{"id":732,"date":"2008-11-13T20:21:45","date_gmt":"2008-11-13T20:21:45","guid":{"rendered":"http:\/\/www.energyrefuge.com\/blog\/us-cap-and-trade-programs-could-be-effective-says-report\/"},"modified":"2017-09-05T17:54:17","modified_gmt":"2017-09-05T21:54:17","slug":"us-cap-and-trade-programs-could","status":"publish","type":"post","link":"https:\/\/www.energyrefuge.com\/blog\/us-cap-and-trade-programs-could\/","title":{"rendered":"U.S. cap and trade programs could be effective, says report"},"content":{"rendered":"

The first of a three-part report produced by researchers at MIT\u00e2\u20ac\u2122s Center for Energy and Environmental Policy Research<\/a> concerning key design issues of proposed ‘cap-and-trade<\/a>‘ programs that are under consideration in the United States as a way of curbing greenhouse gas emissions found that, based on an examination of the European Union\u00e2\u20ac\u2122s system and of similar U.S. programs for other emissions, such a program can indeed be effective in reducing emissions without having a significant economic impact.<\/p>\n

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“The European experience confirms much of what has been learned from similar U.S. systems for other emissions, namely, that cap-and-trade systems can be constructed, that markets emerge to facilitate trading, that emissions are reduced efficiently, and that the effects on affected industries are less than predicted,\u00e2\u20ac\u009d said A. Denny Ellerman, the study\u00e2\u20ac\u2122s lead author and a senior lecturer in the MIT Sloan School of Management.<\/p>\n

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The study found that the most controversial aspect of the European program was how to allocate the permitted emissions levels to different producers. Initial free allocation of allowances, they found, was the necessary price for gaining political acceptance, as it has been in U.S. systems. Over time, the clearly established trend in the E.U. is to phase out the free allocation of permits in favor of auctioning them.<\/p>\n

The second part of the report looked at mechanisms that can be used to control the costs that will be imposed on power producers as a result of implementing a cap-and-trade system. Several alternatives were analyzed, including such things as a \u00e2\u20ac\u0153safety valve,\u00e2\u20ac\u009d banking and borrowing of allowances, and renewable portfolio standards. Rather than a single best choice, the study found that different mechanisms work best for addressing uncertainties associated with long-term, short-term and start-up costs.<\/p>\n

The report\u00e2\u20ac\u2122s third section examined the relationship between state and federal regulations on greenhouse gas emissions. With no federal policy now in place, many states are moving forward with their own initiatives, which range from commitments to reduce greenhouse gases to a regional, multi-state cap-and-trade program slated to begin in 2009.<\/p>\n

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