European system for cutting carbon dioxide emissions is working well

Today's good Green News from our friend Bill Brown up in Taos, New Mexico at www.nmglobalwarming.org

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"Greetings, All -- New research by the Massachusetts Institute of Technology Sloan School of Management on the European Union carbon dioxide (CO2) cap-and-trade system dispels many fears and myths about its workability, and provides some surprising results about its success.

The MIT report notes that cap-and-trade systems for sulfur dioxide and nitrogen oxides have worked well in the USA for years where "Markets for trading allowances operate smoothly, and—in response to the strong economic incentive—facilities have reduced their emissions significantly."


However, "... the EU ETS [Emissions Trading Scheme] is far larger than either of the US programs. It covers 11,000 installations while the US sulfur dioxide program covers only 3,000, and the value of the allowances is about $80 billion as opposed to $4 billion. Perhaps most striking, the EU ETS operates internationally. Allowances are traded by facilities in 27 independent nations that form a loose federal union and differ widely in per capita income, market experience, institutional background, and other features."



In contrast to the fears of critics, the economic effects of the CO2 cap-and-trade system have not been large. "Changes have occurred in certain industries, but the notion that the carbon price would wreck the overall economy is clearly disproved for the European system, which for a long time had a high price compared to what was expected. Even though reducing emissions was not the primary focus of the three-year trial, carbon reductions were in fact achieved, with minimal macroeconomic impact."


The report also counters the argument of those who believe that "... the EU method of allocating free allowances to polluting facilities is morally wrong. But an emissions-control policy is more likely to succeed if those most affected—the current polluters—are given some assets along with the liabilities they are being asked to assume."

Finally, MIT issues the reminder that "Perhaps the main message for policy makers is that everything does not have to be perfectly in place to start up." This cogent idea seems to be a major stumbling block for politicians, activists, and others who demand perfection in new programs while ignoring the vast imperfections in current systems.

I love the scientific solemnity and unintended humor of the statement, "In 2000, leaders in the EU realized that they would not be able to meet their obligations under the Kyoto Protocol, which take effect in 2008, without taking action.""

-- Bill Brown
www.nmglobalwarming.org

follow link above to SCIENCE DAILY article "European System for Cutting Carbon Dioxide Emissions Is Working Well"

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