10 Ways to Trade Up—How Obama can fix the climate, raise billions for clean tech, and …

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http://www.motherjones.com/environment/2009/02/10-ways-trade

10 Ways to Trade Up

How Obama can fix the climate, raise billions for clean tech, and send you a fat check.

—By Kevin Drum

March/April 2009

Though it's not been mentioned much lately amid the sea of bailout headlines, the global economy isn't the only thing melting down right now. So are the polar ice caps. As nasa climatologist James Hansen has warned, we are nearing—if we haven't already passed—the tipping point at which the concentration of carbon in the atmosphere becomes so high that feedback loops will cause it to keep increasing on its own even if humans never emit another CO2 molecule again. To keep the planet habitable, he says, we must cut emissions not 10, not 20, but a full 80 percent by 2050; anything short of that will lead to "global cataclysm."

Fine then. We need to fix the climate, and we need to start yesterday. President Obama plainly understands this. His environmental rhetoric has focused mainly on things like wind farms and green jobs, but the backbone of his climate policy is actually an ambitious program that, if done right, will reduce greenhouse gases and raise desperately needed revenue—and, most important of all, has a fighting chance of making it through the congressional sausage factory in one piece. If he sticks to his guns, the idea will be a household term before the year is out. It's called cap and trade, and it springs from a simple yet surprisingly hard-to-answer question: What's the best, and fastest, way to reduce pollution?

When serious environmental regulation began in the late '60s, the default approach was "command and control," which is exactly what it sounds like. Take, for example, the Clean Air Act of 1970. It gave the government power to regulate six airborne pollutants, and the epa did this by setting firm limits on these pollutants. That's the command part. States then developed various mechanisms for meeting epa standards; one was to require companies to install "Best Available Control Technology" for reducing pollutants. That's the control part.

Command and control works: Back in the mid-'70s, Los Angeles, the smog capital of the country, suffered through 200 days per year of ozone levels above the federal standard. Today it has fewer than 100. But is there a better way? More to the point, is there a cheaper, more flexible way? Enter cap and trade, a concept that's been the go-to approach in environmental wonk circles for years.

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