Advanced Cap and

Trade

The Cap• To achieve this goal, the U.S. government should

steadily tighten the cap until emissions are reduced to 80 percent below 1990 levels by 2050. Businesses would have to obtain permits entitling them to emit a certain quantity of carbon dioxide or its equivalent in other greenhouse gases. All permits would be auctioned off by the government. Emissions permits in the near term would likely fall in the range of $10 to $15 per metric ton of carbon dioxide or its equivalent.• 2008 data

Obama Air• For the first time in years, President Obama made

climate change a major focus in his State of the Union address, continuing a gradual pivot back to environmental issues that appeared to begin around the time of Hurricane Sandy. He didn't just say, "We must do more to combat climate change"—he made actual proposals, including a "race to the top" for state-level energy efficiency initiatives and an energy security trust.

Clean Coal• “The scope of the problem,” says Nicholas Bianco

of the World Resource Institute, who has studied the U.S. executive’s power over emissions, “is too enormous not to have Congress taking an active role. The science is quite clear that we cannot delay.”

Internalizing Externalities• What externalities have been internalized?• Name of Law?• Air Quality/ Clean Air Act• Visibility/ Regional Haze Rule• Noise Pollution/ Grand Canyon Overflights• Water Pollution/ Clean Water Act• Extinction/ Endangered Species Act• Fires/ Building Codes• Smell/ Zoning

New England Program• For the past decade, ten states stretching from

Maine to Maryland have been experimenting with their own modest cap on carbon pollution from electric power plants. And, this week, the Regional Greenhouse Gas Initiative (RGGI) announced that it would continue to cut emissions by tightening the cap between now and 2020.

Can it Work?• The top-line news is encouraging: Carbon-dioxide

emissions from power plants in the Northeast have fallen very sharply since the plan was first devised — from 188 million tons of carbon-dioxide in 2005 to 91 million tons in 2012

• Recession

Too Cheap?• As a result, permits to emit carbon-dioxide are

extremely plentiful and cheap, costing just $1.93 per ton of carbon. If you’re an electric utility, there’s little incentive to invest in efficiency or renewable power to avoid the cost of buying up pollution permits.

IEA• $50/ton by 2030

Revenues• The program has also been quite lucrative for the

states involved, which have raised about $912 million since 2009 from auctioning off pollution permits. States have used that money in different ways. Many have set up programs to improve energy efficiency.

Chicago Carbon Exchange• Social Responsibility• Triple Bottom Line• International• https://www.theice.com/ccx.jhtml • Collapse of Chicago Climate Exchange Means a Strategy

Shift on Global Warming Curbs 11/9/10• http://carbontradexchange.com/ • http://www.tccxchange.com/ • http://www.arb.ca.gov/cc/capandtrade/capandtrade.htm

• http://www.arb.ca.gov/cc/capandtrade/auction/auction.htm • What’s new

• http://www.indeed.com/q-Carbon-Trading-jobs.html

Revenues from Federal Auctions

• Initial estimates by the Congressional Budget Office project that an economy-wide cap-and-trade program would generate at least $50 billion per year, but could reach up to $300 billion. Approximately 10 percent of this revenue should be allocated to help offset costs to businesses and shareholders of affected industries.

Economic Efficiency?• Of the remaining revenue, approximately half

should be devoted to help offset any energy price increases for low- and middle-income Americans that may occur as a result of the transition to more efficient energy sources. The other half of the remaining revenue should be used to invest in renewable energy, efficiency, low-carbon transportation technologies, green-collar job training, and the transition to a low-carbon economy.

Video Time• http://

www.huffingtonpost.com/2012/11/19/california-cap-and-trade_n_2161874.html

• 11/19/12

Links• http://www.3degreesinc.com/products/recs • http://

www.ucsusa.org/clean_energy/res/overviewtrading.html

• http://www.greenenergytrading.com.au/ • Dec 2012/Jan 2013 - Carbon Trading Magazine,

www.carbon-tradingmagazine.com/.../Carbon-Trading-Dec-20...