RSS
Home
Cap, trade and be wealthy? Analysis of the Waxman-Markey climate bill
Print
Email
RSS
Subscribe
The House of Representatives narrowly approved the American
Clean Energy and Security Act Friday.
(AP Photo/Manuel Balce Ceneta)
Although many see the American Clean Energy and Security Act as the most important piece of environmental- and energy legislation in U.S history, much seems unclear. The bill, that the House of Representatives narrowly approved Friday, intends to reduce global warming pollution by the implementation of two regulatory systems, one cap-and-trade system covering greenhouse gas emissions (GHG), another covering hydrofluorcarbons (HFC’s).
“This new ‘Wall Street’ of emission brokers will take the emphasis away from the goal of reducing carbon emissions and focusing on trading on price volatility instead”, says Rex W. Tillerson, Chairman and CEO of Dallas based ExxonMobil.
The Congressional Budget Office estimates that the cap-and-trade programs would cover about 86% of U.S greenhouse gas emissions in 2020, and reduce the budget deficits by about 24 billion over the 2010-2019 period. It is estimated that 7,400 facilities that generates electricity or burn fossil fuel would be affected by the programs.
“The bill that emerged from the House has the fundamental structure we need to significantly reduce carbon pollution while growing the economy”, said Environmental Defense Fund President Fred Krupp. “It puts a strong cap on emissions and reorients our energy market to make low-carbon power the goal”.
But does it? In April the European Union adopted a ‘Climate Action and Renewable Energy’ package with the goal of limiting the rise in global average temperature to no more than two degree Celsius above pre-industrial levels. Still, the EU emission trading system (EU ETS) that started to operate in 2005 and accounted for about three-quarters of value traded carbon in 2008, does not include emissions from household services, transport, waste and agriculture. These non trading sectors currently represent 60% of total EU greenhouse gas emissions.
And change is coming. According to a recent report from ‘Friends of Earth’ carbon offsetting is poised for further expansion into forests and sectors like nuclear power.
“Primary forests in developing countries are currently disappearing at a rate of some 13m ha/y” said Aimie Parpia, lead forest analyst at New Carbon Finance, a division of London based New Energy Finance. “If this rate continues unchecked, primary forest cover in developing countries could reduce by 17% of 2005 levels by 2020, releasing a further 90bnt CO2 into the atmosphere. The carbon market offers one solution to solving not only the increase in emissions but also issues of preserving the world’s primary forests”.
Maybe, but as the U.S GAO report from 2008 points out: “the use of carbon offsets in a cap-and-trade system can undermine the system’s integrity, given that it is not possible to ensure that every credit represents a real, measurable, and long term reduction in emissions”.
You may also like to read:
Investments in renewables surpass the ones in traditional energy
Related Articles:
Comments
