cap and trade and the economic effects
Post on 05-Jan-2016
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By: Brandi Thompson, Cody Vojacek, Seth Wenninger, Kelly White
Greenhouse Effect“The phenomenon whereby the earth's
atmosphere traps solar radiation, caused by the presence in the atmosphere of gases such as carbon dioxide, water vapor, and methane that allow incoming sunlight to pass through but absorb heat radiated back from the earth's surface.”
1st discovered in the 19th century Gained attention in the 1960’s when it was
hypothesized to be increasing global temperatures.
Carbon Dioxide is being targeted 0.038% of atmosphere Prior to Industrial revolution - CO2 - 280 ppm Now - CO2 – 360 ppm
Burning of fossil fuels, mineral and metal production, deforestation
Global WarmingMany scientists believe increased CO2
emissions are increasing global temperatures.World temperature has increased 1°F since 1970.Increased melting of glaciers and arctic ice
shelvesDecreased animal populationsFears:
Rising sea levels Hurricanes, storms, floods, droughts Disease Ecosystem disruption
Kyoto Protocol160 nations met in Kyoto, Japan in 1997“The goal is to lower overall emissions from
six greenhouse gases - carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, HFCs, and PFCs.”Goal was to reduce total emissions by 5.2% of
the 1990 level.Entered into force in 2005 with 187 countries
ratifying.
United States PositionDid not ratify Kyoto protocol due to harmful
effects on economyThe Bush administration offered incentives to
businesses to voluntarily reduce emissions. There have also been incentives for
companies to produce and use renewable energy.
Cap and Trade BillIn June, 2009 U.S. House of Representatives
passed the American Clean Energy and Security Act of 2009.Requires 20% of electricity to be renewable by
2020.Improve energy productivity by 2.5% by 2012Establishes a cap and trade system
Cut emissions by 17% of the 2005 level by 2020 and by 83% by 2050.
Cap and Trade SystemGovernment sets limit (cap) of emissionsCompanies are required to buy permits or
allowances to emit gasses, most importantly CO2.
If they emit more than they are allowed, they are taxed.
Companies can sell or trade their allowances to other companies
Each year the nationwide cap is lowered.
The bill now has to be voted on in the senate.Support has greatly fallen in the last few
months.Republicans are nearly unanimous in their
disapproval.A growing number of democrats and most
independents disapprove.
Pros of the Cap-and-Trade Bill
Limiting total U.S. emissions of carbon dioxide
- An effort to prevent threatening weather conditions in the Midwest farm states, massive coastal flooding, and frequency in Gulf coast hurricanes.
-Reduce carbon emissions by 65% 0f 2005 levels.
Pros of the Cap-and-Trade Bill
Provides bonuses for companies
- Companies can sell unused carbon credits to other companies who have not met the goals.
- Offers bonus allowances for carbon capture and storage.
Cons of the Cap-and-Trade Bill
Driving already rising energy costs even higherObama: Energy prices will “skyrocket.”
- Higher prices cause lower industrial output - Greater competition from overseas
manufacturers. - The loss of thousands of jobs.
Cons of the Cap-and-Trade BillAdding devastation to an already weak economy
- Disposable household income would decrease by up to $6,000 by 2030.
- Gasoline prices would increase by almost 100% by 2030.
- Electricity prices would increase by over 100%.
- School and hospitals will experience a tremendous expenditure increase.
Cons of the Cap-and-Trade BillUnfairly targets U.S. manufacturers - Industrial sectors will pay twice through
additional costs of carbon embedded in energy purchases and higher costs of natural gas and electricity.
- Industry sectors carbon emissions have risen 2.6% since 1990.
- Residential sectors carbon emissions have risen 29% since 1990.
Our Proposal
In response to cap and trade legislation
Suspend Cap and Trade If…Gas prices reach $5 per gallonElectricity increases beyond 10% of prices in
2009Unemployment increases to 15%
Prevent companies from placing full burden on consumers
Without Fuel LimitationCost of living increasesWages will not increase since profit is not
increasingCNS News
Gas expected to rise to $4.50 by 2050With cap and trade
Gas increases to $4.50 by 2030; $5.50 by 2050
Electricity IncreasesGradual increase is naturalDramatic increase harms small businesses
and consumersSmall businesses may close as result of rising
costs Not enough profit to compensate
Consumers Natural increase projected at $0.04 by 2050 With C&T: Increases of 22% by 2030
Unemployment LimitationRestricts unemployment from increasing
beyond: 15%Current rate of unemployment: 10%Natural rate of unemployment: 5%
Additional LegislationGovernment can outline expectationsRequire companies to take responsibilityConsumers should not have to accept full
transfer of costs
Other Alternative• GOP’s Energy Alternative
• American Energy Act• Idea by Pence, Shimkus, and Upton; 3
Republican congressman• Controls CO2 emissions by increasing supply of
carbon free nuclear energy• Establishes a goal of licensing 100 new nuclear
reactors• Revitalize an entire manufacturing sector-
creating hundreds of thousands of jobs• Burdensome regulatory process-fast track
approval program for PP applications
Disposal of wasteSafe storage for spent fuel rodsFuel recyclingNuclear Regulatory Commission can finish
review of national repository without political interference
Gov’t prevented from blocking storage facilities from private company contracts
Own Natural ResourcesAreas in the US are off-limits Allows exploration in the Arctic National
Wildlife RefugeEnvironmentally safe leasing of oil and
natural gas fields in the outer continental shelf in the west.
Revenues from the leases would fund development of tech. to increase clean, renewable energy sources (Wind and solar)
IncentivesBill offers tax incentives for purchases of new
plug-in cars and hybrid vehiclesExpands the successful tax incentives that
have encouraged homeowners to make their homes more energy efficient
http://www.youtube.com/watch?v=yeALwQtJa0E
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