Emissions Trading For Air Quality And Climate Change In The United States And Europe - Part 2.

Extract

---

Emissions Trading For Air Quality And Climate Change In The United States And Europe - Part 2.

This article first appeared in newly released book from NERA Economic Consulting, 'The Line in the Sand: The Shifting Boundary Between Markets and Regulation in Network Industries'. With a foreword by Alfred E Kahn.

Continued from previous page

III. MAJOR GREENHOUSE GAS EMISSIONS TRADING PROGRAMS AND PROPOSALS

The increased national and international interest in emissions trading is largely based on concern about climate change and a consensus that GHGs are well suited to a cap-and-trade program.21 Once emitted, GHGs reside in the atmosphere for periods measured in decades and centuries. Atmospheric currents ensure that emissions are dispersed quickly in the atmosphere so that atmospheric concentrations of GHGs are relatively uniform over the globe. Uniform mixing means that a ton of a given GHG will have the same effect on atmospheric concentration-and thus on climate change-regardless of whether the ton is emitted in California, New York, or elsewhere on the globe. Thus, trading can-at least in theory-be national and international in scope, and the cost savings commensurately larger as the scope broadens.

The cumulative effect of greenhouse gases and their long duration in the atmosphere also mean that the timing of emissions reductions will not have a significant effect on atmospheric concentrations or climate.22 Thus, banking offers additional potential for cost savings by using credit-based approaches to bring in sources that would not otherwise be covered by a cap-andtrade program. Although the specific nature of domestic and global measures to address climate change will evolve over time, few environmental problems appear so well suited to emissions trading as GHG emission control.

The major programs and proposals are the Kyoto Protocol and the European Union Emissions Trading Scheme (EU ETS...

See the full content of this document

---