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Is The New York Times Missing The Decade’s Most Affirmative Climate-and-Energy Story?

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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 Politics and Economics of Obama’s New Climate Program

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We present this guest post by Robert J. Shapiro, Co-founder and Chairman of Sonecon, LLC, and U.S. Under Secretary of Commerce for Economic Affairs during 1997-2001. Click here for his full bio, and here for the same post on Sonecon’s blog. Dr. Shapiro joined CTC’s board earlier this year. 

The Supreme Court’s blockbuster decisions on voting rights and same-sex marriage attracted most of the attention, but President Obama also moved decisively last week, on climate change. The facts that drove the President are scientifically undisputed. Increasing concentrations of greenhouse gas emissions in the earth’s atmosphere continue to raise global temperatures; and without serious action, the long-term effects on sea levels and climate could be catastrophic. Yet climate-change deniers on the far right have a tight hold on a majority of congressional Republicans, who now won’t even acknowledge the threat. With no hope of reaching a reasonable accommodation, the President put forward new regulations that don’t need their approval — and ultimately will be less effective and more costly for average Americans than the alternatives which Congress won’t consider.

Dr. Robert J. Shapiro

For a while now, most climate experts and economists have broadly agreed that the most efficient and effective way to reduce these carbon and other greenhouse gas (GHG) emissions is the direct approach: Raise the price of fuels based on the GHG emissions they produce, and so raise the price of all goods and services based on the emissions created to produce them. In principle, this approach could attract bipartisan support. It rests on one of the bedrock tenets of conservatism, the power of prices in free markets, as well as the liberal disposition to create national programs to improve the general welfare. Yes, the most straightforward way to achieve such climate-friendly fuel prices is apply a dreaded tax to all forms of energy based on their carbon dioxide (CO2) and other GHG emissions. But even that, in more placid political times, could be a basis for attracting broad support, since the revenues from a climate tax could be dedicated to cutting payroll, corporate and other, more economically-distorting taxes.

The truth is that every other serious approach to climate — from a cap-and-trade system to the President’s new regulations — also would raise prices: Directly or indirectly, they make it more expensive to use fuels that emit more than their share of greenhouse gases, relative to other fuels that damage the climate less. Over time, those price differences should gradually move millions of businesses and tens of millions of households to favor the cheaper, more climate-friendly fuels and technologies, and the goods and services produced using them.

The sobering news is, we don’t have much time. Scientists warn that however broadly we might adopt the current generation of cleaner fuels and technologies, the atmospheric concentrations of CO2 and other GHG will soon reach levels that will produce serious climate changes. However, the economics of setting a clear and hefty price on carbon and other GHG would also create new incentives that could extend the frontiers of climate technology. If energy companies, scientists and entrepreneurs can be certain about the price of carbon and other greenhouse gases, looking forward — if they know how much more it will cost people to use climate-damaging fuels, compared to climate-friendly ones — that would create strong incentives to develop and adopt the next generation of climate-friendly fuels and technologies.

The question is, how efficient and effective are each of these approaches, and which is most likely to spur new advances? The question highlights the costs of the extreme right’s current hold on congressional Republicans, which drives the political stalemate on climate policy and has left President Obama with few options apart from executive regulation. His new regulatory agenda has three parts. It includes, first, higher energy-efficiency standards for appliances and buildings, aimed at reducing energy use whether clean or otherwise. There also are new loan guarantees for projects to reduce or isolate the greenhouse gases emitted by fossil fuels, and additional grants to develop more efficient biofuels. These guarantees and grants are designed to promote greater use of more climate-friendly technologies and fuels by reducing the cost of capital to develop them. While these measures provide a sense of the administration moving on many fronts, their combined impact on the climate crisis will be modest.

There is one measure that could matter a great deal more: The President has directed the EPA to develop new CO2 and other GHG emission standards for existing power plants. This follows EPA regulations proposed last year that set similar standards for new power plants. The logic is straight-forward: Set standards that will force utilities to rapidly shift from coal to natural gas and renewable fuels. This makes sense, since the use of cheap coal to generate electricity accounts for about half of worldwide carbon and other GHG. Shifting to natural gas worldwide would cut life-cycle GHG emissions by 20 percent, and shifting to renewable fuels would reduce those emissions by as much as 40 percent.

There is no doubt that sufficient regulation could move the United States to a path under which our GHG emissions would decline in a sustained way. But using regulation in this way will cost Americans a great deal more than a carbon tax with the same result.

Under the new regulation, existing power plants will have to develop and adopt new investments that meet a new, uniform standard by reducing their emissions from fossil fuels or converting their plants to use cleaner fuels. To begin, monitoring and enforcing such regulation will cost a lot more than collecting a tax. More important, the program suffers from the inefficiencies of most regulation, because some utilities will be able to meet the regulation much more cheaply than others, based on the state of their current plants. For example, plant A could reduce its emissions by a required unit by investing $1,000,000, while plant B could reduce its emissions by the same unit for $250,000, and by two units for $500,000. So, reducing emissions by two units under the regulation will cost $1,250,000, while plant B could achieve the same result for the climate under a tax or a cap-and-trade system for $500,000. Under all of these alternatives, most of the costs are passed along to the ratepayers and consumers. But a tax with offsetting tax reductions could return much of those costs to everyone. Based on a simulation from several years ago, those costs could average some $1,500 per-household, year after year.

Finally, while the new regulations should spur technological innovations to enable utilities to meet the standard more efficiently, the incentive to innovate will dissipate once the standard is met. By contrast, the economic incentives to develop and adopt cleaner fuels and technologies never go away under an emissions tax, since every incremental advance would reduce the tax and, with it, the price of energy.

This past weekend, President Obama also devoted his weekly address to his new climate program. He deserves credit for refusing to be cowed by his opponents’ intransigence. He could truly elevate his presidency, however, by taking the case for a carbon/GHG tax with offsetting tax cuts to the country, and beating his opponents on one of the most fateful challenges we face today.

Breaking News: Alaska Sen. Murkowski Rejects $450/ton Carbon Tax

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The arguments being marshaled by U.S. Senator from Alaska Lisa Murkowski to reject either a carbon pollution tax or a carbon emissions cap are timeworn and easy to deflect. Equating more energy with prosperity (and less energy with deprivation) is so far behind the curve, it even got upended in a Super Bowl commercial. (OK, the spot only aired in the Tri-State New York region, but it still had a major car company pushing fuel efficiency with the punchline, “The only way to pay less for gas is to pay for gas, less.”)

What’s harder to absorb is Murkowski’s embrace of that equation at the dawn of the 113th Congress, when enacting a U.S. carbon tax requires at least a modicum of Republican support.

Sen. Murkowski in 2006 with her catch of the day: a 63-lb King Salmon

Murkowski, the ranking Republican on the Senate Energy Committee, has long been regarded as the Republican Senator most likely to someday go for a carbon tax. Back in 2007 she even co-sponsored a carbon cap-and-trade bill, in part because she understood that her state has been experiencing even more severe temperature upheavals than the other 49. Not to mention that the Alaska  Permanent Fund’s pro rata distribution of North Slope oil royalties to households has become a model for the fee-and-dividend carbon tax approach.

All of which makes it confounding that, according to press reports, Murkowski’s new energy “blueprint” brings down the hammer on both carbon price disincentives and limits on fossil fuels:

A carbon tax or a cap and trade proposal or something that is going to make energy more expensive is not going to help us . . . We like to be comfortable in our temperatures. We like to be able to move around. This is the mark of a successful and an economically healthy world. Where you have energy these are the prosperous areas.

Those remarks are not from Murkowski’s energy blueprint, called Energy 20/20, which isn’t Web-available yet. They’re direct quotes from the Senator, from a carefully reported article last weekend in the Anchorage Daily News. The same article helpfully reminded readers that “Murkowski herself co-sponsored an attempt in 2007 to impose a cap on carbon emissions, saying at the time that ‘the permafrost is melting, Arctic ice is disappearing and wildlife habitat is changing.’“

But that was then, as the saying goes. The article makes painfully clear that after years of tantalizing climate advocates, Murkowski has resolved to steer clear of carbon tax legislation — at least for now. Indeed, the headline, “Murkowski energy plan calls for more drilling, nothing to rein in greenhouse gases,” says that loud and clear. But here’s the topper:

If you’re sitting in Aniak [a town 300 miles west of Anchorage] and you get a press release from your senator saying the good news is we are going to address emissions, the bad news is you’re no longer going to be paying $6.99 a gallon for your fuel you’re going to be paying $10.99 then do you feel good about that? I can’t do that.

Where to begin? Well, to raise petroleum product prices by $4.00 a gallon, a carbon tax would need to be around $450 per ton of CO2. That’s literally off the charts: $450/ton is quadruple the 10th-year tax level in the Carbon Tax Center’s preferred bill, Rep. John Larson’s America’s Energy Security Trust Fund Act, and 10-20 times as high as taxes advocated by the Brookings Institution, among others.

And the upside of such a massive carbon tax ― of any carbon tax ― is the revenue it raises, which Murkowski’s “Aniak” sound-bite ignored. Carbon tax revenues could be dedicated to reducing the regressive and stifling payroll tax; or they could be “dividended” to Americans. In the latter scenario, Sen. Murkowski’s implied $450/ton carbon tax would yield annual dividend checks to every American household of $8,000, or six times the size of Alaska Permanent Fund checks.

Maybe that would play in Aniak after all.

Photo: Flickr / Esteban Salazar Herrera.

On Carbon Taxes and Emissions: Seeing Through the Fog from the Breakthrough Institute

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In recent years the Bay Area-based Breakthrough Institute (BI) has staked out a place in the climate and energy debate by arguing that the way to decarbonize U.S. and world energy is to spur technological innovation — not through the “stick” of carbon taxing but by the “force multiplier” of federal R&D. BI’s current poster child for this approach is hydraulic fracturing (fracking), although the Institute also backs wind and nuclear power and photovoltaic solar cells.

BI’s latest salvo, a report released a few days after the elections, made sweeping claims for the superiority of fracking over pricing carbon emissions:

Over the last four years, emissions in the United States declined more than in any other country in the world. Coal plants and coal mines are being shuttered. That’s not from increased use of solar panels and wind turbines, as laudable as those technologies are. Rather it’s due, in large measure, to the technological revolution allowing for the cheap extraction of natural gas from shale. By contrast, Europe, with its cap and trade program, and price on carbon, is returning to coal-burning.

BI president Michael Shellenberger and board chair Ted Nordhaus sounded the same theme in this letter in the New York Times on Nov. 15:

Germany and other European countries have put a price on carbon, through their cap-and-trade system, but are returning to coal burning anyway. A carbon tax can play a useful role as a way to raise money for public investments in innovation, but the suggestion that a carbon tax would result in the kind of innovation that is allowing natural gas to replace coal is to ignore the real-world evidence.

A lot of assertions and assumptions are packed into those two passages. Here are the key ones:

  1. U.S. greenhouse gas emissions have fallen considerably since 2007 or 2008.
  2. Solar and wind had little or nothing to do with that drop.
  3. No country cut greenhouse gas emissions more since 2007 or 2008 than the U.S.
  4. Europe has a price on carbon.
  5. Europe is returning to coal-burning.
  6. A carbon tax won’t contribute to low-carbon innovation.

Assertion #1 isn’t in dispute — we all know that the fracking boom has enabled relatively low-carbon methane gas to make big inroads into coal’s share of U.S. electric power generation. And #6 is more a question of belief — and how high a carbon tax is assumed — than of empirical validation. But assertions #2, #3 and #5 are eminently quantifiable, and so, as we’ll see below, is #4. I wrote to Shellenberger and pressed him on these points. His replies were collegial, but at variance with  empirical data.

Breakthrough Claim #2: Solar and wind contributed little or nothing to the drop in U.S. GHG emissions over the last four years.

Or, in BI’s own words: “Coal plants and coal mines are being shuttered. That’s not from increased use of solar panels and wind turbines.”

Hardly. Verification of wind power’s strong contribution to displacing coal can be seen in the table comparing U.S. electricity generation in 2011 and 2007. Electricity from coal-fired power plants, the single largest source of U.S. CO2 emissions as well as the mainstay of our power supply, fell by 282 TWh, a decrease equivalent to nearly 7% of all U.S. electricity production in either year. (A terawatt-hour is a billion kWh.) Because total U.S. electricity use in 2011 was little changed from 2007, the drop in coal-fired power had to be made up by ― indeed, was caused by ― increases in other sources. As the table shows, gas-fired generation was the largest source of increased electric output, growing by 120 TWh. But wind was a strong second. Its gain of 85 TWh over the same period was 70% as great as the gain from natural gas. (Hydro also grew substantially, but its increase was an artifact of weather variability in the form of deeper snowpack. Note also that solar-generated electricity is relatively tiny.)

To be sure, full-year 2012 data will almost certainly show a further big dip in coal-fired electricity, with the lion’s share of that one-year change (2011 to 2012) attributable to increased use of natural gas. Yet wind’s contribution to the ongoing drop in coal-fired electricity also increased in 2012, albeit by considerably less than the contribution from gas. Moreover, each time a kWh of coal is replaced by wind, CO2 emissions from generating that kWh fall by 100%, whereas the drop when the coal-fired kWh is replaced by gas is only 40-65% (depending on whether the gas-fired kWh comes from a traditional steam-cycle generator or a newer combined-cycle generator). Nor do wind turbines entail mining “natural” gas and the consequent release of climate-destabilizing “fugitive” methane and black carbon. All told, the Breakthrough Institute’s dismissal of wind power as a factor in reducing CO2 from the U.S. electric power sector is both mistaken and incongruous.

Breakthrough Claim #5: Europe is “returning to coal-burning.”

To see if Europe is indeed “returning to coal,” I registered (at no charge) with Enerdata, authoritative compilers of country, region and world data on energy production and consumption. These data are from Enerdata’s table, “Coal and Lignite Domestic Consumption in Europe (millions of metric tons)”:

2007: 1,009
2008:    962
2009:    889
2010:    897
2011:    937

(“Europe” comprises Austria, Belgium, Denmark, Finland, France, Germany F.R., Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, United Kingdom, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia, Bulgaria, Romania, Norway, Switzerland, Turkey, Iceland, ex Yugoslavia, Albania.)

Rather than a return to coal, the data show a dip from 2007-08 to 2009, followed by a slight rise to 2011. Even if the 2011 rise has continued into 2012, it likely amounts to no more than a return to the level of 2007-08. In short, Europe’s coal consumption shows no clear trend.

Beakthrough Claim #3: No country cut greenhouse gas emissions more since 2007 or 2008 than the U.S.

True enough, if Breakthrough was measuring cuts in tons — after all, the U.S. is the World’s second largest CO2 emitter, with nearly triple the emissions of third-place India and fourth-place Russia. But not necessarily true on a percent basis.

Again referencing Enerdata, from 2007 to 2011, CO2 emissions from fossil-fuel combustion decreased by 7.4% in the U.S. and by slightly more, 8.5%, in the 33 countries that Enerdata collects as “Europe.” (See Enerdata table: CO2 emissions from fuel combustion (MtCO2).) While the relative positions of the U.S. and Europe may switch when the data are extended to 2012 (for declines in CO2, though not necessarily for other GHG’s associated with gas fracking), neither entity has a clear lead on the other.

We come now to the final point at issue, and, perhaps, the most central to the Carbon Tax Center’s dispute with the Breakthrough Institute:

Breakthrough Claim #4: Europe has a price on carbon.

It appears that a “price on carbon” is a rhetorical device wielded by the Breakthrough Institute to discredit carbon taxing. At the Carbon Tax Center, we’ve said all along that a carbon tax must be (i) robust (not minuscule), (ii) rising, and (iii) transparent. The “price on carbon” that Nordhaus and Shellenberger claim “Germany and other European countries have implemented through their cap-and-trade system” has been none of those three things, as this graphic shows.

Screen Shot 2016-06-29 at 12.50.11 PMThe graph is by Dieter Helm, professor of energy policy at Oxford, and is from his recent presentation to the Bruegel Energy and Climate Exchange, “Climate change and EU policy — why has so little been achieved?” It shows the first seven years’ worth of CO2 futures prices under the European Union’s Emissions Trading System (EU ETS). The price has varied from 30 euros per ton of CO2 down to zero. As the graph shows, the price’s course over time more closely resembles a Mandelbrot fractal than a clear trajectory that would communicate to entrepreneurs and individuals the rewards from moving to low-carbon behaviors and innovations (and the penalties from maintaining the status quo).

Moreover, it’s not enough for emissions to simply decline, as they have in both Europe and the U.S., due in considerable part to the economic slowdown that has afflicted both. The declines in carbon emissions must be sustained and massive. The heart of the climate solution remains what it has always been: a steadily rising U.S. carbon tax with border tax adjustments that motivate China and other growing emitters to implement their own carbon taxes (else the U.S. will collect their carbon tax revenues via carbon-content tariffs).

A wildly fluctuating carbon price such as the one delivered by the EU ETS may be a handy rhetorical device for the Breakthrough Institute and other carbon tax opponents. But it in no way qualifies as meaningful and should not be wielded as a means to discredit genuine carbon taxing.

"Once the climate tipping point is past …"

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Every so often, you read something that stops you in your tracks. That happened to me yesterday, when I came across this:

We are talking about our grandchildren living in a resource-constrained future where they have a chance to learn to live in balance with the planet, or our grandchildren living in a future truly filled with squalor, death and misery. Once the climate tipping point is past, human beings will pay any price to go back but it will be to no avail. And they will wonder why their ancestors thought driving SUVs and air conditioning the outdoors was more important than water, food and survival of their progeny.

I read this passage yesterday on Amtrak as I was returning to New York City from Washington. Last Saturday, I participated in one of the “Fossil Fuel Disaster Relief Rides” organized by the direct-action environmental group Time’s Up. We hauled supplies by bike to the Rockaways, one of dozens of districts in the New York region devastated by Hurricane Sandy, and we stuck around to help residents drag the sodden wreckage of their living rooms and garages onto the sidewalk. The scene was post-apocalyptic: trash mounds towering over twisted bungalows; dump trucks and ‘dozers lumbering down dirt-caked streets; dust, muck and ruin stretching for miles; the sun filtered through a torn sky. I also knew from published reports that my home town of Long Beach, on the next barrier beach to the east, had similarly been laid waste.

Rockaway Beach, NY, Nov. 11, 2012. Photo: duluoz cats (Flickr).

“Human beings will pay any price to go back but it will be to no avail.” Fittingly, the writer was responding to a post on Streetsblog, the blog of the “livable-streets” movement, that for some dubious reason was pouring cold water on the hope that a carbon tax might figure in the emerging equation for tax and fiscal reform. Not only that, the writer was telling other commenters that a visit to our (Carbon Tax Center) Web site could dispel their doubts that a carbon tax could be made effective and fair. Here’s her comment, in full:

Again, please see the link that Komanoff posted below in the very first comment.  (www.carbontax.org) Most of the questions raised below are answered — how to measure carbon emissions, at what point in the emissions stream to effectively tax it, how a carbon tax can be revenue neutral, why no one is or will ever suggest taxing people breathing, etc.

As to how to deal with off-shoring of carbon emissions, we would indeed have to be more responsible about this than we have been with off-shoring all our other pollution. We could either refuse to trade with countries that don’t impose carbon taxes at similar levels, or we could levy a tariff on all imported products based on the level of that country’s gross fossil-fuel burning carbon emissions. (We would no doubt have to estimate in cases where self-reported numbers are unreliable.) This would have an added benefit of on-shoring manufacturing jobs back to the US.

With a carbon fee and dividend program, people would actually make money as long as they kept their usage below that of the average energy-squandering American. This is not difficult to do! All it takes it takes is simple behavioral changes and/or very small investments of money that will be paid back with lower fuel bills. But there simply must be a price signal or people will not change their energy consumption and carbon emissions patterns. And these carbon emission patterns need to drop immediately. Not by 2020 or 2030. Any plan that talks about doing something 2020 and beyond is a plan to do nothing because it will be too late. It is hypocritical greenwashing designed to distract and pretend, pure and simple.

We are talking about our grandchildren living in a resource-constrained future where they have a chance to learn to live in balance with the planet, or our grandchildren living in a future truly filled with squalor, death and misery. Once the climate tipping point is past, human beings will pay any price to go back but it will be to no avail. And they will wonder why their ancestors thought driving SUVs and air conditioning the outdoors was more important than water, food and survival of their progeny.

I don’t know if I’ve ever seen the case for a carbon tax made more powerfully and eloquently than in those four paragraphs. I know that I in lower Manhattan and my fellow New Yorkers in the Rockaways and Long Beach and Staten Island now wish we could have paid whatever it would have taken to buy the reduction in sea-level rise and ocean-temperature rise that might have quenched some of the force of Hurricane Sandy. Taking that knowledge and building it into support for a robust U.S. carbon tax is our new mission at the Carbon Tax Center.

PS: As for that Amtrak trip to DC yesterday. That’s where AEI, RFF, the IMF and Brookings held an all-day conference — before a packed house — on The Economics of Carbon Taxes. Click the link to unpack the acronyms and see the program. We’ll post a report soon.

Carbon-Tax Champion Pete Stark Loses House Seat

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Tuesday’s election results were mostly positive for climate advocates. The defeats of far-right GOP Senate candidates Richard Mourdock (IN) and Todd Akin (MO) produced a twin blow to the anti-science Tea Party, while two of Congress’s most ardent carbon tax proponents, Rep. John Larson (D-CT) and Rep. Jim McDermott (D-WA), won handily. The re-election of President Obama over Republican Mitt Romney, aided by a dramatic last-minute embrace from superstorm Sandy-battered New Jersey Republican Governor Chris Christie, could also augur well for action on climate. So too could wins for a host of progressive state ballot initiatives, most notably California’s Proposition 30, which will generate $6 billion a year in new tax revenues to support public education.

Californian Pete Stark was first elected to Congress in 1973.

There was this sour note for climate advocates, however:  long-time California Congressmember Pete Stark lost his seat to a fellow Democrat, thanks to redistricting that cut off Stark from a majority of his former constituents, as well as the state’s new “top-two” primary system that pitted Stark against a centrist fellow Democrat rather than a GOP opponent. The victor, Eric Swalwell, an Alameda County prosecutor, is 31. Stark is 80, and has represented parts of California’s East Bay region since 1973, making him the dean of California’s Congressional delegation.

Rep. Stark was both an early and consistent leader in promoting a carbon tax in Congress. In April 2007, Stark introduced legislation that would have levied an upstream tax on fossil fuels equivalent to $10/ton of the fuel’s carbon content, rising annually by $10/ton until CO2 emissions had dropped by 80% from 1990 levels. The bill went nowhere, what with the then-majority House Democrats in the thrall of competing cap-and-trade legislation. But as the first submittal of carbon tax legislation to Congress, it helped galvanize carbon tax advocates, particularly at green groups not beholden to cap-and-trade, including the Carbon Tax Center. Last fall, Rep. Stark dusted off his 2007 bill, upped the tax level to $10 per ton of CO2 (a nearly 4-fold increase) and introduced it as the Save Our Climate Act of 2011.

Pete Stark has been outspoken on many fronts in addition to climate. He was a vocal opponent of the War in Iraq and a strong supporter of a single-payer health-care system. Perhaps even more remarkably, in 2007 Rep. Stark publicly declared his disbelief in a Supreme Being, making him the first openly-declared atheist to serve in Congress. The following year, Stark’s courage was honored with the Humanist of the Year award from the American Humanist Association.

America will be the poorer for losing Rep. Stark’s independence, critical thinking and passion for justice in Congress. The Carbon Tax Center will miss him for these qualities and his vision to place a steadily rising carbon tax at the center of climate protection. A fitting legacy would be enactment of legislation along the lines of Pete Stark’s Save Our Climate Act.

Addendum, Dec. 5, 2012: A profile of Eric Swalwell posted today in the New Republic touches on the missteps that made Rep. Stark politically vulnerable and contributed to his defeat.

Bloomberg No Stranger to Climate Advocacy — Especially for a Carbon Tax

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New York City Mayor Michael Bloomberg’s endorsement yesterday of President Obama’s re-election may have caught the political class by surprise, but not the Carbon Tax Center.

It was five years ago today, in Seattle, at a climate summit organized by the U.S. Conference of Mayors, that Bloomberg made a full-throated appeal to Congress to enact a carbon tax. His speech then, on Nov. 2, 2007, remains the most passionate and compelling call for truly effective climate action by any major American political figure.

The Carbon Tax Center’s New York headquarters are currently off the grid, due to Superstorm Sandy. We hope to be back around Election Day with fresh commentary, including discussion of whether the President’s first-term climate program and second-term outlook merited Bloomberg’s endorsement. For now, to show what real climate leadership looks like, please feast on the full text of Mayor Bloomberg’s 2007 speech, included here, courtesy of The New York Times. (The mayor’s extensive discussion of carbon taxing comes toward the end.)

  — Charles Komanoff

Remarks by New York City Mayor Michael R. Bloomberg, in Seattle, Washington, Nov. 2, 2007, before the U.S. Conference of Mayors’ “Climate Protection Summit”

I’ve had the pleasure of working with Mayor Palmer, Mayor Nickels, Mayor Diaz — and many others in this room — through our coalition of Mayors Against Illegal Guns, which now includes more than 240 mayors from all around the country — Republicans, Democrats, and independents. If you haven’t joined yet, we’d love to have you — and I think illegal guns and climate change are two of the best examples of cities leading where Washington has not. On both issues, those in Washington prefer talk to action. On illegal guns, they extol the virtues of the Second Amendment, which is all well and good, but let’s get serious: protecting the Second Amendment does not stop you from keeping illegal guns out of the hands of criminals. It’s just a political duck-and-cover that allows legislators to escape responsibility for fixing a serious problem. And innocent people — and police officers — are dying as a result.

Mayor Michael Bloomberg at Asia Society in New York City, 2009

On climate change, the duck-and-cover usually involves pointing the finger at others. It’s China-this and India-that. But wait a second. This is the United States of America! When there’s a major challenge, we don’t wait for others to act. We lead! And we lead by example. That’s what all of us here are doing.

This conference has highlighted just how much local leadership there is on the issue of climate change and how many innovative new projects are going on in cities around the country: Seattle’s incentives for greening existing buildings, Los Angeles’s million tree initiative, Miami’s bus rapid transit program — and the list goes on. When we developed our long-term sustainability plan in New York, which we call PlaNYC, we made no apologies for stealing the very best ideas — and we came up with some of our own, including converting our 13,000 taxis to hybrids or high-efficiency vehicles. This will not only help clean our air and reduce greenhouse-gas emissions, it will save each driver about $4,500 a year in gas costs.

Cities and states are both taking action, but the fact is, no matter how far we push the boundaries of the possible, there will be no substitute for federal leadership. Leadership is not waiting for others to act, or bowing to special interests, or making policy by polling or political calculus. And it’s not hoping that technology will rescue us down the road or forcing our children to foot the bill. Leadership is about facing facts, making hard decisions and having the independence and courage to do the right thing, even when it’s not easy or popular. We’ve all heard people say, “It’s a great idea, but for the politics.” And let me give you just one example from New York.

Last spring, as part of our PlaNYC initiative, we proposed a system of congestion pricing based on successful programs in London, Stockholm and Singapore. The plan would charge drivers $8 to enter Manhattan on weekdays from 6 a.m. to 6 p.m., which would help us reduce the congestion that is choking our economy, the pollution that has helped produce asthma rates that are twice the national average, and the carbon dioxide that is fueling global warming.

Now, the question is not whether we want to pay, but how do we want to pay. With an increased asthma rate? With more greenhouse gases? Wasted time? Lost business? Higher prices? Or do we charge a modest fee to encourage more people to take mass transit and use that money to expand mass transit service? When you look at it that way, the idea makes a lot of sense, but for the politics, because no one likes the idea of paying more. But being up front and honest about the costs and benefits, we’ve been able to build a coalition of supporters that includes conservatives and liberals, labor unions and businesses, and community leaders throughout the city.

There is no problem that can’t be solved if we have the courage to confront it head-on — and put progress above politics. Mayors around the country are doing it — and those in Washington can, too. I believe it’s time for both ends of Pennsylvania Avenue to come together around a national strategy on climate change and to lead the way on an international strategy. And I believe that until they do, it’s our job as mayors to point the way forward. That’s why right after this conference, several of us will be testifying before a House committee that is holding a hearing on climate change here in Seattle. It’s why I’m pleased to announce that New York City has recently joined a new campaign being launched by The Climate Group called “Together.” It will unite businesses, think tanks, advocacy groups, faith-based organizations, and cities — and I urge all of the cities in this room to join, and to invite your neighbors. It will be a national effort to help all Americans make a difference in the fight against climate change. And it’s why next month, I will go to the U.N. climate change summit in Bali, in the South Pacific, as a guest participant, and to support our delegation.

It’s time for America to re-establish its leadership on all issues of international importance, including climate change. Because if we are going to remain the world’s moral compass — a role that we played throughout the 20th century, not always perfectly, but pretty darn well — we need to regain our footing on the world stage. That means ending the “go-it-alone” approach to foreign affairs that has never served America well. It didn’t work in the 1920s, when we tried to isolate ourself from the world, and it hasn’t work in recent years, when we’ve tried to stand above it, pretending that vital international treaties can simply be ignored. The fight against global warming is a test of America’s leadership — and not just on the environment.

Climate change presents a national security imperative for us, because our dependence on foreign oil has entangled our interests with tyrants and increased our exposure to terrorism. It’s also an economic imperative, because clean energy is going to fuel the future. Jobs are on the line here — good jobs of every kind: Farm jobs. Factory jobs. Engineering jobs. Sales jobs. Management jobs. If we don’t capture these jobs, they’ll just move overseas. Green energy is going to be the oil gusher of the 21st century, and if we’re going to remain the world’s economic superpower, we’ve got to be the pioneers — just as America always has been.

How do we do it? I think we need a strategy that embraces four basic principles, and I’d like to briefly outline them today. First, we need to increase investment in energy R & D. Right now, we’re spending just one-third of what we were in the 1970s. If we really want to be able to manufacture competitively priced biofuel and solar power, if we really want to sequester the carbon dioxide released from coal, we have to be willing to make the commitments that will drive private capital to these projects — and right now, we’re just not doing that.

Second, we have to stop setting tariffs and subsidies based on pork barrel politics. For instance, Congress is currently subsidizing corn-based ethanol at 50 cents a gallon — and you can argue that’s good agricultural policy, but you can’t argue that it’s good for consumers or the environment. Because it isn’t. Consumers pay more for food, and producing corn-based ethanol results in much more carbon dioxide than producing sugar-based ethanol. But are we subsidizing sugar-based ethanol? No! We’re putting a 50-cent tariff on it. Ending that tariff makes all the sense in the world, but for the politics. Everyone knows that politically driven policies are costing taxpayers billions while providing only marginal carbon reductions — but we need leaders who will do something about it!

Third, we have to get serious about energy efficiency — and the best place to start is with our cars and trucks. In 1975, Congress passed a law requiring fuel efficiency standards to double over 10 years, from 12 miles a gallon to 24, with incremental targets that auto manufacturers were required to meet. But since 1985, Washington has been paralyzed by special interests. If the same incremental gains had been adopted for the last two decades, think of where we would be now! We’d all be saving money at the pump, we’d be producing less air pollution and greenhouse gas, Detroit would be in a stronger competitive position and the “Big Three” may not have lost so many more jobs. (Just yesterday, Chrysler announced another 12,000 job cuts.)

Those job losses hurt hard-working Americans, and we have to ask ourselves: Do we want even more middle-class factory workers to be handed pink slips and left to look for service jobs at half the wages? Because that’s the direction we’re heading in if we continue to fall further and further behind other countries in producing fuel-efficient vehicles. The current Senate energy bill would raise Corporate Average Fuel Economy (CAFE) standards from 27.5 to 35 miles per hour by 2020. That’s nowhere near the leap we made from 1975 to 1985, and many foreign cars are already getting 35 miles to the gallon. Even so, U.S. automakers are trying to water down the Senate bill — and if Congress caves, you can bet the loudest cheers will be heard in Japan. Raising fuel efficiency standards is the best thing we could do for U.S. automakers — and it would’ve been done years ago, but for the politics.

Fourth and finally, we have to stop ignoring the laws of economics. As long as greenhouse gas pollution is free, it will be abundant. If we want to reduce it, there has to be a cost for producing it. The voluntary targets suggested by President Bush would be like voluntary speed limits — doomed to fail. If we’re serious about putting the brakes on global warming, the question is not whether we should put a value on greenhouse gas pollution, but how we should do it. This is where the debate is moving, and I’d like to briefly touch on the pros and cons of the two approaches that are most often discussed: creating a cap-and-trade system, and a putting a price on carbon.

Both of these ideas share the same goal: raising the cost of producing greenhouse gas pollution. If you want less of something, every economist will tell you to do the same thing: make it more expensive. Of course, none of us wants to pay more for electricity or gas or anything else. Rising energy costs, rising health costs, rising college tuition — the middle class is getting squeezed left and right. But raising the cost of pollution can actually save taxpayers money in the long run — and I’ll explain how in a minute. But first, you might be thinking: “Wait a second. Five years ago, oil was selling at $30 a gallon. Now it’s selling at more than $90, and we’re not buying any less of it. So why would raising the cost of carbon make any difference?” The answer is: It would and it wouldn’t. People are going to keep buying gas whether it costs $1 a gallon or $2.75 a gallon — or even more — because the demand for gas is inelastic. But the demand for coal is far more elastic than oil, and so if its price goes up, many power plants would likely switch to natural gas, which is much cleaner, and the 100 coal plants that are now on the drawing boards would likely convert to natural gas as well. Raising the cost of carbon would also make alternative energy sources more cost-competitive, which would lead more consumers and property owners to make the switch.

To raise the cost of carbon, we can take either an indirect approach — creating a cap-and-trade system of pollution credits — or a direct approach: charging a fee for greenhouse gas pollutants. The question is: Which approach would be more effective? I’ve talked to a number of economists on this issue, people like Gilbert Metcalf at the National Bureau of Economic Research, and every one of them says the same thing: A direct fee is the better approach — but for the politics. There’s that phrase again: “But for the politics!”

Cap-and-trade is an easier political sell because the costs are hidden — but they’re still there. And the payoff is more uncertain. Because even though cap-and-trade is intended to incentivize investments that reduce pollution, the price volatility for carbon credits can discourage investment, since an investment that might make sense if carbon credits are trading at $50 a ton may not make sense at $30 a ton. This price volatility can also lead to real economic pain. For instance, if 100 companies release higher emissions than they had planned for, they all have to buy more credits, which can create a very expensive bidding war. That’s exactly what’s happening in parts of Europe right now, and it’s going to cost companies there billions of dollars.

There are also logistical issues with cap-and-trade. The market for trading carbon credits will be much more complex and difficult to police than the market for the sulfur dioxide credits that eliminated acid rain. And there are political issues — because the system is subject to manipulation by elected officials who want to hand out exemptions to special interests. A cap-and-trade system will only work if all the credits are distributed from the start — and all industries are covered. But this begs the question: If all industries are going to be affected, and the worst polluters are going to pay more, why not simplify matters for companies by charging a direct pollution fee? It’s like making one right turn instead of three left turns. You end up going in the same direction, but without going around in a circle first.

A direct charge would eliminate the uncertainty that companies would face in a cap-and-trade system. It would be easier to implement and enforce, it would prevent special interests from opening up loopholes and it would create an opportunity to cut taxes.

I was in England a month ago talking to the Conservative Party, which has proposed a series of revenue-neutral “green taxes” that would be offset by reductions in other taxes. I believe that approach merits consideration — and the most promising idea I’ve heard is to use the revenue from pollution pricing to cut the payroll tax. After all: Employment is good, pollution is bad. Why shouldn’t we lower the cost of the good and raise the cost of the bad? Studies show that a pollution fee of $15 for every ton of greenhouse gas would allow us to return about $500 a year to the average taxpayer. And a charge on pollution would be less regressive than the payroll tax, because the more energy you consume, the more you would pay. That would give us all of us an incentive to reduce our energy use — whether that’s buying a more fuel efficient appliance, or making the switch to compact fluorescent light bulbs, as we’ve done in New York’s City Hall – and as I’ve done in my own home. Under this approach, even though energy costs would rise, the savings from tax cuts and energy efficiencies could, over the long run, leave consumers with more money in their pockets.

Creating a direct charge for greenhouse gas pollution would also incentivize the kinds of innovation that a cap-and-trade system is designed to encourage — without creating market uncertainty. To do this, a portion of the revenue from the pollution charge would be used to create an innovation fund, which would finance tax credits for companies that reduce their greenhouse gas pollution. As a result, companies would have two big incentives to reduce their pollution: minimizing the charges they would have to pay and maximizing their tax savings. And unlike a cap-and-trade system, the certainty of tax credits would be more likely to lead companies to make the long-term investments in clean technology that will allow us to substantially reduce greenhouse gas pollution.

Both cap-and-trade and pollution pricing present their own challenges — but there is an important difference between the two. The primary flaw of cap-and-trade is economic — price uncertainty. While the primary flaw of a pollution fee is political, the difficulty of getting it through Congress. But I’ve never been one to let short-term politics get in the way of long-term success. The job of an elected official is to lead – not to stick a finger in the wind. It’s to stand up and say what we believe — no matter what the polls say is popular or what the pundits say is political suicide.

From where I sit, having spent 15 years on Wall Street and 20 years running my own company, the certainty of a pollution fee — coupled with a tax cut for all Americans — is a much better deal. It would be better for the economy, better for taxpayers and — given the experiences so far in Europe — it would be better for the environment. I think it’s time we stopped listening to the skeptics who say, “But for the politics” and start being honest about costs and benefits. Politicians tend to prefer cap-and-trade because it obscures the costs. Some even pretend that it will lower costs in the short run. That’s nonsense. The costs will be the same under either plan — and if anything, they will be higher under cap-and-trade, because middlemen will be making money off the trades. (I happen to love middlemen. They use Bloomberg terminals and support my daughters. But what’s right is right!)

For the money, a direct fee will generate more long-term savings for consumers, and greater carbon reductions for the environment. And I don’t know about you, but when the economists say one thing and the politicians say another, I’ll go with the economists.

Of course, I also understand that you can’t let the perfect be the enemy of the good. Whether it’s a direct fee or cap-and-trade, we can’t be afraid to try something — to do something — to act. As mayors, we’re all familiar with those who respond to every problem by saying, “Do another study,” or by scaring voters with doom-and-gloom predictions. That approach is why we have health care costs that have spiraled out of control, it’s why we have public school systems that were allowed to collapse, and it’s why we’re still fighting poverty with the same old programs that haven’t worked.

But remember, this is America! We can’t be afraid to lead, to innovate, to experiment. Cities aren’t afraid. We’re showing that we can do better, we can make progress, and we can do it in a way that is good for the environment and the economy. It’s time for Washington to do the same and to show the world that America is ready to be a leader. When our representatives run for re-election or higher office, they talk about “a chicken in every pot.” But why not tell us who’s going to pay, how it’s going to work, when it’s going to be implemented, and if it doesn’t work, what’s Plan B? We need our leaders to have the courage to talk about and implement real climate change solutions, not just because it’s good for the world, but because it’s good for America, our environment, our national security and our economy. Make no mistake: Real jobs are on the line here — because cleaner energy sources are going to be a cornerstone of the 21st-century economy.

If we’re going to remain the world’s economic superpower, we have to create predictable incentives that will drive technological innovations and allow us to lead the world in developing clean, reliable and affordable energy. We can do it! If we stop saying: But for the politics!

In the weeks and months ahead, our job is not just to continue innovating — but to demand that those in Washington join us. Tell them that it’s O.K. to stand up and be honest about the costs and benefits of real solutions. We’ve done it — and we’ve not only lived to tell the tale, we’ve won support and respect from our constituents. They can, too. And we’ve got to hold them accountable for doing it. So let’s get to work.

Are EPA Hammers The Best Tools to Ratchet Down Global Warming Pollution?

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Massachusetts v. EPA (2007), the Supreme Court’s 5-4 decision upholding EPA’s authority to regulate greenhouse gases, is rightly considered a legal milestone in the fight against global warming. But it’s nearly impossible to find an economist, business person, or even an environmental advocate who thinks that EPA regulation of the numerous and diverse activities causing global warming can ever be more productive, fair and cost-effective than policies using price incentives. Even Environmental Protection Administrator Lisa Jackson testified to the House Energy & Commerce Committee that regulation by her agency under the Clean Air Act isn’t the best response to global warming.

Where does EPA regulation of greenhouse gases stand today, after the failure two years ago of carbon cap-and-trade legislation? Recall that in 2009, a huge campaign by environmental groups, along with a well-coordinated effort by the House Democratic leadership, led to House passage of the Waxman-Markey climate bill. That bill would have largely supplanted EPA greenhouse gas regulation with a cap-and-trade-offset system, an indirect way to put a hidden and fluctuating price on CO2 pollution. But in the Senate, John Kerry’s frenzied effort to build a coalition around cap-and-trade with offsets came to naught in 2010. The failure of climate legislation, along with the GOP takeover of the House later that year, leaves climate policy exactly where the Supreme Court left it: at EPA’s doorstep.

The Environmental Protection Agency has issued rules mandating aggressive improvement in efficiency of new autos and trucks, and rules mandating “Best Available Control Technology” for new and expanded coal-fired power plants and other stationary sources. For CO2 emissions, BACT is essentially a combustion efficiency standard. But EPA has yet to propose rules for a far larger category of GHG’s: CO2 emissions from existing stationary sources such as power plants and oil refineries. And indeed, fears of economic dislocation and job loss ― which are always concerns when existing facilities come under stringent regulation ― will make it hard for the agency to clamp down hard on these sources, particularly in today’s heavily politicized climate.

Nevertheless, it’s important to ask what a maximal strategy of EPA GHG regulation might accomplish, and how that approach stacks up against indirect pricing proposals like Waxman-Markey and simpler, more direct carbon pollution taxes such as Reps. Larson and Stark have proposed. Economists Dallas Burtraw, Arthur Fraas and attorney Nathan Richardson of Resources for the Future recently examined EPA’s regulatory options. Looking at a decidedly optimistic scenario, they concluded that EPA regulations would reduce domestic greenhouse gas emissions by 12.9% by 2020 (from a 2005 baseline). That estimate assumes that EPA adopts a flexible approach involving tradeable performance standards, which they concede may be less legally defensible than more prescriptive and costly facility-specific regulatory approaches. Their figure also includes non-CO2 GHG emissions reductions counted in CO2-equivalent terms. By comparison, they estimate that the Waxman-Markey bill would have achieved nearly identical reductions in domestic emissions, 12.7%, in the same eight-year time frame.

What carbon tax level and ramp-up would yield the same 12.9% reduction that Burtraw et al. project for EPA regulations? To see, I ran the Carbon Tax Center model developed by director Charles Komanoff. The model uses historic price elasticities in five sectors to estimate emissions reductions for a given CO2 price trajectory. Thus, the model relies on history to predict future behavior — it assumes we will find ways to use less fossil fuel to the same degree as we’ve responded to price changes in the past; the model also accounts for the increasing difficulty (“diminishing returns”) of reducing emissions.

In the table below, I’ve summarized and ranked in order of effectiveness (which corresponds well with revenue), three legislative and two economists’ carbon tax proposals as well as two carbon tax scenarios that the CTC model indicates would mimic the expected emissions reductions of EPA GHG regulations by 2020:

Proposal Initial Rate ($/T CO2) Increase / yr CO2 Tax Rate in 2020 ($/T CO2) Emission change by 2020 Cumulative Gross Revenue 2012-2020 ($B)
Cantwell-Collins $14 (+/-7) 6% $22.31 – 9.1% 866
Krupnick: Waxman-Markey equiv. $18 8% $33 – 12.3% 1,181
CTC: EPA equiv. (% increase) *
 $21.50 6% $34.27 – 12.9% 1,289
CTC: EPA equiv. (step increase) $10 $3.50 $38 – 12.9% 1,136
AEI / Peterson $26 6% $41.44 – 15.1% 1,532
Stark $10 $10 $90 – 24.0% 2,166
Larson $15 $12.50 $115 – 28.9% 2,694
The Cantwell-Collins “CLEAR Act,” a cap with a “price collar” sets a CO2 price between $7 and $21, rising 6% annually. Krupnick et al. (RFF) used the US DOE’s NEMS model to estimate that an $18T/CO2 carbon tax rising 8%/yr to $33/T CO2 by 2020 would achieve equivalent domestic emissions reductions to Waxman-Markey, very similar to the emissions reductions which Burtraw et al. expect from EPA regulations. (Reassuringly, CTC’s model applied to Krupnick’s price trajectory predicts similar results.) For the third scenario, I chose a 6% annual increment in the CO2 price and used the model to estimate the starting price needed to achieve the same reductions as EPA regulations. For the fourth scenario, I took the opposite tack, specifying a $10 starting price and letting the model determine the annual increment rate that would achieve the same reductions as EPA regulation. The fifth estimate uses the carbon price proposed in Fiscal Solutions: A Balanced Plan for Fiscal Stability and Economic Growth, (Peterson Foundation & American Enterprise Institute, 2011). Finally, I ran the price levels and increments in the carbon tax bills introduced by Rep’s Pete Stark D-CA and John Larson D-CT respectively, to estimate the emissions reductions that their climate bills would achieve by 2020.

The results suggest that, holding other things equal, until 2020 climate advocates should be indifferent between EPA GHG regulations and either (i) a carbon tax starting at $21.50 per ton of carbon dioxide and rising at 6% a year, or (ii) a carbon tax of $10/ton rising by $3.50/yr. But of course, other things aren’t equal: a carbon pollution tax would generate billions in revenue, as shown in the far right column in the table. Indeed, economists Ian Parry and Roberton Williams of RFF estimate that the Krupnick proposal would close 1/3 of the U.S. budget gap by 2030. Moreover, as Burtraw et al. point out, it’s not clear how much further EPA regulation could reduce emissions after 2020. That’s because regulations are essentially static and do little to induce innovation or to reduce fossil fuel demand via conservation.

Burtraw et al. conclude:

EPA action under the Clean Air Act is inferior to new [carbon pricing] legislation from Congress, especially over the long term. Although it is possible to identify some readily available opportunities for emissions reductions and push them via regulation (with market tools to keep costs down), it quickly becomes difficult to identify what steps should be taken next. A carbon price (either cap-and-trade or a carbon tax) created by legislation would allow the market to make these decisions.

The numbers tell a sobering story: EPA regulations might, optimistically, achieve significant near-term reductions, albeit at a higher cost than a CO2 pollution pricing system. But more importantly, those regulations can’t be expected to induce further innovation and reduce demand (for example by encouraging improved efficiency) and EPA has explicitly stated that it is not mandating replacement of high carbon energy sources (coal and oil) with lower or zero carbon sources (gas or renewables).

Where does this leave us? Consider the interesting situation that could arise by year’s end. Congress faces both mandatory “sequestration” of the military and domestic budgets (imposed by the debt ceiling legislation) and expiration of the Bush/Obama tax cuts. The House and Senate may therefore be forced to consider ways to raise revenue, perhaps as early as in the “lame-duck” session after the Nov. 6 elections, when the pending retirement of some members and the passing of the election season might allow political “grand bargains” to be struck.

In that eventuality, it will be important to hammer home the point that a rising carbon pollution tax offers not only the potential to achieve greater and far more sustained emissions reductions than EPA regulations, but also a growing stream of revenue from taxing pollution. That is especially salient now, when every tool available is needed to encourage job growth and productive economic activity including reducing or at least avoiding new taxes on work and investment.

Photo by “thefixer” (Flickr).

* Postscript: In A Balanced Plan to Stabilize Public Debt and Promote Economic Growth (2010), William Galston (Brookings) and Maya MacGuineas (Committee for a Responsible Federal Budget) recommended a carbon pollution tax similar to my third scenario: starting at $23/T CO2, rising 5.8% yearly, with proceeds to reduce payroll taxes and deficits.