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Carbon pricing, environmental justice, and compromise are the focus of the Energy Institute Blog.

Carbon pricing is a method to reduce greenhouse gas emissions by putting a price on carbon pollution. Environmental justice advocates often push for policies like carbon pricing to ensure that vulnerable communities are not disproportionately impacted by climate change.

However, the reality of climate policy is more nuanced and complex than issues I can resolve on my whiteboard. Inequalities in local pollution exposure have not been eliminated despite decades of policies that explicitly target local air pollution. Advocates for environmental justice who are fed up with the status quo are searching for any way to make their communities better.

Economists are worried that reducing the flexibility of the carbon market will drive up prices. The distributional effects of depending on markets to coordinate GHG abatement efforts will worry proponents of economic justice. Both issues will be crucial to take into account when California modifies its cap-and-trade policy.

Climate change is accelerating due to greenhouse gas emissions. However, the cause of local air pollution is not GHG emissions. You may be asking yourself, then, why EJ advocates care so much about the results of the carbon market!

The graph indicates that, generally speaking, lower GHG emissions are linked to lower criterion pollutants; nonetheless, this relationship is somewhat erratic. For thirty percent of the facilities, higher SO2 emissions are correlated with lower GHG emissions (upper left). During this time, 17% of the sources in the lower right quadrant saw a rise in GHG emissions while a decrease in criteria emissions.

This image contributes to the explanation of why local air pollution and greenhouse gases ought to be handled independently. GHG reduction regulations will have an imperfect and indirect effect on local air pollution. However, it's important to remember that money raised by the carbon market can be utilized to directly combat local air pollution. A sizeable portion of GHG market proceeds are allocated, per AB617 and SB535, to investments that enhance the environment in underprivileged areas.

Dallas Burtraw and Nick Roy, researchers at RFF, examined one potential strategy in detail in a recent article. To guarantee that GHG emissions at controlled DAC sources fall as quickly as the system-wide cap, they take into account the use of facility-specific caps. Dallas and Nick examine what would have happened to emissions outcomes in California's carbon market if these facility-specific permit trading constraints had been in place from the beginning. Three salient points from their stimulating work are as follows:

These findings imply that facility-specific limits could have improved the quality of the air for some DAC areas without appreciably raising overall expenses. It is crucial to remember, nevertheless, that this report is a rearview mirror view. Going forward, a stricter cap will be required to achieve our goals for reducing GHG emissions. Source-specific trading limits may have a greater impact on emissions, emissions leakage, and abatement costs in a more competitive carbon market.

These advantages are significant. However, if the extra GHG reductions needed for DAC facilities prove to be much more expensive than alternative GHG abatement possibilities, then they may come at a hefty price. Trading limits may unintentionally interact with the allowance price containment reserves depending on how they are constructed.

We must strike a balance between concerns about justice, fairness, and cost containment as California's GHG reduction targets become increasingly aggressive. A difficult balancing act. However, in the next months, California will need to carefully manage this one.

I believe that everyone can agree that climate change is happening. I think we can all agree that climate change is driven by humans because the rate of temperature increase is the highest it has been in the last 20,000 years. Is the threat posed by climate change existential? I've read enough literature to know that it most likely is if we do nothing.

Regretfully, Cap & Trade hasn't worked well enough to address the climate emergency that we are currently facing. Those who aim to preserve the status quo by manipulating the system and creating the appearance of genuine action still have numerous opportunities to undermine legislative attempts by forming alliances with regulators, air boards, etc.

Obviously, in addition to cap and trade, we will also need to use carbon pricing, or a carbon tax. That does not preclude specific programs from simultaneously achieving DOC objectives. The desire to do so is all that is needed.

The current rate of climate action is too slow. For example, serious commitments to invest in clean, renewable energy sources for energy generation and storage have not been made. Bring it on if the price of carbon accelerates that scenario!

I do not think that a carbon tax and a CATP are meant to coexist. Democrats have supermajorities in both chambers of the California legislature, but a 2/3s majority is needed to approve a tax. This is just not going to happen. Furthermore, the combination of a carbon tax with a CATP would lead to peculiar carbon market dynamics that would actually make attempts to reduce greenhouse gas emissions less successful.

I'll let Meredith and other authorities on market design handle that. But given the new findings of Severin and Ryan Kellogg demonstrating that the economic case for carbon pricing in the US electrical sector isnt as strong as we and many others had thought, we should seriously explore, say, a clean energy standard. Is taxing carbon really the best way to decarbonize the grid?

The best way to cut greenhouse gas emissions quickly in (sub)urban neighborhoods—the areas where the majority of Californians reside and use energy—is to provide incentives for solar parking lot canopies, stationary storage batteries, and vehicle-to-grid chargers, which will cover our many acres of heated asphalt parking lots everywhere. Within the current distribution grids, shade such large heat islands by implementing a widely dispersed matrix of dependable local micro grids. Parking canopies can be swiftly approved by local building inspectors with little to no opposition from the neighborhood, and no additional utility transmission spending is needed. This can be funded by IRA incentives in addition to any additional measures required to persuade owners of leased commercial real estate to act in their own best interests; these measures may even include municipal and state building code regulations. The CA structure

I concur that parking lots with sun protection should be optimized. Still, EV charging ought to be the main purpose of these lots. Look at all the solar-covered lots we now have. Few have a wide range of charging choices.

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