That sounds like roughly $100 billion per year. Is that reasonable? The United States produces about 7 billion tons of CO2 equivalent a year right now, which means that Obama expects his cap-and-trade plan to generate a price of about $14 per ton in its first year -- assuming it covers every single molecule of carbon emitted in the U.S. If only half of all emissions are covered at first, it means a price closer to $28 per ton.For comparison, the European ETS cap-and-trade plan currently prices CO2 at about 10 euros per ton. That's roughly $13. And that price has dropped considerably over the past few months thanks to the recession. By 2012 it's likely to be back up in the range of $20 or more.
I'm going to disagree, for a couple of reasons. First, spikes like the one we saw between 2004-8 have long lags. I bought a tiny fuel efficient car, in part because of high prices. I will now drive it into the ground. It will be five or ten years before I even have an opportunity to increase my carbon footprint. Ditto weatherproofing homes, replacing air conditioners, etc. Moreover, when supply suddenly goes from tight to loose, oil prices tend to overshoot, because big producers, especially those in OPEC, have gotten dependent on the money. They cheat on their quotas, and the price falls further--look at 1986 or 1998.
Second, I doubt economy-driven demand will have recovered by 2012. The major economies are crashing so hard that it will take years of growth to get demand back where it was, and the big developing countries that drove demand past capacity are in worse shape than we are; they were depending on growing consumer demand in the US to drive their growth.
Third, I think it is decidedly iffy whether congress actually passes any cap and trade system with teeth. For a cap and trade system to work, it will have to make energy more expensive at a time when incomes are declining. This will be very, very, very unpopular. I imagine the Democrats will try to get the Republicans to kill it for them, but they don't have much margin--one flipping Republican in the Senate and a few in the house should let them pass it. If the Republicans are smart, they will provide three moderate Republicans in the Senate, a few Republicans from safe seats in the House, and make the Democrats suffer the consequences of raising the price of gas and electricity. But I doubt they'll be smart; they'll do Pelosi's dirty work for her.
If the Republicans are smart...
If the Republicans think purely in terms of political expediency, you mean. It's possible that many Republicans genuinely think this is a bad idea, and would like to kill it even if they pass up an opportunity to gain power by doing so.
After all, what good is power if you can't use it to push your agenda?
The proposal is ludicrous. Everyone should know that significant increases in energy prices are political death in the US, and even with the recent collapse in prices, this has not changed in any significant way. However, by all means, let the Democrats go forward with their plan.
Is there a decent and accessible analysis anywhere of cap-and-trade vs carbon tax? I can't see any reason why the tax is not superior on every metric (efficiency, scalability, address the entire market) -- except cap-and-trade facilitates political tinkering and rent-seeking.
On a related note: what good is power if you can't use it to push your agenda?
It's useful for maintaining your power, rewarding freinds, punishing enemies, and most especially making ginormous loads of money. See, for example, Joe Biden.
I think your second disagreement is the most substantive, especially considering today's GDP revision. The budget probably (at least I would hope) uses the same projections of GDP in the cap-and-trade as it does elsewhere and we've already seen how Rosy those Scenarios are.
More broadly, though, I think the concerns you raise are precisely what makes the estimations so smart. People can raise all sorts of problems like this and then Obama or Chu or the EPA can say, "Geez, you're right, we'd better retool our assumptions so we don't run into the same toothless-regime problems Europe had. Thank you for your concerns, we will be sure to take them into effect when designing an effective cap-and-trade system." In getting a proposal into the budget, any deviation from those numbers can be used to confirm the fierce urgency of now. Even if the numbers aren't right, Obama has you playing ball on his court. Change his assumptions or strike the program and you're robbing the government of much needed revenue.
Yancey, I'm guessing you're over 40.
There are too many unknowns to name a carbon cost or a revenue (let alone a gasoline price impact).
It IMO very unlikely to be a "per year" thing.
Surely any rational architect of a 100% auction would set the "year one" cap close to the projected emissions. Rational bidders would get their emission coupons cheap. Then, with a 2050 goal, you'd ramp toward that, tightening the market (and raising the price) a little bit each year.
Has the starting cap or the rate of tightening been named? If not all this discussion is premature, to say the least.
If Obama (or Gore or Pelosi or whoever) really wanted to reduce carbon - they would propose and push a revenue-neutral carbon tax. Propose a carbon emission tax on producers at whatever level they think is appropriate and completely offset those revenues with a cut or elimination of the corporate tax.
There'd be a lot of screaming and shouting, but ultimately I think more than enough Democrats and Republicans would support a proposal like this to pass it.
Of course such a proposal doesn't address the real incentives behind carbon politics (making government bigger, greener than thou preening, pandering to extreme enviros, enriching cronies through a highly corruptible cap and trade system, etc.) - but it would reduce carbon emissions and it would be politically viable.
BTW, a gallon of gasoline produces about 20 pounds of co2. That's 20/2000 of a ton, or 1/1000th.
Kevin's $13-26/1000 == 1.3 to 2.6 cents per gallon impact?
The good news is that's low. The bad news is to think that it impacts (changes) consumer use patterns (gallons burned) is laughable.
RobB, if I squint I see this as revenue neutral ... the budget gap has to be closed. Pulling revenue from CO2 emitters prevents it from being pulled anywhere else (income tax).
odograph: If that's revenue-neutral (with no cuts or offsets), then so is any other conceivable tax, no?
"I bought a tiny fuel efficient car, in part because of high prices. I will now drive it into the ground. It will be five or ten years before I even have an opportunity to increase my carbon footprint. "
More fuel efficient cars may actually INCREASE fuel consumption because they encourage more driving. This is called Jevons Paradox, and is based on the observations of coal consumption patterns after the invention of the steam engine. So named because it was first proposed by 19th century liberal economist William Stanley Jevons.
http://en.wikipedia.org/wiki/Jevons_paradox
Kinda makes you think twice about subsides for hybrid cars, don't it?
Cap and Trade may be revenue neutral for the government, but it is revenue negative for the U.S. economy as a whole, because it makes our manufactured goods relatively more expensive to produce when compared to goods made in countries with less stringent carbon controls.
It's just going to drive more manufacturing (and jobs)overseas while increasing our already huge trade deficit.
Odo - You may squint and see this as revenue neutral others won't. My point is that if you really want to pass a carbon reducing policy rather than make a nifty proposal - you ought to propose something that has a good chance of passing. A revenue neutral proposal - especially one that is attractive to your likely opponents would pass. And if your goal really is to reduce carbon... well then it's a win.
I think a fair number a free market conservatives and libertarians would be happy to accept a carbon tax if they could get a significant corporate tax reduction out of it.
Kinda makes you think twice about subsides for hybrid cars, don't it?
No, I still thing they're stupid.
I think RobB gets me, but let me tell Lorenzo a story ... for decades I used to deposit my paychecks in one account, and write my checks from the same account. Periodically I'd shift the surplus, savings, to investment or etc.
Recently I started depositing my paychecks in an account in one bank, and writing my checks from an account at a totally separate bank.
It felt weird ;-), but it really comes out the same.
Putting money into a cap and trade income account adds to the bottom line, and reduces need at the "income tax" and "corporate tax" windows.
Given that we are in a horrible deficit/debt position (possibly justified by x degrees of contraction, another topic) ... we need to put money in somewhere. If putting money in from cap and trade reduces the need, reduces other taxes ... if you squint
alright, so first we got a recession caused by too much debt, the solution to which is to borrow more money. And now, to reduce taxes, we must levy new taxes?
Ummmmm, what?
If the US currently emits X tons of CO2 in year T and the regulatory marginal price is $0, and it then goes up to (say) $14, emissions in year T+1 are EXTREMELY LIKELY to be far lower than X.
How did Mr. Drum write his post without even pretending to take that into account, and how did you respond to it without correcting that glaring omission?
Ken, I might be alone on this ... but I actually find the current situation sub-optimal.
That said, there is a theory, called countercyclical fiscal policy.
I think fiscal policy probably should be countercyclical .. which means more spending in a downturn ... but which doesn't necessarily say that this level of "more" is perfect.
BTW, a gallon of gasoline produces about 20 pounds of co2. That's 20/2000 of a ton, or 1/1000th. Kevin's $13-26/1000 == 1.3 to 2.6 cents per gallon impact? The good news is that's low. The bad news is to think that it impacts (changes) consumer use patterns (gallons burned) is laughable.
Barely the tip of the iceberg. About half of US land shipping occurs via diesel truck and the other half via diesel rail, and diesel fuel produces CO2 at a similar rate (about 22lbs/gal). The net cost of fuel to ship a good and its constituent components will get added to the final cost of the good.
Coal, accounting for nearly 80% of US power generation, produces CO2 at the rate of about 3 tons per ton of coal. One ton of coal produces about 2000 kW-h of electricity, and an average home uses about 1000 kW-h/month. Therefore the average residential utility bill could increase by $21. The cost of electricity for commercial and industrial use will also increase the overhead cost of doing business, which will get factored into the final cost of goods and services. It will also find its way indirectly into electricity-intensive utility services like water and sewer.
Many residential and commercial buildings in the US are heated by fuel oil or natural gas. These will also increase in price and therefore increase the cost of both residential utilities, and commercial goods and services by proxy.
It's not unreasonable to expect that the average US household could see its total cost of living increase by $40-70/month in the short-term, with the long-term payout in renewable energy conversions and efficiency improvements (e.g. lighting an office in daytime primarily by skylights or ducted sunlight systems using low-grade fiber optic channels) being 5-10 years out before cost offsets kick in. This would definitely modify consumer spending habits, but more importantly, it would produce a whopper of a political backlash.
Noah is spot on. People and businesses take taxation into account when they make economic decisions. Exporting the remaining bits of US manufacturing capability to China won't do a whole lot for the treasury.
The point of cap and trade is to alter people behaviour so, i think its a little strange that Drum assumes there wont be any substitution away from carbon. I know its short run and all but still.
Also Mouse how can you produce 3 tons of carbon from 1 ton of coal? Im not a scientist but does burning coal really cause it to gain mass?
"This would definitely modify consumer spending habits, but more importantly, it would produce a whopper of a political backlash."
I can't wait. That and higher taxes may be the only thing that gets sane fiscal polity back into power.
Also Mouse how can you produce 3 tons of carbon from 1 ton of coal? Im not a scientist but does burning coal really cause it to gain mass?
I think he means three tons of CO2, which has picked up the weight of two extra oxygen molecules for every carbon that went into it.
I understand that talking about technical issues is difficult and boring because it is, like, sooo technical. However, let's try.
There are 4 ways to reduce carbon emissions: increased efficiency; fuel switching; reduced energy consumption; and, permanent sequestration of carbon emissions. These approaches must be discussed against a background of growing US population, which is expected to reach 450 million by 2050.
The potential of increased efficiency is limited by the laws of thermodynamics; and, it is quite limited. Fuel switching, for example from coal to natural gas, has greater potential, though it is still quite limited. Reduced energy consumption (conservation), while it has potential, tends not to be durable. (How many of us are still wearing out "Jimmy Carter" cardigans during the winter?) Permanent sequestration, once demonstrated at commercial scale, has the potential to eliminate carbon emissions from large stationary sources, but is not likely to be applicable to medium-to-small stationary sources or to mobile sources.
It is important to remember that we are not talking about incremental reductions in carbon emissions, but rather about an 80% reduction among a 50% larger population (~86% on a per capita basis). That implies elimination of mobile source and small-to-medium stationary source emissions. Eliminating some of those emissions, such as those from baking, will be more difficult unless we are willing to shift to unleavened bread.
Absent technically practical and economical carbon capture and sequestration technology, coal and natural gas power generation must be replaced with non-fossil generation. The major non-fossil generation technologies (nuclear and hydro) are constantly faced with major resistance. Solar and wind are ~25% capacity factor sources, unsuitable for coal or natural gas replacement in the absence of efficient, economically viable storage. Geothermal (steam/hot water) is a geographically limited resource. Ocean thermal energy conversion (OTEC) and wave energy are potential future technologies. Dry hot rock geothermal has the potential, but is not economically viable today.
Therefore, the important question is not: "Is it a tax or not?" The important question is rather: "How will we do what we need to do with 86% lower carbon emissions on a per capita basis?"
For US industry, the problem is likely fairly simple, since the rest of the world is highly unlikely to follow our altruistic lead and slit their own economic throats. US industry can simply move to developing countries which have no intention of reducing carbon emissions. US citizens (US workers) are not quite so flexible.
The first victims will likely be electric utilities, since many direct fossil fuel users could switch their processes to electricity, thus shifting the carbon emission reduction burden to the utilities. The utilities must then guess whether and on what schedule their customers will either: shift from fossil fuel to electric energy consumption, this increasing demand and utility carbon emissions; or, shift production to China or some other developing country which is not reducing carbon emissions.
The sad reality is that, unless all the nations on the globe commit to massive carbon emissions reductions, carbon emissions will not be reduced in absolute terms, although they would be lower than they would otherwise have been.
Investing ~$700 billion per year in the US between now and 2050 without reducing global carbon emissions in absolute terms, or halting the growth of atmospheric carbon concentrations, seems a lot like "tilting at windmills".
If communism becomes popular again, we should be able to save the carbon output of about 100 million people over the next century, including breathing.
Stalin and Mao weren't mass murderers, they were merely battling global warming!
BTW, a gallon of gasoline produces about 20 pounds of co2. That's 20/2000 of a ton, or 1/1000th.
Kevin's $13-26/1000 == 1.3 to 2.6 cents per gallon impact?
How can anyone take a tax seriously that is 2.6cents a gallon?
Who is going to buy a smaller car because gas is $2.39 but by a Hummer when gas is at $2.36???
A carbon tax might save the world but it sure ain't gonna change the way I drive!!
Cheap cynicism is harmful. Perhaps Megan should consider that Nancy Pelosi might believe in global warming, and might be willing to take some risks to mitigate it. I don't think much of Bush, but I am willing to believe he thought he would improve American security by invading Iraq.
Ed, other wealthy nations consume far less energy so conservation can be durable. No one option will solve the problem alone but together real improvements are achievable. Why do you think taxing energy as opposed to income will "slit" our economic "throats"? And what's your preference - do nothing until every country agrees to act in concert?
Tom
A question for any people who are seriously concerned about global warming:
Let's say China didn't reduce any of its carbon emissions over the next 20 years. Let's say that it actually increased them to a point where they offset any reduction by other nations, and then went beyond that.
Is that a reason to invade????
Coal, accounting for nearly 80% of US power generation
Just to nitpick, coal is 50%
Megan,
Kevin's argument completely misses the point. How can he try to calculate the potential revenue from a cap-and-trade system in the U.S. based on the permit prices in Europe? The prices in the U.S. will crucially depend on the number of permits issued by the U.S. government. Since these are separated markets, prices in Europe and in the U.S. have nothing to do with each other.
Lorenzo,
The allocations possibly achieved by the carbon tax are equivalent to the cap-and-trade system where government sells the permits to the firms at market clearing prices.
The cap-and-trade system where the government hands out the permits for free is equivalent to the carbon tax which is rebated lump sum to the industry.
Equivalent means that whatever result you can achieve using one method, you can also achieve using the other method. The only difference is that one method (tax) sets prices and lets quantities equilibrate, while the other (cap-and-trade) sets quantities and lets prices equilibrate.
The possible preference for the cap-and-trade system (this does not tell anything about my position) may lie in the fact that the government's goal is to limit the emissions to a certain amount. With cap-and-trade, you just set the amount by the number of permits, and let the market do the rest. With tax, you have to fiddle around with the tax level until you reach the desired level.
Energy is the input for all economic activity, small changes in price have big impacts over time. Positive feedbacks really do exist, in human behavior. When costs go up for everything, everyone must adjust to eachothers new prices. The higher costs and slimmer margins mean more risk and uncertainty. Eventually things grind to a hault.
The assumption under which all here operate who propose a CO2 tax or a cap'n trade is not that prices for energy will/should go up. Rather - the assumption is that new clean energy sources will be deployed even more - hence leading to a drop in prices compared to dirty energy. Hence also balancing higher oil and gas prices.
Oil and gas are limited in nature. We could see what happened in Europe with natural gas and Russia. Nobody in Europe believes that the Russian can deliver enough until 2020. The Caspian Sea is the only other option but also not infinite and dirt-cheap and with Iran being politically unstable... I am with NASA on the petrol reserves. Coal and Nuclear are the only real competitors here.
In other words - cap'ntrade and a tax are, if one things 5 years ahead, only about coal and nuclear. When it comes to nuclear - it would be suicide to promote that energy source internationally (North Korea, Iran, Iraq, etc etc). Our security spending would have to increase 10fold and we cannot afford that until 2050.
When it comes to coal - we all know what "clean coal" stands for. Here a nice video directed by the Coen brothers. The bad good news are that we will feel climate change very soon. We will not have to wait for future generations to experience a decline in life-style because of environmental unsustainability. This is not a cost-benefit analysis regarding future generations and never will be as most of those "generations" are already alive (look at the demographics of the world). What we usually mean is "future tax payers have to pay for what adult voters decide today". This is every different from saying that the worst impact of climate change will be experienced by future generations - that one is simply NOT true. You either already have daughters and sons or you are young enough yourself to expect many decades of life to come. This "future generation" analysis would have been fitting 60 years ago when we changed the human thread not in degree but in kind - especially with the Green Revolution.
Today every child or person under the age of 50 (80+%) has a high NPV if you will. Net Present Value and not a Net Future Present Value.
I am with Plutarch: “Themosticles said "The Athenians govern the Greeks; I govern the Athenians; you, my wife, govern me; your son governs you”
If you want to cut carbon but refuse you accept nuclear energy as an option, you simply aren't serious. Or, at least, you are as serious as Al gore, who pollutes more in a month than I do in a year, while demanding I lower my standard of living.
Europe manages to run nearly 200(!) nuclear power plants generating almost 170,000 MWe (while still failing to reduce their carbon emissions).
If you truly care about CO2 and global warming (I think it's a crock), then start allowing our country to build them and dump the irrational fear of nuclear power.
This isn't the 70's. There are new technologies such as pebble bed reactors that make nuclear energy much safer.
One thing I think Megan's original comment, and a lot of subsequent commments, are missing: Peoples' energy consumption seems mostly pretty static over time--I don't think it responds much to day-to-day price fluctuations. Instead, it seems like most people don't start thinking seriously about their energy usage until prices go up enough to really cause them some pain, and then they're liable to think about it at some depth, and make big changes that last a long time. In economics terms, I think this is an area where constraints on rational decisionmaking (limited knowledge and time and mental energy) are important.
Megan's example of buying a hybrid is a good one. Other examples include choosing where to live relative to your job based on your expectations of fuel prices (is it important to have a short commute or a commute mostly over bus/rail?), insulating your house and replacing appliances, etc. But the first step to all of these is to start thinking about your energy usage. I've seen a lot of people do that as a result of much-higher electric bills or gas prices. Once people start thinking about this, they're paying attention, and they're likely to:
a. Make decisions that decrease their long-term energy consumption, like insulating their house or buying a hybrid car.
b. Still have some consideration of energy usage in their minds as they make future decisions, because they've now spent some time thinking about it, so the additional cost of thinking about it is relatively low.
If (b) is important, we'll see people in the next decade weighing energy prices into their decisions about where to live and what big plans to make, which will decrease energy usage regardless of price. Higher prices will still affect this--they'll keep people thinking about how to minimize their energy costs--but they're not the only thing that will be driving energy usage down.
Ed Reid: Solar and wind are ~25% capacity factor sources, unsuitable for coal or natural gas replacement in the absence of efficient, economically viable storage.
Minor disagreement — Solar PV and wind can replace natural gas consumption to a considerable extent. Solar generates power during the day, when demand is high. Wind mostly generates power at night, but a lot of gas is used then. The gas capacity has to remain, of course, for when the wind isn't blowing. Solar thermal with thermal storage can have higher capacity factors, allowing it to generate power into the evening. If it turns out to be really cheap, it could generate (much less) power all through the night.
Others have already mentioned the need for nuclear to replace coal, so I'll simply concur.
Fraggle:
I keep thinking that, given the scale of the problem, the only way we can reduce CO2 emissions globally by enough to actually stop the increases (let alone reverse them) in atmospheric CO2 levels involves massively painful things (making energy way more expensive) across the whole planet, with the pain felt decades before any benefit is felt. As a political problem, this looks hopeless to me. I can see how specific countries, especially relatively rich ones, can make such decisions. But not even all rich countries will manage it, and certainly a lot of developing countries (in this case, meant literally, not as a euphemism for third-world countries full of starving kids) like China and India are likely to prefer faster economic growth now to better climate in two or three decades.
That convinces me that the only way we can solve this problem is through better technology. I suspect the best we can do is some combination of:
a. Put the carbon tax or cap-and-trade infrastructure in place now, but without making it too painful. This avoids a popular backlash that gets rid of the infrastructure.
b. Fund the hell out of research on energy storage, smart grid technology, sequestration, and non-CO2-producing energy sources. Use grants, subsidies, prizes, everything you can. Spend every dime made from the carbon taxes, plus a lot of other money, on trying to get better alternatives available.
c. Short-term, try to encourage the move toward lower-CO2 power sources--nuclear and hydro are best (of currently-workable sources), natural gas is better than coal. This is probably a good place for regulatory reform and subsidies, especially where it comes to nuclear plants. (With luck, we'll get something better than big expensive fission plants from (b), and this can be the last generation of them we need to build for general-purpose power generation.)
I think (b) is the only realistic hope we have of major decreases in CO2 emissions.
albatross:
a. Cap & trade is essentially a tax....in a recession. Telling the American people that it won't really do anything right now isn't going to make it likely to be popular.
b. Congress will spend every dime from carbon taxes on buying more votes, with only a token amount going toward the technologies you advocate. Once money goes in the general fund, it's spent, and Obama's stimulus buying things like doorknobs shows how disciplined the Democrats will be.
c. The environmentalist constituents (which includes Hollywood) and their lawyers of the Democrats will make sure no new dams or nuclear power plants are built.
Which leaves us with the Al Gore scenario. Bitch a lot, rake in the dough, and basically be a loud-mouthed hypocrite.
Re: For a cap and trade system to work, it will have to make energy more expensive at a time when incomes are declining.
A direct carbon tax is probably a political impossibilitym because it would have the government's fingerprints all over it. However the cap-and-trade system would be hidden from view. Prices might go up, but people would blame the energy companies for it.
Fraggle
I cannot speak for everybody but I too was a proponent for nuclear energy. That was until I understood the economics of other sources and started some work for the IAEA and discovered some underrated figures that are also not necessarily "pushed" by the Agency. Nuclear trafficking of "dangerous materials" does not happen while transporting nuclear weapons - it happens via power plants.
Everyone who is afraid of Iran and North Korea getting hold of nuclear weapons - should be afraid of nuclear energy. It is not a discussion about plant security anymore - I agree. It is a matter of safeguarding and domestic and international stability.
What I cannot understand, just like I cannot understand Christians who are pro-death penalty, is people who practice fear-mongering regarding our security challenges with Iraq, Iran and North Korea and at the same time promote nuclear energy.
Spending 1 trillion on making sure that Iraq will not get hold of a nuclear weapon some time in the future is clearly quite costly.
Everybody knows of the challenges of solar energy - expensive base-load costs and no 24/7 production. Not many understand the advantages of low retail peak prices and the economic break-even point for 20% of all energy here and now. Retail prices depend on 3 variables in the US. Baseload production - transportation - the last mile grid. Each component accounts for ca 1/3 of the retail price. Solar does not need to pay for transportation and the last mile as it is local. This is why it is economical even compared to coal and nuclear here and now for ca 20% (mostly peak hours).
Nuclear plants require billions of upfront investment and it takes 10 years to build during which opportunity costs increase. And then - it takes another 10 years until the 5cent/kWh is reached. 20 years compared to a few months for cash flow generation!!!! Take this into account and solar is probably economical for 35+% of all energy here and now. Add more efficiency and we can really go clean on 50% of all needs very quickly and more economically than with nuclear and coal.
The question about a tax or cap'n trade should NOT be - how much CO2 will it save how quickly as this is only treating a symptom. The question is - which policy will lead to a fast switch away from dirty, foreign energy to clean domestic one. Obama's plan intends to double domestic clean energy in 2-3 years. There are many ways to do it. Deregulate energy nationally so that one does not have for the states? Subsidize every kWh of clean energy rather than R&D or paying for national grids. Let's see.
But I hope that you see my point that even if you do not believe in climate change (not global warming) and even if new nuclear plants are safe - there are good reasons for investing in clean domestic energies such as solar.
Obama already has the carbon problem sorted out.
1. Borrow $1.75 trillion per year.
2. Demonize investment class.
3. Regulate everything.
4. Watch energy consumption drop as the economy slows and slows and slows.
Derek
I live in coal country. The coal gurus fully expect a cap n trade, and they're going to pass along the cost to the consumer, as will the power companies. So expect your power bills to increase.
Though this was a side point, Megan, I'd like to pick at the "student loan" bit. Yes, it acts as a tuition-inflation mechanism, and that's unfortunate, but because it's means tested, it really does help the students at the lower end of the family income ladder, and the rates are low enough so as not to be ruinous (in addition, a few thousand bucks helps a lot more when your income is $30 K than $300 K). In effect, tuition goes up for the richer families, but comes down for the poorer ones-it's a bit like a rather inefficient transfer payment in which the administrative costs come from passing it through the federal govt.
I think size is key. People respond poorly to excessive rewards and excessive penalties. People look as the small numbers of the actual expected costs of emmisions and think it won't change things, they underestimated the power if influence. They also don't understand the structure of economy well. They'll moan about income inequality, but don't consider the implications at all. Many people who do valuable work aren't paid the majority of the gain from their work. Small changes in cost affect the poor's decissions greatly.
The national research council estimates the costs of energy independence and GHG emmissions at $0.26 a gallon of gas. This is probably very high, as better estimates are between $2 and $14 a ton of CO2. If it's even a net cost, we'll likely discover that the warming we'll see will be a net benefit. We have a habit of looking at negative externalities and ignoring the positive.
When gas prices started climbing, we actually saw delining fuel economy. Until recently, when the economy ground to a halt and congestion declined, price pressures seemed to make things worse.
Europe runs almost 200 nuclear power plants already, if Iran and North Korea doesn't get weapons material from them, they aren't likely to get it from us.
Obama is as likely to double "clean" energy in the next 2-3 years as Europe was to cut emissions after Kyoto.
As far as Christians and the death penalty, "do unto others"...if I was a filthy murderer, I'd fully expect to have it done unto me, and I'd deserve it.
What if...(if mind you), global warming is not a crisis?
man. that sounds so cynical. i truly hope that will not be the case, and that it is achieved over despite the political hurdles.
BTW, a gallon of gasoline produces about 20 pounds of co2. That's 20/2000 of a ton, or 1/1000th.
Isn't that off by a factor of 10? 20/2000 is equal to 1/100 not 1/1000. So the gas tax increase would work out to 13 to 26 cents a gallon, not 1.3 to 2.6 cents.
@Fraggle
You did not quite get my meaning. Iran and North Korea are building nuclear energy plants. That is the only reason why they can also build nuclear weapons and are also trying so. They are not trying to steal nuclear materials from plants in the US and Europa - those are "terrorists". Nations starts with "peaceful, cheap and clean" nuclear energy. If you are promoting nuclear energy, like it or not, you are also promoting nuclear bombs.
"We" already have some plants and bombs. But more countries will try to get them too. We do not want that. That is why we are not building more nuclear weapons but have actually destroyed some arsenals. Again - I rather see 1 trillion $ flow into our economy than into Iraq and Iran etc. Be it the oil we currently buy or the "security".
And it is very realistic that Obama can double clean energy. There isn't much around to start with and it has generally doubled worldwide for the past decade. It is actually a low benchmark for what is possible. But if this is achieved - the economics will change in favor of clean energy soon for an even bigger portion of the energy mix.
@mark_0815
What if the state of the environment is not in crisis? well - that would be splendid. we would not experience the worst decline in biodiversity since the hit of meteorites more than 60+ million years ago. only no meteoroids have hit this time. our current financial crisis would then actually feel like a real problem compared to the environmental situation. As it is - our current economic woes remain a broken fingernail on a cancer patient.
Google CEO Eric Schmidt thinks that switching to clean energies would actually solve our economic problems and is cheaper than switching to nuclear and coal in the long-run. This he reckons - is independent of climate change.
Everyone who is afraid of Iran and North Korea getting hold of nuclear weapons - should be afraid of nuclear energy. It is not a discussion about plant security anymore - I agree. It is a matter of safeguarding and domestic and international stability.
This is a specious argument. Iran and North Korea will build nuclear power plants regardless of whether or not the US has them. The horse has already left the barn in North Korea, and Iran will not be deterred from nuclear weapon acquisition short of a full-scale invasion, which isn't going to happen.
People had best get over fears of nuclear armed North Korea and Iran. At this point there isn't anything we can do.
Iran and North Korea will build nuclear power plants regardless of whether or not the US has them.
You beat me to it.
Nuclear power generation is critical. And theoretically, if the US has enough power generation we'd be better able to produce cheap non nuclear fuels like bio diesel for export. Farms pretty easy to convert to electric in the present tense, because their vehicles don't need to range too far from charging stations.
Increasing US power generation provides much less opportunity for gov't corruption than limiting consumption.
And in terms of danger - high fossil fuel prices seem to bolster dictators in countries that have the fuel; in Russia, in Venezuela, in Iraq. Considering that, and considering that there's little evidence that countries like Iran actually care about the US's halfhearted rolemodeling, the negatives for nuclear power seem underrated compared to the positives.
@Hugo -
From the article you linked to; "He says more parks and reserves are needed." How would those prevent Global Warming? Also the article attempts to link the spread of disease to global warming;
"Disease is the bullet that's killing the frogs," said J. Alan Pounds, the study's lead scientist from the Tropical Science Center in Costa Rica. "But climate change is pulling the trigger."
The pattern that I see here is that there are a myriad of factors lowering species diversity associated with human migration and population (overhunting, spread of old diseases to new continents where animals are not resistant such as several African fungal species, destruction of habitat) with rather weak attempts to link these things back somehow to climate change, even though many clearly predate climate change.
Horses were not killed off on the American continent because of climate change, for instance, but (it is argued) because of human migration and overhunting.
Also, Australia lost a great deal of biodiversity because settlers introduced rabbits to the island long before global warming was even debatably an issue, not because of climate change.
Even from the article you cited;
Whilst previous mass extinctions were due to natural environmental causes, research shows that wherever on Earth humans have migrated other species have become extinct. Human overpopulation especially in the past two centuries is said to be the underlying cause of the Sixth Extinction.
@tsotha and @Ryan
With all due respect gentlemen but I have used Iran and North Korea as examples for what we do not want to happen all over the world - no? I know that these two are nuclear - where are we missing each other?
@Ryan
Thank you for pointing out that there are more reasons for environmental destruction than CO2 per se. We should take all of them seriously but mostly they are related anyway. E.g. livestock agriculture has more than doubled in the last 4 decades per head and is responsible for more new CO2 emissions than al cars, planes and trucks combined. It is also responsible for water waste, most mono-culture and rainforest destruction.
The point here is not "hey it was CO2 and not over-hunting". The point is "no meteoroids or sun spots threatening humans - merely humans threatening humans".
Deriving from that are quite important conclusions regarding behavior choices. Hey - all this is not up to god but up to me. I could choose not to play god on earth when it comes to pleasure excesses. I could choose not to delegate all the responsibility to god when it comes to the slightly uncomfortable.
PS: It is not the loss of large mammals like ice bears and horses that poses a risk for humans. It is mostly the little ones that we do not understand that are believed to be so called pillar species. Have a go at E O Wilson.
If the CEO of Google said it, it MUST be true.
@Fraggle
No. It does not have to be true (are you German?). The point is that he claims to have gone through the numbers and INDEPENDENT of climate change - it makes economic sense to him to switch to clean rather than nuclear energies. That is all. Referecing the person you has done the business modeling is not a call for authority but a reference.
As he says himself - you can disagree with his number and he invites everyone to compare their business models. It is besides the point that he claims to have some experience with hands on business building and has some rather interesting degrees from MIT.
Again - the point Eric Schmidt makes is that the economics in favor of eg solar and geothermal are there independent of climate change. Just like the problems we have and create usually affect many areas - so do the solutions.
"(are you German?)"
- Hugo Pottisch
Good God, no, I'm American. I like my beer cold, my TV loud and my homosexuals flaming.
Why do you not consider nuclear a "clean" energy source like solar or geothermal?
Fraggle: "Why do you not consider nuclear a "clean" energy source like solar or geothermal?"
Because of so called "dirty" bombs. Al qaeda's holy grail.
Again - the worst case scenario is Iraq. We provide them with money and weapons and then have to fight them for $ trillions. Better to provide the US with money and weapons and if necessary inject $ trillions into the US economy.
The Democrats right now seem to act like the GOP only with a more domestic focus. Instead of only talking to the US (new orleans) and acting abroad - we are now talking abroad and acting at home. It is also obvious in the "do onto others.." context that nuclear diplomacy is bound to fail if we supported nuclear energy in the US with billions ourselves.
The economics of nuclear energy are even worse for developing countries. North Korea and Iran are depleting their people with their costly programs that have a questionable payback. In the end - they gain international respect (ie fear) but also have to find distractions and scapegoats for their domestic troubles. Not good soil.
I say - do not support any particular CO2-free source. If one had to really subsidize - pay an additional sum for any CO2-free kWh source and the economics will be plain to see. Nuclear will only cost tax payers for 10 years without any returns in terms of cash-flow and job creation. Deregulate energy! aka stop subsidizing energy transportation and grids for monolithic plants and the economics for tax payer will be even less in favor of nuclear... There is a reason no nuclear plant was build in the US for more than 32 years.
PS: I did not know there was beer in the US. German tourists speak of the children lemonade they encounter. Germans also say "it must" when they actually mean "it has to".
Global warming is a dire, man-made crisis, but the economic downturn will do more than any Kyoto-style treaty (which I support) to cut emissions.
Illegal immigration, commodity prices, and global warming are a few problems that are actually helped by the downturn.
I suspect that efficiency has much less of a lag than you assume. Yes you bought a car back when gas was more expensive, but I am going to buy a new one now. So in the aggregate the effect just doesn't last that long. To the extent to which it does that means there is a strong case for doing anything we can to increase energy costs so that their ability to disrupt things is smaller. I actually think Obama is going to get a Cap and Trade system with teath. The more likely problem is that congress will insist on lots of subisidies for things like "Clean Coal" which will prevent energy prices from being higher, and therefor undermine the whole effort. Possibly Obama or someone else will then come back down the road to cut those subsidies while leaving the Cap and Trade system. If Republicans get serious about being against big government, they could try to stop the energy subsidies or cut them, but instead they will complain a lot about how Gore made up Global Warming.
Someone above said coal is 90% of U.S. power generation. Since that doesn't sound plausible, I looked it up at the DOE. The real number seems more like 50%.
http://www.eia.doe.gov/cneaf/electricity/epm/tablees1a.html
With all due respect gentlemen but I have used Iran and North Korea as examples for what we do not want to happen all over the world - no? I know that these two are nuclear - where are we missing each other?
My point is this: Nothing we do regarding peaceful power generation is going to affect whether or not other countries use nuclear power.
I'm always puzzled by sin taxes - and I think cap and trade is essentially a sin tax - that claim to both raise revenue and decrease consumption of something the government deems bad.
When the government raises taxes on cigarettes or alcohol, consumption often goes down - either people quit, or they find ways around it (buying smokes from Indian reservations, moonshine). And revenue raised is far less than expected.
With cap and trade, one of two things will happen - either companies will find that paying the cost of pollution is cheaper than abating it and the government will profit, or they will find that it's cheaper to find ways to not pollute. Either the first will happen, and the government will get revenue, or the latter will happen and pollution will decline. But it's unlikely that both will occur. While I realize that the amount of credits sold will probably be lower than existing pollution, so there will be some drop in pollution, if there is too much of a drop, revenue will be lower than expected.
@hugo - "where are we missing each other?"
You think Iran is less likely to build a nuclear weapon if America sets a "Good example" and refrains from nuclear power. I think Iran and similar nations are less likely to make a nuclear weapon if there's less demand for their oil and they are poor.
I don't think that all environmental problems are nessecarily linked. Nuclear power and other tech advances can help maintain intensive agriculture, thus using less space rather than more. Solar power creates a lot of heavy metal waste that needs to be disposed of, making it worse than nuclear in some ways.
Deregulate energy!
Does that include removing regulations on nuclear power?
It is the cost imposed by regulations that make building plants prohibitive, including prohibitions on recycling nuclear waste into fuel.
Also, will you force recycling of solar power panels?
A carbon tax is absolutely the better approach. Not only would it avoid the evasion and market manipulation that are inherent to a cap and trade scheme, but it would also incentivize the creation of new, climate-friendly technology. The only downside is possibly its greatest strength: it's transparent, straightforward and called what it is: a tax.
"it's transparent, straightforward and called what it is: a tax"
- CTF
Well that should keep Washington from implementing it.
Someone above said coal is 90% of U.S. power generation. Since that doesn't sound plausible, I looked it up at the DOE. The real number seems more like 50%.
80%, which someone else also caught me napping on. Yes, it's more like 50%. The US has historically gotten about 80% of its electric generation from fossil fuels, which is where I managed to juggle up the numers.
Fair enough Mouse, anyone can make a mistake.
Not like you would have been snarky if someone else had done the same, is it?
540 million years ago CO2 was 7000ppm (when land animals appeared).
170 million years ago CO2 was 1700ppm (when dinosaurs roamed the Earth)
250 years ago CO2 was 250ppm (after Little Ice Age)
currently, because of man, CO2 is 385ppm.
Plant life dies at 150-180ppm through asphyxiation.
CO2 is a finite resource. Nature has been sequestering it underground for 540 million years. At the rate of decrease over the last 170 million years, Earth would have hit 150ppm in about 10 million years. Odd as it may seem, man had inadvertently increased the life essential CO2 concentrations, and if we were to disappear today, the added CO2 probably adds another 10 million years to plant life on Earth. However, man is clever, and may find a way to bury CO2 and make it unavailable to nature at an accelerated rate. Thus, we may yet find a way to kill off most of the planet's plant life, thus ending the 3rd atmosphere.
Meanwhile the Obama Administration and most of the press focus on the wrong components.
N2O, which has no carbon, is 296 times worse than CO2, and 3% of fertilizer for corn to make ethanol is emitted into the air as N2O. Will that be regulated? And if so, will the cost of food soar?
CH4 (methane) is emitted from rotting wood and is 22X worse than CO2. Will that be regulated? Termites create considerable methane, how will regulate that? And will it receive equal penalties for unequal effect?
H2 (hydrogen) in the atmosphere combines with hydroxyls (-OH) and removes H2 from the air. Hydroxyls normally combine with free methane to remove it. A hydrogen economy may actually increase the longevity of methane in the air, thus increasing Global Warming Gas effect. Will the EPA control that?
Burning wood reduces the amount of methane released but increases CO2 over letting it rot which releases much more methane and less CO2. Methane oxidizes in about 9 years to CO2. Will the EPA promote burning scrap wood as a means of decreasing the overall GW effect?
The current policy doesn't actually use science in its decision making. What is at stake is that if the government controls CARBON it controls LIFE.
I grow trees. Agricultural growth rate has increased 30+% because of the increase of CO2 in the past 250 years. It is projected to increase further with any continued rise of CO2. What is the political end game? Are ecopoliticians trying to reduce CO2 to preindustrial 250ppm? Do you realize that we would lose the 30% agricultural gain and thus cause massive STARVATION across the planet. And do you know what happens when global concentrations drop to about 150ppm? Most life on Earth DIES. Is this what you want to promote?
If CO2 is a genuine crisis, then it is suicidal not to push for nuclear, and breeder reactors in particular.
It is the ONLY technology out there which can meet global energy demand without releasing buried carbon into the air.
I refuse to take any energy lobbyist seriously who is not willing to face up to that reality.
good debate
www.youtube.com/watch?v=ACo2OCSJnBI
any hypothesis must stand up to testing with actual data. check out the graph at about 6 min
The Cap and Trade system doesn't have to make energy more expensive "while incomes are declining." There is no need for it to go into affect until the economy is recovering. Putting the short term effects aside it should also be noted that Cap and Trade should be an automatic stabilizer in a way that a Carbon tax would not be. When the economy is weak energy demand will fall and it will be easier for the country to stay below the Carbon caps, when the economy is booming it will be hard to stay under the caps. This should result in increased government revenues during upswings and decreased government revenues during downswings. The problem politically will be during boom times when there will be pressure to ease the Carbon caps or punch holes in them.