I set off a media firestorm in New York City last week.

It was Friday morning, the day after Trump repudiated the Paris Climate Agreement, and Mayor Bill de Blasio was using his weekly “ask the mayor” turn on the popular Brian Lehrer radio show (NPR) to tell New Yorkers “We’re going to step up our game” to address climate change. I called in and the screener put me through as “Charles from Manhattan.” Here’s what I said:

Mayor de Blasio, you spoke eloquently a moment ago about stepping up our game in light of Trump’s withdrawal from Paris. How about you stepping up your game, leading by example, getting out of your SUV armada, and if you need to go to the Park Slope “Y” five days a week, rather than a gym near you, why don’t you take mass transit? Or even once in awhile ride a bike, like the vast majority of your fellow New Yorkers, so you will know how we are suffering under a transit system — yes governed by the governor, not by the mayor — but you need to lead by example.

I finished with this:

One of the reasons we are in this climate crisis is because the average person sees elites not playing by the rules that elites seek to impose on everyone else. And you’re not going to be able to lead when you’re sitting in your SUV being chauffeured every day, twelve miles from Gracie Mansion to Park Slope just so that you can ride an exercise bike.

Then it was Mayor de Blasio’s turn. He defended his climate record and called my criticism “cheap symbolism,” as reported by Politico (abridged slightly here):

Charles, I understand the emotional appeal of what you’re saying but I’m just not going to take the bait, my friend.

I have instructed folks in my government to turn our fleet into electric cars. We are moving to renewables, we are retrofitting our buildings, that’s the real leadership — it’s not whether I go to the gym.

Whether I go to the gym does not affect the policies that affect millions of people. I’m going to keep going to the gym. I’m proud to say we have a hybrid. It’s a good car, it’s very fuel efficient. I use the subway when it makes sense to use the subway, and I do stay in touch with what people are going through and I knew it for years and years, because for many years I never had any car.

So it’s easy for you to say that, but it doesn’t really have anything to do with how we change the world. We change the world with policies that affect people and the policies of this city are going to lead to addressing climate change in a much more aggressive way than it’s ever been addressed in the history of New York City.

But again, the issue is not cheap symbolism here. The issue is, are we gonna take action. That’s really the motherlode of addressing emissions in this city. It comes from buildings. We’re going to be very very aggressive about that.

That was that, or so I thought. What I soon learned was that the City Hall media bullpen was going nuts. One of the reporters put my voice together with my first name, and the papers started calling for quotes. By nightfall, their stories were up, with front-page headlines in the Daily News and the NY Post branding the mayor a “green hypocrite” and even the staid New York Times putting my exchange with the mayor at the top of its Metro section.

I was able to go deeper in those interviews. My most-teachable moment came on Saturday. The NY Post was doing a follow-up and I said that transit riders “need a voice and we don’t have one,” when neither the mayor nor the governor rides a subway or bus.

There are levels galore, here. Let’s unpack them.

First, when we quantify the direct carbon consequence from the mayor’s mini-fleet of SUV’s from home to gym, we see it’s really small: just 24 pounds of CO2 per trip, which monetizes to a mere half-a-dollar’s worth of climate damage.

(Burning one gallon of gasoline releases 19.57 lb of CO2, we’ll call it 20 lb. Let’s assume two SUV’s, each averaging 20 mpg, though actual mileage is probably less. They’re going 12 miles, so we get 2 (vehicles) x 20 lb/gal x 1/20 gal/mile x 12 miles, which yields 24 pounds of CO2. In 2015 Pres. Obama directed federal agencies to use a “social cost of carbon” of $37 per ton of CO2, in 2007 dollars; that equates to $44/ton in 2017 dollars, which is just 2.2 cents per lb of CO2. So the mayor’s 24 lb per trip is imposing a direct climate cost of 53 cents (24 lb x 2.2 cents/lb).)

It’s true that the official U.S. cost of carbon (since rescinded by Trump) is a low-balled estimate, but even quadrupling it raises the direct climate cost of the mayor’s tailpipe CO2 to just two bucks — befitting the fact that global CO2 is the end-product of billions of actions that are individually insignificant but collectively fraught.

A second level of costs arises from the spatial impacts from driving in a dense city. These are experienced most acutely as traffic congestion and its attendant time cost. And here I mean not mayoral time lost to traffic (since de Blasio gets to read and talk by phone while being ferried to the gym) but the time his auto trip effectively takes from others on the roads, by virtue of occupying space and slowing them down.

As long-time subscribers to this blog may know, I’ve done a lot of analysis of traffic congestion costs in New York City, even to the point of quantifying the time costs from a single additional trip in or near the city’s Manhattan core. This analysis is embedded in the kaleidoscopic spreadsheet I maintain to model “congestion pricing” for New York (download here, Excel required; go to Delays and Delay-Costs tabs) but more conveniently summarized in Time Thieves, an article I wrote a half-dozen years ago with then-Princeton student Will Fisher.

The takeaway for our purposes is that a single mile driven by just one vehicle during ordinary congested conditions in or near Manhattan slows down other vehicles by a combined 8 or 9 minutes (think of it as hundreds of vehicles delayed by a few seconds each). Factoring that by the 24 miles in the mayor’s ride to the gym (12 miles by 2 vehicles), the cars, trucks, cabs and buses in the mayor’s “traffic field” are absorbing an aggregate slowdown of 3 to 4 hours. By any reasonable estimate of the average value of time of those vehicle users, the aggregate cost of the time taken from them by each mayoral ride from his residence to his gym is easily in excess of a hundred dollars.

That’s two orders of magnitude greater than the direct carbon cost per trip — indicative of the fact that traffic congestion manifests as an inefficiency problem far more than as a climate problem, at least directly. It also demonstrates that the mayor’s (or any other New York car user’s) promise to switch to an electric vehicles won’t put a dent in the societal costs of driving in a congested metropolis.

Yet even those several hours of extra congestion dissolve into insignificance in a city of 8.5 million people and 2 million registered vehicles. The crux of the matter — which I tried to telegraph in my radio remarks but didn’t really nail until that second NY Post interview the next day — is found in this syllogism:

• New York City is inherently green by virtue of its urban density. This idea was most lucidly distilled by the writer David Owen in his 2009 book, Green Metropolis. Density both facilitates and enforces shorter trips, non-automobile travel, and compact and contiguous living and working spaces, all of which translate directly into smaller carbon footprints.
• What makes this density possible is our mass transit (subway) system. But it is deterioriating from insufficient investment in equipment and maintenance. (The local press corps is all over this; see for example these vivid stories last month by The Times’ Emma Fitzsimmons, 1 and 2.)
• Politicians are ignoring this crisis. Neither NY State Gov. Andrew Cuomo, who controls the state-chartered Metropolitan Transportation Authority, nor Mayor de Blasio, who has a voice in running the MTA along with a bully pulpit to call out problems and demand solutions, has stepped up to take responsibility. Neither of them ever rides a subway or bus, except in a photo-op.

It’s safe to say that Mayor de Blasio isn’t steeped in this logical chain connecting density, transit and leadership. For evidence, look no further than the end of his radio rejoinder to my harangue, in which he called the city’s building stock the “motherlode” of emissions and, thus, his climate focus. While it’s true that heating and powering the city’s offices and apartments generates a good deal more CO2 than fueling our cars and trucks, that’s because extensive and efficient mass transit keeps down automobile use. Take that away — as the governor and mayor are effectively doing by turning their backs as the subways fall apart — and transportation emissions will surely rise.

But the stakes are higher still. Low-CO2 NYC can’t grow or even maintain its current population without reliable and humane transit. Businesses and families won’t suffer a city dependent on undependable transit and will locate in less inherently-green cities or suburbs instead. And while in theory leaders could care enough about transit to make it work even if they never stepped onto a train or bus, ours have shown no inclination to do so in their combined decade in office (6.5 for Gov. Cuomo, 3.5 for Mayor de Blasio).

Maybe the only way the situation gets turned around is if each of them is stuck on a jammed, sweltering, subway … or is forced to wait on a packed platform as the minutes tick and the tension mounts. And not just once, but again and again.

That, in a nutshell, is why I called up and berated the mayor. As I told The Times, I’d been pondering it for weeks. The combination of Trump’s craven Paris announcement and the mayor’s wrapping himself in the mantle of climate savior gave me an opening and also pushed me over the edge.

I’ll close with a bit of irony inspired by Nicole Gelinas, the trenchant urban affairs analyst at the Manhattan Institute and New York Post columnist. In her Monday column, Bill de Blasio is a climate change hypocrite, she noted:

People will use less carbon — eventually — not because they’re nice, but because it will be more expensive. The world’s governments could achieve this effect more quickly through a carbon tax. Why not get it over with now? Because it’s too hard, politically and practically, to change people’s behavior by making them pay the full purported cost of carbon — that is, asking you to pay for next decade’s hurricane with your gas purchase today. (emphasis added)

Yes and no. Enacting a carbon tax is hard, but not necessarily impossible. But in this case, as we’ve seen, even a stiff carbon tax wouldn’t impel de Blasio to switch to subway from SUV; and that’s probably true even if he were paying for the ride from his own pocket.

What’s needed are new social norms that will make my radio complaint so ordinary that it’s not news; and unnecessary besides, because the idea of being chauffeured 12 miles to a gym would be nearly extinct. That is where a carbon tax would help.

We put up 42 blog posts last year, an average of one every nine days. Half-a-dozen addressed the Washington state carbon-tax initiative, I-732, explaining why we backed it strongly. Ten pertained to the elections, with four on Trump, three on GOP denialism, and three on the Democratic candidates’ carbon tax stances.

Several of our posts used our carbon-tax model to quantify impacts of different carbon taxes and contrast those that would make a big dent in emissions (like Sen. Sanders’) and those that wouldn’t (ExxonMobil’s). Other posts ranged from soda taxes (a possible political template for pollution taxes) to climate science, from China (where emissions appear to be peaking) to Wyoming (still in the thrall of coal, while renewables languish).

Collectively, they got lots of eyeballs. Below we’ve collected screenshots from the ten most popular, in reverse chronological order. Links in titles will take you to the full posts. For the really curious, our directory of 2016 posts (and 2015, 2014, 2013 …) is here.

 

Dec. 13: The Good News: A clean electricity boom is why the Clean Power Plan is way ahead of schedule

Dec. 6: “Keep It In The Ground” Needs a Carbon Tax

Nov. 10: After The Trump Win

Oct.28: Fighting in the Trenches Doesn’t Excuse Ignorance on Carbon Taxes

Sept 13: Carbon Tax Can Be a Remedy for Toxic Hot Spots

July 7: Carbon Tax Works: CTC’s New Carbon Tax Model

June 2: How Donald Trump Profited From Clean Air Rules

April 16: What the Sanders-Clinton Clash over a Carbon Tax Says about Democrats and Climate Change

March 9: China Emissions Will Peak Soon (If They Haven’t Already): New Study

Jan. 21: Just How Scary Is 2015’s Temperature Record? We Count the Ways

Want more posts like these? Sign up on CTC’s home page to receive notices of new posts. And please support our work: click here. Many thanks.

[T]he quantity-based Kyoto-type approach [to UN climate negotiations] has pretty much broken down, leaving the world with a highly non-optimal patchwork of sporadic regional volunteerism that does not address centrally how to correct the critical externality of global warming.  — Harvard economist Martin Weitzman.

The Kyoto Protocol is broken. What can replace it? Professor Weitzman, considered one of the world’s most influential economists, proposes a game change: Instead of squabbling over the quantity of fossil fuels each nation may burn, negotiate a single carbon price all can adhere to.

Weitzman is best known for modelling the economics of catastrophic climate change. In a ground-breaking 2009 paper, he demonstrated that conventional cost-benefit analysis under-weights the risk of catastrophic scenarios. In two new papers, he scrutinizes the Kyoto Protocol’s quantity-based structure through the lens of game theory. He calls Kyoto’s attempt to set and divvy up a global emissions cap “the ultimate… top-down worldwide treaty.” That’s not a compliment. Observing that Kyoto hasn’t come close to its goal of “an internationally harmonized binding system of emissions caps,” Weitzman shows why: the Kyoto framework induces each nation to game the system by attempting to maximize the efforts required of others while minimizing its own.

Weitzman lays out three criteria for an effective global emissions reduction system:

1. It should induce cost-effective emissions reductions.

2. It should allow negotiators to focus on negotiating one central and highly salient parameter.

3. It should align negotiators’ incentives toward internalizing climate costs.

On the first criterion, Weitzman points out that while a carbon tax is more easily administered and more transparent than a cap-and-trade system, a carbon cap or a tax can both achieve cost-effective emissions reductions.

On the second, Weitzman builds on Nobel-laureate Thomas Schelling’s pioneering game theory analysis establishing the importance of a clear focal point in negotiations. Kyoto’s quantity-based approach assigning different binding emissions quotas to each nation has no focal point. In contrast, a price-based negotiation offers a single focal point for all parties.

And building on the seminal work of Ronald Coase, Weitzman stresses the importance of minimizing transactions costs. Coase showed that parties that might otherwise negotiate an agreement can be deterred by the high costs of getting to yes. Weitzman points out that any quantity-based structure such as Kyoto necessarily multiplies transaction costs: “It is easier to negotiate one price than n quantities — especially when the one price can be interpreted as ‘fair’ in terms of equality of effort,” he writes.

The bulk of Weitzman’s analysis focuses on his third and most important criterion: the need to negotiate a structure that counteracts parties’ national self-interests and aligns their incentives toward reducing emissions. [Read more…]

The Environmental Protection Agency will unveil a draft proposal on Monday to cut carbon pollution from the nation’s power plants 30 percent from 2005 levels by 2030, according to people briefed on the plan. The proposed rule amounts to one of the strongest actions ever taken by the United States government to fight climate change. (emphasis added)

That’s this morning’s breaking news on President Obama’s climate action plan, from NY Times national energy-climate correspondent Coral Davenport. Yet peel back the numbers and the plan turns out to be precious little.

Relative to 2030 emissions projected from current trends, the drop in that year’s U.S. CO2 emissions sought by the President is a painfully modest 355 million tonnes (metric tons). That equates to just 7% of total actual emissions from all sources last year (5313 million tonnes).

To be sure, the business-as-usual (no action) trajectory producing that 355 million tonne figure is mine, not the administration’s. (At the time I wrote this the White House hadn’t translated its percentage target into metric tons of CO2.)

I derive it below, and it’s subject to argument. What’s not debatable is that power plants are the low-hanging fruit in cutting CO2. That’s because electricity-sector emissions can be cut relatively easily not just via the demand side (through energy efficiency and conservation) but also on the supply side (by converting from coal to gas, and from coal and gas to renewables). Indeed, as of last year, demand and supply steps by industry, household and government had already wrought a 15% reduction in U.S. power plant emissions from the president’s 2005 base year (a drop of 361 million tonnes from 2414 million). By calling for only a second round of 15% cuts (355 million tonnes) from 2014 to 2030, the Obama plan in effect takes twice as long (16 years) to cut as much carbon pollution as the country just did (in 8 years, from 2005 to 2013).

Here’s another way to see how undersized a CO2 cut 355 million tonnes is: in a different political universe, one in which a carbon tax could be made the economic engine for cutting CO2, that same reduction (355 million tonnes) could be effectuated through almost the tiniest carbon tax imaginable: a carbon pollution fee starting in 2015 at $2.15 per ton of CO2 and rising by $2.15/ton each year to reach $34.40 by 2030, and applied only to the electricity sector (i.e., ignoring the other 61% of U.S. CO2 that comes from cars, trucks, planes, refineries, factories, heating, mining, etc., as the Obama plan does). Equivalently, an economy-wide carbon tax of just a buck and a quarter per ton of CO2 (rising by the same $1.25 each year so it reaches an even $20 in 2030) would also do the CO2-cutting job of the Obama plan. (These tax rates are derivable with my newly updated carbon tax, which you can download here.)

So when the NY Times calls the Obama plan one of the strongest U.S. government actions ever taken on climate, that’s a sign of how low the bar has been set by our country’s history of inaction.

What to do? Two things.

First, lean on the environmental lobby to stop caving to the White House. We need prominent advocates like NRDC and EDF to insist on more. Yes, it can be difficult to talk tough to the President when even halting steps like today’s are viciously attacked by the dirty-energy lobby. But heaping praise on a policy to cut emissions just 7% over 16 years doesn’t square with treating global warming like the planetary emergency it is.

Second, get behind a carbon tax — a real one, like the $12.50/tonneCO2 tax (starting at that rate and rising annually at the same rate) that Rep. Jim McDermott (D-WA) is readying for introduction this week. Our modeling indicates that in its tenth year, the McDermott carbon tax (which equates to $11.34 per conventional “short” ton of CO2), would reduce U.S. CO2 emissions by a third from 2005 levels, and by nearly 30% from future emissions without the tax. (By 2030, the reductions would be 41% from 2005 and 37% from business-as-usual.) The local chapter of the Citizens Climate Lobby is an excellent vehicle for political action for this or other robust carbon taxes.

Like you, we know full well that a measure like McDermott’s can’t and won’t make it through this Congress, and perhaps the next, even though it could be folded into comprehensive tax reform, spurring economic growth by shifting tax burdens off work and investment and onto climate pollution. But seven percent won’t do. A robust carbon tax like McDermott’s is more essential than ever.

Electricity-sector CO2 emissions in 2030 under “business-as-usual”: These depend on two parameters — electricity sales (which determine) generation; and the CO2 “content” of an average kWh generated. I estimated future electricity sales using AEO (that’s the US Energy Information Administration’s Annual Energy Outlook) forecasts of GDP growth and electricity rates, which I processed through assumed elasticities of 0.5 for income and (negative) 0.7 for price. For CO2 content, I assumed an annual decline in CO2/kWh of 1.0%, which is half of the average 2.0% “decarbonization” rate experienced in 2005-2013. As noted or implied above, U.S. electricity-sector emissions were 2414 million tonnes of CO2 in 2005 and 2053 million in 2013. A 30% cut in the former figure (the President’s goal) is 724 million tonnes, implying a 2030 target of 2414 less 724, or 1690 million tonnes. My modeling implies business-as-usual year-2030 emissions of 2045 million tonnes (coincidentally, almost identical to actual 2013 emissions). Reducing that to 1690 million tonnes requires a relative cut of 355 million tonnes, which is just 6.7% of actual year-2013 total U.S. emissions of 5313 million tonnes. For sources, more details and all calculations, see the Electricity “tab” of my carbon tax spreadsheet model.

Alone among the major economies, Germany is moving purposefully to phase out fossil fuels while also shuttering nuclear power. Germany’s energy makeover, or “energiewende,” appears to be thriving, as evidenced by the country’s humming economy, low unemployment, robust exports, stable or declining CO2 emissions, and rapid uptake of renewables. Yet the world’s most influential newspaper casts this ambitious program as an incipient failure, even as elsewhere it decries the climate stalemate in Washington.

Here are ten packets of information worth bearing in mind as you sift through coverage in “the paper of record” of Germany’s transformative energy agenda.

1. The German economy is the world’s fourth largest ― after the United States, China and Japan. Of the three dozen highest-population countries, Germany boasts the highest per capita GDP, save for the U.S.

2. Germany has embarked upon a concerted program to transform its energy system from fossil fuels to renewable sources ― wind power, electricity from sunlight, and biological-based fuels. This energy makeover — energiewende, in German — is not an overnight phenomenon but the accumulation of a dozen synergistic laws and policy directives instituted over several decades. The energiewende is now reaching critical mass, such that last year over 20% of German-produced electricity was generated from renewable sources, not even counting traditional hydro-electricity: wind, 8.4%; biomass, 6.7%; photovoltaics, 4.7%; municipal waste, 0.8% (an additional 3.2% was from water power) ― more than triple the comparable percentage for the U.S. (see table), and the highest share by far of any major economy. Perhaps most notably, Germany, with cloudier skies, a more northerly location, and 1/27th the land area, produces more than three times as much photovoltaic electricity as the United States. PV’s share in Germany’s electricity generation mix is 20 times as large as that in the U.S. [Read more…]

The Carbon Tax Center told the U.S. Senate Finance Committee today that an economy-wide tax on the carbon content of coal, oil and gas will cut U.S. CO2 emissions more than twice as fast as proposed clean-energy subsidies delivered as tax credits.

This finding leads a new 22-page analysis, “Design of Economic Instruments for Reducing U.S. Carbon Emissions,” that we submitted today to Senate Finance Committee Chair Max Baucus. Our analysis is in the form of “Comments” on a Committee “Discussion Draft” that proposes replacing 42 federal energy tax subsidies with either credits for “clean (low-carbon) electricity” production and “clean fuels,” but also asks for input on the merits of a tax on carbon pollution instead.

Our comments can be boiled down to this ringing conclusion: A carbon tax will do everything the clean-energy credits will do, and much more. While simplifying and rationalizing the current hodgepodge of energy subsidies is all to the good, only a carbon tax can course through our entire economy and reward energy efficiencies and conservation along with low-carbon production.

Moreover, with the right design, a carbon tax can protect lower-income families and energy-intensive U.S. industries alike, at no cost to the Treasury. In contrast, even the proposed streamlined clean-energy subsidies could cost taxpayers more than $30 billion a year.

 

 

 

 

 

 

 

 

We performed our analysis using the Carbon Tax Center’s carbon tax spreadsheet model, which may be downloaded via this link. With the model, we estimated that the proposed subsidies would reduce U.S. carbon dioxide emissions by roughly 400 million metric tons a year, whereas an economy-wide carbon tax set at the same level as the subsidies would eliminate 960 million metric tons of emissions. (For comparison purposes, U.S. carbon dioxide emissions from burning fossil fuels totaled 5,221 million metric tons in 2012, the last year for which data are available.)

The Senate Finance Committee’s Dec. 18 statement, Baucus Unveils Proposal for Energy Tax Reform,” is available by clicking here. That two-page letter contains a link to the Committee staff’s 8-page discussion draft, which solicited comments on both the proposed subsidies realignment and on alternatives that would tax carbon emissions directly.

Our comments were submitted on behalf of the Citizens Climate Lobby and the Citizens Climate Education Corp. CCL/CCEC are the most visible and vociferous grassroots organizations advocating for a revenue-neutral U.S. carbon tax, and we are proud to stand with them. CCL chapters and members across the U.S. submitted their own comments backing a carbon tax as well.

Our hope is that the Senate Finance Committee’s discussion draft signals a new interest in carbon taxing among the tax-writing committees on Capitol Hill . . . and that CTC’s comments along with those from others will persuade incoming Committee Chair Sen. Ron Wyden (D-OR) to convene informational and/or legislative hearings this year on the optimal choice of economic instruments to reduce U.S. carbon emissions. (Longtime Committee Chair Baucus is leaving the Senate to serve as U.S. Ambassador to China.)

In the interim, we believe that our comments stand as the first broad quantification of the relative efficacy of a carbon tax vs. energy subsidies (even rationalized ones) to reduce emissions. As the figures in the table indicate, a carbon tax wins hands down.

CTC’s comments were researched and written by CTC director Charles Komanoff and CTC senior policy analyst James Handley. Support for their preparation and submittal was provided by the Alex C. Walker Educational and Charitable Foundation. We are grateful for their support.

Two weeks ago, I caught a tantalizing glimpse of a possible carbon tax in China.

I was part of an international delegation brought to Hangzhou to meet with 200 officials from 11 provinces, 30 cities, and at least a dozen universities at China’s first-ever “International Forum on Economic Policies for Traffic Congestion and Tailpipe Emissions.”

Traffic gridlock and tailpipe emissions are mounting in China’s megacities, and officials are looking to economic policy instruments to control both. It seems only a matter of time — and perhaps not much time — before Chinese cities begin to charge vehicles a fee to be driven into their central areas during peak periods.

And if congestion pricing is truly on the table for China, might a carbon tax, which is cut from the same cloth of cost internalization and price incentives, be close behind?

My experience in China, which you can read about here, reinforces my conviction that there will be a U.S. carbon tax.

Maybe, if we get lucky with the new Congress, as part of tax reform in 2015. Or perhaps not till after 2016 or even 2020, given our low-functioning political system.

The push may need to come from the states and spread to D.C., as it has for marriage equality. Or a carbon tax may be forced upon Congress as China and other countries enact carbon taxes and impose carbon tariffs on our exports.

But a national carbon tax will come. The moment will arrive when, to paraphrase Jim Hansen, the laws of physics and chemistry, not to mention economics, overwhelm even denialism and gridlock.

The Carbon Tax Center works to accelerate that moment. And to ensure that the carbon tax that eventually passes Washington isn’t piecemeal and opaque, but is rapidly rising, transparent, and just.

Just under the radar — ­ in think tanks, meeting halls and, yes, Congressional offices ­ — carbon pricing is inching back into conversations about climate, energy policy and fiscal and tax reform. And CTC is key to these discussions.

We run numbers for Capitol Hill staff, journalists and grassroots advocates. We cross-pollinate the carbon tax grapevine to keep others in the field up-to-date and connected. We help fellow climate proponents see that neither subsidies for clean-tech nor EPA regulations can rid our economy of fossil fuels fast enough . . . and to grasp that a robust and transparent carbon pollution tax is needed to level the entire playing field, not just select pieces.

The Carbon Tax Center does all this on a budget that barely qualifies as shoestring. With your help now, we’ll do it even more vocally, in more arenas, and more effectively in 2014.

Your contribution, of any size, will help us grow support for a U.S. carbon tax in Washington and the states. Please click here, now, to make your tax-deductible donation.

Thank you for your past and future support. Have a wonderful New Year.

  — Charles Komanoff, founder-director, Carbon Tax Center

Photo: Silvia Moroni, Mobility, Environment and Land Agency, Milan.

This post, co-written with Alex Matthiessen and published in the Huffington Post over Thanksgiving (2013), is reproduced here with a handful of minor changes. Alex, a CTC board member, is president and founder of Blue Marble Project, Inc., an environmental consulting firm.

Small beer is perhaps too kind a term for the prosaic proposals being batted around by New York Governor Andrew M. Cuomo’s tax reform commission: close loopholes, broaden the base, modernize collection of property taxes, stop taxing retirement income. Little about restructuring taxes to help New York State businesses create new jobs and give hard-pressed working families a break. And nothing about tax reform that could establish New York as a leader in curbing climate change.

Yet one possible reform, a carbon tax swap, can do all of the above — and is already being used successfully in other countries. With whole sections of the Philippines in ruins from Typhoon Haiyan, and the Warsaw global climate talks ending in tatters, the governor’s tax commission needs to go long and put a carbon tax swap at the top of its pending report.

What’s a carbon tax swap? It’s revenue-neutral tax reform in which a new fee collected on the carbon content of fossil fuels lets the state slash existing taxes that hamstring businesses and make it hard for middle class New Yorkers to make ends meet.

Albany wouldn’t keep a dime under the swap. Instead, taxes that stifle enterprise would be replaced by a fee on polluting fossil fuels that would motivate businesses and homeowners to accelerate the transition to clean energy.

One obvious candidate for tax relief is the state sales tax, which adds four cents onto each dollar spent on goods and services from Buffalo to Babylon. (Localities tack on another three to five cents.) NY State’s average combined rate, the country’s eighth highest, exerts a double drag on commerce, driving purchases — and businesses — out of state and cutting into households’ buying power.

A statewide carbon tax on oil, gas and coal used in vehicles, buildings, industry and power generation of $20 per ton of carbon dioxide — the equivalent of 19 cents per gallon of gasoline — would net $3.5 billion a year. With this revenue, legislators could reduce the state sales tax from 4 percent to 3 percent. Plus, there would still be $500 million to invest each year to finance storm-related infrastructure and help building-owners finance climate-friendly solar power systems.

Alternatively, the new revenue could pay down business taxes that place New York in the bottom 10 percent of Forbes‘ rankings of state business climates. Abolishing one such tax, the $2.7 billion corporation franchise tax, would give companies much-needed administrative and financial relief, and help attract businesses and jobs to New York.

Yes, the carbon tax will make electricity, gasoline and other fuels more expensive. That’s by design. But less-affluent families use less energy than average and thus will bear less of the burden. Meanwhile, upstate hydropower, which is carbon-free, will be exempt from the tax, offsetting many rural residents’ greater usage of gasoline and heating fuels. (New York City residents have smaller homes and drive less.) A reduction of the sales tax would disproportionately benefit lower-income family, thus mitigating further the impact of the swap on working families.

How much would a $20-per-ton carbon tax reduce New York’s emissions? Around 6 to 8 percent. While that’s barely a tenth of what most climate scientists believe must be the nationwide emissions-reduction target for 2050, it would constitute a strong start toward a 100 percent clean-energy economy for New York. It would also create a template that other states could follow, especially if, as some climate-policy specialists suggest, U.S. EPA lets states use carbon taxes to meet national carbon-pollution reduction standards.

A year ago, Hurricane Sandy made the devastating reality of climate change painfully clear to 20 million New Yorkers from Gov. Cuomo on down, as well as other Americans. Yet Congress has proven incapable of enacting even a single meaningful measure to mitigate it. On climate, as with marriage equality, the states will have to show the way.

Now the governor’s tax-reform push gives him the chance to provide national leadership on how states, with a single policy instrument, can start delivering both tax and climate relief to their people.

Click here for a 6-page brief backing up most of the tax-swap figures in this post. Go to CTC’s “States” Web page for info on how advocates in Oregon, Washington and elsewhere are working to advance state-level carbon taxes. 

In my in-box are a dozen e-mails wanting my reaction to Eduardo Porter’s column in yesterday’s New York Times in which he insisted that of all non-carbon based energy sources, nuclear power is “the cheapest and most readily scalable.”

Whether my correspondents knew that in my former life I meticulously established the spectacular failure of nuclear power plants to stay on budget and produce affordable electricity, or they simply thought I might have a halfway informed opinion on reactors’ proper role in combating the climate crisis, I can’t say. But I dutifully opened up Porter’s column and was quickly appalled.

The column fails the single most critical precept in nuclear economics: don’t confuse promise with performance. I made this point in 1979, a month before the Three Mile Island reactor accident, in a review of a book that plumbed that very theme. I was struck with how the authors of Light Water: How the Nuclear Dream Dissolved — two business academics with experience in the American and French Atomic Energy Commissions — showed that from Day One nuclear power proponents mesmerized themselves with idealized cost estimates that ignored reactors’ innate complexities and razor-thin tolerances — twin Achilles Heels that time and again broke project budgets and sowed mistrust among policymakers and the public, especially in the U.S.

Things haven’t changed. In June, Porter’s colleague Matt Wald, who has covered the nuclear industry for the Times since the early eighties, reported on a nuclear plant under construction in Georgia named Vogtle — one of two reactor projects underway in the U.S. First, Wald summarized the disastrous cost escalation at predecessor projects 30 years ago:

In those decades parts of plants were built, ripped out and rebuilt because of design and regulatory problems, leading to ruinous costs. Examples sit across the muddy construction site: Vogtle 1 and 2, which opened in 1987 and 1989, cost $8.87 billion. When they were proposed in 1971 the estimated cost was $660 million.

Wald noted that the new project, Vogtle 3 and 4, had instituted cost-control measures to lock-in plant designs and also replace often-chaotic field assembly with prefabricated parts. But, he noted:

[T]he company that was supposed to be making prefabricated parts like clockwork, from a factory in Lake Charles, La., was shipping them with some parts missing or without required paperwork. Southern [Company, the reactor owner] built a cavernous “module assembly building,” 120 feet high and 300 feet long, where the parts were supposed to be welded together, largely by robots, into segments weighing thousands of tons. But shipments stopped last August and are still arriving too slowly.

“[I]t remained to be seen,” the Georgia state construction monitor told Wald, “whether modular construction would actually save time.” Meanwhile, 5,000 miles away from Vogtle and “stifling” U.S. regulations that for decades have been blamed for “suffocating” nuclear power here, an ambitious reactor project in Olkiluoto, Finland has run completely off the rails.

“The massive power plant under construction on muddy terrain on this Finnish island was supposed to be the showpiece of a nuclear renaissance,” the Times reported back in 2009. “The most powerful reactor ever built, its modular design was supposed to make it faster and cheaper to build. And it was supposed to be safer, too.”

Instead, the Times reported then, “after four years of construction and thousands of recorded defects and deficiencies, the price tag . . .  has climbed at least 50 percent.” That was just the beginning. By December 2012, three-and-a-half years after the Times article appeared, the cost of the Olkiluoto reactor had doubled again, according to Wikipedia, to 8.5 billion euro — nearly triple the original €3 billion delivery price. So calamitous is the cost spiral that the Finnish electric utility owner and the French reactor supplier are suing each other.

Why bring up Vogtle and Olkiluoto? Because they exemplify the real-world experience that Porter ignored. (They also constitute a majority of reactor construction now underway in the Western economies.) Instead, Porter hung his column on — you guessed it — paper cost estimates from the U.S. Energy Information Administration and the U.K. government. Here’s Porter’s faithful workup of nuclear vs. wind and solar, per EIA:

Take the Energy Information Agency’s [sic] estimate of the cost of generating power. The agency’s [sic] number-crunchers include everything from the initial investment to the cost of fuel and the expense to operate, maintain and decommission old plants. Its latest estimate, published earlier this year, suggests that power generated by a new-generation nuclear plant that entered service in 2018 would be $108.40 per megawatt-hour. . . This is not cheap. . . Still, nuclear power is likely to be cheaper than most power made with renewables. Land-based wind farms could generate power at a relatively low cost of $86.60 per MWh, but acceptable locations are growing increasingly scarce. Solar costs $144.30 per MWh, the agency estimates. A megawatt-hour of power fueled by an offshore wind farm costs a whopping $221.50.

Case closed, eh? $108.40 a MWh for nukes, $144.30 for solar, $221.50 for offshore wind? I’ll leave it to others to see if the EIA figures for renewables properly credit the still-ongoing declines in unit costs for photovoltaics and wind. My point here is that the nuclear numbers in Porter’s column overlooked not just Vogtle and Olkiluoto but the deep-seated problem that invariably leaves paper estimates of reactor costs bearing as little resemblance to the real thing as campaign promises bear to officials’ actual policies: the fabulous energy density that makes nuclear power so appealing in theory requires heroic countermeasures that demand degrees of perfection that are only achievable, if at all, through a punishing array of rules, regulations, paper trails, quality assurance, inspection, checking and double-checking that come at enormous cost.

I documented this in painstaking detail long ago in a book, Power Plant Cost Escalation, that took me several years to conceptualize and several more to quantify and compose and finally publish, in 1981. The book’s bottom line was that through the 1970s, costs of completed U.S. nuclear plants rose twice as fast as costs of completed coal-fired plants; while the higher costs at least paid for coal plants to become much cleaner but not for nuclear plants to be made any safer, judging by the steady drip of nuclear mishaps that culminated in the meltdown of the final nuclear plant in my database, Three Mile Island Unit 2. (The book is on-line here, as a 12MB pdf, or you can pick up a hard copy from me, cheap; send me an e-mail.)

This work went viral in the energy and business world of the time, giving me a good run as expert witness for state government agencies charged with representing utility consumers in electricity rate cases. Eventually I moved on — to bicycling advocacy, road traffic pricing, and, of course, carbon taxing. These days I mostly steer clear of nukes per se, and, indeed, of specific technologies, preferring to agitate to get the most-level playing field possible, via full-cost carbon pollution pricing.

The problems with Porter’s column don’t stop with his slavish adherence to paper estimates of reactor costs. He flogs Germany for its 0.9% bump in CO2 emissions last year (“even as they declined in the United States and most of Western Europe”), ignoring that German GDP grew relative to that of every other major European economy, and that the drop in U.S. CO2 was mostly due to the horrific (and possibly transitory) boom in fracked natural gas.

Indeed, from 2010 to 2012, a two-year period encompassing the March, 2011 Fukushima catastrophe and Germany’s subsequent decision to turn off 29% of its nuclear power production (reducing reactor output from 140.6 terrawatt-hours in 2010 to 99.5 TWh in 2012), Germany actually held constant its use of fossil fuels to make electricity.

How did German society make up for the 41.1 TWh drop in reactors’ electricity generation? Numerically, it was simple:

• German solar-photovoltaic generation grew from 11.7 TWh to 28.0 TWh (a rise of 16.3 TWh).
• Wind generation grew from 37.8 TWh to 46.0 TWh (a rise of 8.2 TWh).
• Total consumption of electricity fell by 16.4 TWh (from 610.9 TWh to 594.5 TWh), despite GDP growth.

(Figures are based on data from Bundesministerium für Wirtschaft und Technologie, Statistisches Bundesamt, Arbeitsgruppe Erneuerbare Energien-Statistik (AGEE-Stat).)

The institutional mechanisms are more complex and involve feed-in-tariffs and other mechanisms to elicit investment in renewables. (You can get the full scoop on how Germany turned off nearly 30% of its nuclear power without burning more fossil fuels from the excellent Energy Transition (The German Energiewende) blog run by Craig Morris at the Heinrich Boll Institute.)

Now that’s a story worth pursuing, and one I pitched to Porter in an e-mail the week before Labor Day. Perhaps my note was too gentle. In retrospect, I might have ripped a page from Nate Silver’s playbook and muttered a cautionary tale about the 2012 election pundits who went with discredited over robust poll data and predicted a Romney victory.

Photo: BBC World Service / Flickr.