The cap & trade bill making its way through Congress has been called most every name in the book: job killer, factory outsourcer, economic disaster.
But the legislation is unlikely to produce any of those outcomes, if experience in Europe is a guide. In fact, many companies in the states could find economic benefit, says David Hone, senior climate advisor at Shell.
Many companies in the U.S. could benefit, says Shell's David Hone
Shell, an oil company, is one of a handful of firms facing million in higher costs if a cap & trade bill limiting carbon emissions is passed. So Hone’s favorable comments should carry particular weight.
In an interview on an MIT Technology Review Webcast, he said one particular benefit to companies such as Shell is the creation of a market price for carbon. That will enable companies to invest in new technologies – carbon capture, for instance – knowing the long-term costs.
Hone said he anticipates a bill will be approved. Republicans have raised a wall of opposition in Congress, with some opponents having claimed they disbelieve in global warming and its impact.
“If 27 very diverse countries in Europe can reach an agreement, then 50 states can do the same,” he said. “If we don’t pass a bill, the issue is not going to go away.” In fact, the regulation of greenhouse gas emissions will likely fall to the EPA, a less appetizing alternative to businesses.
In Europe, cap & trade has proved an efficient method for creating a price of carbon at the “lowest cost to the economy,” Hone said. At Shell, this has served to accelerate efficiency projects and the use of carbon capture technology.
“Cap & trade sends a price signal to the market,” he said. An established price should have a positive impact on many companies in the U.S., he added.
Europe’s cap and trade system has been largely unsuccessful, merely serving to raise taxes and doing nothing to lower emissions. It should not be used as a successful model for the US. This argument seems to be grasping at straws. The reality is that we need more discussion and analysis of this bill. Write your legislators at http://tiny.cc/uRpHX.