Common Resources

RFF Policy Commentary - Cap-and-Trade in California: An Introduction to Offset Buyer Liability

In this week’s commentary, Danny Morris and Harrison Fell discuss California’s approach to a simple problem—what happens when carbon offsets go bad (that is, when they don’t deliver promised emissions reductions)? California’s solution under its new cap-and-trade program is buyer liability: firms holding an invalidated offset have to replace it to stay in compliance. This […]

California’s New Gold (recap)

Dallas Burtraw and Blair Beasley posted on Wednesday, pointing out the big decision California must make soon about how to spend the auction revenues from its cap-and-trade program. Yesterday, Burtraw testified before the California Air Resources Board, offering his view on this decision. You can read his testimony here; but here are the key points:

California’s New Gold

California is preparing itself for an influx of billions of dollars in new government revenue. The money is slated to come from auctioning tradable emissions allowances generated under the state’s cap-and-trade program, which is set to launch next year. Those interested in California’s cap-and-trade program are paying particular interest to this anticipated revenue. The auction […]

Allowance Allocation and John Locke

An Associated Press “Fact Check” on statements from President Obama and Mitt Romney looks at the president’s claims that Republicans have abandoned their support for market-based solutions to environmental problems: But in recent years, cap and trade failed when Democrats controlled the Senate and the House. Moreover, Republicans argued the legislation was not a truly […]

Understanding Australia’s Emissions Trading Scheme

Australia plans to introduce an Emissions Trading Scheme (ETS) in July 2012 to progressively reduce carbon dioxide and other greenhouse gases to five percent below year 2000 levels by 2020. Around 500 large emitting companies will be required to hold an allowance for each ton of emissions. Initially the allowance price will be fixed, but […]

Would Weaker Targets Reduce Allowance Prices?

The recent spate of hearings in the Energy and Natural Resources Committee and those planned this week for Environment and Public Works Committee signal the Senate’s re-engagement on comprehensive climate legislation. Surely, one of the front-and-center issues will be the higher energy prices resulting from a cap-and-trade program for greenhouse gases (GHGs). The magnitude of […]

What Can We Learn from RGGI Auction Prices?

Regional Greenhouse Gas Initiative auction prices hit their lowest mark since the program began selling polluting rights last year. The auction to disperse CO2 emissions permits in ten northeastern states sold allowances for the 2009 vintage at a price of $2.19/each—down 32 percent from June—and allowances for the 2012 vintage at a price of $1.87/each—down […]

Lessons from the E.U.’s Emissions Trading Program

Since 2005 major power generation and industrial emitters in the European Union have been monitoring their emissions and paying for the right to release CO2 and other greenhouse gasses into the atmosphere. While a landmark moment in multi-national environmental cooperation, observers have found that in its early years the E.U.‘s emissions trading scheme (ETS) has […]

What Electricity Sector Allocations Could Mean for Households

The introduction of a cap-and-trade program for carbon dioxide emissions could have important effects on households. Changes in the electricity sector are especially important because nearly 40 percent of emissions come from this sector and a majority of emissions reductions are expected to come from this sector in the early decades of a program.   […]

Waxman-Markey Auction Plan Draws Heavily from RGGI

There are undeniable similarities between the proposed emissions auctioning scheme in the newly-released draft of the Waxman-Markey energy bill (H.R. 2454) and the approach adopted for allowance auctions in the ten-state cooperative arrangement in the Northeast, the Regional Greenhouse Gas Initiative (RGGI). With little precedent to look to, it appears the framers of H.R. 2454 […]