Hi everyone,
Here is a link to an alternative take on cap-and-trade, in the form of a
PowerPoint presentation (short and longer versions):
http://www.thunks.net/Cap-and-Trade.htm
The author (Holmes Hummel) raises most of the same issues as Annie
Leonard, but draws a more positive conclusion. The graphics are nice,
though no match for Ms. Leonard's. I think I may show them both in my
class tomorrow and see what the students have to say!
Best wishes,
Rob
Jim Salzman wrote:
This has been circulating on the envlawprofs listserve and drawn some
pretty harsh criticism. I've pasted some of the back-and-forth below
(which I also shared with my students).
-js
____________________
Dear colleagues,
Here is one view on the "trade" part of "cap and trade." Click on the
link.
Perhaps someone on the list will explain what's wrong with Annie
Leonard's
analysis. (By the way, the Government of Ukraine refuses to disclose
documents showing what it is going to do with the billions of dollars
to
be received from Japan to offset Japan's failure to reduce emissions.
My
colleagues in Ukraine are filing lawsuits to obtain the documents.)
Thanks,
John Bonine
____________________
There's so much wrong with it, one would be hard pressed to respond to
it
all. And what's not wrong is misleading. An example of misleading is
the
fact that at the end in small type is the fact that "carbon fees,"
which are
never mentioned orally by Ms. Leonard that I heard, apparently become
the
means to achieve a cap. Repeating over and again that Bernie Madoff
and
Goldman Sachs are behind cap-and-trade, but hiding that instead she is
suggesting carbon taxes is somewhere between dishonest and
dissembling.
Carbon taxes, or fees if you are afraid of the "t" word, have certain
theoretical advantages, but they also have certain disadvantages, and
that's
not even counting the fact that carbon taxes, whatever their
theoretical
advantages, are DOA. Ms. Leonard's revelation that the existing Clean
Air
Act provides all the authority we need (but I can't see where the
carbon
fees come from under the CAA) is ludicrous.
I repeat, just what we need, environmentalists opposing cap-and-trade.
Cap-and-trade may not be ideal, and the cap-and-trade bills possible
of
passage may be only slightly better than terrible, but they are the
only
game in town, and cartoons won't change that for the better.
Bill Funk
__________________
So Bill, apart from the errors in the video, am I to take it that you
think that the trade part of cap-and-trade is going to work across
borders
and between continents, and in "selling" countries with weak
governance
and rampant corruption?
If so, Japan's purchase of mythical reductions or benefits in Ukraine
will
be a win-win for the planet. If not, Japan gets off the hook and fails
to
reduce its emissions as much as needed.
John Bonine
____________________
Dear John,
Entertaining, a lot of fast talk, and some good points, but some red
herrings too.
Cap and trade was NOT designed by Enron and Wall Street, though both
use/misuse it. It's fun to have Monopoly-type figures running around
with $ on their clothes, but cap and trade is not a get-rich-quick
scheme with nothing behind it. It's a serious strategy with lots of
economics behind it, and it can work and has worked if designed
properly. If some brokers make money on the side, so be it. There's a
comprehensive recent assessment of cap and trade systems in the US by
Dan Burtraw and colleague at RFF that shows it's been effective, in
part by stimulating cost-reducing innovation even by parties not
directly in the system. It also shows that the acid rain program
would have captured more benefits if Congress had tightened the cap,
but that's another story.
The GIVEAWAY is not such a terrible idea as Annie suggests. Most
serious economic analysts say that in the end giving away the rights
has the same effect on prices and business strategy as the auction
approach. I'd prefer the auction, too, as would most economists,
especially for its government revenue potential, but the giveaway is
not a scam and it's not the end of the world, just a second-best
approach. Again, see the acid rain program.
Her claim that cap-and-trade didn't work in Europe is a canard. The
EU commission made a big mistake at the start by setting their cap too
high, causing some of the market instability that Annie describes, but
they tightened the cap and the system has been working more smoothly
for quite a while. And don't believe her suggestion that cap and
trade has anything to do with fuel prices at the pump. We could learn
a thing or two from the Europeans on this point, as I think Annie
would agree. Gasoline here in Denmark is around $2 per liter, or well
over $8 a gallon. Their petroleum costs what ours does; the
difference is taxes. Personally, I favor much higher prices at the
pump as a good climate policy, but Annie would lose her US audience if
she made that pitch.
Cheating: Yes, it's an issue, a big issue, but that's true of any
system where so much money is at stake. Direct regulation is not
necessarily the better approach, as we saw with the recent stories
about non-enforcement of the CWA. As Annie argues, the devil is in
the details (isn't it always?), but that doesn't mean the system is
flawed in principle, just that it will need a lot of bells and
whistles and good monitoring and enforcement to try to assure real
emission reductions. And transparency, too--your Ukraine story shows
the problem.
Is cap and trade a distraction? I don't buy that argument. If
developing countries (at least the major emitters) won't buy the cap,
then the game is up anyway. So what are we arguing about? The cap is
the central idea; the trade part is just a way to create some
flexibility and private choice and innovation incentive in how
emitting sources meet the cap.
Will cap and trade allow the coal companies to stay in business? I
suppose so--but this is not about punishing the bad guys. We can't
simply shut down every coal-fired power plant tomorrow. In the longer
run, under cap and trade the carbon price will go up, and coal will
have to become a very innovative, lower-carbon industry to keep it's
market. In the end, what coal offers is carbon to burn, so unless
they can find ways sequester all that carbon after combustion they
will get squeezed out of the market.
A final thought: If we all went with Annie's plea (and my heart is
with her), we would be writing our Senators and Congress people to
tell them to kill cap-and-trade. My mind says that's not a good idea.
We've had too much temporizing in Washington already. A full-scale
political attack on cap-and-trade from the left will just prolong the
political deadlock at the national level. That will leave us with
what we have now, a patchwork of state and local initiatives--good,
but not good enough to match the scale of the problem and it would
leave us on the sidelines internationally.
--Sandy Gaines
<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>
Professor Jim Salzman
Duke Law School
Nicholas School of Environment and Earth Sciences
Box 90360
Durham NC 27708
USA
office (1)919.613.7185
fax (1) 919.613.7231
<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>-<>
Matthew Paterson <[email protected]> 12/2/2009 11:04 AM >>>
Hi all
A great animation on cap and trade, would be perfect for teaching
purposes.
Cheers
Mat
--
Associate Professor of Political Science
Director of the University Honors Program
University of Massachusetts Dartmouth
