Big Cap, Little Trade
posted by: Dave R. 131 days ago
The cap and trade bill that was passed in the House this week is a good start, but fails to address the still inconvenient fact that we'll need to change our ways in order to truly live more sustainably.
In his book Natural Capitalism, Paul Hawken wrote that "One of nature's most critical cycles is the continual exchange of carbon dioxide and oxygen among plants and animals. This recycling service is provided by nature free of charge. But today carbon dioxide is building up in the atmosphere, due in part to combustion of fossil fuels. In effect, the capacity of the natural system to recycle carbon dioxide has been exceeded, just as overfishing can exceed the capacity of a fishery to replenish stocks."
This tragedy of the commons is a result of both a lack of monetary value being assigned to maintaining a healthy planet, and a lack of recognition that our planet's ability to absorb fossil fuel emissions is finite. The point of cap and trade is to solve both of these problems - by limiting the total emissions (the cap), and letting the market set a price (the trade) on polluting.
At the heart of cap and trade is the idea that when polluting has a cost, all of us will have to pay for it, and will change our behaviors accordingly. The Congressional Budget Office estimates that a truly functional cap and trade bill - where all major polluters have to buy their pollution rights or find a cleaner way to to do business - would cost $890 per family per year. That's a pretty big number, and the reaction in the House was to give away most of the permits, which reduced the cost to $175 but also removed the connection between cost and behavior.
A small but vocal minority both conserves and offsets voluntarily, despite the occasional inconvenience and cost. But a far larger number of consumers and businesses will head this way when they see the true cost of their fossil fuel based behavior. Giving away permits prevents this from occurring. The question is, are we willing to go further?
In his book Natural Capitalism, Paul Hawken wrote that "One of nature's most critical cycles is the continual exchange of carbon dioxide and oxygen among plants and animals. This recycling service is provided by nature free of charge. But today carbon dioxide is building up in the atmosphere, due in part to combustion of fossil fuels. In effect, the capacity of the natural system to recycle carbon dioxide has been exceeded, just as overfishing can exceed the capacity of a fishery to replenish stocks."
This tragedy of the commons is a result of both a lack of monetary value being assigned to maintaining a healthy planet, and a lack of recognition that our planet's ability to absorb fossil fuel emissions is finite. The point of cap and trade is to solve both of these problems - by limiting the total emissions (the cap), and letting the market set a price (the trade) on polluting.
At the heart of cap and trade is the idea that when polluting has a cost, all of us will have to pay for it, and will change our behaviors accordingly. The Congressional Budget Office estimates that a truly functional cap and trade bill - where all major polluters have to buy their pollution rights or find a cleaner way to to do business - would cost $890 per family per year. That's a pretty big number, and the reaction in the House was to give away most of the permits, which reduced the cost to $175 but also removed the connection between cost and behavior.
A small but vocal minority both conserves and offsets voluntarily, despite the occasional inconvenience and cost. But a far larger number of consumers and businesses will head this way when they see the true cost of their fossil fuel based behavior. Giving away permits prevents this from occurring. The question is, are we willing to go further?
Read more: global warming, cap and trade
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better than nothing i suppose...
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there is no global warming.but we must stop destorying our forrests we need to save what is left.
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When the government and corporations are best friends, capitalism becomes fascism. It's unclear whether a capitalist democracy is actually possible... since the wealthy seem to control the world anyway. But obviously, until we cut those ties between the public and private sector, we are never going to find laws that favor the public as opposed to the corporate giants. And that's very sad.
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Willeam G. - I'm glad someone else has been doing a little research on what is going on. For others, ask yourself why would the government want to pass this law? It's only about money, power and control. It's the "new" bubble that only a handful will become billionares at your cost.
It would be nice and helpful to some if sites like this would do research and then TELL the truth, not the propaganda that is being force fed by the media and government.
If you want to help the earth and animals do some research. Read what real scientist are saying, find the papers the EPA didn't want published, read the Cap & Trade bill. You need to read the bill. Why are they going to "auction" off credits and let big business go unchecked but the small companies will have to go out of business? It's all about money, power and control. A "real bill" to help the earth is not going to make Saches, Gore, GE into billionares, but this bill will.
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All Cap N Trade does is set up Goldman Sachs to make even more money trading derivatives on the carbon market. Look at the details. They have an extensive section on setting up the financial aspects. It is just a trading scheme to give brokers control of energy.
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I agree with you Tim M. Appalachia is like a third world nation right among our mitts. No different then the Native Americans. I am surprised that we haven't practiced genocide on them also. We will have to watch the Cap and Trade, I certainly need more information. When this goes to The Senate and they finish, we wont even recognize the Act. It will be so watered down we shouldn't even have bothered.
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I should really check my facts before posting here, as the amendments have been flying fast and furious, but i don't want to re-read the bill (I skimmed the entire 900-page version).
Yes, it would be better if we auctioned 100% of the emissions (and, even better, in my opinion, would be a carbon tax).
In my opinion, the best use for the majority of the money raised is to give it equally per capita to all citizen-residents.
But, to the best of my knowledge, a fairly large portion of the permits which are "given to utilities" are required to be given equally to all customers of those utilities (equally per customer, not equally per kilowatt).
This should mean that the price per kilowatt is going up (even as bills for people who use less than the average amount of energy are falling). In other words, if this bill works as designed, people will still have the correct incentive.
Now, if we can just tighten the caps sooner (or at least get a floor on the price). My suggestion, set a price at which the government will buy back the permits (and retire them?).
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I agree with Tim and wonder if anyone has an update on the activists that were jailed during the protest and given the outrageous bond of 2000 cash?
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Appalachia can't stand anymore of the progress and prosperity of mountaintop removal, Wise County, Virginia is being bombed, blasted and bulldozed right into 3rd world America. END MOUNTAINTOP REMOVAL !
http://www.wisecountyisses.com/?p=138
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