Putting a Cap (and Trade) on Emissions

by Francis P. Koster, Ed.D.

Putting a Cap (and Trade) on Emissions In 1950, there were 2.5 billion people on earth. Forty years later, in 1990, that number doubled to more than 5 billion people. By 2010, just twenty years later, we are at almost 7 billion. Scientists tell us that the population of the earth is likely to grow from its current 7 billion to 8 billion in 7 years - by 2020. And one in three people walking around will be Indian or Chinese. Energy use by a citizen of the USA in 2010 was roughly 24 times that of a citizen India and 7 times more than a Chinese citizen.

India and China are on their way to developing a middle class, members of which use more energy than poor people. As emerging countries ramp up their energy production, they make more pollution. For example, recent headlines estimate a five year reduction in life expectancy in China due to air pollution. And that impact is not limited to inside their borders. In 2010 roughly one third of all air pollution in San Francisco came from China- a number that is expected to rise as more coal fired electrical generation stations from that part of the world are brought on line. Both of these examples refer to visual or particulate pollution, not climate changing gases, which are also released in massive quantities. Recent advances in technology means that multinational energy companies operating in the United States can cost effectively remove coal, oil and gas from under our feet and export it to their other markets like China and India. Exports of US coal tripled in the last eight years. If this is continues, both our national air pollution and global climate change will get much much worse.

Recently, the International Energy Association announced that if just one third of the proven reserves of coal, oil, and natural gas energy was actually used by 2050, all the known safety zones for climate change would be trespassed - at huge cost to property and health. This means that there are two major forces arrayed against our collective best interests. The first is the existing players in the production of coal, oil, and natural gas who are eager to profit from sales to developing nations. They have, and will continue to, fight efforts to cut back on sales of their product. The more they sell, the worse off the rest of us are. The debate resembles the anti-tobacco fights of 40 years ago, where the tobacco producers argued that prohibition would lead to job loss, and argued there was no proof of damage to public health, effectively delaying action for decades, and costing millions of lives.

The second vested interest group are the emerging nations themselves, who understandably will not look favorably on America telling them that the health of the worlds’ citizens will be hurt if they try to catch up to us in energy use. We have no moral high ground in this debate because we use much more energy per citizen We must begin efforts to solve the problem ourselves before telling others to do so. One tool we can use is called “Cap and Trade”. Under this system, originally conceptualized by members of President Reagan’s administration as way to use free market economics for the public good, polluters have to pay increasing amounts of money for the right to pollute. This leads energy users to search out non-polluting energy sources. Once they find a less polluting method, they can auction off their increasingly valuable rights to pollute to other bidders. As the price of pollution rises, reducing pollution becomes a path to increase profitability while achieving a public good. Under the terms of a 2006 state law, California (the world’s eight largest economy^xiii) launched this system in 2008. Since then they have reduced emissions by 22%, and the law is not even fully implemented. Because of outcries from its population over damaged public health, China is also implementing a “Cap and Trade” system in five of its cities and two of its states this year, and are taking the program nationwide by 2015

^xiv.

The costs to both near term and long term health of our citizens and our economy for failing to address these issues is beyond calculation. We can take heart that some leaders, like California, have had the courage to look at the danger squarely, and take action.