Comments on: What kind of carbon trading system for the US? http://www.globaldashboard.org/2009/03/23/what-kind-of-carbon-trading-system-for-the-us/ Global risks and how to respond to them, edited by Alex Evans and David Steven Sat, 11 Feb 2012 13:49:12 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Jules Evans http://www.globaldashboard.org/2009/03/23/what-kind-of-carbon-trading-system-for-the-us/comment-page-1/#comment-9089 Jules Evans Wed, 25 Mar 2009 14:21:47 +0000 http://www.globaldashboard.org/?p=8642#comment-9089 Just following up on my 'auction the permits' position as expressed above, the alternative view was put to me yesterday by Patrick Birley, the head of the European Climate Exchange here in London. He suggested it might be worth giving out emission allocations to US utilities for free in the first instance 'just to get them involved in the scheme'. You can then gradually reduce the allocations over the coming years, as the EU has done, and increase the amount of permits that are auctioned. Over time, you reward those utilities who reduce their emissions, and punish those who don't, but it happens over time. This doesn't necessarily have to mean a big free giveaway for the utilities if a) the permits are not over-allocated, as was the case in Phase 1 of the EU scheme and b) the utilities are not allowed to pass on the costs of carbon permits which they were given for free, as also happened in phase 1 of the EU scheme. If Obama auctioned 100% of permits, Birley suggested, 'the law wouldn't be passed for years and years' because of the lobbying power of the utilities in the US. The question is, does the world have time to move slowly on this issue? Could people power / NGOs successfully oppose the lobbying power of the utilities. This article suggests popular opinion may not be sufficiently galvanised: http://blogs.tnr.com/tnr/blogs/galston/archive/2009/03/23/a-cap-and-trade-calamity.aspx Just following up on my ‘auction the permits’ position as expressed above, the alternative view was put to me yesterday by Patrick Birley, the head of the European Climate Exchange here in London.

He suggested it might be worth giving out emission allocations to US utilities for free in the first instance ‘just to get them involved in the scheme’.

You can then gradually reduce the allocations over the coming years, as the EU has done, and increase the amount of permits that are auctioned. Over time, you reward those utilities who reduce their emissions, and punish those who don’t, but it happens over time.

This doesn’t necessarily have to mean a big free giveaway for the utilities if
a) the permits are not over-allocated, as was the case in Phase 1 of the EU scheme and
b) the utilities are not allowed to pass on the costs of carbon permits which they were given for free, as also happened in phase 1 of the EU scheme.

If Obama auctioned 100% of permits, Birley suggested, ‘the law wouldn’t be passed for years and years’ because of the lobbying power of the utilities in the US.

The question is, does the world have time to move slowly on this issue? Could people power / NGOs successfully oppose the lobbying power of the utilities.

This article suggests popular opinion may not be sufficiently galvanised:

http://blogs.tnr.com/tnr/blogs/galston/archive/2009/03/23/a-cap-and-trade-calamity.aspx

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