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On Naomi Klein Undervalues the Potential of the EU's Cap-and-Trade Plan to Curb CO2

Hi Bob,

Thanks for the feedback.

You will find the estimates for emission reductions I mentioned on page 15 of the report. I do realize I linked a huge pdf for brevity purposes and I appreciate you comment and that you are willing to get into the details. Essentially one of the pieces of research that has looked into this was led by Denny Ellerman at MIT for a book called "Pricing Carbon" (cited in the report). The report cites another study by Deutsche Bank which corroborates the preivous findings. 

To your other comment, the amount of revenues cap-and-trade can raise is actually hugely important. The advantage of carbon pricing as a climate policy is that it can (if properly designed) generate the so called double divident - reduces emissions and raise revenues (that could be reinvested to reduce even more emissions!) This is what's happening now with the EU ETS. Much of the money raised so far, 3 billion euro in 2013 actually (you can see proof at the link in the article), was used for climate funding, including renewables, and energy efficiency (the UK's green deal program is one example). So literally, the higher the carbon price is on any given day or month or year, the more money we will have for climate finance. As Naomi Klein herself explains very well in her book, huge amounts of climate funding are needed to transition our economic system.

When it comes to UK's price floor, the press release I linked says "gas-fired power generation finally reversed its downward trend and became more competitive against coal in some countries, due to plunging crude oil prices and national policies such as UK Carbon Price Floor" So as you can see, it is making the UK switch from coal to gas.

And you have misinterpreted me. I clearly did not criticize Klein for trying to find an inherent flaw with cap-and-trade. On the contrary, the fact she dedicated so much attention to cap-and-trade is exactly what inspired me to review it, which was the very first thing I said in the piece. And as you pointed out I happily admit that Klein is 100% right about cap-and-trade being too complex. The ultimate question for me is whether we can overcome this challenge. I would love to hear suggestions about how to go about clearing out some of that smoke you are talking about. 

Finally, I heartily recommend you read the book!



April 9, 2015    View Comment    

On EU Sets Binding Renewable Energy Targets After Tough Negotiations

Indeed the Commission sees the carbon price signal playing a greater role in the 2030 climate framework than it did for the 2020 targets. In the white paper published this week, the Commission states that a 40% GHG target "should by itself encourage a greater share of renewable energy in the EU of at least 27%". From this perspective, the proposed 2030 renewable target appears to be not more than business as usual. 

January 25, 2014    View Comment