Researchers at MIT's Center for Energy and Environmental Policy Research have produced a report concerning key design issues of proposed "cap-and-trade" programs that are under consideration in the United States as a way of curbing greenhouse gas emissions. The first contribution of the three-part study found that, based on an examination of the European Union's system and of similar U.S. programs for other emissions, such a program can indeed be effective in reducing emissions without having a significant economic impact.
"The European experience confirms much of what has been learned from similar U.S. systems for other emissions, namely, that cap-and-trade systems can be constructed, that markets emerge to facilitate trading, that emissions are reduced efficiently, and that the effects on affected industries are less than predicted," said A. Denny Ellerman, the study's lead author and a senior lecturer in the MIT Sloan School of Management.
The study found that the most controversial aspect of the European program was how to allocate the permitted emissions levels to different producers. Initial free allocation of allowances, they found, was the necessary price for gaining political acceptance, as it has been in U.S. systems. Over time, the clearly established trend in the E.U. is to phase out the free allocation of permits in favor of auctioning them.
The second part of the report looked at mechanisms that can be used to control the costs that will be imposed on power producers as a result of implementing a cap-and-trade system. Several alternatives were analyzed, including such things as a "safety valve," banking and borrowing of allowances, and renewable portfolio standards. Rather than a single best choice, the study found that different mechanisms work best for addressing uncertainties associated with long-term, short-term and start-up costs.
The report's third section examined the relationship between state and federal regulations on greenhouse gas emissions. With no federal policy now in place, many states are moving forward with their own initiatives, which range from commitments to reduce greenhouse gases to a regional, multi-state cap-and-trade program slated to begin in 2009.
While federal legislation is expected in the next few years, it is unclear how it will define the relationship between a federal cap-and-trade program and other state or regional initiatives. The report analyzes the economic and environmental impacts of the range of possible interactions between the federal program and state or regional programs.
Differences in the abatement costs among states can create economic inefficiencies that make achievement of the climate goal more costly than it need be. This inefficiency can be avoided by either federal preemption of duplicative state programs, the authors found, or by a "carve out" of more demanding state programs from the federal cap with linkage.
- PHYSICAL SCIENCES
- EARTH SCIENCES
- LIFE SCIENCES
- SOCIAL SCIENCES
Subscribe to the newsletter
Stay in touch with the scientific world!
Know Science And Want To Write?
- Case For Moon: Gateway For Open Ended Exploration, With Planetary Protection Central - On The SpaceShow
- Can't Resist Temptation? That May Not Be A Bad Thing
- After Losing In Government, Environmental Groups Embrace The Free Market
- Sweet Irony: The Environmental Impacts Of GMO Sugar Science Denial
- Catching The 750 GeV Boson With Roman Pots ?!
- Wildfire -- It's Not Spreading Like Wildfire
- Money Back Guarantees For Non-reproducible Results?
- "Okay, that may be true, but we never hear from them. Instead we hear from Environmental Working..."
- "You lost me at: Environmental groups, who ordinarily love centralized government and social authoritarian..."
- "Mi Cro, I happened upon your global temperature charts recently, and want to be sure I understand..."
- "You make good points. I thank you for them. I am enjoying reading your work. I agree that asteroid..."
- "Oh, okay, glad you aren't worried about little asteroids. Yes I agree, I haven't come across that..."
- Ketamine Better than Haloperidol for Sedation Onset But Not Much Else
- TIps & Tricks To Ward Off Ticks
- What is CRISPR-Cas9 and why do we need to know about it?
- Pancreatic Cancer: Surgery Improves Survival in One-third
- Intervention Decreases Adolescents’ Obesity
- What Organic and Chemical Actually Mean: A Glossary of Hijacked Terms
- Science instruments of NASA's James Webb Space Telescope successfully installed
- Tiny wasp sniffs out, picks up 'good vibrations' to battle ash borer
- Abundance inequality in freshwater communities has an ecological origin
- Family size and education levels: The right support could reverse long-held theory
- New water-quality data on impact of corn, soybeans on nitrate in Iowa streams