R. Glenn Hubbard of Columbia Univ, formerly on Bush's Council of
Economic Advisors has an opinion piece in today's WSJ endorsing
"tradeable credits" as the way to respond to the now acknowledged
problem of Greenhouse Gas emissions.
Hubbard mentions the National Commission on Energy Policy (NCEP) as
behind the proposed legislation of Senators Bingaman & Specter. The
NCEP is a creature of corporations and big environmental money
sources. The Bingaman and Specter legislation has also been endorsed
by some major labor unions which would be directly impacted by
emissions reductions -- e.g. IBEW electrical workers at utilities,
the Boilermakers, the United Mine Workers.
Emissions trading is clearly the choice over carbon taxes among
these players, and it seems likely to be the path the US Congress
will go down.
The Bingaman/Specter Bill amounts to very little useful impact on
emissions. First, it targets emissions INTENSITY (emissions per unit
of GDP) rather than emissions. And the targeted reductions are trivial.
The allowances to emit are to be 90% given (not sold to) the
emitters. If what an emitter is given as an allowance to emit is
less than what is needed, more allowances can be purchased from
another emitter operating below what that entity is allowed to emit.
So there will be a market for the allowances. But to make sure the
price for an allowance on the market does not become burdensome,
there is a safety valve allowing purchase from the government at a
very, very low price. In 2004 dollars the safety vale rises from
$5.89 per metric ton in 2012 (when the program would begin) to $14.18
in 2030.
So we have very modest goals, a distant timetable, and not much of a
monetary incentive to reach the goals == all endorsed as the
preferred solution by the corporate, labor, academic, and
environmental establishment.
Unless Cockburn is correct, and he is not, the world is going to
undergo large and rapid changes.
Key Features
Target, Timing and Price Cap
• Emissions Target: The target is calculated in advance to reflect a
2.6 percent per
year decline in the emissions intensity of the U.S. economy
(expressed as total
GHG emissions per dollar of GDP) for the first period of program
implementation
(2012 to 2021). The target rate of decline in emissions intensity
increases to 3.0
percent per year in the second period (2022 onward). The emissions
target
establishes the total quantity of allowances available each year.
• Price Cap: The government would make additional allowances (above and
beyond the quantity initially allocated under the emissions target)
available for
sale at a fixed price. The price starts at $7 per metric ton of
carbon-dioxideequivalent
GHG emissions in the first year of program implementation and rises
steadily thereafter at an annual rate of 5 percent above the rate of
inflation.
