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Shai Agassi on TED. 18 minutes well spent.
The first reviews are in of how Europe's Emissions Trading Scheme fared in 2008. Green Inc today cites a PointCarbon study in a post titled "recession cuts Europe's carbon emissions," which says that overall emissions decreased 6% in 2008. An earlier New Carbon Finance report provides a bit more detail:
emissions from the EU ETS totalled 2.1Gt CO2 in 2008, down 3% from 2007 levels. Even taking into account reduced economic output, ... analysis indicates that the largest cause of the reduction is the EU ETS itself encouraging greater use of gas in power generation.
That's 3% of a total decrease of 5%, according to New Carbon Finance.
We won't know for sure until more analyses come in later this year (the first official data were released today), but the signs look encouraging: even in a year when we'd think the recession would dwarf everything else, EU ETS seems to be responsible for a good chunk of emissions reductions -- even larger than the recession itself, per New Carbon Finance.
If the original statement wasn't dated March 24, 2009, it could easily be construed as an April Fool's joke. Last week, the National Republican Campaign Committee sent out a press release claiming:
The administration raises revenue for nationalized health care through a series of new taxes, including a light switch tax that would cost every American household $3,128 a year.
The "light switch tax," of course, refers to cap and trade. That's a flat out misrepresentation, but it could at least be defended as a cutesy marketing gimmick. The claim that the administration would like to fund health care through climate legislation, on the other hand, is flat out wrong. The "$3,128" figure is in a different league altogether. It's "nearly 10 times the correct estimate which is approximately $340," according to a letter published today by John Reilly, one of the authors of the MIT study misquoted in the press-release.
Even more disturbing, Alexander Lane at PolitiFact caught the NRCC in a flat out lie. He checked with Reilly directly:
"It's just wrong," said John Reilly, an energy, environmental and agricultural economist at M.I.T. and one of the authors of the report. "It's wrong in so many ways it's hard to begin."
Not only is it wrong, but he told the House Republicans it was wrong when they asked him.
"Someone from the House Republicans had called me (March 20) and asked about this," Reilly said. "I had explained why the estimate they had was probably incorrect and what they should do to correct it, but I think this wrong number was already floating around by that time."
If that isn't enough, the NRCC repeated the $3000 lie in another press release sent out yesterday.
Get the full story from Think Progress (HT: Climate Progress) or EDF's Truth Squad.
If you want to take a break from today's Waxman-Markey climate bill excitement but still can't wean yourself away from cap-and-trade entirely, read Michael Lewis's take on Icelandic banking in Vanity Fair. It's a morbidly humorous take on the madness, which led a perfectly fine nation that gave us Björk on a roller-coaster ride to financial ruin.
Along the way we learn about the "charming lack of financial experience in Icelandic financial-policymaking circles," the male-dominated macho world of high finance and the combination of the two: Iceland's leaders these past few years "are the guy driving his family around in search of some familiar landmark and refusing, over his wife’s complaints, to stop and ask directions."
One regulatory lesson we can take from Iceland is how to combat overfishing:
Fishermen...are a lot like American investment bankers. Their overconfidence leads them to impoverish not just themselves but also their fishing grounds. Simply limiting the number of fish caught won’t solve the problem; it will just heighten the competition for the fish and drive down profits. The goal isn’t to get fishermen to overspend on more nets or bigger boats. The goal is to catch the maximum number of fish with minimum effort. To attain it, you need government intervention.
The solution?
[P]rivatized the fish. Each fisherman was assigned a quota, based roughly on his historical catches. ...Before each season the scientists at the Marine Research Institute would determine the total number of cod or haddock that could be caught without damaging the long-term health of the fish population; from year to year, the numbers of fish you could catch changed. But your percentage of the annual haul was fixed, and this piece of paper entitled you to it in perpetuity. Even better, if you didn’t want to fish you could sell your quota to someone who did. The quotas thus drifted into the hands of the people to whom they were of the greatest value, the best fishermen, who could extract the fish from the sea with maximum efficiency. You could also take your quota to the bank and borrow against it, and the bank had no trouble assigning a dollar value to your share of the cod pulled, without competition, from the richest cod-fishing grounds on earth. The fish had not only been privatized, they had been securitized.
Voilà: cap-and-trade for fish -- aka "Individual Transferable Quotas" -- was born. Rob Stavins provides a good summary of how the system works in his blog post this week.
It has certainly done wonders for Icelandic fisheries and for Iceland itself. Lewis surmises that:
This insight is what led Iceland to go from being one of the poorest countries in Europe circa 1900 to being one of the richest circa 2000.
Of course, it also had its problems. With all the riches from fishing, Iceland became "a place to turn cod into Ph.D.'s," who eventually figured that banking was the way to go, which led Iceland to become Ground Zero of the global financial meltdown.
Lest anyone uses this roundabout logic to blame cap and trade for Iceland's de facto bankruptcy, I'd say there are still much bigger fish to fry as we try to use the same principles to solve overfishing around the globe -- and design sensible cap-and-trade legislation to combat climate change.
You know something's up, if "All the News That's Fit to Print" seems to be all climate all the time. Today's New York Times contains no fewer than six articles that have climate change and climate economics as their central themes -- and that doesn't even count the Magazine cover story. A quick reader's guide:
Have you heard the one about climate legislation costing every U.S. household $5000? Turns out it's far from the truth, but that didn't stop Heritage from putting the number on its blog.
The median impact on GDP from capping carbon for 2030 of analysis done by independent organizations such as the EIA and EPA is 0.58% (less than two-thirds of one percent). This figure is so small that even the differences between GDP forecasts overwhelm the impact that any of them predicts from a federal climate policy.
FT.com highlights an impressive flash annimation on the greenness of recovery packages. Spoiler alert: China's trumps the United States' package 2:1.
Green stimuli are important, but they are not the full answer. Obama’s stimulus package contains provisions to the tune of $100 billion in direct appropriations and tax breaks for green energy and energy efficiency. Even that number is dwarfed by the needs.
McKinsey estimates that the United States alone will require one trillion dollars in added investment by 2020 to guide it onto a low-carbon pathway and meet climate policy goals. This translates into one stimulus bill per year, every year between now and 2020. Government spending alone will not generate the required investment.
Tom Friedman filed today's column from New Delhi:
The U.S. Embassy’s roof is loaded with antennae and listening gear. The Chinese Embassy’s roof is loaded with ... new Chinese-made solar hot-water heaters. You couldn’t make this up.
The rest of the column on Indian solar cars and the Indian Youth Climate Network is worth a read, too.
Climate starts a minute into the clip: Hillary Clinton correctly emphasizes that the United States must lead, and equally correctly says that everyone needs to pitch in. Bon voyage.
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