In proposing mandatory caps on the greenhouse gases linked to global warming and a system for auctioning permits to companies that emit them, President Obama is taking on a huge political and economic challenge.

And while a cap-and-trade approach bears substantial cost, it also brings a benefit whose value is incalculable — a steady decrease in emissions that scientists say will over time reduce the risk of climate catastrophe.

Business lobbies and many Republicans raised loud objections to the cap-and-trade program Mr. Obama proposed as part of his budget this week, saying the plan amounted to a gigantic and permanent tax on oil, electricity and manufactured goods, a shock they said the country could not handle during economic distress.

Green groups and supportive members of Congress applauded, saying the proposal was long overdue after eight years of inaction on climate change under President George W. Bush. The costs, they said, would not begin to bite until at least 2012.

But the full costs and benefits of controlling greenhouse gas emissions remain unknown, and perhaps unknowable. While there is rough consensus on the science of global warming — with some notable and vocal objectors — there is less agreement on the economics of the problem and very little on the policy prescriptions to address it. And while a cap-and-trade approach bears substantial cost, it also brings a benefit whose value is incalculable — a steady decrease in emissions that scientists say will over time reduce the risk of climate catastrophe.

Mr. Obama’s budget estimates $645 billion in cap-and-trade revenue over the next 10 years that will largely be paid by oil, electric power and heavy industries that produce the majority of carbon dioxide and other gases blamed for the warming of the planet. Many of these costs are expected to be passed on to consumers.

But Mr. Obama offered a sweetener in the form of tax relief for lower- and middle-income families and billions of dollars in new spending for renewable sources of power to cut emissions and ultimately, it is hoped, bring down the cost of energy. He also plans to spend billions to weatherize homes to bring down heating costs for the poor.

Congress has debated versions of a cap-and-trade regime for years but never enacted one, in part because it would become so complex. The House is working on such legislation now; Senate leaders promise action later this year. Mr. Obama laid out only broad principles and targets, and his aides admit that revenue estimates are only a rough guess and will depend on whatever emerges from Congress. The White House projects the program to be in place starting in 2012.

http://www.nytimes.com/2009/02/28/science/earth/28capntrade.html

Economic pressure is changing the climate-change policy debate around the world—except maybe in the United States. President Barack Obama came out of his Feb. 19 meeting with Canadian Prime Minister Stephen Harper sounding remarkably similar to his predecessor. Obama resolved to pursue carbon-capture technology, a system that would allow industry to avoid cutbacks in energy use. He also stated that the participation of China and India are “absolutely critical” for the success of any worldwide energy pact, a position that echoes the Bush administration if not the existing Kyoto Protocol. Sagging markets are leaving large Kyoto-adhering European companies with loads of carbon credits to sell off without any need to alter their emitting practices. And the UN has warned that the global credit crunch threatens to dry up funds pledged from wealthy nations.

http://www.worldmag.com/articles/15081

On September 18-19, 2008, the Belfer Center’s Energy Technology Innovation Policy (ETIP) research group convened leaders from academia, research centers, government, business, and non-governmental organizations for a major conference on U.S. energy policy, titled Acting in Time on Energy Policy. The conference was co-sponsored by the Consortium for Energy Policy Research at Harvard and the Harvard University Center for the Environment. Conference attendees discussed future energy policy directions in six main areas: global climate change, carbon capture and storage technology, oil and transportation, energy technology innovation, electricity, and leadership.

This seven-minute video captures the essence of the event and highlights recommendations given by participants during each of the six panels. A book, also titled Acting in Time on Energy Policy, edited by Kelly Sims Gallagher, Director of ETIP, and to be published by Brookings Institution Press this spring, will offer readers a comprehensive summary of the conference and versions of the presented papers. More information about the book can be found on the Brookings Institution Press website at: http://www.brookings.edu/press/Books/…

For more information and press inquiries, please visit the Belfer Center website: http://belfercenter.org

 ”Over the next two weeks [Gordon] Brown’s government will shape an international deal that could settle whether we conquer climate change, or let the planet cook. The UK needs to … lead all developed countries in committing to cutting their greenhouse gas emissions by 40% by 2020.”

“..Electricity generation is likely to be based on renewable energy, nuclear power and coal with carbon capture…”

http://www.guardian.co.uk/environment/2008/dec/01/carbon-emissions-electric-energy-climate-change/print 

Important decisions about the future of coal power in Britain are likely to be made today when the government’s climate change committee sets out plans to de-carbonise the economy.

The committee will publish its first report recommending how Britain can achieve its target of cutting greenhouse gas emissions by 80% by 2050, which could eventually see the country ending almost all fossil fuel use to generate energy or run cars and public transport.

It will also urge quicker development of carbon capture and storage for coal power, and recommend whether government should allow coal plants to be built before the technology is fully developed.

Environmentalists hope the committee will set emissions standards from about 2020 which would force coal plants to fit at least some capture equipment, possibly with increasingly tough limits.

Critics believe such a move would make it too risky or expensive to proceed with a coal-fired power station at Kingsnorth, Kent, and up to seven others, unless the technology has been proved to work.

Jeff Chapman, chief executive of the Carbon Capture and Storage Association, said with enough government financial support there could be partial trials by 2015 and full capture in 2020.”We’ve talked the talk, now it’s walk the walk time,” he said.

Under the climate change bill, which received royal assent last week, Britain set the world’s first legally-binding target to cut emissions of CO2 and other greenhouse gases. The climate change committee will recommend interim targets up to 2022, taking into account both the 2050 target and the EU’s pledge to reduce emissions by 20-30% by 2020. Friends of the Earth has urged the committee to ask for a 40% cut by 2020.

The report, Building a Low Carbon Economy – Britain’s Contribution to Tackling Climate Change, will set out a transformation of Britain’s economy, including widespread reliance on electric energy for homes and industry, and to power transport.

Electricity generation is likely to be based on renewable energy, nuclear power and coal with carbon capture.

The committee will suggest what proportion of cuts can be “bought” as credits for overseas carbon-reduction schemes, and how the interim targets should be increased to account for emissions from aviation and shipping.

An interim report this year estimated the cost of meeting the 2050 target would be 1-2% of GDP. Ministers are due to respond to the full report in March.

The report comes as international talks on a climate change treaty resume today in Poznan, Poland. The negotiations aim to set the stage for a deal in 2012 on global warming to succeed the Kyoto protocol, which needs to be agreed by this time next year at a meeting in Copenhagen. Insiders say the Poznan talks are not expected to produce a breakthrough, as negotiators will wait for the new US administration to declare its intentions.

Yvo de Boer, executive secretary of the UN climate secretariat, said the Poznan meeting was not likely to be “exciting” but important progress could be made on issues such as how rich countries help the developing world cope with the impact of climate change.

“The whole issue of adaptation needs to be taken off the back burner and receive a lot more serious attention,” he said. The talks could also work out a way to pay tropical countries to protect their forests, as a cost-effective way to tackle rising CO2 emissions despite fears from green campaigners that a lack of land rights could see the money diverted.

The Poznan talks follow a meeting in Bali last December where countries agreed to formally negotiate a new treaty. Analysts say it needs to be agreed at Copenhagen for it to come into force by 2012.

De Boer said: “I think it is important that countries in Copenhagen reach a political agreement that is a response to what scientists tell us need to be done.”

Andy Atkins, executive director of Friends of the Earth, said: “Over the next two weeks [Gordon] Brown’s government will shape an international deal that could settle whether we conquer climate change, or let the planet cook. The UK needs to … lead all developed countries in committing to cutting their greenhouse gas emissions by 40% by 2020.”