Cap and trade not enough to curb emissions by 2050
The alternative title on this: Republicans quash market functionality to fit within their ideological views, even when liberals try to work within their market-based framework to do something about climate change.
Highlights:
But while cap and trade policies use prices and market mechanisms to induce investment, climate bills in Congress typically have measures to prevent allowance prices from rising quickly. Sen. John Thune (R-S.D.) recently introduced an amendment in the U.S. Senate stating that a cap and trade policy should not increase energy prices, and it passed by a wide margin.
"The future price of carbon dioxide permits must rise to at least $50 per ton [it is currently 2$/ton in America and 10$/ton in EU -td9m] or more before electric power companies will find it cost-effective to build coal-fired power plants that will capture and sequester their emissions and other types of low-carbon power plants. Potentially higher prices might be required to foster the big changes we need in the way we make and use appliances and automobiles," Samaras said. "We should be augmenting cap and trade proposals with strong standards to induce low- carbon investments in the near-term."
Of course, there is some validity to protecting the interests of the poor in making sure that market prices don't change too quickly. But after a phone call I sat in on last week, it seems to me that it is really complaints from the coal and mining industries that would drive Republicans to try to make sure prices don't move too quickly.
The Chinese use this tactic to hold on to power as well. Of course, under Communism, price fixes are the norm. So is Thune a socialist? Shall we start a red-scare campaign against him? Graphic artists, please post (with your credentials if required on the image) your best red-scare John Thune image.
[scary gravelly commercial voice]
"John Thune is fixing prices for an ideology. Does that remind you of someone else? [image of Gorbachev or the hammer and sickle]"
"John Thune wants to keep energy prices low so that this [picture of coal plant] can continue for as long as it's profitable"
Carnegie Mellon Experts Say Cap and Trade Policies Are Not Enough To Reduce Emissions by 2050
PITTSBURGH, Apr 13, 2009 -- ASCRIBE NEWS
A team of researchers at Carnegie Mellon University report in a new policy brief that cap and trade climate policies alone will not be sufficient to put the nation on track to achieve a 50 to 80 percent reduction in greenhouse gas emissions of carbon dioxide by mid-century.
"While a cap and trade or carbon tax policy is an important step in reducing emissions, the range of prices for carbon dioxide permits being discussed will be too low to induce the large-scale investments we need," says Constantine Samaras, a research fellow in the Engineering and Public Policy Department and a co-author of the policy brief along with five other Carnegie Mellon researchers.
Under a cap and trade policy, the number of annual permits to emit carbon dioxide are limited or "capped." The permits are allocated to companies producing fossil fuels or releasing carbon to the atmosphere. These companies can then trade any extra permits they have with companies that need more.
But while cap and trade policies use prices and market mechanisms to induce investment, climate bills in Congress typically have measures to prevent allowance prices from rising quickly. Sen. John Thune (R-S.D.) recently introduced an amendment in the U.S. Senate stating that a cap and trade policy should not increase energy prices, and it passed by a wide margin.
"The future price of carbon dioxide permits must rise to at least $50 per ton or more before electric power companies will find it cost-effective to build coal-fired power plants that will capture and sequester their emissions and other types of low-carbon power plants. Potentially higher prices might be required to foster the big changes we need in the way we make and use appliances and automobiles," Samaras said. "We should be augmenting cap and trade proposals with strong standards to induce low- carbon investments in the near-term."
The Carnegie Mellon policy brief argues for aggressive standards in the electric power, building and transportation sectors as an addition to a cap and trade program. "We believe standards that require power companies to continuously reduce the average carbon dioxide emissions of the electricity they sell over time can serve as a market signal and driver of innovation toward a low-carbon economy," said co-author M. Granger Morgan, head of Carnegie Mellon's Engineering and Public Policy Department.
The authors also argue for the promotion of strategies that separate utility profit from the amount of electricity it sells, tighter standards on buildings and appliances, and fuel efficiency standards that at least double the miles per gallon over current vehicles. Some of the provisions recommended in the policy brief are included in the draft climate bill recently offered by U.S. Rep. Henry Waxman (D-Calif.), chairman of the Energy and Commerce Committee, and U.S. Rep. Edward J. Markey (D-Mass.).
"Without decoupling electricity revenues from sales, utilities can not be expected to widely promote energy efficiency, since they are losing money by doing so," said co-author Ines Azevedo, a Ph.D. candidate in the Department of Engineering and Public Policy at Carnegie Mellon. "While efficiency could save consumers up to 20 percent of their electricity while saving money, market barriers often prevent this from happening. Appliance and other standards are needed to allow consumers to take advantage of such savings," Azevedo said.
The Obama administration hopes to reduce greenhouse gas emissions by 80 percent by 2050, and make the U.S. a leader on climate change.
"To achieve the large emissions reductions required to ensure that atmospheric concentrations of carbon dioxide do not reach levels considered by many scientists to be disastrous, additional measures beyond cap and trade will be necessary. We need to build low-carbon power plants, give incentive to utilities to invest in efficiency, and significantly reduce the energy use of our appliances, buildings and vehicles," according to Carnegie Mellon researchers.
ABOUT CARNEGIE MELLON
Carnegie Mellon is a private research university with a distinctive mix of programs in engineering, computer science, robotics, business, public policy, science and social science, fine arts and the humanities. More than 11,000 undergraduate and graduate students receive an education characterized by its focus on creating and implementing solutions for real problems, interdisciplinary collaboration, and innovation. A small student-to-faculty ratio provides an opportunity for close interaction between students and professors. While technology is pervasive on its 145-acre Pittsburgh campus, Carnegie Mellon is also distinctive among leading research universities for the world-renowned programs in its College of Fine Arts. A global university, Carnegie Mellon has campuses in California's Silicon Valley and Qatar, and programs in Asia, Australia and Europe. For more, see http://www.cmu.edu .
Highlights:
But while cap and trade policies use prices and market mechanisms to induce investment, climate bills in Congress typically have measures to prevent allowance prices from rising quickly. Sen. John Thune (R-S.D.) recently introduced an amendment in the U.S. Senate stating that a cap and trade policy should not increase energy prices, and it passed by a wide margin.
"The future price of carbon dioxide permits must rise to at least $50 per ton [it is currently 2$/ton in America and 10$/ton in EU -td9m] or more before electric power companies will find it cost-effective to build coal-fired power plants that will capture and sequester their emissions and other types of low-carbon power plants. Potentially higher prices might be required to foster the big changes we need in the way we make and use appliances and automobiles," Samaras said. "We should be augmenting cap and trade proposals with strong standards to induce low- carbon investments in the near-term."
Of course, there is some validity to protecting the interests of the poor in making sure that market prices don't change too quickly. But after a phone call I sat in on last week, it seems to me that it is really complaints from the coal and mining industries that would drive Republicans to try to make sure prices don't move too quickly.
The Chinese use this tactic to hold on to power as well. Of course, under Communism, price fixes are the norm. So is Thune a socialist? Shall we start a red-scare campaign against him? Graphic artists, please post (with your credentials if required on the image) your best red-scare John Thune image.
[scary gravelly commercial voice]
"John Thune is fixing prices for an ideology. Does that remind you of someone else? [image of Gorbachev or the hammer and sickle]"
"John Thune wants to keep energy prices low so that this [picture of coal plant] can continue for as long as it's profitable"
Carnegie Mellon Experts Say Cap and Trade Policies Are Not Enough To Reduce Emissions by 2050
PITTSBURGH, Apr 13, 2009 -- ASCRIBE NEWS
A team of researchers at Carnegie Mellon University report in a new policy brief that cap and trade climate policies alone will not be sufficient to put the nation on track to achieve a 50 to 80 percent reduction in greenhouse gas emissions of carbon dioxide by mid-century.
"While a cap and trade or carbon tax policy is an important step in reducing emissions, the range of prices for carbon dioxide permits being discussed will be too low to induce the large-scale investments we need," says Constantine Samaras, a research fellow in the Engineering and Public Policy Department and a co-author of the policy brief along with five other Carnegie Mellon researchers.
Under a cap and trade policy, the number of annual permits to emit carbon dioxide are limited or "capped." The permits are allocated to companies producing fossil fuels or releasing carbon to the atmosphere. These companies can then trade any extra permits they have with companies that need more.
But while cap and trade policies use prices and market mechanisms to induce investment, climate bills in Congress typically have measures to prevent allowance prices from rising quickly. Sen. John Thune (R-S.D.) recently introduced an amendment in the U.S. Senate stating that a cap and trade policy should not increase energy prices, and it passed by a wide margin.
"The future price of carbon dioxide permits must rise to at least $50 per ton or more before electric power companies will find it cost-effective to build coal-fired power plants that will capture and sequester their emissions and other types of low-carbon power plants. Potentially higher prices might be required to foster the big changes we need in the way we make and use appliances and automobiles," Samaras said. "We should be augmenting cap and trade proposals with strong standards to induce low- carbon investments in the near-term."
The Carnegie Mellon policy brief argues for aggressive standards in the electric power, building and transportation sectors as an addition to a cap and trade program. "We believe standards that require power companies to continuously reduce the average carbon dioxide emissions of the electricity they sell over time can serve as a market signal and driver of innovation toward a low-carbon economy," said co-author M. Granger Morgan, head of Carnegie Mellon's Engineering and Public Policy Department.
The authors also argue for the promotion of strategies that separate utility profit from the amount of electricity it sells, tighter standards on buildings and appliances, and fuel efficiency standards that at least double the miles per gallon over current vehicles. Some of the provisions recommended in the policy brief are included in the draft climate bill recently offered by U.S. Rep. Henry Waxman (D-Calif.), chairman of the Energy and Commerce Committee, and U.S. Rep. Edward J. Markey (D-Mass.).
"Without decoupling electricity revenues from sales, utilities can not be expected to widely promote energy efficiency, since they are losing money by doing so," said co-author Ines Azevedo, a Ph.D. candidate in the Department of Engineering and Public Policy at Carnegie Mellon. "While efficiency could save consumers up to 20 percent of their electricity while saving money, market barriers often prevent this from happening. Appliance and other standards are needed to allow consumers to take advantage of such savings," Azevedo said.
The Obama administration hopes to reduce greenhouse gas emissions by 80 percent by 2050, and make the U.S. a leader on climate change.
"To achieve the large emissions reductions required to ensure that atmospheric concentrations of carbon dioxide do not reach levels considered by many scientists to be disastrous, additional measures beyond cap and trade will be necessary. We need to build low-carbon power plants, give incentive to utilities to invest in efficiency, and significantly reduce the energy use of our appliances, buildings and vehicles," according to Carnegie Mellon researchers.
ABOUT CARNEGIE MELLON
Carnegie Mellon is a private research university with a distinctive mix of programs in engineering, computer science, robotics, business, public policy, science and social science, fine arts and the humanities. More than 11,000 undergraduate and graduate students receive an education characterized by its focus on creating and implementing solutions for real problems, interdisciplinary collaboration, and innovation. A small student-to-faculty ratio provides an opportunity for close interaction between students and professors. While technology is pervasive on its 145-acre Pittsburgh campus, Carnegie Mellon is also distinctive among leading research universities for the world-renowned programs in its College of Fine Arts. A global university, Carnegie Mellon has campuses in California's Silicon Valley and Qatar, and programs in Asia, Australia and Europe. For more, see http://www.cmu.edu .