November 23 2008 holmes hummel phd holmes@holmeshummel net
Download
1 / 65

November 23 - PowerPoint PPT Presentation


  • 471 Views
  • Updated On :

Committing a Carbon Trust: The Trillion Dollar Bargain Session #5 November 23, 2008 Holmes Hummel, PhD [email protected] Targets, Timetables, and Technology Politics of a Durable Deal: Justice as Realism Carbon Price Policies: Questions for Both Tax and Trade

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'November 23' - Mercy


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
November 23 2008 holmes hummel phd holmes@holmeshummel net l.jpg

Committing a Carbon Trust:

The Trillion Dollar Bargain

Session #5

November 23, 2008

Holmes Hummel, PhD

[email protected]


Climate policy design pro series l.jpg

Targets, Timetables, and Technology

Politics of a Durable Deal: Justice as Realism

Carbon Price Policies: Questions for Both Tax and Trade

Cap-and-Trade: Devils in the Details

Committing a Carbon Trust: The Trillion Dollar Bargain

Essential Complementary Policies: California’s Advantage

Climate Policy Design Pro-Series


Committing a carbon trust l.jpg
Committing a Carbon Trust

Political Context: Concepts of Justice

Proposals for Spending Auction Revenue

Show-stopping Reasons Not to Spend Revenue

Compelling Claims – and Non-Compelling Claims

Bargaining on Terms of a Cap-and-Trade Policy


Bargaining on impacts of climate policy l.jpg

Negotiating between “winners” and “losers” on the path to climate stabilization.

Utilitarian justice: We’re all winners if we reach climate stabilization – and we’re all losers if we don’t.

Distributive justice: Because the wealthiest 10% of U.S. households owns more than twice everything the other 90% own combined, climate policy should be progressive (not regressive).

Bargaining on Impacts of Climate Policy


Bargaining on impacts of climate policy5 l.jpg

Negotiating between “winners” and “losers” on the path to climate stabilization.

Utilitarian justice: We’re all winners if we reach climate stabilization – and we’re all losers if we don’t.

Distributive justice: Because the wealthiest 10% of U.S. households owns more than twice everything the other 90% own combined, climate policy should be progressive (not regressive).

Rawlsian justice (?): On the path to climate stabilization (i.e. a path to abolition of fossil fuel use), the climate policy bargain should satisfy the interests of fossil fuel company shareholders, who could be the biggest “losers”.

Retributive justice (?): To prevent the profit potential of incumbent fossil fuel corporations from being diminished, the companies organize to diminish the political authority of those who would pass such a policy.

“If you take away our profits, we will take away your power.”

“If you want to stay in power, you will pay us to accept your policy.”

Option 1: Address corporate influence in U.S. democracy.

Option 2: Bargain…

Bargaining on Impacts of Climate Policy


Bargaining on impacts of climate policy6 l.jpg

Negotiating between “winners” and “losers” on the path to climate stabilization.

The “losers”?

People invested in fossil fuel companies.

Transition options: Guide your companies out of the fossil fuel business. Alternatively, you are only a click away from selling your interest, now.

  • Open Letter to Investors in Coal Power

  • from Chairs of the Senate Energy and Environment Committees

  • January 2007

Bargaining on Impacts of Climate Policy

  • “Building a new coal plant without taking into account global warming is neither good for the environment nor smart financially.”

  • “Any company planning to spend billions of dollars on new coal-fired power plants, and any investor in such a company, should think carefully about how to spend their funds so as to be part of the solution to climate change, not a part of the problem.”


Bargaining on impacts of climate policy7 l.jpg

Negotiating between “winners” and “losers” on the path to climate stabilization.

The “losers”?

People invested in fossil fuel companies.

Transition options: Guide your companies out of the fossil fuel business. Alternatively, you are only a click away from selling your interest, now.

Laborers working in the fossil fuel industry.

Transition options: Job creation (e.g. Stimulating the clean energy sector) Worker training (e.g. Green Jobs Act)

Investors in utilities that are regulated monopolies, with profits legally tied to sales volume.

Transition options: Petition governing body to decouple profits and sales. Organize to win a return on investments in efficiency on par with generation.

The “winners”?

People, ecosystems, and investors in clean energy sector

Bargaining on Impacts of Climate Policy


Bargaining on impacts of climate policy8 l.jpg

Negotiating between “winners” and “losers” on the path to climate stabilization.

We’ve determined that:

Greenhouse gas emissions caused by (some) people are driving climate change.

The “overproduction” of this pollution is a result of a prices in private transactions that externalize the actual social cost.

A price on GHG pollution is warranted to communicate the full social cost, which would diminish production of greenhouse gases to a socially optimal level.

Either a tax or a cap-and-trade policy would generate revenues for a government presumably representing “society.”

Do the “winners” have to compensate the “losers”?

This is the trillion dollar bargain.

Bargaining on Impacts of Climate Policy


Bargaining on impacts of climate policy9 l.jpg

Negotiating between “winners” and “losers” on the path to climate stabilization.

Economic Theory:

“Economically efficient prices yield a socially optimal outcomes, and equity is not a requirement of Pareto optimality – a condition that defines efficient prices.”

Formal Implication: Using revenues to balance benefits and burdens is purely a political exercise that has no effect on cost of the policy.

Applied Implication: Use of new government revenues from social “bads” (like GHG pollution) to displace old government revenues from social “goods” (e.g. labor) results in a net benefit to the economy, reducing the cost of the policy.

Qualified Implication: Because a cost externality is not the only market failure driving the over-consumption of GHGs, using the new revenues to address the other market failures increases market efficiency and relaxes the carbon price, reducing the cost of the policy.

Physics: Climate change damages are high. Bargain for your life.

Bargaining on Impacts of Climate Policy


Committing a carbon trust11 l.jpg
Committing a Carbon Trust path to climate stabilization.

Political Context: Concepts of Justice

Proposals for Spending Auction Revenue

Show-stopping Reasons Not to Spend Revenue

Compelling Claims – and Non-Compelling Claims

Bargaining on Terms of a Cap-and-Trade Policy


Essential elements to federal climate policy l.jpg
Essential Elements to path to climate stabilization.Federal Climate Policy

  • National cap

  • Economy-wide price on carbon

  • Abatement for the federal government itself

  • International commitment

  • Accelerating technology development & commercialization

Is there any other level of authority where these can be won?

Most other essential elements for a climate policy platform

either flow from these at the federal level –

OR they can be achieved through authority at a different level of jurisdiction.


Slide13 l.jpg
What happens if we try to keep the cost of a cap-and-trade policy down by giving pollution permits to fossil fuel investors for free…?

Well, the fossil fuel investors still want the free permits –

(rational rent-seeking behavior)

And Members of Congress still want to keep their jobs…

(which many apparently believe are more threatened by policies that

raise fossil fuel prices to deter fossil fuel consumption than those

that expose all of humanity to the risk of catastrophic climate change.)

Lieberman-Warner approach: “Let’s use the value of pollution permits to…”

a) Satisfy the demands of our patrons (and opponents)

b) Mitigate the policy’s regressive impact on low-income households

c) Address other market failures bottling up low-cost mitigation


Slide14 l.jpg

Lieberman-Warner Bill policy down by giving pollution permits to fossil fuel investors for free…?

PREVENTING ECONOMIC HARDSHIP

2012

PARTNERSHIPS WITH STATES, LOCALITIES, AND TRIBES

EFFICIENCY AND RENEWABLES

LOW CARBON TECHNOLOGY AND ADVANCED RESEARCH

FUTURE OF COAL

FUTURE OF TRANSPORTATION

INTERNATIONAL PARTNERSHIPS TO REDUCE EMISSIONS AND ADAPT

OTHER PROGRAMS


Slide15 l.jpg

40 Years of Funding for… policy down by giving pollution permits to fossil fuel investors for free…?


Recycling revenue to households l.jpg
Recycling Revenue to Households policy down by giving pollution permits to fossil fuel investors for free…?

  • The point of cap-and-trade is to send a price signal to every economic actor: your choice to pollute is not free.

  • On the path to effectively abolishing fossil fuel use, businesses will:

    (a) abate emissions [leave the game of musical chairs], or

    (b) pass the additional costs on to consumers, who will mitigate.

  • If the point is to expose consumers to additional costs, then why return the additional revenue to them?

    • Keep most household budgets mostly unchanged.

    • Secure popular acceptance; defend against claims of “new taxes.”

    • Give direct incentive to individuals to “get ahead” by reducing their carbon footprint below the average.

    • Clear the federal books as fast as possible.*

      It is very difficult to match the federal budgeting process to the volatility carbon revenue streams may experience.


Mechanisms for delivering money to households l.jpg
Mechanisms for Delivering Money to Households policy down by giving pollution permits to fossil fuel investors for free…?

Dividend

  • Simplest, and cuts ruling-class households into the deal.

  • Leaves little for anything else if all receive at least as much as low-income families need.

$

20%

80%

0%

50%

100%

U.S. Households by Income


Mechanisms for delivering money to households18 l.jpg
Mechanisms for Delivering Money to Households policy down by giving pollution permits to fossil fuel investors for free…?

Payroll tax

Reduces an existing large, unpopular, and perverse tax.

Many of the poorest 20% of households are not paying the payroll tax.

$

20%

80%

0%

50%

100%

U.S. Households by Income


Mechanisms for delivering money to households19 l.jpg
Mechanisms for Delivering Money to Households policy down by giving pollution permits to fossil fuel investors for free…?

Utility discount

Returns auction revenues from all sources as an electricity (& natural gas) discount.

Undermines and distorts price signal on energy use; incomplete coverage.

Option: PUC grant utilities permission to print revenue rebate information on bills.

$

20%

80%

0%

50%

100%

U.S. Households by Income


Mechanisms for delivering money to households20 l.jpg
Mechanisms for Delivering Money to Households policy down by giving pollution permits to fossil fuel investors for free…?

Low-Income Heating and Energy Assistance Program (LIHEAP)

Direct energy subsidy to low-income households.

Undermines and distorts price signal on energy use; relatively low enrollment.

$

20%

80%

0%

50%

100%

U.S. Households by Income


Mechanisms for delivering money to households21 l.jpg
Mechanisms for Delivering Money to Households policy down by giving pollution permits to fossil fuel investors for free…?

Electronic Benefits Transfer (EBT) & Earned Income Tax Credit

Reaches lowest-income households using existing classifications and administrative infrastructure to deliver an automatic monthly payment for immediate use on all goods.

EITC phases out as income rises, so extent of coverage is negotiable.

Immigrant eligibility challenge: ineligible for EBT, and would need to use a Taxpayer Identification Number (TIN) to file taxes in order to receive the EITC; This eligibility problem persists in all sectors: education, health care, labor protection.

E.B.T.

E.I.T.C.

E.I.T.C.

E.I.T.C.

$

20%

80%

0%

50%

100%

U.S. Households by Income


Committing a carbon trust22 l.jpg
Committing a Carbon Trust policy down by giving pollution permits to fossil fuel investors for free…?

Political Context: Concepts of Justice

Proposals for Spending Auction Revenue

Show-stopping Reasons Not to Spend Revenue

Compelling Claims – and Non-Compelling Claims

Bargaining on Terms of a Cap-and-Trade Policy


Show stopping reasons not to spend carbon auction revenue at federal level l.jpg
Show-stopping policy down by giving pollution permits to fossil fuel investors for free…? reasons not to spend carbon auction revenue at federal level

  • Anything you could want to spend carbon auction revenue on could be funded through $1.2 Trillion of annual appropriations – starting now.

    There really is a lot of money. It’s at the Pentagon.

    Obama plan is $15Billion per year for 10 years without auction revenues.

  • Anything you could fund with auction revenue wouldn’t start until 2013

  • Negotiating spending can delay even getting a price signal even that soon.

    Jurisdictional defensiveness by leadership of other committees is strong.

    The price signal needs to endure while spending priorities will change, and putting rules for both in the same legislation jeopardizes each.

    4. It’s hard to bite the hand that feeds you if your mission is funded by a policy that deserves critique.

    It only takes a few dimes to blind people to dollar-sized crimes.


Show stopping reasons not to spend carbon auction revenue at federal level24 l.jpg
Show-stopping policy down by giving pollution permits to fossil fuel investors for free…? reasons not to spend carbon auction revenue at federal level

5. Simplicity is best.

A negotiated deal that you think you understand today is highly likely to emerge from the back side of a Congressional conference as something totally Byzantine doctored by lobbyists.

  • All levels of governance draw funds off a residential base (rate payers, taxpayers, etc.), and many can deliver higher value policies with superior performance to the federal government – if the feds send the money back to households.

    7. A carbon price will affect household budgets, and if the money is not returned, it is “raising taxes.”

    CBO recognizes this with the 25% deficit-reduction factor – and that’s just to shore up the $1.2 Trillion budget!


Show stopping reasons not to spend carbon auction revenue at federal level25 l.jpg
Show-stopping policy down by giving pollution permits to fossil fuel investors for free…? reasons not to spend carbon auction revenue at federal level

8 & 9. Negotiations for new money are subject to the same forces as existing money.

  • People don’t trust the way Congress spends money; impluse to reject new spending..

  • Competing claims are strong: National debt and liability to elders and veterans.

  • If you try to protect auction revenues from the appropriations process, you create “the mother and father of all earmarks.”

  • Variability in carbon revenue receipts challenges the annual budgeting process for spending items.

  • Oil interests will want gas tax reduced in response to carbon tax; gas tax pays for transportation infrastructure.

  • No matter how much money you spend on compensation, it will never be enough for the fossil fuel companies being driven into new product lines.

    10. If you spend a large proportion of the money (rather than return it), fossil interests will exploit distributive claims and prevailing distrust of government to destroy the policy within a matter of a few election cycles.

    The best defense for the policy is to engage those households directly.


Committing a carbon trust26 l.jpg
Committing a Carbon Trust policy down by giving pollution permits to fossil fuel investors for free…?

Political Context: Concepts of Justice

Proposals for Spending Auction Revenue

Show-stopping Reasons Not to Spend Revenue

Compelling Claims – and Non-Compelling Claims

Bargaining on Terms of a Cap-and-Trade Policy


Compelling exceptions to returning revenue to households l.jpg
Compelling Exceptions policy down by giving pollution permits to fossil fuel investors for free…?to Returning Revenue to Households

  • Implementation and enforcement of the policy itself

  • Competitiveness Issues

  • Worker transitional assistance

  • Incentives for states

    Policy-based: decoupling; interconnection standards,

    Performance-based: exceeding the national avg reduction (1.7%)

  • International commitments

    Infrastructure investments and adaptation in the U.S. should be included in appropriations for existing agencies.

  • Budget deficit reduction payment

    Required to receive a “revenue neutral” score from CBO.

    Point: It costs less to pay for things out of regular appropriations because it is not new tax money.



Slide29 l.jpg

U.S. Industry Exposure to Competitiveness Concern Due to a Price on Carbon

80

Imports

70

Plot U.S. Industries

By Category

60

50

Nonferrous metals

40

30

Imports as % share of consumption (2006)

Ferrous

Metals

Chemicals

20

Fabricated

Metals

Paper

Energy Intensity

10

Refining

Nonmetallic

Mineral products

0

0

1

2

3

4

5

6

7

8

9

10

U.S. Energy Costs as % Share of Shipment Value (2002)

Houser, T. (2008) Leveling the Playing Field. Peterson Institute for International Economics: Washington, D.C.


Slide30 l.jpg

U.S. Industry Exposure to Competitiveness Concern Due to a Price on Carbon

80

70

Size of bubble

indicates scale of

CO2 emissions

(2002)

60

50

40

30

Imports as % share of consumption (2006)

20

10

0

0

1

2

3

4

5

6

7

8

9

10

U.S. Energy Costs as % Share of Shipment Value (2002)

Houser, T. (2008) Leveling the Playing Field. Peterson Institute for International Economics: Washington, D.C.


Slide31 l.jpg

U.S. Industry Exposure to Competitiveness Concern Due to a Price on Carbon

80

70

60

50

Nonferrous metals

Nonferrous metals

40

30

Imports as % share of consumption (2006)

Ferrous

Metals

Ferrous

Metals

Chemicals

20

Fabricated

Metals

Paper

10

Refining

Refining

Nonmetallic

Mineral products

Nonmetallic

Mineral products

0

0

1

2

3

4

5

6

7

8

9

10

U.S. Energy Costs as % Share of Shipment Value (2002)

Houser, T. (2008) Leveling the Playing Field. Peterson Institute for International Economics: Washington, D.C.


Slide32 l.jpg

U.S. Industry Exposure to Competitiveness Concern Due to a Price on Carbon

80

70

60

50

Nonferrous metals

40

30

Imports as % share of consumption (2006)

Ferrous

Metals

Chemicals

20

Fabricated

Metals

Paper

10

Refining

Nonmetallic

Mineral products

0

0

1

2

3

4

5

6

7

8

9

10

U.S. Energy Costs as % Share of Shipment Value (2002)

Houser, T. (2008) Leveling the Playing Field. Peterson Institute for International Economics: Washington, D.C.


Slide33 l.jpg

U.S. Industry Exposure to Competitiveness Concern Due to a Price on Carbon

If the U.S. takes action on climate change, foreign competitors will be at an advantage,

so we should use a ‘stick’ as a consequence to make them take comparable action.

What kind of ‘stick’?

Restricting access to our markets for energy-intensive goods like iron, steel, cement, etc.

I see, so I’m in favor of climate policy, but to protect jobs in our industrial sector, we should insist China and India taking comparable action…?

This is the rhetorical linkage

between competitiveness and developing country commitments.


Energy intensive primary goods in perspective l.jpg
Energy-Intensive Primary Goods in Perspective Price on Carbon

U.S. GDP

$13.8 Trillion

2007 manufacturing data for the U.S. will be available in March 2009.


Energy intensive primary goods in perspective35 l.jpg
Energy-Intensive Primary Goods in Perspective Price on Carbon

Energy-Intensive

Primary Goods

$173 Billion

9%

All U.S. Imports

$2 Trillion

U.S. GDP

$13.8 Trillion

2007 manufacturing data for the U.S. will be available in March 2009.


Energy intensive primary goods in perspective36 l.jpg
Energy-Intensive Primary Goods in Perspective Price on Carbon

Energy-Intensive

Primary Goods

$173 Billion

Energy-Intensive

Primary Goods

Imported from China

$18.4 Billion

10%

9%

All U.S. Imports

$2 Trillion



Slide38 l.jpg

Energy-Intensive Primary Goods in Perspective Price on Carbon

China GDP

$3.25 Trillion

All Exports

Exports

To U.S.

37%

$1.21 Trillion

26%

$322 B


Slide39 l.jpg

Energy-Intensive Primary Goods in Perspective Price on Carbon

China GDP

$3.25 Trillion

All Exports

Exports

To U.S.

37%

$1.21 Trillion

26%

$322 B

6%

Energy-Intensive

Primary Goods

$18.4 Billion


Slide40 l.jpg

Concerns about “Competitiveness” Price on Carbon

International Market Price for Steel: $1000/ton

Labor

&

Ore

&

Equip

Illustration: Steel

Profit

Energy


Slide41 l.jpg

Concerns about “Competitiveness” Price on Carbon

Illustration: Steel

International Market Price for Steel: $1000/ton

Profit

Labor

&

Ore

&

Equip

Energy


Slide42 l.jpg

Concerns about “Competitiveness” Price on Carbon

Illustration: Steel

International Market Price for Steel: $1000/ton

CO2

“Leakage”

Production, emissions,

and jobs

all leave the country

For no benefit to the

climate or the economy

Climate

Policy

Intensity commitment

No price on carbon

Kyoto + 10%

No price on carbon

15% reduction

Price on carbon


Slide43 l.jpg

Concerns about “Competitiveness” Price on Carbon

Labor

&

Ore

&

Equip

Must

Keep Costs

Competitive

Illustration: Steel

International Market Price for Steel: $1000/ton

Carbon

AND

Reduce

GHG’s

Labor

&

Ore

&

Equip

Energy

Climate

Policy

No price on carbon;

Intensity commitment

No price on carbon;

Kyoto + 10%

Price on carbon;

15% reduction


Slide44 l.jpg

Concerns about “Competitiveness” Price on Carbon

Labor

&

Ore

&

Equip

Option D: Output-Based Rebate

Carbon

Carbon

Carbon

Labor

&

Ore

&

Equip

Energy

Climate

Policy

No price on carbon;

Intensity commitment

No price on carbon;

Kyoto + 10%

Price on carbon;

15% reduction


Committing a carbon trust45 l.jpg
Committing a Carbon Trust Price on Carbon

Political Context: Concepts of Justice

Proposals for Spending Auction Revenue

Show-stopping Reasons Not to Spend Revenue

Compelling Claims – and Non-Compelling Claims

Bargaining on Terms of a Cap-and-Trade Policy


Slide46 l.jpg

Snapshot of U.S. Power Plants: Price on CarbonSize, Location, and Fuel

Plant Fuel Type

2004 Generation


Slide47 l.jpg

How the Electric Power Sector Stacks Up Price on Carbon

Biggest CO2 Polluter

Millions tons of CO2

Total CO2 Pollution by Firm

Most Carbon-Intensive Generation

lbs CO2 per MWh

Average Carbon Intensity of Generation, by Firm


Slide48 l.jpg

How the Electric Power Sector Stacks Up Price on Carbon

  • AEP

  • Southern

  • Duke

  • TVA

  • Ameren

  • MidAmerican

  • NRG

  • Xcel

  • FirstEnergy

  • TXU

  • Progress

  • Edison

  • Dominion

  • FPL

  • Allegheny


Slide49 l.jpg

Power Companies Reporting for 2000-2008 Price on CarbonOver $10 Million in Lobbying & Campaign Contributions

Southern

Entergy

FPL

Duke

FirstEnergy

TXU

Progress

DTE

AEP

Xcel

Edison

Dominion

Ameren

$85 Million

$25 Million

$24 Million

$21 Million

$19 Million

$19 Million

$15 Million

$15 Million

$15 Million

$15 Million

$14 Million

$11 Million

$10 Million

Top 20 CO2 emitters* contributed

more than $230 million total,

with Southern Company

accounting for more than 1/3.

* TVA excluded because it cannot contribute as a federal entity.

Source: Center for Responsive Politics


Slide50 l.jpg

Power Companies Reporting for 2000-2008 Price on CarbonOver $10 Million in Lobbying & Campaign Contributions

Southern

Entergy

FPL

Duke

FirstEnergy

TXU

Progress

DTE

AEP

Xcel

Edison

Dominion

Ameren


Slide51 l.jpg

Power Companies Reporting for 2000-2008 Price on CarbonOver $10 Million in Lobbying & Campaign Contributions

Southern

Entergy

FPL

Duke

FirstEnergy

TXU

Progress

DTE

AEP

Xcel

Edison

Dominion

Ameren


Committing a carbon trust53 l.jpg
Committing a Carbon Trust Price on Carbon

Political Context: Concepts of Justice

Proposals for Spending Auction Revenue

Show-stopping Reasons Not to Spend Revenue

Compelling Claims – and Non-Compelling Claims

Bargaining on Terms of a Cap-and-Trade Policy



Slide55 l.jpg

Federal Climate Negotiations Price on Carbon

Auto

USCC

Coal

Utilities

Big

Green

Big

Oil


Slide56 l.jpg

Federal Climate Negotiations Price on Carbon

Auto

USCC

Big

Biz

Market

Mechanism

Cap &

Trade

Coal

Utilities

Big

Green

Big

Oil

Declining

Emissions

Cap


Slide57 l.jpg

Federal Climate Negotiations Price on Carbon

Cost

Containment

Auto

USCC

Big

Biz

Market

Mechanism

Cap &

Trade

Coal

Carbon

Sequestration

Utilities

Big

Green

Free

Pollution

Allowances

Big

Oil

Declining

Emissions

Cap


Slide58 l.jpg

Federal Climate Negotiations Price on Carbon

Trade Protection

Industry

Cost

Containment

Auto

USCC

Jobs

Protection

Big

Biz

Market

Mechanism

Unions

Cap &

Trade

Coal

Carbon

Sequestration

Utilities

Big

Green

Free

Pollution

Allowances

Big

Oil

Declining

Emissions

Cap


Slide59 l.jpg

Federal Climate Negotiations Price on Carbon

Trade Protection

Industry

Cost

Containment

Auto

USCC

Jobs

Protection

Big

Biz

Market

Mechanism

Unions

Cap &

Trade

Coal

Carbon

Sequestration

Utilities

Big

Green

Free

Pollution

Allowances

Big

Oil

Civil

Society

Declining

Emissions

Cap

Rebates to

Low-Income

Adaptation

Funds


Slide60 l.jpg

Federal Climate Negotiations Price on Carbon

Trade Protection

Industry

Cost

Containment

Auto

USCC

Jobs

Jobs

Big

Biz

Market

Mechanism

Unions

Unions

Cap &

Trade

Coal

Carbon

Sequestration

Utilities

Utilities

Big

Green

Free / Auction

Pollution

Allowances

Big

Oil

Civil

Society

Declining

Emissions

Cap

Rebates to

Low-Income

Adaptation

Funds


Slide61 l.jpg

Federal Climate Negotiations Price on Carbon

Trade Protection

Industry

Cost

Containment

Auto

USCC

Jobs

Big

Biz

Market

Mechanism

Unions

Cap &

Trade

Tighter

Targets

Plan B

Complementary

Policies

Coal

E.J.?

Carbon

Sequestration

Utilities

Big

Green

Free / Auction

Pollution

Allowances

Big

Oil

Civil

Society

Declining

Emissions

Cap

Rebates to

Low-Income

Adaptation

Funds


Major terms affect financial impact l.jpg
Major Terms Affect Financial Impact Price on Carbon

PropositionOpposition

Coverage Broad as possible Narrow

Cap 5% below 1990 by 2020 1990 by 2020

80% below 1990 by ‘50 65% below ‘90 by ‘50

Price Control Updating Price Buffer Safety Valve

Stringency Control Limit Accumulated Bank Slack cap okay

Offsets Limit below 15% No limit

CompetitivenessOutput-Based Rebates Border Taxes

Scientific Review Obligation to act Recommendation only

Env. Justice Hard Cap in Non-Attainment Areas (not yet proposed)

Auction / Allocation / Spending…


Committing a carbon trust proposed terms l.jpg
Committing a Carbon Trust: Proposed Terms Price on Carbon

Proposition Lieberman-W. 20122022

Int’l commitments * 15% 2.5% → 4%

State incentives * 10% 4% → 6%

Carbon-intensive Manufacturers 6% via OBR 11% via free allocation

Worker transition * 10% 1% → 2%

Fossil Fuel Companies 26% → 14%

Households 50% via EBT/EITC 16% → 20% via utility discounts

Enforcement * 0.5% 0.75%

Deficit reduction (for * items) 8% 6% → 18%

Complementary incentives 18%→ 19%

Other interests and programs 15%

Proposition is among many combinations consistent with (but not specified by)

the Waxman Markey-Inslee principles, which now has 152 Congressional co-signers.


Climate policy design pro series64 l.jpg

Targets, Timetables, and Technology Price on Carbon

Politics of a Durable Deal: Justice as Realism

Carbon Price Policies: Questions for Both Tax and Trade

Cap-and-Trade: Devils in the Details

Committing a Carbon Trust: The Trillion Dollar Bargain

Essential Complementary Policies: California’s Advantage

Climate Policy Design Pro-Series


United nations framework convention on climate change unfcccc l.jpg

Subsidiary Body on Price on Carbon

Implementation

Subsidiary Body

on Scientific and

Technological Advice

United Nations Framework Convention on Climate Change (UNFCCCC)

Conference

Of the

Parties (COP)

UNFCCC

Secretariat

IPCC

Tracking Progress

on Agreements

Kyoto Mechanisms

Technology Transfer

Emission Inventories

Capacity Building

Review Financial

Assistance to

Non-Annex I Countries

Land Use &

Land Use Change

and Forestry

Vulnerability

(Adaptation)

HFCs and PFCs

COP Budget

and Administration

Adaptation and

Vulnerability


ad