Dr. Daniel Fine of NMCEP on Cap and Trade
I found these Q & A on Cap and Trade to shed new light on the policy and politics behind the highly debated issue of cap and trade. I encourage everyone to take a look…::::::::
The questions below concern the discussion by Panel 2: “Renewable Energy and Crisis, Cost and Carbon.” Each question was submitted by attendees of the 2009 Energy Conference.
Q: Do you favor a Carbon Tax or carbon Cap & Trade? Since carbon Cap & Trade is fertile ground for abuse and a huge bureaucracy to support it, how would it be imposed? Europe imposed Cap & Trade and it was rife with fraud and failed.
A: I favor carbon Cap & Trade with the condition that offsets are provided. This allows investment in low or no-carbon emissions projects, e.g., reforestation and landfill methane mitigation. If an oil company invests in such ventures and they are effective in offsetting its carbon emissions from extraction or refining, then there is clearly a business outcome and an avoidance of GHG status quo output. A second condition is that the Federal government establish regulatory reform that would limit speculation and manipulation of the price of carbon dioxide. Senator Bingaman has moved in this direction with provisions for government intervention as a seller of credit or allowances if price volatility occurs and threatens the sustainability of trading. Dr. Daniel Fine, NMCEP Research Associate at New Mexico Tech
Recently, Rep Mike Conaway intimated in an article in the Midland-Reporter (Permian Basin Oil Report- Sunday – April 12, 2009 - page 4F). He stated that the “Cap and Trade system is mentioned that could be very negative for Texas” He went on to say that higher electricity costs could cost individual families (an average family) $3100 a year. Where will the average family come up with the cash to do this? And if that is true for Texas, what would be the case for NM?
A: The number of $3100 per family per year as a cost of cap & trade depends on the auction or free distribution to the utility industry of carbon credits. Following the conference, the utility would be given free 35% of the total of emissions (cap). This is pending action by the U.S. Senate. It, alone, reduces the $3100 cost significantly. Dr. Daniel Fine, NMCEP Research Associate at New Mexico Tech
Q: Can Cap & Trade be structured so that tracking and accountability required of Cap & Trade does NOT suck all the benefits out of developing new energy systems? Explain how.
For more q&A from the New Mexico Center for Energy Policy go to–>http://nmcep.nmt.edu/index.php/2009-Energy-Conference/2009-conference-q-a-group-2.html