Carbon pricing will ‘cost more, deliver less’ than advocates suggest (Your letters)
Feb. 13, 2020
To the Editor:
Two recent letters supporting carbon pricing on the national level and in New York suggest that this theoretical approach has numerous advantages and no disadvantages ( “Local action isn’t enough; we need carbon pricing to fight climate change,” Feb. 6, 2020, “NY can lead the way on carbon pricing,” Feb. 11, 2020). Based on my observations working in a carbon pricing program, I think implementing any similar scheme is fraught with difficulties and will not work as advertised.
If the carbon pricing plan covered all energy sectors and across the globe, then carbon dioxide (CO2) reductions would occur and not simply move elsewhere (“leakage”). The New York Independent System Operator’s plan for just the electric generating sector in just New York has not satisfactorily explained how its plan will avoid this problem. None of New York’s Regional Greenhouse Gas Initiative proceed investments in CO2 reduction programs have a cost per ton reduced less than the Social Cost of Carbon (SCC) threshold of $50. The SCC value is supposed to represent the future cost impact to society of a ton of CO2 emitted today, so that means none of the investments have been cost-effective.
I could go on, but I think the summary from the Regulatory Assistance Project analysis for the State of Vermont is good. It said: "We conclude that an attempt to reduce Vermont’s carbon emissions based on carbon pricing alone will cost more, and deliver less, than a program of carbon reductions that is based on practical public policies — policies that attack the main sources of carbon pollution through tailored, cost-effective programs geared to Vermont’s families, businesses, and physical conditions.”
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