Cross-posted from ThinkProgress Green.
Rep. Ralph Hall (R-TX) has asked the Energy Information Administration to evaluate an unrealistically harsh and unsophisticated clean energy standard, designed to represent the Republicans’ worst nightmare: every electricity retailer in the country (some of them quite small) must meet a relatively high and rising standard for low-carbon energy, starting very soon, with no trading between companies, banking of excess credits, or other flexibility mechanisms that would soften the blow.
Even the Republican nightmare doesn’t look as bad as one might have suspected: according to the EIA analysis, it achieves a rapid reduction in carbon dioxide emissions, while causing electricity prices to rise by less than one percent per year, and lowering GDP per capita in 2035, the end of the study period, all the way from (watch closely or you’ll miss this) $65,848 to $65,658 – a reduction of less than 0.3 percent, in a national income nearly twice as high as today’s. Employment is slightly higher, as a result of this standard, from the mid-2020’s onward.
In the light of day, no one would allow this nightmare version of a clean energy standard to be adopted. Trading of clean energy credits between companies would almost certainly be included in any real standard. The goal, after all, is to reduce nationwide emissions as cheaply as possible, not to impose burdens on each and every company regardless of size or situation. The large reduction in costs that can result from trading is well established in economic theory, and confirmed by the experience of sulfur emissions trading under the Clean Air Act, among other cases. If some companies can reduce emissions more inexpensively than others, it makes perfect sense to let them sell credits to others; the same amount of emission reduction occurs, but at much lower cost than under the rigid plan that troubles Ralph Hall. This, by the way, is perfectly orthodox free market economics, of a sort that Republicans, once upon a time, used to swear by.
Frank Ackerman, CPR Member Scholar; Senior Economist, Synapse Energy Economics. Bio.
| 1 Though a lot of the destruction is self-inflicted, few sectors are as maligned as the debt collection industry. Complaints against the industry filed with the Federal Trade Commission are at an all-time-high. Lawsuits from the FTC are also increasing. Collectors will need payday loans to fight all the suits coming their way. The Federal Trade Commission, according to USA Today, has been increasing its efforts in holding debt collectors accountable to the laws that govern how they can do business. Though suits against collection agencies are often left to the states, FTC suits brought against collectors are reaching an all time high. During the past three years, there have been 10 suits against debt collection agencies brought by the FTC. There were only six in the three years previous to that. -- Juniel D |