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the energy & environmental security initiative
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Student Comment:
Kendall Burgemeister

EESI Research Assistant
Second-Year Law Student

Cost Containment for Cap & Trade:
An Upside for Everyone

The biggest roadblock to passing greenhouse gas (GHG) cap-and-trade legislation has been fear that any system would create larger-than-expected energy costs with a potentially disastrous impact on the economy. If a severe economic downturn did materialize, this would pose a major threat to the stability, credibility, and survival of the cap-and-trade system. Therefore, adequate cost-containment measures are crucial to achieving immediate action on GHG emissions, and to the long-term vitality of a GHG-limiting regime.
Congress has a wide range of cost-containment measures at its disposal. For example, systems that allow carbon emitters to bank and borrow permits, and to use carbon offsets as a substitute for buying permits, are scattered in various forms throughout many of the bills that have already been introduced to Congress. Going one step further, the Bingaman-Specter bill introduced on July 11 includes a price ceiling on emissions permits (a “safety valve”) at $12 per ton in the first year, rising by inflation plus five percent in each year thereafter.
Many corporations argue that banking, borrowing, and offsetting do not offer enough flexibility and security, while many environmentalists argue that a system with a safety valve is not potent enough.
On July 24, four U.S. Senators—two Republicans (Senators Lindsey Graham and John Warner) and two Democrats (Senators Blanche Lincoln and Mary Landrieu)—released a proposal aimed at minimizing the short-term negative economic impact of a GHG cap-and-trade system. The proposal was developed with the aid of the Nicholas Institute for Environmental Policy Solutions at Duke University (details can be found here).
The proposal, designed not to be standalone legislation, but rather to be an add-on to any of the other proposals, calls for the creation of a “Carbon Market Efficiency Board” that would monitor and, if needed, intervene in the carbon market just like the Federal Reserve Board does with the money market. Intervention could include expanding or contracting emitters’ ability to use banking and borrowing of permits, and offsets.
See Student Comment, Page 6

Doran: (continued...)
Doran moved straight into the field of non-profit environmental work after graduating from Andrews University in 1996. In addition to several other groups, Doran worked for the Fund for Public Interest Research, headquartered in Boston, Massachusetts and Washington D.C. He worked on fundraising, lobbying, proposal drafting, and environmental education. He also managed many of the Fund’s offices across the country, including the offices in Los Angeles and San Diego, California; Eugene, Oregon; and Minneapolis, Minnesota.
After six years of non-profit environmental work, Doran enrolled at the University of Colorado Law School, where he was an editor of the CU Law Review. He obtained his J.D. in 2003, whereupon he began work as a research associate at the Natural Resources Law Center at CU. Under Jim Martin, who is now the Executive Director of the Colorado Department of Health and Environment, Doran worked on drafting and analyzing international conservation easements, figuring out how to work with foreign legal systems so that these easements could be used to protect private land.
Then, two and a half years ago, Dr . Lakshman Guruswamy approached Doran with an idea that he had been thinking about—a group that would research how to use law and policy to deal with the issue of sustainable energy. Initially working as an unpaid volunteer, Doran set about trying to get Guruswamy’s idea off the ground. He researched. He analyzed. He organized. He fundraised. He made connections and contacts. “I had to wear a lot of hats,” said Doran. But, by carefully balancing all of these jobs, EESI was born.
With dedication, time, and support from Doran, EESI has blossomed into an accomplished research center, with the mission of using law and policy at all levels to tackle the issue of sustainable energy. From being EESI’s initial volunteer, Doran has turned EESI into a bustling office with a staff of seventeen. A single idea has become the seed for eight funded research projects, as well as three or four internal projects relating to law school curriculum development, assistance with environmental efforts on campus, and article publications.
“The more I learned about environmental issues, the more I saw that energy was a thread that ties everything together,” said Doran. “If you can supply clean energy to people, it can alleviate a whole constellation of social problems that you can’t really tackle adequately one by one. To me, it’s a really great way of making a big difference by working on a single area that impacts many other areas. EESI is so exciting because we deal directly with energy issues and we educate students to become the kind of leaders who can competently handle these difficult issues.”
According to Guruswamy, Director of the now flourishing EESI, “Kevin is a totally dedicated, innovative, imaginative, and brilliant guy who works relentlessly with superb results on EESI’s many projects. He is a one-man band.” And EESI applauds his performance.