cap-and-trade

By Matt Huber - Jacobin, October 9, 2016

Climate change is often chalked up to “market failure.” We’re told that, despite prevailing assumptions that prices accurately transmit “signals” about the costs of goods and services, emitters like power plants, refineries, automobiles, and households simply do not pay the full ecological costs of their emissions. Hence, the market has failed.

To fix the problem, the argument goes, we must internalize the costs of emissions into the price mechanism so that emitters pay the full costs of their actions. If we could craft a policy that accurately monetized the ecological costs of emissions — a carbon tax, or fee and dividend scheme — fossil fuels would become costlier and renewables would be more competitive and cost effective. The failure could be corrected, and the market would succeed in guiding us to a clean energy future.

Accounting for ecological costs has become the primary way of crafting environmental policy for public officials and legal experts. But the rhetoric of cost internalization is a political dead end for a left climate politics.

Focusing on getting the price right, and thereby assuming the market can be corrected, allows right-wing and fossil-fuel interests to effectively argue that any and all climate policy will be a cost to working people. Recently, the CEO of Chevron put it bluntly “I’ve never had a customer come to me and ask to pay a higher price for oil, gas, or other products.” Indeed, while many on the climate left attribute slow movement on climate to a problem of education and denial of climate science, popular opposition to climate policy is more often framed in economic terms, focusing on costs to the economy and to everyday people’s lives.

In an ideological landscape dominated by an obsession with accounting for and trimming costs, environmental policy proposals often advocate raising costs—costs that are likely to end up being passed down to working people. Opponents of climate justice easily argue that any tax or cost will end up percolating throughout the economy and hitting ordinary people: wealth doesn’t trickle down, but costs do.

A left climate politics must move beyond a language of cost-internalization, and emphasize the real material benefits for a society beyond fossil fuel: not only in terms of a cleaner environment, but also cheaper energy and green jobs. This requires a language of public goods and collective action, not a language of markets and costs. If the Left must speak of costs at all, it needs to be framed in class terms — costs that the wealthy and corporations must pay to fund a better energy economy.

By Rachel Morello-Frosch, Manuel Pastor, James Sadd, Lara Cushing, Madeline Wander, and Allen Zhu - California Environmental Justice Alliance, September 2016

California’s cap-and-trade program is a key strategy for achieving reductions in greenhouse gas (GHG) emissions under AB32, the California Global Warming Solutions Act. For residents living near large industrial facilities, AB32 offered the possibility that along with reductions in GHGs, emissions of other harmful pollutants would also be decreased in their neighborhoods. Carbon dioxide (CO₂), the primary GHG, indirectly impacts health by causing climate change but is not directly harmful to health in the communities where it is emitted. However, GHG emissions are usually accompanied by releases of other pollutants such as particulate matter (PM₁₀) and air toxics that can directly harm the health of nearby residents.

In this brief, we assess inequalities in the location of GHG-emitting facilities and in the amount of GHGs and PM₁₀ emitted by facilities regulated under cap-and-trade. We also provide a preliminary evaluation of changes in localized GHG emissions from large point sources since the advent of the program in 2013. To do this, we combined pollutant emissions data from California’s mandatory GHG and criteria pollutant reporting systems, data on neighborhood demographics from the American Community Survey, cumulative environmental health impacts from the California Environmental Protection Agency’s CalEnviroScreen tool, and information from the California Air Resources Board (CARB) about how regulated companies fulfilled their obligations under the first compliance period (2013-14) of the cap-and-trade program. Our methodology is described in greater detail in the appendix to this report.

In this analysis, we focus primarily on what are called “emitter covered emissions,” which correspond to localized, in-state emissions (derived mostly from fossil fuels) from industries that are subject to regulation under cap-and-trade. The cap-and-trade program also regulates out-of-state emissions associated with electricity imported into the state and, beginning in 2015, began regulating distributed emissions that result from the burning of fuels such as gasoline and natural gas in off-site locations (e.g., in the engines of vehicles and in homes).

We found that regulated GHG-emitting facilities are located in neighborhoods with higher proportions of residents of color and residents living in poverty. In addition, facilities that emit the highest levels of both GHGs and PM₁₀ are also more likely to be located in communities with higher proportions of residents of color and residents living in poverty. This suggests that the public health and environmental equity co-benefits of California’s cap-and-trade program could be enhanced if there were more emissions reductions among the larger emitting facilities that are located in disadvantaged communities. In terms of GHG emission trends, in-state emissions have increased on average for several industry sectors since the advent of the cap-and-trade program, with many high emitting companies using offset projects located outside of California to meet their compliance obligations. Enhanced data collection and availability can strengthen efforts to track future changes in GHG and co-pollutant emissions and inform decision making in ways that incentivize deeper in-state reductions in GHGs and better maximize public health benefits and environmental equity goals.

Read the report (PDF).

By Carol Zabin, Abigail Martin, Rachel Morello-Frosch, Manuel Pastor and Jim Sadd - UC Berkeley Labor Center, September 13, 2016

California’s leadership role in climate policy has once again been confirmed by the passage of Senate Bill 32 (Pavley, 2016), which commits the state to the ambitious target of reducing greenhouse gas emissions to 40 percent below 1990 levels by 2030—staying the course to an 80-percent reduction by 2050. A central issue in the SB 32 political debate, as well as the many related policies that preceded it, is the impact of climate policy on equity: how to ensure that low-income and working-class Californians do not dis-proportionately bear the costs and are included in the benefits of California’s transition to a low-carbon economy. This report presents a Climate Policy Equity Framework to assist California decision-makers interested in reducing greenhouse gas emissions in ways that promote economic, social, and environmental equity. We suggest that policymakers, regulators, community groups, advocacy organizations, and business interests should develop a “social contract” to manage a transition to a low-carbon economy that both maximizes the benefits of low-carbon economic development and minimizes the risks to working people and disadvantaged communities. This social contract can strengthen the broad political coalition needed to stay the course on the state’s ambitious greenhouse gas reduction goals, particularly in the face of accelerating greenhouse gas emission reductions and a legal challenge to the constitutionality of California’s cap-and-trade system. The Climate Policy Equity Framework can then guide policy development and program implementation to reflect and support the social contract.

But what is climate equity? How can it be defined in a way that promotes both good jobs and prioritizes those communities that are hardest hit by climate change, multiple environmental hazards, and socio-economic stressors? What key criteria can then be used to develop and assess policies such as renewable portfolio standards, incentives for energy retrofits, cap and trade, transit-oriented development, low-carbon fuels and vehicle deployment, and much more? And finally, when faced with trade-offs between different equity criteria or tensions between environmental justice and labor interests, how can decision-makers maximize equity outcomes?

To answer these questions, this report proposes a “Climate Policy Equity Framework” that operates at three levels to:

• Articulate equity principles and goals to guide policy design;
• Present key criteria to analyze how close a particular climate policy or program comes to meeting these equity goals; and
• Propose indicators that point the way to mechanisms and strategies to advance climate equity.

We then apply these equity criteria to assess progress on environmental justice, economic equity, and public accountability goals, using the limited data currently available. Our assessment highlights positive developments, remaining challenges, and the data gaps that must be filled to facilitate more complete assessments in the future. We also apply the criteria and indicators to two specific climate policy arenas—energy efficiency and renewable energy—to illustrate how to improve the equity outcomes of specific climate policies and programs. Finally, we present a preliminary set of recommendations to illustrate some concrete opportunities for equitable climate initiatives.

Read the report (PDF).

By staff - It Takes Roots to Weather the Storm - January 2016

The Paris Climate Agreement of December 2015 is a dangerous distraction that threatens all of us. Marked by the heavy influence of the fossil fuel industry, the deal reached at the United Nations Framework Convention on Climate Change (UNFCCC) never mentions the need to curb extractive energy, and sets goals far below those needed to avert a global catastrophe. The agreement signed by 196 countries does acknowledge the global urgency of the climate crisis, and reflects the strength of the climate movement. But the accord ignores the roots of the crisis, and the very people who have the experience and determination to solve it.

Around the world, negotiators use the term “red line” to signify a figurative point of no return or a limit past which safety can no longer be guaranteed. Our communities, whose very survival is most directly impacted by climate change, have become a living red line. We have been facing the reality of the climate crisis for decades. Our air and water are being poisoned by fossil fuel extraction, our livelihoods are threatened by floods and drought, our communities are the hardest hit and the least protected in extreme weather events—and our demands for our survival and for the rights of future generations are pushing local, national, and global leaders towards real solutions to the climate crisis.

We brought these demands to the UNFCCC 21^st Conference of Parties (COP21) as members of the delegation called “It Takes Roots to Weather the Storm.” Grassroots Global Justice Alliance (GGJ), the Indigenous Environmental Network (IEN), and the Climate Justice Alliance (CJA) organized the delegation, which included leaders and organizers from more than 100 US and Canadian grassroots and Indigenous groups. We helped to mobilize the thousands of people who took to the streets of Paris during the COP21, despite a ban on public protest—and amplified the pressure that Indigenous Peoples, civil society, and grassroots movements have built throughout the 21 years of UN climate talks.

The Paris Agreement coming out of the COP21 allows emissions from fossil fuels to continue at levels that endanger life on the planet, demonstrating just how strongly world leaders are tied to the fossil fuel industry and policies of economic globalization. The emphasis within the UNFCCC process on the strategies of carbon markets consisting of offsets and pollution trading created an atmosphere within the COP21 of business more than regulation. The result is a Paris Agreement that lets developed countries continue to emit dangerously high levels of greenhouse gasses; relies on imaginary technofixes and pollution cap-and-trade schemes that allow big polluters to continue polluting at the source, and results in land grabs and violations of human rights and the rights of Indigenous Peoples. Our analysis of the Paris Agreement echoes critiques from social movements around the world, led by those most impacted by both climate disruption and the false promises that governments and corporate interests promote in its wake.

“Frontline communities” are the peoples living directly alongside fossil-fuel pollution and extraction—overwhelmingly Indigenous Peoples, Black, Latino, Asian and Pacific Islander peoples in working class, poor, and peasant communities in the US and around the world. In climate disruption and extreme weather events, we are hit first and worst.

We are Mother Earth’s red line. We don’t have the luxury of settling for industry or politicians’ hype or half measures. We know it takes roots to weather the storm and that’s why we are building a people’s climate movement rooted in our communities. We are the frontlines of the solution: keeping fossil fuels in the ground and transforming the economy with innovative, community-led solutions.

By Staff - World Rainforest Movement, August 10, 2015

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

Once again, the world’s governments will meet at the end of this year within the United Nations convention framework to supposedly deal with the real and tangible problem of climate change. However, the agenda of the climate negotiations – mainly driven by governments of industrialized countries and corporate lobbying groups – follows the mantra of capital accumulation, which in terms of climate change it is translated in the carbon market. This mantra has led to a further increase of greenhouse gas emissions, deforestation and environmental destruction in general. This growing destruction is “accepted” and even promoted, as long as it is “offset” by a project elsewhere. It is primarily traditional, forest-dependent peoples who suffer the consequences; not only with the impacts of severe droughts, floods and many other changes in the climate, but also through the plundering and looting of their territories, due to the expanded extraction legitimated by the carbon market. The last (public) draft of the climate agreement to be implemented post-2020, and which is expected to come out of the negotiations this year in Paris, France, opens the door wide to market mechanisms such as REDD at a global scale (1).

What does this mean?

Carbon market mechanisms such as REDD have allowed the continuation, legitimization and intensification of destructive activities such as mining, oil, gas and coal, monoculture plantations, agribusiness, among others. This extractive model has resulted in dispossession, violence, criminalization, destruction and loss for hundreds of communities worldwide, and with them, their cultures, spirituality, knowledge, autonomy and control over their lives and territories (2). How can we speak of a mechanism that seeks to “stop deforestation” or “benefit forest peoples” when the underlying logic is to expand industrial scale extraction? Despite all the propaganda and speeches created to make us believe that REDD is a “viable solution”, experience teaches us that what it is really seeking is to maintain an economy of capital accumulation which controls more territories and fills the pockets of just a few (3).

By Richard Smith - World Economics Association - 2015

This book is a collection of five essays that deal with the prime threat to human life on Earth: the tendency of global capitalist economic development to develop us to death, to drive us off the cliff to ecological collapse. It begins with a review of the origins of this economic dynamic in the transition to capitalism in England and Europe and with an analysis of the ecological implications of capitalist economics as revealed in the work of its founding theorist – Adam Smith. I argue that, once installed, the requirements of reproduction under capitalism – the pressure of competition, the imperative need to innovate and develop the forces of production to beat the competition, the need to constantly grow production and expand the market and so on, induced an expansive logic that has driven economic development and overdevelopment, down to the present day.

In successive essays I explicate and criticize the two leading mainstream approaches to dealing with the ecological consequences of this over-developmental dynamic – décroisance or “degrowth”, and “green capitalism”. I show that the theorists and proponents of no-growth or de-growth – like Herman Daly or Tim Jackson – are correct in arguing that infinite economic growth is not possible on a finite planet, but that they’re wrong to imagine that capitalism can be refashioned as a kind of “steady state” economy, let alone actually “degrow” without precipitating economic collapse. There are further problems with this model, which I also investigate. I show that the theorists and proponents of “green capitalism” such as Paul Hawkin, Lester Brown and Frances Cairncross are wrong to think that tech miracles, “dematerialization”, new efficiencies, recycling and the like, will permit us to grow the global economy – more or less forever – without consuming and polluting ourselves to death. I show that while we’re all better off with organic groceries, energy-efficient light bulbs and so on, such developments do not fundamentally reverse the eco-suicidal tendencies of capitalist development, because in any capitalist economy the environment has to be subordinated to maximizing growth and sales, or companies can’t survive in the marketplace. Yet infinite growth, even green growth, is impossible on a finite planet.

In the final essays I argue that since capitalism can only drive us to ecological collapse, we have no choice but to try to cashier this system and replace it with an entirely different economy and mode of life based on: minimizing not maximizing resource consumption; public ownership of most, though not necessarily all, of the economy; large-scale economic planning and international coordination; and a global “contraction and convergence” between the North and the South around a lower but hopefully satisfactory level of material consumption for all the world’s peoples. Whether we can pull off such a transition is another question. We may very well fail to overthrow capitalism and replace it with a viable alternative. That may be our fate. But around the world, in thousands of locations, people are organizing and fighting against corporate power, against land grabs, against extreme extraction, against the incessant commodification of our lives. Here and there, as in Greece and China, ruling classes are on the defensive. All these fights have a common demand: bottom-up democracy, popular power. In this lies our best hope. This little book is intended as more ammunition for that fight.

Read the report (Link).

By ITF Climate Change Working Group - International Transport Workers’ Federation, August 4, 2010

This report, now more than a decade old, was remarkably forward-thinking for its time (except for the uncritically positive assessment of Carbon Capture and Storage and Cap-and-Trade, positions the authors would likely now no longer hold. It also, interestingly, includes in an appendix, the delegate of one union affiliate, Robert Scardelletti, President of the Transportation Communications International Union (TCU), an affiliate of the International Association of Machinists and Aerospace Workers (IAMAW), from the US, who dissented from this report's conclusions, because it's green unionist orientation would "destroy jobs", a position held by the most conservative unions in the AFL-CIO.

From the introduction:

Climate change is the biggest single challenge ever faced by human civilization. Human economic activity has put so much carbon dioxide (CO2) and other greenhouse gas emissions (GHGs) into the atmosphere that serious global warming is already happening. As a society, we have no choice but to reduce these emissions drastically in order to stand a good chance of avoiding potentially catastrophic changes in our climate. Moreover, emissions from transport are rising faster than emissions from any other sector and in some cases the increase in transport emissions is counteracting emissions reductions achieved in other sectors. Lowering transport emissions presents a series of unique and formidable challenges.

The good news for transport workers is that a serious approach to emissions reductions will create new opportunities for quality employment, particularly in public transport, railways (both passenger and freight), transport infrastructure, road repair, and in developing clean transport technologies. But failure to act on climate change will have the opposite effect.

Read the text (PDF).