Editor’s Note: After a several
month hiatus Cascadia Planet is back. I’ve been busy ramping up my global
sustainability practice, MROC, engaging in a huge project that represents
nothing less than the invention of a new, seawater-based agriculture. I’ll tell
you more about that in coming months. Meanwhile, I will be posting
articles on a number of topics related to climate and sustainability. In
the spirit of the original 1990s Cascadia Planet, building global
sustainability solutions in regions and localities, I will offer occasional
analyses of climate policy being developed on my home ground in Washington
state. This is the first. For background see my articles in Crosscut, Part 1
and Part 2.
And I will be doing the second and third pieces of my American Nations
review, which will illuminate the difficulties of passing a national climate
policy and the need to make sure state and regional climate policies stand on
their own two feet.
The Brits came to Washington state recently to tout
the wonders of carbon cap-and-trade before Washington Gov. Jay Inslee’s Carbon
Emissions Reduction Task Force (CERT).
United Kingdom representatives on May 15 came to
share their insights on Britain’s carbon cap-and-trade (CCAT) before the
21-member group tasked with designing Washington state’s carbon framework. Gov. Inslee’s own executive order mandates a
system very much like Britain’s.
“The carbon emissions reduction program must
establish a cap on carbon pollution emissions, with binding requirements to
meet our statutory emission limits, and it must include the
market mechanisms needed to meet the limits in the most effective and
efficient manner possible,” the order reads.
In other words, CCAT.
To hear the British representatives, CCAT is a slam dunk. John Stang reported on the meeting
in Crosscut.
“The United Kingdom's combined efforts reduced its
carbon emissions by 25 percent from 1990 to 2013, according to (Alyssa) Gilbert
(of Ecofys UK) and Emma Wright of the United Kingdom's Department of Energy and
Climate Change. British law sets a 34 percent reduction target for 2020 and an
80 percent reduction target by 2050. Nuclear power is a significant plank in
the British approach.”
An impressive performance, particularly if one has
no objections to new nuclear power in the quake-prone Northwest. But how real is that 25 percent?
It’s more like an emissions shell game, the UK
Energy Research Center reports in its paper "Carbon Emission Accounting –
Balancing the
books for the UK."
“Nearly 20 years of climate change policy has
failed to reduce greenhouse gas (GHG) emissions linked to
economic activity in
the UK,” researchers conclude. “Although the UK has met its Kyoto obligations,
this has been achieved largely by outsourcing production and relying on
importing consumer products from abroad to meet growing consumer demand. As UK
consumer demand has continued to grow, so have the GHG emissions embedded in
imported goods.”
In essence, consumption-based carbon accounting
demonstrates that UK’s emissions reductions are showing up in the accounts of
China and other industrializing nations. Working-class manufacturing jobs are
going out the door in the UK. It may be
they would have anyway with global trends, but a carbon policy that works by
making fossil energy more expensive certainly is a disincentive to
energy-intensive manufacturing.
Washington state should take a lesson. If we want an economy of software engineers,
lawyers, accountants and other professionals, along with the people who make
their coffee, clean their houses and walk their dogs, CCAT will work just fine.
These are low-carbon activities. But if we want an economy where people
actually make stuff, and which actually sustains family-wage working class
jobs, we had better take the British experience to heart. Particularly a state that has put billions of
taxpayer benefits into retaining aerospace manufacturing.
How does a state policy avoid such impacts? By giving manufacturing industries free
passes to emit carbon. In a CCAT carbon
emitters must secure a permit for every ton they release. Some permits are auctioned in a trading
market. Others are handed out for free
in the opening years of a CCAT in order to avoid negative economic
impacts. Such as manufacturing companies
moving out of state. The membership of CERT clearly
says it is where the “who gets what” deals on emissions permits will be
cut.
But those free passes undermine the goal of CCAT,
which is to reduce carbon emissions. So
CCAT is caught in its own contradictions.
If it’s too tough it drives companies away. Idaho is just across the
line. If it’s too loose it falls short
of what is needed to avoid carbon impacts such as loss of snowpack or shellfish
industries. Eventually the cap will
tighten as free passes run out. But then
it’s back to square one. Will companies
stay when competing states and nations are offering energy with no carbon penalties? Only if low-carbon energy is by that time
price competitive. We can hope with
trends in wind, solar and energy storage it will be. But if it’s not pressure will mount to politically
bust the cap. And if that does not
happen Washington will be competitively disadvantaged.
CERT and the Washington climate community have no
excuse for not understanding the distinction between carbon produced by
economic activities in state and carbon associated with goods imported into the
state. One of the first studies anywhere
on consumption-based carbon accounting was done by Stockholm Environmental
Institute for King County, Washington. King County residents emit 12 tons of
carbon directly each year, but 29 tons if imports are taken into account, the
study concludes.
To capture imported carbon emissions in a state
CCAT, goods coming into state would have to secure emissions permits for their
embedded carbon energy. But this would
amount to a carbon tariff that would violate the Interstate Commerce Clause of
the U.S. Constitution. Ultimately, a national carbon framework could put a
carbon tariff on goods imported from nations where carbon is not priced. But states do not have the power.
This represents a big hole in state carbon
frameworks. They can only cover a
portion of the carbon emissions associated with economic activity in the
states, perhaps less than half if the King County study reflects a statewide
reality. The portion they can cover,
carbon from energy used in state, makes the state less competitive and other
destinations more attractive for manufacturers.
The more effective the CCAT, the more powerful this effect becomes.
It is with these realities that Gov. Inslee and the
CERT will have to cope, not happy talk from the Brits.