California is taking a closely watched step to cut greenhouse gas emissions through a new cap-and-trade program. On Wednesday, the state will open a carbon market that forces its biggest polluters to buy and sell permits to emit carbon dioxide. Some say cap-and-trade here could become either a model or a cautionary tale for others.

Craig Miller, science editor for KQED who hosted and co-reported the documentary, "Heat and Harvest"
Severin Borenstein, professor at UC Berkeley's Haas School of Business and co-director of The Energy Institute at Haas
Jasmin Ansar, economist with the climate program at the Union of Concerned Scientists
Shelly Sullivan, executive director of the AB 32 Implementation Group

  • Jon Rainwater

    Thanks for this show. California’s faith community sees this week’s action as a hopeful step in curbing carbon and its impact on Creation.

    • Jon Rainwater

      Rev Canon Sally Bingham: “AB32 is particularly important to the faith community because we
      believe that we are the stewards of creation. We see climate change and
      too much carbon dioxide in the atmosphere as very detrimental to God’s
      creation, in that it is affecting all aspects of life.”

  • Is the 15% reduction based on current emissions? Or forecasted emissions?

    • Mik

      15% is the percentage of greenhouse gas emission reductions from the 1990-level goal that will be handled by the Cap-and-Trade program. Other scoping plan measures like the 33% Renewable Portfolio Standard (wind and solar) and Low Carbon Fuel Standard, along with a long list of early actions are handling the other greenhouse gas reductions needed to achieve 1990 emission levels by 2020.

  • James Ivey

    In pure, simple, economic terms, taking something of value (such as clean air, a stable climate) without compensation for the taking is theft. Capping carbon output is simply limiting theft to a “normal” amount, not eliminating it. Free carbon credits is acquiescence in theft.

    I favor a carbon tax in which no amount of theft is tolerated, but at least this is a start.

  • Guest

    Your fear mongering guest claiming this cap and trade program will be bad for “the economy” reminds me of libertarian doubt producers who claim carbon dioxide is just part of “life” because trees convert it. I welcome the departure from California of industry not willing to participate in our new cap and trade program. Good riddens! Take your filth producing jobs with you. Pollution-based profits are always a NEGATIVE impact on California.

  • James Ivey

    About protecting jobs, I believe I once heard on Forum that clean energy employs at least 4 times as many people as carbon-based (conventional) energy nationwide. It seems that cap-and-trade (or any carbon regulation) would add jobs, not cost jobs.

  • JustSomeone

    Great topic forum! I had a question: what is the price ceiling for allowances and what is the intended plan for the program after 2020?

    • Mik

      The floor price is: The price starts at $10 (the higher of $10 US or Canadian depending on exchange rates @ 9 am day of auction) and rises at a real interest rate of 5% per year plus inflation.

      Ceiling price is: Cost-Containment Reserve allowances will be sold at prices of $40/metric ton for the first tier, $45/metric ton for the second tier, and $50/metric ton for the third tier in 2012. These prices will escalate by 5 percent plus the cost of inflation each year, such that the reserve prices are approximately $60/ metric ton, $67/ metric ton, and $75/metric ton in 2020.

      • JustSomeone

        Thanks Mik – – do you know what the size of the tiers are? I didn’t know about the CAN/US exchange rate component. Interesting.

        • Mik

          Not off hand, I could be wrong but all the tiers represent about 10% of all the allowances (2013-2020) and were created as a backstop.

          Tomorrows auction is not expected to have a high clearing price but as we get closer to surrender periods is when these prices will spike. If the cost-containment reserves are touched the programs cost can almost double.

  • jim

    Soot is soot is soot. You can downplay where it comes from but it’s just as dangerous from a grill as a truck.

    • jim

      He was right. You have too many people, in too small an area, to NOT directly force people to change.

    • Bob Fry

      A grill smells way better tho.

    • Mik

      Soot or Particulate Matter is not a greenhouse gas and not regulated by AB 32 or the Cap-and-Trade regulation. The California and Federal Clean Air Acts address PM emissions. Most Air Districts are now regulating fire places along with diesel trucks as a result of non-attainment of those other laws.

  • Disgusted

    Oh my goodness! stop letting your listeners walk away so UNINFORMED.New energy technology has been developed insecret and it ends the climate crisis much more completely than anything you have ever named on National Petroleum Radio. To inform yourself (bc KQED wont) Google Sirius Never Ending Light or the Thrive Movie to get some real information into the discussion.

  • Mik

    1.) AB 32 does not regulate soot, that is something the California clean air act addresses. Greenhouse gases (Kyoto gases: carbon dioxide, methane, nitrous oxide, sulphur hexafluoride and two groups of gases, hydrofluorocarbons and perfluorocarbons) do not have localized impacts like asthma. Thus conversation about diesel truck PM emissions are not relevant when discussing the California Cap-and-Trade. Additionally, AB 32 is more extensive than this single program and some of these vehicle issues will be addressed in other scoping plan measures, including the Pavley standards (adopted as the National CAFE standards).

    2.) Coal import contracts are being phased out through regulations/rules at the CEC and CPUC. Additionally, there are stringent rules on resource shuffling.

    3.) The Acid-Rain program operates with a minor auction (~3%) and is widely considered an effective cap-and-trade program with minor economic impacts. Any argument that free allowances are theft is absolutely ridiculous and falacious.

    4.) Cap-and-Trade does not exist in a regulatory vacuum. There are hundreds of laws at multiple boards, commissions, departments, and agencies that regulate air quality and greenhouse gases.

  • Greg

    “electricity flows wherever it wants on the wires” by Severin Borenstein? That does not sound right, at least that’s not what your typical power grid operator would say. It’s all about policy, and we need a policy adjustment that sets us up for a clean air future. None of us will do business without breathable air.

  • David Kerrigon

    Scott Shafer,

    During Forum programs, could you please set the context behind groups like Cal Chamber and California Manufacturers & Technology Association (AB 32 Fight Climate Protection Group). These groups contributed to Proposition 23 to overturn AB32. Under modern capitalism (See KQED Forum | Nov 23, 2007 Robert Reich: ‘Supercapitalism’), firms maximize short term profits, so carbon producing firms will fight AB32 / Cap n Trade and will fund studies that support their positions, no matter what the facts say. There’s nothing evil about firms, that’s just the way capitalism works. You should also differentiate Cal Chamber from US Chamber on climate, as US Chamber is one of the strongest anti-climate voices.

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