I disagree with you, however, on the success of the Acid Rain program: for example, “an abundant source of low sulfur fuel became available” – my understanding was that the low sulfur fuel was available before the Acid Rain program, but the coal plants weren’t about to spend the money to ship low sulfur coal across the country without some incentive. When there was a price on sulfur, those coal plants had an option: install expensive SO2 equipment or buy Powder River Basin coal. A lot of the plants decided that the latter was a cheaper route to reducing SO2 emissions, and so they did. And _that_ is the strength of a market based mechanism over more traditional command and control methods. And the politics of the issue was Republic Senator Simpson of Wyoming and other Powder River Basin senators signed on to the cap and trade mechanism whereas they would have fought against the more traditional technology regulation approaches. Yes, the reduction in railroad costs that made it cheaper to ship low sulfur coal wasn’t expected, but that is another advantage of a market based mechanism – flexibility. An omniscient regulator could do good command and control, but us imperfect regulators like more flexible instruments.

As far as the comparison to Europe goes: Mr. Lipow is being rather misleading: Germany dropped its SO2 emission by 87% because of reunification – East Germany was godawful dirty, and Germany gets to take credit for shutting down all the dirty industry there. Similarly, Thatcher in Britain wanted to break the coal union, and her success there lead to a large drop in both CO2 and SO2.

I agree you do need to be careful with perverse incentives, like credits for destroying HFC23 in China that might not have been produced in the absence of those credits, or credits for biofuel that leads to forest degradation. Also, in addition to setting a market price, there are other useful activities for government: get rid of perverse subsidies, like tax credits for parking places in new buildings, cheap and easy permitting and leasing for oil drilling, mortgage deductions for McMansions, and so forth. And the government can also step in for R&D, land use planning, public transit investments, and other issues. And some gases aren’t well covered by markets – land use change CO2, N2O, and agricultural methane emissions are all hard to monitor, and so would be better addressed by non-market regulation.

But the point is, there are ways to use market mechanisms intelligently that will reap large environmental benefits. And market and non-market regulations can have lots of synergies. Eg, if we just require 40 mpg cars, we get some environmental benefit. But if we tax gasoline and subsidize public transit, some people will buy 40 mpg cars, and some people will choose to live nearer to their jobs to save money, and even the people with 40 mpg cars will drive less, and we get lots more environmental benefit than by just requiring the better cars.

To Julian: Implicit comparisons to Nazi sympathizers is rather uncalled for – so much for keeping it civil. Yes, if we do nothing about reducing greenhouse gases, we might see 100s of millions of people die over the next century. I am NOT saying do nothing. On the other hand, if you could wave a magic wand and stop all burning of fossil fuels tomorrow – I bet 5 billion people would be dead by the end of the year. Very few things in life are as clearly black and white as the evil of the Nazi regime, and it does your cause no good to make false analogies. But, as long as you’ve chosen this analogy: cap-and -traders have figured out a way to smuggle some people out of the death camps and to safety, while working on plans to save everyone down the road. You, on the other hand, won’t accept any plan that doesn’t free everyone simultaneously, and therefore end up saving no one.

Let me share something with you – except for my two grandparents, my father’s entire family was wiped out in the Holocaust, killed off by the Nazis. They were operating with a certain logic – a logic of imperialism, expansion, and purification. Their specific group has been disbanded, but that logic is alive and well – it was the logic of Manifest Destiny and indigenous genocide. It is the logic of colonization.

To everyone who says that let’s work towards a “better market based system”, “better rules” and all the rest of it… Try telling that to my grandparents’ family as they are lead into the gas chambers. Would you try to reform the Nazis, make their apparatus just a little bit better? Would you call a substitution of one kind of gas for the chambers with another a “step in the right direction”? Would you work real hard to submit your resume and become part of their power structure so that you can “fight them from within”? Or would you do your damndest to band together and escape, and rebel, fighting for your life?

See, the Nazis knew that in the face of overwhelming suffering, people’s psyches shut down. So you can offer them two limited choices, and people will tend to try and get by with what is “better”. Wear a patch or not? Get your papers stamped or not? Try to get in the line for the work camp or head down the line to the train station?

Each “step in the right direction”, when that direction is outlined by those in power, is a step closer to annihilation.

The Jews who fought back in the Warsaw Ghetto Uprising had a much higher rate of survival than those who did not.

Cap-and-trade sounds well and good in theory, but once we add-in the known overlay of political reality, we get political favors of over-allocation, financial incentives for fraud (e.g. under RECLAIM oil companies under-reported their emissions and over-reported their car-scrapping offsets by factors of 10 to 1,200), fraudulent offset projects the world-over, and laughably low prices per ton of traded carbon (e.g. 2 cents per ton of carbon under Phase I of the EU ETS, or $3.07 per ton in RGGI’s first market-launching auction in Sept.) Even though the EU has put a price on carbon, 40-50 coal-fired power plants are still marching forward.

The EU ETS has and is failing. RGGI is over-allocated and prices will likely remain so while it allows banking. RECLAIM failed, and yet continues to exist 10 years later. In Los Angeles, one of the principle architects of RECLAIM was convicted in federal court for printing and selling $17 million worth of fraudulent credits on her home laser printer. If this can happen under one of the most sophisticated air pollution regulatory bodies in the U.S., what about in developing countries where cross-boundary monitoring and enforcement is nearly non-existent? This presents opportunities for a new “Enron-Environmentalism.”

And comparisons to the Acid Rain program are sheer fiction. The acid rain program did not allow offsets, did not require serious innovation (unlike SO2, there is no such thing as a readily-available low-carbon scrubber), and was miniscule in comparison to the economy-wide proposals for a carbon market. (See also, “Dispelling the myths of the acid rain story (part 2)” Environment, Date: 7/1/1998, by Don Munton, http://www.encyclopedia.com/doc/1G1-20979661.html (This article documents that most of the improvements from the acid rain program did not result from trading. Rather, an abundant source of low sulfur fuel became available and nearly all of the improvement in acid rain and the low expense of reduction are attributable to this fact.); Gar Lipow, Gristmill, Feb. 19, 2008, (“Compare the success of the often-touted sulfur dioxide trading system the U.S., instituted in 1990, with the speed and quantity of reductions under rule-based systems during the same period. U.S. SO2 emissions dropped by 31% between 1990 and 2001. Over the same period of time, under old fashioned rule-based regulation, Germany reduced its emissions by 87%, Italy by 62%, and Western Europe as a whole by 57%. … In general, it is not surprising that emission trading discourages innovation. The whole point of spatial flexibility is to encourage use of all cheap means before turning to expensive ones.”)

In regard to carbon trading, municipal utilities in LA are telling us that they are committed to meeting an aggressive 33% RPS goal and are willing to invest $1B to do so, but don’t want to be double-penalized and forced to buy offsets in the short-term under a C&T program (according to study by Stanford researchers up to 2/3 of offsets would have happened anyway, paying for nothing.) A trading program is a major barrier and distraction diverting billions to traders and unscrupulous offset projects the world over. A luxury that low-income rate-payers and consumers simply can’t afford in this economy. As a ratepayer, I’d rather see my higher energy costs go towards deployment of renewables than to creating and destroying HFC23 in China, plowing over native forests in Brazil with eucalyptus plantations, and purchasing cheap plastic tarps from Costco to cover pig piles in Patagonia… all of which have been real offset projects.

The whole theory behind trading that the “free market” will magically find the cheapest reductions possible conversely undermines the expensive investments needed to develop & deploy renewable clean sources of energy (E.g. it costs approx. $1M/ mile to build transmission lines for solar.) Markets arn’t magic. Deregulation taught us something.

A straight-forward carbon tax would not unleash the pandora’s box of trading. (For simple comparisons see, “Time to tax carbon,” Los Angeles Times , May 28, 2007; “California’s Cap-And-Trade Won’t Work,” LA Times, Mar. 10, 2008; “The Real Climate Debate: To Cap or to Tax?”, New York Times, Nov. 2, 2007; “Tax on Carbon Emissions Gains Support,” Washington Post, Apr. 1, 2007; “Cap and Charade: The political and business self-interest behind carbon limits,” Wall Street Journal, March 2007.

See also, Josh Harkinson, “Turning Carbon Into Gold,” Mother Jones, July/August 2008, http://www.motherjones.com/news/outfront/2008/07/outfront-turning-carbon-into-gold.html; Spencer Reiss, “Carbon Credits Were a Great Idea, But the Benefits Are Illusory,” Wired Magazine, May 19, 2008, http://www.wired.com/science/planetearth/magazine/16-06/ff_heresies_07trading; John Vidal, “Billions wasted on UN climate programme: Energy firms routinely abusing carbon offset fund, US studies claim,” The Guardian, May 26, 2008, http://www.guardian.co.uk/environment/2008/may/26/climatechange.greenpolitics

1) A small group of die-hard environmentalists says “we _can_ get rid of fossil fuels if we just put our mind to it. So lets do it. None of this stupid cap-and-trade business!”

Leaving out whether it is indeed possible to keep civilization while going cold-turkey on fossil fuels in the next 10 years (and I grant that it might be, though I think it is unlikely without human trauma larger than what we expect from climate change), it is politically never going to happen. We don’t have the lawmakers in any nation who would be willing to make that leap, let alone the US. And there isn’t the bottom-up support for this sort of change either, outside of a few echo-chambers – heck, I lived in “the People’s Republic of Cambridge” for years, and I don’t think you could get a majority of people _there_ to go cold-turkey on fossil fuels, much less the majority of people in Ohio, Minnesota, or Virginia (to name some states that helped elect Obama, who I think and hope will indeed do something serious about climate change).

Option 2) Pass a cap-and-trade bill within the next 2 years. Make sure that the cap-and-trade bill actually yields a price for carbon by installing a “floor” (to differentiate it from the European Trading System practice period where the price dropped to near zero because of over-allocation). At the same time (and I know that even Environmental Defense people don’t like this, so you guys are going to hate it) add in a Safety Valve. The purpose of the safety valve is three-fold: one, prevent temporary price spikes that don’t have much environmental benefit but cause a lot of unhappiness. two: make the bill feasible to pass. three: with safety valve flexibility, maybe a lot of other “cost containment” measures that are less well understood can get dumped (eg, poorly quantified offsets, international trading, etc.).

The price in the first few years of the system will reduce emissions somewhat by rewarding people and industries that are more carbon efficient. More importantly, it will send a signal that we are actually going to _do_ something on climate, that there is a price and that the price will go up. _That_ will stop construction of coal plants and other long-term carbon intensive capital investments. That will give incentives to companies to become the next Big Company in solar, wind, geothermal, you name it.

And yes, we _should_ auction most of the permits, and use revenue recycling to reduce the regressivity of the carbon price. By hating on cap and trade because it “gives money to polluters” you are ignoring the fact that Obama, Congress, and most academics have all come out in favor of mostly or 100% auction plans.

Or, possibly, Option 3: if you really think cap-and-trade isn’t going to work, then why don’t you come up with a realistic alternative – and a realistic pathway to getting there. It is easy to criticize the leading solution, and to sabotage it by refusing to accept reasonable compromises (I sometimes wonder if back during the Kyoto negotiations, rather than jumping up and down until the US accepted an 8% below 1990 target, if there had been the option of a safety valve, whether that treaty might have had a chance of being submitted to Senate for ratification. And if that had happened, where we might be today – with a cap and trade that had a decade of testing and improvement, rather than still trying to get the first attempt out the door), and easy to say “we have to get to zero-carbon future” without a politically and economically viable way to get there.

ps. As far as my credentials: I have given money to the Sierra Club and Union of Concerned Scientists over the years, I sold my car and live carless, I have gone mostly meat-less, I’ve written peer-reviewed scientific articles on climate change, etc. etc. All of which is great, but if we can’t get a majority of the country to believe in evolution, if a significant percentage of the country doesn’t even believe the global warming is anthropogenic, how are we going to persuade the entire country to voluntarily change their entire lifestyles? I think moving towards a less consumeristic society is great, but while we work on social changes from below, I think that we also need legislation from above, and that legislation will work most efficiently, and be most likely to actually be _implemented_ if it is market based.

Thanks for listening to my rant,
-Marcus

The problem here is that someone came up with a viable solution to climate change, but it wasn’t environmentalists, it was economists. Our movement (environmentalism) stems from leftist thought, which tends to be very anti-economic. In order to truly abate climate change need to stop being a “Liberal” movement and become a solution-focused movement! That means focusing on what can be done right now, rather than waiting around until the perfect socio-econo-environmental paradise arrives.

We need to put our energy into making sure that the solutions that are on the table are as good as they can be, and once they are in place, we need to work to make them even better. Sitting around complaining about capitalism isn’t going to stop it, and the sooner we can swallow our “idealism” and get to work the better.

1) one goal of the action was to draw attention to cap and trade bull, the climate action partnership and the big greens that are in bed with the corporate interests. One post suggested that since the action targetted one of these big “greens” specifically rather than all of them equally that the action should be disregarded. whatever, i wasn’t there but maybe ED had logistically the easiest office to invade. good enough reason to single them out. If the nature conspiracy’s office in your city is more vulnerable than ED’s than go after them.

2) cap and trade is not a step in the right direction. it’s an industry-backed strategy to redirect real grassroots pressure into some political hoodwink that purports itself to address the problem but really 1) perpetuates the status quo; and 2) (and this is even more dangerous) makes it harder for grassroots activists to gain traction on a real solution.

thank you rising tide! oh my word how i love rising tide!

w

And where does this belief that cap and trade hasn’t worked come from? The only cap-and-trade program that has come to maturity is the clean air act, and most would say that’s been the most effective environmental policy in the last 25 years.

Sure, the most recent programs haven’t reduced emissions much, but that’s because they’re in their infancy and their caps are still high. Once, the caps are lowered, emissions will reduce… that’s the point of the CAP.

In terms of how credits are apportioned is a matter of debate, but if you really care about protecting jobs, finding some way to protect American industries that manufacture the inputs for clean tech is going to be important (Cement, Steel, etc.). It’s not the worst idea ever to protect our manufacturing sector.

to specifically respond to this quote:
“The devil was in the details. We should be focused on getting the details of the legislation right here in the US, making sure we have an aggressive and comprehensive cap, not trying to derail the emerging consensus and momentum behind a market based emissions system.”

I believe that the devil IS the details, and by details I mean the whole framework of market based approaches, the techno-language it requires, the idea that carbon can be measured, and most importantly, that “valuing” something is the same thing as attaching a dollar and then buying and selling it.

You cannot buy and sell what you don’t own… inherent in any of these approaches require turning carbon (or more specifically the earth’s ability to cycle the element called carbon… or the planet’s breathing cycle) into a commodity – it is yet another enclosure of the commons into private property.

Did putting a price on land and creating private property from communal lands help preserve the land itself? Does privitizing water help keep it clean and accessible by all? Or do these systems help the mighty and powerful expand their Ownership into new realms.

Pricing carbon and having people own it is opening a new frontier for capitalism to expand into. The business community’s interest in carbon markets is not to save the world, but to expand their ownership into new realms, and to buy the rights to continue doing what they are doing.

That is plain and simple, but they hide it with all their details. Their details are the devil. And the devil’s old remedy says… If you’re dying from poison, try taking some more poison.