Carbon Markets
California’s Air Resources Board and Governor Jerry Brown approved a proposal to link California’s carbon market with Quebec’s, to allow for greater investment in low-carbon technologies, more flexibility for companies to trade carbon permits, and larger reductions in greenhouse gas emissions.
RFF’s Dallas Burtraw, Karen Palmer, Clayton Munnings, and Matt Woerman, along with Paige Weber from Yale University, recently introduced a framework to help policymakers who are working to link cap-and-trade markets. They note: “The incremental alignment of program elements—which we call ‘linking by degrees’—can capture benefits in program administration, build institutions and political support, and may influence the design of expected rules governing greenhouse gas emissions under the US Clean Air Act.“ They also apply the framework to California’s cap-and-trade program and the Regional Greenhouse Gas Initiative, finding that “the two markets are nearly ready to formally link.”
Eradicating Extreme Poverty
Last week, World Bank President Jim Yong Kim announced that, “The world can end extreme poverty by 2030.” He calls for continued sustainable growth in the developing world, and cites climate change as “a fundamental threat to economic development and the fight against poverty.”
In his Resources 2020 lecture at RFF, Nobel Laureate Joseph Stiglitz noted that “inequality ought to be a fundamental consideration when fashioning environmental policies.” He continued: “In democracies, the desperately poor tend to have less of an interest in pursuing policies designed to protect the environment, because their most important concern is doing whatever’s necessary to get out of the current situation. So societies with more inequality will get less support for good environmental policies.” Read an excerpt from the lecture here or watch the full video here.
Energy Tax Reform
The Obama administration is having bipartisan discussions on energy tax policy issues. Administration officials have said that maintaining the production tax credit for renewable energy is a priority, which they hope will be maintained in the tax code.
However, in new research, RFF Fellow Joshua Linn and Clayton Munnings examined five renewable electricity policies and found that the production tax credit “is the least cost-effective policy.” They suggest “[financing] the subsidy from a charge to consumers rather than out of general tax revenue,” to stabilize electricity prices, which can cause increased electricity consumption.
