PER 2015
Integration
We’re trying to save the world, not just some national 20% emission reduction targets. Therefore it is encouraging to see that the world’s biggest economies like China and the USA are trialling the scheme in separate regions, but the whole world needs to start linking schemes together. This is why California has paired its cap and trade program with its twin in Quebec, Canada. Alberta is also expected to join as North America works towards one giant cap and trade.
This is part of the reason why the European Commission has been harassing the International Civil Aviation Organisation(ICAO) for so long , and in 2013 the organisation finally yielded by agreeing to apply a market based mechanism by 2020. The year before, in 2012, the ETS had forced all flights to and from the EU to be part of the cap and trade scheme. That same year the EU decided they had taken too big a bite and suspended the legislation to allow aviation breathing space. It has now been agreed that only flights within Europe should fall under EU ETS. It seems strange that the EU ETS has been assaulting the airliners for so long when they only produce 3% of its total emissions. However the reason lies in globalisation. Getting the airlines to engage in a global cap and trade system could set the world on the path to a globally linked carbon trading system. Further more the ICAO predicts that by 2050 global aviation emissions will grow by 300-700%. Action is needed to stop the airliners flying out of control.
There’s a bigger picture
The cap and trade schemes are a great piece of economic engineering. However they are not the solution, merely a solution. The heart of the matter is that when the system functions perfectly and firms look for cleaner technology it needs to be available.
Therefore investment needs to be there for those entrepreneurs and scientists who are developing the green technology. Most important of all, there must be a global desire to do as much as possible to fight climate change. We are living in a peaceful(well, mostly) world where poor countries are developing very quickly. If everyone can get on board the climate train then we have the opportunity to grow a more prosperous future and live happier lives. After all is that not the objective of economics?
Bibliography:
http://www.latimes.com/business/hiltzik/la-fi-hiltzik-20150613-column.html#page=1 http://ec.europa.eu/clima/policies/ets/index_en.htm http://www.theguardian.com/environment/2011/apr/28/overhaul-europe-carbon-trading-scheme
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