Limiting the Magnitude of Future Climate Change (2010) / Chapter Skim
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6 Interaction with Other Major Policy Concerns
6 Interaction with Other Major Policy Concerns
Pages 165-192
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From page 165... ...
, in this chapter we do explore a few key issues that influence or are influenced by climate change limiting policies. We first consider some areas where policies for limiting climate change can potentially offer added benefits on domestic and international levels, including energy security, protection of air and water quality, and adaptation to the expected impacts of climate change.
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From page 166... ...
Domestic Ancillary Benefits and Costs Energy Security Reducing oil use in the transportation sector can be achieved through greater efficiency, substitution of noncarbon fuels, and electrification of transport systems.1 Opportunities also exist to reduce oil consumption in the buildings sector (home weatherization to reduce heating oil usage) and the industrial sector (increasing the efficiency of industrial processes that use liquid fuels)
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From page 167... ...
Reducing the use of coal and natural gas does not affect energy security because they are supplied almost entirely from domestic sources and neither presently displaces oil in the transportation sector. Furthermore, the electric power sector uses very little oil and so does not affect domestic economic vulnerability to oil dependence.
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From page 168... ...
Mitigating black carbon emissions therefore offers both health and climate change benefits. In contrast, the sulfate aerosols generated by fossil fuel combustion exert negative radiative forcing (i.e., cooling)
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From page 169... ...
For instance, distributed energy-generation systems can enhance energy efficiency by allowing waste heat from power production to be used for water heating and other purposes. At the same time, these distributed systems strengthen resilience against climate change impacts by reducing the risk of widespread power loss from severe storms or from peak periods of demand during heat waves.
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From page 170... ...
survey the value of ancillary benefits attributable to actions designed to limit climate change. Those reviews point out that the literature on this subject is limited and the studies that do exist vary widely in modeling approaches, key assumptions, and coverage.
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From page 171... ...
The results of studies done in eight countries are consistent with the data developed by the IPCC.5 In other cases, the ancillary benefits of GHG limitation have spillovers that result in the benefit being shared among nations. For example: • To the extent that any country reduces oil consumption, all countries may ben efit from a downward pressure on world oil prices.
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From page 172... ...
The use of offsets as a climate policy may have indirect but beneficial effects on forestry and agricultural practices. In principle, climate change limiting policies should be designed to capitalize on these benefits, but applying this principle systematically is difficult in practice, because estimates of ancillary benefits are uncertain and the benefits, costs, and potential for leakage are often project- and location-specific.
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From page 173... ...
We then focus on examining how policies to limit climate change may affect economic and employment opportunities across the country, since employment opportunities are of course a key means of enhancing equity. Socioeconomic Distributional Impacts Climate change impacts, and actions to limit these impacts in the future, will take place in the context of existing social and economic disparities, many of which are related to environmental concerns.
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From page 174... ...
Yet low-income and minority populations are likely to suffer disproportionately from climate change effects. Some examples include the following: • Extreme heat or cold events.
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From page 175... ...
As discussed in Chapter 4, initial allowances may be allocated via auction or be given away. Pricing the initial allowances provides revenues to government, and these revenues could be spent in a variety of ways, from providing energy allowances to low-income households to reducing income or corporate taxes (Burtraw et al., 2008)
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From page 176... ...
Reduced income taxes work similarly, because the highest income brackets receive the greatest tax savings. In contrast, if revenues are used to expand the earned income tax credit, the result is progressive.
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From page 177... ...
. The Clean Air Act and some state-level air quality management programs do address pollution hot-spot concerns with requirements for more stringent pollution abatement actions; however, there may be opportunities for accelerating such efforts via careful coordination with programs targeted at GHG emissions abatement.
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From page 178... ...
through corporate income taxes Rose and Oladosu (2002) Data on emissions and energy from Energy Information Cap and trade Administration (EIA)
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From page 179... ...
On an annual basis, a carbon price is 2-3 times more regressive than on a lifetime basis (i.e., using annual expenditures) Continued
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From page 180... ...
. Direct costs based on EIA energy prices and estimated cost of carbon considering elasticities.
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From page 181... ...
Consumer surplus lost estimated. Reduce C 100% allowance costs Allowance price of roughly $100 per metric emissions by 15 passed on to the consumer.
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Differences across regions are attributed to variations in industry mix, energy consumption, energy sources, and assumptions regarding allocation of allowances.
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From page 183... ...
claim that national climate change response policy measures will lead to job losses numbering in the millions. At the same time, "green jobs" advocates argue that responding to climate change provides an unprecedented opportunity to create new industries and new jobs across the country, for example, in manufacturing and installing solar and wind power systems, weatherizing homes and commercial buildings, and building and operating public transportation systems.
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From page 184... ...
Reduce Income Tax Tax Credit Transport Sector (iv) Free Credit Allocation Southwest 1.40% 1.27% 1.32% 1.44% California/Nevada 0.97% 1.23% 1.25% 1.25% Texas 1.59% 1.27% 1.39% 2.00% Florida 1.68% 1.56% 1.59% 1.86% Ohio Valley 1.65% 1.78% 1.79% 1.89% Mid-Atlantic 1.03% 1.45% 1.48% 1.41% Northeast 1.09% 1.68% 1.66% 1.51% Northwest 0.90% 1.01% 1.05% 1.14% New York 0.95% 1.27% 1.38% 1.29% Plains 1.42% 1.72% 1.71% 1.59% Mountains 1.53% 1.38% 1.54% 1.59% National 1.36% 1.36% 1.43% 1.60% NOTES: Scenarios include the following: (i)
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From page 185... ...
region, for an approximately 200 Gt CO2-eq budget. Differences across regions are attributed to variations in industry mix, energy consumption, energy sources, and assumptions regarding allocation of allowances; the largest losses are projected for the Plains states.
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From page 186... ...
0.81 Trillion Instruments Miscellaneous manufacturing Printing and publishing Government enterprises Apparel and other textile products Finance, insurance and real Personal and business services Communications Textile mill products Food and kindred products Tobacco manufactures -5% 0% 5% 10% 15% 20% 25% FIGURE 6.2 Projected composition of output and losses by industry in 2030, for a 203 Gt CO2-eq scenario with unlimited domestic offsets. These projections indicate that fossil fuel industries, agriculture, machine manufacturing, and wholesale and retail trade sectors -- and the regions where these sectors are more concentrated -- would be expected to suffer the largest job losses.
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From page 187... ...
The Pew study confirms that the clean energy economy can in fact be an engine for new economic growth, and these studies are largely consistent with expectations of economic restructuring described above. Given that new industries and jobs will develop, it is appropriate to consider whether this investment can be used to promote local economic development in high-poverty areas such as inner cities, Appalachia, or Native American reservations, or in the areas that are expected to experience the greatest economic and job losses as a result of policies to limit climate change.
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From page 188... ...
to promote local development. Enterprise zones have been established in economically distressed cities, typically offering financial incentives, special permitting or zoning, infrastructure, and tax credits for job generation or net revenue generation (e.g., Bartik, 1991; Wassmer, 1994; Wren, 1987)
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From page 189... ...
Program with Sustainable South Bronx is one of the nation's first green-collar job training and placement systems. Students graduate with certifications such as water quality management and Occupational Safety & Health Administration Brownfield Reme diation.
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From page 190... ...
KEY CONCLUSIONS AND RECOMMENDATIONS Low-income groups consume less energy per capita and therefore contribute less to associated GHG emissions. Yet, low-income and some disadvantaged minority groups are likely to suffer disproportionately from adverse impacts of climate change and, absent proactive policies, may also be adversely affected by policies to limit climate change.
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From page 191... ...
; design ing incentive-based climate change limiting policies to be accessible to poor households (such as graduated subsidies for home heating or insulation improvements) ; • Assuring that efforts to reduce energy consumption in the transport sector avoid disadvantaging those with already limited mobility; and • Actively and consistently engaging representatives of poor and minority com munities in policy planning efforts.
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