James Hansen, NASA Climate Scientist, Calls California's Cap-And-Trade System 'Half-Assed,' Certain To Fail

During a talk given at the Commonwealth Club of California in San Francisco earlier this week, one of the world's foremost climate scientists predicted the failure of California's newly implemented cap-and-trade system to curb carbon emissions.

Appearing at the club on Tuesday evening to accept the Stephen Schneider Award for Climate Science Communication, Dr. James Hansen called the Golden State's newest high-profile effort to slow greenhouse gas emissions "half-assed."

KQED reports:

Based on other statements from the climate pioneer, including an interview to be aired on KQED on December 24, it's pretty clear that Hansen was taking aim at cap-and-trade as a concept -- but he made clear that there are features of California's program that he thinks will make it specifically ineffective.

Hansen said California "is a leader and really has people who understand this and want to do something about it, so I'm very disappointed when they choose a half-baked system like cap-and-trade, with offsets. Offsets allow industry to comply with the regulation partially by funding carbon-reduction projects elsewhere, rather than cleaning up their own operations."

The comment drew applause from the audience of about 180 in San Francisco. "That's been tried in Europe and it didn't do much," Hansen told the audience. "What you want is a system which is very simple."

Hansen is the director of the NASA Goddard Institute for Space Studies and has for decades been one of the leading voices in the United States on the dangers of global warming, having once called combating climate change a "moral issue on par with ending slavery."

Instead of a cap-and-trade system, Hansen has said he prefers a comparatively simple carbon tax levied at the first point of sale after extraction, with the revenues being redistributed to citizens in the form of a "green check" to offset the increased fuel costs energy companies would ultimately pass on to consumers.

The California legislature approved cap-and-trade in 2006 and the state held its first auction of emissions permits earlier this year. The legislature's efforts to combat climate change were reinforced by the electorate in 2010 when the California voters overwhelmingly rejected a proposition that would have suspended all of the 2006 bill's environmental provisions until the state's unemployment rate dropped under 5.5 percent for a full year.

According to the U.S. Bureau of Labor Statistics' most recent figures, California's unemployment rate currently sits at 10.2 percent.

California's cap-and-trade program puts a cap on the level of emissions a given business is allowed release. If a firm wants to go over that limit, it has to acquire pollution permits. These permits can be traded on the open market, giving companies an incentive to implement procedures reducing emissions so they can then sell their permits and raise revenue.

In November, the California Air Resources Board held its first auction of emissions permits, which was widely viewed as a success. The state sold 23.1 million permits--each one, priced at just over $10, allows a company to release one ton of pollutants.

The final price for 2013 allowances was just nine cents above the $10 minimum price set by regulators.

"The fact that the prices are clearing a little above the reserve is a good sign that people's fears about out of control costs for cleanup are not justified by the way the market actually worked," Nichols said.

The state plans to hold similar auctions on a quarterly basis.

One of the state's largest business groups, the California Chamber of Commerce, has filed suit in hopes of blocking the program, arguing that not only is cap-and-trade unconstitutional, but it also hampers California's economy.

"The current...proposal is the most costly way to implement...[the 2006 law] will hurt consumers, the job climate, and the ability of businesses to expand here," the chamber said in a statement on its website.

California's market for trading emissions permits is the second largest in the world--the only bigger market is the one operated by the European Union.