John Gardner: Use tried and true tools on greenhouse gas emissions

Like a lot of folks around here, I enjoy time in my workshop. Over the years, I've acquired a lot of tools to handle just about any job I'm likely to encounter around the home.

When choosing the right tool for a given job, I'm guided mostly by my own experience. Have I tackled a similar problem in the past? What tools did I use? How did that job turn out? If I experienced good outcomes in the past, I'm likely to approach a similar problem with the same set of tools.

This approach could be taken when considering the development of a policy to address the problem of greenhouse gas emissions. When weighing various policy options, we can ask: Have similar approaches been used in the past? If so, how did they work out?

This fall, the U.S. Senate will pick up the climate change bill passed by the U.S. House of Representatives in June (The American Clean Energy and Security Act). This is a sweeping piece of legislation that, among other actions, establishes a cap-and-trade system intended to reduce the emissions of greenhouse gases over the next 40 years.

But what kind of tool is cap-and-trade? How can we assume that this approach will be successful in reducing harmful emissions?

To answer these questions, we should consider how we solved the critical problem of acid rain.

During the latter half of the 20th century, our freshwater lakes and rivers were experiencing acidification to the point of upsetting the ecological balance and endangering many native species of fish and plants. The problem was studied by scientists who, as early as the 1970s, hypothesized that the problem could be traced to sulfur dioxide emissions, mostly from coal-powered electrical generating plants.

Throughout the 1980s, the science behind this hypothesis was hotly debated but, in the end, a strong consensus developed in support of the link between the acidification of the waterways and the emission of sulfur dioxide.

To solve the problem, the Clean Air Act of 1990 established a cap-and-trade system that put strict limits on the total amount of sulfur dioxide that could be emitted. The overall cap was lowered every year, but only the total emissions were controlled.

Companies responsible for the emissions were free to trade the emissions allowances among themselves at a mutually agreed-to price. Companies that got ahead of the problem by investing in scrubbers or finding sources for low-sulfur coal would benefit by selling some of their allowances to other companies who wouldn't or couldn't take actions to reduce their emissions.

This program not only achieved the targeted reduction in emissions, but exceeded them. In 1995, the power plants included in the first phase of this regulation achieved an emission level that was 40 percent lower than that required by the law.

Idahoans were beneficiaries of this system when, just last year, Idaho Power sold $19 million worth of sulfur dioxide allowances that it no longer needed. The majority of that windfall was used to offset power cost increases that would otherwise have been passed on to consumers.

Throughout the 1980s, while the Clean Air Act was being debated, industry lobbyists warned that the cost of the act would be ruinous to the economy. Such did not prove to be the case. In fact, compliance with the act ended up costing only a fraction of what the EPA predicted it would.

No one thinks that the reduction in greenhouse gas emissions will be easy, but it's worth noting that many in 1990 thought that significant reductions of sulfur dioxide would be impossible. What was needed was a system that established incentives, allowing the power of the free market to find solutions and do so in a manner that was much more efficient than overt taxation or specific regulations.

To be sure, the American Clean Energy and Security Act that the Senate takes up this fall is a complicated piece of legislation and will likely become more so by the time they're finished.

But at its core, it's an attempt to apply a tool that proved to be just right for a similar problem.

John Gardner is Boise State University's associate vice president for energy research, policy and campus sustainability.