High greenhouse gas (GHG) emissions often go hand-in-hand with high levels of other pollutants, as well as traffic congestion, loss of forests, and other socially negative impacts. Improving local air quality has been among the most important considerations in establishing an Emissions Trading System (ETS) in California and China alike. Emissions-intensive processes are associated with high levels of local pollutants and poor air quality, notably due to coal-fired power plants and road transportation. One study estimates that a 50 percent reduction in GHG emissions by 2050 relative to 2005 levels could lead to a 20-40 percent reduction in premature deaths over the same time period.
Preserving local environments can be similarly important, in particular when forests and land-use change are either included in the ETS or linked via emissions reduction credits (“offsets”). For example, avoiding carbon losses from tropical forest destruction can help reduce flooding and drought, contribute to the preservation of biodiversity and other ecosystem services, and support the livelihoods of forest-dependent communities. Other co-benefits include increased energy security from a more diverse fuel mix, induced technological change, the creation of green jobs, and lower traffic congestion and accidents from reduced use of passenger vehicles.
The government can distribute allowances through free allocation, auctioning, or a combination of the two. Auctioning generates government revenue, which can be used for a variety of purposes, including to fund climate action or to help low-income households.
In a 2016 research brief titled, Preliminary Environmental Equity Assessment of California’s Cap-and-Trade Program, they point out that large carbon polluters are more likely to be located in poor communities and communities of color. Such neighborhoods have a 21% higher proportion on average of residents living in poverty within 2.5 miles of facilities emitting localized greenhouse gases. Global climate change disproportionately impacts disadvantaged communities.
In recent years there has been a shift, with climate change polices now beginning to focus on people. The environmental justice community wants to be engaged and become relevant contributors to policy frameworks that ultimately affect people, particularly those people living in lower income communities that often bare the brunt. There is a moral and ethical imperative to address this issue, and at The Climate Trust we believe that carbon mechanisms and policies should treat these communities equitably. Carbon markets can play a significant role in championing a healthy and just world by ensuring industry incorporates the cost of carbon pollution into our economy, incentivizing direct reductions as the cap is lowered, and by enabling reductions in sectors that are not yet regulated under the cap.
Low Carbon Policies Create Jobs and Spur a Healthy Economy | March 20, 2017
Finding Common Ground Through Climate Change Conflict | January 23, 2017
California Cap and Trade Invests in Equity | October 31, 2016
What We Stand For | 2017
Attribution: Content from Partnership for Market Readiness (PMR) and International Carbon Action Partnership (ICAP). 2016. Emissions Trading in Practice: a Handbook on Design and Implementation. World Bank, Washington, DC. License: Creative Commons Attribution CC BY 3.0 IG
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