Cap and Auction Will Tackle Global Climate Change
It is critical to pass strong federal legislation as soon as possible.
We must reduce our carbon emissions 80% by 2050 in order to avoid the worst
impacts of global climate change. If we don’t succeed in passing a strong
bill this year, it may be impossible to make up for lost time.
Environmentalists are struggling to use the “first 100 days” of the new
administration to get this legislation through Congress.
Energy efficiency is a source of energy like coal, gas, or nuclear – except
instead of drilling for it or blowing up mountaintops to get to it, we can
tap into this clean energy source by using ingenuity to do more with the
energy we generate: we can work smarter, not harder. The fastest and best
way to encourage efficiency and innovation is through legislation that makes
waste too expensive to ignore.
What is Cap and Auction, or Cap and Trade?
Cap and trade refers to:
• the establishment of an emissions cap that would limit and reduce overall
greenhouse gas emissions in a certain set of economic sectors;
• the creation of a system that turns emissions reductions into equal
economic units (generally one ton) that can be then traded like a currency.
Basics
• The most likely mechanism for tackling global warming is a so-called “cap
and trade” system, whereby a declining cap is put on total emissions with
individual emissions permits being traded amongst emitters. Depending on how
it is designed, such a system can be heavily tilted toward the interests of
the planet or, as some would prefer, the interests of polluters.
• Right now the carbon industries are lobbying to get a cap and trade deal
that would give away carbon permits free of charge to existing polluters,
which would bribe the sluggish to do nothing, and slowing down innovation.
• The design of a cap and trade program is critical to its chances of
success. Permits to emit carbon must be used for public benefit, not private
windfalls. All allowances should be auctioned or otherwise used to benefit
the public, not to generate windfall profits for polluting industries. Free
allocations, if any, must be limited in size and restricted to a short
transition period.
• Revenue raised by permit auctions should be used to promote a clean energy
future by investing in the highest-value solutions for emissions reductions
first. These funds should not be used to perpetuate dirty, expensive,
outdated technologies like coal burning. Allowances and auction revenues
should be used to accelerate deployment of the clean energy technologies we
have today and to develop the ones we need for tomorrow.
• Auction revenues should also be used to protect low- and moderate-income
citizens from rising energy costs and other negative economic impacts,
create new jobs, ensure fair treatment for affected workers and their
communities, and drive technology transfer to help achieve emissions
reductions around the world.
• Enforcement of the rules is essential. Polluters must be strictly held to
both short and long-term goals. There must be careful inventory of present
pollution levels and accurate measurement of reductions. There must be no
loopholes that allow continued releases while making claims of reductions.
• For complete success in a global climate change mitigation plan, any cap
and auction program should be carried out in conjunction with the
establishment of regulatory programs in 3 areas: a renewable electricity
standard, a utility energy efficiency standard, and increased fuel economy
standards. A complete solution to global warming is comprised of initiatives
in all sectors.
(adapted from a Dave Hamilton memo, and from Carl Pope’s essay here:
http://gristmill.grist.org/story/2008/2/14/95124/2187)
Submitted by Peg La Point, Program VP
