How carbon allowances can cut CO2

Factory exhaust stacks belch smoke in Latrobe Valley, Australia

TEXT OF STORY

Bill Radke: We should get our first look today at the Senate's version of a climate change bill. The bill proposes slashing carbon emissions by 20 percent by 2020. A big part of that effort lies in handing out permission slips to pollute, or so-called carbon allowances. Reporter Ashley Milne-Tyte explains.


Ashley Milne-Tyte: The government would hand out a set number of carbon allowances to companies. Most would be free until 2025, but some would be auctioned.

Mark Bernstein runs the University of Southern California's Energy Institute:

Mark Bernstein: I believe that to make this work, more and more have to be auctioned more rapidly to begin to get the right price signal into the market. And the key here is, is carbon should have a cost to it. It should be expensive.

Many of the allowances -- and the money they eventually generate -- will go to local utilities.

Daniel Lashof is with the National Resources Defense Council. He says the money could be used to help consumers become more energy-efficient.

Daniel Lashof: So that would help you lower your electric bill by helping you use fewer kilowatt hours.

It all sounds hopeful. But it looks like the U.S. may not pass a bill in time for a new global climate treaty set for December.

I'm Ashley Milne-Tyte for Marketplace.

About the author

Ashley Milne-Tyte is the host of a podcast about women in the workplace called The Broad Experience.

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