Under cap-and-trade, if a business can cut emissions faster, you can trade emission credits - for a price - to a business that can’t. (Photo courtesy of the US EPA)
Congress is debating a cap-and-
trade plan to reduce greenhouse
gas emissions. But a recent poll
determined most people don’t know
what cap-and-trade means. Lester
Graham reports:
Transcript
Congress is debating a cap-and-
trade plan to reduce greenhouse
gas emissions. But a recent poll
determined most people don’t know
what cap-and-trade means. Lester
Graham reports:
A poll by Rasmussen found 76% of Americans don’t know what cap-and-trade is.
Person 1: “Putting a price cap on something?”
Person 2: “Cap and trade? I have no idea.”
Person 3: “Captain Trade? I never heard of him.”
Here’s the simple version: cap greenhouse gases. The government will lower that cap over time.
Cut emissions faster, you can trade emission credits – for a price – to a business that can’t.
Overall, it’ll make fossil fuels more expensive, clean energy cheaper.
Democratic leaders in the House have agreed on a cap-and-trade plan. Republicans – and some Democrats – hate the plan. They think it’ll cost the economy too much.
The House will likely pass it. But Darren Samuelsohn with GreenWire says President Obama will have to push for it in the Senate.
“He could probably twist some arms and make some votes go his way if he really wanted it.”
And, even then, CAP and TRADE will likely only squeak through.
Henry A. Waxman is the chair of the House Energy and Commerce Committee, which has just started debating a carbon cap-and-trade program. (Photo courtesy of energycommerce.house.gov)
The debate on what to do about climate change has begun in Congress. Lester Graham reports the House Energy and Commerce committee is discussing an energy bill that includes a plan to reduce the greenhouse gases that cause global warming:
Transcript
The debate on what to do about climate change has begun in Congress. Lester Graham reports the House Energy and Commerce committee is discussing an energy bill that includes a plan to reduce the greenhouse gases that cause global warming:
In opening comments, members of the House committee had very different views of what the plan –called carbon cap-and-trade might do.
“A cap-and-trade energy tax will cost this country millions of good jobs and will force the average American family to pay thousands of dollars in increased energy costs.”
That’s Steve Scalise, a Republican from Louisiana. No one actually knows the cost yet, because there’s not a final plan. But several studies estimate it would be a few hundred dollars a year not thousands.
Meanwhile supporters say carbon cap-and-trade will create millions of jobs in a new green economy. Betty Sutton is a Democrat from Ohio.
“It will be a challenge for our country to transform the way we operate and transition to a green economy. But, the costs of not addressing climate change far outweigh the challenges.”
And members of President Obama’s cabinet all told the House committee pretty much the same thing.
Economists say if a cap and trade plan passes, energy prices will go up no matter what (Photo courtesy of aoc.gov)
President Obama and some leaders in Congress want to take on global warming by cutting back on carbon dioxide. The big plan is called carbon cap and trade. If the plan passes, economists say there’s no doubt your bills will go up, though there’s debate about how much. Mark Brush reports on one of the biggest sticking points in these carbon cap and trade plans:
Transcript
President Obama and some leaders in Congress want to take on global warming by cutting back on carbon dioxide. The big plan is called carbon cap and trade. If the plan passes, economists say there’s no doubt your bills will go up, though there’s debate about how much. Mark Brush reports on one of the biggest sticking points in these carbon cap and trade plans:
Under some of the cap and trade plans, oil and gas companies would have to buy pollution permits.
But these companies want them for free.
They say if they’re forced to pay, they’ll have to pass the cost onto you and me.
But economists say if a cap and trade plan passes, energy prices will go up no matter what.
That’s because things like coal, oil, and natural gas will be restriced.
And they say that’s what drives prices up.
Chad Stone is the Chief Economist for the Center on Budget and Policy Priorities.
He says if pollution permits are bought at an auction, the money can be passed onto you and me. But it’s different if they’re just given away for free.
“If you don’t auction, you don’t have any revenue and consumers only get a hit to their budgets.”
Stone says if the pollution permits are auctioned, you could be getting a check in the mail or a tax credit to help you pay for higher energy bills.
Carol Browner is the President's Assistant on Energy and Climate Change. (Photo courtesy of cdc.gov)
The White House climate change chief is laying the groundwork to get an energy bill through Congress. Lester Graham reports it includes a controversial plan to reduce the use of fossil fuels such as coal and oil:
Transcript
The White House climate change chief is laying the groundwork to get an energy bill through Congress. Lester Graham reports it includes a controversial plan to reduce the use of fossil fuels such as coal and oil:
Carol Browner is President Obama’s assistant for Energy and Climate Change.
MIT posted video from an energy conference at the college. In it, Browner indicated we’ve got an opportunity to get the nation off its fossil fuel addiction, become more energy independent and create jobs in green energy.
“Let us dare to dream of a nation where the excess solar energy of our deserts, the wind potential of our Great Plains fuel our homes, our cars, and our businesses. Let us commit ourselves to a future where the businesses that sustain our planet are rewarded and those that endanger our Earth are held accountable.”
Next week Congress begins hearings on an energy bill that includes a carbon cap-and-trade plan that makes fossil fuels more expensive and renewable energy a better option all in an effort to lessen reliance on foreign oil and to reduce greenhouse gases causing global warming.
Congress is debating whether a carbon cap-and-trade program would kill jobs or save money in the long run. (Photo courtesy of aoc.gov)
Congress will be considering an energy and climate bill. Lester Graham reports the legislation would shift the American economy from reliance on fossil fuels to greater reliance on renewable energy and energy efficiency:
Transcript
Congress will be considering an energy and climate bill. Lester Graham reports the legislation would shift the American economy from reliance on fossil fuels to greater reliance on renewable energy and energy efficiency:
The fight over what –if anything– should be done about climate change will center on this legislation.
Coal companies, big oil –and industries that use a lot of energy say this is a jobs killer and our energy bills will go through the roof.
Environmental groups and green businesses say ‘no, actually this will create jobs in a new green economy and in the long run our energy bills will be lower.’
A carbon cap-and-trade scheme included in the package would limit greenhouse gas emissions and put a price on them. Those against it call it cap-and-tax.
Liz Perera is with the environmental group the Union of Concerned Scientists. She says doing nothing about climate change would cost more.
“That’s definitely the most expensive thing we can do: just ignore this and then suffer these consequences of global warming.”
Those consequences are uncertain and will be among the many arguments we’ll hear in Washington this summer.
Four Corners Power Plant is one of the dirtiest in the country, based on its emissions of nitrogen oxide, carbon dioxide and mercury. Under a cap-and-trade system, plants like this would have to cut pollution or buy carbon permits. (Photo by Daniel Kraker)
President Obama wants the U.S. to reduce the greenhouse gases like carbon dioxide that contribute to global warming. Congress is considering a carbon cap-and-trade program. Lester Graham reports on what that will mean to coal-burning industries and your power bill:
Transcript
President Obama wants the U.S. to reduce the greenhouse gases like carbon dioxide that contribute to global warming. Congress is considering a carbon cap-and-trade program. Lester Graham reports on what that will mean to coal-burning industries and your power bill:
For all the talk about carbon cap-and-trade, few people really understand what it is. And no one really knows what it will end up costing you on your electric bill – at least not yet.
The President wants carbon dioxide polluters such as coal-burning power plants to cut how much carbon dioxide they spew from the smokestacks.
So, the government is now designing a plan to cap the total amount of carbon dioxide pollution nation-wide. Once that amount is set, each polluter is allotted a limited amount of allowances to release carbon dioxide. Go over that allowance and the polluter has to pay per ton of CO2 released. Don’t use all of the allowances, and a company is free to trade them -–for a price—to others who need the allowances.
Over time that nation-wide cap will keep get lower, making carbon pollution more and more expensive.
How much of that cost ends up on your electricity bill is the big question.
There are some wildly different predictions. Some lobby groups indicate cap-and-trade could nearly double electric rates. But politics really plays into many of those predictions.
We went to analysts at Point Carbon. It’s a respected world-wide carbon market consultant. Veronique Bugnion says Point Carbon made some estimates based on President Obama’s carbon cap-and-trade plan in his proposed budget.
“Now, in terms of the U.S. average, what we calculated is that it would represent a roughly seven% increase over current electricity rates.”
That’s the average.
But, if your power company uses mostly coal instead of hydro-power or nuclear or wind or solar, Bugnion says it could cost more.
“At the extreme, in the regions that are essentially entirely coal dependent, the impact would be closer to anywhere between ten and 15-percent.”
President Obama says says a carbon cap-and-trade scheme can be designed so that it smooths out the effect on consumers who live in a coal-dependent area.
“The way it’s structured has to take into account regional differences. It has to protect consumers from huge spikes in electricity prices. So, there are a lot of technical issues that are going to have to be sorted through.”
And Congress is just beginning to sort through them. But coal and power companies as well as big oil and industries that use a lot of energy are lobbying hard to kill carbon cap-and-trade or make sure doesn’t cost them, or their shareholders, more than they want.
That leaves most of us wondering what reducing the greenhouse gases will end up costing us after Congress gets finished.
Sandy Kline runs a small house-cleaning business called “More Grime than Time” out of her home in suburban Detroit. Because of the economy she’s lost some business lately. Times are a little tighter.
She says she’s concerned about climate change, but she’s worried what the President’s carbon cap-and-trade plan might do to her power bill and her family budget.
“What he’s proposing sounds like a good idea –big picture– as far as the greenhouse emissions and that, but, you know, on an individual basis it can really hurt people like me.”
She wonders if consumer pressure isn’t enough to get those power companies using coal-burning plants to change. But, that could take decades. Climate scientists say we don’t have that kind of time. We have to do something to reduce greenhouse gases now.
So, experts say you should get ready. Since we don’t know exactly what cap-and-trade will do to electricity rates, it might be a good idea to reduce your power usage. Take advantage of the current tax incentives to get more energy efficient appliances and tighten up your home.
They say, even if rates do go up because of carbon cap-and-trade, if you’re using less power, it could be you won’t see a much of a difference when you get your electric bill.
Republicans in Congress incorrectly cited an MIT report on cap-and-trade, claiming it would raise consumer energy prices by $3,400. The report actually said $340. (Photo courtesy of GOP.gov)
House Republicans used an M.I.T. report to come up with cost estimates for the carbon cap-and-trade program. Lester Graham reports the author of that report has informed the Republicans their conclusions are almost ten times higher than the report indicated:
Transcript
House Republicans used an M.I.T. report to come up with cost estimates for the carbon cap-and-trade program. Lester Graham reports the author of that report has informed the Republicans their conclusions are almost ten times higher than the report indicated:
The House Republicans recently issued a press release that claimed the carbon cap-and-trade program would cost every American houseold more than $3,100 a year. They based it on that report. Problem is, the author of the report –an economist– says that’s just wrong. John Reilly says when a House Republican staffer called Reilly the economist made it clear the Republicans’ number was wrong by a factor of ten.
“To the extent they knowingly took wrong numbers, they’re really kind of just misinforming the debate and trying to scare people with numbers that really aren’t accurate. If they’re just confused, I’ve sent a letter now. In principle they could put out a press release that said that they had made an error and the right number is actually 340 not 3,100 or something.”
The discrepency was first noted by PolitiFact, a truth squad project at the St. Petersburg Times.
A regional carbon cap-and-trade program was supposed to be a model for the nation. Lester Graham reports now environmentalists are hoping it doesn’t set a bad example for the federal government:
Transcript
A regional carbon cap-and-trade program was supposed to be a model for the nation. Lester Graham reports now environmentalists are hoping it doesn’t set a bad example for the federal government:
Ten northeastern states have been working for years on an agreement to reduce the emissions that cause global warming.
The Regional Greenhouse Gas Initiative limits the amount of carbon dioxide power plants will be allowed to emit and puts a price on carbon allowances.
But, the Governor of New York, David Paterson, is changing the rules for his state.
The New York power generators complained existing contracts don’t include all the costs of the allowances. So, Governor Paterson plans to give those power generators some free allowances. That puts the other nine states’ power companies at a disadvantage.
Luis Martinez is with the environmental group the Natural Resources Defence Council.
“You know, I’m wishing, I’m hoping that he changes his mind once he realizes how important this is not only for the people of New York, but as a precedent for federal policy-making.”
Martinez hopes the other governors in the Northeast don’t follow Paterson’s example.
Congress will soon debate a carbon-cap-and-trade program. Lester Graham reports that debate will renew arguments about jobs versus the environment:
Transcript
Congress will soon debate a carbon-cap-and-trade program. Lester Graham reports that debate will renew arguments about jobs versus the environment:
This is an old argument with a new twist.
It goes like this. The economy is a mess. We need jobs. So right now we should worry less about the environment and more about jobs.
Putting a price on carbon emissions will gradually make fossil fuels like coal more expensive to burn.
That will cost big corporations that use a lot of energy. Opponents of cap-and-trade say it’s a job-killer.
But at the same time, carbon-cap-and-trade will make solar and wind more attractive. And that could create green collar jobs.
Environmental activists such as the Environmental Defense Fund’s Tony Kreindler say that won’t stop the critics.
“You’re always going to have defenders of the status quo claiming that it’s going to be economic ruin.”
But, a growing number of business leaders see carbon-cap-and-trade as a way to invest in an energy future that pollutes less and makes the U.S. more energy independent.
program will only increase the cost of everything.
Dan Lashoff is with the Natural Resources Defense
Council, one of the US CAP members.
The Environment Report’s Lester Graham asked him
why the companies in US CAP would want Congress
to come up with a cap-and-trade program now?
Transcript
We can expect Congress will take up a carbon
cap-and-trade bill soon. That would make
greenhouse gases a commodity. The United
States Climate Action Partnership wants to
know the rules of the carbon trading game
sooner rather than later. US CAP is made
up of businesses such as GE, automakers,
some power companies and environmental groups.
Other business leaders say a carbon cap-and-trade
program will only increase the cost of everything.
Dan Lashoff is with the Natural Resources Defense
Council, one of the US CAP members.
The Environment Report’s Lester Graham asked him
why the companies in US CAP would want Congress
to come up with a cap-and-trade program now?
Dan Lashoff: The opportunity that we have, right now, is to, first of all, invest
billions of dollars in the economic stimulus package – which the Congress will be
taking up in the next couple of weeks, that President Obama has made clear he
wants to see a substantial portion of that investment go into clean energy
technologies: insulating homes, building a smart grid to carry renewable energy
around the country. So, there’s an immediate step that needs to take place to
get investment flowing, to jump-start the green energy economy that we need.
That should be quickly followed with the type of comprehensive climate policy
that US CAP has called for, because that will guide longer-term investments, it
will mobilize private capital that is needed to build the clean energy future that we
need to have. And that will put people to work installing wind turbines, installing
solar systems, insulating homes, insulating schools. And keep the investment
flowing, and actually create an export opportunity for companies that are making
clean and efficient energy systems that the world is going to increasingly
demand.
Lester Graham: President Obama has talked a lot about the green economy and
green-collar jobs that you just mentioned, but will those jobs actually offset the
economic pain that a cap-and-trade program is expected to cause?
Lashoff: Well, first of all, you have to realize, if we passed a cap-and-trade bill
tomorrow, the actual limits would not kick in until 2012 at the earliest, and, by that
time, hopefully, the economy is really moving forward. So, what the value of
passing the legislation now is that it sets the long-term agenda, it sets the
strategic agenda that’s going to reduce our emissions, and it mobilizes
investment flows. The actual price signal that is needed to discourage global
warming pollution actually wouldn’t kick in for a couple of years, and that actually
works quite well with the timing, that is appropriate given the current economic
crisis.
Graham: The 80% emissions reduction below 2005 levels by 2050 is exactly
what President Obama has suggested we do, but there still are enough
Republicans who hold enough seats in the Senate to block cap-and-trade if they
wanted to. What are the chances of having legislation like this passed?
Lashoff: Well, I’m very optimistic that with the momentum that the US CAP
proposal delivers, the strong business support from at least a significant portion
of the business community, certainly not universal, that we can move forward. It
certainly will require a bi-partisan effort. There will need to be Republicans
joining the Democratic majority in the Senate as well as in the House to enact
legislation. I think we can do that. I think that this proposal provides a lot of
insight into the types of provisions, in addition to the cap itself. Things like
energy efficiency investments that will hold down the costs for consumers,
approaches to dealing with concerns of the economic impact – that chose a
pathway to get legislation enacted, hopefully in 2009.
Under cap-and-trade, if a business can cut emissions faster, you can trade emission credits - for a price - to a business that can’t. (Photo courtesy of the US EPA)
