Each has upsides and downsides which are worth debating, but the important first step is to remedy this market failure and put some
sort of price on carbon emissions.
While these spillover scenarios could entail a variety of serious costs to the United States the question for New York is whether the surety of increased
costs of a price on carbon to our wholesale electric market is appropriate relative to those speculative effects.
Coal remains cheaper, but when you factor in the reduced capital cost (gas plants cost between a quarter and a third what coal plants of equivalent output do), the life - cycle costs point to gas, even in the absence
of a price on carbon emissions.
And the bulk of the emissions drop is not a
consequence of a price on carbon or the cap — as theory would hope — but rather a byproduct of the mild winter in 2009 paired with a collapse in the U.S. economy — both of which reduce the demand for electricity and therefore the amount of CO2 pumped out to create it.
LOTS of excitement after the boss of mining giant BHP Billiton gave a speech in which he said was in
favour of a price on carbon and would quite like it if Australia's Labor - led coalition government could get on with it.
«We support the
introduction of a price on carbon because this will encourage innovation and investment in the most cost effective ways of reducing carbon emissions widely.»
The carbon - tax solution was also touted last week by panelists at the University of Chicago, who invoked video clips of free - market patron saint Milton Friedman in
support of a price on carbon.
«If you really want to get the reduction people are talking about, 80 percent by 2050, it's going to take some
sort of price on carbon to get there,» Thornton said.
While Cleetus supports carbon trading as one of many policy tools for tackling global warming, she says: «The carbon market only gets at one market failure: the
lack of a price on carbon.
The argument is simply that those efforts will be insufficient; alongside them should be a concerted push for more public investment in disruptive clean energy tech, to drive prices down and make clean energy competitive with dirty, even in the
absence of a price on carbon (in, say, China).