The hazards of oversimplifying cap + trade

A two-hour PowerPoint/Keynote presentation isn't enough time to explain the science of climate change, the political forces governing our response to it, and the economics involving in reducing greehouse gas-emissions. Oversimplification is an unavoidable hazard. Just imagine how much trouble you're going to get into if you try to compress all that into 10 minutes? Is it even possible to make a meaningful contribution in such a format?

Annie Leonard's new short feature making the rounds of the net this week, The Story of Cap Trade, clocks in at 9:56. So you know there's going to be complaints that the producers have failed to capture the complexity of the issue. Before you watch, a word of warning: this should not be your only source of information about the legislation now before the U.S. Congress. If you haven't already managed to find a few hours to read up on it, Googling "cap and trade" and following your links of choice would be a good idea.

Done? OK. Now you're ready for

The Story of Cap & Trade from Story of Stuff Project on Vimeo.

The video's shortcomings are many. Stick figures may be cheaper to animate, but they only serve to remind us that we're watching an extremely simplified version of reality. David Roberts at Grist is practically apoplectic over Leonard's failure to capture the nuances of offset mechanisms and the realpolitik of the legislative process:

These are complex topics, and they're not well-served by the simplistic, hand-waving dismissal of offsets in Leonard's video. Regardless, if you think offsets are a problem, the obvious solution is to reduce the number of offsets. But again, Leonard and crew pretend that offsets are inherent to cap-and-trade and the only solution is to ditch it. Again, they pretend that "real" solutions would be immune to similar loopholes and giveaways.


First of all, there are reasons cap-and-trade has garnered the most support, but C&T bashers are so busy attacking a caricature they can't see them. Second of all, what is the sociopsychological theory here supposed to be? If we just stopped talking about cap-and-trade, everyone would wake, as though from mysterious trance, and start talking about "real" solutions? The only reason the world hasn't come together around tough measures that would financially damage fossil fuel companies is that the world's citizens are, like kittens, distracted by the shiny cap-and-trade bauble?

Roberts is right, to an extent. The Story of Cap and Trade does leave the viewer with some misapprehensions about the EPA's powers and Europe's experience with emissions trading. But Robert's efforts to set the record straight don't fare much better.

For example, Leonard claims the Europe's cap and trade mechanism has failed to reduce emissions. That's questionable, as Europe is one of the only parts of the developed world that will actually beat its Kyoto commitment. But why emissions are down is debatable. The shuttering of huge pieces of emissions-intensive Eastern European industry helped. So has tax shifting in a number of countries. What contribution has the emissions trading system made? We just don't know. ETS was a mess for the first few years. It seems to have settled down, but it's too early for a meaningful evaluation like Robert does, when he writes that most such markets "work perfectly well."

Leonard's dismissal of offsets is also rather broad. But Robert's response that we shouldn't throw out the whole idea of a offsets because of a few bad apples is just as problematic. Yes, the proposed legislation contains some safeguards to ensure the offsets are real, but in the end we'll be asking foreign governments in politically unstable and sometimes corrupt nations to guarantee -- in perpetuity -- that their projects will do what they promise. And the fact remains that the legislation would allow emitters to claim credits for giving up expansion plans. This is no way to reduce emissions. As written, neither the Senate nor House versions of the legislation would actually see real emissions reductions until well into the next decade, which is simply too late. Until such provisions are removed, it is entirely fair to criticize the legislation.

Roberts is closer to the mark when he complains, repeatedly, that "The policy isn't the problem; the power of the fossil fuel lobby is." True. I wish this point were being made more often. Unless and until we relieve the people in power of that power, the chances of changing business as usual into something that can actually get us on the road to a zero-carbon economy, are slim.

The thing is, that's more or less the take-home message of The Story of Cap Trade. Leonard asks us if it makes sense to let the same culprits responsible for the economic hole we're still trying to dig ourselves out of run our climate change mitigation efforts. She doesn't make the case the way Roberts, or I, would have. She does dumb down some essential points beyond the levels at which we're comfortable. But at the end of the day, there is a strong argument to be made that the cap and trade legislation before Congress is seriously flawed because it represents more of the same old same old.

Does that mean we should reject cap and trade? Not necessarily. I'd rather follow Roberts' approach, which is to accept the flawed bills and then work on fixing the flaws after they become law. Mostly because there's not much chance of an alternative getting through Congress. But as much as we need some kind of climate change mitigation legislation to pass through Congress, so we need criticism of the flaws of that legislation.

I've made this argument before. If we must compromise, then we must do our collective best to redefine the center. That means including Leonard's efforts to highlight the problems with cap and trade along with the more constructive, work-within-the-system approach. As Roberts himself notes, we need "less Mead and more Machiavelli."

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Although it is true that this short feature is a very simplistic summary of Cap and Trade, it is meant to be just that - a summary. The report which drives it is very thorough and very much worth the read. It can be found here:

The basics of it are that Cap and Trade is not something we can try now and make better in the future. Cap and Trade starts us down a road which will be very difficult to get off and will most certainly not lead us to the low carbon future we need to get to.