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Congressional Budget Office / Testimony before the Committee on Energy and Natural Resources, U. S. Senate : Statement of  Douglas W. Elmendorf, Director
http://www.cbo.gov/doc.cfm?index=10561

[From Director's Blog] Today I testified about the economic effects of legislation aimed at reducing emissions of greenhouse gases, drawing on a report that CBO released a few weeks ago.

Reducing the extent of climate change would entail substantial reductions in U.S. emissions and in emissions from other countries over the coming decades. Achieving such reductions in this country would probably involve some combination of three broad changes: transforming the U.S. economy from one that runs on carbon-dioxide-emitting fossil fuels to one that increasingly relies on nuclear and renewable fuels; accomplishing substantial improvements in energy efficiency; and implementing the large-scale capture and storage of carbon dioxide emissions.

My testimony emphasized several points:

• The economic impact would depend importantly on the design of the policy. Decisions about whether to reduce greenhouse gases primarily through market-based systems (such as taxes or a cap-and-trade program) or primarily through traditional regulatory approaches that specify performance or technology standards would influence the total costs of reducing emissions and the distribution of those costs. The costs would also depend on the stringency of the policy; whether other countries imposed similar policies; the amount of flexibility about when, where, and how emissions would be reduced; and the allocation of allowances if a cap-and-trade system was used.
• Reducing the risk of climate change would come at some cost to the economy. For example, CBO concludes that the cap-and-trade provisions of H.R. 2454, the American Clean Energy and Security Act of 2009, would reduce GDP below what it would otherwise have been—by roughly ¼ to ¾ percent in 2020 and by between 1 and 3½ percent in 2050. By way of comparison, CBO projects that real (that is, inflation-adjusted) GDP will be roughly two and a half times as large in 2050 as it is today, so those changes would be comparatively modest. In the models that CBO reviewed, the long-run cost to households would be smaller than the changes in GDP because consumption falls by less than GDP and because households benefit from more time spent in nonmarket activities. Moreover, these measures of potential costs do not include any benefits of averting climate change.
• Climate legislation would cause permanent shifts in production and employment away from industries that produce carbon-based energy and energy-intensive goods and services and toward industries that produce alternative energy sources and less-energy-intensive goods and services. While those shifts were occurring, total employment would probably be reduced a little compared with what it would have been without such a policy, because labor markets would most likely not adjust as quickly as would the composition of demand for different outputs.
• CBO has estimated the loss in purchasing power that would result from the primary cap-and-trade program in H.R. 2454, incorporating both the higher prices that households would face and the compensation they would receive (primarily through the allocation of allowances or the proceeds from their sale). CBO’s measure omits some channels of influence on households’ well-being that cannot be readily quantified, and it appears that the measure probably understates the true burden to a small degree. As estimated, the loss in purchasing power would be modest and would rise over time as the cap became more stringent, accounting for 0.2 percent of after-tax income in 2020 and 1.2 percent in 2050. Households in the lowest fifth of households when arrayed by income would see gains in purchasing power in both 2020 and 2050, because the compensation they would receive would exceed the costs they would bear. However, households in the middle fifth would see net losses in purchasing power amounting to 0.6 percent of after-tax income in 2020 and 1.1 percent in 2050.

Brookings Institution / by Craig Pirrong
http://tinyurl.com/yk4b3ef

[From introduction] The original concept of cap-and-trade envisioned that the total amount of carbon dioxide (CO2) emissions would be capped and rights to emit would be traded. But it is inevitable that there will be demand to trade instruments other than emissions rights themselves. Specifically, there will be a demand to trade derivatives on emissions rights…

the current regulatory environment is extraordinarily hostile to derivatives generally, and to carbon derivatives particularly. Indeed, several proposals have been introduced to constrain or eliminate various types of derivatives trading, including proposals to:

• Impose limits (e.g., speculative limits) on the uses of these products, or on the amount of trading certain kinds of entities can undertake;
• Restrict where and how derivatives are traded, with a decided preference for trading on organized exchanges;
• Constrain arrangements for the allocation of performance risk, with a decided preference for “clearing” derivatives transactions through central counterparties (“CCPs”);
• Ban certain derivatives altogether.

The American Clean Energy and Securities Act (ACESA), passed by the US House of Representatives in June, includes provisions mandating many of these restrictions.

All of these proposals are misguided, some extremely so. They are predicated on a widespread misunderstanding of what derivatives are, how they work, and the reasons that firms trade them…In this chapter I will support them by going back to basics, describing what derivatives are, why they are used, how they are traded, the abuses they are subject to, and the most efficient ways to constrain those abuses.

Brookings Institution / by Bryan K. Mignone
http://tinyurl.com/yfmn2s9

[From introduction]…Here we imagine that an appropriate US emissions reduction blueprint has already been selected from the space of available alternatives and focus…on the set of design considerations that could enhance the overall performance of the resulting regulatory program. We start from the premise that cap-and-trade will be the primary policy vehicle through which any proposed emissions reduction schedule will be realized…

In this paper, we focus on a key element of the response to…price uncertainty, namely the suite of compliance flexibility mechanisms that could be incorporated into the fabric of policy itself. We suggest that carefully designed temporal flexibility instruments, such as banking and borrowing, combined with a limited centralized authority to make subtle market adjustments, could eliminate most price volatility resulting from short-term economic dislocations. When it comes to longer-term uncertainty and the possibility that sustained high prices and costs will threaten the durability of the policy itself, we suggest that a carefully-designed upper bound on the carbon price could reduce these threats without materially increasing the risk to the overall environmental integrity of the program.

Brookings Institution / by Bryan K. Mignone
http://tinyurl.com/yzsyznb

[From introduction] …a consensus climate stabilization target will ultimately emerge as a result of ongoing political discussions. This target will most likely take the form of a number that expresses the maximum acceptable deviation of the global average surface temperature from its preindustrial value. For example, at the most recent G-8 meeting in June 2009, leaders from the industrialized countries committed to limiting the long-term temperature increase to 2 degrees Celsius (3.6 degrees Fahrenheit) above its preindustrial value.

…we will show that a 50% global reduction of CO2 emissions by 2050 relative to 2005 levels, another often stated policy goal,is plausibly consistent with the 2-degree C temperature target. However, this response is on the low end of what might ultimately be required, given the nature of the scientific uncertainties involved.

In light of the many known uncertainties associated with the climate system response, policymakers may wish to revise the global emissions path in order to improve the likelihood of attaining the 2-degree temperature target, or they may decide to adopt a different target altogether…

National Library of Medicine
http://toxnet.nlm.nih.gov/cgi-bin/sis/htmlgen?HSDB

The National Library of Medicine (NLM) Hazardous Substances Data Bank (HSDB) has added its first set of nanomaterial records.  Nanotechnology is the study of matter on an atomic and molecular scale– structures 100 nanometers or smaller. A nanometer (nm) is one billionth of a meter.

Like other HSDB records, the nanomaterial records are peer-reviewed and contain information on toxicity, manufacturing and use, chemical and physical properties, environmental fate and exposure, and more.

There are currently seven HSDB nanomaterial records:

•    Carbon nanotubes
•    Fullerenes
•    Silver nanoparticles
•    Iron nanoparticles
•    Titanium oxide nanoparticles
•    Zinc oxide nanoparticles
•    Cerium oxide nanoparticles

Information on hollow, spherical or ellipsoidal carbon nanostructures is found in the fullerenes record. The carbon nanotubes record contains information on tubular or lattice materials.

The fields of nanoparticles and nanostructures, as well as associated nomenclature, are continually evolving. Information and/or records will be added as data become available.  The HSDB and nanomaterial records can be accessed at: http://toxnet.nlm.nih.gov/cgi-bin/sis/htmlgen?HSDB

HSDB is a toxicology data file on the NLM Toxicology Data Network (TOXNET®). It focuses on the toxicology of potentially hazardous chemicals. It is enhanced with information on human exposure, industrial hygiene, emergency handling procedures, environmental fate, regulatory requirements, and related areas. All data are referenced and derived from a core set of books, government documents, technical reports and selected primary journal literature. HSDB is peer-reviewed by the Scientific Review Panel (SRP), a committee of experts in the major subject areas within the data bank’s scope. HSDB is organized into individual chemical records, and contains over 5,000 such records. (from NLM-TOX-ENVIRO-HEALTH-L)

Brookings Institution/ by Carolyn Fischer and Richard Morgenstern
http://tinyurl.com/yksauet

[From summary] This paper reviews the evidence on the competitiveness burdens imposed on domestic energy-consuming industries as a result of a unilateral or near-unilateral carbon pricing policy. We also examine the nature and magnitude of emissions leakage that could undermine the environmental effectiveness of such a policy. Subsequently, we analyze a range of options designed to address these concerns, with particular emphasis on the measures included in the American Clean Energy and Security Act of 2009 (ACESA). Overall, we find that this bill adopts a quite reasonable approach to the multiple challenges involved, although we do identify a number of possible refinements that might be considered as parallel legislation is discussed in the Senate.

Brookings Institution / by Adele Morris
http://tinyurl.com/ykezgbk (summary) / http://tinyurl.com/ylmbb5t (pdf)

As the Senate Environment and Public Works Committee hosts a series of hearings this week on climate change legislation, Adele Morris discusses the likely distributional implications of a U.S. cap-and-trade system. She explains how policy-makers could manage these implications by altering the way in which allowances or allowance revenues are distributed throughout the broader economy.

National Academy Press
http://www.nap.edu/catalog.php?record_id=12794

[Press release]  A report just released by the National Academies of Science estimates the “hidden” costs of energy production and use. These costs, which include human health effects, physical damages to buildings and other structures, and reduction in grain crop harvests caused by air pollution are not reflected in market prices of coal, oil, other energy sources, or the electricity and gasoline produced from them.

Known to economists as external costs, the report estimated these costs at $120 billion in the U.S. in 2005,  Health damage from air pollution associated with electricity generation and motor vehicle transportation is the largest single item.

Belfer Center, Kennedy School, Harvard University / by Melissa Chan and Laura Diaz Anadon
http://tinyurl.com/yhckc5y

This is PDF of a presentation without accompanying text.