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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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