European Cap-And-Trade Example

  • Europe was the first to do carbon cap-and-trade, four years ago. (Photo courtesy of NASA)

Congress is haggling over a climate
bill that includes a carbon cap-and-
trade system. In many ways, it’s
similar to the one the European Union
put in place several years ago. Liam
Moriarty looks at what
the European experience has been and
what the lessons for the US might be:

Transcript

Congress is haggling over a climate
bill that includes a carbon cap-and-
trade system. In many ways, it’s
similar to the one the European Union
put in place several years ago. Liam
Moriarty looks at what
the European experience has been and
what the lessons for the US might be:

Slashing greenhouse gas emissions is hard. Our economy is powered mostly by fossil fuels. Switching to clean fuels will be disruptive and expensive, at least to start with.

So how do we get from here to there? The approach that’s proving most popular is what’s called “cap-and-trade.” It works like this – first, there’s the cap.

“We’re going to put an absolute limit on the quantity of carbon-based fuels that we’re going to burn. And we’re going to develop a system to make sure we’re not burning more fossil fuels than that.”

Alan Durning heads the Sightline Institute, a sustainability-oriented think tank in Seattle. He explains that once you put the cap in place…

“Then, we’re going to let the market decide who exactly should burn the fossil fuels based on who has better opportunities to reduce their emissions.”

That’s the “trade” part. Companies get permits to put out a certain amount of greenhouse gases. Outfits that can cut their emissions more than they need to can sell their unused pollution permits to companies that can’t.

The cap gets ratcheted down over time. There are fewer permits out there to buy. Eventually even the most polluting companies have to reduce their emissions, as well.

The goal is to wean ourselves off dirty fuels by making them more expensive. And that makes cleaner fuels more attractive.

Europe was the first to do carbon cap and trade, four years ago. And things got off to a rough start. They set the cap on emissions too high and way overestimated the number of permits – or allowances – that companies would need.

“We have too many allowances. Simple supply means that the prices of those allowances crashes. They don’t have much value, and therefore the price went down to close to zero.”

That’s Vicki Pollard. She follows climate change negotiations for the European Commission. She says the whole system got knocked out of kilter.

For the first two years, European carbon emissions actually went up. After the collapse of Phase One, big changes were made. The next phase of the trading system has a tighter cap, more stringent reporting requirements and enforcement with teeth.


Today, Europe’s on track to meet its current emissions target. But environmentalists, such as Sanjeev Kumar with the World Wildlife Fund in Brussels, say those targets are still driven more by politics than by science.

“We have a cap that’s very weak, i.e. that means that it doesn’t mean that we’re going to achieve the levels of decarbonization that we need within the time scale.”

Leading climate scientists say we have to cut greenhouse gas emissions to 80% below 1990 levels by the middle of this century to avoid catastrophic climate change.

Business still has concerns about the EU cap and trade scheme. Folker Franz is with BusinessEurope, sort of the European version of the US Chamber of Commerce. He says companies worry about the additional cost of carbon emissions putting them at a competitive disadvantage.

“If you produce one ton of steel, you emit roughly one ton of CO2. So any ton of steel produced in the EU is right now some 17 dollars more than outside the European Union. And that makes a difference.”

But, Franz says, European businesses accept the need to take prompt action on climate change and are on board with the stricter cap and trade rules coming over the next few years.

Americans have watched Europe struggle with carbon cap-and-trade. The Sightline Institute’s Alan Durning says we can benefit from Europe’s willingness to break new ground.

“It was a big advance when they started it, because nothing like it had ever been done. But, it’s not the be-all-and-end-all. In fact, the United States now has an opportunity to learn from their mistakes and leapfrog ahead to a much better climate policy.”

Durning says an American cap and trade system could avoid the costly stumbles that’ve hampered Europe’s carbon reduction efforts.

For The Environment Report, I’m Liam Moriarty.

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Interview: The Future of Water in a Warmer World

  • Peter H. Gleick, President and co-founder of the Pacific Institute, is concerned that without reducing greenhouse gas emissions, global warming will have dire impact on water resources. (Courtesy of the Pacific Institute)

With concern about climate change growing, some scientists are trying to determine how global warming will affect sources of water. Lester Graham spoke with the President of the Pacific Institute, Peter Gleick about what climate change might mean to weather patterns:

Transcript

With concern about climate change growing, some scientists are trying to determine how global warming will affect sources of water.

Lester Graham spoke with the President of the Pacific Institute, Peter Gleick about what climate change might mean to weather

patterns:


PG: Overall, the planet is gonna get wetter because as it gets hotter, we’ll see more
evaporation. The problem is, we aren’t always gonna get rain where we want it.
Sometimes we’re gonna get rain where we don’t want it. And at the moment it looks like
the biggest increases in rainfall will be in the northern regions where typically water is
less of a problem. Or at least water quantity is less of a problem. And we may actually get
less rainfall in the Southwest where we need it more.


LG: Let’s talk about some of the precious areas to North America. For instance, a lot of
people are worried about snow pack in the Rockies.


PG: Yes, well, one of the most certain impacts of global climate change is going to be
significant changes in snowfall and snowmelt patterns in the western United States as a
whole, actually in the United States as a whole because as it warms up, what falls out of
the atmosphere is going to be rain and not snow. Now that really matters in the Western
United States, in the Rocky Mountains and the Sierra Nevada where our snow pack really
forms the basis of our water supply system. Unfortunately, as the climate is changing,
we’re seeing rising temperatures and decreasing snow pack. More of what falls in the
mountains is falling as rain, less of it’s going to be snow. That’s going to wreck havoc on
our management system, the reservoirs that we’ve built to deal with these variations in
climate. Incidentally, it’s also going to ruin the ski season eventually.


LG: You mentioned that the farther north you go, according to some models, we’ll see
more rain or more precipitation. At the same time, with warmer temperatures, we’ll see
less ice covering some of the inland lakes, such as the Great Lakes, which means more
evaporation. So, what are we going to see as far as those surface waters sources across
the continent?


PG: Without a doubt, global climate is changing. And it’s going to get worse and worse
as humans put more and more greenhouse gases in the atmosphere. And as it gets
warmer, we’re going to see more evaporation off of the surface of all kinds of lakes,
including especially the Great Lakes. And interestingly, even though we don’t have a
great degree of confidence of what’s going to happen precisely with precipitation in the
Great Lakes, all of the models seem to agree that over time, the Great Lakes levels are
going to drop. And it looks like we’re going to lose more water out of the surface of the
Great Lakes from increased evaporation off the lakes than we’re likely to get from
precipitation, even if precipitation goes up somewhat. And I think that’s a great worry for
homeowners and industry around the margin of the lake. Ultimately for navigation,
ultimately for water supply.


LG: There’s a lot of talk about the gloom and doom scenarios of global warming, but
they’ll be longer growing seasons and we’re also going to be seeing, as the zones change,
more of this fertile ground in as northern US and Canada get longer growing seasons.
That’s not a bad thing.


PG: There are going to be winners and loser from global climate change. And
interestingly, there are going to be winners and losers at different times. Certainly, a
longer growing season is a possibility as it warms up. And I think that, in the short term,
could prove to be beneficial for certain agriculture in certain regions. Interestingly
though, and perhaps a little depressingly, over time, if the globe continues to warm up, if
the globe continues to warm up, evidence suggest that the short term improvements in
agriculture that we might see might ultimately be wiped out. As it gets hotter and hotter,
some crop yields will go down after they go up. We’re going to see an increase in pests
that we didn’t used to see because of warmer weather. Unfortunately, pests like warmer
weather. Furthermore, if we don’t really get a handle on greenhouse gas emissions, if we
don’t really start to cut the severity of the climate changes that we’re going to see, the
doom and gloom scenarios unfortunately get more likely. Over time, the temperatures go
up not just one or two or three degrees Celsius but four or five or eight degree Celsius.
And that truly is a catastrophe for the kind of systems we’ve set up around the planet.


HOST TAG: Peter Gleick is a water expert and President of the Pacific Institute for Studies in Development, Environment and Security, based in California.

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States Ready for Wolf Delisting?

  • Once hunted nearly to extinction, the gray wolf has recently rebounded under the protection of the Endangered Species Act. Now, the U.S. Fish and Wildlife Service is proposing to take the wolf off of the Endangered Species List and hand wolf management back to the states. (Photo by Katherine Glover)

The U.S. Fish and Wildlife Service wants to remove the eastern population of the gray wolf from the Endangered Species List and turn over wolf management to state control. But not everyone thinks the states are up for it. The Great Lakes Radio Consortium’s Katherine Glover has the story:

Transcript

The U.S. Fish and Wildlife Service wants to remove the eastern population
of the gray wolf from the Endangered Species List and turn over wolf management
to state control. But not everyone thinks the states are up for it. The Great Lakes Radio
Consortium’s Katherine Glover has the story:


(sound of wolves howling)


The image of the wolf has always had a powerful effect on people. Wolves seem dangerous,
mysterious, romantic. They are a symbol of the untamed wilderness. Before Europeans came
to America, wolves roamed freely on every part of the continent. In 1630, the colony of
Massachussetts Bay started paying bounties to settlers for killing wolves. Over the next
300 years, wolf killing spread across the country, until all that was left was a few small
pockets of surviving wolf packs.


When the Endangered Species Act passed in 1973, the only wolves left to protect in the
Midwest were in Northern Minnesota. By some estimates, there were as few as 350 of them.


Today, Minnesota has a healthy wolf population of around 2400 animals, and smaller populations
are growing in Wisconsin and Michigan. Becaue of this success, the U.S. Fish and Wildlife Service
has proposed removing the animals from the Endangered Species List. This would mean wolves would
no longer be federally protected – it would be up to the states.


(sound of gate opening)


Peggy Callagan works with captive wolves at the Wildlife Science Center in Minnesota. She’s the
Center’s co-founder and executive director. She and her staff research ways to minimize
conflicts between wolves and people. Callahan is looking forward to seeing the wolf taken off
the Endangered Species List.


“It’s a good thing for the Endangered Species Act, to take a wolf off or an eagle off or a
peregrine off when it has recovered. The act was not established to provide a permanent
hiding place. It was established to protect a species until such time that they could be
managed in a different way.”


Wisconsin and Michigan have wolves because young born in Minnesota have migrated east to start
their own packs. Callahan says how Minnesota manages its wolves will affect wolf numbers in the
Midwest. And she isn’t crazy about Minnesota’s current wolf management plan, which has different
rules for different parts of the state.


“Now, there’s a boundary; there’s a boundary called a wolf zone, and there’s a boundary that’s
called the ag zone. And nobody likes it. We went backward.”


In Northeastern Minnesota, where the majority of wolves are, landowners can only kill wolves
if they can demonstrate an immediate threat to pets or livestock. In the rest of the state, where
there is more agriculture and more people, the rules are more lenient. On their own property,
landowners can kill any wolf they feel is a danger, without having to prove anything to the state.


The Sierra Club is opposed to taking the wolf off the Endangered Species list, largely because
of Minnesota’s management plan. Ginny Yinling is the chair of the Wolf Task Force of the Sierra
Club in Minnesota.


“They’ve pretty much given carte blanche to landowners, or their agents, to kill wolves
pretty much at any time in the southern and western two thirds of the state; they don’t even
have to have an excuse, if a wolf’s on their property they can kill it. Instead of this being
what should have been a victory in terms of wolf recovery and the success of the Endangered
Species Act, instead we’re afraid it’s going to turn into something of a disaster.”


Yinling is also concerned with the protection of wolf habitat, such as den sites, rendezvous
sites, and migration corridors.


“The current management plan protects none of those areas; it leaves it entirely up to the
discretion of the land managers.”


But wildlife managers say these are not critical for a large wolf population
like Minnesota’s. Mike DonCarlos is the wildlife program manager for the Minnesota
Department of Natural Resources.


“As you look at the range of species that are threatened by habitat change, ironically the wolf
in Minnesota is not one of them. As long as there’s a prey base that continues, wolves should
do just fine. The key is mortality rates and availability of food.”


In Wisconsin and Michigan, where there are fewer wolves, state laws will continue to protect
wolf habitat. Peggy Callahan says she has faith that the wolves will be fine, even if the
Minnesota state plan is not perfect. But at the Sierra Club, Ginny Yinling says they have
plans to challenge wolf delisting in court.


For the Great Lakes Radio Consortium, I’m Katherine Glover.

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