Tuesday, June 5, 2012

More on cap & trade

From the New York Times:

Cap & trade leads to lower energy costs for consumers

Cap & trade leads to lower emissions

More on the RGGI program here.

Here is a great article by Tom Tietenberg on cap & trade in the US


Stella Smith said...

6/5 More on Cap and Trade
This is really exciting that there is concrete evidence that cap and trade can and is working, especially after the disappointing results from the EU’s carbon trading system. It would be interesting to see if the carbon cap and trade could be expanded to a national or even global scale. Though I would worry about the money being made from the auctioning of the permits actually going to something useful (in RGGI’s case retrofitting homes to be more energy-efficient). If it was on a national scale, the US House could use the money raised from auctions to fund “pork barrel” projects or Colombian hookers.

Brian Graham said...

This is great news because consumer sovereign is being taken into consideration. Investing in more efficient housing is a great way of lowering usage of this product in a natural way as opposed to intervention. I have first hand experience in how poor insulation and poor construction can require a house to have to use energy that it would not be if these circumstances were ratified. It is also good that the study showed that not only consumers are benefiting but suppliers as well and we have to remember that everyone is a consumer to some extent so by helping the suppliers increase their net gains this in turn helps additional consumers. The numbers look good and this is a big step in my opinion to helping the environment while limiting sacrifices to do so (win-win). Permits are a great way of achieving this obviously.

J. Embrey said...

Correlation does not imply causation.

I would not be so quick to attribute pollution reduction to cap-and-trade.

The data being presented was obtained during a period of severe economic downturn.

Industrial production is just now returning to 2009 levels.

This glaring omission by the author leads one to question the motive of the articles and her competency as an impartial journalist.

One should question whether society would be better-off if the production facilities were allowed to keep the $912 million and invest that money into cleaner and more efficient forms of production.

The author also makes no mention of the loss in profit that the power generating firms will experience due to the reduction in demand brought about by the energy efficiency measures that they were forced to pay for and what will be the long-run effect of this exponential cost on market efficiency.

One thing the author did give a nod to and should perhaps spend more time investigating is the switch from coal to natural gas for electrical production and this real effect on pollution reduction.

The 23% average decline in pollution cited by the author is approximately the same % increase in electrical production via natural gas and the same % decrease in electrical production using coal during the stated time period.

The shift in electrical production methods coupled with the effects of a severe economic downturn during the stated time period most likely have had a greater impact than cap-and-trade on pollution reduction in the area of study.

Teresa Campbell said...

I think this is a step in the right direction; however, the findings seemed a little odd to me.
I get the concept on how trading credits reduces the over pollution down to regulated amounts. The part that stuck with me is that plant owners are experiencing lower revenues and higher costs yet consumers are seeing lower bills. Wouldn’t the additional costs the plant owners are experiencing that are causing lower net gains get pushed back to the consumer?

Theresa Evans said...

I am excited to see that there are results with the cap-and-trade program. I think it is a good idea to have a ceiling to control the amount of emissions from electric power providers. Incentives are as seen here a great way to motivate people to reduce and improvement their amount of emissions.
Not only is the cap-and-trade program reducing emissions, but energy costs are also decreasing. As a consumer I am interested in any way that can help me reduce costs while also helping the environment.

Spencer K said...

I think it is funny that they would make a goal like "a 2 degree change in global temperature by 2050." There is no doubt that CO2 traps in heat, but we have almost no understanding of why our climate is changing. I have also heard that it is debatable if global temperature can be defined let alone to the accuracy of 2 degrees.

bethany pahl said...
This comment has been removed by the author.
bethany pahl said...

I think Mr. Embrey summed up my thoughts. But this is good news thatvpollution was reduced.