Emissions trading to reduce greenhouse gas emissions in the United States : the McCain-Lieberman Proposal
Name
MITJPSPGC_Rpt97.pdf
Size
234.71 KB
Format
Adobe PDF
Checksum (MD5)
f26ee6deb9ea40a860889858fd771010
Author(s)
Paltsev, Sergey.
Reilly, John M.
Jacoby, Henry D.
Ellerman, A. Denny.
Tay, Kok Hou.
Date Issued
June 2003
Series/Report no.
Report no. 97
Abstract
The Climate Stewardship Act of 2003 (S. 139) is the most detailed effort to date to design an economy-wide cap-and-trade system for US greenhouse gas emissions reductions. The Act caps sectors at their 2000 emissions in Phase I of the program, running from 2010 to 2015, and then to their 1990 emissions in Phase II starting 2016. There is a strong incentive for banking of allowances, raising the costs in Phase I to achieve savings in Phase II. Use of credits from outside the capped sectors could significantly reduce the cost of the program, even though limited to 15% and 10% of Phase I and II allowances respectively. These credits may come from CO2 sequestration in soils and forests, reductions in emissions from uncapped sectors, allowances acquired from foreign emissions trading systems, and from a special incentive program for automobile manufacturers. The 15% and 10% limits increase the incentive for banking and could prevent full use of cost-effective reductions from the uncapped sectors. Moreover, some of the potential credits might contribute little or no real climate benefit, particularly if care is not taken in defining those from forest and soil CO2 sequestration. Analysis using the MIT Emissions Prediction and Policy Analysis model shows that costs over the two Phases of the program could vary substantially, depending on normal uncertainty in economic and emissions growth, and the details of credit system implementation.
Description
Abstract in HTML and technical report in PDF available on the Massachusetts Institute of Technology Joint Program on the Science and Policy of Global Change website (http://mit.edu/globalchange/www/).
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