Climate Roundup: Cap & Trade's Cap Called Uncertain

Updated Jan. 3, 2018

Two prominent energy economists contended in a Jan.2 article that California’s carbon cap-and-trade program will yield uncertain greenhouse gas reductions because it really doesn’t impose a firm and fast cap on emissions.

University of California at Berkeley economists Severin Borenstein and Jim Bushnell point out that carbon emissions allowance price control features in the program could result in either more or fewer emissions reductions than ostensibly required by cap-and-trade.

For instance, they note that if the price of allowances exceeds a price ceiling to be set by the California Air Resources Board (which they say likely will be less than $85 a ton) the Air Board would inject emissions allowances into the state’s carbon market to reduce the price of allotments. This would allow higher emissions levels.

Conversely, if allowances became too cheap the Air Board would have to buy up allotments to take them out of the market in order to support prices. This, they note, would create an additional constraint on emissions.

However, the two argue that the lack of a hard cap under the program is not a bad thing, but instead a benefit that will “balance a desire for significant emissions reductions with the recognition that regulations that are seen as overly harmful to the economy would set climate policy back both locally and globally.”

On the global scale, the two point out that a shortfall or overage of emissions reductions in California won’t matter much when it comes to the overall course of climate change. * * * * *

While it’s far from over, the dry start to the winter could point to reduced hydropower this spring and early summer in California.

The Department of Water Resources’ first snowpack reading this wet season on Jan. 3 at Phillips Ranch in the Sierra Nevada showed a water content level of just 3 percent of normal for this time of the year.

“As we’re only a third of the way through California’s three wettest months, it’s far too early to draw any conclusions about what kind of season we’ll have this year,” DWR Director Grant Davis said. “California’s great weather variability means we can go straight from a dry year to a wet year and back again to dry.”

Broader electronic monitoring of the snowpack throughout the Sierra Nevada showed a less dire picture with the water content at 24 percent of normal for the beginning of the year.

An ongoing high pressure dome over the Pacific and the Intermountain West has blocked major storms so far this winter. The immediate outlook is for continued dry conditions. * * * * *

The city of Pasadena completed a comprehensive climate change plan Dec. 28 that calls for a 14 percent cut in greenhouse gas emissions by 2020 compared to their 1990 level. The plan outlines continuing reductions through 2050, when the goal is to cut emissions by 80 percent from their 1990 levels.

The city’s Planning & Community Development Department said the plan will cover both “community-wide activities and municipal operations.”

Pasadena’s plan says that climate change in the city, which lies northeast of downtown Los Angeles in the San Gabriel Valley, “will most likely present local challenges to human health and welfare, the economy, and ecosystems.”

The plan calls for high energy efficiency in new construction, as well as retrofits of existing structures. It also calls for a shift from auto use to walking, bicycling, and public transit to meet local transportation needs through associated improvements in transportation infrastructure.

Other key components call for more water conservation, including use of recycled water, greater emphasis on waste reduction, and increased planting of trees to sequester carbon.

Overall, the plan includes 27 separate carbon reduction measures. —William J. Kelly

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Climate Roundup: Cap & Trade’s Cap Called Uncertain

William J. Kelly

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