In the News

There is no doubt that “cap-and-trade” has joined “liberal” on the list of terms conservatives have effectively tar-and-feathered. It’s also clear that a market-based system is the best way to reduce greenhouse gas emissions. The term needs political rehabilitation, for the planet’s sake. But how? A recent study by NYU Law School’s Institute for Policy Integrity shows how a different take on cap-and-trade, known as “cap-and-rebate” or “cap-and-dividend,” could be the answer.

The Carbon Limits and Energy for America’s Renewal (CLEAR) Act, sponsored by Sens. Cantwell (D-Wash.) and Collins (R-Maine), would help to employ workers hit hardest by the housing bubble burst—generating jobs through increased consumer spending and green technology investment. These are some of the findings of an analysis released April 12 by the Institute for Policy Integrity at New York University School of Law.

The Institute for Policy Integrity at New York University Law School contends in an analysis that the “CLEAR Act” sponsored by Sens. Maria Cantwell (D-Wash.) and Susan Collins (R-Maine) could help businesses diminish greenhouse gas emissions more affordably by establishing a nationwide price on carbon. (Subscription required.)

The cap-and-dividend law drafted by Sens. Maria Cantwell (D-Wash) and Susan Collins (R-Maine) will spur green energy investment while avoiding regional disparities, according to a new study by the Institute for Policy Integrity at New York University School of Law.

A new study by the Institute for Policy Integrity praises climate legislation sponsored by Sens. Maria Cantwell (D-Wash.) and Susan Collins (R-Maine) — a bill that has received less attention than the upcoming proposal by Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.).

Climate legislation from Sens. Maria Cantwell (D-Wash.) and Susan Collins (R-Maine) would give industry a consistent, predictable price signal for releasing greenhouse gases while also creating new demand for construction jobs, according to a study by the Institute for Policy Integrity at New York University School of Law. (Requires subscription.)

This week, the Environmental Protection Agency will do more than set new fuel efficiency standards for cars. It will put a price on carbon. Within this historic climate change regulation is a powerful new way of thinking about greenhouse gas emissions: as costs that will borne by society. Burning oil in cars imposes a steep price tag, from dirtier air now, to more expensive flood insurance in a decade, to potential climate catastrophe for our grandchildren.

“The countries that move first to a low-carbon economy are definitely going to have a head start in terms of relative growth rates,” said J. Scott Holladay, an economics fellow at New York University School of Law’s Institute for Policy Integrity. “In the not-too-distant future there is going to be a huge market for green energy, and it feels like the Scandinavian countries and Germany are leading that charge, and China is quickly catching up. In the U.S., it doesn’t seem to be a huge policy priority.”

Details about the forthcoming Kerry-Graham-Lieberman climate bill are still as hazy as the smog over the San Fernando Valley. But one tidbit has already trickled out: The Senate proposal would, in all likelihood, eliminate the EPA’s authority to regulate greenhouse gases under existing law. This is something industry groups have demanded in exchange for the creation of a CO2 cap-and-trade program set by Congress. Environmentalists, by contrast, see the EPA’s Clean Air Act authority as sacrosanct. It’s possible, however, to find a compromise here.

Strictly from an economic efficiency perspective, you’re better off with either an economy-wide cap-and-trade policy or an economy-wide carbon tax,” says Michael Livermore, executive director of the Institute for Policy Integrity at New York University Law School.

Unless the carbon tax on fuel is exactly equal to the price of the permits traded between power plants — in which case it’s no different than an economy-wide cap-and-trade system — electrical companies and oil companies will have different financial incentives to offset the same quantity of emitted carbon, Livermore says.