Charles Komanoff – Page 109

Carbon Tax Center

Pricing carbon efficiently and equitably

Wanted: Cloudsplitter

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(Originally posted on May 21 on Grist, under the title, Waxman-Markey: ‘80% less by 2050’ is too hard, let’s do 46%.)

I’ve read humongous books in my time, most memorably Cloudsplitter, Russell Banks’ magisterial cinderblock-sized novel of John Brown, the anti-slavery warrior whose “Bloody Kansas” campaign in the 1850s helped provoke the Civil War.

The similarly supersized Waxman-Markey bill couldn’t be more different – not just in genre, but in attitude. Where Brown gave his life to abolish slavery, the “American Clean Energy and Security Act of 2009” seems intent on postponing Americans’ day of reckoning with climate-damaging fossil fuels.

In a bid to pick up support from coal state Democrats, Waxman and Markey this week pruned their cap-and-trade “20% by 2020” greenhouse gas (GHG) reduction target to 17%. The actual reduction will almost certainly be even less, thanks to the bill’s generous “offset” provisions and the economic collapse that has pushed emissions way below levels from the 2005 base year.

spiral-cash-_-fpsurgeons-photostreamWorse, if a larger share of the GHG reductions comes from “other” greenhouse gases such as methane and nitrous oxide, then reductions from fossil fuel burning will be disproportionately smaller. While that won’t necessarily hurt the climate, it will mean that many of the ancillary but vital benefits from reducing carbon emissions, such as reduced oil dependence and diminished environmental destruction from coal mining, will be watered down.

To make my points, I’m going to go quantitative and speak of emissions in “CO2 equivalent terms,” in which emissions of methane and other GHG’s are scaled up to reflect their true heat-trapping capacities. All figures are in millions of metric tons (“Tg” or trillion grams). Ready?

Total U.S. GHG emissions in 2005 were 7,130 Tg, of which 6,074 Tg was carbon dioxide. A 17% reduction (Waxman-Markey’s 2020 target) requires trimming that by 1,033 Tg to reach 5,042 Tg. But I estimate that due to contractions in driving, flying and use of electricity, CO2 emissions this year will be just 5,770 Tg, or roughly 300 Tg less than in the 2005 base year. Hence, the required reduction from 5,770 to 5,042, which is 728 Tg, is just 12.6% of current emissions. That’s one-fourth less than Waxman-Markey’s advertised 17%.

Worse, non-CO2 emissions, which accounted for 1,056 Tg in 2005, are probably fertile territory for quick and cost-effective fixes. If that component could be shrunk at twice the overall target rate, i.e., by 34%, it would contribute 359 Tg of the necessary 1,212 Tg total reduction. This would allow a mere 853 Tg of CO2 to be cut from the 2005 base year, or only 549 Tg to be cut from this year’s estimated CO2 emissions of 5,770 Tg. The latter drop, a paltry 9.5%, could be gotten with annual reductions averaging just 0.9%. And of course the use of offsets will dilute those reductions even further.

Let’s round that 0.9% annual CO2 reduction rate from 2009 to 2020, to 1%, and take it out to 2050. At that rate, in 2050 CO2 emissions would have fallen from today’s levels by only one-third. Even if non-CO2 GHG emissions were completely eliminated, total U.S. emissions of greenhouse gases in 2050 would still be down by less than half (46%) from those in the 2005 base year. There’s a world of difference, alas, between that and the ostensible 80% reduction.

I ran a few of these numbers past a journalist I know who follows climate policy. He replied that “The political deal was to eviscerate short-term drivers [reductions and price rises] in order to get a long-term framework in place.” Maybe so, but what’s troubling is that the first GHG reductions are supposed to be easier to get than the last. Not to mention that U.S. environmentalists once had pretensions of making our country a model for the world, and weren’t going to settle for anything less than science-driven reductions.

I know, I know, investments take time to bear fruit, and the bulk of the reductions to mid-century will come via economies of scale and tech breakthroughs and societal tipping points. But at this stage that’s a matter of faith as much as of empirical evidence (as well as a subject for a separate post). And, last time I checked, Congress had not abolished the Law of Diminishing Returns and its corollary about low-hanging fruit.

Some say that Waxman-Markey, while imperfect, is at least a step on the road toward ridding society of fossil fuels. With the anemic numbers shown here, it smacks more of accommodation than abolition. Our atmosphere still awaits its John Brown.

Addendum

On the same day this was posted to Grist, the Economist ran an editorial, Compromise has enfeebled America’s cap-and-trade bill. A carbon tax would be better, roundly criticizing the Waxman-Markey bill. While the entire editorial is worth reading, the conclusion is particularly trenchant:

The weakening of this bill illustrates one of the central problems with cap-and-trade systems. They are complex, obscure and therefore susceptible to horse-trading. A chunk of allowances can be handed out to one lobby, a sliver to another, and soon the system’s effectiveness has been sliced away. The corresponding attraction of a carbon tax, which this newspaper has always supported, is its simplicity. The government sets the rate. Everybody can see what it is. Voters get transparency. Businesses get certainty. And the government gets a large chunk of revenue—not to be sniffed at in these difficult times.

This is an important moment. Thanks to much effort on the part of many well-intentioned people, America is prepared to legislate to control carbon. The country needs to seize this opportunity and introduce a simple carbon tax. Sceptics will howl about the initial cost, but it will be transparent and far, far cheaper than the impact of serious climate change.

Photo: Flickr / fpsurgeons photostream

BC Voters Stand By Carbon Tax

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Climate campaigners across North America awoke this morning and smelled the coffee: a resounding electoral victory in British Columbia.

Voters in Canada’s third-largest province yesterday returned to power, for a third four-year term, BC premier Gordon Campbell and his Liberal Party, who last July instituted the Western Hemisphere’s first major carbon tax.

We’ll let AFP news service report for us (emphases added):

British Columbia re-elects Liberals (May 13)

VANCOUVER, Canada (AFP) — Voters in Canada’s westernmost province kept a controversial carbon tax by re-electing the provincial government and rejected a landmark referendum for proportional representation.

As the British Columbia elections agency reported more than 60 percent of votes had been counted, the pro-business Liberals held a strong lead, with nearly 46 percent of votes compared to slightly more than 42 percent for the left-wing opposition New Democratic Party.

Two hours after the polls closed, New Democratic leader Carole James conceded defeat…

The Liberals and New Democrats, the province’s two main parties, had sparred during the campaign over issues including the economy, homelessness and several local scandals. But the environment — and especially the carbon tax — became the key election issue.

The tax, the first straight carbon tax in North America, was introduced by the government of British Columbia Premier Gordon Campbell in 2007 [ed. note: 2008] to help fight climate change. The tax is revenue neutral — the collected tax money is paid once a year to provincial residents.

The New Democrats, led by Carol James, fiercely opposed the carbon tax, arguing that it especially hurt rural residents. But the party’s opposition to the tax cost them the support of almost all environmental organizations, which sided with Campbell solely on the issue, while the nonpartisan Conservation Council launched a campaign telling voters to choose “anybody but James.”

The Green Party, which garnered slightly more than eight percent of total votes in early results, supported the carbon tax. But Green Party leader Jane Sterk was defeated in her home riding on Vancouver Island.

The election win gave Campbell a third term — a rare occurrence in the province — with his party holding a majority of British Columbia’s 85 legislature seats.

While elections are not referenda, the AFP report makes clear that the carbon tax stood front and center in the BC voting. After scanning hundreds of articles on the two-month campaign (and being interviewed for a handful, as well as appearing on Vancouver radio), our reading is that voters rewarded the Liberals for sticking to principle and standing up to the NDP’s withering attacks, as much as for the substance of the carbon tax itself.

campbell_skagit-ims1

The BC carbon tax took effect on July 1, 2008 at a rate of $10 (Canadian) per metric ton of carbon dioxide. Converting currencies and metrics, it equates to a very modest $7.80 per ton of CO2. However, the tax is to rise each year through 2012 by half the original amount, reaching the U.S. equivalent of around $11.75/ton this July 1 and, in 2012, around $23.50.

A U.S. carbon tax at that level would raise petrol prices by approximately 23 cents a gallon and national-average electricity prices by around 1.7 cents a kilowatt-hour. (Virtually all power generation in British Columbia is hydro-electric, so the carbon tax effectively exempts electricity.)

The BC tax is revenue-neutral, with revenues returned to taxpayers through personal income and business income tax cuts. The Feb. 19, 2008 BC Budget and Fiscal Plan spells out the tax’s rationale, impacts and mechanics, and is essential reading for any carbon tax advocate seeking to master communication tools for making a carbon tax palatable to the public.

In an e-mail to the Carbon Tax Center yesterday, American climatologist and climate campaigner James Hansen said, “The important thing is to get on the right policy track at the beginning — the policy must attack the fundamental problem, that dirty fossil fuels are the cheapest energy because they are not made to pay their costs to society.” Yes, carbon taxes must eventually reach high levels, but what matters now is that one major jurisdiction has gotten on the right policy track.

U.S. climate campaigners, mired in cap-and-trade murk, could learn from yesterdays’ election. At the very least, we owe a big debt of gratitude to BC Premier Gordon Campbell and his Liberal Party for political courage, and likewise to the voters of British Columbia for rewarding that bravery in the voting booth.

Photo: Flickr / Skagit IMS