Covering California’s cap-and-trade program and Near Zero’s report, California’s climate emissions are falling, but cap-and-trade is not the cause, Capital & Main spoke with Near Zero’s Danny Cullenward:
The Near Zero study found that California greenhouse emissions have been cut – by five percent in 2016 alone – but through changes in the mix of sources generating electricity, including hydropower and solar, rather than cap-and-trade.
The study’s lead author Danny Cullenward said research found that the current limits on pollution set by cap-and-trade are far above actual emissions. The result is an oversupply of allowances that keep the price of carbon cheap and, critics contend, give companies little incentive to slash emissions. That build up of unused allowances enables companies “to maintain their emissions farther into the future than post-2020 program caps might nominally suggest,” he wrote in the report’s summary.
Cullenward told Capital & Main cap-and-trade needs to be tweaked in order to meet California’s goal of reducing emissions by 40 percent below 1990 levels by the year 2030. “Emissions have fallen pretty quickly and that’s good news. But a lot of people are saying, ‘See, the cap and trade program is working,’ and our analysis shows that it’s too soon to say that.”
Cullenward added that the promise of cap-and-trade is real, but that there is “more work to do” to make it effective. “The state is pursuing an ambitious 2030 climate target, and regulators expect cap-and-trade to play the single biggest role in reducing emissions.”
Read the full article, “Study Shows Limits of Cap-And-Trade in California,” by Larry Buhl, on the Capital & Main website.