should have, any absolution from paying their fair share of the consumption tax)


fcnotpdaaj
3.7 / 5 (6) Apr 14, 2009
Lets see making complicated laws that harm industries not good enough. We need to reduce standard of living to that of 2000 years ago for the majority of Americans. That why elite Democrats and Liberals like Obama, and Al Gore can fly in their private jets to summits at resorts, have parties at their mansions, without guilt.

Those that voted for Obama wake up! They are a bad joke, see www.democratsareajoke.com for the latest jokes these jokers are pulling on us.
bmerc
3.7 / 5 (3) Apr 14, 2009
cap and trade is just another overly loose regulation that will allow companies to circumvent meaningful efforts to force them to lower their emmisions. furthermore it will shift jobs from private sector to government by generating a need for more federal regulators. if you want to tax energy, just tax it per unit of c02 that is emitted. nuclear--almost no taxes coal--lots of taxes water, solar, wind, etc... full tax credits and writeoffs of all investment. basically, a c02 tax is most easily implemented by imposing extra coal taxes. natural gas creates c02 so you can tax it by the volume. the easiest way to regulate c02 is by taxing that which creates c02, not by taxing indirect 'emissions' which will only creative massive , expensive, and ambiguous regulatory studies and laws. and if you want to discourage oil use, tax gasoline more , do not tax vehicle travel or other complex nonsense. if youre worried about consumers bearing the burden of the tax, just make special taxes on the industry as well ( as the consumer do not have, nor should have, any absolution from paying their fair share of the consumption tax)



And why the different treatment in your proposal of nuclear as compared to wind and solar? Just one more example that the real aim isn't to reduce CO2 but to get the world to their utopia dream and then once we are there they will start complaining about our dependance on energy and what we are doing to the earth to by making so many wind mills and solar panels and start calling for even more to make everyone's energy bills higher, it is always going to be a never ending process with today's environmental movement.
vos
4 / 5 (4) Apr 14, 2009
there is no evidence for man made global warming. the greenies want control and money.
GrayMouser
5 / 5 (2) Apr 14, 2009
cap and trade is just another overly loose regulation that will allow companies to circumvent meaningful efforts to force them to lower their emmisions.

Cap and trade was just a new venue to allow the accumulation of wealth in the hands of the few. It has already put AlGo on the road to being a billionaire.
QubitTamer
5 / 5 (2) Apr 16, 2009
This article is dead on. We really need to begin massive population culls to get our CO2 emissions down. I suggest all who are most worried about CO2 emmisions kill themselves first. All of the AGW hyperventilators can have themselves chemically sterilized and have their mouths sewn shut. That will also reduce a lot of CO2 AND get rid of a lot of bad DNA from the gene pool.



GrayMouser
5 / 5 (1) Apr 16, 2009
This article is dead on. We really need to begin massive population culls to get our CO2 emissions down. I suggest all who are most worried about CO2 emmisions kill themselves first. All of the AGW hyperventilators can have themselves chemically sterilized and have their mouths sewn shut. That will also reduce a lot of CO2 AND get rid of a lot of bad DNA from the gene pool.

It doesn't work that way. Those most concerned about CO2 are the Guardians of our Earth and must remain (and produce more new Guardians.) Those that don't believe are Bad People and should be eliminated.