Jeff Bingaman United States Senator from New Mexico

Four Strategies to Reduce Emissions

Four possible strategies have emerged to try to deal with the problem.

The first strategy that has been advanced is one that has been closely associated with the current Administration.  It is to rely primarily on funding new energy technology research and development.  This has been a popular strategy because everyone likes to invest in technology, and we know that we need a new suite of advanced energy technologies to reduce the costs of meeting our climate change challenges.  However, by itself, a technology development strategy cannot work.  New technology will always be more expensive than the conventional way of doing things.  So, unless we start assessing a price associated with greenhouse gas emissions from conventional industrial and electricity plants, we won't change the incentives that result in the current dominant position for high-carbon energy technologies.

The second strategy that has been advocated is to impose a carbon tax.  This is the path the province of British Columbia has recently chosen.  While this would clearly associate a price with greenhouse gas emissions, we do not know, ahead of time, what price would result in the most effective reductions of such emissions.  Too low a price, and you are just increasing energy costs without changing the balance of energy technologies that are being implemented.  Too high a price, and you are charging consumers more than what is needed in order to see the desired change.  I also wonder whether some of my colleagues in the Senate who have criticized cap-and-trade proposals, arguing that we should be imposing a carbon tax, have not also signed pledges to vote against imposing any new taxes.  I remember one conversation with a Member of Congress early in my career – he told me that he was not opposed to seeing new taxes imposed, he was just opposed to voting for them.

A third strategy that has been contemplated for dealing with the climate crisis has been to directly regulate greenhouse gas emitters through command-and-control regulations.  But if you think of the size and complexity of the energy system we are trying to change, direct regulation on a plant-by-plant basis is very impractical.  It will also likely be more expensive to consumers, because it is economically inefficient to squeeze reductions from some sources when those same reductions can be found elsewhere far cheaper.

Therefore, the fourth – and I believe most reasonable – strategy for us to explore is to implement a cap-and-trade program.  The advantage of cap and trade is that it places a cap on total emissions, but incorporates flexibility mechanisms that allow regulated entities to seek out the cheapest possible reductions in the economy.

I believe that most Members of Congress are persuaded that this is the preferred strategy to pursue.  Both of the Presidential candidates in the upcoming election agree as well.  But not all cap-and-trade designs will prove workable for the task that is at hand. 

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