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But there is a need to be careful to avoid the mistakes of the EU’s system. Far too many permits were issued. As a result, prices of permits so far have been too low to discourage much pollution.

China recently adopted a timid form of Cap and Trade. The Californian plan is more ambitious.

The California cap and trade system was created in 2012. Any business that emits more than 25 thousand tons of CO 2 per year must obtain permits from the state government for those emissions. Most of the permits thus far have been issued free of charge. An auction system was devised to distribute the remainder. From 2012-2014 there have been eight auctions. In the latest, in August 2014, businesses paid $11.50 per ton for permits. A total of $2.27 billion had been raised from the auctions by Fall 2014.

The program has clearly been successful in raising revenues for the state. Whether the program helps to materially reduce emissions has yet to be determined. If the program does work as intended it would have reduced greenhouse gases arising in California by 2% by the end of 2014. Should the program prove successful, it may become a model for other states, or even the National Government.

5. encourage worldwide shifts from coal-fired power plants to natural-gas fired plants

A typical coal plant burns 10 million BTUs of fuel to produce one megawatt hour of electricity, but an efficient natural gas power plant burns only 7 million BTUs to get one M.W. of electricity.

That is a 30% reduction in fuel, and the natural gas yields as much as 50% lower carbon emissions. In addition construction gas-fired plants is cheap relative to those for coal. Gas-fired plants cost to build only $1 million per M.W. hours. So a 650 M.W. plant costs $650 million. But a new coal-fired plant costs $3 million per M.W. hour to build, or triple that for a gas plant.

6. invest in programs to make low carbon energy cheaper

For the short to medium-term, the whole world could carefully consider the example of France which relies heavily on nuclear with relatively few problems. If the U.S. is serious about reducing carbon emissions, nuclear energy there requires a sober, new look. However, because of very high capital costs and long construction periods, new nuclear capacity is not competitive without a carbon tax of at least $20 per ton especially when natural gas is as low as $2.00 or $3.00 per million per BTU (British Thermal Units).

Developed and emerging nations are also beginning to capitalize on opportunities in such non-traditional energy sources including wind, solar and tidal power to ultimately bring their combined share of energy to at least 15% by 2025. Technologies in all three, especially wind, are finally beginning to mature, and the costs of deployment are falling.

Sensible investment in bio-fuels, including bio-diesel produced by algae and even bio-fuel from sugar and plant waste could contribute to reduction in emissions as long as it is recognized that the U.S. program for ethanol from corn is not a sensible answer to any question (except the Iowa caucus in Presidential election years). This is one of the most ill conceived subsidy programs ever. Not only does it not , on balance, provide any significant incremental energy, it greatly pollutes the soil and the ocean.

Appendix chapter 17: project evaluation and sustainability

This appendix reviews concepts on discount rates and NPV and IRR. Note that the terms project appraisal project evaluation and cost-benefit analysis are used interchangeably.

Private Sector Project Evaluation ----Uses market information

1. NPV = - K o + R 1 - C 1 1 + r + R 2 - C 2 ( 1 + r ) 2 + . . . + R n - C n ( 1 + r ) n


  • K o = Initial Capital Costs (Front End Loaded Capital Costs)
  • R = Revenues accruing to a private firm
  • C = Costs to the firm

This is all market information
NOTE: For years 1thru n costs include any capital expenditures in addition to K o , but not depreciation.

  • r = Opportunity cost of capital to firm (the discount rate)

Government investments

For government (public investments in projects and any multi-year program such as those intended to curtail CO 2 emissions

2. NPV G = - K o + B * 1 - C * 1 1 + i + B * 2 - C * 2 ( 1 + r ) 2 + . . . + B * n - C * n ( 1 + r ) n


  • B* = Measured benefits ($, lives saved, floods prevented etc.)
  • C* = ($, plus any costs due to externalities)
  • i = Social discount rate when [o<i<r] - Social rate less then private rate. To be explained.

The Stern Review cited in this chapter utilizes the NPV framework to forecast the future net costs of global warming. Example:

NPV wm = - K o + B 1 - C * 1 1 + i + B 2 - C * 2 ( 1 + r ) 2 + . . . + B n - C * n ( 1 + r ) n


  • B 1 , B 2 , B 3 = Benefits are assumed to be negligible or middling, depending on the deca2de
  • C* = Costs of global warming to society worldwide (costs alternate on sea-level rise, temperature changes, presumed higher level incidences of tropical diseases(dengue fever, malaria etc.)

It is to be noted that the Stern Review uses a very low rate of social discount (0.01%) that with a low discount rate, costs emerging decades from now are unduly magnified. And , the really big costs do not emerge for decades.

*Major point: Stern uses a social discount rate of 0.01%

Questions & Answers

where we get a research paper on Nano chemistry....?
Maira Reply
nanopartical of organic/inorganic / physical chemistry , pdf / thesis / review
what are the products of Nano chemistry?
Maira Reply
There are lots of products of nano chemistry... Like nano coatings.....carbon fiber.. And lots of others..
Even nanotechnology is pretty much all about chemistry... Its the chemistry on quantum or atomic level
no nanotechnology is also a part of physics and maths it requires angle formulas and some pressure regarding concepts
Preparation and Applications of Nanomaterial for Drug Delivery
Hafiz Reply
Application of nanotechnology in medicine
what is variations in raman spectra for nanomaterials
Jyoti Reply
ya I also want to know the raman spectra
I only see partial conversation and what's the question here!
Crow Reply
what about nanotechnology for water purification
RAW Reply
please someone correct me if I'm wrong but I think one can use nanoparticles, specially silver nanoparticles for water treatment.
yes that's correct
I think
Nasa has use it in the 60's, copper as water purification in the moon travel.
nanocopper obvius
what is the stm
Brian Reply
is there industrial application of fullrenes. What is the method to prepare fullrene on large scale.?
industrial application...? mmm I think on the medical side as drug carrier, but you should go deeper on your research, I may be wrong
How we are making nano material?
what is a peer
What is meant by 'nano scale'?
What is STMs full form?
scanning tunneling microscope
how nano science is used for hydrophobicity
Do u think that Graphene and Fullrene fiber can be used to make Air Plane body structure the lightest and strongest. Rafiq
what is differents between GO and RGO?
what is simplest way to understand the applications of nano robots used to detect the cancer affected cell of human body.? How this robot is carried to required site of body cell.? what will be the carrier material and how can be detected that correct delivery of drug is done Rafiq
analytical skills graphene is prepared to kill any type viruses .
Any one who tell me about Preparation and application of Nanomaterial for drug Delivery
what is Nano technology ?
Bob Reply
write examples of Nano molecule?
The nanotechnology is as new science, to scale nanometric
nanotechnology is the study, desing, synthesis, manipulation and application of materials and functional systems through control of matter at nanoscale
Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
what school?
biomolecules are e building blocks of every organics and inorganic materials.
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Source:  OpenStax, Economic development for the 21st century. OpenStax CNX. Jun 05, 2015 Download for free at http://legacy.cnx.org/content/col11747/1.12
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