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December 31 2013

18:42

2013 A Promising Start for California’s Carbon Cap-and-Trade Program

If California were a nation, its economy would be the twelfth largest in the world. Not only does the Golden State have the largest and one of the most diverse economies in the U.S., it has been at the leading, even cutting, edge of efforts aimed at forging a leaner, cleaner, low-carbon society for the 21st century.

When it comes to government-led efforts to reduce carbon emissions and mitigate and adapt to the potentially devastating effects of rapid climate change, 2013 marked another path-setting year for California. In 2013, its first full year of operation, the value of carbon allowances traded under the state’s pioneering carbon emissions Cap-and-Trade Program totaled $1.1 billion and brought nearly $500 million in much needed revenue to a fiscally challenged state government.

California's first year of its cap-and-trade program is a successSetting a price on carbon pollution

As  News10 ABC reported, California’s climate change law sets annual caps on greenhouse gas emissions for heavy polluters, such as coal-fired power plants, oil refineries, and industrial companies. The carbon/greenhouse gas (GHG) emissions pollution cap will slide lower 3 percent each year beginning in 2013.

Those that cannot reduce their GHG emissions to the cap level or below are required to offset their emissions by investing in cleaner, less polluting operations, such as reforestation projects, or purchase carbon emission offset allowances on the cap-and-trade market. These are offered by companies whose emissions fall below the cap or issuers that have developed projects that effectively offset quantifiable amounts of carbon and GHG emissions.

Auctions of carbon cap-and-trade allowances brought in nearly $477 million for the California treasury in 2013, News10 ABC reported. “Those pollution allowances are selling like hotcakes,” commented political editor John Myers.

California’s carbon cap-and-trade program “brings together the best aspects of regulation and using the market to drive flexible mechanisms,” added Stanley Young of the California Environmental Protection Agency’s Air Resources Board (CARB).

Making polluters pay for pollution

As CARB explains on its website,

“Market forces spur technological innovation and investments in clean energy. Cap-and-trade is an environmentally effective and economically efficient response to climate change.”

As originally enacted, California’s cap-and-trade auction revenues were earmarked to be invested in efforts to combat climate change. Struggling to balance the state’s budget, the governor and state congress suspended that aspect of the legislation and used them to help balance the state’s budget, however.

With huge budget surpluses projected in coming years, proponents and supporters of the cap-and-trade bill are now urging Governor Jerry Brown and state legislators to repay that money and invest it in the type of projects for which it was originally intended.

“Let’s spend the climate change revenues to reduce the pollution that causes climate change,” Bill Magavern of the Coalition for Clean Air stated in an News10 interview, such as home weatherization or subsidizing solar panel installations for low-income households.

Moreover, even more in the way of cap-and-trade revenue would have come the state’s way had oil companies and other big polluters not been given carbon emissions allowances for free, Magavern noted.

“The oil companies are essentially getting off the hook…I think politics has everything to do with it,” he commented.

Other governments are now looking to emulate and/or link to California’s carbon cap-and-trade market. Quebec looks like it will be the first. An announcement was made back in October that representatives from the respective U.S. state and Canadian provincial governments had signed “an agreement outlining steps and procedures to fully harmonize and integrate the two programs.”

With some luck, opposition legislators in Washington D.C. may finally see the light and hold polluters responsible for the pollution they create and the health and environmental damage that results. Enacting a national carbon emissions cap-and-trade program, or perhaps even a national carbon emissions tax, would be a historic step in that direction.

The post 2013 A Promising Start for California’s Carbon Cap-and-Trade Program appeared first on Global Warming is Real.

December 19 2013

20:09

All I Want for Christmas is a Price on Carbon

As 2013 winds down, there are promising signs that we may actually see a price on carbon in the U.S. In 2010, the cap-and-trade bill was killed in the Senate by the fossil fuel industry’s ubiquitous misinformation campaigns. However, a confluence of events have renewed hopes that we may yet see carbon pricing legislation that could significantly reduce U.S. carbon emissions.

Implementing a carbon tax is no longer a pipe dream but understood as a coming - and much needed - realityWhy we need a carbon tax

Paying for carbon pollution is the best way to put free markets to work to reign in emissions that cause global warming. There is a virtual consensus among economists who say that putting a price on carbon is the most effective way to fight global warming. The case for carbon pricing is strong, this point has been repeatedly made by the World Bank and a number of economists including a team from the London School of Economics.

According to most analyses, carbon pricing is the most powerful regulatory mechanism we have to bring down emissions without wreaking havoc on the economy. Putting a price on carbon will allow market forces to drive down demand for carbon rich industries like fossil fuels and help to buoy cleaner low carbon technologies like renewable energy.

On a very pragmatic level, carbon pricing could enable the U.S. to achieve the pledges it has made at UN climate talks. This includes carbon emissions cuts of 17 percent below 2005 levels by 2020, and 80 percent by 2050.

Corporate juggernauts are onboard for putting a price on carbon

One of the reasons to be hopeful comes from a Carbon Disclosure Project (CDP) report which indicates that at least 29 big American corporations are actively preparing for a carbon tax. The companies in the CDP report include powerhouses like American Electric Power, ConAgra Foods, Delta Air Lines, Duke Energy, DuPont, Google, General Electric, Microsoft, Walmart, Walt Disney and Wells Fargo.

What is most surprising is that this list also includes five major oil companies (BP, Chevron, ConocoPhillips, ExxonMobil, and Shell). While they can hardly be called champions of a low carbon economy, they are, if nothing else, economic realists. They see the writing on the wall, and their actions are a strong indication that they see some form of carbon tax as inevitable.

Make no mistake about it, fossil fuel companies are not embracing the common good, they are acting in their own best interest. Preparing for the expense of a carbon tax is simply good business and for many, it represents a great opportunity. To illustrate the point, ExxonMobil, America’s wealthiest corporation supports a carbon tax because it has a vested interest. As the nation’s biggest producer of natural gas, it would profit from carbon pricing. Such a scheme would inflate the costs to the coal and crude oil industries far more than natural gas.

Republicans may be left out in the cold

Support for a carbon tax from corporate interests including fossil fuel companies could be a real problem for the GOP’s political future. Republican opposition is a salient reason for the failure of cap-and-trade legislation in 2010. The GOP’s climate denial was underscored during the 2012 presidential elections and they continue to beat the climate denial drum to this day. As recently as Wednesday December 11, their ignorance was on display for all America to see. On this day, Republicans in the House of Representatives held sham hearings that called upon climate change denying scientists to reinforce their subterfuge.

Corporate interests are the traditional support base for Republicans, but as they embrace a carbon tax, Republicans will be left out of the cold if the companies responsible for global warming are seeking a carbon tax.

The Koch brothers may be the only friends that the GOP has left. The only U.S. supporters from big oil still onside with climate denial is Koch Industries, who continues to pressure Republicans to stay onboard the denial train. In 2012, all of the GOP’s presidential candidates had ties to the owners of Koch industries. Koch continues to use its various front groups to oppose science and resist any form of carbon tax. However, this oil company has repeatedly been exposed as the nation’s biggest purveyor of misinformation. Koch industries is a pariah even in the dirty and destructive fossil fuel industry. Republicans who embrace Koch may undermine their own election hopes and further tarnish the GOP’s already badly battered brand.

According to the latest research, Americans, including supporters of the Republican party, embrace the veracity of climate change and want government to do something about it. A Stanford University study showed that all states, even traditionally Republican states, acknowledge global warming and would like government to find ways to reduce climate change causing emissions. Recent election and ballot initiatives may also signal a change in American attitudes.

Republicans have effectively painted themselves into a corner. Changing public and corporate attitudes are stranding GOP policy positions. If Republican support is eroded they may not have enough political representation to thwart progress and this could in turn pave the way for carbon pricing.

Carbon trading in place and calls for emissions reduction from U.S. state governments

Carbon trading is increasing around the world with emissions trading schemes now operating in 35 countries, 13 states, provinces and cities. Europe already has the world’s biggest emissions market and China is launching its own schemes. In North America, new additions to the Regional Greenhouse Gas Initiative (RGGI) and the Western Climate Initiative (WCI) doubled carbon trading in 2012. There are now 48 schemes internationally and when added to the 7 in China, a total of 880 million people, representing about 20 percent of global emissions will be part of some form of carbon pricing.

As reported by Reuters on December 16, fifteen U.S. states (California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Oregon, Rhode Island and Washington) are asking the Environmental Protection Agency (EPA) to adopt their carbon-cutting policies.

As part of President Barack Obama’s climate change strategy announced in June, the EPA has been directed to develop federal emissions standards for existing power plants. Now a coalition of states have told the EPA that they would like to see a “system-wide” approach to cutting emissions rather than working on individual power plants.

The Clean Air Act has stipulated that states must develop their own plans to meet EPA standards. States have been asked to provide feedback ahead of a planned June 2014 proposal which is scheduled to be finalized a year later. States that are part of carbon pricing schemes want to make sure that the EPA gives them credit for being early adopters.

Benefits of price on carbon far outweigh cost

The most frequently cited argument against carbon pricing and carbon taxes is the cost. According to the Potsdam Institute for Climate Impact Research, the introduction of a carbon tax could cause fossil fuel companies to lose between $9 trillion an $12 trillion in profits by the end of the century. That is because a carbon tax would drive up costs and decrease demand, as the demand was reduced the prices would fall.

However, the Potsdam Research indicates that the cost to fossil fuel companies would be more than compensated for by carbon taxes (or carbon auction revenues). Their analysis reveals that such taxes would generate revenues equaling $21 trillion to $32 trillion by the end of the century. That translates to a net economic benefit of around $20 trillion, in addition to potentially staving off the worse impacts of climate change and providing citizens with cleaner air and water. The profits from carbon taxes could be used for green-energy projects and climate adaptation efforts.

There was a time in the recent past when putting a price on carbon was dismissed as a utopian dream, however, the overwhelming logic is becoming increasingly undeniable, even in the most unlikely places.

The introduction of a carbon tax is unlikely to occur without a political fight, but the weight of the evidence will inevitably triumph over ignorance.

——————
Richard Matthews is a consultant, eco-entrepreneur, green investor and author of numerous articles on sustainable positioning, eco-economics and enviro-politics. He is the owner of The Green Market Oracle, a leading sustainable business site and one of the Web’s most comprehensive resources on the business of the environment. Find The Green Market on Facebook and follow The Green Market’s twitter feed.

Image credit: Gustavo Madico, courtesy flickr

The post All I Want for Christmas is a Price on Carbon appeared first on Global Warming is Real.

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July 26 2012

15:34

A Climate and Energy Stalemate

Is climate change a real and present danger? Why does the United States lag behind many other industrialized nations in addressing it?

February 28 2012

19:36

Climate Change, US Debt and Deficits: House Reps Urge Congressional Colleagues to Put a Price on Carbon


Fiscal 2013′s budget battle is now officially under way in Washington D.C., as President Obama submitted the administration’s proposed budget for the coming year. Budgetary debates and controversy were heated enough this past year, all but shutting down the federal government, and they’re sure to get even hotter given this year’s elections.

Congressional representatives on both sides of the aisle in both houses can agree on an urgent need for prudent fiscal discipline at a time when significant financial system and economic risks persist. They differ wildly on the need for counter cyclical economic and fiscal policy, however, as well as how best to guide the US economy forward into the 21st century.

Perhaps nowhere is this political divide as wide or as apparent as it is regarding climate change, environmental and energy policy. Despite the weight of scientific and empirical evidence, Republicans have not only effectively squashed any serious attempt to enact proactive federal climate change and clean energy policies, they continue to push hard to maintain and expand US reliance on fossil fuels.

That’s not to say that proponents have given up on such efforts, however. In fact, climate change and clean energy are likely to be defining and distinguishing issues for Democrats and Republicans as 2012 progresses.

House Reps. Push For Carbon Price

As reported by The Hill, Reps. Henry Waxman (D-Calif.), Ed Markey (D-Mass.), former Reps. Sherwood Boehlert (R-N.Y.) and Wayne Gilchrest (R-Md.) wrote an op-ed article published in the Washington Post asserting that the nation’s most pressing fiscal and environmental problems could be addressed by enacting a straightforward piece of legislation: the imposition of a price on carbon.

“The United States could raise $200 billion or more over 10 years and trillions of dollars by 2050 while cutting carbon emissions by 17 percent by 2020 and 80 percent by 2050,” they wrote.

Speaking subsequently to Washington Post reporter Ezra Klein, Waxman acknowledged that getting Republican opponents to sign-off on such a policy isn’t any more likely than it has been to date. He pointed the alternatives are even more problematic, however, arguing that passing an emissions trading scheme or carbon tax was the best practical alternative, one that would result in significant deficit and debt reduction, while at the same time providing economic stimulus at a time when it is still very much needed.

“Will it be easier to slash Medicare benefits? Make deep cuts to defense? Raise income taxes? A climate policy is the easiest way to face these challenges,” Waxman told Klein, perhaps somewhat rhetorically.

“There’s an interesting similarity in the problems of the two issues. Cumulative debt and cumulative carbon emissions are both rising,” Waxman continued. “If you look at the debt problems they’re going up and up and up and the cumulative emissions of carbon are going up as well. One can have terrible consequences for the economy and the other for our planet. I don’t think people have realized the similarities of these two issues.”

Increasing Costs of Political Procrastination

Putting a price on carbon would establish a pathway for addressing these critical issues, both of which require consistent, long-term policy frameworks and action. Inaction will only raise the cost of addressing them, Waxman emphasized.

“If we could put in place a price on carbon and then use the sales of carbon allowances to raise revenues we could raise money and cut emissions at the same time, and we can have a transition that will be as orderly as possible. If we leave both to become much more severe then the answers will be more radical and painful,” he stated.

Political opponents who acknowledge the urgency of addressing climate change still assert that establishing a price on carbon would be foolhardy given the persistent fragility of the banking system and economic recovery. Waxman and supporters refute this, citing numerous studies that indicate that a well-crafted price on carbon could both cut pollution and stimulate the economy.

“Policies can be adopted to protect our energy intensive, trade exposed policies. Policies can be adopted to avoid spikes in electricity prices,” Waxman told Klein. “But I think this is exactly the time to act because we can have a number of benefits from these policies, none more important than the jobs that could be produced by giving clean-energy entrepreneurs certainty that they can begin to invest.”

Reports and studies spanning the scientific and economic communities have shown that extreme weather events are on the rise, and that often subtle, long-term climate change effects are increasingly being seen. Whether US government representatives are will to acknowledge and show leadership on a defining issue of the times remains to be seen.

January 27 2012

16:37

Reaping a Bonus From Cap-and-Trade

Rather than imposing higher costs on consumers and businesses, the Regional Greenhouse Gas Initiative lowered their bills.

November 15 2011

12:29

Carbon Trading Initiative a Success, Study Says

A study estimates that the 10 states in the regional initiative will realize $1.6 billion from a three-year period in which the cap-and-trade market operated.

October 21 2011

14:57

July 06 2011

22:04

Wooing Voters (or Not) With a Climate Pitch

A limited study suggests that politicians could gain votes by taking a green position on climate change -- or at the very least, not risk offending voters. \

June 29 2011

14:25

June 14 2011

12:40

California Revises Its Greenhouse Gas Analysis

Responding to a judge's order, state regulators in California undertook a new analysis of how different strategies would succeed in reducing emissions. The bottom line: they think cap-and-trade would work best.

May 26 2011

16:10

March 23 2011

21:45

March 22 2011

22:13

February 15 2011

15:03

February 14 2011

16:45

Gingrich's Energy Policies Rile Conservative Critics

Negative reviews focused on two stumbling blocks that Mr. Gingrich, who is weighing a presidential bid, faces with the activist base of the Republican Party: ethanol and climate change.

January 27 2011

22:31

New Mexico's Supreme Court Overrules Climate Skeptic Governor: Greenhouse Gases Will Be Regulated

On Wednesday, New Mexico’s newly elected Governor Susana Martinez, a climate change skeptic, suffered a major defeat. After suspending global warming regulations on her first day in office, the New Mexico Supreme Court ruled against the Governor, requiring the state to regulate global warming emissions and to implement a carbon reduction program.

Highlighting years of climate action during his administration, and following two years of deliberation, members of former Governor Bill Richardson’s (D-NM) Environmental Improvement Board (EIB)  voted 4-3 in November to mandate global warming emissions reductions from large stationary sources (3% per year from 2010 levels, starting in 2013); and to approve a state cap and trade system.

Riding the Republican climate skeptic wave to power in the fall elections, however, Martinez wasted little time undoing her predecessor’s progress. She issued Executive Order 2011-001 on January 1st in an effort to halt proposed and pending science-based rules and regulations (including the EIB’s decision) for a period of 90 days. The new governor had no scientific reasoning for her position, however, it was purely based on ideological opposition to climate action. <!--break-->

Scott Darnell
, a spokesman for the Governor, explained her strategy: “The cap and tax regulation had not been published in the New Mexico register, which means it was not yet valid or enforceable.”

Not content with simply quashing a science-based regulation, three days later, the Governor fired all 7 members of the EIB:


“Unfortunately, the majority of EIB members have made it clear that they are more interested in advancing political ideology than implementing common-sense policies that balance economic growth with responsible stewardship…”

She also appointed former Senator, astronaut, NASA geologist and fellow climate skeptic Harrison “Jack” Schmitt to head the Energy, Minerals and Natural Resources Department. 

Arguing that Martinez did not have the authority to interfere in the rule-making process, the New Mexico Environmental Law Center (NMELC) filed lawsuits in January against the Governor, the Secretary of the New Mexico Environment Department and the New Mexico State Records Administrator. On behalf of New Energy Economy and Amigos Bravos, the NMELC petitioned the New Mexico Supreme Court for a writ of mandamus to require the Governor and Environment Department to comply with existing law, and to compel the State Records Center to publish the global warming emissions regulations in the State Register.

“The issue is whether the suspension of the printing of the rules was proper,” stated New Mexico Supreme Court Chief Justice Charles Daniels who delivered the decision. While he stopped short of issuing a writ against the Governor or the Secretary of the New Mexico Environment Department, he was clear that the law had been broken: “We will issue a writ against the State Records Administrator. She has a non-discretionary administrative duty to follow the law.”

Bruce Frederick, NMELC staff attorney applauded the judge’s decision:

“This is a tremendous and deserved victory for the administration of justice in New Mexico…The ruling ensures that our regulations will continue to be developed in a public and open process, and be protected from revision through secret, backroom deals.”

Darnell, speaking for Martinez, responded to the court's decision:


“In the case of Cap and Tax…a new EIB will be appointed consisting of bi-partisan members who we fully expect will put science ahead of political ideology in every matter they consider.”

That seems to confirm the Governor’s ideology will continue to cloud her grasp of science, since it was in fact science that won the day over ideology in the court's ruling that the state must regulate emissions.  Hopefully the new governor and her skeptical staff will learn the difference between ideology and science sometime soon, otherwise it will be a long four years for New Mexicans who understand the urgent need to curb global warming pollution.

January 19 2011

22:40

Europeans Suspend Trade in Emissions Permits

The attacks raise new questions about the viability of the bloc's main tool to combat a rise in warming gases in the atmosphere.

January 04 2011

15:56

Environmental Economist Joins White House Staff

An early proponent of a cap and trade system to control greenhouse gas emissions joins the White House as Republicans seek to undo much of the administration's environmental agenda.

December 16 2010

19:09

The Energy Future Ain't What It Used To Be

An Energy Department forecast projects that the price of natural gas and electricity will remain relatively low over the next quarter-century.

December 10 2010

18:28
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