Who’s Afraid of Cap & Trade
From The Bear Deluxe magazine: June 2009
When you cheat on your partner you add to the heartbreak, pain and jealousy in the atmosphere. Cheatneutral offsets your cheating by funding someone else to be faithful and not cheat. This neutralises [sic] the pain and unhappy emotion and leaves you with a clear conscience.
—Spoof of Cap & Trade schemes at Cheatneutral.com. “Helping you because you can’t help yourself.”
In 2007, psychologist Paul Slovic and his colleagues conducted an obscure experiment in which starving children in Mali were used to quantify the breaking point of human compassion. His findings, and those of others who research the relationship between emotion, logic and the will to act altruistically, speak ill of our efforts to solve such nebulous problems as global warming.
They speak worse still of efforts such as the faceless, abstruse, convoluted Cap & Trade scheme to reduce carbon emissions not by motivating constructive changes in human behavior, but by allowing companies to either sell the right to pollute, or “offset” pollution here with a green conscience elsewhere. Cap & Trade, it could be argued, is like combating drought and starvation in Africa by serving baked Alaska in The Hamptons.
Co-founder of Decision Research, Inc. in Eugene, Ore., Slovic doesn’t have his head in the clouds, but rather in shallow graves. His research focuses on what motivates or mitigates altruistic behavior in the face of genocide and mass atrocity, rather than on melting icecaps and the hypothesized extinction of remote polar bears. The connection is there, but, like heat, is easier felt than seen. Which is what puts Slovic (and others) on the outs with Cap & Trade in its inchoate, inhuman incarnations.
Slovic and Daniel Västfjäll at Gothenborg University in Sweden tested the will of subjects to ship humanitarian aid to emaciated Mali children, and discovered, surprisingly, that donations (and self-reported feelings of empathy) fell significantly when subjects were presented with images of two starving children, rather than a single face. Slovic’s work followed that of psychologists at Hebrew University in Jerusalem who found that test subjects were significantly less willing to act to save the lives of a group of eight children than that of the life of a single child.
Writing in the March 2007 issue of Foreign Policy, Slovic noted, “The higher the number of people involved in a crisis, other research indicates, the less likely we are to ‘feel’ for each additional death.”
And what does the will to save one rather than the many have to do with proposed legislation on global warming, with the debate over a carbon tax, with Cap & Trade and (later) refrigerator manufacturing in China? Not one thing. In the voluminous data, in the apocalyptic projections, in the calculated threats of mass extinctions and mass starvation and mass global suffering (concomitant with a statistically significant standard deviation of median annual rainfall in Sri Lanka), it is the absence of the number one, of the singularity of a breathing human being (you?), of any corporeal self, of blood and bone that makes Cap & Trade so insidious, so ethereal and inscrutable, and therefore, some argue, so irresistibly tempting to abuse—not to mention, a plague on the poor.
What is Cap & Trade? No one knows for certain. It hibernates during inflationary cycles. It rises and falls on the tides of the yen. On Wall Street it’s cloaked in a verdant, minty green. But in Patagonia, it’s brown and stinks. Jane Williams, chair of the Sierra Club’s National Air Toxics Task Force, says it’s a pile of pig shit.
A mystery, wrapped in an enigma, containing feces
Williams, co-chair of the advisory committee to the California State Air Resources Board, has been riding the national lecture circuit of late, working to deflate what she says is a “Rube Goldberg scheme to reward polluters” and further impoverish the poor. She notes that in their simplest form, most Cap & Trade proposals set a limit on the tonnage of greenhouse gases a utility or corporation is allowed to emit, but if the same entity then plants a ‘forest’ or initiates some other action that ‘offsets’ its carbon footprint, the polluter can then sell the net tonnage on the open market as a ‘credit.’
“The main problem with Cap & Trade,” she explains, “is that you can end up granting windfall profits to the worst polluters. The ones that pollute the most get the most credits, and that gives them the opportunity to sell them. Rather than invest in technology or better practices to reduce pollution, you’re rewarded by being allowed to sell it.”
According to a report issued by Carbon Trade Watch this January, abuse of the emissions trade system in Europe has gutted the price of carbon credits on the continent. It’s led some of Europe’s biggest polluters to cash in their credits “in order to aid failing balance sheets.” The group alleges that companies such as Lafarge, the world’s largest cement producer, netted more than $1 billion in Euros not by reducing their emissions, but through direct sale of carbon credits.
The most egregious schemes under Cap & Trade, Williams alleges, are no better than a corporate shell game. “We’re already seeing incredible abuses,” Williams says. “Under the use of offsets, we’ve seen a company claim CO2 credits in the U.S. by covering a pile of pig [feces] in Patagonia. They took a tarp and covered some crap in South America, reduced the CO2 emissions, then got to emit more carbon in North America.”
Williams, founder of California Communities Against Toxics, headquartered in Rosamond, Calif., says she’s also reviewed proposals by companies vying for carbon credits by building incinerators on the banks of the Ganges River in order to reduce the CO2 emissions from the funerary pyres of burning Hindus. She also alleges that Chinese manufacturers, upon discovering that hydrochlorofluorocarbons (commonly known as HCFC’s—used in the production of refrigerator coolant) held 1700 times the global warming potential of CO2, stepped up their production of the noxious chemical in order to capture it and then claim the ‘offset’ as a carbon credit.
According to the United Nations Environment Programme, of the 26,940 tons of HCFC’s produced globally in 2006, “China was responsible for just over 90 percent.”
Cap & Trade has been put forth as a market that will create innovate and change,” Williams claims, “but what it’s really done is create innovation in corruption. We haven’t seen innovative technologies to combat the problem. What we’ve seen are all these incredibly innovative ways to corrupt the system.”
Amory B. Lovins, co-founder of the Rocky Mountain Institute and whom Newsweek termed “one of the Western world’s most influential energy thinkers,” seems lukewarm on Cap & Trade, but believes if might work “if properly regulated.”
Lovins warns against adopting a Cap & Trade policy—which the Obama Administration appears to favor over a carbon emissions tax—that ignores the behavior of the individual, while rewarding large corporate polluters. “We have the problem in this country of ancestor worship,” explains Lovins, “exhibited thru grandfather clauses. In a Cap & Trade system it’s tempting to issue free allowances not for the guy who’s driving a more fuel-efficient car, but for a corporation. It’s tempting to simplify who gets credit, just to make the bookkeeping simple, but if you’re not careful, that can destroy the incentive for widespread change.”
Again, the issue is whether Cap & Trade will work if it only addresses corporate behavior, not that of the individual. Ben Henneke, a member of the EPA’s Clean Air Act Advisory Panel since 1991, believes that Cap & Trade fails to address industries that, despite any scheme to reduce emissions, are working to offset the offsets. “We cut down the equivalent of a Great Britian every year in the tropics,” explains Henneke, president of the nonprofit group Clean Air Action, in Tulsa, Ok. “That’s 20 percent of all the greenhouse gas emissions. The only thing bigger than that is if you add up [the impact of greenhouse gas emissions from] all the power plants around the world.”
Williams argues that as bad as Cap & Trade appears (to some), a carbon tax on fossil fuels (including gasoline, naturally) would be worse, due to its disproportionate effect on the poor. “A person who is poor and living in L.A. isn’t driving a Hummer,” she scoffs. “They might not be driving at all. When you go into a home in South Central, you’re not going to see three plasma screen TV’s and you’re not going to see a huge refrigerator.
When you increase the cost of electricity relative to carbon emissions, you’re not going to decrease the energy consumption of the poor. They’re already at rock bottom. All you’re going to do is make them worse off. Poor people are fairly inelastic in their use of electricity and gasoline.”
Republican Congresswoman Michele Bachmann of Woodbury, Minn. appears even more vehemently, if not militantly, opposed to a carbon tax. During a March radio interview, on WWTC Radio in Eagan, Minn., Bachmann told voters in the Gopher State, “I want people in Minnesota armed and dangerous on this issue of the energy tax because we need to fight back. Thomas Jefferson told us, ‘Having a revolution every now and then is a good thing,’ and the people—we the people—are going to have to fight back hard if we’re not going to lose our country.”
Washington Senator Maria Cantwell (D) has also expressed reservations about Cap & Trade’s potential for abuse. Chair of the Senate Energy and Natural Resources Committee’s energy subcommittee, Cantwell told the Kansas City Star April 19 that Cap & Trade” might allow Wall Street to distort a carbon market for its own profits.”
But in Oregon, Cap & Trade has an advocate in Democrat Jeff Merkley. According to Marc Siegel, deputy communications director for the state’s freshman senator, Merkley “understands that climate change is one of the foremost challenges of our time.” The senator’s “preferred approach includes a mandatory cap on carbon as well as robust policies to support renewable energy, energy conservation, advanced vehicles, and public transportation.” Merkley has no serious concerns regarding the junk-bonding of carbon credits, or similar schemes to abuse the system, Siegel adds, “as long as any trading market has strong provisions to provide public oversight.”
Williams stands by her claim that Cap & Trade greenwashes our overreliance on fossil fuels, and thus circumvents significant reductions in greenhouse gases. “What this debate needs to be about is not the numbers, not how the market works, but about changing the way we produce and use fossil fuels.”
She points to the initially optimistic projections on Cap & Trade pitched by the European Union, which has since heavily divested in green-incentive programs, undercutting the value of carbon credits throughout Europe and Asia. The EU withdrew green-construction funding from Russia after it invaded breakaway province of Georgia in August of 2008, and consequently, Williams notes, the overzealous Great Bear has now proposed a minimum of 40 new coal-fired utility plants. “These companies might try to offset the impact of building those plants, but they shouldn’t be allowed to claim credits for making more pollution.”
Williams adds, “I had an economics professor at UCLA who said it best. Nothing is foolproof because we fools are so damned ingenious. Never underestimate the genius of people who can make money doing something that doesn’t make any sense.”
$1 billion Euros? 26,940 tons of HCFC’s?
Slovic sighs, “Those numbers bounce off us, like the numbers of dead in Darfur bounce off us. They work against the idea of individuals acting effectively. I’m a bit skeptical that we can fight global warming by talking about numbers.
“We could act in Darfur, but for the past seven years we’ve been paralyzed, and we’re talking about tens of thousands of dead. What kind of language could we employ to help people understand that individuals have to act? Maybe if we didn’t talk about Cap & Trade, tons of carbon. Maybe if we talked about Freedom. People aren’t going to give up their lives for carbon, but freedom! Now there’s something they’re willing to die for.” The End