Varun Sivaram

Energy, Security, and Climate

CFR experts examine the science and foreign policy surrounding climate change, energy, and nuclear security.

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Showing posts for "cap-and-trade"

Cap-and-Trade is Faltering in Europe, But the Problem Isn’t What You Think It Is

by Michael Levi

The last couple weeks have seen a steady stream of news articles heralding the near-death of Europe’s cap-and-trade system. The basic story is straightforward. After the European Parliament declined to effectively tighten the emissions cap in the continent’s Emissions Trading System (ETS), prices for emissions permits plunged. Since high permit prices are required to drive serious energy-system transformation, many people have concluded that the ETS – and by association cap-and-trade more broadly – is bust. Read more »

Cap-and-Trade Didn’t Kill the Dems

by Michael Levi

There’s been a lot of back and forth about whether cap-and-trade hurt the Democrats this past Tuesday. It’s mostly spin, with people focusing on whatever results they think bolster their case. But the debate matters: as Chris Horner of CEI points out, the fact that people attributed the 1994 bloodbath in part to Democrats’ attempt to pass a Btu tax is a big part of what killed anything along those lines for a generation. Read more »

Hard Times Ahead for US Climate Diplomacy

by Michael Levi

I have a short piece up at on the international implications of the climate bill collapse. Here’s the conclusion:

“The United States spent the better part of the last decade being pilloried for its lack of action on climate. The last year and a half has seen a new attitude from much of the rest of the world. International observers have watched the U.S. political debate with growing skepticism over whether Washington could ever deliver cap-and-trade, but they have still held out hope. The sharp setback to the Senate’s cap-and-trade efforts on July 22 means that the honeymoon for U.S. climate diplomacy is over.” Read more »

Parsing the Bingaman Climate Bill Draft

by Michael Levi

Earlier this afternoon, several media outlets posted a discussion draft of a utility-only cap-and-trade bill that Senator Jeff Bingaman is apparently working on. It’s not a finished product (provisions for offsets, for example, remain to be added) and apparently is a slightly out-of-date iteration (dating roughly to April). But it provides some signs of what a utility-only bill might look like,  and what some of the associated issues might be. Three things stand out to me as particularly interesting. Read more »

Responding to Andrew Chamberlain

by Michael Levi

Andrew Chamberlain has responded at length in two blog posts to my critique of his study of Kerry-Lieberman for the Institute for Energy Research. He gives some useful examples of how utilities might try to game regulators that I’ll engage with below. I’m going, however, to take his points in order, which means that I’ll be negative for a while before I get to that point. Read more »