« Link for the talk tonight | Main | Last Post for the Semester »



Max Thomas

If the Waxman-Markey Bill couldn’t pass beyond the House in 2009, I see little chance of a comparable bill passing today. The way I see it, any bill with immediate, tangible costs and seemingly uncertain, non-monetary future benefits would be dead in the water. Rationally, carbon pricing makes sense – it incentivizes firms' actions to align with social needs. Carbon pricing proposals, especially those that return revenues to individuals, should be popular. However, given their inflationary nature, they never will be.

Though nominal price increases are, in the long run, inconsequential, and emissions reductions are of immediate concern, for voters, inflation is the more visceral issue. The inflationary nature of carbon pricing limits the political chances of such legislation to near zero.

Instead of paying individuals dividends from carbon pricing revenue, I wonder what effect conditional (re)payments to firms would have on inflation. For example, if firms were issued a per-unit carbon tax, would an equivalent subsidy for renewable energy consumption counteract the tax’s inflationary impact? As I see it, this policy would create a closed-loop – taxes fund subsidies, and consumers are left unaffected. The subsidy would act as a carrot, incentivizing RE consumption, and the tax would act as a stick, disincentivizing hydrocarbon consumption.

Matthew Todd

It is always interesting to look at who is bearing costs associated with emissions. I would have assumed that it would be lower-income individuals who bear the most of the costs, however the article outlines that is actually the middle income individuals who bear the brunt of these costs. I think that it is especially important to insure that the cost is applied fairly across everyone, which would likely spread out the cost of mitigating the harm across society. I was also impressed by the affordable nature of the Waxman-Markey plan. I’d like to see more policy ideas that are more “attainable” just in terms of the costs not being so high to be less politically feasible.

I believe that when addressed in its totality, fighting climate change issues can seem extremely daunting due to the large costs associated with them. Also, regressive policies that attack the middle class are exactly the kind of rhetoric that those who have monetary and political incentives to fight to continue harmful climate behavior will capitalize on to shut down common sense climate policy. Ideally, this can be avoided and strong policy can be put into effect.

Giang Nguyen

First of all, when I was reading through the Waxman-Markey climate bill, I noticed that they have must have made a lot of compromises regarding their energy goals. For example, it only required that 6 percent of electricity come from renewables by 2012 and 20 percent of electricity to come from renewables by 2020. Looking from a 2022 perspective, this may not be enough for us to meet our climate goals. However, at the time the bill was written, it provided an important opportunity for the government to finally cap and trade emissions.

Secondly, the paper made clear that under any approaches, low-income families are the ones to benefit the most. However, this is also the group of people that are really resistant to these kinds of legislative changes (according to the paper we read on Tuesday). I wonder why. Is it because of politics or education?

Allyssa Utecht

The study analyzed how cap-and trade proposals affect households in the short term by studying the impacts by age group, region, and income, which allowed them to focus on the socio-economic groups that are the most vulnerable. They found it benefits low and high income households because allowance value offsets energy spending and flows to capital owners; however, it impacts middle-income households the most because they do not get low-income rebates or own capital stock. It is important to note that low-income households are protected under all scenarios, and actually receive a net gain. Additionally, older households also do better, and in the pessimistic scenarios, they have fewer average burdens. This study found that while the region had a negligible impact on household burden, the implementation of a cap-and-dividend approach is most significant, as well as how allowances are allocated in this system. This paper serves as important evidence that the most vulnerable population groups will be protected when policies change, and that managing the costs of a changing climate is feasible.

Belen Delgado Mio

I thought it was really interesting that the paper described the socioeconomic classes and age groups that end up winning and losing in the various climate change policy scenarios. The paper affirmed a lot of what we had already discussed previously in class - that low income households would benefit the most from policies tackling climate change because they would receive some sort of rebate that would supplement their regular income. However, on Tuesday we talked about how low-income households are generally the group that are most likely to not support climate change policies. I think part of this has to be because low-income households may not be aware that many climate change policies come with rebates that are greater than the income they will lose due to price increases in gas, energy, etc.
I wonder if educating low-income households on how these policies could benefit them would increase their support for these policies. Especially since it has recently become more apparent that poorer households will incur the most costs due to climate change.

AJ Mabaka

I thought it was phenomenal that each of the cap and trade policies discussed helped to ensure that low-income households were protected through various regulatory measures (like the per-capita rebate). As we've been discussing the effects of climate change and the degree to which associated burdens are often carried by marginalized, poorer communities, I was happily surprised by many of the conclusions discussed toward the end of the paper. Specifically, I was surprised that in some of the modeling and policy predictions, households in British Colombia might actually be better off after the carbon tax than before, especially elderly people with low income. As we've begun transitioning toward increased monitoring of carbon emissions and mitigating our negative climatic impacts, I found it heartwarming that multiple demographic groups seem to be benefiting from the carefully developed carbon policies in BC and elsewhere. Initially, I met some these conclusions with skepticism because I felt as though there would be tendencies (following suit with history) for wealthier and more ~homogenous~ communities, if you will, to benefit from these policies, rather than the poorer and more ~heterogenous~ communities who carry more of the burden when it comes to impacts from climate change and emissions.

Jacob McCabe

I thought this article was interesting because it took a comprehensive approach to how energy policy affects different regions and socioeconomic households. The main takeaway I found interesting was the negative effects on middle-income families due to a lack of capital ownership and a position outside of social safety nets. This brings a certain fear that has been pushed by media outlets prophesying the "death of the middle class" and while that's something outside of environmental policy entirely, it plays a large role in social dynamics and therefore the proportionate effects of climate. As energy crises become more frequent and more exogenous shocks hit the market it is inevitable that the effects will fall back heavily on those who are outside of the need for a safety net but also without the means to ensure long-term stability.

The comments to this entry are closed.