European Trading Scheme Costs Consumers No More Than a Few Good German Beers
This post was written by Justin Guay, Apprentice for the Sierra Club Global Warming & Energy Team.
The senate committee on foreign relations held a hearing yesterday entitled “Industrial Competitiveness under Climate Policies: Lessons from Europe”. The Panel included Steven Fries Chief Economist for Shell, Wolfgang Weber Head of the Energy and Climate Policy for BASF Group, Ben Lieberman Senior Policy Analyst for Energy and Environment for the Heritage Foundation, and Dr. Felix Matthes Research Coordinator for Energy and Climate Policy for the Institute for Applied Ecology.
The hearing focused primarily on the issues of carbon leakage and job creation with a few wonderfully wacky, off-base comments from Ben Lieberman -- including his assertion that cap and trade legislation-heralded as a market based solution to climate change-is a “centrally planned option”. Dr. Felix Matthes helped to deflect Lieberman’s “quirky” assertions, by assuring the senator that the socialist planners he grew up with in East Germany would not agree.
Matthes pr
oved to be the most interesting, and supportive of cap and trade of the panel members providing a list of lessons to be taken from the EU experience, including the need for a robust system that avoided providing a “huge potential for perversion” through the free distribution of allowances to the power sector. Though he acknowledged the need to curb leakage-the burning of carbon in nations not covered by cap and trade legislation-to countries such as China, he continually disagreed with Wolfgang Weber on the need to auction allowances.
Though Wolfgang was promoting industry handouts, Matthes stuck his ground and demonstrated effectively that the allowances must be auctioned. In perhaps the most entertaining portion of the hearing, Matthes, with the help of some on the spot calculations, determined that the cost passed on to European consumers was no more than 90 Euro per year. According to Matthes this was no more than “9-18 good German beers a year”. Now that's an energy policy worth considering!
The senate committee on foreign relations held a hearing yesterday entitled “Industrial Competitiveness under Climate Policies: Lessons from Europe”. The Panel included Steven Fries Chief Economist for Shell, Wolfgang Weber Head of the Energy and Climate Policy for BASF Group, Ben Lieberman Senior Policy Analyst for Energy and Environment for the Heritage Foundation, and Dr. Felix Matthes Research Coordinator for Energy and Climate Policy for the Institute for Applied Ecology.
The hearing focused primarily on the issues of carbon leakage and job creation with a few wonderfully wacky, off-base comments from Ben Lieberman -- including his assertion that cap and trade legislation-heralded as a market based solution to climate change-is a “centrally planned option”. Dr. Felix Matthes helped to deflect Lieberman’s “quirky” assertions, by assuring the senator that the socialist planners he grew up with in East Germany would not agree.
Matthes pr
Though Wolfgang was promoting industry handouts, Matthes stuck his ground and demonstrated effectively that the allowances must be auctioned. In perhaps the most entertaining portion of the hearing, Matthes, with the help of some on the spot calculations, determined that the cost passed on to European consumers was no more than 90 Euro per year. According to Matthes this was no more than “9-18 good German beers a year”. Now that's an energy policy worth considering!
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