learning from others

As Congress explores the merits of various proposals to reduce U.S. greenhouse gas emissions (see yesterday's post for a comparative chart of bills being considered), it should look across the "pond" to see what Europe is learning about "cap and trade" systems.

An article in yesterday's Washington Post, titled Europe's problems color U.S. plans to curb carbon gases, warns of unintended consequences that have occurred under the EU's system.

According to the article:

In some ways, Europe's program has been a success. It covers 45 percent of the continent's emissions, 10,000 companies and 27 European Union countries. It has built registries that list carbon dioxide emissions for every major plant.

In other ways, the approach has been a bureaucratic morass with a host of unexpected and costly side effects and a much smaller effect on carbon emissions than planned. And many companies complain that it is unfair.

To generalize, the crux issue in Europe is the increase in electricity costs.

Of all the effects of the new rules, the rise in the price of power has aroused the most outrage. Much of the anger of consumers and industries has been aimed at the continent's utility companies. Like other firms, the utilities were given slightly fewer allowances than they needed. But instead of charging customers for the cost of buying allowances to cover the shortfall, utilities in much of Europe charged customers for 100 percent of the tradable allowances they were given — even though the government handed them out free. Electricity rates soared.

While Congress deliberates, legislators in Olympia, Washington are already facing the issue of how much electricity might cost if legislation is enacted to reduce greenhouse gas emissions. Sunday's Seattle Times ran a story titled Twist in climate change fight pits corporations against each other.

The bills under consideration in Olympia would

forbid utilities from making new investments or signing long-term contracts to get power from plants that produce a lot of greenhouse gases.

…to get the state's biggest utilities not to resist, lawmakers have added several provisions to the bills relating to how highly regulated power rates get set.

Of course

some of the biggest power users in the state contend the provisions would hand too much power to the utilities, potentially translating into higher power bills.

While debate continues in Olympia, our U.S. Senators and Representatives would do well to look to both Europe and Washington state for real-life examples of the complexities of legislating reductions in greenhouse gas emissions.

Bottom line: you can't please all the people all the time. There are some tough choices ahead; tough choices that must be made with one thought in mind–we've got to find the most effective way possible to curb greenhouse gas emissions. It won't be popular and it may be expensive, but it's absolutely necessary.

Carbon Neutral Journal's thoughts are brought to you by Hawtin Jorgensen Architects.

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