Conservatives have begun their offensive on climate change initiatives such as green house gas cap and trade. House republicans have declared they will use any legislative power available to roll back environmental regulations. Conservatives cite job loss and increased energy prices as primary reasons for undoing climate change initiatives.
For some, this story may sound familiar. In 1990, acid rain was a serious public and environmental health problem. Acid rain occurs when sulfur dioxide and nitrogen oxide emissions, typically from power plants, react with oxygen, water, and oxidants in the atmosphere which creates acidic compounds. These compounds return to earth as liquids (rain, snow, fog) or in dry forms (gases, particles). These acidic compounds impair air quality, public health, destroy ecosystems, acidify water sources, decay building materials, and more.
Thus, the Acid Rain Program was established under Title IV of the 1990 Clean Air Act. This program used a market based cap and trade system to curb acid rain. The program set a national sulfur oxide emissions cap as well as nitrous oxide limitations. The trading component of the program allowed for compliance flexibility. This system enables those who can reduce pollution cheaply to earn a return on their pollution reduction investment by selling extra permits. This enables those who cannot reduce pollution as cheaply to purchase permits at lower costs than the cost of reducing their own emissions. This enables everyone to make progress towards emission caps in a cost effective manner.
Like today, many in the 1990’s stated that energy costs would spike and rampant job loss would occur because cap and trade. Those opposed to the program stated it would cost ratepayers $5.5 billion annually between 1990 and 2000, increasing to $7.1 billion annually from 2000 to 2010. This proved to be false as average electric rates dropped from 8.05 cents per kilowatt hour after the passage of the 1990 Clean Air Act to 7.48 cents per kilowatt hour in 1995 and 6.81 cents per kilowatt hour in 2000. Unemployment rates stayed stable with a brief peak at 8.2% in 1992 but underwent a steady decline until bottoming out at 3.7% in April of 2000.
The acid rain cap and trade system has effectively curbed acid rain in a cost effective manner. The program did not kill jobs or increase energy costs. As of 2010, the program costs $1 to $2 billion annually which is one quarter of what the EPA originally estimated. Sulfur Oxide emissions from power plants have decreased 9% since 2000, while the program has gained over 99% compliance nationally. Furthermore, the Congressional Budget Office stated in 2003 that the acid rain cap and trade system provided the “largest quantified human health benefits of any major federal regulatory program with benefits exceeding costs by more than 40:1”.
Of course, there are differences of scope between green house gas (CO2) and sulfur oxide cap and trade. However, it would be unwise to discredit green house gas cap and trade with ideological speculation, as many have been proned to do. The 1990 cap and trade success story should merit more than ideological backlash in relation to current cap and trade proposals, especially considering the potential benefits of decreased green house gas emissions.