Just as Governator Schwartzenegger suggests he might want to join the EU Emissions Trading System (EUETS), a nice new article warning us that carbon trading is not any sort of panacea has appeared in the Los Angeles Times, by Dartmouth professor Michael Dorsey. It argues:

• The Clean Air Act reauthorization of 1990, which included some rights-to-pollute trading, was a partial success
• Carbon trading systems are different than sulfur-dioxide-pollution trading systems
• The EU’s system allowed companies and nations to specify their own baseline level of carbon output, and then receive credits at those levels
• This way of receiving credits led to a large oversupply of pollution credits, and led to a large crash in price last year
• The EU’s system probably had the effect of allowing big polluters to receive financial rewards
• Companies in the U.S., getting together under the name “U.S. Climate Action Partnership”, are likely to have such small reduction targets in their trading scheme that it will not lower the U.S. output of carbon dioxide at all over the next 5 years.

It doesn’t look good for carbon trading. Suggesting that it can solve anything is a red herring, unless the many issues I discussed before can be solved. The EUETS hasn’t solved them even slightly, and instead has had perverse results. Will the U.S. do anything different?