Does Todd favor carbon taxes, cap-and-trade, both, or neither?

1 2 3 4

82% 12%6%0%1. Carbon taxes2. Cap-and-trade3. Both4. Neither

What does Todd suggest doing with the revenue?

1 2 3 4

21% 5%68%5%1. Clean energy R&D2. Per-capita rebate3. Sales and business

tax cuts4. Property tax cuts

How much would Todd’s proposal increase the value of gasoline?

1 2 3 4 5

37% 47% 5%11%0%1. $0.03 per gallon2. $0.13 per gallon3. $0.23 per gallon4. $0.33 per gallon5. $3.33 per gallon

Uncertainty, Cost and Policy

Addressing climate change involves some key assessmentsWhat is the level of risk?How certain are we of that risk?

Paul Krugman“It’s true that scientists don’t know exactly how

much world temperatures will rise if we persist with business as usual. But that uncertainty is actually what makes action so urgent. While there’s a chance that we’ll act against global warming only to find that the danger was overstated, there’s also a chance that we’ll fail to act only to find that the results of inaction were catastrophic.”

Low Certainty High Certainty

Low Cost

High Cost

IPCC Likely Temperature Scenarios

The scenarios with the greatest potential cost have the most uncertaintyThose scenarios have “fat tails”But they also demonstrate that we know little

about the relative forcing of CO2 and other climate elements

Scientific Consensus and High Risk?No. Risk comes from uncertainty.Uncertainty indicates that much about the

science of climate change is not understood.Why Not Be Precautionary on Global Warming?

We are trying to maximize wellbeingSpending trillions chasing ghosts is a wasteCould solve every one of these problems instead:

MalariaMalnutritionWorldwide childhood immunizationProvide rural water supply

Hybrids v. Electric v. HydrogenCalifornia required zero emissions vehicles be sold

by auto manufacturersNow California has changed to meet the market

“California air regulators on Thursday gutted rules seeking to place tens of thousands of zero-emission vehicles on the road, instead ordering automakers to produce a fleet of cleaner-burning hybrids. The decision is expected to affect 12 other states -- including Washington -- that had adopted California's target for zero-emission vehicles, defined as those powered solely by batteries or hydrogen fuel cells.” – AP, March 27

Seattle Kyoto AnnouncementAnnounced that their efforts had met Kyoto targetsA closer look shows that market forces caused

reductionsEconomic forces caused much of the reduction

5 percent improvement in fuel efficiency for cars10 percent reduction in CO2 from residential

heating due to “economic reasons”Market created reductions, not government

policiesUS CO2 emissions fell by 1.6 percent in 2006

while European CO2 emissions increased

Are better at addressing uncertainty“Because supply, demand, and regulatory conditions

evolve unpredictably over time, quantity type regulations are likely to cause volatile trading prices of carbon emissions. Price volatility for allowances is likely to be particularly high because of the complete inelasticity of the supply of permits, along with the highly inelastic demand for permits in the short run.”

Are more SimpleCap-and-Trade is likely to be gamedCarbon offsets are likely to create cheating

Cost less to administer

Improving Lives Through Market Solutions