Has CARB studied Europe’s experience with cap and trade?
Nichols: We followed the process in the EU very closely. We have had a member of the U.K. government working on the details for the past year. We have had people in Europe; we’ve had people visiting us. We have been concerned from the beginning about the issue of over-allocation, which is now widely recognized. One of the most important lessons in the European experience was that because they gave away the allowances in the beginning—and gave every country what they said they should have on the honor system—there was an immediate impact in terms of increases in prices of energy and a very visible and politically unacceptable transfer of wealth into certain sectors of the economy, mainly the energy sector. Many people have used that fact as an argument to try to discredit the entire market-based program. My response to that has generally been that anytime you have money involved you have the potential for fraud. If there isn’t money involved, there is no reason for anyone to try and com
Related Questions
- Since Cap & Trade is already on the table wouldn’t it be beneficial to just get it passed and then try to refine the policy or push Fee & dividend?
- How important is it for Greeces economic future to boost trade and investment in southeast Europe?
- Does my previous military grade or civilian experience transfer to senior membership in CAP?
