For Immediate Release:
9/20/2007
For More Information:
Matthew Davis, 207-253-1965
Emily Figdor, 202-683-1250
Rob Sargent, 617-747-4317
Report Charts ‘Cleaner, Cheaper,
Smarter’ Path On Global Warming Policy
EASIER
TRANSITION TO CLEAN ENERGY ECONOMY WHEN POLLUTERS PAY
Capping
emissions and making polluters pay for putting global warming emissions into
the atmosphere is the most economically efficient and fair approach to cutting
global warming pollution nationwide, according to a new report by U.S. Public
Interest Research Group (U.S. PIRG) Education Fund, released today by
Environment Maine. (Environment America
is the new home of U.S. PIRG’s environmental work.)
"Cleaner,
Cheaper, Smarter: The Case for Auctioning Pollution Allowances in a Global
Warming Cap-and-Trade Program" recommends that the United States and any
state or region contemplating a cap-and-trade program sell 100 percent of
pollution permits – called “allowances” – at an auction as opposed to giving
them to emitters for free. Environment Maine also released a statement signed by
more than 100 organizations and individuals, including former Labor Secretary
Robert Reich, the Consumer Federation of America, MoveOn.org, and OXFAM,
calling for a 100 percent auction.
“Giving
away pollution allowances absolves polluters of their responsibility and even
provides some polluters with a new opportunity to profit,” said Tony Dutzik,
Senior Policy Analyst for the Frontier Group and an author of the report.
“Auctioning allowances, on the other hand, ensures that all polluters pay based
on the amount of pollution they release.”
The
report also recommends that revenues from the auction be used to:
- Support clean energy
technological development, including research and development funding and
early market support for clean technologies;
- Invest in energy efficiency
improvements to reduce the cost of the program to consumers; and
- Provide direct consumer
rebates to alleviate any increases in energy costs that result from the
program.
“The
smartest, cheapest way to tackle global warming is to place a stringent cap on
emissions and to make companies pay for every ton of pollution they put into
the atmosphere,” said Matthew Davis of Environment Maine. “Maine has ensured that nearly all of the
emissions in the program to cut power plant pollution are auctioned. We can use
the revenues to ease the transition to a clean energy economy by promoting
energy conservation, clean energy and other measures that lower the cost of
meeting the challenge of global warming.”
The
report asserts that the auctioning of allowances prevents polluters from
gaining “windfall” profits as a result of an emissions trading program. Europe’s emission trading system, which includes free
distribution of the vast majority of allowances, has resulted in power plant
owners receiving billions of dollars in windfall profits from the pollution
program. In the United
Kingdom alone, windfall profits from
emission trading have been estimated at nearly $2 billion. These profits come
directly from the pocketbooks of consumers.
“The
decision of how to distribute pollution permits is one of the most important
that policy-makers will make on climate change policy,” said Dallas Burtraw,
Senior Fellow with Resources for the Future and a national expert on the
economics of cap-and-trade programs. Burtraw is currently advising Northeast
States on the design of an auction for the Regional Greenhouse Gas Initiative,
which caps power sector emission in nine Northeast States, and he recently
served on California’s
advisory committee for cap-and-trade programs. “Households bear eight
times as much cost as do producers under a cap-and-trade program, and
households should be first in line for the assignment of allowance value
created by a cap-and-trade program, as long as that is achieved in a way that
reinforces climate goals. An auction can accomplish that.”
“Auctioning
allowances is important to ensuring that we reduce the impact to consumers and
provide important public benefits,” said Mark Cooper, Research Director at
Consumer Federation of America. “Returning some of the auction revenue
directly to consumers will cushion any price impacts from the effort to cap
global warming emissions while giving American households a direct and tangible
benefit from the program.”
In
addition to auctioning allowances, Environment Maine recommends that federal,
state and regional policy-makers adopt complementary policies that further
reduce global warming emissions, including stronger energy efficiency standards
for vehicles and equipment, enhanced building energy codes, renewable energy
standards for electricity generation, global warming performance standards for
electricity generation and transportation fuels, and incentives for deployment
of clean energy technologies, such as solar power and “zero-energy” homes.
“All of the Northeast states that have adopted the agreement
to cut power plant pollution, RGGI, have required that all or nearly all of the
carbon emissions be auctioned instead of given away to polluters,” concluded Rob
Sargent, Energy Program Director for U.S. PIRG.
Global-Warming-Auctions-Supporters-9-19-07.doc