Solutions offered to curb greenhouse gases

09/20/07 Seán Kinane
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Congress will consider global climate change legislation this fall. In addition, many states are taking action to limit emissions of greenhouse gasses that contribute to global warming.

One way for emissions of gasses such as carbon dioxide to be controlled is through a process called cap and trade. Under cap and trade, an absolute ceiling of emissions is set, and businesses may trade with each other the right emit portions of pollution up to that cap.

Today, the federation of state Public Interest Research Groups, U.S. PIRG, released a report advocating implementing a cap and trade system by holding an auction in which industries purchase allowances for certain amounts of emissions that can later be traded.

The alternative to an auction would be for polluting business to be given the rights to emit based on their previous levels of pollution.

The report, called Cleaner, Cheaper, Smarter: The Case for Auctioning Pollution Allowances in a Global Warming Cap-and-Trade Program, makes the case that auctioning emissions allowances would be better for the environment, the economy and consumers.

Mark Cooper is research director for the Consumer Federation of America; he explained why auctioning makes more sense than giving away credits to pollute.

Tony Dutzik, the primary author of the report, is a senior analyst for the Frontier Group. He said that Europe has relied less on an auction system and has instead given away emissions credits to polluting companies with shoddy results.

To avoid the most catastrophic impacts of global climate change, most research indicates that growth in emissions of greenhouse gasses must be stopped now and the total amount must be reduced by 15 to 20 percent by 2020 and 80 percent by 2050.

Dallas Burtraw, a senior fellow with Resources for the Future, has experience designing environmental policies in the electricity industry. Burtraw said that an auction would help alleviate the costs of reducing greenhouse gas emissions.

Tony Dutzik said that the tens or even hundreds of billions of dollars of revenue generated by an auction could be used to help consumers and the environment in three ways.

Another alternative is to offer a direct rebate which might be similar to the one all residents of the state of Alaska receive from oil revenue.

Still another way to try to control the amount of carbon dioxide emissions is by putting a price on pollution would be a carbon tax. Dutzik said he thinks a cap-and-trade system with an auction would more effectively control emissions than a carbon tax.

Learn more:

Cleaner, Cheaper, Smarter: The Case for Auctioning Pollution Allowances in a Global Warming Cap-and-Trade Program.


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