Posted by Brad Johnson on 02/12/2008 at 05:16PM
A report from the Government Accountability Office finds that Europe’s
initial cap-and-trade system for limiting greenhouse gases set overly
high limits and gave redistributed significant wealth to covered
entities. The report
(GAO-09-151),
requested by Republican members of the House Energy & Commerce
Committee, was completed November 18 but publicly released today.
The summary notes that the cap was set too high:
By limiting the total number of emission allowances provided to
covered entities under the program and enabling these entities to sell
or buy allowances, the ETS set a price on
carbon emissions. However, in 2006, a release of emissions data
revealed that the supply of allowances-the cap-exceeded the
demand, and the allowance price collapsed. Overall, the cumulative
effect of phase I on emissions is uncertain because of a lack of
baseline emissions data.
The report also notes that polluting entities passed on the price of
emissions permits to consumers, despite receiving them for free,
resulting in windfall profits:
Studies have found that in the EU’s deregulated energy markets, power
producers passed on the market value of allowances to consumers by
adding the value of the allowances to energy rates.
The GAO also describes Europe’s international
offset system, the Clean Development Mechanism, and notes the extreme
difficulty in accurately calculating the worth of such investments in
terms of emissions reduction. CDM investments
are intended to prevent or lessen future emissions or factors such as
deforestation which reduce the sequestration of greenhouse gases. Thus,
the reductions are based against a hypothetical business-as-usual
scenario, which cannot be precisely determined.
Posted by Brad Johnson on 20/02/2008 at 02:44PM
Citing the
American Enterprise Institute, the Economist, and the editorial page of
the Wall Street Journal, a group of environmental justice organizations
including the California Environmental Rights Alliance (CERA) have come
out in opposition to carbon
trading schemes, in particular the European Union cap-and-trade system
(the European Union Greenhouse Gas Emission Trading Scheme or
EU ETS) and the Kyoto Protocol’s Clean
Development Mechanism for investing in
emissions reductions in developing countries. Major signatories include
the Rainforest Action
Network
and the Los Angeles chapter of Physicians for Social Responsibility.
The declaration cites the windfall profits generated by the initial
phase of EU ETS and argues that carbon trading
“stands in the way of the transition to clean renewable energy
technologies and energy efficiency strategies.”
CDM is criticized for encouraging “carbon
dumps” and financing “private industrial tree plantations and large
hydro-electric facilities that appropriate land and water resources”.
The California Environmental Justice Movement will oppose efforts by
our state government to create a carbon trading and offset program,
because such a program will not reduce greenhouse gas emissions at the
pace called for by the international scientific community, it will not
result in a shift to clean sustainable energy sources, it will support
and enrich the state’s worst polluters, it will fail to address the
existing and future inequitable burden of pollution, it will deprive
communities of the ability to protect and enhance their communities,
and because if our state joins regional or international trading
schemes it will further create incentives for carbon offset programs
that harm communities in California, the region, the country, and
developing nations around the world.
Signatories are
below the jump.