An emissions trading program, if designed and implemented effectively, can achieve environmental goals faster and at lower costs than other alternatives, says a report co-authored by MIT professors.
Looking at ways to potentially reduce U.S. greenhouse gases was the subject of a report issued May 15 by the Pew Center on Global Climate Change. A. Denny Ellerman, senior lecturer at the Sloan School; Paul L. Joskow, the Elizabeth and James Killian Professor of Economics; and David Harrison Jr. of the economic consulting firm NERA reviewed six U.S. emissions trading programs, drawing general lessons for the development of greenhouse gas reduction programs.
Their analysis suggests that a cap-and-trade program is especially attractive for controlling greenhouse gases because the warming effects of greenhouse gases are the same regardless of where they are emitted, the costs of reducing emissions vary widely by source and the cap ensures that the environmental goal is attained.
In addition to "Emissions Trading in the U.S.: Experience, Lessons and Considerations for Greenhouse Gases," the Pew Center also issued a report on "Designing a Mandatory Greenhouse Gas Reduction Program for the U.S." The full text of each report is available at http://www.pewclimate.org.