Environmental Law Blog
Climate Change Consensus?
The U.S. Government Accountability Office released its Expert Opinion on the Economics and Policy Options to Address Climate Change to the U.S. Congress (and the public) last May. All of the experts assembled by the GAO agreed that Congress should consider using a market-based mechanism to establish a price for greenhouse gas emissions. Fourteen of the eighteen experts further recommended additional emissions curbing actions to address climate change, such as investment in research and development of low-emissions technologies.
Most experts preferred a basic tax on emissions, but some considered a hybrid market-based option that involves both an emissions tax and a cap-and-trade emissions system. In a cap-and-trade system, companies are assigned a maximum allowable emission rate, or cap. Companies can then "bank" under-cap emissions for future use. Companies also have the option to trade under-cap emissions for a price determined by the market. Experts believe that the emissions trade price should be set somewhere between $1 and $20 until the market stabilizes in order to spur initial participation.
The report indicates that the GAO was particularly concerned about the potential impacts of elevated levels of greenhouse gases in the Earth's atmosphere, such as rising sea levels and a shift in the intensity and frequency of floods and storms. The implementation of a market-based mechanism would likely curb these potentially catastrophic effects of global climate change.
On the other hand, the GAO also noted the increase in energy costs that would likely result from the costs of an emissions tax or cap-and-trade system. Altogether, the GAO felt the benefits to the environment outweighed the costs.
In light of the continued controversy surrounding the science and politics of climate change, what effect do you think the GAO's report will have on the average Missourian's opinion about the government's role in preventing climate change?