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Comment 102 for Public Input on Cap-and-Trade Auction Proceeds (investmentplan-ws) - 1st Workshop.


First Name: Dominic
Last Name: Gaffney
Email Address: dominicgaffney@gmail.com
Affiliation:

Subject: Public Input on Investment of Cap-and-Trade Auction Proceeds
Comment:
California’s landmark Cap & Trade system is one of the
best-designed carbon markets in the world, and it will be
instrumental in helping California meet its greenhouse gas
reduction targets for 2020 and 2050. 

Its benefits go beyond simply meeting the reductions fixed by the
system’s cap. The revenue from allowance auctioning also offers a
unique and reliable source of funding for deeper greenhouse gas
mitigation in the state. The revenue can also be put towards
accomplishing many of the supplementary goals of the state’s AB 32
Scoping plan, such as health, employment, and environmental justice
benefits. Obviously the cost-effectiveness of the greenhouse gas
abatement remains a top priority— however, these additional
benefits of meeting the goals of AB 32 should not be undervalued. 

Because of the seemingly infinite number of mitigation
opportunities in the state, a definitive solution for the effective
investment of auction funds will be hard to come by. Therefore,
having a way of comparing potential investments based on their
overall benefits is fundamental for developing a suitable
investment plan. 

Farbes and Kammen’s (2010) report for Next 10 provides a suitable
example. It outlines possible methods of quantifying the different
benefits of proposed investment options. They came up with five
categories: health benefits, green job creation, social/community
benefits, ecological benefits, and market barrier reduction. 

Quantifying these benefits would allow the Air Resources Board to
perform a simple cost-benefit analysis, providing a useful means of
comparison between potential revenue investment plans. Each
supplementary benefit could be assigned a weighting based on the
priorities of the ARB. Projects providing the greatest emissions
reduction and supplementary benefits at the lowest cost would
receive funding. This would create competition to maximize total
benefits and ensure that cap and trade revenues are invested
fairly. 

Auction revenues are projected to be $5.8 billion in 2015,
increasing steadily thereafter. If they are invested effectively
they could make a significant impact on the success of California’s
Global Warming Solutions Act. However, this rides on having a
proper framework to compare the multiple benefits of potential
investments— until then, California runs the risk of seeing this
valuable resource go up in smoke. 


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Date and Time Comment Was Submitted: 2012-06-22 13:47:10



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