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Climate Change The Story of Cap and Trade

Published on December 1st, 2009 | by Tom Schueneman

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The Story of Cap and Trade

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December 1st, 2009 by
 

Why you can’t solve a problem with the thinking that created it

Many are probably aware of the viral video hit The Story of Stuff created by Annie Leonard. Today the Story of Stuff Project, in partnership with Climate Justice Now!, releases it’s next project, an animated 9-minute video called The Story of Cap and Trade.

Produced by Free Range Studios, The Story of Cap and Trade does what no congressional hearing or lobbyist talking head can do – make a greenhouse gas cap and trade scheme comprehensible. The short video by no means explains the entire scope of the cap and trade schemes proposed here in the US, or in place internationally, but what it does give a thorough grounding on the subject so that you and I can start to make sense of it. Once we do that, we can explore further, ask questions, begin a real dialog, and perhaps see why cap and trade schemes are not the best mechanism to deal with carbon emissions and climate change. Based on that, we can act and urge our leaders to make better choices.

With the world beginning to focus on the start of the COP15 climate conference next week, the timing couldn’t be better.

A false solution?

Last week I spoke with Daphne Wysham, a Fellow at the Institute for Policy Studies and co-director of IPS’ Sustainable Energy and Economy Network. Daphne was one of the principal consultants on the film and explained why she believes that cap and trade is a false solution to the challenge of stabilizing and then reducing carbon emissions. And it isn’t just her. In her research for the project, she heard from many legislators and policy wonks that may offer public support to the current cap and trade bills now before Congress, but privately harbor serious doubts as to the viability of a carbon trading scheme.

Why is this? Cap and trade isn’t new. It’s been considered by many as an unequivocal success in reducing acid rain in the United States. But many also fear that cap and trade for sulfur dioxide is one thing, and quite another for carbon.

The problem lay in the details, Wysham told me (and the film argues), and can be refined to three main problems:

  • Who sets the cap? – Defining the cap is something set in smokey back rooms by political wheeler-dealers. The point is that it’s primarily a political consideration. As the example of the high initial cap of the European Union’s first round of carbon trading demonstrated, an overallocation of free emissions “allowances” to polluters can force the price of the allowances to collapse and do little to motivate any real reduction of emissions. (To be fair, much of the problems of the first round of trading has been addressed in second round that began in 2008. Some have characterized the first round as the “trial phase.” For more on the EU Trading Scheme, see this paper done by the Pew Center on Global Climate Change (pdf))
  • Regulating carbon offset markets – is it really the best idea to hand over the buying and selling of carbon offsets to the same people that brought us the crash of ’08? There is continuing doubt about the effectiveness of carbon offsets, and turning them into a financial instrument traded in the derivatives market is likely to blow huge sums of cash into a bubble that will one day burst. We all know how that feels.
  • Free pollution permits – the wrong signal is sent by simply giving away pollution permits to the nation’s worst polluters. The Story of Cap and Trade suggests that all emissions credits should be sold or auctioned by the government, who can then use the revenue to fund clean energy development

Real progress

Wysham told me that cap and trade schemes really just play around the edges, giving an impression that something is being done about reducing carbon emissions, when it really isn’t. That’s one of the big problems outlined in The Story of Cap and Trade – that of distraction. With scientists saying the world needs to peak its carbon emissions within ten years, if not sooner, chasing down the dead-end road of cap and trade is a dangerous diversion to real progress.

What is needed is a tax shift that puts a definite price on carbon and shifts incentives toward clean energy development and efficiency. In particular the huge subsidies still given to fossil fuel development needs to shift to renewable energy expansion and distribution.

A new way of thinking is required. As we said at the outset, “you can’t solve a problem with the thinking that created it.”

Hope

So does that mean there is no hope for implementation of a workable solution to emissions reduction and climate change? Not necessarily, say Wysham. The current debate in Congress, such as it is, “reveals the process” of cap and trade and means that finally the country is having a conversation about how to address the challenge. And that’s where The Story of Cap and Trade serves it’s purpose.

I spoke with Free Range Studios founder Jonah Sachs over the weekend. For Sachs, the way we all understand our lives and the issues before us is through narrative. OUr lives and our world is told and understood through stories. By delivering a clear, repeatable message, people will begin to comprehend the issue at hand and thus drive social change. It’s a bottom-up approach that can spread a message through people’s conversation and help create real dialog. “The only potential for change,” says Sachs, “is through media that is democratized. People speaking to each other, one on one.”

So here, at last, it is: The Story of Cap and Trade. You may not entirely agree with it, it might make you ask some questions. It hopefully will help you better understand what is at stake and talk about it with friends and colleagues, and they with theirs.

That’s the whole point.

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About the Author

is an online publisher, editor, and freelance writer. He is the founder of GlobalWarmingisReal.com and the History Blog Project, as well as publisher and site director for the HippieMagazine.com. Tom also contributes to numerous environmental blogs, including TriplePundit, Ecopolitology, Sustainablog, and Planetsave.   Tom's work has led him to Europe, Africa, Latin America, Canada, the South Pacific, and across the United States. His home base is San Francisco, California.



  • Patricia

    Tom, Thank you for the thought provoking article and video. There are so MANY questions about how we should approach the environmental crises we have created…

  • Patricia

    Tom, Thank you for the thought provoking article and video. There are so MANY questions about how we should approach the environmental crises we have created…

  • AncientViking

    Ms. Leonard is clearly smart, talented, and well-intentioned. But her video is substantively a total disaster.

    How did this happen? A terrible research assistant! Watch here:

    http://www.funnyordie.com/ancientviking/videos

  • AncientViking

    Ms. Leonard is clearly smart, talented, and well-intentioned. But her video is substantively a total disaster.

    How did this happen? A terrible research assistant! Watch here:

    http://www.funnyordie.com/ancientviking/videos

  • Anastacio Rodríguez

    El video es verdaderamente genial, ojalá pudiesen traducirlo en español, me encantaría porque podría utilizarlo en mis clases; calro, siempre y cuando ustedes me den permiso.

  • Anastacio Rodríguez

    El video es verdaderamente genial, ojalá pudiesen traducirlo en español, me encantaría porque podría utilizarlo en mis clases; calro, siempre y cuando ustedes me den permiso.

  • Zachary Shahan

    i lean towards the Friends of the Earth argument, very briefly summarized in this 10-minute video for the common public

  • Zachary Shahan

    Tom, thanks for the video. good short coverage.

    for a real in-depth discussion of the issue, the grist article Tom just added and the Comments below it get into much more detail — tons more than the 10-minute video could.

  • SallyVCrockett

    The better solution is the one that virtually all of the world’s leading scientists and economists agree is the best: a revenue-neutral carbon tax. And in fact, according to a CTF/ future500 study released yesterday (http://www.climatetaskforce.org/climate-change-policy-survey/) it’s the solution that the overwhelming majority of Americans beleive is the best solution as well.

  • SallyVCrockett

    The better solution is the one that virtually all of the world’s leading scientists and economists agree is the best: a revenue-neutral carbon tax. And in fact, according to a CTF/ future500 study released yesterday (http://www.climatetaskforce.org/climate-change-policy-survey/) it’s the solution that the overwhelming majority of Americans beleive is the best solution as well.

  • SallyVCrockett

    The better solution is the one that virtually all of the world’s leading scientists and economists agree is the best: a revenue-neutral carbon tax. And in fact, according to a CTF/ future500 study released yesterday (http://www.climatetaskforce.org/climate-change-policy-survey/) it’s the solution that the overwhelming majority of Americans beleive is the best solution as well.

  • http://www.globalwarmingisreal.com/blog Tom Schueneman

    Here’s a good counter-point to the video from Grist for anyone who’s interested:

    http://www.grist.org/article/2009-12-01-annie-leonard-misses-the-mark-her-new-video-story-cap-and-trade

  • http://www.globalwarmingisreal.com/blog Tom Schueneman

    Here’s a good counter-point to the video from Grist for anyone who’s interested:

    http://www.grist.org/article/2009-12-01-annie-leonard-misses-the-mark-her-new-video-story-cap-and-trade

  • http://www.globalwarmingisreal.com/blog Tom Schueneman

    Bring on Copenhagen indeed. Will I see you there?

    BTW – did you watch the video? Is the opinion you object to mine or that of the video? The point is that it is a subject to be discussed (hopefully) without polarizing barbs going back and forth – though that may be too much to ask. If you are suggesting this post was intended on outlining a full alternative to cap and trade, then you are a bit mistaken. Though a shift of tax burden and fossil fuel subsidies seems like a pretty good start.

    This is a review of a video and a recap of interviews with principals involved in the video. I’m not sure who needs to simmer down.

    Feel free to add your own ideas for solutions.

  • http://www.globalwarmingisreal.com/blog Tom Schueneman

    Bring on Copenhagen indeed. Will I see you there?

    BTW – did you watch the video? Is the opinion you object to mine or that of the video? The point is that it is a subject to be discussed (hopefully) without polarizing barbs going back and forth – though that may be too much to ask. If you are suggesting this post was intended on outlining a full alternative to cap and trade, then you are a bit mistaken. Though a shift of tax burden and fossil fuel subsidies seems like a pretty good start.

    This is a review of a video and a recap of interviews with principals involved in the video. I’m not sure who needs to simmer down.

    Feel free to add your own ideas for solutions.

  • Paul

    If you’re going to say this ISN’T how it should be done then you need to make a BETTER suggestion. The only alternative offered is to stop subsides to fossil fuel development… AND???

    Bring on Copenhagen so all this political positioning in the media can simmer down again. It’s about as pathetic as all the opinion pieces addressed to Obama around the time of his election telling him how he should run the country. LOL

  • Paul

    If you’re going to say this ISN’T how it should be done then you need to make a BETTER suggestion. The only alternative offered is to stop subsides to fossil fuel development… AND???

    Bring on Copenhagen so all this political positioning in the media can simmer down again. It’s about as pathetic as all the opinion pieces addressed to Obama around the time of his election telling him how he should run the country. LOL

  • Paul

    If you’re going to say this ISN’T how it should be done then you need to make a BETTER suggestion. The only alternative offered is to stop subsides to fossil fuel development… AND???

    Bring on Copenhagen so all this political positioning in the media can simmer down again. It’s about as pathetic as all the opinion pieces addressed to Obama around the time of his election telling him how he should run the country. LOL

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