A Critical Conversation on Climate Change ... - Green Choices

102 development dialogue september 2006 – carbon tradingelimination of a legal requirement for redundant scrubbers, that werethe main source of subsequent cost reductions. 140In the late 1980s, too, officials and experts had often overestimated thecost of cutting future emissions, which made a lot of what happenedafterwards seem like a ‘saving’ even if it wasn’t. The American ElectricPower Company assumed in 1981 that scrubbers would cost usd 500per tonne of sulphur dioxide removed. The Tennessee Valley Authoritythought usd 155 was closer to the mark; the department of energyusd 153–273, the Office of Technology Assessment usd 116–313. Mostestimates didn’t anticipate the historical accident of cheaper coal fromthe Powder River area. 141 As economist Dallas Burtraw points out, thisprice reduction, together with fuel switching cost reductions and othersuch factors that ‘have caused marginal abatement costs to fall wouldalso have lowered the costs of achieving the SO 2 emissions cap via someform of command and control policies’. 142Once the trading scheme got under way, in addition, a lot of installationsmanaged to cut emissions without trading at all. Most of thosewho did trade traded only within their own firm. Inter-firm tradingamounted to only two per cent of total emissions. 143But no one denies that emissions trading did save the private sector at leastsome money, right?No, that’s fairly uncontroversial. The question is what the impacts wereon others – and on society and its environment in the long term.What do you mean? Surely if the programme saved energy producers money,then everybody who used electricity benefi ted. Society as a whole was enabledto produce goods more effi ciently, no?It’s not so simple. Sure, such schemes save specific companies money.And in doing so they are supposed to maximise what the grandfatherof emissions trading, Ronald Coase, called ‘total product’ (readGDP), and thereby benefit society as a whole (see Chapter 2).But they do so only by lumping together emissions with other economicgoods. For a Coasean economist, the ability of the earth tokeep temperatures within liveable limits has to find a market valuejust like wheat or silver. It must be translated into an ‘abstract’, calculable,alienable form that can live what globalisation guru Hernandode Soto pictures as an ‘invisible, parallel life’ 144 alongside its physicalexistence.Thus creating ‘efficiencies’ in emissions reductions, like creatingmost other ‘efficiencies’, is a political process of morphing apples and