Well, duh.
From the DOE/Lawrence Berkeley National Laboratory
New research suggests cap and trade programs do not provide sufficient incentives for innovation
Cap and trade programs to reduce emissions do not inherently provide incentives to induce the private sector to develop innovative technologies to address climate change, according to a new study in the journal Proceedings of the National Academy of Sciences.
In fact, said author Margaret Taylor, a researcher at Lawrence Berkeley National Laboratory (Berkeley Lab) who conducted the study while an assistant professor at the University of California, Berkeley’s Goldman School of Public Policy, the success of some cap and trade programs in achieving predetermined pollution reduction targets at low cost seems to have reduced incentives for research and development that could help develop more appropriate pollution control targets. Taylor is a scientist in the Environmental Energy Technologies Division of Berkeley Lab.
“Policymakers rarely see with perfect foresight what the appropriate emissions targets are to protect the public health and environment—the history is that these targets usually need to get stricter,” said Taylor. “Yet policymakers also seldom set targets they don’t have evidence that industry can meet. This is where R&D that can lead to the development of innovative technologies over the longer term is essential.”
In the study, Taylor explored the relationship between innovation and cap and trade programs (CTPs). She used empirical data from the world’s two most successful CTPs, the U.S. national market for sulfur dioxide (SO2) control and the northeast and mid-Atlantic states’ market for nitrogen oxide (NOx) control. (Respectively, Title IV of the 1990 Clean Air Act and the Ozone Transport Commission/NOx Budget Program.)
Taylor’s research shows that before trading began for these CTPs, analysts overestimated how difficult it would be for emissions sources to achieve targets, in a pattern frequently observed in environmental health, safety, and energy efficiency regulation, including all of the world’s CTPs. This was seen in overestimates of the value of allowances, which are permits to release a certain volume of emissions under a CTP. If an entity can reduce emissions cheaply, they can either sell these allowances for whatever price they can get on the market or they can bank these allowances to meet later emissions restrictions.
The cap-and-trade programs Taylor studied exhibited lower-than-expected allowance prices, in part because program participants adopted an unexpected range of approaches for reducing emissions sources in the lead-up to trading. A large bank of allowances grew in response, particularly in the SO2 program, signaling that allowance prices would remain relaxed for many years.
But this low-price message did not cause the policy targets in the CTPs to change, despite evidence that it would not only be cheaper than expected to meet these targets, but it would also be more important to public health to tighten the targets, based on scientific advances. The lower-than-expected price signal did cause emissions sources to reassess their clean technology investments, however, and led to significant cancellations, Taylor reported.
Meanwhile, the low price also signaled to innovators working to develop clean technologies – which are often distinct from the emissions sources that hold allowances – that potential returns to their research and development programs, which generally have uncertain and longer-term payoffs, would be lower than expected.
This effect also helps explain the study’s finding that patenting activity, the dominant indicator of commercially-oriented research and development, peaked before these CTPs were passed and then dropped once allowance markets began operating, reaching low levels not seen since national SO2 and NOx regulation began in 1970.
“There are usually relatively cheap and easy things to do at the start of any new environmental policy program,” said Taylor, who specializes in policy analysis, environmental and energy policy, and innovation. “But if doing these things has the tradeoff of dampening the incentives for longer-term innovation, there can be a real problem, particularly when dramatic levels of technological change are needed, such as in the case of stabilizing the global climate.”
Lawrence Berkeley National Laboratory addresses the world’s most urgent scientific challenges by advancing sustainable energy, protecting human health, creating new materials, and revealing the origin and fate of the universe. Founded in 1931, Berkeley Lab’s scientific expertise has been recognized with 13 Nobel prizes. The University of California manages Berkeley Lab for the U.S. Department of Energy’s Office of Science. For more, visit www.lbl.gov.
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How do these guys calculate best fit line (RSS Graphs)?
http://www.remss.com/msu/msu_data_description.html#channels TLT
Should they not now be thinking of readjusting it?
LazyTeenager says:
March 18, 2012 at 2:58 pm
“So the message is:
1. Don’t underestimate the ability of free enterprise to innovate and to comply with policy requirements at low cost, even if they complain bitterly ahead of compliance.
2. Innovating to reduce carbon emissions will not be as expensive as many people expect and therefore will have minimal impact on the economy.
So now we have evidence that all that handwringing you guys were doing is not “worse than we thought”. No surprises there for me.”
LazyTeenager, here in Europe we DO have Cap&Trade; and in Germany, skyrocketing electricity prices due to renewables. Now how DO companies adapt to such a regime? As you have noticed they adapt quickly. One such adaptation is currently happening in Duisburg, where Thyssen Krupp sells their steel mill to the Finnish Outokumpu who will shut it down, dismantle it and move it somewhere else. ThyssenKrupp plans to get out of steel completely.
Of course, this frees up some carbon credits for the remaining industry and also helps to reduce electricity usage, as unemployed steelworkers only need a little electricity to run their playstations.
THAT’s “the ability of free enterprise to innovate and to comply with policy requirements at low cost” for you.
Too much power is in hands of the wrong people. I think it is time to take it away from them before they destroy it all.
Clearly a person who is logically irredeemable with nothing that he/she will not rationalize in support of the CO2 religious cult. Oh the irony of alarmist handwringing and bedwetting over forcings and tipping points while completely disregarding others …
Scenario A :: theoretical environmental forcings conspiring to tip the climate into a catastrophic condition. This is what the climate cult chooses to fret about.
Scenario B :: a gravely teetering economy submerged in hundreds of TRILLIONS of dollars red ink debt and future liabilities, ongoing job destruction, outsourcing, unemployment, rising fuel prices, extravagant welfare spending and not-even-yet implemented obamacare. THIS is cavalierly targeted for a carbon tax that will affect every remaining product and job that exists. This is what the climate cult chooses to rationalize, likely as an acceptable casualty of war.
The complete and utter destruction of the economy and America itself will be the only possible result if we keep voting for people that are representative of this commenter, and there are far too many still in place in our District Of Criminals. They are like drunk drivers that drink more and more, then get in the car and drive faster and faster. Nothing will ever penetrate their inebriated ‘thought process’. You must take the car keys away. Vote them out next chance you get!
Apples and oranges. Just because controling SO2 and NOX were relatively easy doesn’t mean controling CO2 will be.
An artificial market manipulation will always yield poorer results than the self-regulatory market forces will bring to bear. But that’s too damn hard to comprehend for those who don’t participate in a market.
Given a 50/50 choice on incentives, Government will make the wrong choice 99% of the time.
18 March: UK Register: Microsoft signs up Aus eco geeks
Australian cloud computing eco-warrior Carbon Systems has scored its most significant deal to date with a global Microsoft agreement.
Carbon Systems’ Australian developed cloud app, Enterprise Sustainability Platform (ESP), will be implemented across Microsoft’s 600 global facilities across 110 countries…
The privately owned and funded Australian company with digs in London, New York and Sydney, started in 2004 developing its core technology for electricity smart meters readings.
The company has also been supported by business incubator ATP Innovations and now has over 110 clients globally, 25 of which have stemmed from the sustainability software market which the company entered three years ago…
http://www.theregister.co.uk/2012/03/18/carbonsystems_wins_microsoft_deal/
Carbon Systems: Executive Team
http://www.globalcarbonsystems.com/About/Executive-Team.cfm
Bastiat long ago drew attention to the foolishness of imagining that any cadre of ‘crats, no matter how numerous, could possibly monitor and allocate the resources as effectively as the private parties directly concerned. The attempt to force unreal prices onto marketplaces is the worst of such interventions. The consequences are immediate, drastic, and contrary to those desired.
The Invisible Hand has brass knucks, and will inflict mortal uppercuts and right crosses to those who try to substitute their own clumsy fiddling.
Not exactly true….as an engineering consultant who tried to help some of these idiot carbon-credit-aggregator companies in hey-dey of the Kyoto Clean Development Mechanism, I came up with plenty of innovations that would have saved money for the clients and greatly improved their odds of making obscene profits from these projects. Mostly these were manure biogas projects in Asia and Latin America. Cool stuff, we have pig farms in the Philippines that produced 100% of their electricity from the pig manure fumes!
However, I was dealing with bean-counters and university washouts who had no idea of industrial equipment, elementary physics, chemistry, biology etc. Oh well, it was fun while it lasted!
18 March: EarthTechling: Kristy Hessman: Carbon-Cutting Kids Cop Cool Cash
Helping reduce carbon emissions is not only good for the environment, it can also have financial advantages. That’s what the schools that participated in Make an Impact: Change Our 2morrow (CO2) discovered. The month-long energy conservation challenge, put on by Alcoa Foundation and the Center for Climate and Energy Solutions (C2ES), ended with six of the eight schools winning grants totaling $9,000.
The Gilbert School in Winsted, Conn., won the grand prize. The school completed a whopping 793 percent of its pledge list, according to the competition’s leader board. The school was rewarded with a $5,000 grant for engaging the most students, teachers, families and community members…
Regional runner-up schools included…ETC
http://www.earthtechling.com/2012/03/carbon-cutting-kids-cop-cool-cash/
LazyTeenager says:
March 18, 2012 at 2:58 pm
So the message is:
1. Don’t underestimate the ability of free enterprise to innovate and to comply with policy requirements at low cost, even if they complain bitterly ahead of compliance.
2. Innovating to reduce carbon emissions will not be as expensive as many people expect and therefore will have minimal impact on the economy.
So now we have evidence that all that handwringing you guys were doing is not “worse than we thought”. No surprises there for me.
_______________________________________
You forget there is a cost associated with all those regulations. For one thing you have to hire someone to handle all the paperwork and someone else to handle taking samples and sending them out for testing BTDT. That cost never ever goes away.
The cost of all this gets then passed onto the consumer because the company IS going to make a profit or close its doors. For example it used to be that diesel fuel was a heck of a lot cheap than gasoline. Now, in my area it is a good $0.38 more expensive. That is a 10% additional “tax” at the pump we as consumers are not even aware of.
Second thanks to all the regulations since the 1970’s, manufacturing jobs have gone from 24% of the job force to less than 9% the last time I looked and that was before the recession.
Free Trade Agreements combined with expensive energy and stringent regulations means business has fled the USA or gone under. And that means NO JOBS or rotten paying jobs as burger flippers and shop keepers. See: Largest American Employers
U.S. unemployment is ~ 23%
It means the US Gross Domestic Product Growth is near zero ~ 1%
And our balance of trade as a result is deeply negative: graph
In short the USA is in deep doodoo and sinking.
Even a liberal blog like smirkingchimp can see that: Make It In America: How We Can Bring Manufacturing Back (No, Really)
And so can economists.
WARNING: This is not a joke:
18 March: GreenProphet: Miriam Kress: Christians Take on Carbon Fast for Lent
Among other eco-conscious Church leaders, the Archbishop of York has gone vegan and fair-trade for the duration of Lent…
And recently, churches are encouraging their congregations to take on an innovative Lenten sacrifice. It’s called the Carbon Fast.
Congregants are encouraged to take simple, carbon-reducing steps like eating less meat. (Our vegewarian recipes, like this risotto, give some good ideas for meatless meals.) Or packing groceries in reuseable bags instead of using that eco-menace, plastic bags. Walking, bicycling, or riding a bus rather than driving. You get the idea. These churches provide weekly calendars with suggestions and tips for carbon reduction, each paired to a spiritual goal. An intriguing example is, “Remember your baptism and the power of water. Conserve water: leave a bucket near the kitchen sink and water your plants with grey water.”…
This year communities in Canada, the Netherlands, India, Hong Kong, Australia, and Brazil are observing Carbon Fast.
Fully aware that individual acts must eventually lead to popular support for green legislation, Tearfund still calculates that the Carbon Fast’s actions, taken over the whole year, might save more than 7 tons of CO2 per person. This article in The Center for American Progress reports that 6000 people committed to last year’s Carbon Fast. With promotion through social media plus adaily carbon-lowering tip in congregant’s email inboxes, there should be even more this year. That sounds powerful.
Tomorrow’s interfaith convention on climate change and sustainable energy in Jerusalem promises to bring forward the power of religion in effecting eco-consciousness…
http://www.greenprophet.com/2012/03/christians-carbon-fast-for-lent/
Pretty soon the government will be wanting to run the entire country.
And an endless stream of non-jobs from AGW. People paid to write proposals to ‘solve it’; others paid to criticise the proposals as inadequate; yet more paid to criticise the critics as underestimating the inadequacies….
The 21st Century will see the undoing of centuries of upward civilisation if we carry on like this.
Don’t forget that the present administration uses the EO (executive order ) to pass anything they desire ,so a cap and trade or something similar could be on the way.
The whole theory presupposes that there is a viable alternative form of energy and that its just a matter of developing the technology to implement it. Hobbling competition may make that development more likely.
However, when the same government hobbles or even bans the only promising alternatives which are just waiting for development, supposing that something else is miraculously going to appear out of thin air, or maybe that a Vulcan spaceship is going to drop by and give us the secret of unlimited energy, then the results are predictable.
The so-called renewables (so called, because NOTHING is renewable, entropy will get it all in the end) such as wind and solar are non-starters for anyone that cares to invest a few moments of real thought.
The real alternatives, gas and oil from fracking, oil from tar sands, hydro electricity and, of course, nuclear energy are all forbidden.
The only thing that cap and trade in combination with these prohibitions will deliver is a broken energy industry, unreliable power, economic collapse, misery despair, famine, plague and death.
Cap-and-trade would have been run by the likes of these:
http://www.theaustralian.com.au/business/financial-services/outgoing-goldman-vp-lambasts-bank-for-calling-clients-muppets/story-fn91wd6x-1226299973997
Excerpt:
NVESTMENT banking titan Goldman Sachs has become a “toxic and destructive” firm focused on milking clients for everything it can, a resigning executive director said overnight in The New York Times.
Greg Smith said the Wall Street giant, which paid huge penalties for double-dealing with investors in mortgage securities during the financial crisis, had dumped its old culture of honestly helping its customers make money.
Today, instead, customers are called “muppets” by top executives and staff talk about “ripping their clients off”, Mr Smith wrote in an opinion piece.
=====================
Is treason to strong a word ?
So the message is: blah, blah, blah, more bafflegab.
The delusion is crashing down. If you believe in the problem to begin with, where is the solution? Every green fantasy has been pursued without any tangible result other than the waste of resources, capital and human effort. Most people would support research into a new energy source. Where is it? So far it has been dead ends and con jobs. Most of the ideas are so silly you would have to be very stoned to even consider them. Thorium is the flavour of the month but it has serious problems that may never be solved. More research, maybe, but don’t count any chickens.
The enviro movement won the day but they are lost now. None of their plans actually work. The hard part now is admitting the failure. That may take some time. The only thing that would meet their goals is a massive population cull. That one is a non starter I hope. Way too much work.
The toll booth approach doesn’t seem to be working for the klepto-bureaucrats here.
Expect something more hidden, like the fees Europe is imposing on airlines.
Obama get’s Ping Pong table made in China, Cameron gets Barbeque made in USA. So much for CO2 and global warming. I think a Hallmark card would have been sufficient. DAISNAID. http://www.telegraph.co.uk/news/politics/david-cameron/9151444/David-Camerons-table-tennis-table-gift-to-Barack-Obama-made-in-China.html
“It was a gift that David Cameron chose to represent the best of Britain on his recent visit to meet Barack Obama in Washington.
But far from showcasing the wealth of talent in UK manufacturing, the £600 Dunlop tennis table presented to the US President was reportedly made abroad.
Downing Street had insisted that the “truly British” product was a fitting gift in the run up to the London 2012 Olympics.
However, it has been found that although the ping pong table was “designed and branded” in the UK, it was actually manufactured in China. “
Brian H says:
March 18, 2012 at 5:13 pm
Bastiat long ago drew attention to the foolishness of imagining that any cadre of ‘crats, no matter how numerous, could possibly monitor and allocate the resources as effectively as the private parties directly concerned. The attempt to force unreal prices onto marketplaces is the worst of such interventions. The consequences are immediate, drastic, and contrary to those desired.
The Invisible Hand has brass knucks, and will inflict mortal uppercuts and right crosses to those who try to substitute their own clumsy fiddling.
_______________________________________
The whole idea of bureaucratic fiddling and regulations is to divert money from the producing classes to the pockets of the a href=”http://joannenova.com.au/2012/03/climate-coup-the-politics/”>Regulating Classes.
As far as the Regulating Classes are concerned the producing classes aka “the average joe” are sheep to be sheared and if recent events are any indication they could care less if a few million of us die because of there economic manipulations.
How Goldman Sachs Created the Food Crisis
Results of the 2008 price spike
Hunger and deaths: http://www.heartsandminds.org/poverty/hungerfacts.htm
And we turn corn into ethanol to burn in our cars so Monsanto, Cargill, Archer Daniels Midland, could make record breaking profits.
Craig Moore says: Are you suggesting that Mr. Swift would have approved of climate Lilliputians being roasted on kabob sticks as a means of carbon reduction ?
What a horrible idea, Mr. Moore! The very idea of putting them on kabob sticks! Much better as a nice stew with taters. They are much too tough to make kabobs of them.
[Do I really need a /sarc on this???]
CRS, DrPH says:
March 18, 2012 at 5:16 pm
…… Cool stuff, we have pig farms in the Philippines that produced 100% of their electricity from the pig manure fumes!
However, I was dealing with bean-counters and university washouts who had no idea of industrial equipment, elementary physics, chemistry, biology etc. Oh well, it was fun while it lasted!
________________________________
Neat!
I knew a farmer who ran his Pick-up on Chicken Manure…. I keep looking at that manure pile I have sitting off in the woods.
The bean-counters are very very frustrating to work with. In desperation I took accounting courses so I had a chance of arguing successfully with them at least part of the time.
The only innovation is to learn how to trade a new derivative, CO2 for profit. Better to sell the business to China/India/Brazil/Russia and trade carefully with the profit. No running costs, no regulation red tape, no union troubles or delivery delays etc etc etc. Just you the trading platform and the tax office.