Overheard at the Montreal climate negotiations yesterday:

"Emissions trading may be unfair, but we don't have time to work out a better solution. It's the approach that will work the fastest."


History lesson:

The US required 23 years to eliminate leaded gasoline through a trading programme, a task which took China three and Japan 10, without trading. Even in the short term, the US lead trading programme can be said to have slowed the phaseout of lead in gasoline. Lead trading allowed refiners that banked purchased lead credits to continue exceeding lead limits through 1987, whereas the previous regulation had required refiners to meet the standard by 1986 (David M. Driesen, “Is Emissions Trading an Economic Incentive Program? Replacing the Command and Control/Economic Incentive Dichotomy” (1998) 55 Wash. & Lee L Rev. 317; The Economic Dynamics of Environmental Law, Cambridge, 2003).

The US Acid Rain programme is expected to cut sulphur dioxide emissions by only about 35 per cent by its 20th anniversary in 2010. In contrast, Germany cut power plant emissions by 90 per cent from the first proposal in 1982 to completion of its programme in 1998, without trading (Curtis A. Moore, Marketing Failure: The Experience with Air Pollution Trading in the United States, Washington, 2003).
by: ProfMKD @ 9:31 am | 0 comments

by: ProfMKD @ 9:19 am | 0 comments

Chris Rowland of Dresdner Kleinwort Wasserstein has this to say about European emissions trading in the International Emissions Trading Association's Greenhouse Gas Market 2005: The Rubber Hits the Road being distributed at the Montreal climate negotiations:

"Faced with a shortfall of CO2 allowances, companies seem to be adopting a variety of strategies -- but few seem to be centred on abating CO2" (p. 39).

Instead, companies are hoping they'll be able to

• Get allowances from "operators in the new EU member states" (p. 39).
• "Buy cheaper offset credits" (p. 39)
• Pay up for CO2 allowances in return for a political "agreement not to phase out their nuclear facilities" (p. 40).
• "Wait for the problem to go away" (p. 40).

by: ProfMKD @ 8:56 am | 0 comments