As a native of the Pacific Northwest, I’ve always enjoyed the stunning scenery the region has to offer. From the Cascade Mountains and Mount Rainier to Olympic National Park, I find it hard to leave when I have to return to Michigan — even with the beauty of the Great Lakes and Upper Peninsula. However, I’m increasingly worried about the disastrous effects that changes in the climate could have on these national treasures. There’s one solution that would provide the best bang for our buck: a cap-and-trade system.
The idea of cap-and-trade has been around for a while; however, Americans have never taken it seriously. This system would require all manufacturers to purchase the right to emit pollution in a marketplace and allow them to buy and sell those rights. However, current legislation does not consider the effects of many chemicals. For future legislation, Americans cannot focus only on carbon dioxide emissions. Companies and legislators must implement a cap-and-trade system that will attempt to reduce many harmful chemical emissions, including carbon dioxide, sulfur dioxide and methane.
A cap-and-trade system would actually be a better financial move than people may expect. Three years ago, President Barack Obama announced a cap-and-trade plan that would raise $645 billion in revenue from the government-run emissions auctions over eight years. In January 2012, California Gov. Jerry Brown predicted that the state would earn a projected $1 billion through cap-and-trade auctions. Those companies that have already reduced their emissions would not have a need for those credits, so they would sell them to other companies. This would provide additional revenues for those companies and possibly help revitalize struggling industries.
Along with the economic benefits of the system, electricity costs will be driven down. Since 2009, a coalition of Northeastern states has imposed a cap-and-trade system on the electric utility sector. In that time, electricity bills in those states reduced by a total of $1.3 billion. Additionally, a study conducted by the Analysis Group said there’d be an overall reduction in energy costs of $1.1 billion by charging electricity companies for their carbon dioxide emissions, meaning “average savings of $25 for residential consumers, $181 for commercial consumers and $2,493 for industrial consumers.” Over time, a cap-and-trade system will reallocate energy production to different types of alternative energy, encouraging more production from these sources and eventually increased energy production.
More importantly, the environmental benefits from cap-and-trade will be substantial. If climate change continues at the same rate, the Brookings Institute estimates that greenhouse gas emissions will cause roughly $100 billion worth of damage over the next decade and about $1.3 trillion dollars by 2050, according to 2010 emissions figures. In the same article, the think tank estimates that by levying a cap-and-trade system, the costs would be lowered substantially. If legislation is enacted now, the total global benefit will add up to between $1.5 trillion and $1.7 trillion by 2050, according to 2010 emissions figures.
State governments, including California’s, are already starting to enact these policies. According to the Regional Greenhouse Gas Initiative, carbon dioxide emissions from power plants in nine East Coast states that have enacted cap-and-trade policies fell on average by about 23 percent over a three-year period. Lowering carbon dioxide emissions will reduce the chance of a warmer planet, which could prevent more environmental catastrophes and higher costs from storm damage. A cap-and-trade system will be able to harness the power of markets to find the lowest possible cost to reduce greenhouse gas emissions.
However, other chemicals, such as methane, have been left out of the conversation even though they may have an even greater impact on climate change. According to an Aug. 2010 The New York Times article, climate experts have said that a chemical known as HFC-23 “has the potential to trap about 12,000 times as much heat as a molecule of CO2” when it’s released into the atmosphere. Going forward, these types of emissions need to be focused on, too — their impact on our environment could be much greater than that of carbon dioxide.
This issue is going to become unavoidable as climate conditions will become much worse. Americans must implement a cap-and-trade system now as opposed to creating reactionary measures that will only serve as Band-Aids. Covering up the future environmental challenges will cost Americans and the planet much more in the long term. Hopefully, I’ll still be able to enjoy the beautiful natural environments that I’ve grown to know and love, whether in Washington state, Michigan or elsewhere on earth.
Paul Sherman can be reached at pausherm@umich.edu.