By Nicole Beletsky
Though the ideal may be carbon-neutrality, as highlighted by Web Urbanist’s coverage of plans for Masdar City in Abu Dhabi, “cap and trade” programs demonstrate one method to reduce carbon emissions without significant economic harm.
Tokyo’s “cap and trade” system to reduce greenhouse gas has successfully incentivized 1,400 office buildings to cut emissions by 23% below their base-year level in its first phase (2010-2014). Citiscope notes that despite its success as the first city to try this strategy at the municipal level, Tokyo’s “cap” on emissions levels has overshadowed the “trade” market for credits to offset buildings that cannot reach the capped level.
Though Tokyo’s system was planned to be part of a nationwide trading scheme, the central government of Japan has stalled in developing any advances after the Fukushima disaster. Tokyo itself has maintained an ambitious climate program, one which may prove a model for other municipalities worldwide. Pilot programs have already been instituted in the Chinese cities of Beijing, Shanghai and Shenzhen.
In the United States, the Obama Administration set emission reduction targets, but early data shows an increase of 2% for carbon emissions in 2013, after a 12% reduction between 2005-2012. (See Planetizen’s coverage for more info). National policy may move too slowly, especially given the fractured political environment, to see much progress for carbon emissions systems. American cities that attempt to act on their own and follow Tokyo’s lead may need to emphasize the long-term economic benefits of carbon emissions limits. The current evaluation of climate change regulations relies on economic measures that anticipate the future negative effects of carbon emissions. In a recent report, the Environmental Defense Fund, NYU’s Institute for Policy Integrity, and the Natural Resources Defense Council outline some of these social and economic costs of carbon pollution. The report criticizes the current $37 cost estimate for one ton of carbon dioxide emission that was released by the Obama Administration. Planetizen wisely highlights that many proponents recognize this number is crucial because it is used in the economic cost-benefit analyses that evaluate the potential of new agency regulations.
In the U.S., cap and trade programs have more often been instituted on the state level. California’s program is only in its infancy, but The Energy Collective notes that the state has shown its ability to administer a carbon trading market. Additionally, the state has entered into agreements with Oregon, Washington, British Columbia, Quebec, and even China’s National Development and Reform Commission to establish regional climate plans and set standards for industrial and power sector emissions. Irwin David of Planetizen, however, points out that California’s system only affects industrial plants, but is set to expand to vehicle fuels. In expanding the system, the state must decide whether to impose a carbon tax instead of the cap-and-trade system, with motorists paying at the pump for carbon emissions.
If carbon tax approach is chosen, California may look to Boulder, CO, as one example of an effective program. Boulder was the first municipality to launch a carbon tax in April 2007, using the revenue to fund renewable energy programs. (See the CEC’s report on Boulder’s Program for more details). In 2012, Boulder citizens voted to extend the carbon tax past its March 2013 expiration date.
All of these approaches and programs to address carbon emissions remain options for municipalites around the globe. What becomes the consensus solution seems like it will depend largely on the success of these pioneers.
Links from this Blog:
Photo Credit: https://pixabay.com/en/smoke-smoking-chimney-fireplace-258786/
http://www.citiscope.org/story/2014/tokyo-carbon-market-office-buildings-all-cap-and-not-much-trade
http://www.planetizen.com/node/66880
http://costofcarbon.org/files/Omitted_Damages_Whats_Missing_From_the_Social_Cost_of_Carbon.pdf
http://www.planetizen.com/node/67842
http://theenergycollective.com/lucas-bifera/304301/california-marks-first-anniversary-cap-and-trade
http://www.planetizen.com/node/67488
http://www.cec.org/municipalenergy/docs/Boulder.pdf
http://www.dailycamera.com/ci_21941854/boulder-issue-2a-carbon-tax-appears-likely-be
Links for Even More Info:
http://www.ieta.org/assets/Reports/EmissionsTradingAroundTheWorld/edf_ieta_japan_case_study_september_2013.pdf