As state leaders consider extending the program beyond 2020, Severin Bornstein [right] at the Energy Institute at Haas, UC Berkeley, argues, based on a paper he co-wrote, that the program suffers from lack of effectiveness:
While policy makers have argued that the low allowance prices just mean that other carbon-fighting programs must be successful, Bornstein begs to differ and offers some important recommendations:
The program is complicated and not nearly as elegant as a straightforward carbon tax would be. But it’s worth trying to get the details right, in case cap-and-trade can function as a viable alternative for tax-averse jurisdictions who want to decarbonize their economy. In that spirit, I hope Bornstein and his colleagues’ advice is well-taken by state leaders, as they work to improve the program.