Think About it! What is one of the major greenhouse gas emissions that you have heard talked about in the news? Why would we want to lower emissions of this greenhouse gas?

Carbon Emissions Objectives: Model Command and Control, Cap and Trade and Carbon Tax regulation in order to see which is the most economically feasible while also protecting the environment.

Background- Video ObamaVideo Obama In the United States President Obama has identified climate change as one of the greatest challenges of our generation. Canada’s prime minister is interested in joining with President Obama to craft a global solution. You are all owners of power plants in America and Canada. You have been picked to try out three different systems to see which ones are the best for your factory in terms of economic and environmental factors.

Background I will play the role of the head of the North American Greenhouse Gas Initiative. We are using your factories as test factories to see which regulation would work best. Now fill in your worksheet with the owners name (yours) the plants name ( listed on sheet) and initial emission rate ( found under technical specifications-CO 2 Emissions)

Round 1- Command and Control NAGGI( North American Greenhouse Gas Initiative) has decided that each company has to reduce its emissions by installing a High- Tech SmokeStack Scrubber.(HTSS) The cost on average for each plant is $50 million and will reduce CO 2 emissions by 25%. Now on your sheet find the cost of installing a HTSS at your plant and what the reduction in emissions would be for your plant. Write that information on your worksheet.

Command and Control - Results Name of CompanyCost of installing HTSSEmission reduction after installation Ontario Quebec Carbon Industrial Energy Fossil COALCOA Giant Power

Question Set 1 1. Would installing a HTSS at your plant be cost effective? ( Meaning would it cost more than the average of 50 million or less or the same) 2. Would your plant reduce its carbon emissions by 25%?

Video- Upgrades What are the advantages and disadvantages of command and control? AdvantagesDisadvantages

Start Over!

Round 2 – Carbon Tax Starting NAGGI has decided that each company must pay a carbon tax of $20 per ton of carbon dioxide emitted at the plant. Decide: Do you want to pay the tax on your current emissions( 10 million tons per year)or do you want to implement upgrades at your plant which would lower your emissions? Complete part two of your worksheet.

Carbon Tax - Results Name of PlantEmissions Reduction Cost of Upgrades Carbon Taxes Paid after Upgrades Cost of Upgrades + Carbon Taxes Ontario Quebec Carbon Industrial Energy Fossil COALCOA Giant Power

Question Set 2 1. Look at the board. Did most companies decide to just pay the tax? Or did most companies lower their emissions to avoid a higher tax? 2. Do you think that this method benefits the environment?

What are the advantages and disadvantages of command and control? AdvantagesDisadvantages

Start Over!

Background The USEPA implemented a successful cap and trade system in the 1990s to reduce sulfur dioxide emissions and acid rain in the United States. Recently, discussion has begun on developing a cap and trade system to reduce carbon dioxide emissions. Your company will be a part of a test group to see how this system will work.

Round 3- Cap and Trade - Each company must reduce their emissions by 25% - Each company should use their Spec worksheet to determine what would work best for their company to lower emissions. Decide as a group how you are going to lower emissions………. BUT!!!!!!!

You can earn credits! - If a plant achieves a CO 2 emissions reduction in excess of 25%, it earns a credit for the amount of the excess reduction - Companies can then sell the credits to other companies. Companies who purchase the credits may use them to offset emissions at their plant and reach the goal of 25% Example: If Plant X reduces their emissions to 6.5mty even though they only had to reduce to 7.5mty, then they have a credit of 1.0mty. They can then sell that credit. YOU determine the price paid for credits along with the carbon brokers.

This is how it will work: Remember you are in a competitive market! Figure out how you would like to reach the cap first and if you can sell or buy credits. Then pay attention to what other groups are doing to see how you can make your company come out on top! If you would like to buy or sell a credit you can write this information on the board at the front of the classroom. The winner of this round will be the company who is the most efficient meaning that they will spend the least amount of money to reach their cap limit! The fake money represents a credit. If you buy a credit use one piece of fake money to write how much you are buying the credit for. ( on back) You can try to make a deal with a company before anything is written on the board.

Cap and Trade- Results Use Excel Document to Check Final Accounting! We will also see who the winner is!

Closure Questions- As a Class 1. Which method is the easiest to implement? 2. Which method is most effective? 3. Why is Cap and Trade so popular then?

Closure Questions Now in a group write down the advantages and disadvantages of each system for the following factors and then we will discuss as a group: Environmental Economics Political