Some people balk at putting a price tag on the environment. But converting carbon dioxide emissions into economic goods might reduce global warming, environmental panelists told about 75 people on Tuesday night in Norris University Center.
Students for Ecological and Environmental Development sponsored a panel discussion on economic policy that gives businesses a monetary incentive to reduce global warming. Human activity has nearly doubled the amount of carbon dioxide within the last two million years.
“There is essentially no question that the human experiment with carbon dioxide will have far-reaching millennial consequences,” said panelist Raymond Pierrehumbert, a geophysics professor at University of Chicago and a member of the Intergovernmental Panel on Climate Change. “This argues for the most urgent action.”
One proposed action is a market-based approach to reducing greenhouse gas, particularly carbon dioxide, panelists said. In 1990, the Clean Air Amendment used this “cap-and-trade” system to monetize units of sulfur dioxide. Businesses such as power plants were given an allowance of emission units per year. These businesses could buy and sell these allowance units on the open market.
For example, one plant might have an allowance of 200 emission units a year but emits 300 units a year. Another plant with the same 200-unit allowance that has cut emissions to 100 units a year can sell its extra 100 units to the first plant.
“One of the things that happens is it harnesses the creativity folks have that is closely tied to making money,” said panelist Gerry Keenan, a partner in the energy strategy division of PricewaterhouseCoopers Consulting. “People think smarter when they’re given incentives to do so.”
Under the cap-and-trade system, sulfur dioxide emissions fell by 8.5 million tons when compared to 1985 levels, Keenan said.
Panelist Jenny Johnson, a specialist with Sierra Club Chicago, said while the principle of trading is sound, loopholes can abound. Weaknesses are apparent in the Kyoto Protocol, which applied the cap-and-trade system to countries, Johnson said. For example, countries gain credits from possessing natural resources such as forests. This allows a country to buy its way out of reducing emissions.
“The devil is in the details,” Johnson said. “The Kyoto Protocol really doesn’t give an incentive for companies to raise the bar and make themselves more environmentally correct.”
But some groups are working to develop a successful cap-and-trade system. The Chicago Climate Exchange is a pilot program that will set voluntary emission caps on greenhouse gasses for American businesses.
Panelist Rafael Marques of the Chicago Climate Exchange said business leaders have an incentive to reduce pollution voluntarily.
“No CEO in his right mind wakes up and says, ‘I’m going to be a racist, misogynistic polluter,'” Marques said. “(Businesses) want to set the standard. If you don’t have that first mover advantage, you lose ground.”
Event organizer Lisa Zelljadt said she had to find 20 additional chairs to seat the audience for the discussion.
“Usually academic events, especially this time of the quarter, don’t get a lot of people,” said Zelljadt, a Weinberg junior. “(But) the environment is just so hot as a topic. Students study it in their majors and their classes. It’s pretty heartening to see people interested in this.”
