To the European mind, the U.S. approach to climate change is shaped by the oil, gas, and coal lobbies coupled to an intransigent yet paradoxically lobby-sensitive White House. In practice, Americans now worry about climate change, recognizing the emergence of new and unusual weather patterns with huge consequences for the local economy (unpredictable snowfalls, avalanches, floods, excessive summer heat, and storms and the costly infrastructure, roof, and other building damages that result). In addition, all manner of initiatives are emerging at regional, state, and municipal levels and in the day-to-day behavior of U.S. citizens.
Beginning on page 8 of this issue, the article by Sondra Bogdonoff and Jonathan Rubin on the Regional Greenhouse Gas Initiative describes one of the key efforts to mitigate greenhouse gases now being adopted across the United States. Seven states in New England and the mid-Atlantic have joined forces to create a cap-and-trade program for all major fossil fuel–power producing installations, and at least three other states have signaled that they will sign on. What is interesting is that many of the utilities involved are cooperating voluntarily and openly and have agreed to use the income they generate from such good corporate behavior for the benefit of consumers and for further gains in energy efficiency and greenhouse gas removal. In many ways, this scheme is still a modest enterprise. It may cut total greenhouse gas emissions for fossil-fuelled installations by roughly 17 percent by 2019 (assuming no other restraint on emissions in the meantime).
Nevertheless, we have to look at this as more than a gesture of corporate politics. Companies the world over are beginning to see that good corporate behavior requires an increasing commitment to achieving carbon neutrality, using improved technologies of efficiency in energy conversion and non–fossil fuel power sourcing, and engaging directly with consumers in a constructive dialogue over energy and carbon management. We probably have at best a couple of decades in which to turn around all major economies to achieve carbon neutrality.
Yet the companion article by David A. Evans and Joseph A. Kruger, which begins on page 18, looks critically at the Emissions Reduction Market System for the control of volatile organic materials in Chicago. Evans and Kruger’s analysis suggests that success in these types of ventures may be harder to achieve than previously imagined. There are still some design flaws in many cap-and-trade schemes, particularly with setting the cap, making initial allocations, and implementing mechanisms for correction.
To complicate the design problems mentioned in the article, cap-and-trade schemes are notoriously vulnerable to fudging and can be usurped by business lobbying for cozy deals, unexpected shifts in business tolerance, and the basic unwillingness of all parties concerned to adopt really tough, progressive regulatory regimes. Indeed, the much-vaunted European Union emissions trading scheme is showing signs of business and political meddling. Cap-and-trade schemes can be fickle and fragile. These schemes require a deep sense of corporate commitment, regulatory toughness with sympathetic guidance, and strong consumer surveillance. We are not out of the woods yet.
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