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Editor’s Note: This is a follow up post to Obama’s Plan to Reduce Foreign Oil Dependence.
Regardless of who is elected next November, both candidates agree that climate change is a fact and not a theory. “I know that climate change is real,” said John McCain. “We can have a debate about how serious it is, but the debate about climate change is over.”
McCain and Obama however vary widely in their response to this issue, leaving the American people with a choice of approaches when choosing the next president. McCain’s primary weapons in this battle includes implementing a cap and trade system for emissions and utilizing greater amounts of nuclear power.
Cap and Trade
“Cap and trade is being implemented in Europe and they have stumbled and they’ve had problems but it is still the right thing to do,” said John McCain. “It is what we did in relation to acid rain.”
One of the reasons McCain supports this approach is because it encourages the market to respond with the lowest cost approach. He believes the market will correct itself with the use of cleaner technologies without the need for intervention, such as a tax credit or major investment from the government.
Can a cap and trade system for greenhouse gas emissions harness market forces to address climate change? As I noted on Monday, that’s the thesis of Fred Krupp and Miriam Horn’s new book Earth: The Sequel. To support this claim, Krupp and Horn focus on the innovative ecopreneurial efforts happening around the world in the broad field of clean technology. From thin-film solar to algae biodiesel to an Alaskan ice palace powered (and kept frozen) by geothermal energy, Earth: The Sequel tells the stories of scientists, business people, and outright dreamers experimenting with both current incarnations, and the next generation, of renewable energy technologies. A few of these companies include:
Of course, the technologies under development by the companies profiled in Earth: The Sequel aren’t cheap; in almost every case, major investors, such as Vinod Khosla and John Doerr, have backed these start-ups with significant funding. At one level, some might argue that the market is already working: capital is flowing to promising ideas.
I’m a bit behind the curve in getting to Fred Krupp (the president of Environmental Defense Fund) and Miriam Horn’s new book Earth: The Sequel– my reading time ain’t what it used to be! While other green bloggers have beat me to the punch on this one, I still wanted to weigh in on this book, especially since the US Senate begins its debate of the Lieberman-Warner-Boxer Climate Stewardship Act today. While this timing was a matter of luck, as opposed to planning, Krupp and Horn’s book provides some valuable insight into the debate that will occur on the Senate floor this week… let’s hope a few of our esteemed representatives have read it.
At it’s core, Earth: The Sequel is an argument for cap-and-trade as a viable, market-based mechanism for addressing climate change. While long-time sustainablog readers are likely up on the concept of cap-and-trade, it’s worth a quick explanation. Krupp and Horn define the concept in the book’s first chapter:
The U.S. Congress must set a legal and steadily declining limit on global warming pollution. The allowances will be divvied up among emitters, or auctioned by the government to raise revenues — or some combination of the two. Polluters who emit more will need to pay for the extra pollution reduction achieved by others; those who can reduce global warming pollution further will profit by selling those reductions in an open market. We can, in short, use the power of the market system to climb out of the hole created by flawed markets.
One might worry that what follows such an introductory chapter might be a long, boring treatise on market-based economics and the environment; rather, the bulk of the book focuses on the companies (mostly start-ups) involved in innovative research and development of next-generation clean energy technologies. I’ll be discussing some of those stories in subsequent posts at CleanTechnica and Ecopreneurist. Today, I want to stay focused on this main argument: cap-and-trade is the mostly viable method of achieving significant reductions in greenhouse gas emissions.
For those of you who are bettin’ folks, traders on the Chicago Climate Exchange view the Democrats as more bullish on cap-and-trade systems. So if you’re betting on a Democratic victory, you’ll want to buy those contracts now, in anticipation of a price spike on Nov. 5 (Politico).
Toyota Prius sales have topped 1 million and dealers in most markets simply can’t keep them on the shelves. Toyota says domestic inventory is limited by production [...]
Tries to woo Western Dems by touting climate change as key
It might be argued, that the only way for John McCain to win in November’s general election would be by setting himself apart from President Bush enough to attract support from the middle - and one way he is doing that is by emphasizing his stance on environmental issues. Last week, the Straight Talk Express began a PR campaign aimed at courting independent-minded environmentalists, especially in the swing states.
In remarks he prepared to give at a wind technology firm in Portland, Oregon, on Monday, the Arizona senator said he would seek international accords to reduce greenhouse gas emissions, and would offer an incentive system to make businesses in the United States cleaner. McCain said:
“We stand warned by serious and credible scientists across the world that time is short and the dangers are great. The most relevant question now is whether our own government is equal to the challenge.”
The presumptive Republican presidential candidate is using his stance on energy and the environment to draw distinctions between himself and President Bush, whose approval rating has sunk to a near-record low of 28% (Pew, Gallup, USA Today).
By Carol Gulyas •
February 27, 2008
“Personal choices, no matter how virtuous, cannot do enough. It will also take laws and money.”
The New Yorker has published an illuminating article on carbon emissions and carbon “cap and trade” systems, which shares the example of the successful reduction in sulfur emissions to illustrate how carbon emissions could be reduced. The passage of the Clean Air Act in 1990 mandated massive acid-rain reductions, and created a market for sulfur-dioxide emissions that forced companies to “pay to pollute”. Once a cost was associated with sulfur-dioxide emissions, companies could save money by installing scrubbers. Emissions were reduced from eighteen million tons to nine million, and acid rain evaporated as an environmental problem. Cap and trade is already happening, at the Chicago Climate Exchange (CCX), where carbon futures are traded like pork bellies.
“…CCX members buy and sell the right to pollute. Each makes a voluntary (but legally binding) commitment to reduce emissions of greenhouse gases—including carbon dioxide, methane, and nitrous oxide—and hydrofluorocarbons. Four hundred corporations now belong to the exchange, including a growing percentage of America’s largest manufacturers. The members agree to reduce their emissions by a certain amount every year, a system commonly known as cap and trade. A baseline target, or cap, is established, and companies whose emissions fall below that cap receive allowances, which they can sell (or save to use later). Companies whose emissions exceed the limit are essentially fined and forced to buy credits to compensate for their excess.” — Michael Specter, The New Yorker
This isn’t just a method for punishment and reward. Establishing a carbon market allows money to flow toward developing the new energy technologies that will help companies save money. And if Silicon Valley is ever going to become “Solar Valley”, as some have predicted, the money needs to flow. Obama, Clinton and McCain are all advocating a cap and trade system.
Florida Governor Charlie Crist (R) signed an executive order last summer to develop a carbon market in the state, and has been making other good strides in the renewable energy department. Now, the governor, lawmakers, and Florida-based companies are debating the two main methods of carbon control: A carbon tax or a cap-and-trade system.
A cap-and-trade policy to limit carbon dioxide (CO2) - a major contributor to global warming - is a [...]
Thursday morning’s session at the Papandreou Foundation’s Symi Symposium focused on the "green economy": how to craft economic policy that both internalizes the costs of a carbon-based economy, and creates incentives to move away from carbon-intensive energy sources. The presenters in this session were Joseph Stiglitz, professor of economics at Columbia University and former member of the Clinton administration, and Angelo Consoli, Director, Codeco s.s., European Affairs and Progressive Communication.
Professor Stiglitz’s presentation picked
[...]
As California implements a cap-and-trade system for carbon dioxide (CO2), a major contributor to global warming, it’s eyeing the European CO2 market as a model. Creating similar market-based mechanisms to fight global warming could create a more thorough, comprehensive solution to the problem.
California officials met with EU lawmakers last week to discuss cap-and-trade, a system in which industries are given a limit as to how much CO2 they can emit. For companies [...]
Editor’s Note: This is a follow up post to Obama’s Plan to Reduce Foreign Oil Dependence.
