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Rethinking Downstream Regulation: California's Opportunity to Engage Households in Reducing Greenhouse Gases

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  • Niemeier, Debbie A.
  • Gould, Gregory
  • Karner, Alex
  • Hixson, Mark
  • Bachmann, Brooke
  • Okma, Carrie
  • Lang, Ziv
  • Heres Del Valle, David

Abstract

With the passage of the Global Warming Solutions Act of 2006 (AB32), California has begun an ambitious journey to reduce in-state GHG emissions to 1990 levels by 2020. Under the direction of executive order S-20-06, a mandated Market Advisory Committee (MAC) charged with studying market-based mechanisms to reduce GHG emissions, including cap and trade systems, has recommended taking an “upstream†approach to GHG emissions regulation, arguing that upstream regulation will reduce administrative costs because there are fewer agents. In this paper, we argue that, the total costs to society of a GHG cap and trade scheme can be minimized though downstream regulation, rather than the widely proposed upstream approach. We propose a household carbon trading system with four major components: a state allocation to households, household-to-household trading, households to utility company credit transfers, and utility companies to government credit transfers. The proposed system can also be considered more equitable than carbon taxes and upstream cap and trade systems to control GHG emissions from residential energy use and is consistent with AB32.

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Paper provided by Institute of Transportation Studies, UC Davis in its series Institute of Transportation Studies, Working Paper Series with number qt2ct0n1xv.

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Date of creation: 01 Jul 2008
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Handle: RePEc:cdl:itsdav:qt2ct0n1xv

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Keywords: UCD-ITS-RP-08-34;

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References

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  1. Goodin, Robert E, 1994. "Selling Environmental Indulgences," Kyklos, Wiley Blackwell, vol. 47(4), pages 573-96.
  2. Jacoby, Henry D. & Ellerman, A. Denny, 2004. "The safety valve and climate policy," Energy Policy, Elsevier, vol. 32(4), pages 481-491, March.
  3. Burtraw, Dallas & Palmer, Karen & Bharvirkar, Ranjit & Paul, Anthony, 2002. "The Effect on Asset Values of the Allocation of Carbon Dioxide Emission Allowances," Discussion Papers dp-02-15-, Resources For the Future.
  4. Stavins, Robert, 2001. "Experience with Market-Based Environmental Policy Instruments," Discussion Papers dp-01-58, Resources For the Future.
  5. Azqueta, Diego & Delacamara, Gonzalo, 2006. "Ethics, economics and environmental management," Ecological Economics, Elsevier, vol. 56(4), pages 524-533, April.
  6. Paul Leiby & Jonathan Rubin, 2001. "Intertemporal Permit Trading for the Control of Greenhouse Gas Emissions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 19(3), pages 229-256, July.
  7. A. Greening, Lorna & Greene, David L. & Difiglio, Carmen, 2000. "Energy efficiency and consumption -- the rebound effect -- a survey," Energy Policy, Elsevier, vol. 28(6-7), pages 389-401, June.
  8. M. Fleurbaey & F. Maniquet, 1997. "Implementability and Horizontal Equity Imply No-Envy," Econometrica, Econometric Society, vol. 65(5), pages 1215-1220, September.
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Cited by:
  1. Hickman, Robin & Saxena, Sharad & Banister, David & Ashiru, Olu, 2012. "Examining transport futures with scenario analysis and MCA," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(3), pages 560-575.
  2. Bristow, Abigail L. & Wardman, Mark & Zanni, Alberto M. & Chintakayala, Phani K., 2010. "Public acceptability of personal carbon trading and carbon tax," Ecological Economics, Elsevier, vol. 69(9), pages 1824-1837, July.
  3. Wadud, Zia, 2011. "Personal tradable carbon permits for road transport: Why, why not and who wins?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(10), pages 1052-1065.
  4. McNamara, David & Caulfield, Brian, 2011. "Measuring the potential implications of introducing a cap and share scheme in Ireland to reduce green house gas emissions," Transport Policy, Elsevier, vol. 18(4), pages 579-586, August.
  5. Kopczuk, Wojciech & Marion, Justin & Muehlegger, Erich & Slemrod, Joel, 2013. "Do the Laws of Tax Incidence Hold? Point of Collection and the Pass-Through of State Diesel Taxes," Working Paper Series rwp13-027, Harvard University, John F. Kennedy School of Government.
  6. Schwanen, Tim & Banister, David & Anable, Jillian, 2011. "Scientific research about climate change mitigation in transport: A critical review," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(10), pages 993-1006.
  7. Fawcett, Tina, 2010. "Personal carbon trading: A policy ahead of its time?," Energy Policy, Elsevier, vol. 38(11), pages 6868-6876, November.

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