Chicago's Carbon Cap and Trade

The City of Chicago is all set to launch a cap-and-trade system for carbon emissions. The city is seen to the right, as viewed from a NASA satellite. Image source: NASA.

Both candidates in the presidential election supported a cap and trade system for the nation to reduce carbon emissions. As such it’s likely that we’ll see a national plan developed in the next few years. The city of Chicago is ahead of the game however, having started one in their metro region as reported by this article.

Mayor Richard M. Daley of Chicago on Thursday unveiled perhaps the most aggressive plan of any major American city to reduce heat-trapping gases.

The blueprint would change the city’s building codes to promote energy efficiency. It also calls for installing huge solar panels at municipal properties and building alternative fueling stations.

….

Like hundreds of other cities, Chicago has pledged by 2020 to reduce the emissions of heat-trapping gases 25 percent from the levels in 1990, the baseline established by the Kyoto Protocol, an international climate treaty. Mr. Burke said the Chicago plan offered much more specific ways than other cities’ plans to measure and cut the emissions.

The challenge facing cap and trade programs is implementation. It’s one thing to limit emissions, and a second thing to empower citizens, small businesses and industry to make the changes necessary to achieve emission reductions. For a city to succeed it must develop a multi-faceted plan, addressing private and public transportation, residential energy consumption, commercial energy consumption, government energy consumption, as well as low impact water and sanitation systems. Chicago’s proposal is a comprehensive one, addressing issues from renewable, alternative fuels, to building design and reducing water consumption.

“People think in terms of polar ice caps and rising ocean levels,” Mr. Burke said, “but this takes a look at what would happen to a Midwestern city like Chicago if nothing is done.”

By the end of the century, if no action is taken, he said, Chicago is likely to face 30 more days of 100-degree weather per year, as well as stretches of severe drought.
“The climate of Chicago,” Mr. Burke said, “would resemble what is currently East Texas.”

This was the first time a major American city has produced models to show local effects of global warming, he added.

The mayor argues why he is enacting these changes on a region scale, when climate change is truly a global problem.

“We can’t solve the world’s climate change problem in Chicago,” Mr. Daley said at a news conference at the John G. Shedd Aquarium, “but we can do our part.”

Mayor Bloomberg, who is pushing hard for a third term in spite of recent public referendums supporting term limits, has begun investigation how New York City could handle the effects of climate change, but has not yet proposed a cap and trade for the city. It is likely that he will not be willing or able to do so under the current economic conditions.

Election 2008: Climate Change

Today we continue our look at the two presidential candidates' positions on environmental science issues. We’ve previously looked at the candidates’ positions on Funding Science Research, Alternative Energy, and non-Renewable Energy. Today we conclude our discussion with a look at how the candidates will tackle the looming challenge of climate change.

I’m ready to be done with this election. I’m tired of seeing attack ads on the sides of highways, hearing damning reports on the radio and having a steam of slanderous video beamed into my living room. I’m certainly tired of hearing about the latest polls from Pennsylvania, Nevada or North Carolina. And I’m definitely tired of writing these long winded research intensive posts that have seemingly generated very little interest.

Do the candidates believe that climate change is occurring?
Obama:

There can no longer be any doubt that human activities are influencing the global climate and we must react quickly and effectively.

McCain:

We know that greenhouse gas emissions, by retaining heat within the atmosphere, threaten disastrous changes in the climate. The same fossil-fuels that power our economic engine also produced greenhouse gases that retain heat and thus threaten to alter the global climate….The facts of global warming demand our urgent attention, especially in Washington.

Okay great, glad we’re all on the same page here.

What actions will you take to address the situation?
McCain:

To dramatically reduce carbon emissions, I will institute a new cap-and-trade system…

Obama:

Specifically, I will implement a market-based cap-and-trade system to reduce carbon emissions…

Alright, everyone’s on the same page, this is going to be a short post! Both McCain and Obama state that their cap and trade program will reduce US emissions to 1990’s levels by 2020, and then to a cut 60% (McCain) or 80% (Obama) on current emissions by 2050. In essence the same thing.

McCain in his answer proposes a few additional steps:
- Increasing the penalty for not meeting CAFÉ standards. CAFÉ standards set the gas mileage standards for passenger vehicles in the United States. Senator McCain does not however indicate a desire to increase standards, which Senator Obama proposes to do.
- Senator McCain proposes to create a research and development tax credit to those businesses producing greenhouse gas friendly products.
- Senator McCain proposes a $300 million dollar prize for the creation of a battery to power hybrid-electric vehicles.

The Devil is in the details…
So Senators McCain and Obama have similar perspectives on global warming, similar goals and share a mechanism by which to address it. Both propose a cap and trade, but each would go about implementing their cap and trade in different ways.

First, let’s shed a bit of light on what a cap and trade is. A regulating body, in the form of a government sets a limit (cap) on the total amount of pollutants to be allowed. The total amount of pollutants is divided into small increments, otherwise called “credits,” and are distributed to those doing the polluting. If a polluter produces more pollution than it has credits for, it must purchase additional credits from a polluter who has not used all of theirs. Thus trading industry is developed, with fiscal incentives for companies to reduce the amount of pollution produced. The total cap is often reduced incrementally, so as to over time slowly reduce the total amount of pollution a nation is producing.

This concept is not new to the United States. There is a cap and trade system in place for sulphur and nitrogen oxides, a gas most commonly produced from coal burning.

There are two major variables in a cap and trade: the initial allocation of credits and at what level the “cap” is set. The candidates are more or less in agreement of the cap, that is to say they have a specific goal to be at by 2020. But how the candidates would initially distribute the carbon credits is different. Senator Obama would auction off carbon credits, whereas Senator McCain would give allotments to companies based on current emissions.

Conclusion:
Both Senator Obama and Senator McCain are in agreement about climate change being the fault of mankind. Both Senators agree that US needs to take a leadership role. Senator McCain supports market based, Senator Obama supports federal regulations (mandates). Both would address the situation by implementing a cap and trade. There are slight differences in how the candidates would initially distribute their carbon credits. From what I read environmentalists tend to prefer Senator Obama’s cap and trade program, but both candidates get good marks from me for their desire to tackle climate change.

Another reference that might be interesting is grist.org’s candidates factsheets about the environment. Click here for Obama’s and here for McCain’s. Actually those factsheets cover pretty much everything we discussed over the past four posts but much more succinctly.

Oh well, next we’ll hear my endorsement for President, along with a few other races in the New York Metro Region.