May 11, 2009 - In the News
For more information contact
Michael Wara, Law Professor; Faculty Fellow at PESD
Michael Wara on lessons to be learned from the European cap and trade system
Appeared in Green Inc., New York Times, May 8, 2009
Michael Wara, a law professor and energy expert at Stanford's Program on Energy and Sustainable Development, has cast new doubts on the efficacy of the European Union's Emissions Trading System, which is the model for a carbon-capping system foreseen in the United States.
Mr. Wara wrote in an e-mail message to Green Inc. that European-based polluters were likely to have bought so many permits from carbon-reduction projects based outside the trade bloc that industries emitted roughly 1 percent more in 2008 than they did in 1990.
That date is significant because the European Union has pledged to reduce emissions compared to 1990 levels under the Kyoto climate treaty. More than 162 million tons of offsets most likely were used in 2008, wrote Mr. Wara, who said that was "just a little bit more than the 8 percent cut required by" Kyoto.
Mr. Wara's contention also is significant because separate figures issued in April indicated that the European Union system might be working by showing a decline in industrial emissions in 2008 compared to the year before.
Offsets allow companies and governments in the wealthy world to pay developing nations to make their carbon reductions for them.
In theory, these offsets allow companies to reduce emissions more cost-efficiently abroad then they would do at home. And on balance, one ton of carbon cut in Asia - where many of these offset programs are based - should have the same effect on the climate as cutting a ton of carbon in Europe.
But whether offsets work in practice is a heated debate. Environmentalists have harshly criticized many offset programs for failing to deliver genuine carbon reductions, and for making claims about reductions that are difficult to verify.
Mr. Wara said those lessons should be reflected in any cap-and-trade program in the United States, so that polluters could only use offsets of the highest quality. Mr. Wara warned that "if the offsets are bogus, we will have lots of monitoring, lots of trading, but no change in the growth of atmospheric concentrations of" greenhouse gases.
He added that European-based polluters probably would have bought many more of these offsets had there not been such a severe economic downturn.