It may be that this is best viewed at this link: http://www.storyofstuff.org/movies-all/story-of-cap-trade/
Blog Archive
Showing posts with label Cap-and-trade. Show all posts
Showing posts with label Cap-and-trade. Show all posts
Wednesday, February 13, 2013
Sunday, December 23, 2012
James Hansen: Storms of My Grandchildren's Opa
I refer not to Sandy, although it too was our storm1 -- and my recent op-ed in The Guardian reminds people of the implications of Sandy for public policies.
I refer rather to a little tempest following an article in the San Francisco Chronicle, which described my remarks at the Commonwealth Club on 4 December. My criticism of ineffectual cap-and-trade-with-offsets was not a condemnation of the total California climate law, and I noted that California has done much better than the U.S. as a whole in limiting emissions. Indeed, my point was that the fate of the planet, and our children's lives, depends on people in places such as California and parts of Europe, people who have an inkling of the climate threat that we are up against, supporting an approach that will actually work.
"Actually work" means an approach with the potential to phase out most fossil fuels fast enough to leave most coal and unconventional fossil fuel (tar sands, tar shale, fracked gas) in the ground.
Background: Unhelpful Prognostications
Prognostications asserting "we are already committed to X °C global warming; if we don't agree on international goals for emission reductions we will soon be committed to Y °C, where Y > X" are not very helpful. They have about as much effect on decision-makers as a fart in a hurricane.
X and Y keep changing, but X °C is already so large that we would pass tipping points sufficient to guarantee an unfolding disastrous path to a different planet, one with a bleak future for young people and other life on the planet. And never mind that an international approach based on caps, goals and promises is worth about as much as the paper the Kyoto Protocol was printed on.
Presented with such a prognostication you might say: Hey, wait a minute, we don't need a complex unworkable cap approach or a carbon tax. We need a simple honest flat across-the-board fee on the carbon content of fossil fuels, collected from fossil fuel companies at the domestic mine or port of entry, the fee gradually rising over time, the funds distributed 100% to the public, equal amounts to all legal residents, not one dime to the government, no enlargement of government. Such a "fee-and-dividend" system would cause fossil fuel CO2 emissions to rapidly decline; most coal and unconventional fossil fuels would be left in the ground. For example, economic modeling for the U.S. shows that a $10/ton CO2 fee, rising $10 each year, would reduce emissions 30% after a decade -- more that a factor of 10 greater than the oil carried by the proposed Keystone XL pipeline, rendering that pipeline superfluous.
Business and Jobs
Business leaders, such as Jim Rogers of Duke Power, say that what they need is knowledge of the carbon price and a general sense of how it will change. If we give them that, our captains-of-industry can be a huge part of the solution.
We have tremendous potential for innovation that will be spurred once there is a rising carbon price. New products, more jobs. As the carbon price rises, tipping points will be reached where low-carbon or no-carbon alternatives phase in rapidly, leaving fossil fuels in the ground.
Of course, many other actions are needed. We need energy R&D. We need building standards, we should not produce electronic goods that draw energy even when not in use, etc. Such things will be easier to achieve, and partly self-enforced, by an underlying steadily rising carbon price.
Politics
I gave a talk to international labor leaders. When I noted that fee-and-dividend would let the market place, rather than government bureaucrats, make decisions, one of them said "that's libertarian!" So it is, with a small l.
After I gave a talk at one of Grover Norquist's meetings (on-the-record portion), one participant said "that's income redistribution!" Yes, fee-and-dividend is populist. Low-income people can gain by limiting their emissions. People with multiple houses, or who fly around the world a lot, will pay more in increased prices than they obtain in the dividend -- but they can afford that.
Fee-and-dividend is democratic -- treating everybody equally -- as well as libertarian and populist.
Wait a minute, you say, collecting a fee from fossil fuel companies, making fossil fuels pay their honest cost to society, is not realistic. There are a lot of people making money off fossil fuels or planning to make money off the pipeline. American politicians are well-oiled and coal-fired, we can't get such a plan through the government.
Presidential Leadership
Unrealistic? What if President Obama, when he was first elected and had 70% approval, had chosen to have fireside chats, informing the public that a rising carbon price was needed for national security, energy independence, economic stimulation, and preserving a good life for
young people and our fellow species on the planet? With 60% of the people getting more in their dividends than they pay in increased prices, he would have been a populist President. He could have taken the matter to the public. His party controlled the House and Senate.
President Obama chose not to do that in his first term. He gave minimal support to a cap-and-trade-with-offsets proposition, which would have made little actual reduction in U.S. emissions and was ineffectual globally. Unless he faces up squarely and effectively to the greatest practical
and moral issue of the 21st century, he forfeits his chance to be a great president.
International Implementation
Cap-and-trade-with-offsets is the Kyoto Protocol approach, in which countries are begged to join and set emissions targets. When they fail to meet their target, they withdraw from the Protocol.
China will not accept a cap on their emissions. Why should they? The U.S. is responsible for 27% of the fossil fuel CO2 in the air today. China's responsibility is just approaching 10%. However, their population is more than three times that of the U.S., so they have used only 10% of a fair cap. By the time they reach that cap, we will all be doomed.
Why would China put a fee on carbon? Lots of reasons. They do not want to develop the addiction that plagues the U.S. They have heavy air and water pollution from fossil fuels, which is very costly and has the public upset. They are among the most vulnerable nations to climate change, including sea level rise. China has a long history and is capable of taking a long view. The fact that the worst climate impacts will be visited on future generations will not likely cause China to "discount" future climate effects and heap consequences on the young.
Only a few nations need agree on a carbon fee. They will place a border duty on products from countries that do not have an equivalent carbon fee. They can also rebate to their manufacturers the carbon fee covering the fraction of their production that is exported to nations without the carbon fee. This approach provides a tremendous incentive for other nations to adopt a similar domestic carbon fee, so they can collect it themselves rather than lose it as a border duty.
Border tariff adjustments are not unique to fee-and-dividend. However, the flat cross-the-board fee on carbon, a reasonably well-defined number, makes international implementation simpler, as revealed via objective comparison's in Shi-Ling Hsu's book "The Case for a Carbon Tax."
Criticisms of Fee-and-Dividend
A common criticism is that low income people will waste the dividend, e.g., buying powerball tickets. I come from a low income family, my father a tenant farmer educated to 8th grade, with seven children. We would not have wasted the money. Nor would most low income families.
Of course a minority of people will waste the money. You can't legislate against foolishness. But note that even in such cases the money will soon be back in the economy.
The second criticism of fee-and-dividend is that it is better to tax fossil fuels and let the government invest the money in clean energies. Uh, you mean the government can make the best decisions about winning technologies? That should be an easy call.
We already have a situation in which even advanced nuclear power development is being financed privately, e.g., by Bill Gates. Quietly, despite the failure of our government to require fossil fuels to have an honest price, very exciting advances are being made in many technologies, even, believe it or not, carbon capture. These technologies, including energy efficiency, will spread like wildfire once a rising carbon fee begins to be collected and distributed, so that fossil fuels begin to pay their true costs and the public has the funds at their disposal.
Government has a role in R&D (e.g., the excellent ARPA-E program) and assuring that new technologies are safe, but those departments already exist, funded by existing taxes.
Nor should the fee be used to pay down the national debt. The public is not stupid. If the money is thrown into government coffers, regardless of how its use is described, the public will know it is being used to support big government. The only way the public will allow a continually rising price on carbon is if the money goes to them, so that they can deal with increasing fossil fuel prices. The rallying cry should be "100 percent or fight!"
Governors and Mayors
I am sorry if my remarks at the Commonwealth Club (reported out of
context) were interpreted as criticism of people who have worked hard to reduce fossil fuel emissions. My remarks were not intended that way, nor were they interpreted as such by the Governor. I acknowledged the success of California in limiting their emissions relative to that of other states, and I made it clear that my remarks were about ineffectual policies, not people.
In addition to several governors, a number of mayors, perhaps most notably Republican Mayor Bloomberg in New York City, have been vocal about climate change and effective in reducing emissions. Helped by a flagging national economy, this has reduced United States emissions a few percent, which is a significant improvement compared with continued emissions growth.
However, the science has made crystal clear that these efforts and policies are not enough. We must pursue policies that can lead to global emissions reductions and a phase-out of reliance on fossil fuels, such that most remaining coal and unconventional fossil fuels are left in the ground.
Cap-and-Trade vs. Carbon Fee
A crucial point is that we need policies that reduce emissions as rapidly as practical. Cap-and-trade, even if it were applied across-the-board on all fossil fuels at the source (it is not) and even if applied across the nation (it will not be; can you imagine the Texas Governor's response if the California Governor called and asked him to follow suit?), would provide no prospect of the rapid reduction of global emissions needed to cause most fossil fuels to be left in the ground.
Why not? Cap-and-trade, to the extent it reduces emissions some places, reduces demand for fossil fuels, lowers their global price, thus encouraging their use elsewhere. At best, this slightly slows the burning of fossil fuels, which is little help. Fossil fuel CO2 emissions stay in the ocean-atmosphere system for millennia. Most fossil fuel carbon must be left in the ground.
In contrast, a carbon fee can more readily be made universal [cf. discussion above and Hsu's "Case for a Carbon Tax"]. If the funds are distributed 100% to the public, the public will allow the fee to rise to high levels, in contrast to the relatively ineffectual carbon price characterizing cap-and-trade or a pure carbon tax. Resulting reduction in fossil fuel use under a rising carbon fee causes demand to drop, and the net price that producers receive falls (because the fee portion goes to the public). This causes rapid loss of market for costly fuels (tar sands, tar shale). Most coal, as the carbon fee rises, also will be left in the ground or used only with carbon capture.
Summary
An honest, gradually rising, price on carbon, making fossil fuels pay their costs to society, including externalities, makes economic sense and is needed for rapid phase-down of fossil fuels. Other things are needed, but the base requirement is an across-the-board universal carbon fee.
Scientists should not accept fossil fuel scenarios foisted on us by compliant government agencies. Instead, we should help define carbon emission scenarios that avoid growing regional climate extremes and climate tipping points that can cause disintegration of ice sheets and large-scale extermination of species. Those government agencies, virtual arms of the fossil fuel industry, have a bad record in projecting energy requirements. Even in the U.S., with little effort to control energy use growth during the past few decades, reality forces energy agencies to continually revise downward their projections (cf. Fig. 3 in "Storms of My Grandchildren").
We must stanch a pervasive defeatism that is about. Humanity is not a bunch of lemmings marching unstoppably toward a cliff. There is such a thing as free will. It seems that many people have slipped into an unhelpful resignation, ultimately leading to a way of thinking that accepts fossil fuel industry propaganda.
People please wake up! For the sake of young people, future generations, and other life on our planet, don't settle for what some "experts" say is the best we can do. In fact, we can move on to clean energies and energy efficiency, but only if we are wise enough to put an honest rising price on carbon emissions. It is equally clear, I submit, that the public will only allow an adequate rising price on carbon if the system is simple and transparent with the proceeds distributed to the public. That will provide the public with the resources required to make the needed changes as we move to cleaner energies and a bright future that preserves the planet and life that we know.
James Hansen, December 13, 2012
_______________
1It was a bit eerie. When the power went out (not restored for almost a week) we were in pitch dark except for candles and a battery powered lantern. Soon we heard thunderous noise as the railings around our second floor flat roof (deck) were blown off and crashed to the ground. The next morning we found four large trees blown over, one of them leaning against the house -- their root systems pulled out of ground that was too soggy to hold them. Similarly, because of the soft rain-soaked ground, large sections of the stockade fence separating our property from the road were blown down, as were sections of the fence around the horse pasture. Windows in the barn were blown out, but the solar panels were unharmed. Storm power and damage supposedly vary with the cube of wind speed, so amping up of the winds by the unusually warm coastal waters probably had a big effect. We live in eastern Pennsylvania and are thus buffered from Atlantic storms by New Jersey, but this was a marginal hurricane imbedded in a frontal storm that can affect a huge area. These kind of storms, as described in Storms of My Grandchildren, will become far stronger if we allow Greenland to begin to melt fast enough to cool the North Atlantic Ocean.
http://www.columbia.edu/~jeh1/
I refer rather to a little tempest following an article in the San Francisco Chronicle, which described my remarks at the Commonwealth Club on 4 December. My criticism of ineffectual cap-and-trade-with-offsets was not a condemnation of the total California climate law, and I noted that California has done much better than the U.S. as a whole in limiting emissions. Indeed, my point was that the fate of the planet, and our children's lives, depends on people in places such as California and parts of Europe, people who have an inkling of the climate threat that we are up against, supporting an approach that will actually work.
"Actually work" means an approach with the potential to phase out most fossil fuels fast enough to leave most coal and unconventional fossil fuel (tar sands, tar shale, fracked gas) in the ground.
Background: Unhelpful Prognostications
Prognostications asserting "we are already committed to X °C global warming; if we don't agree on international goals for emission reductions we will soon be committed to Y °C, where Y > X" are not very helpful. They have about as much effect on decision-makers as a fart in a hurricane.
X and Y keep changing, but X °C is already so large that we would pass tipping points sufficient to guarantee an unfolding disastrous path to a different planet, one with a bleak future for young people and other life on the planet. And never mind that an international approach based on caps, goals and promises is worth about as much as the paper the Kyoto Protocol was printed on.
Presented with such a prognostication you might say: Hey, wait a minute, we don't need a complex unworkable cap approach or a carbon tax. We need a simple honest flat across-the-board fee on the carbon content of fossil fuels, collected from fossil fuel companies at the domestic mine or port of entry, the fee gradually rising over time, the funds distributed 100% to the public, equal amounts to all legal residents, not one dime to the government, no enlargement of government. Such a "fee-and-dividend" system would cause fossil fuel CO2 emissions to rapidly decline; most coal and unconventional fossil fuels would be left in the ground. For example, economic modeling for the U.S. shows that a $10/ton CO2 fee, rising $10 each year, would reduce emissions 30% after a decade -- more that a factor of 10 greater than the oil carried by the proposed Keystone XL pipeline, rendering that pipeline superfluous.
Business and Jobs
Business leaders, such as Jim Rogers of Duke Power, say that what they need is knowledge of the carbon price and a general sense of how it will change. If we give them that, our captains-of-industry can be a huge part of the solution.
We have tremendous potential for innovation that will be spurred once there is a rising carbon price. New products, more jobs. As the carbon price rises, tipping points will be reached where low-carbon or no-carbon alternatives phase in rapidly, leaving fossil fuels in the ground.
Of course, many other actions are needed. We need energy R&D. We need building standards, we should not produce electronic goods that draw energy even when not in use, etc. Such things will be easier to achieve, and partly self-enforced, by an underlying steadily rising carbon price.
Politics
I gave a talk to international labor leaders. When I noted that fee-and-dividend would let the market place, rather than government bureaucrats, make decisions, one of them said "that's libertarian!" So it is, with a small l.
After I gave a talk at one of Grover Norquist's meetings (on-the-record portion), one participant said "that's income redistribution!" Yes, fee-and-dividend is populist. Low-income people can gain by limiting their emissions. People with multiple houses, or who fly around the world a lot, will pay more in increased prices than they obtain in the dividend -- but they can afford that.
Fee-and-dividend is democratic -- treating everybody equally -- as well as libertarian and populist.
Wait a minute, you say, collecting a fee from fossil fuel companies, making fossil fuels pay their honest cost to society, is not realistic. There are a lot of people making money off fossil fuels or planning to make money off the pipeline. American politicians are well-oiled and coal-fired, we can't get such a plan through the government.
Presidential Leadership
Unrealistic? What if President Obama, when he was first elected and had 70% approval, had chosen to have fireside chats, informing the public that a rising carbon price was needed for national security, energy independence, economic stimulation, and preserving a good life for
young people and our fellow species on the planet? With 60% of the people getting more in their dividends than they pay in increased prices, he would have been a populist President. He could have taken the matter to the public. His party controlled the House and Senate.
President Obama chose not to do that in his first term. He gave minimal support to a cap-and-trade-with-offsets proposition, which would have made little actual reduction in U.S. emissions and was ineffectual globally. Unless he faces up squarely and effectively to the greatest practical
and moral issue of the 21st century, he forfeits his chance to be a great president.
International Implementation
Cap-and-trade-with-offsets is the Kyoto Protocol approach, in which countries are begged to join and set emissions targets. When they fail to meet their target, they withdraw from the Protocol.
China will not accept a cap on their emissions. Why should they? The U.S. is responsible for 27% of the fossil fuel CO2 in the air today. China's responsibility is just approaching 10%. However, their population is more than three times that of the U.S., so they have used only 10% of a fair cap. By the time they reach that cap, we will all be doomed.
Why would China put a fee on carbon? Lots of reasons. They do not want to develop the addiction that plagues the U.S. They have heavy air and water pollution from fossil fuels, which is very costly and has the public upset. They are among the most vulnerable nations to climate change, including sea level rise. China has a long history and is capable of taking a long view. The fact that the worst climate impacts will be visited on future generations will not likely cause China to "discount" future climate effects and heap consequences on the young.
Only a few nations need agree on a carbon fee. They will place a border duty on products from countries that do not have an equivalent carbon fee. They can also rebate to their manufacturers the carbon fee covering the fraction of their production that is exported to nations without the carbon fee. This approach provides a tremendous incentive for other nations to adopt a similar domestic carbon fee, so they can collect it themselves rather than lose it as a border duty.
Border tariff adjustments are not unique to fee-and-dividend. However, the flat cross-the-board fee on carbon, a reasonably well-defined number, makes international implementation simpler, as revealed via objective comparison's in Shi-Ling Hsu's book "The Case for a Carbon Tax."
Criticisms of Fee-and-Dividend
A common criticism is that low income people will waste the dividend, e.g., buying powerball tickets. I come from a low income family, my father a tenant farmer educated to 8th grade, with seven children. We would not have wasted the money. Nor would most low income families.
Of course a minority of people will waste the money. You can't legislate against foolishness. But note that even in such cases the money will soon be back in the economy.
The second criticism of fee-and-dividend is that it is better to tax fossil fuels and let the government invest the money in clean energies. Uh, you mean the government can make the best decisions about winning technologies? That should be an easy call.
We already have a situation in which even advanced nuclear power development is being financed privately, e.g., by Bill Gates. Quietly, despite the failure of our government to require fossil fuels to have an honest price, very exciting advances are being made in many technologies, even, believe it or not, carbon capture. These technologies, including energy efficiency, will spread like wildfire once a rising carbon fee begins to be collected and distributed, so that fossil fuels begin to pay their true costs and the public has the funds at their disposal.
Government has a role in R&D (e.g., the excellent ARPA-E program) and assuring that new technologies are safe, but those departments already exist, funded by existing taxes.
Nor should the fee be used to pay down the national debt. The public is not stupid. If the money is thrown into government coffers, regardless of how its use is described, the public will know it is being used to support big government. The only way the public will allow a continually rising price on carbon is if the money goes to them, so that they can deal with increasing fossil fuel prices. The rallying cry should be "100 percent or fight!"
Governors and Mayors
I am sorry if my remarks at the Commonwealth Club (reported out of
context) were interpreted as criticism of people who have worked hard to reduce fossil fuel emissions. My remarks were not intended that way, nor were they interpreted as such by the Governor. I acknowledged the success of California in limiting their emissions relative to that of other states, and I made it clear that my remarks were about ineffectual policies, not people.
In addition to several governors, a number of mayors, perhaps most notably Republican Mayor Bloomberg in New York City, have been vocal about climate change and effective in reducing emissions. Helped by a flagging national economy, this has reduced United States emissions a few percent, which is a significant improvement compared with continued emissions growth.
However, the science has made crystal clear that these efforts and policies are not enough. We must pursue policies that can lead to global emissions reductions and a phase-out of reliance on fossil fuels, such that most remaining coal and unconventional fossil fuels are left in the ground.
Cap-and-Trade vs. Carbon Fee
A crucial point is that we need policies that reduce emissions as rapidly as practical. Cap-and-trade, even if it were applied across-the-board on all fossil fuels at the source (it is not) and even if applied across the nation (it will not be; can you imagine the Texas Governor's response if the California Governor called and asked him to follow suit?), would provide no prospect of the rapid reduction of global emissions needed to cause most fossil fuels to be left in the ground.
Why not? Cap-and-trade, to the extent it reduces emissions some places, reduces demand for fossil fuels, lowers their global price, thus encouraging their use elsewhere. At best, this slightly slows the burning of fossil fuels, which is little help. Fossil fuel CO2 emissions stay in the ocean-atmosphere system for millennia. Most fossil fuel carbon must be left in the ground.
In contrast, a carbon fee can more readily be made universal [cf. discussion above and Hsu's "Case for a Carbon Tax"]. If the funds are distributed 100% to the public, the public will allow the fee to rise to high levels, in contrast to the relatively ineffectual carbon price characterizing cap-and-trade or a pure carbon tax. Resulting reduction in fossil fuel use under a rising carbon fee causes demand to drop, and the net price that producers receive falls (because the fee portion goes to the public). This causes rapid loss of market for costly fuels (tar sands, tar shale). Most coal, as the carbon fee rises, also will be left in the ground or used only with carbon capture.
Summary
An honest, gradually rising, price on carbon, making fossil fuels pay their costs to society, including externalities, makes economic sense and is needed for rapid phase-down of fossil fuels. Other things are needed, but the base requirement is an across-the-board universal carbon fee.
Scientists should not accept fossil fuel scenarios foisted on us by compliant government agencies. Instead, we should help define carbon emission scenarios that avoid growing regional climate extremes and climate tipping points that can cause disintegration of ice sheets and large-scale extermination of species. Those government agencies, virtual arms of the fossil fuel industry, have a bad record in projecting energy requirements. Even in the U.S., with little effort to control energy use growth during the past few decades, reality forces energy agencies to continually revise downward their projections (cf. Fig. 3 in "Storms of My Grandchildren").
We must stanch a pervasive defeatism that is about. Humanity is not a bunch of lemmings marching unstoppably toward a cliff. There is such a thing as free will. It seems that many people have slipped into an unhelpful resignation, ultimately leading to a way of thinking that accepts fossil fuel industry propaganda.
People please wake up! For the sake of young people, future generations, and other life on our planet, don't settle for what some "experts" say is the best we can do. In fact, we can move on to clean energies and energy efficiency, but only if we are wise enough to put an honest rising price on carbon emissions. It is equally clear, I submit, that the public will only allow an adequate rising price on carbon if the system is simple and transparent with the proceeds distributed to the public. That will provide the public with the resources required to make the needed changes as we move to cleaner energies and a bright future that preserves the planet and life that we know.
James Hansen, December 13, 2012
_______________
1It was a bit eerie. When the power went out (not restored for almost a week) we were in pitch dark except for candles and a battery powered lantern. Soon we heard thunderous noise as the railings around our second floor flat roof (deck) were blown off and crashed to the ground. The next morning we found four large trees blown over, one of them leaning against the house -- their root systems pulled out of ground that was too soggy to hold them. Similarly, because of the soft rain-soaked ground, large sections of the stockade fence separating our property from the road were blown down, as were sections of the fence around the horse pasture. Windows in the barn were blown out, but the solar panels were unharmed. Storm power and damage supposedly vary with the cube of wind speed, so amping up of the winds by the unusually warm coastal waters probably had a big effect. We live in eastern Pennsylvania and are thus buffered from Atlantic storms by New Jersey, but this was a marginal hurricane imbedded in a frontal storm that can affect a huge area. These kind of storms, as described in Storms of My Grandchildren, will become far stronger if we allow Greenland to begin to melt fast enough to cool the North Atlantic Ocean.
http://www.columbia.edu/~jeh1/
Sunday, December 9, 2012
James Hansen calls cap-and-trade a half-baked, half-a@@ed way to deal with global warming
James Hansen blasts cap and trade
by David R. Baker, SFgate, December 5, 2012
James Hansen, who received an award from the Commonwealth Club, says a carbon tax would be more effective than the state's cap-and-trade program. Photo: Melanie Patterson, The Daily Iowan/AP / SF
Many environmentalists were thrilled last month when California launched its cap-and-trade system to rein in greenhouse gases.
But not James Hansen.
Arguably the best-known climate scientist in America, Hansen trashed cap and trade during a talk Tuesday night at the Commonwealth Club in San Francisco. The system, in which companies buy and sell permits to produce greenhouse gases, is a "half-baked" and "half-assed" way to deal with global warming, Hansen said.
And he made those comments with California Gov. Jerry Brown sitting in the audience.
Hansen, who leads NASA's Goddard Institute for Space Studies, was there to receive the Commonwealth Club's annual Stephen H. Schneider Award for Outstanding Climate Science Communications. The award, named after a Stanford University professor who died in 2010, goes to scientists who make significant contributions to the public discussion of climate change. Hansen, who has been pilloried by climate-change doubters, certainly fits that bill.
His comments Tuesday were typically blunt. Cap and trade, he said, does little to cut emissions. But it does enrich the trading desks of banks, which have a new market to explore.
"Why do you want big banks in this problem?" Hansen asked. "Why should they be making money? Every cent they make is coming out of the public's hide. And they add absolutely nothing. What you want is a system which is very simple and makes things cleaner."
That simpler system would be a carbon tax. Hansen argued for taxing carbon pollution and returning the money to taxpayers, an approach often called "tax-and-dividend." Although it's a touchy subject for many conservative politicians, a carbon tax has been discussed as one possible ingredient in a "grand bargain" on taxes, providing a way to raise federal revenue and fight climate change in one move. Most people suggesting it have called for keeping at least some of the money with the federal government, perhaps using it to cut other taxes.
To Hansen, the most important thing is putting a firm, high price on carbon. Do that, and the private sector will quickly find ways to cut greenhouse gas emissions, he said.
"People will see in the marketplace that something using fossil fuels is going to cost more because of that carbon price, and so they will make their decisions based on that," Hansen said. "You don't want a system with caps, where you have trading, you have derivatives, you have markets that then collapse and don't actually reduce emissions much. That's been tried in Europe, and it didn't do much."
After Hanson received his award, Brown made a few brief comments congratulating him on his work. The governor didn't address Hansen's criticism of cap and trade. Not directly, anyway.
"We are out there in the forefront," Brown told the crowd. "As you've just heard, the forefront isn't good enough. But it's still pretty damn good."
David R. Baker is a San Francisco Chronicle staff writer. E-mail: dbaker@sfchronicle.com
http://www.sfgate.com/business/article/James-Hansen-blasts-cap-and-trade-4094663.php
Tuesday, December 15, 2009
Secret Cap-and-Trade proposal: Canada has no intention of meeting 2020 emissions target; Leaked cabinet documents show government plan for massive increase in oil and gas emissions by 2020
Secret Cap-and-Trade proposal confirms that Canada has no intention of meeting its 2020 greenhouse gas target
Leaked cabinet documents show government plan for massive increase in oil and gas emissions by 2020
December 15, 2009 (Copenhagen, Denmark) – Cabinet documents unveiled last night show that Environment Minister Jim Prentice’s planned cap-and-trade system is so weak that the federal government clearly has no intention of meeting its 2020 emissions target, according to Climate Action Network–Réseau action climat Canada. The documents were described in a CBC news story and have been analyzed by members of the Climate Action Network.
The documents reveal that the Government of Canada is contemplating an approach to regulating emissions from the oil and gas, manufacturing and mining sectors that is more than three times weaker than their 2008 “Turning the Corner” plan.
“The government is lying to Canadians, Parliament and the world,” said Steven Guilbeault of Équiterre.
“These leaked documents show that Canada’s government has chosen expanding the tar sands over protecting our climate. Canada is negotiating in bad faith in Copenhagen by calling on poor countries to do more while it is secretly planning to do less.”
Under “Turning the Corner,” oil and gas producers would have been required to reduce their annual emissions by 48 million tonnes (Mt) in 2020, relative to business as usual; the new approach requires just 15 Mt of reductions below business-as-usual in 2020.
This would leave the oil and gas sector’s emissions 37% above the 2006 level in 2020.
“This secret plan is a scandal. These documents reveal that the emissions target that Canada is presenting in Copenhagen — weak as it is — is a sham,” said Graham Saul, Climate Action Network–Réseau action climat Canada. “Minister Prentice needs to stop lying to negotiators from other countries and admit that he has no intention of fulfilling his commitment.”
“These documents reveal a detailed plan to allow massive emissions growth from Canada’s oil producers,” said Matthew Bramley of the Pembina Institute. “Because of their high emissions and rapid growth, the litmus test of any Canadian cap-and-trade proposal is the way it treats the oil sands. The plan outlined in these documents fails that test spectacularly.”
The leaked documents reveal plans for a number of measures that further undermine Canada’s cap-and-trade proposal. For example, firms would be allowed to meet their targets by making payments into a technology fund instead of actually reducing emissions. The government also plans to give emission allowances to firms free of charge instead of selling them in an auction.
Measures like these mean that the Canadian proposal is far weaker than the U.S. approach passed by the House of Representatives in June — in contrast to Minister Prentice’s claims of “harmonizing” Canada’s
policies with the U.S.
For more information, contact: Steven Guilbeault, +45-416-325-44; Matthew Bramley, +45-269-809-68; Graham Saul, +45-255-360-63
Link: http://www.pitchengine.com/climatevoicecop-15/secret-capandtrade-proposal-confirms-that-canada-has-no-intention-of-meeting-its-2020-greenhouse-gas-target/38072/
Sunday, November 15, 2009
Laurie Williams & Allan Zabel: Cap-and-trade mirage
Cap-and-trade mirage
by Laurie Williams and Allan Zabel, Washington Post, October 31, 2009
Supporters of the climate bill passed by the House and the similar bill under consideration in the Senate -- including President Obama and Democratic congressional leaders -- say that the cap-and-trade approach would guarantee greenhouse-gas reductions. But this claim ignores the flaws inherent in both bills that would undermine even their weak emissions-reduction targets and would lock in climate degradation.
We are speaking out as parents, citizens and attorneys, but our analysis is informed by more than 20 years each at the Environmental Protection Agency's San Francisco Regional Office, including Allan's extensive experience overseeing California's cap-and-trade and offsets programs for the EPA.
Cap-and-trade means a declining "cap" on total emissions, while allowing trading of pollution permits. Confidence in the certainty of declining caps is based on the mistaken assumption that cap-and trade was proven in the EPA's acid rain program. In fact, addressing acid rain required relatively minor modifications to coal-fired power plants. Reductions were accomplished primarily by a fuel switch to readily available, affordable, low-sulfur coal, along with some additional scrubbing. In contrast, the issues presented by climate change cannot be solved by tweaks to facilities; it requires an energy revolution through investments in building clean-energy facilities.
The biggest obstacle to this revolution is that uncontrolled fossil fuel energy remains much cheaper than clean energy. Cap-and-trade alone will not create confidence that clean energy will become profitable within a known time frame and so will not ignite the huge shift in investment needed to begin the clean-energy revolution. In recent interviews, even the economists who thought up cap-and-trade have said they don't believe it's an appropriate tool for climate change.
What guarantees failure of the proposed climate bills, however, are their provisions for carbon offsets, a concept not used in the acid rain program. Both bills allow all required greenhouse-gas reductions for almost 20 years to be met with carbon offsets rather than actual reductions in use of the capped sources. Offsets -- considered indispensable to keeping cap-and-trade affordable -- are supposed to be "additional" reductions beyond what is legally required. But experience with offsets in Europe and California has shown that ensuring real "additionality" is not an achievable goal.
Suppose, for example, that a landowner is paid not to cut his forest so that it can continue capturing carbon dioxide from the atmosphere. Purchasing this offset allows owners of a coal-fired power plant to burn extra coal, above the cap.
But if the landowner wasn't planning to cut his forest, he just received a bonus for doing what he would have done anyway. Even if he was planning to cut his forest and doesn't, demand for wood isn't reduced. A different forest will be cut. Either way, there is no net reduction in production of greenhouse gases. The result of this carbon "offset" is not a decrease but an increase -- coal burning above the cap at the power plant.
Or consider the refrigerant HCFC-22, the manufacture of which creates an extremely powerful greenhouse gas as a byproduct. This byproduct is relatively easy and cheap to destroy, and governments could require refrigerant manufacturers to do just that. But offset investors have persuaded regulators to approve destruction of the byproduct as a carbon offset, making it twice as profitable to sell byproduct destruction as it was to sell the refrigerant.
Some have even fought to keep release of this byproduct legal because, otherwise, destruction of the byproduct would no longer produce offsets as it would no longer be "additional." The situation also creates incentive for some to make unneeded refrigerant to profit from byproduct offsets.
Carbon offsets create the illusion of "additional" greenhouse-gas reductions, but we are just getting business as usual. Untrackable shifting of economic activity and perverse incentives such as these are inherent problems for carbon offsets and cannot be solved by certification or verification processes. Since the most flawed offsets will be the cheapest, they will also be the most popular.
The House and Senate climate bills are not a first step in the right direction. They would give away valuable rights in cap-and-trade permits and create a trillion-dollar carbon-offsets market that will not lead to needed reductions. Together, the illusion of greenhouse-gas reductions and the creation of powerful lobbies seeking to protect newly created profits in permits and offsets would lock in climate degradation for a decade or more. The near-term opportunity to create an effective international framework would also be lost.
Laurie Williams and Allan Zabel are lawyers with the Environmental Protection Agency. The views expressed here are their own and not those of the EPA. Their discussion paper and video on climate change solutions are online at www.carbonfees.org/home/.
Link: http://www.washingtonpost.com/wp-dyn/content/article/2009/10/30/AR2009103002988.html
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