Climate auction pays dividends in MD
Cap & trade may be a dead letter in Congress, but the carbon-dioxide emission auction set up by Maryland and other northeastern states to combat climate change has yielded millions of dollars for cleaner and more efficient energy - all without destroying the region's economy, as critics have claimed it would if applied nationwide.
I'm reminded of that by today's announcement from the Maryland Energy Administration that it's awarding another $2 million in grants to local governments and nonprofits for improving energy efficiency in low- and moderate-income households. The agency's doling out 41 grants across the state for everything from home energy upgrades in Caroline County to weatherization in Montgomery County.
The money comes from the Regional Greenhouse Gas Inititiative, in which Maryland and other states have imposed caps on carbon dioxide emissions from their power plants and regularly auction off credits or permits for emissions of the climate-warming gas.
It's a market-based pollution control, giving power companies flexibility to buy and sell carbon credits so they can find the most cost-effective way of reducing their emissions. And the revenues from the auction have been plowed back into energy efficiency and renewable energy projects, though some also has been diverted to help the poor pay their utility bills.
Critics of cap & trade call it a tax scheme that'll ruin the nation's economy by raising the cost of energy, since most of our heat, light and fuel comes from burning carbon-emitting coal, oil and gas. But the auction's impact on energy costs in the northeast has been negligible. That's no doubt because the carbon-dioxide emission caps imposed by the states have been very loose and auction prices for emission credits relatively low as a result.
But the regional auction was originally set up in expection and hope that it would serve as a model for national action - which now seems unlikely, at least in the near term, with skeptics of climate change gaining seats in the November congressional elections. As Sen. Tom Carper, D-Del., said last week while attending an offshore wind announcement in Baltimore, prospects for climate legislation emerging from Congress are "going going gone."
(Civic Works members install energy-saving lightbulbs, faucet aerators and water heater blanket in 91-year-old resident's home, 2010 Baltiimore Sun photo by Algerina Perna)
Comments
RGGI is failing.
http://newjersey.watchdog.org/
TW: That's debatable, NJC, at the very least.
Yes, RGGI is "failing" to curb power plant emissions - because they've fallen on their own, thanks to reduced electricity demand during the recession. They'll go back up - and maybe already are - as commerce picks up again. But RGGI wasn't intended to make much of a dent in emissions for at least the first few years anyway.
As I pointed out, the emission caps were set high, with plans to tighten them gradually over time. The idea was to introduce the system and get the industry acclimated to it. That's been very successful.
Meanwhile, RGGI also has raised tens of millions in funds to promote energy efficiency and renewables. And the revenues raised through the auction haven't pushed energy prices through the roof here or had a noticeable effect on the economy. Which makes you wonder about that oft-heard argument that taxes of any type at any level are job killers.
Mind you, I"m not saying reducing greenhouse gases is painless. There are real costs associated with either improving energy efficiency or capturing carbon dioxide emissions enough to affect global climate. Cap and trade is only a tool for doing that that its proponents argue can ease the pain somewhat because it's more flexible than a government mandate or a flat tax on all emissions.
Posted by: NJConservative | December 1, 2010 3:34 PM
You are talking out of both sides of your mouth. Yes, the cap was set high on purpose - so that the "pain" would not be felt. It's the proverbial foot in the door.
But when the cap is made more stringent utility rates will indeed "necessarily skyrocket" and jobs will be destroyed all for an effort that will do virtually nothing to global temperatures. That is not a success but a scam being pulled on ratepayers.
Further, you conveniently omit that fact that the cost of cap-and-trade is passed along to ratepayers on the front end. You can't claim "savings" on the back end when the wealth is redistributed to lower payments for the poor. Heck, let's call that what it is, too: welfare.
Cap-and-trade is a total sham. And, ironically, RGGI is being exploited by Wall Street firms -- another target of the left -- who see a chance to make an easy buck should the day ever come when the emissions caps are ratcheted down.
TW: You're right about the foot in the door, NJC, but I have to differ with you on the rest. As I said before, it was planned to be relatively painless to get folks accustomed to it. The inevitable "pain" you forecast is less when it's shared by everyone, and how much it's felt depends on how quickly and severely the cap gets ratcheted down. Most seem to want to think the sooner you start, the more gradual the price increase and less painful it'll be - kinda like fixing Social Security. If we start on it now, doesn't have to be draconian, but if we wait until 2030 or whatever when the brick wall is nearing, watch out.
As for the impact on global climate of cranking down on carbon dioxide via cap & trade or anything else, it really depends on how widespread the effort is. Individual actions won't make much of a dent, but if all individuals act in concert, the cumulative impact can be quite significant. How you get everyone to join in when there are holdouts is tricky, because no one wants to bear the burden for others.
Finally, the cost being borne by ratepayers in cap & trade is meant to deal with the unintended environmental consequences of their consumption of energy produced by burning fossil fuels. There are other ways to capture that cost - a tax on carbon-based fuel, for instance. How would you prefer to deal with it - or would you? Becasue if you don't think climate change is real or human-driven, then any proposed remedy looks like a sham.
Posted by: NJConservative | December 1, 2010 6:56 PM
"has yielded millions of dollars for cleaner and more efficient energy - all without destroying the region's economy"
Carbon is being auctioned off there at $1.86 per ton, that's almost for free. In the EU they were selling it for $30 per ton a year or so ago and now it's about $15 per ton. That's a far cry from $1.86. So at these prices a company could conceivable buy 50 years worth of carbon offsets in a single purchase. What a joke. People have to understand climate change is dead, and making a buck from it has one foot in the grave.
TW: Someone forgot to tell the Earth that climate change is dead. And the offsets are auctioned off in limited batches to prevent the kind of dodge you're talking about.
Posted by: klem | December 2, 2010 8:22 AM
Global warming is a sham and a fraud and we don't need to do anything about it.
As for the economic consequences, a Cap & Trade energy tax -- and that's exactly what it is -- will kill jobs and export our prosperity.
Nor will Cap & Trade do much at all to impact global temperatures because CO2 is a miniscule amout of the atmosphere. If anything is causing temps to rise, in itself in dispute, it's that big yellow ball up in the sky.
There's no need to cripple our economy and send us back to the Dark Ages for totally unproven science.
Posted by: NJConservative | December 3, 2010 1:10 PM