Senate Considers Emissions Market to Reduce Greenhouse Gasses

By Isaac Wolf

Washington - The idea is to set an economy-wide emission limit based on an initial 2.4 percent decrease in carbon dioxide emissions, said Jason S. Grumet, executive director of the National Commission on Energy Policy, a group of energy experts working to improve national energy policy.

Companies that do not meet the standards would be able to purchase emissions credits from firms that have lower emissions. Effectively, the plan penalizes companies that don't improve their emissions records and rewards those that do.

The U.S. emitted almost 7 billion metric tons of carbon dioxide-equivalent in 2003, 0.7 percent more than in 2002, according to the Department of Energy.

The emission-trading plan caps the price for greenhouse emission credits at $7 per ton, shielding companies that fail to meet the emissions requirements from prices that could rise precipitously on the free market.

Currently, the Environmental Protection Agency regulates an emissions trading market for sulfur dioxide, mainly from coal-burning power plants. The new plan would create a separate, but similar, program for carbon dioxide.

President Bush opted out of the Kyoto Treaty in 2001 – which included restrictions on carbon dioxide – and the U.S. does not have national restrictions on carbon dioxide emissions.

While the Senate Committee on Energy and Natural Resources looks for ways to cut back on harmful emissions, it is also concerned with the adverse effects emissions reductions would have on the economy, said Sen. Pete V. Domenici, R-N.M., the committee chair.

Grumet told the committee that the emissions trading plan would fairly balance the costs between businesses and citizens. "We can either put the entire burden on the private sector," he said. "Conversely, we can put the entire burden on the public sector."

One criticism of the plan is that it doesn't do enough to reduce the volume of greenhouse gas entering the environment. Anne E. Smith, vice president of consulting firm CRA International, told the committee that the plan is only a drop in the bucket: An emissions market might make a small dent in the short term, but it would have no real effect on long-term climate change, she argued.

Smith, who previously worked for the EPA, said the solution to greenhouse gas emissions is for government to subsidize research and development for new technology instead of funding existing technology.

"We need to figure out how we're going to get where we need to be," Smith said.

Another problem with the proposal is that it doesn't demand an absolute drop in greenhouse gas emissions, but instead pegs reductions to the gross domestic product, said Greenpeace energy specialist John D. Coequyt.

"At the end of the day, this doesn't cap emissions," Coequyt said. "Until we do something that reduces our CO2 emissions, we're not making any progress."

Coequyt also said that the $7 per ton maximum was an "escape clause" for irresponsible businesses. "What that's saying is, 'This is an important problem, but not nearly as important as our continued reliance on fossil fuels,' " he said.

Sen. Larry E. Craig, R-Idaho, said he was upset that there is not yet a clear plan for energy alternatives. "I'm a little frustrated that we're still hypothetical-ing where the future is," Craig said.

Sen. Dianne Feinstein, D-Calif., mentioned a recent Georgia Tech study, published in the Sept. 16 issue of the journal Science, which found that global warming may be making hurricanes stronger.

"The situation is changing rather dramatically," Feinstein said. "It looks to me as if this is beginning to happen."

Domenici rejected Feinstein's insinuation that Hurricane Katrina might be linked to U.S. greenhouse emissions. He defended Bush's decision not to support the Kyoto agreement, and he mentioned at least twice his disgust with Europeans who have argued that America "deserved" Hurricane Katrina for neglecting the environment.

He admitted, however, that more should be done to develop fuel-efficient technology. "We don't put enough money into research," Domenici said.

Source: Scripps Howard Foundation