The news is mostly good out of California, where the Air Resources Board voted earlier this month to approve a resolution to initiate a statewide cap-and-trade system by the beginning of 2012.
I say “mostly good” because while a program of this type is finally being constructed so that more than just the energy sector is affected (as is the case in the northeast U.S.), there will initially be too many free allowances available to polluters. That is the same complaint that I had about the climate legislation being considered by the U.S. Congress last year.
Ninety percent of the allowances would be free in the first years of the program to give industry time to upgrade to cleaner equipment or account for increased future costs as the cap tightens.
Over time, as the cap gets lower and fewer allowances are available, costs would rise.
I understand that systems like cap-and-trade have to spin up before they achieve useful levels of efficiency and actually affect larger systems like statewide or countrywide economies. I understand that industry wants more time before being forced to clean up their act.
I also understand that the climate system doesn’t care about any of these things. As a physical system, it responds only to real forces, not imaginary human markets. Quite simply, we are out of time. The time to phase things in nicely and neatly was the past 40 years and industry chose not to pay attention.
There will be nothing orderly about the effects of global warming becoming apparent. In too many cases, those effects will take place too quickly for us to adapt to them in ways which we might prefer.
My criticisms aside, I am glad the CARB realizes that a price must be placed on carbon and that the federal government has largely failed at creating appropriate systems for doing so. I fear that the true price of carbon on the globe is much higher than most people involved in climate activism are willing to admit. The sooner carbon is honestly priced, the better for everybody.
I’ll finish with a little more good news:
California’s system, however, could end up being linked to ones being developed in other countries. State officials are talking with the European Union as well as provinces in China and Canada to link systems.
In the U.S., New Mexico narrowly approved its own cap-and-trade program last month and OK’d the state’s participation in a regional market.
h/t Itgetsbetter2012 @ dKos