|
Columnists
Sustainability
and Sustainable Development
Nicholas
R. Hild, PhD Professor ASU
Polytechnic
Nicholas
R. Hild, PhD., Professor, Environmental Technology Management, Arizona
State University College of Technology and Innovation, has extensive
experience in Environmental Management in the southwestern U.S. Dr. Hild
can be reached at 480-727-1309 and by email at DrNick@asu.edu.
Cap
and Trade: Writing Permits to Pollute
Aug/Sept
2009
"No
economic model has ever accurately modeled
technological
change induced by government action.
That
is why they overestimate the cost of action."
Joseph
J. Romm, former Energy Department
Official
and author of ‘Cool Companies,’ 1999
In
late June, Congress passed legislation that will place limits on industry’s
emissions that cause climate change—legislation that has generated
praise, salutations, and down-right consternation from practically every
corner of the political spectrum. Environmental Defense Fund President,
Fred Krupp called it the "most important environmental and energy
legislation in our nation’s history…" while critics like
Director of Natural Resources Defense Council’s climate center, Daniel
Lashof noted that "there’s been outrageous demagoguery on the
costs of the bill…"
Obviously,
most of the commentary was offered by pundits who are too young to
remember when the Water Quality Act Amendments of 1972 were vetoed by
(then) President Nixon because he said industry would go broke and jobs
would be lost if that piece of legislation were passed…environmentalists
responded with saying that legislation wasn’t tough enough and only
offered a "permit to pollute" the nation’s waterways—
So,
the rhetorical response to the greenhouse gas ‘Cap and Trade’
legislation smacks of that 1972 reactionary dialog: environmentalists say
it doesn’t go far enough and industry says it’s going to cost way too
much to implement, at a time when our economy can ill-afford more family
budget stress, so it won’t be enforced anyway.
But,
the ‘experts’ who modeled the ‘economics’ for the Congressional
Budget Office, and how many tons of CO 2
would be reduced over the next decades, quickly defended their models,
saying how the ultimate ‘outcomes depend upon lots of
"variables" which are largely unknown’—which left
the legislation’s sponsors saying very little about their confidence
intervals when they presented the legislation to be signed off by Congress—
John
Carey, writing in Business Week (July, 2009), noted that, "it’s
easy for politicians to pick the numbers they want, given all the moving
parts." But, no matter if the amount that this cap and trade
program ultimately costs families $3,000 or only $175 per family-year, as
critics have estimated, utilities are the biggest single generators of CO2,
so how they implement reduction programs will tell the tale. All those
variables (i.e. unknowns) like whether or not the nation builds a lot of
nuclear plants or if supplies of natural gas are abundant (in the future),
or if the technology to capture carbon dioxide from coal plants is or isn’t
feasible in the near future, or even how we ultimately ‘measure’ the
CO2
reductions—(no small variable itself!)— but, trust us—this
will be cost beneficial in our efforts to eliminate greenhouse gas
emissions in the U.S.
Call
me gullible, but if we have finally decided that CO2
is now a ‘pollutant,’ this ‘cap and trade’ program sure
sounds like a "permit to pollute" that was pioneered in
the 1972 WQAA NPDES program—a permit to pollute by any other name, still
smells the same: it allows levels of pollutants to be emitted (i.e. with a
permit signed off by the government), that somehow is off-set by ‘trading’
or purchasing offsets that are calculated by modelers who freely admit,
they have to wait and see what the "unknown variables" are
before they can show proof of concept.
But
what really got me thinking about this CO2
Cap and Trade program, was the idea that our congressional representatives
have used consultants who are expert at conducting studies— that’s how
they make their living off us taxpayers—studies that basically are
designed to provide congressional committees (and the Congressional Budget
Office), with reports that confirm what they want to know—in this case,
to ‘model’ the legislation that was passed by Congress—legislation
that is written in a way that shows emitting industries exactly how they
will be required to ‘model’ their emissions!
For
Congress, these ‘studies’ are conducted by a large cadre of
Washington, D. C.-area ‘beltway bandits’ whose sole mission is to
conduct studies for various sub-committees in the House and Senate, to be
proposed and blessed by the Congressional Budget Office. What they are ‘expert’
in doing, however, is getting fat consulting contracts and not (by their
own admission) knowing what variables to put into their models.
And,
therein lies my problem with ‘cap and trade’— modeling ‘systems’
that utilize a congressional subcommittee’s values (for unknowns) is
guaranteed to be a disaster. The result will be that actual
reduction in greenhouse gasses emitted will be far less than those models
predict, except (and, unlike the WQAA pollutants addressed in ’72),
there will be no measuring technology that can verify the output or the
reduction effects of the sequestering (offset) mechanisms that are
purchased. That is why they have to model their emissions, in the first
place!
So,
sometime in the future, after industry has absorbed the tremendous
additional expense that will be required to staff up to meet the
record-keeping and reporting requirements, AND the modeling
requirements each facility will be required to meet, we will find there
have been very few real environmental benefits which have actually been
accrued—questionable benefits that will have future generations asking, "
what were they thinking?
As usual, this
will be another government program that is destined to cost industry (i.e.
taxpayers and consumers), tremendous amounts of money while yielding
little, if any, positive environmental benefits for our children’s,
children’s, children.
2008/1234
|
