Climate change ideas for On Day One

Day five of the UN Dispatch-Grist collaboration

Posted by Ideas for On Day One (Guest Contributor) at 11:13 AM on 27 Jun 2008

The UN Dispatch - Grist collaboration concludes today with discussion of an idea submitted by On Day One user James Hansen -- yes that Dr. James Hansen!

Tony Kreindler of the Environmental Defense Fund, Nigel Purvis, Kate Sheppard, Timothy B. Hurst, and David Roberts respond below the fold.

Tony Kreindler, media director of the National Climate Campaign at the Environmental Defense Fund

As usual, great issues raised here by Dr. Jim Hansen, whose outspoken leadership on climate change has been instrumental in raising public awareness and creating the opportunity we have now to craft effective solutions at the federal level.

We're clearly not going to fix global warming without addressing the market failure at the very root of the problem -- the lack of a price tag on dumping carbon pollution into the atmosphere. So a carbon tax on first blush may seem like a sensible way to go, according to basic economics: If you tax something, you get less of it, so we should tax carbon.

But the litmus test of an effective climate policy is not whether it achieves some carbon emissions reductions and drives investment in energy efficiency. The test has to be whether it reduces carbon emissions far enough and fast enough to ward off the serious consequences of runaway global warming. From that perspective, a carbon tax has a basic drawback: it may get you some emissions reductions, but it leaves the amount of reductions up in the air -- literally.

No one knows where to set a carbon tax to drive sufficient pollution cuts, and the political pressure in the U.S. Congress (not to mention a general aversion to taxes) will always be to drive that price down. Given the urgency of the climate crisis, we simply can't afford guesswork that will inevitably be muddied by politics.

What we do know is how far we need to reduce emissions to help avoid the worst climate outcomes. That's why a mandatory cap on emissions, coupled with an emissions trading market, is a better approach: It sets a legal limit on pollution to ensure that greenhouse gas concentrations don't reach dangerously high levels in the atmosphere. Emissions trading helps ensure that we meet that cap at the lowest cost -- by putting companies and private-sector investment in the hunt for the broadest pool of pollution reduction options across the economy.

That promises to make the renewable energy electricity system advocated by Dr. Hansen about much more than just wind and solar (though we hope they play a huge role). It will also be about innovative new technologies like fuel brewed from yeast, advanced geothermal, and energy harvested from the waves of the sea. Cap-and-trade establishes a low-carbon playing field that lets them compete. You can get a sneak peek at some of those technologies in a series of short videos from my EDF colleague Miriam Horn.

Nigel Purvis

Dr. Hansen is right that we do need to move as quickly as possible toward renewable energy, understanding that the transition will take decades even under the best circumstances. Government policy holds the key to speeding that transformation of the global economy. Carbon taxes are working in some countries and theoretically might be effective in the United States. The key to success, of course, is urgent action. We are most likely to see action in the United States through a cap-and-trade system, which already has considerable support from industry, environmentalists and many members of Congress. Cap-and-trade is not perfect (although it has some important advantages as Tony noted) but it's the only approach that is seriously in play. The worse thing would be to lose another decade holding out for a better policy framework.

Kate Sheppard

Hansen isn't alone in calling for a carbon tax -- Al Gore and other notables in the climate community have called for it. Heck, even John Dingell, chair of the House Energy and Commerce Committee, says that "a carbon tax would be the most efficient way of dealing with global warming." It probably is the most efficient way of dealing with it, but as Tony points out, efficiency and effectiveness don't necessarily win the day with the public in this debate over how to deal with climate change. We live in a country founded largely in protest of taxes, and the aversion remains strong. I don't think anything that involves the word "tax" would fly at this point in time. During the debate of the Climate Security Act earlier this month, Republicans called the bill the "Boxer Carbon Tax" in an effort to malign it. I think that some sort of cap-and-trade scheme is the best option that stands a chance at this point.

But Hansen has a great point about how to gain public support, and how to do this most effectively, in advocating for a return of all the revenues to the public. Tax-and-dividend, or cap-and-dividend, is likely to fare much better with Republican politicians and the public in general. It also takes away the Republican argument that climate legislation is meant to be a new, giant money-suck for government-happy Democrats. Though I may personally favor using a portion of the revenues to invest in technology R&D and green jobs programs, this would probably make legislation more appealing to the general public.

And clearly Hansen's idea that the next president should call for a completely renewable energy electrical system is great. Setting a price on carbon would correct the market in order to make that possible.

David Roberts

I largely agree with Tony on the cap-and-trade vs. carbon tax question. That debate has taken on a very strange character -- everyone from economists to social justice advocates talks about a carbon tax in reverent tones, as though it's a Blu Ray DVD player while a cap-and-trade system is a Betamax VCR (you younger readers can ask your parents about that one). But it's not exactly fair to compare a real-world cap-and-trade system (like the one in the E.U., which admittedly had a very rough start) with the Platonic ideal of a carbon tax as sketched on Greg Mankiw's whiteboard. In the real world, as Tony says, it's just as easy for a tax to be complex and unwieldy, once the lobbyists fill it with loopholes and exemptions. Most of all though, a well-crafted cap-and-trade system gets you certainty on emission reductions, which is the overriding priority here.

That said, if you want to drive a large-scale, short-term shift to efficiency and renewables -- as Hansen does, and I do -- it's important to realize that federal carbon-pricing is only one piece of the policy puzzle, and not even necessarily the most important piece. You also need a large, sustained program of public investment, along with complimentary regulations and regulatory reform.

On the investment front, we need to plow a lot of money into infrastructure, particularly public transit, a smarter electrical grid, and improved water systems. We need to raise our R&D spending tenfold. We need to use the government's full purchasing power to expand markets for new green products and technologies. And we need investment to help seed and nurture nascent industries.

On the regulatory front -- which is boring to talk about, I realize, but vitally important -- we need to fix the perverse regulatory scheme that governs our electricity sector and biases utilities in favor of large central generation plants (which is why they all love nuclear and "clean coal"). We need to radically raise our efficiency standards for buildings, which is where most of the easiest, cheapest reductions can be found. We also need higher efficiency standards on everything from industrial boilers to vehicles to appliances.

And -- tipping my hat to the illustrious Dr. Hansen -- we need an immediate moratorium on new coal-fired power plants. That's the biggest prize in the short term, and if anyone's reading this wondering where they should direct their energy, direct it here. No new coal!

Timothy B. Hurst

First, I would like to extend my thanks to Grist, On Day One, UN Dispatch, and all of those who have weighed in on this important project all week. We must understand this whole experiment not just as a thought exercise, but rather as a potential conduit to our elected officials. One of the critical tenets of agenda setting is problem definition and associating the proper frame with that problem -- this project is already well on the road to doing that. Another critical component in setting the agenda will be to ensure that the properly framed problem and its concomitant solutions reach our policymakers with the kind of broad-based support needed to affect substantive policy change -- and that's next.

Broadly speaking I think Dr. Hansen's suggestions are excellent ones, and I will address them separately. First, the suggestion that we need to move to a "national low-loss electric grid" powered solely by renewable energy sources is a useful one. But considering the incrementalism that is built into our government structure, not to mention the fact that a national grid infrastructure and our multi-layered federalism go together like oil and water, we may not be able to do so within the ten years that Dr. Hansen suggests -- but that certainly doesn't mean he shouldn't suggest it. We need urgent action now to simply maintain the kind of investments in renewable energy that will ensure its continued growth. Whether that action comes in the form of investment tax credits, production tax credits, feed-in tariffs, carbon credits, a carbon-tax, or some combination thereof, "the key to success...is urgent action," as Nigel rightly suggests.

Like Dr. Hansen, I am a big proponent of a carbon tax. The cap-and-trade mechanism (especially ones with soft limits and ten-year phase-ins), would not provide the type of certainty that Tony suggests when he writes, "No one knows where to set a carbon tax to drive sufficient pollution cuts...". One only needs to look at Europe to see the 'effectiveness' of their carbon cap-and-trade program. I am not opposed to a cap-and-trade outright, as one was successfully built and implemented to address acid rain. We may even be able to learn from the mistakes made in the European model. But there is just as much "guesswork" involved in formulating a cap-and-trade as any other carbon policy.

Yes, Americans have an aversion to taxes. But, might that aversion be lessened if a carbon tax replaced personal income tax? A carbon tax would not stifle our economy, it would actually stimulate it. We need to take ownership of this issue and stop letting nay-sayers win the framing battle by continually allowing them to play the economic trump card. Environmental protection and economic vitality are not mutually exclusive.

Yes, transitioning to a revenue stream fed by carbon taxes as opposed to income taxes would require a complete restructuring of our tax code as we know it, something few want to do. But we might be beyond the point of choosing the easy path.

Part one, two, three, and four of On Day One: UN Dispatch-Grist collaboration.

For story: Climate change ideas for On Day One
21 Comments | Post a Comment

Electric grid

Hansen is correct to identify the electric grid as a critical part of the puzzle. In "The U. S. Electric Grid: Will It Be Our Undoing?" Gail the Actuary identified the problems that we have in the electric grid, which (of course) has not been well-maintained, so that even putting small amounts of solar or wind on it would be problematic.

However, Hansen doesn't advocate a revenue source for upgrading the grid, since he wants all carbon pricing to go back to the public.

by Jon Rynn at 12:40 PM on 27 Jun 2008

Tax v. Cap & Auction

The key here is that we need to price carbon--the mechanism is only important in so far as it's efficient, politically viable and can react to new information.

Because a Cap & Auction prices carbon by starting with necessary the carbon reductions than allowing the market to figure out the price, I think it's a better way.

A tax allows the politicians to set the price to try to drive the necessary reductions-- I think it's unlikely that electeds could be trusted to year after year pass the necessary carbon tax increases.

My sense is that most people agree that either way is fine.

by setb at 1:01 PM on 27 Jun 2008

Right

Right, most tax proposals I have heard make it revenue neutral for the consumer -- no money lost to the individual. It kills Republican arguments.

Now I am a neophyte when it comes to economics, so someone tell me why having BOTH a cap and trade AND a tax cannot be done? Al Gore told Hillary Clinton that it could be done on national television when he had his 2007 congressional hearing.

Is it a false choice between the two?

by christophersj at 2:36 PM on 27 Jun 2008

Personal Responsibility

Instead of imposing taxes on poor people who are just trying to get to work, how about the elites such as Hansen using their own money to fund change?

For example, a Prius costs $20,000.

Al Gore supposedly is spending $300 million to put ads on tv extolling global warming.

So, why not find the ( $300,000,000 / $20,000 = ) 15,000 poorest people and buy them Priuses?

On the same note, I would take 1/2 of Hansen's salary and use it to fund CO2 sequestering. I would also take 1/2 of anyone's salary who want to tell the rest of the world what to do and use it for buying poor people fuel efficient cars.

Then everyone would be happy. I mean, Gore and Hansen would be happy living in smaller homes and not drinking wine every night

...right?

by jabailo at 11:23 AM on 28 Jun 2008

2 reasons you are wrong Jabailo

2 reasons you are wrong Jabailo. You are a liar.

1.) every tax or cap and trade proposal includes relief for the consumer, especially low income consumers. The current bill that your Republican friends just killed in Washington had those amendments.

Its not a new tax, its a tax shift. Stop lying.

2.) a tax shift, with its punishment and reward for industry behavior, will do one million times the amount of good as a tiny hand-out to the poor.

And finally, these "taxes" are the most gentle and pro free-market way to start this endeavor. Its pro free-market because it assumes faith in the creative competition amognst private industry.

If rejected, the next steps to accomplish the desired goal can only be more disruptive, uncomfortable, and harsh. Beware of corporate propaganda claiming that this is "big government" wanting to tax the consumer to death. It's not. It's the will of the people who wish to see a sustainable world for their grandchildren.

-Christopher

by christophersj at 3:41 PM on 28 Jun 2008
[ Parent ]

Mr. disruptive here...

...you may be right, Chris, because if society gets serious only when it's too late, you're looking at something close to central planning by the government -- because when people are on the edge of starvation, which is what might happen if nothing is done to prevent global warming, they are not going to worry about little niceties like the free market. ..which is why I advocate some planning now, so we won't have to do a whole lot of planning later.

by Jon Rynn at 3:53 PM on 28 Jun 2008

Here's One For You, Nineteen for Me...

1.) every tax or cap and trade proposal includes relief for the consumer

What exactly is industry supposed to do to not have to pay these taxes? I don't see how individually a person or even a business can make a real decision that would escape the penalty.

Therefore, this is not any type of behavior modification, it is a tax plain and simple -- an unavoidable tax by any definition.

2.) a tax shift, with its punishment and reward for industry behavior

Why not reward personal behavior?

For example, why doesn't Richard Branson renounce his CO2 intensive lifestyle.

How about this: All rich Libs who fear CO2 should "sequester" any assets above $1,000,000 -- that way they won't be blowing so much (invisible) smoke our way.

by jabailo at 4:07 PM on 28 Jun 2008
[ Parent ]

My understanding

I am not an economic expert, as I said in my first post. Someone credible here correct me if am wrong. This scenario below is as plain as day and answers your question:

Tomato soup from a carbon free company will cost less than tomato soup from a polluting company. The carbon free tomato soup company will make sell more and more profits to pay for their new CO2-free energy and equipment and hire more workers. Basic economics will dictate the rest of behavior.

Don't you have faith in the entrepreneur and the creative passions of competition?

And this DOES reward individual behavior. I am rewarded for buying carbon free tomato soup by paying less for it!!

by christophersj at 4:24 PM on 28 Jun 2008

A bowl with not quite so much CO2 in it please...

Tomato soup from a carbon free company will cost less than tomato soup from a polluting company.

What you fail to say is how one tomato soup company gets "carbon freer" than another. I'm just asking for details over generalities.

by jabailo at 5:44 PM on 28 Jun 2008
[ Parent ]

By either..

By either making their own on-site carbon free energy or buying it from a utility. If they are smarter than their competitor then they will win by doing it in the most cost effective way. If they are less clever, then they will lose. This means job loss at that plant, but the tomato soup company who is winning will hire them because they are growing and need more workers.

Additionally, the NEW company that makes the (solar/wind/nuclear/wave) power that the tomato soup company will buy, will also need more new workers. These are called "green-collar" jobs.

That's as specific as I can be.

By the way, when FDR, and Ford, and GM, and the shipyards, and the millions and millions of citizens turned this whole frickin' country around in a matter of months to join together to defeat fascism, would you have been such a resistant force?

Would you have called foul on the overturning of the "familiar" in the face of endangerment?

by christophersj at 6:04 PM on 28 Jun 2008

And...

And you can talk to Amory Lovins about more specifics than I can provide. I'm just a dude with a day job who comes by this forum from time to time.

Pssst. By the way, you know that BOTH McCain AND Obama have said they are going to regulate carbon. So why are we even talking about it at this level? This train has already left the station.

by christophersj at 6:12 PM on 28 Jun 2008

It's A Start

By either making their own on-site carbon free energy or buying it from a utility. If they are smarter than their competitor then they will win by doing it in the most cost effective way.

What if Company A reduces Co2 but increases costs (by having to amortize new technology). They are then less competitive with a company that decides to eat the CO2 costs.

And also, aren't "carbon free" energy sources already subsidized...wouldn't companies already be making the conversion without the extra overhead of an unworkable cap and trade system?

Also, are transportation, storage other CO2 emitting processes included? For example, suppose one soup company in Italy uses solar cells -- but they ship their product on commercial freighters. A local company uses electricity from a "clean coal" plant. The costs of the Italian company are subsidized, but their CO2 because of transportation overall is higher. How far does metering/estimation of CO2 usage go? And why a tax? Can't one simply put a label on every product: n Kg of CO2 was produced to bring you this can of soup...and let the consumer decide.

millions of citizens turned this whole frickin' country around in a matter of months to join together to defeat fascism

That gives me hope that the Gorecarthites and Hansens can be routed from government and that sanity will return to science.

by jabailo at 10:54 AM on 29 Jun 2008

Jefferson Smith Will Not Yield

By the way, you know that BOTH McCain AND Obama have said they are going to regulate carbon. So why are we even talking about it at this level? This train has already left the station.

Why are the ecofascists always trying to squelch debate? "The science is settled", "the train is leaving the station". You people talk out of both sides of your mouth -- on the one hand you're always talking about "the People", but when a Person questions the logic of AGW you start a diatribe about how no one should question the sacred logic of the IPCC.

Sorry, but I just watched "Mr. Smith Goes to Washington" and I think the citizens of this country are about to be railroaded into an unnecessary tax by a lot of phoney-balonies who wouldn't know science if it bit them on their ass!

by jabailo at 10:58 AM on 29 Jun 2008
[ Parent ]

Not squelching

Not squelching. The debate on whether to regulate carbon has been going on for YEARS and YEARS and YEARS. And its over. Finished. You are free to spin your wheels as much as you want -- its a free country (U.S.).

But the debate on the METHOD of regulation is hot and happening now. Why not jump in on that instead?

Tell me, why do you put up with the extra costs of a catalytic converter in your car and unleaded gasoline at the station? Why not debate that? Did Nixon take your rights away as an individual? Lets go on and on about how Nixon ruined your liberty in the name of the environment.

Carbon regulation in general is inevitably becoming as real as the Clean Air Act and it's a waste of my time to discuss it at that level anymore.

by christophersj at 11:23 AM on 29 Jun 2008

Color My World

Coloring the Models: Climate Change through Color Change

http://wattsupwiththat.wordpress.com/2008/06/28/coloring- ...

Unfortunately for the USGCRP, the two models show the areas of warming and cooling to be occurring in widely different sections of the United States. The USGCRP's solution to this conundrum was to alter the temperature color scale by eliminating yellow and green, and extending the color orange into negative temperature ranges as low as -1.0°F, thereby implying warming, when in fact the models were showing no temperature change or cooling for some localities.

by jabailo at 11:30 AM on 29 Jun 2008
[ Parent ]

Re: Cheating models

Yeah, they shouldn't have done that. Its a shame.

I am sure there is bad science in any field. That's why there is peer review, conferences, and public journals.

by christophersj at 1:26 PM on 29 Jun 2008

A Jury of His Cronies

That's why there is peer review

What good is peer review if the peers are all on the same payroll?

Tell me, why do you put up with the extra costs of a catalytic converter in your car and unleaded gasoline at the station? Why not debate that? Did Nixon take your rights away as an individual? Lets go on and on about how Nixon ruined your liberty in the name of the environment.

Amazing isn't it...that during the era of the greatest increase in ecological mandates, that nobody gave a lick about CO2...

by jabailo at 5:25 PM on 29 Jun 2008
[ Parent ]

Referees and rewards

It seems to me that the most difficult thing about reducing CO2 emissions is how to discourage cheating.

Whether you tax CO2 or cap-and-trade it, there's always an urge to cheat, and there's not a lot of money to spend on referees to insure that cheating doesn't happen. It's true that peer pressure does discourage cheating, but only if most people are honest. When cheating becomes something that "everybody does," then it's hard to stop.

Perhaps the comparative cost of referees will help us to decide whether to choose CO2 taxes or CO2 capping-and-trading.

And if you think referees are expensive, just imagine how much "Jabailo's" system of "rewards" would cost. You will recall that he asked:

"Why not reward personal behavior?"

Sure, why not pay thieves not to steal? Nope, sorry, I prefer a solution that's less expensive to implement.

by JakobFabian01 at 6:08 AM on 30 Jun 2008

Investing in solutions

Another thing that may help to determine whether we choose CO2 taxes or capping-and-trading is how we encourage investing in technologies that make CO2 reductions possible.

If all we do is cap-and-trade, then big CO2 producers have to pay small CO2 producers, and the result is that those who need to invest in more efficiency have to pay those who are already efficient. I like meritocracy, but doesn't this kind of trade make improving efficiency more difficult for those who most need to do it (since they get punished financially) and less attractive for those who are already efficient (since they get rewarded just for doing what they're already doing)?

Of course, every proposal includes tax breaks for technological improvements. But it seems to me that a CO2 tax could immediately produce revenue to fund these improvements. This might speed things up.

Everybody talks about the US-American aversion to taxes as if this thing is the one unchangeable fact about the universe. I agree that the anti-tax movement has done an amazing job befuddling US-Americans with their simple vision of big corporations as golden geese, from which all wealth comes (not from labor, apparently) and of government as a terrible black hole into which our money disappears, never to be seen again.

Actually, I know the secret of what government really does with our hard-earned money. It SPENDS it. That's right, and through our votes, we can influence the way the government spends our money - much more than we can influence the way corporations spend the money that we pay them.

So I say, if our calculations should show that CO2 taxes would be either more efficient or fairer (or both) than CO2 capping-and-trading (and I confess I haven't yet done all the math here), then we should SAY SO and not be concerned with "taxophobia." This and other similarly irrational fears would seem less inevitable if we more often had the courage to criticize them rather than pander to them.

by JakobFabian01 at 6:30 AM on 30 Jun 2008

Simplicity; Not Bureacracy

The only thing that causes CO2 is burning fuel.

Therefore the only things that matter are how much fuel you burn, and how efficiently you burn it.

Fuel reduction is its own reward...hence Co2 reduction is its own reward.

So, no need for an unnecessary bureaucracy to police CO2...it's already "capped" by business costs.

by jabailo at 9:47 AM on 30 Jun 2008

"Fuel reduction is its own reward"

Jabailo said, "Fuel reduction is its own reward".

Yeah, IF ITS EXPENSIVE ENOUGH!!!

Thank you for supporting a carbon tax. Welcome to the team!

-Christopher S. Johnson

by christophersj at 2:08 PM on 30 Jun 2008

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