PIELC - Some Thoughts on Carbon Tax Versus Cap and Trade and Other Things Carbonesque

What follows are some of my notes from PIELC 2008 from the "Real Climate Debate " Panel, which became an overview of Cap-and-Trade system versus Carbon Tax, mostly advocating carbon tax and bashing cap-and-trade based on its poor history in the United Kingdom.

Jane Williams: Executive Director of CA communities against toxics
EB32 CA (Bill reference)= California is a nationstate; by 2021 ONE in EIGHT Americans will live in CA.

Political compromise: cap & trade has not worked well – “market mechanism”…  
Gore wanted cap & trade in Kyoto…


*outcome of Kyoto: emissions in European Union have increased

 

SD: March- announced failure. Oct. change -- it is being called an “experiment”, not a failure
Property -->Wealth <-- Cap; Cap and trade system results in a transfer of wealth to the wealthy
Caps generate wealth FROM people to worst polluters, transfer money from consumers to worst polluters

SD: “We will auction 100%” --> Nope. Did not happen.  
Utilities, cement factories, refineries weigh-in on political front  

Staffron Demos (UK) waffling ("SD" above)  

 

LA Dept of Water / Power = biggest carbon footprint Utility
$6Billion:
$2B energy efficiencies
$2B green path
$2B renewable investments

 

Michael Peevee (not sure of spelling - this is phoenetic) may choose alternative path to renewable investments. You, the consumer, will pay more. How will that $ be used?
Kevin (a guy from the UK who was on teleconference into the meeting)
Since 2005, emissions challenge = disaster
More focus on energy efficiency & biggest polluters made enormous profit


6-8B profit to 4 largest power companies:
1)      over allocation of permits
2)      passed cost of permits to consumers as if they had to pay easiest access to power --> easiest access to decision makers --> successful lobbying  

 

*permits were given!

 

Citigroup – Peter Appleton?
Highly regressive tax falling mostly on poor
Coal, Nuke, Hedge, Energy trade = biggest winners
Phase II – 2008 10% permits auction allowance.
Fewer than 1% from only 10 members = ACTUAL
Theory: caps tighten in successive rounds of trading
Problem: CBM credits exceed market demand
Linking directive
New pool of permits into system. Keeps carbon price down  
Carbon financing--> Carbon Trade Watch

 

 

*Climate Policy = journal

 

Sulphur trading in US – US Rule-Based Regulation ---> EU (more effective)

Waterstones: UK book retailer – eliminated cardboard… Net result = profitable  

Silvester Johnson: Options (currently) cap/trade / cap/auction/tax
Trading:

  • Undercuts TBL
  • -empowers major polluters
  • – escalate power
  • -acts as covert tax, only more absurd
  • – cost dispersed
  • -traders, brokers, attorneys, bureaucracy for monitoring commodity market
  • -inherently flawed becasue of escape clauses (“stop prices”)
  • -volatility may influence broader economy and increase hazard for government to breach caps, sell more credits  Enact Federal Carbon Tax  

Ithaca NY example:
-mentions press coinciding w/positives / virtues of federalcarbontax.org City/county enviro. Mgmt. 

opportunity to influence national issue… no time after federalcarbontax.org resolution passed  
If you are looking blankly at the screen, your eyes are glazing over and you just said, "Huh...?"
Tax sets price, market determines reductions
Cap sets reductions, market determines price  

Sinclair decision in CA
-putting fee on point, “reduce lead-poisoning” = no more lead in paint, but fee still here  
Utility / Gov’t take $ (tax), go do something with it

Game: what are they going to do (with the money) and will it replace fossil fuels? (as opposed to displacing them) Not so at federal level
  1 pound PM (particulate matter) trading at around $200,000
Not effective; new plants still ON

Coal owns politics.

 

Today, I'm understandably in favor of a carbon tax, then, as opposed to cap-and-trade. The arguments set forth during the panel as noted above were convincing in this respect. I still buy some offsets of my own, in part to kill my guilt and in part becasue I think the programs I buy from are doing good work and I want to be able to support that. It's important to me to advocate a Green Polyculture, and as important to encourage critical thinking about some of the solutions we have developed.