A Carbon Cap-N-Trade Alternative?

http://news.yahoo.com/s/mcclatchy/20090419/sc_mcclatchy/3213792

Lawmakers forge alternative to cap-and-trade proposal

By Les Blumenthal, McClatchy Newspapers Les Blumenthal, Mcclatchy Newspapers – Sun Apr 19, 6:00 am ET

WASHINGTON — A growing number of lawmakers who are deeply involved in the effort to reduce greenhouse gases and global warming are beginning to question "cap-and-trade," the current hot-button solution to the problem.

The chair of the Senate Energy and Natural Resources Committee's energy subcommittee, Sen. Maria Cantwell , D- Wash. , says she isn't so sure the "cap-and-trade" approach favored by the White House , environmental groups and many of her Democratic colleagues is the way to reduce carbon dioxide emissions from coal-fired power plants and other industries. She fears that it could lead to the same type of unregulated Wall Street money-making schemes that fueled the current recession.

"I have serious concerns about how a cap-and-trade program might allow Wall Street to distort a carbon market for its own profits," Cantwell said in an interview.

Cantwell and others are leaning toward a system, dubbed cap-and-dividend, that would cap carbon dioxide emissions and require companies to pay for their credits or allowances. The money raised would be distributed to taxpayers, who likely would face higher utility bills as utilities pass along the added costs of curbing greenhouse gases.

"We are looking at ways that would allow consumers to get something back," she said.

Congress returns from its spring recess this week with energy and climate change near the top of its legislative agenda.

The House Energy Committee , with 59 members who come from every part of the country and represent all political persuasions, is expected to consider a climate change bill in the next month or so.

Cantwell is one in a growing number of lawmakers who are tinkering with the cap-and-trade approach, including Reps. Chris Van Hollen , D- Md. , the chairman of the Democratic Congressional Campaign Committee, Jim McDermott , D- Wash. , and Lloyd Doggett , D- Texas . Other Democrats have proposed an outright tax on carbon dioxide emissions, which Republicans were quick to criticize.

Cantwell has experience in these issues. She helped blow the whistle on Enron and other companies that manipulated electricity markets. She's railed against natural gas and oil companies that she thinks have maneuvered to drive up prices and reap record profits. She thinks the agencies that might regulate the carbon trading markets, the Federal Energy Regulatory Commission or the Commodities Futures Credit Commission , are toothless.

The Europeans already have created a cap-and-trade market for carbon dioxide emissions. Credits are being bundled by financial institutions such as Credit Suisse and sold to investors in much the same manner as mortgage-backed securities and other exotic financial products whose collapse helped lead to the global financial crisis, Cantwell said.

"We all know the problems with these derivative markets," Cantwell said.

One recent report warned that trading in carbon credits and derivatives could grow so quickly that it would create a "carbon bubble" that could burst and create another major global financial meltdown.

"Today speculators do the majority of carbon trading, and they will continue to dominate as carbon trading markets grow," said the report from the environmental group Friends of the Earth .

The report said that without proper regulation, the markets soon could be offering "subprime carbon" investments or "junk carbon" offerings.

" Carbon -trading firms have strongly advocated self-regulation as a way to govern this market, and most cap-and-trade bills implicitly reflect this mode of governances," the report said.

Another group lobbying for a cap-and-trade bill, the Environmental Defense Fund , thinks the regulatory issues can be worked out.

"We need to make sure market manipulation doesn't occur and that any scofflaws out there are punished," said Steve Cochran , director of the Environmental Defense Fund's national climate campaign.

Cochran, however, said the cap-and-trade approach would ensure a maximum amount of capital would start flowing to pay to upgrade existing plants or build more efficient new ones.

While Cantwell would like to see a comprehensive energy-climate change bill pass this year, she isn't opposed to doing it in pieces. The Senate Energy and Natural Resources Committee is expected to consider legislation in the next few weeks that would set targets requiring utilities to increase the development of alternative sources of energy and set energy efficiency standards for such things as appliances.

"We are doing the softball stuff," she said. "My philosophy is get what you can, keep the ball moving, and holding it up for one mega-thing can be a mistake."

PLANS COMPARED

There are no standard definitions of cap-and-trade or cap-and-dividend, but both are aimed at reducing greenhouse gas emission and getting a handle on global warming. Here's a quick rundown on the two:

CAP-AND-TRADE

It's a market-based approach that already is being used in Europe . It's helped reduce by up to 60 percent emissions of sulfur dioxide, a key ingredient of acid rain, in the U.S.

The government would set an aggressive cap, or maximum limit on emissions of carbon dioxide, that would tighten over the years. Each source of carbon dioxide emissions, such as a coal-burning power plant or other industry, would be given an "allowance" or credit that would cap its emissions. The allowances can be bought and sold.

Exchanges that sell carbon credits already exist. Companies that exceed their caps would have to install pollution control equipment or find other efficiencies. Or they could buy credits from companies that were below their emissions cap.

CAP-AND-DIVIDEND

It's a relatively new approach that would eliminate the trading of emissions credits. The idea is for the government to cap carbon dioxide emissions. Companies that emit carbon dioxide would have to purchase emissions allowances or permits.

The money the government raises by selling the allowances could be rebated to taxpayers in the form of dividends. Utility rates would rise because of the limits, and the dividends would help ratepayers absorb the added costs. But the increased utility rates would be uneven across the country, and there could be fairness issues in distributing the dividends.

There are all kinds of variations, but proponents say it would lessen the chance of market manipulation and put money back in the pockets of taxpayers.

Views: 26

Comment

You need to be a member of 12160 Social Network to add comments!

Join 12160 Social Network

"Destroying the New World Order"

TOP CONTENT THIS WEEK

THANK YOU FOR SUPPORTING THE SITE!

mobile page

12160.info/m

12160 Administrators

 

Latest Activity

Doc Vega posted a blog post
3 hours ago
Saint Quinn favorited Burbia's video
21 hours ago
Doc Vega posted blog posts
yesterday
Burbia commented on tjdavis's blog post The Jewish Couple That Taught Bob Dylan Hebrew and Introduced Him to Zionism
"Haaretz put this story behind a pay wall. Sali Ariel and Terry Noble were the names of the couple…"
Wednesday
William Heckman is now a member of 12160 Social Network
Wednesday
cheeki kea commented on tjdavis's photo
Wednesday
cheeki kea commented on cheeki kea's video
Thumbnail

This Woman DESTROYED Harley-Davidson's Future Forever

"It's a sad day on the highway. But I guess the show must go on. Watch out for the ruination of…"
Wednesday
cheeki kea posted a video

This Woman DESTROYED Harley-Davidson's Future Forever

This Woman DESTROYED Harley-Davidson's Future ForeverWelcome to Ride Radar – Your Frontline Source for Motorcycle Deals, Trends & Market Mayhem.Looking for t...
Wednesday
tjdavis posted a photo
Wednesday
Burbia posted a status
"Who knew releasing the MLK files and literally deflecting, it ends up implicating himself with the Epstein Files."
Tuesday
Burbia posted a video

Dan Bilzerian DEMOLISHES MAGA Nutjob Patrick Bet-David on His Own Show

Watch as two powerhouse personalities collide in this no-holds-barred debate on one of the world’s most contentious issues. Patrick Bet-David, known for his ...
Monday
Doc Vega's 7 blog posts were featured
Sunday
tjdavis's 2 blog posts were featured
Sunday
Less Prone favorited tjdavis's blog post Track AIPAC
Sunday
FREEDOMROX's blog post was featured

MRNA VACCINES: Question

Hello my fellow sojourners,I know it has been five years since the Plandemic, but one question has…See More
Sunday
Less Prone favorited FREEDOMROX's blog post MRNA VACCINES: Question
Sunday
cheeki kea commented on cheeki kea's photo
Jul 19
cheeki kea posted a photo
Jul 19
Doc Vega posted blog posts
Jul 18
Doc Vega commented on Doc Vega's blog post Marjory Taylor Green Proposes Bill Abolishing Geoengineering or Weather Modification
"cheeki kea Marjory is in a daily battle with Democrats on the hill constantly coming up with more…"
Jul 18

© 2025   Created by truth.   Powered by

Badges  |  Report an Issue  |  Terms of Service

content and site copyright 12160.info 2007-2019 - all rights reserved. unless otherwise noted