Article on the debate over a ‘safety valve’
Posted by Daniel Hall on March 12, 2008
Evan pointed us to the new ClimateWire service a couple days ago. They seem to have gotten off to a great start. Tuesday’s edition contained a lengthy and well-researched article by senior reporter Darren Samuelsohn on the history of the safety valve proposal — the idea that a cap-and-trade system include a maximum price above which the government would sell additional allowances. It is an absolute must-read. It is lucid, interesting, and detailed — I work on these issues and I learned quite a bit from the article. (Including things about some of the people I work with!) ClimateWire is a subscription service, but fortunately for the general public the Carbon Tax Center obtained permission to run the entire column at its blog.
I’ll make two quick observations about the safety valve:
1. The controversy about the safety valve is largely a question of “what is the price?” Most environmental advocates would not have a problem with a safety valve of $100 per ton of CO2 emissions (three times higher than current prices in Europe and even higher than the Stern Review’s estimate of the cost of emissions).
2. There is a “price” safety valve but there is also a “political” safety valve. If a cap-and-trade program without a price safety valve turns out to be far, far more costly than projected the program will be suspended, weakened, or dismantled.
For those of you in DC, remember that RFF is hosting a workshop on managing the costs of climate policy (including discussion of the safety valve) next Wednesday. RSVP by today at the link.
Remember, please read the article, it is superb.