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How California's Carbon Market Actually Works
Lasrick writes: Almost 10 years ago, California's legislature passed Assembly Bill 32, the Global Warming Solutions Act of 2006. AB 32 set the most ambitious legally binding climate policy in the United States, requiring that California's greenhouse gas emissions return to 1990 levels by the year 2020. The centerpiece of the state's efforts — in rhetorical terms, if not practical ones — is a comprehensive carbon market, which California's leaders promote as a model policy for controlling carbon pollution. Over the course of the past 18 months, however, California quietly changed its approach to a critical rule affecting the carbon market's integrity. Under the new rule, utilities are rewarded for swapping contracts on the Western electricity grid, without actually reducing greenhouse gas emissions to the atmosphere. Now that the Environmental Protection Agency is preparing to regulate greenhouse gases from power plants, many are looking to the Golden State for best climate policy practices. On that score, California's experience offers cautionary insights into the challenges of using carbon markets to reduce greenhouse gas emissions.
No, just more imported products of energy-intensive industrial processes, like steel and aluminum. It's already happening to an alarming extent in Europe for exactly that reason, with large metal-working plants (which can consume hundreds of megawatts each) getting moved overseas. Just because you can't import the electricity itself doesn't mean the resulting products have to be made in the US!
The problem described in the OP is one of several reasons why setting a fee for each ton of carbon dioxide emission is a much better idea that a cap-and-trade scheme. There are numerous other reasons, but I will only highlight the most important.
The entire purpose of either a fee or cap-and-trade scheme is to get carbon consumers to change their behavior (either doing less of things that emit greenhouse gases or by reducing the carbon intensity of the same activities). But almost all the reasonable mitigation measures have long time horizons (years to decades). In cap-and-trade, it is very difficult to predict what the price signal will be at any time in the future. So how can I, as a consumer, decide if it is worth it to buy a more efficient or electric car if there is great uncertainty in how much the carbon control scheme is going to add to my gasoline cost?
CO2 knows no borders
What you said is true, but obvious. Effectiveness on global CO2 levels aside, the CA program has been a success by other measures. They intended it to be a pilot program, and it looks like it has mostly worked out from a technical standpoint. They have demonstrated that the system is workable from an administrative and bureaucratic standpoint. Few people are silly enough to think that CO2 emissions can be handled on a local (or even national) level - but having what is effectively one of the largest economies in the world to use as an example is a pretty good start.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Centralized energy generation (including coal) is arguably cleaner and more efficient, and it's modular... it can be replaced by solar, wind, natural gas, or fusion in the long run.