New analysis by Harvard economist shows EU carbon market costly, ineffective
WASHINGTON, June 23 /PRNewswire-USNewswire/ -- Today, as the Senate contemplates whether now is the time to act on climate proposals, the U.S. Climate Task Force released a new analysis of how Europe's cap-and-trade program has worked in practice. The report, "Europe's Emissions Trading System," by Harvard economist and international trade expert Richard Cooper, details how this approach has produced substantial volatility in the price of carbon, proven to be vulnerable to significant abuses, and has failed to spur any meaningful reductions in greenhouse gas emissions.
In order for a climate program to achieve significant, long-term effects, Dr. Cooper notes, "a steady, persistent price signal should be sent to all decision-making agents that they should reduce CO2 emissions at all times." Such a signal can be achieved through a revenue-neutral, carbon fee or tax.
"Dr. Cooper's in-depth analysis supports what many long speculated – carbon trading schemes are costly and ineffective," adds Dr. Elaine Kamarck, former senior policy advisor to Vice President Al Gore and current CTF Co-chair. "These failings may explain why a 2009 Hart Research survey found that only two percent of US voters hold very positive view of cap and trade – the system at the core of the current Senate bill. Using the trials and errors of Europe's ETS as guideposts, Washington lawmakers can make a much needed course correction on America's climate policy."
CTF Chair Dr. Robert Shapiro, former U.S. Under Secretary of Commerce and senior advisor to Bill Clinton notes, "the myriad problems inherent in Europe's ETS will only be exacerbated in the US. While permit prices fluctuated from 30 Euros at its height to zero Euros at its five year low, the EU reduced GHG emissions by a mere two percent. If the US Congress truly aims to pass effective, long-term climate legislation – as it must -- a carbon-based tax of the type that been highly successful in Scandinanvia is the only sensible course."
Follow the activity on Twitter at #ClimateTF or on the CTF blog at www.climatetaskforce.org.
The U.S. Climate Task Force (CTF) was created to be a leading voice in the discussion of policy options available to contain the risks of climate change. Founded by Sonecon and joined by Future 500, CTF is advocating that the United States government takes the lead in the global effort to combat climate change by enacting legislation that encourages cost-effective technological advances, innovation and efficiency in order to reduce greenhouse gas emissions.
To date, Washington has focused on a narrow range of legislative proposals, many of which inadequately address the entirety of the issue. By offering a unique forum for original research and stakeholder engagement, CTF is fostering a robust discussion about the full range of policy options available to address climate change, to help ensure that whatever climate change action is taken substantially and measurably reduces emissions while imposing the least burden on the economy.
SOURCE U.S. Climate Task Force