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Old 06-09-2014, 03:46 PM  
Direckshun Direckshun is offline
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Cap and trade has had no major suppression of growth for any state that's tried it.

And this is why you have to embrace federalism. Use the states as labs for policy experiments, and see what comes out. It worked out with Romneycare turning into the Affordable Care Act. And now it seems to be working out for the Regional Greenhouse Gas Initiative, a pact signed by nine northeastern states to embrace cap and trade in 2009.

Since 2009, all nine states have enjoyed better economic growth than the other 41. Debunking the idea that this would, therefore, be a job-killing proposal.

Now, it's not solid proof that cap and trade is an economy-booster, nor is it proof that cap and trade has zero downside to an economy.

What it does prove is that cap and trade's effect on the economy of every single state that's tried it is marginal. At best.

And, oh yeah, let's not forget it's been very effective at reducing carbon emissions.

http://www.nytimes.com/2014/06/06/up...owth.html?_r=0

Best of Both Worlds? Northeast Cut Emissions and Enjoyed Growth
Hannah Fairfield
6/6/14

Some critics of the Environmental Protection Agency’s new requirements for power plants argue that forcing emissions reduction will curtail economic growth. But the recent experience of states that already cap carbon emissions reveals that emissions and economic growth are no longer tightly tied together.

One of the ways that states will be able to meet the new E.P.A. standards is by joining a Northeastern cap-and-trade program known as the Regional Greenhouse Gas Initiative, which first put in a carbon cap in 2009. In a cap-and-trade system, the government places a ceiling on total carbon emissions and issues permits for those emissions, which companies can buy and sell from one another.

The nine states already in the program — Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont — have substantially reduced their carbon emissions in recent years. At the same time, those states have had stronger economic growth than the rest of the country.

Historically, the demand for electricity was closely tied to growth in the economy; only recently have the two decoupled.

These nine states had large emissions drops even before the program began in 2009, in part because the recession and warmer winters lowered the demand for power. The states also began switching to natural gas power, retiring coal units, and adding wind and solar energy generation. As the economy recovered, participation in the program spurred the states to find ways to meet the increasing demand for power without driving up emissions.

Since 2009, the nine states have cut their emissions by 18 percent, while their economies grew by 9.2 percent. By comparison, emissions in the other 41 states fell by 4 percent, while their economies grew by 8.8 percent.

The states in the program “were able to reduce emissions faster and more efficiently than was previously assumed,” said Peter Shattuck, director of market initiatives at ENE, a research and advocacy group based in Boston. “It was encouraging to see how quickly they hit the targets.”

Capping carbon emissions could still slow economic growth, and it is possible that the nine states that joined the cap-and-trade program would have had even better economic growth without the program. These states have more nuclear and natural-gas energy in their portfolios than do many other states; other states that depend primarily on coal power may not be able to reduce emissions as swiftly.

But the results in the nine states suggest that the effect of the cap-and-trade program on growth was, at most, modest. The sharp cut in emissions in the Northeast did not prevent the economy there from doing just as well as elsewhere.

Joining the Northeast cap-and-trade program, or another similar program in California that began in 2013, is one of many ways states can reach the new goals the E.P.A. has set. Other options include taking a series of individual steps — such as upgrading older power plants and expanding nuclear, wind and solar power generation — without a statewide cap. The states themselves will decide exactly how they will meet the goals set for them.

Economists have long praised cap-and-trade programs, compared with detailed mandates from regulators, because they create a market in which businesses are responsible for finding the cheapest way to comply with the regulation. Businesses that devise less expensive ways to reduce pollution can sell their permits to those that cannot change their habits so easily.

The administration of President George H.W. Bush began the original cap-and-trade program in the United States, for emissions related to acid rain. It is considered a major success, with sharp reductions in acid rain at little economic cost.
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Old 06-13-2014, 10:07 AM   #31
Direckshun Direckshun is offline
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Quote:
Originally Posted by RaiderH8r View Post
So "employment growth" appears to assume a new normal of low employment under the Obama recession and proposes any growth from there constitutes growth. Can't get over the high bar? Then lower the bar.
Employment growth compared to the rest of the country.
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Old 06-13-2014, 10:12 AM   #32
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Quote:
Originally Posted by RaiderH8r View Post
In fact, in 2009 when RGGI went into effect emissions among RGGI states was just over 100 tons. In 2010 emissions peaked at about 120 tons and have gone down ever since. The RGGI cap was 165 tons. As pointed out, emissions in the NE never tested the cap and therefor the market forces designed to kick in to create demand destruction through high prices never kicked in. Ergo, the entire thread title and premise of the article is ****ed. Cap and Trade didn't work. It didn't not work either. It wasn't used. Let's see what happens going forward since the RGGI states emissions are currently above the new cap of 91 tons/yr.
Not exactly:

Quote:
So how effective has the RGGI program been? It depends on how you look at things. The top-line news is encouraging: Carbon-dioxide emissions from power plants in the Northeast have fallen very sharply since the plan was first devised from 188 million tons of carbon-dioxide in 2005 to 91 million tons in 2012.*

Yet a good chunk of that drop was driven by the recession, which bit into electricity demand, as well as by the fact that power plants across the country have been swapping out coal for cheaper natural gas, which reduces carbon emissions. In fact, power-plant emissions in the Northeast have been falling much, much faster than the cap requires: Emissions are currently 45 percent below the RGGI cap of 165 million tons for 2013.

That means that power plants don't have to do much to comply with the existing cap they're already sitting well below the limit. As a result, permits to emit carbon-dioxide are extremely plentiful and cheap, costing just $1.93 per ton of carbon. If you're an electric utility, there's little incentive to invest in efficiency or renewable power to avoid the cost of buying up pollution permits.

The flip side to this, though, is that the RGGI cap-and-trade program hasn't driven up electricity prices. Quite the opposite: A recent analysis found that electricity bills have fallen 10 percent across the region since 2009. (Strangely enough, the same business groups that once warned that RGGI would send power bills soaring are now complaining that carbon permits are too cheap.)

The program has also been quite lucrative for the states involved, which have raised about $912 million since 2009 from auctioning off pollution permits. States have used that money in different ways. Many have set up programs to improve energy efficiency. Before it withdrew from the program in 2011, New Jersey pocketed about $75 million to shore up its budget and spent another $27 million on renewable energy.
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Old 06-13-2014, 10:13 AM   #33
Direckshun Direckshun is offline
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Some more on that:

Quote:
And what comes next? On Thursday, RGGI announced a proposal (pdf) to ratchet down its overall emissions cap between now and 2020 in an attempt to force power plants to make further reductions. Assuming that the nine still-participating states approve this plan, here's what things will look like, courtesy of the Boston Globe:



A tighter cap means fewer pollution permits will be available. That will likely drive up the cost of emitting carbon-dioxide to as high as $10 per ton. That will give electric utilities a greater incentive to cut their emissions.

On the flip side, the tighter cap will also drive up the cost of electricity, though RGGI expects that this increase will be small (customers will see less than a 1 percent increase in their bills). And if permits are more expensive, that will give states more revenue to invest in, say, energy-efficiency programs to help cushion the impact.
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