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Lecture12_EnvironmentPartA - Professor Kelemen Professor...

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Unformatted text preview: Professor Kelemen Professor Kelemen Social Policy and Politics: Lessons from Europe Spring 2010 LECTURE 13 Transportation, Energy and Climate Change Policies Health Care Reform: some key points Health Care Reform: some key points How health care reform may affect you: http://www.nytimes.com/interactive/2010/03/21/us/health­care­reform.html http://www.healthcareandyou.org/ Regulation of Insurers: No denial of coverage based on pre­existing conditions (kids now, adults from 2014) Bans recision and lifetime caps Creates competitive ‘Insurance Exchanges’ where individuals can shop for policies Extends coverage: Extends Medicaid coverage (for low income people) to 16 million Subsidizes private insurance for families up to 4x the federal poverty level Overall should extend coverage to approx 32 million more people Mandatory Insurance from 2014 Individuals who don’t have insurance will pay penalty (of 2% of income) Employers with over 50 employees must offer insurance or pay penalty Taxes Some increased taxes on families with incomes over $250,000 Tax on ‘cadillac’ insurance plans (over 27,500k per family in premiums) Cost / Cost savings $938 billion over 10 years, BUT will reduce the federal deficit by $138 billion over a decade. Cost cutting measures: Eliminate subsidies to Medicare Advantage Medicare Bundling Outline Outline Introduction: US – EU differences on Climate Policies and Greenhouse Gas Emissions A tale of two light bulbs A tale of two light bulbs “The EU is phasing out traditional light bulbs over next 3 years in favour of new energy­efficient lighting” Under new rules coming into force in September 2009, manufacturers and importers can no longer sell clear incandescent light bulbs of 100 watts or above in the EU. Part of an effort to save energy and fight climate change, the ban will be expanded in September 2011 and 2012 to include lower wattages. By 2020 the measures will save enough energy to power 11 million households every year. This will reduce emissions of carbon dioxide by 15 million tons each year. Introduced 130 years ago, conventional incandescent light bulbs convert only around 5­10% of the energy they use into light; the rest is given off as heat. They are far more wasteful than newer devices like compact fluorescents and low­energy halogens or emerging products such as light­emitting diodes. Fluorescent bulbs cost more initially but are cheaper in the end because, besides using less energy, they last much longer. http://ec.europa.eu/news/energy/090901_en.htm Give Up Familiar Light Bulb? Not Without Fight, Some Say Give Up Familiar Light Bulb? Not Without Fight, Some Say By EDWARD WYATT, March 11, 2011 A 2007 bill, passed overwhelmingly by both houses of Congress and signed into law by George W. Bush, will make the familiar incandescent bulb subject to strict efficiency standards next year. The effect will be to make current 100­watt bulbs obsolete — and that has sent conservative lawmakers, libertarians, some environmental activists and owners of Easy­Bake Ovens into a frenzy of activity to get the law repealed To Representative Joe Barton, the Texas Republican who has sponsored a bill to reverse the new guidelines, that nevertheless means Congress is dictating what types of light Americans can use in their homes. “From the health insurance you’re allowed to have, to the car you can drive, to the light bulbs you can buy, Washington is making too many decisions that are better left to you and your family,” Mr. Barton said when he introduced his bill in January. Michele Bachman and Rand Paul have spoken out against gov’t regulation of lightbulbs Per Capita CO2 emissions (2007) Per Capita CO2 emissions (2007) Per capita CO2 emissions map (2000) Per capita CO2 emissions map (2000) EU is reducing its emissions EU is reducing its emissions Total % change in Total % change in emissions from 1990­2007. Source UNFCC Some videos Some videos Green Economy http://www.tvlink.org/mediadetails.php?key=f116e2d8abb5e00c79f1&title=EU­US%3A+Partners+in Emissions Trading: http://www.tvlink.org/mediadetails.php?key=598fc6775adebe5b314b&title=Emissions+trading+­+pu Climate and energy package: http://www.tvlink.org/mediadetails.php?key=556e322a66ef195ccda4&title=Climate+action%3A+put 20% renewables: http://www.tvlink.org/mediadetails.php?key=75b873fe1b948fa7048f&title=20%25+renewable+energ Lighting and bulbs: http://www.tvlink.org/mediadetails.php?key=e08333dcb47cfef388c6&title=Making+the+switch%2C+ http://www.tvlink.org/mediadetails.php?key=e08333dcb47cfef388c6&title=Making+the+switch%2C General site: http://www.tvlink.org/media.php?type=video&chid=3&titleleft=Energy The EU as a ‘Green Giant’ Founding States 1957: Belgium, France Germany, Italy, Belgium, Netherland, Luxembourg Enlargements 1973: Denmark, Ireland, UK 1981: Greece 1986: Spain, Portugal 1995: Finland, Sweden, Austria (and DDR 1990) 2004: Estonia, Latvia, Lithuania, Hungary, Poland, Czech Republic, Slovakia, Slovenia, Malta, Cyprus 2007: Bulgaria and Romania Others? Why is the EU involved in Why is the EU involved in Environmental Policy? It is a popular issue so the EU wants to respond to citizens concerns. Many environmental issues have ‘transboundary’ effects, can’t be dealt with by individual countries Differences in national environmental rules would undermine EU’s effort to create a ‘Single Market’ with a ‘level playing field’ for business. How does the EU make laws? How does the EU make laws? More on this later, but essentially… The European Commission (executive body) proposes laws The Council of Ministers (representing governments) & the European Parliament (directly elected) amend/vote/agree on laws National governments implement them, under oversight of the European Court of Justice The EU’s Emissions Trading System The EU’s Emissions Trading System (ETS) Key element of EU effort to meet Kyoto targets ETS sets an EU­wide ‘cap and trade’ system allowing polluters (factory operators, oil refineries, power plants) to trade permits to emit carbon dioxide. Seen as a cost effective way to reach emissions reduction goals. Encourages polluters to find their own ways to reduce emissions. Also, hard for EU to adopt taxes, so this was easier to do legally and politically. Background on Emissions Trading Background on Emissions Trading The EU’s ETS relies on the concept of emissions trading, whereby firms are allocated a fixed number of CO2 emissions permits, and are then allowed to sell excess permits if they manage to reduce their emissions below their allocation, or to buy extra permits if they need to exceed their allocation. US invented emissions trading (1990 Clean Air Act) It was a Republican/conservative idea championed by economists and people like EPA administrator William K. Reilly How the ETS works How the ETS works Sectors covered by the ETS, emitters must monitor and report their CO2 emissions every year. By end of year, they must give government a number of EU emissions allowances (EUAs) = to the amount of C02 they emitted. In Phase 1 (2005­2007), 95% of EUAs were allocated to industry for free. Decisions over how to allocate them were left to national governments – National Allocation Plans Sectors covered: electricity and heat generation, cement, pulp and paper manufacturing, iron and steel, glass, … ETS Phase 1 (continued)… ETS Phase 1 (continued)… Lots of problems getting started, but system basically works A market for CO2: Trading takes off at various exchanges (European Climate Exchange in Amsterdam, Powernext in France and the European Energy Exchange in Leipzig) A transparent and widely accepted price for CO2 allowances emerges across the EU ETS helps cut 50 to 100 million tons of CO2 a year (2­ 5%) Makes companies take it seriously. Establish internal controls Problems: Member States allocate too many permits. Windfall profits for power sector Prices collapse briefly in 2006 ETS Phase 2 and Phase 3 ETS Phase 2 and Phase 3 Phase 2 (2008­2012) EU tightens up scheme, controls national allocations more closely EU lowers overall EU­wide ‘cap’ Phase 3 (2013 EU wide cap (not country by country cap) 50% of allowances will be auctioned (at around 30 Euros per ton of CO2), so no more freebies! EU ETS linked to other international schemes (ie in US?) New sectors to be covered ‘Carbon leakage’ debate What is Carbon leakage? Idea that if the EU (or any other country) restricts or raises the cost of emitting CO2, then emitters may relocate to countries that do not restrict emissions (e.g. to China) Post­2009 EU climate and Energy strategy addresses carbon leakage. Identifies sectors of economy most prone to ‘carbon leakage’ and suggests ways to help them remain competitive. Key issue: Carbon tariffs Same issue is crucial in climate proposals before US Congress EU Climate and Energy Policy EU Climate and Energy Policy March 2007 EU leaders agree to new targets for 2020 – the 20­20­20 targets Reduce greenhouse gas emissions by 20% compared to 1990 EU energy consumption should be 20% from renewable sources 20% reduction in overall energy use (through enhanced efficiency) Also investment in new technologies such as carbon capture and storage In December 2008 EU law makers agree on ‘climate and energy package’ to achieve commitments EU Climate and Energy Policy EU Climate and Energy Policy Largely this is about climate change goals But ‘security of energy supply’ is also key EU depends heavily on energy imports Russia and countries in the middle east are unreliable suppliers Renewable energy sources and nuclear can be generated within Europe, decreasing foreign leverage (ie Russia on natural gas) Renewable energy policy can help EU firms take leadership in new technologies, become exporters of those technologies. EU wants to be world leader in Green technology. ...
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