Politics Hey, Democratic Majority. Please Get Real About CO2 Emissions Already.
posted by January 26 at 0:11 AMon
Senator Jeanne Kohl-Welles (D-36, Ballard, Queen Anne) and Rep. Maralyn Chase (D-32, Edmonds, Shoreline)—along with a small contingent of Democratic co-sponsors like Seattle Sens. Eric Poulsen and Adam Kline —are pushing a bill that would allow industry to get tax credits for limiting carbon dioxide emissions.
Specifically, participants would get a dollar tax credit for every ton of carbon mitigated in a year. (The total credits granted per year could not exceed $1 million.)
It’s an okay idea, but it seems a bit timid in that it’s voluntary. Moreover, while there may be an economic incentive for companies to reduce, there may be a stronger economic incentive to pump out more CO2. After all, the more coal, natural gas, or whatever fossil fuels a given utility burns—the more electricity it can take to market. Those profits could outweigh the savings from cutting back production. (Ha! Plus: The more CO2 a company produces, the more tax breaks the company could get. Afterall, the more CO2 a company kicks out, the more there is to mitigate.)
Furthermore, tax breaks sap state revenues.
Luckily, there’s a better approach that puts money into the public coffers. It’s called a cap and trade system.
More important: Cap and trade systems mandate mitigation rather than making it voluntary. Lastly, cap and trade systems offer a much more compelling financial incentive to reduce emissions.
Here’s how it works: The state puts a cap on how much CO2 a certain industry can produce. Then the state divvies up the total and sells permits allowing companies to produce a portion of the total.
Here’s a good explanation of cap and trade from the Union of Concerned Scientists that highlights why this system actually creates a stronger financial incentive than tax breaks do:
First, an environmental regulator establishes a “cap” that limits emissions from a designated group of polluters, such as power plants, to a level lower than their current emissions. The emissions allowed under the new cap are then divided up into individual permits—usually equal to one ton of pollution—that represent the right to emit that amount.
Because the emissions cap restricts the amount of pollution allowed, permits that give a company the right to pollute take on financial value. Companies are free to buy and sell permits in order to continue operating in the most profitable manner available to them. So, those that are able to reduce emissions at a low cost can sell their extra permits to companies facing high costs (which will generally prefer to buy permits rather than make costly reductions themselves).
Well, just yesterday, Oregon’s governor Ted Kulongoski expressed his intent to go the cap and trade route.