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David Hone
Climate Change Adviser, Shell Group

David Hone

David Hone is the climate change adviser for the Shell Group and vice chairman of the International Emissions Trading Association. He also works closely with the World Business Council for Sustainable Development. ALL POSTS

A potentially costly pathway forward

Given the gridlock in Congress over the climate bill, is the Obama administration's fallback strategy to let EPA regulate greenhouse gas emissions a good idea?

There is no doubt that the USA needs to act from a federal perspective on reducing greenhouse gas emissions. But the EPA route isn't going to be the best way to do it. Whilst the initial proposals from the EPA on greenhouse gas reporting will form a useful and important foundation, a future driven by clean technology mandates, as one example of the type of action expected, may result in higher costs for the economy than is actually necessary to reduce emissions.

A comprehensive, economy wide cap-and-trade system can deliver the required reductions at lowest overall cost to the economy. It does this by moving progressively through the abatement curve (of reduction opportunities) in an organized way, driven by the allowance trading aspect of the design. But an EPA driven approach will dive into the abatement curve at somewhat arbitrary points linked to certain technologies, leaving lower cost abatement opportunities on the table. This will ultimately cost the economy more than a cap-and-trade system.

Almost certain legal challenge to an EPA driven solution could result in significant delay in implementation, giving rise to investment uncertainty for business. Even if a cap-and-trade system is slow in starting, its very existence following passage by Congress and approval by the President immediately creates a carbon price driven by a known reduction target. Business can begin to act on this even though it may be some years before actual allowance distribution and compliance requirements start. Investment is triggered from the outset and new jobs can flow as a result.

By David Hone  |  February 26, 2010; 10:29 AM ET Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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EAGLE2ROOST Writes: are they also the ones keeping secret what is really going on in Area 51?

No, they are the same ones who told us in the 70's that another Ice age was coming. Look up "Global Cooling".

Educate yourself on the subject.

Posted by: Senator_Salesman | February 28, 2010 10:11 PM
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Cap and trade is a fairly benign solution to pollution. The advantage is that it attaches a cost to something that is now "free". Corporations pollute and we all pay the price, whether it is through health costs or taxes for clean-up.

However, cap and trade can back fire in that if a corporation saves enough money by polluting it may be worth it to buy "credits" to offset that pollution. It can only work if it is part of a strategy that includes regulations and limits which is where the EPA comes in.

As for the conspiracy of hundreds of scientists around the world over the past 40 years to trick us into believing carbon emissions have something to do with climate change... are they also the ones keeping secret what is really going on in Area 51?

Posted by: eagle2roost | February 28, 2010 7:54 PM
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Wow, What a surprise. David Hone vice chairman of the International Emissions Trading Association thinks a cap and trade system will work best.

You are a con artist Mr. Hone.

People like you won't be happy until you destroy this country.

Global Warming is a Scam people. Mr. Hone is a sell out who uses scare tactics based on Junk science.

You and your friends are now in the minority. More and more people everyday are waking up to this Global warming hoax.

Hey Mr. Honeā€¦ I bet your favorite U.S. Senator is Senator Inhofe right?

Posted by: Senator_Salesman | February 27, 2010 7:03 PM
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