cap | trade | blog

Two hundred and fifty Heads of State and Government from around the world will meet in New York tomorrow for a Summit on Climate Change being convened by UN Secretary-General Ban Ki-Moon. The stated purpose of the summit is “to build positive political momentum” toward the upcoming climate conference in Copenhagen (COP15) by demonstrating that there is private sector support for climate action. There’s an air of pessimism about COP15 as the Senate is bogged down in discussions of health care reform and no one country has come forward as a climate leader. As was the case when the Bush Administration did not ratify the Kyoto Protocol, the heart of the issue lies in potential reduction targets for India and China versus those for developed nations.

ACES contains several objectives for multilateral climate negotiations, one of which is to reach an internationally binding agreement in which all major greenhouse gas-emitting countries contribute equitably to the reduction of global greenhouse gas emissions. And yet I find it suspicious that ACES’ section on international participation begins like this:

“The Administrator, in consultation with the Department of State and the United States Trade Representative, shall annually prepare and certify a report to the Congress regarding whether China and India have adopted greenhouse gas emissions standards at least as strict as those standards required under this Act. If the Administrator determines that China and India have not adopted greenhouse gas emissions standards at least as stringent as those set forth in this Act, the Administrator shall notify each Member of Congress of his determination, and shall release his determination to the media.”

What feels implied here is that the US will keep moving forward unless China and India fail to pass equivalent emissions standards. This is worrisome given the long lead time involved in setting up emissions trading schemes at any scale. New England’s Regional Greenhouse Gas Initiative, for example, was conceived in 2003, but trading didn’t begin until early 2009. So the US could very well pass ACES this year and begin spinning up its emissions reductions plans only to put them on hold again in a year or two if the EPA finds that China and India haven’t passed new emissions standards.

Let’s hope that tomorrow’s summit does give the negotiations leading up to COP15 a little boost. They sure could use it. With an opening ceremony that features Academy Award Nominee Djimon Hounsou, I can’t imagine the likes of Silvio Berlusconi and Hu Jintao *not* getting pumped about reducing emissions.

The “cap” of cap and trade involves setting a limit to the total emissions of a given entity, whether it’s a state, a country, or a planet. The general idea is that the cap lowers over time, mandating emissions decreases. The Waxman-Markey bill lays out the cap for reducing GHG emissions in the US as such:

“[The] Safe Climate Act - Amends the [Clean Air Act] to require the Administrator [of the EPA, in this case Lisa Jackson] to promulgate regulations to: (1) cap and reduce GHG emissions, annually, so that GHG emissions from capped sources are reduced to 97% of 2005 levels by 2012, 83% by 2020, 58% by 2030, and 17% by 2050; and (2) establish a federal GHG registry.”

Since these reduction goals use 2005 as a baseline, it’s worth looking into our emissions trends over time. Based on the most recent GHG inventory available on the EPA’s website, our emissions in 2005 totaled 7108.6 teragrams (1 Tg = 1 million metric tons) of CO2 equivalent*. That’s about 16.5% above our 1990 emissions, so emissions have been rising at a rate of about 1.1% per year.

If that rate of increase were to continue until 2012, our emissions would be 4.6% above the 2005 levels. So the 2012 goal of reducing emissions to 97% of 2005 levels means that we’d have to both eliminate that rise AND cut out an additional 3%. All in all, it would amount to a 7.6% reduction in just 3 years, assuming that the legislation passes this year. That’d be huge.

Whether the ~1% increase/year will hold steady is an open question. Changes in emissions have generally been tied to economic growth or contraction. In 2008, corresponding to the onset of the current financial crisis last year, emissions decreased 2.8% compared to 2007 values.  The decrease was driven by high gas prices and the financial crisis rather than increases in efficiency or the use of renewable energy.

*Some GHGs are more potent than others in terms of their ability to warm the planet. The “equivalent” takes into account the global warming potential of other GHGs, such as methane, and references that potential to CO2’s global warming potential.

The American Clean Energy and Security Act (ACES), also known as the Waxman-Markey bill, features a national cap and trade plan. The bill passed in the House at the end of June and will be up for debate in the Senate in September. I’ll be blogging about ACES, its progress through the Senate, and its implementation if it passes.

ACES raises lots of rich questions–How will the passage of the bill play out in the development of a post-Kyoto scheme? How will the proposed emissions reductions in the U.S. compare to the rising emissions in China and India?–that I’ll be exploring over the next few months.