Who should get carbon credits, automakers or utilities?
Toyota Prius PHEV - click above for high-res image gallery
Governments everywhere are trying to use a carrot and stick approach to get reductions in emissions, particularly when it comes to greenhouse gases. The stick is well-known approach: fail to miss the requirements and you pay a fine. For the carrot, things get a bit more complicated. The most popular approach has been to offer credits to those that exceed emissions reduction targets. Those credits can then be sold to other emitters that are failing to hit targets for any number of reasons. However, the question is who should get the credit for reducing vehicle emissions.
California is currently planning to start giving carbon credits in 2010, but at least a part of those credits will be going to utilities in return for upgrading infrastructure to support plug-in vehicles. Toyota, which, along with other automakers, will be required to sell some number of plug-in vehicles over the next five years, is not pleased. It feels that automakers who are spending billions of R&D dollars to develop and build plug-ins should get the credits.
Ultimately, the answer is probably somewhere in between the extremes. Automakers should definitely get some credit for the vehicles they build and sell. Utilities should also get some reward for migrating energy production to less carbon-intensive sources like solar, wind and tidal power. They should also get some credit for building out public charging networks. The question is figuring out how much credit should go to each party.
Gallery: Toyota Prius PHEV concept
[Source: Bloomberg]
Reader Comments (Page 1 of 1)
Reality Hurts 11:03AM (10/13/2009)
Uh... both...
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nrb 12:22PM (10/13/2009)
How about neither? Carbon Credits themselves are a joke.
KK 11:09AM (10/13/2009)
This is why carbon tax makes a lot more sense than carbon credits. There's much less ambiguity on who supplies (sells) fossil fuels.
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GoodCheer 12:00PM (10/13/2009)
I agree. A well crafted stick will give everybody who 'does good' a competitive advantage compared to companies/individuals who are dirty.
Tax the emitters, give the revenue back to individual taxpayers so that they can make purchase decisions, and their choices will reward those that can make desirable products AND do it in an environmentally sound (and fiscally sound in re the tax) way.
3PeaceSweet 11:26AM (10/13/2009)
Make it simple, slowly increasing carbon tax offset with increasing reduction in income tax.
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Tim 11:29AM (10/13/2009)
".... automakers or utilities?
That's our choice?
Why is it that WE always seem to have OUR money taken only to be given to the giant corporations or Big Gov't politicians?
The taxpayer or consumer ALWAYS pays but where's MY credit?
Damn Corporatist SCUM!!!
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wincros 11:36AM (10/13/2009)
What, is a plug in contribution to reducing your fleet average CAFE not enough? Do they really expect favors from California after closing the assembly plant in Fremont? Or from anyone when their bought and paid for southern senators from states where they have plants calling for letting American automakers go to bankruptcy? Does anyone care whether Toyota is pleased?
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Brent 12:56AM (10/15/2009)
AutoMakers, NO BRAINEr guys.
They are the ones making the clean investment, not the power producers.
That simple, the one making the effort gets the reward.
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radler63 4:26AM (10/14/2009)
Well, the carbon credits system is much better than distributing funding randomly for powerful OEMs dictating public policies, like it is done in Europe, especially in Germany - read my critical comments here:
http://energyforesight.blogspot.com/
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