This entry was posted on Sunday, July 11th, 2010 at 5:30 pm and is filed under Futures Trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Given carbon regulation realities in the USA, shouldn’t everyone support cap and trade?
In an interesting article written by a couple of economists – one from the Bush Sr. administration and one from the Clinton Administration – they compare and contrast the two likely options regarding carbon. As they note, the EPA is set to begin regulating greenhouse gas emissions from large emitters in 2011. That’s just the reality of the situation. The first effort to overturn the EPA’s ability to regulate GHGs was immediately squelched, and even if it had miraculously passed Congress, President Obama would have vetoed it. The only way to change this reality is if Republicans control both houses of congress, the presidency, and still want to eliminate EPA regulation in 2013.
So for at least 2 years, the option is to either let the EPA regulate emissions, or to set up a carbon cap and trade system. Both economists (and probably every economist in the country) agree that cap and trade is far preferable from an economic standpoint.
"It would be a tragic mistake if this legislation did not include the broadest possible carbon pricing signal"
"Under the legislative approach, we can create markets that send a carbon price signal — ideally, throughout the economy — which would stimulate innovations and reduce the cost of making emissions reductions"
"Failing to make low-cost emissions cuts today would force us either to make more expensive cuts in the future or to see greenhouse gas concentrations rise to the point where severe damage to human and natural systems would become unavoidable. It is wiser and more economical to begin reducing emissions now."
http://www.rollcall.com/news/47821-1.html
Given the reality that we’re going to reduce carbon emissions one way or another, and cap and trade is economically far preferable to EPA regulation, shouldn’t every one support cap and trade?
AMP – as I learned long ago, you can’t expect intelligent answers in the Politics section 
Raiden – most of our renewable energy comes from hydroelectric. I refer you to a suggestion gcnp made the other day to deniers – run your fingers (do a little research) before running your mouth.
Raiden, I suggest you re-read the question. Focus on the 7th word specifically.
Frankly, I haven’t seen any indication that anyone here has more than a vague notion of what cap and trade is all about. There hasn’t been any serious discussion about it here in months that I have seen that has gone beyond accusations and name-calling. I know I’ve gone back to the Bush Ethanol Mandate again and again and again, expressing my concern that cap and trade could have similar unintended consequences, and I think anyone who understands the potential economic impact of these types of policies would have very legitimate concerns about the lack of serious dialogue or offering of other ideas coming from the other side. Reminds me of Calvin Coolidge when he left Church one morning and was asked what the sermon was about. ‘Sin,’ he replied. ‘And what did the pastor say about it?’ the asker queried. ‘He’s agin it,’ said Coolidge.
Let’s face it, the people who are opposed to Cap and Trade aren’t offering enough substantive counterpoints or alternative ideas to help avoid problems developing because the concept has been co-opted by the Democratic Party. They have a vested interest in seeing it fail because the Dems will take the fall for it and increase the chances of the Republican Party regaining power. It’s not unlike the accusations the Republicans made about the Democrats wanting the war in Iraq to fail, except this time there is a lot more substance to the charge because virutally no Republican is trying to do anything except say no-to the point that one recently said quite publicly, ‘What is wrong with saying no?’ Well, what’s wrong with that, Sarah, is when there is a problem that a lot of people want solved and one side is trying to come up with ways of solving it and the other is just saying no, no no instead of coming up with better ideas, the chances of failure or having to deal with unintended consequences grows expotentially higher.
So the question becomes, do we have problems or not? Is Cap and Trade the best proposal so far to deal with the potential impact of climate change? Appears to be-and it also appears that there is only one side in the political debate who wants to even try to work on the problem. The other side just wants to doom it to failure, regardless of the consequences.
Why is anyone tolerating that?
Bottom line is, there are reasons for concern about Cap and Trade, but unless people start discussing them in very specific terms rather than just shouting ’socialists’ and so on, there are no options that will present themselves other than going ahead with it. Sometimes I wonder where all the adults are nowadays.
11 Responses to “Given carbon regulation realities in the USA, shouldn’t everyone support cap and trade?”
Leave a Reply
July 11th, 2010 at 11:05 pm
Either cap and trade, or a carbon tax, would let the market decide which cuts to make.
This is infinitely preferable to regulation, which imposes more or less arbitrary ceilings, forces everyone to comply with them, and wastes opportunities to cut below the ceiling, where it is economically better to do so
So all right-thinking Republicans should be supporting cap and trade.
References :
July 11th, 2010 at 11:25 pm
Personally, I just accept the reality of it. It is far preferable to anything else being proposed (that stands a chance of happening any time soon) and something needs to be done *now* to curtail carbon emissions. So at this point, I pretty much have resigned myself to accepting that cap&trade should pass.
My problem with it is the potential for abuse in the markets, not the cap&trade idea itself. That is sound and I believe that it will work well based on the results of the existing cap&trade system for SO2 emissions.
_
References :
July 12th, 2010 at 12:08 am
Frankly, I haven’t seen any indication that anyone here has more than a vague notion of what cap and trade is all about. There hasn’t been any serious discussion about it here in months that I have seen that has gone beyond accusations and name-calling. I know I’ve gone back to the Bush Ethanol Mandate again and again and again, expressing my concern that cap and trade could have similar unintended consequences, and I think anyone who understands the potential economic impact of these types of policies would have very legitimate concerns about the lack of serious dialogue or offering of other ideas coming from the other side. Reminds me of Calvin Coolidge when he left Church one morning and was asked what the sermon was about. ‘Sin,’ he replied. ‘And what did the pastor say about it?’ the asker queried. ‘He’s agin it,’ said Coolidge.
Let’s face it, the people who are opposed to Cap and Trade aren’t offering enough substantive counterpoints or alternative ideas to help avoid problems developing because the concept has been co-opted by the Democratic Party. They have a vested interest in seeing it fail because the Dems will take the fall for it and increase the chances of the Republican Party regaining power. It’s not unlike the accusations the Republicans made about the Democrats wanting the war in Iraq to fail, except this time there is a lot more substance to the charge because virutally no Republican is trying to do anything except say no-to the point that one recently said quite publicly, ‘What is wrong with saying no?’ Well, what’s wrong with that, Sarah, is when there is a problem that a lot of people want solved and one side is trying to come up with ways of solving it and the other is just saying no, no no instead of coming up with better ideas, the chances of failure or having to deal with unintended consequences grows expotentially higher.
So the question becomes, do we have problems or not? Is Cap and Trade the best proposal so far to deal with the potential impact of climate change? Appears to be-and it also appears that there is only one side in the political debate who wants to even try to work on the problem. The other side just wants to doom it to failure, regardless of the consequences.
Why is anyone tolerating that?
Bottom line is, there are reasons for concern about Cap and Trade, but unless people start discussing them in very specific terms rather than just shouting ’socialists’ and so on, there are no options that will present themselves other than going ahead with it. Sometimes I wonder where all the adults are nowadays.
References :
July 12th, 2010 at 12:41 am
i dont want a 200$ power because of cap and trade. cap and trade is very bad.
i hope obama get the full blame for all the jobs that will be lost because of cap and trade
References :
July 12th, 2010 at 1:27 am
>>>Given the reality that we’re going to reduce carbon emissions one way or another, and cap and trade is economically far preferable to EPA regulation, shouldn’t every one support cap and trade?
I asked a very similar question in the Politics section (oops), where most of the users there tried to point out to me that this was a form of extortion.
http://answers.yahoo.com/question/index;_ylt=Aj5ONz7ZMO9aB4Poe09nWZjty6IX;_ylv=3?qid=20100611150500AAOqBWO
I was not really sure how to counter this idea. The fact of the matter is that the EPA is a federal agency tied to the executive branch and thus a correlation between the actions of the agency and the will of the branch is in a way logical, even if it was not necessarily correct.
It was difficult for me to try to find a way to elaborate on this point I wanted to make. The Democrats have an agenda. Every party has one. They get into power, and they try to implement their agenda. This is simple politics – if people want to complain about it then they should move to 1776 and earlier to where (when) party affiliation in the British Parliament did little to restrain the acts of King George. They should be happy then with parties not implementing agendas. Any other dictatorship would do nicely as well.
However, the point that many people seem to miss is that the agenda of the party is not what controls the agency. As a body that has specialized in environmental matters for decades, ever since Nixon (a Republican) initiated it, the EPA is not just some sort of tool that one party uses. It has made decisions during each of the past Presidents’ terms, and I would bet unilaterally in regards to whether or not the Presidents ever approved or ordered them themselves.
http://www.epa.gov/oalj/orders.htm
This isn’t some conspiracy by the Democrats, this is an environmental issue that the EPA is going to take into its own hands because the agency specializes in these fields. It has for years been a proponent of AGW – this isn’t something new just because of the Democrats’ control of the government. That claim is far too simplistic and juvenile, and it does not help address the problems being discussed.
It’s not extortion. Nobody is using the EPA as a threat or weapon. What EVERYONE is trying to do is pass a comprehensive CAT scheme because almost NOBODY wants the EPA to regulate emissions. People have to start waking up and realize that for everyone’s benefit, a CAT system should be seriously considered and, in my mind, passed before 2011. Unfortunately, as booM has expanded upon, this obviously has not been happening.
References :
July 12th, 2010 at 2:06 am
I may not know about the carbon capture realities in the USA but I do believe that a cap and trade system, ETS or whatever you want to call it is a joke. In fact I have actually stated on Yahoo! Answers that I believe it a scam. Why? ALL human industrial activities (amongst other things) are apparently causing global warming are they not? The actions of one nation or even a few aren’t going to be enough to stop global warming and therefore a GLOBAL effort is required, correct? So a global agreement with BINDING treaties is the only way to ensure catastrophic global warming doesn’t occur. If Copenhagen is anything to go by then this will never happen and the reality is that a few nations here or there implementing Cap and Trade is not only laughable, it is….baffling because how is that going to solve the problem?
As far as I can see, if global warming is indeed true then it isn’t the environment that will benefit from this system but instead those who will reap huge profits from things such as investments in carbon credits. If you want to reduce carbon emissions as nations then why won’t the governments invest in technologies like hydroelectric? Tasmania (in the land down under) is getting most of it’s power from this ALONE and you can see an example here:
http://www.iris.tas.gov.au/infrastructure/energy/supply/electricity
If it is that effective then why not use this and other measures which work (and not just random alternatives for the sake of it)? But I guess this is what happens when you have incompetent people in power and it seems this is the case in many parts of the world.
EDIT TO DANA: Firstly, I wasn’t referring to any particular place in the world (including where you live) when I made my comments. This is why I said words such as "nations", "governments" and even "how there are incompetent people in power throughout many parts of the world". Read my words and don’t jump to conclusions before running your mouth.
I’m not sure if you are referring to the whole of the US or just an area of it where you live but you say most of the renewable energy comes from hydroelectric? Cool. But it is powering most of the area? Or are fossil fuels doing that? Personally, I don’t know but if the answer is fossil fuels then you miss my point about Tasmania. It is probably only one of the few places that actually gets MOST of its power from using hydroelectric ALONE which I thought was pretty amazing when I heard about it.
References :
A catastrophic AGW skeptic – me.
July 12th, 2010 at 2:17 am
After one too many blackouts due to the regulations imposed by the EPA, I do not think that there will be too many politicians brave enough to stand up to an angry public.
References :
July 12th, 2010 at 2:49 am
No, because cap and trade is just a shell game. Then again, the EPA is doing a good job of taking the current bad thing and regulating it. My question, is how is the EPA going to define the background levels? We would have to sample air coming in from overseas to get the baseline so that our companies don’t get hit by what China is outputting. Then again, I don’t think you have thought about that at all.
References :
July 12th, 2010 at 7:39 am
[...] E Trade » Blog Archive » Given carbon regulation realities іח tһе US… [...]
July 12th, 2010 at 8:31 am
Great site. A lot of useful information here. I’m sending it to some friends!
July 12th, 2010 at 8:17 pm
[...] E Trade » Blog Archive » Given carbon regulation realities in the USA, shouldn’t e… [...]