Crossposted with www.TheGreenGrok.com.
Dead, say the experts.
Once it was a rising star. The Chicago Climate Exchange, launched in 2003 to give companies a place to voluntarily buy and sell carbon emissions, was doing a brisk business (see here and here). In June 2009 the U.S. House of Representatives passed a climate bill that would set up a national cap-and-trade system, and plans were falling into place for the Copenhagen climate confab where the international community was primed to put an international emissions cap into place.
Alas, it was not to be. In the United States, in a creative but devastating wordplay, climate change "refudiaters" invoked the dreaded "t" word, calling cap and trade "cap and tax," and it stuck. (See here, here and here.) Things for poor little cap and trade -- the brainchild, you might be surprised to learn, of none other than Republican C. Boyden Gray, a lawyer in the Reagan administration and the White House Counsel under President George H. W. Bush -- went from bad to worse as many on the left signaled their opposition to a system they saw as a poorly disguised money grab by big business and speculators (see here and here). A weakened and demoralized cap and trade, once thought to be able to leap over political hurdles in a single bound, found itself unable to rise above the 60-vote threshold for passage in the Senate.
But cap and trade had not yet hit bottom. During last month's mid-term election campaign, candidate after candidate for U.S. Congress did his or her best to outdo opponents in proving his of her bona fides in opposing cap and trade. Perhaps no one performed better than West Virginia's Joe Manchin whose TV ad for his Senate run featured himself shooting a bullet right through the heart of a cap-and-trade bill.
As election results tumbled in during the night, it became clear that passage of a cap-and-trade bill would not be in the cards any time soon -- a prognosis confirmed by President Obama in a press conference following, in his word, the "shellacking."
And then the final coup de grace. With carbon trading at only five cents a ton, the Chicago Climate Exchange announced it was shuttering.
It was, rather ironically, Environmental Defense Fund President Fred Krupp -- a chief architect of the cap-and-trade program for acid rain -- who seemed to sound the cap-and-trade death knell with his pronouncement: "Economywide cap and trade died of what amounts to natural causes in Washington."
On the international scene, cap and trade has hit rough water as well. After last year's fiasco in Copenhagen, this year's climate summit, just a few days in, does not appear to be going all that well despite the fact that ambitions for Cancun are relatively modest. The latest new flash is Japan's announcement that it will not participate in an extension of the Kyoto Protocol following 2012.
It's worth remembering that not everything that plays out on the world stage, where diplomats have a habit of grandstanding, is indicative of what individual nations think and do. (Anyone read any leaked cables lately?) And not every nation acts exactly as the United States does. Indeed not even every state does.
Fledgling cap-and-trade systems are being developed in California, where an initiative to undo the state's ambitious climate legislation was soundly defeated. Through the Regional Greenhouse Gas Initiative, the Northeast has its own trading system. And European nations are still moving forward with their plans and trading schemes, looking at tightening caps.
And what's more, China, of all places, is getting on board. Remember China? The poster child for the bad-climate actor? The rising behemoth in the world economy that is now responsible for more emissions than any other country including the United States? The one whose intransigence about reining emissions is the very reason many Americans oppose climate legislation here?
Yes, in that very same China a cap-and-trade heartbeat, albeit a faint one, is emanating: a cap-and-trade program, whose details are still to be ironed out, is a centerpiece of China's upcoming five-year energy plan.
Yes, it's important to keep in mind that China's cap and trade is geared toward meeting its 2020 carbon intensity target rather than an overall reduction of carbon dioxide emissions, but they are at least in the game.
And while we here in the United States appear to have decided to ignore the faint Chinese heartbeat, Europe has not. And what do they hear in it? Opportunity knocking.
Earlier this month, China and officials from the European Union met to scope out a pilot carbon-trading program. Could there be a new international economic regime in the making -- one with billions of dollars in carbon credits and low-carbon technologies flowing between Europe and China and the United States locked out?
Pronouncements of the death of cap and trade may be premature.
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Meaning, in short, that Europe paid China to do what it would have done anyway, and then everybody beat their chests and said they had done something for the planet.
So please excuse me if I'm skeptical when I hear of China wanting to work with Europe on a cap-and-trade scheme. Of course they want that.
I'm sure Indonesia might want to join the scheme, now that the European Commission in its infinite wisdom has decided that destroying rainforests to plant oil palms, too, must be rewarded with carbon offsets.
Cap-and-trade is a ripoff, a bureaucratic nightmare that favors big business (which can draw up those fancy reports) and punishes small business (which can't), which often makes CO2 pollution worse, and in the best case leads to trivial reductions. We have to outlaw all deforestation, now. We have to close all coal-fired plants, now. We need measures that actually change the way we treat our environment, not accounting tricks.
I think they are wrong and we do have a problem with Global warming!
To save CAP & TRADE rename it TARIFF - CAP&TRADE! Charge GREEN TARIFFS on products made using dirty fossil fuel energy, smaller tariffs on lower carbon emissions energy, and no tariffs on green energy manufactured products. Make it level playing field full of opportunities for domestic manufactures. This would also resonate well with the middle class, really spur innovation, pay down the national debt, and it just might save the planet!
The only real solutions will be evolutionary ideas where free trade allows them to gradually decrease in prices to become more competitive with existing cheap energy and production methodologies. Taxes, regulations, and tariffs really only distort and slow this process down.
I think everyone at some level wants to help, but self preservation will always prevail. In other words, the reality is, nearly all people making less than $60K a year are not concerned about global warming if it means it will cost them more.
Personally, I think a handful of scientists blew it with misleading information and too common wrong forecasts. Now we have masses of people between mistrust and disbelief, making good research go to deaf ears.
We have become a free trade nation only the last 10-15 years. How has the MIDDLE CLASS done the last 5 years with the full effect of free trade? How many middle class manufacturing jobs have left? Is it better to buy a shirt at Wall-Mart at a discount with an unemployment check or pay full price with a pay check and have some left over for savings?
World wide Free trade in my opinion allows large corporations to move to or source from places that will allow the greatest injury to the environment and it's workers for the maximum profit! When Corporations can move away from government regulations as regards to treating workers and the environment its never good.
Green tariffs are a mechanism to at least to protect the worlds environment if not the local environment. If a nation decides to destroy its environment for goods used in that nation the damage remains local.
I understand the theory of free trade but why argue with 180 years of proven success?
China loves the CO2 excitement in the West. China is positioned to sell the West the technology the West claims it needs to save the planet, and the ongoing voluntary handicapping of the West's production capabilities only helps the Chinese.
Where can I get a good deal on beach front property? With the fears of five foot sea level increases, there must be some beautiful barrier reef properties on the market for cheap.