Hard to believe in the heart of a polar Chicago winter, but the planet is warming. That, many scientists have warned, is likely to be a problem in the future. The question is: what, if anything, should we do about it now?
The Bush administration has set voluntary goals for reducing emissions of heat-trapping greenhouse gases, which have been linked to global warming. And officials reportedly are collecting written pledges from various companies around the country to voluntarily curb emissions.
There’s nothing wrong with voluntary goals, but the potential threat of global warming demands far tougher measures. A better course of action has been suggested by Sens. Joseph Lieberman and John McCain, who introduced a bill recently that would would force U.S. companies to modestly reduce greenhouse emissions or pay penalties.
Their bill makes sense because it calls for mandatory reductions, but provides flexibility in how those reductions are reached. It is far less stringent than the emissions cuts proposed in the much-reviled Kyoto treaty, which the president rightly rejected because it put an inordinate burden on the U.S. while largely exempting some of the world’s largest polluting nations.
McCain and Lieberman would set up a flexible, market-based “cap and trade” system under which emissions of greenhouse gases–including carbon dioxide, methane, and nitrous oxide–would be traded by companies.
Here’s how such a system generally works: Federal officials would set a national limit or “cap” on emissions of certain pollutants. Then they would tell each company that operates power plants or other significant sources of that pollution what they can emit. If a company’s emissions fall below the cap, that company would earn credits it could sell on the open market, or “bank.” Companies that exceed their limits could reduce their emissions or buy some of those credits.
That approach has worked extremely well in a federal effort to cut levels of sulfur dioxide–a main component of acid rain–since 1990.
The key to all cap and trade systems is setting the cap at a reasonable level, tight enough to make a difference, but not too tight to hobble industries. The McCain-Lieberman bill calls for industries to reach 1990 levels of greenhouse gases by 2016–an estimated 15 percent reduction.
There’s little doubt a cap and trade system can work with greenhouse gases, and the first proof of that may come in Chicago. At City Hall recently, officials unveiled a private, voluntary pilot program to start a market for trading in greenhouse gas emissions, the first in the country.
The brainchild of financial futures guru Richard Sandor, the Chicago Climate Exchange has quite modest goals–each company in the exchange promises a 1 percent yearly reduction in greenhouse gases through 2006. It’s encouraging that a heavyweight roster of companies has signed up–including DuPont, Ford Motor Co., Motorola, American Electric Power, Waste Management Inc. and Baxter International Inc.
All of these companies apparently figure there’s going to be mandatory cuts some day and they can not only learn about cost-effective ways to reduce emissions but help shape the market in pollution credits. Some also figure that sooner or later there could be profit in that trading. In the meantime, the companies reap a whirlwind of good public relations for taking steps toward cleaning the environment.
In other words, they’re getting ahead of the curve, trying to start solving the problem before it gets a lot worse. That’s the right idea, and more companies need to get it. But that won’t happen without new laws that have teeth.
