Toles on cap and trade

Certainly, this is the conventional wisdom:

Of course, cap and trade is just a means.  Perhaps something will rise Phoenix-like from its ashes that can achieve the same end and get 60 votes in the Senate.  If not, then indeed, America will be abandoning the global race for 20 million clean energy jobs by 2030 (see Lindsey Graham: “Every day that we delay trying to find a price for carbon is a day that China uses to dominate the green economy”).

5 Responses to Toles on cap and trade

  1. WAG says:

    Of course, cap and trade is just a means. Perhaps something will rise Phoenix-like from its ashes that can achieve the same end and get 60 votes in the Senate.

    Interesting to get your thoughts on what that might be. I was at the Clean Economy Network DC Chapter Launch Event last night, and got a chance to ask a similar question to Dr. Arun Majumdar of the Advanced Research Projects Agency – whether it’s possible to solve the CO2 problem with a massive investment in energy technology alone (without a formal cap on carbon). He didn’t answer yes or no, and said the two go hand in hand. If I had to guess though, it sounded like he would come down on the “technology is more important” side, since he basically said that a cap on carbon won’t work without some major breakthroughs in energy technology – he said that pricing carbon sent an important message to the market, but stopped short of saying it was impossible to reduce CO2 without a legal cap.

    The question in my mind is twofold. On the one hand, will a carbon price alone lead to enough investment in green technology over a short enough time frame? On the other hand, is there any scale of investment at which we could reduce the costs of clean energy to the point that it made sense for industry to make the switch away from fossil fuels without government regulation?

  2. Jeff Huggins says:

    Peter Barnes — Where Are You?

    Awhile back, I read a great little book — “Climate Solutions: A Citizen’s Guide”, by Peter Barnes.

    It was clear, smart, enjoyable, easy to read, on point, insightful, and so forth.

    What is he up to now? Have the right people read that book, carefully? Why is our political process so (apparently) broken?

    Joe, do you know of Peter Barnes?



    [JR: I know him. We don’t quite agree on some things. Check the Cantwell Collins thread.]

  3. Jeff Huggins says:

    And Where is McKinsey?

    And where is McKinsey & Company on this issue?

    Addressing climate change smartly — and quickly, and responsibly — is vitally important, of course.

    McKinsey SHOULD help on this and SPEAK OUT — identifying and supporting something that will be EFFECTIVE and RESPONSIBLE to humankind, including future generations. It’s time to be courageous and speak out, even if that will certainly upset some clients. Who cares. The stakes are too big.

    Future credibility requires speaking out, on this issue.

    C’mon McKinsey!

    Jeff Huggins
    McKinsey & Company, 1986-1990
    Concerned citizen and parent

  4. Andy Bauer says:

    I wonder how long Toles thinks the lawn mower and leaf blower will be powered by gas.

  5. Ken Johnson says:

    Cap-and-trade is a means of imposing a carbon price. I think people tend to equate “carbon pricing” with “making fossil-fuel energy really expensive,” but the goal of decarbonizing energy can be achieved equally well by making renewable energy really inexpensive.

    For example, suppose there are ten power plants in a particular service area, all with the same generation capacity. Nine are coal-fired and one is renewable. What would be easier: Imposing a 10-cent-per-kWh carbon fee on all nine coal plants, or giving the renewable plant a 10-cent-per-kWh subsidy? Or alternatively, impose a 1-cent-per-kWh carbon fee on coal and use the revenue to finance a 9-cent-per-kWh subsidy for renewables. In any case, the carbon pricing will make renewable energy cost-competitive if its amortized technology cost is less than 10 cents per kWh more than coal.

    So “price” can be interpreted to mean either “how much you pay to pollute” or “how much you get paid to not pollute”.