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Memo to James Hansen: Your opposition to Waxman-Markey is ill-conceived and unhelpful. There isn’t going to be a carbon tax nor should there be. Get over it and move on.

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"Memo to James Hansen: Your opposition to Waxman-Markey is ill-conceived and unhelpful. There isn’t going to be a carbon tax nor should there be. Get over it and move on."

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Climate Wire (subs. req’d) reports today:

NASA’s leading climate scientist says he hopes that climate legislation proposed by Democratic Reps. Henry Waxman (CA) and Edward Markey (MA) to introduce carbon emissions trading to the United States fails. He says lawmakers should abandon cap-and-trade initiatives altogether and implement a simple carbon tax instead….

“Trading of rights to pollute “¦ introduces speculation and makes millionaires on Wall Street,” Hansen said in his keynote lecture at Columbia University’s 350 Climate Conference held here Saturday. “I hope cap and trade doesn’t pass, because we need a much more effective approach.”

Hansen also stands opposed to so-called “cap and dividend” proposals that would introduce pollution trading and a near full auctioning of emissions, with proceeds from the auctions going back to the public. Instead, Hansen proposed a “tax and dividend” approach to tax fossil fuels at the point where they are extracted from the ground, to set a firm price on carbon. Proceeds from the tax, rather than from the auctioning of allowances, would then be distributed to consumers.

“It could be implemented in one year, as opposed to decades with cap and trade,” he said. “The bureaucracy is very simple.”

Why oh why do even smart people like NASA’s James Hansen think that there is such a thing as a “simple carbon tax”?  Have you folks ever looked at the friggin’ tax code?

Seriously, nothing bugs me more than this notion that Congress would ever pass a “simple” carbon tax, even if it were politically feasible, which it most certainly is not.  Well, one thing bugs me more — people who attack the first serious chance we have to get major energy and climate legislation because they are operating under the severe misimpression that the political system of this country might embrace a tax.

Nobelist Al Gore, who also embraces a 350 ppm target like Hansen, combines political realism with his climate science realism, which is why he takes the exact opposite view that Hansen does — see Gore on Waxman-Markey: “One of the most important pieces of legislation ever introduced in the Congress “¦ has the moral significance” of 1960s civil rights legislation and Marshall Plan.

Let’s be very clear here, since there are obviously a great many smart people who keep pushing a carbon tax instead of cap-and-trade, who are wasting a lot of time tilting at windmills, so to speak, when they should be building them instead (with the help of Waxman-Markey):

  1. A carbon tax, particularly one capable of deep emissions reductions quickly, is a political dead end. Neither the Obama administration nor senior members of Congress support a carbon tax.  Quite the reverse.  Obama (and Clinton and Biden) campaigned on a cap-and-trade system.  That is the only game in town.  Now you can choose to play checkers when everyone else is playing chess, but don’t be surprised if everyone else starts to criticize or ignore you.
  2. A carbon tax that could pass Congress would not be simple. Advocates of a tax argue that simplicity is one of its biggest benefits.  Again, those advocates seem bizarrely unfamiliar with the tax code in spite of the fact that they pay taxes every year.  And those advocates seem unfamiliar with what happened the last time Congress tried an energy tax.  Does anyone think a carbon tax could be enacted into law that did not have various exemptions or that did not allow companies to pay part of that tax by purchasing offsets?  Get real, people.  Again, we ain’t playing checkers here.  The Waxman-Markey cap-and-trade bill isn’t complicated because its authors want a complicated system.  It is complicated because this is a complicated issue and various powerful interests get to weigh in and influence the outcome to protect their interests.  The same would be true of a carbon tax bill.
  3. A carbon tax is woefully inadequate and incomplete as a climate strategy.  Why?  Well, for one, it doesn’t have mandatory targets and timetables.  Thus it doesn’t guarantee specific emissions results and thus doesn’t guarantee specific climate benefits.  Perhaps more important, it doesn’t allow us to join the other nations of the world in setting science-based targets and timetables.  Also, a tax lacks all of the key complementary measures — many of which are in Waxman-Markey — that are essential to any rational climate policy, but which inherently complicate any comprehensive energy and climate bill.  Also, the notion that you could return all the money of a tax back to the public is rather na¯ve at best and counterproductive at worst.

Let me elaborate on these points.

1.  A carbon tax, particularly one capable of deep emissions reductions quickly, is a political dead end. There simply aren’t any major politiciansin office who support one.  So I’m not certain who is going to introduce this imaginary “simple carbon tax” as a bill, and I’m quite certain very few are going to vote for it.  The Obama administration campaigned on a cap-and-trade, and they are the only ones who can change the direction of US climate policy, the only ones who could move us to a tax.  Since they aren’t going to do that, it is a monumental waste of everyone’s time for people like Hansen to rail against cap-and-trade.  You might as well howl at the moon or look for gold at the end of the rainbow.

The weird thing to me is not that Hansen refuses to combine policy/political realism with climate science realism.  He is, after all, a climate scientist — the one I admire most greatly (see “American Meteorological Society gives James Hansen its top honor“) — and not a politician.  The weird thing to me is that Hansen refuses to be internally consistent and advocate policies that match his scientific statements.  I have blogged on this at great length here:  “An open letter to James Hansen on the real truth about stabilizing at 350 ppm.”

Let me repeat the key point:  It is utterly inconceivable that you could stabilize atmospheric concentrations anywhere near 350 ppm by using a carbon price as your primary mechanism.

A price isn’t what is needed to stop building any new coal plants and shut down every existing one in 10 years in rich countries and 20 years everywhere else “” and replace all that power (plus growth) with carbon-free generation and efficiency.  Plus you have to build all the necessary transmission.

Indeed, I can’t imagine how high a price would be needed but it is probably of the order of $1000 a ton of carbon or more starting in 2010. Talk about shock and awe. Remember, we are talking about a carbon price so high that it actually renders coal plants that have been completely paid for uneconomic to run. And once you stop new demand and start shutting down existing plants, the price of coal will collapse to almost nothing.

Once you start building all of the alternatives at this unimaginable pace, bottlenecks in production and material supply will run up their costs. The collapse in coal prices, making existing plants very cheap to run, together with the run up in the price of all alternatives will force carbon prices even higher.

But, in any case, if you want to replace all those existing coal plants with carbon free power that fast, again the carbon price is almost beside the point. How are you going to site and build all the alternative plants that fast? How are you going to site and build all the power lines that quickly? How are you going to allocate the steel, cement, turbines, etc? How are you going to train all the people needed to do all this?

There is only one way to 350.  That is a WWII-style and WWII-scale government-led mobilization.  As Hansen and his coathors conclude in their landmark paper (see “Stabilize at 350 ppm or risk ice-free planet, warn NASA, Yale, Sheffield, Versailles, Boston et al“):

The most difficult task, phase-out over the next 20-25 years of coal use that does not capture CO2, is Herculean, yet feasible when compared with the efforts that went into World War II.

Well, we didn’t accomplish the WWII mobilization through a pricing mechanism.  So if you support 350 ppm — and as readers know, I have various issues with that target — then you need to be honest with the public about what the right policy approach is and not go about A) offering policy proposals that won’t get you 350 and B) criticizing others who may not embrace your target for advancing a different approach that also won’t achieve 350 ppm.

2.  A carbon tax that could pass Congress would not be simple. I would have thought this was obvious were it not for the large number of very smart people who believe otherwise.  Again, look at the U.S. tax code.  Let’s also look at what happened with the BTU tax.  There were granted:

… a steady string of energy-tax exemptions to key lawmakers, special pleaders and important industries. Farmers won exemptions on diesel fuel for tractors. Majority Leader George Mitchell won an exemption for home heating oil, an important commodity in New England. Clinton himself agreed in an April telephone call (from a Congressman at a pay phone in Oklahoma) to change the way the tax would be collected on natural gas, electricity and oil.

And as for rip-offsets, strong political forces are insisting upon a cap-and-trade system that includes large amounts of offsets to substitute for a fraction of the emissions permits/allowances that carbon-emitters need to buy.  I am not a fan of rip-offsets (see “The one simple change that could vastly improve Waxman-Markey: Sunset the rip-offsets“) — although they are not as bad as many people think, as I will discuss in later posts.

But why wouldn’t those same strong political forces insist that carbon-emitters be able to pay some of their carbon tax through the purchase of offsets? It would be very “simple” to introduce that into this imaginary carbon tax bill.  But it would create a bureaucracy comparable to the one needed for Waxman-Markey.

It’s the golden rule, folks.  If you have the gold — in this case, the lucre from selling unsustainable, polluting energy — you get to write some of the rules.

And if Hansen thinks that it would be politically possible to raise carbon prices that high without diverting some of the money to affected industries, again, I’m not certain what country he is living in.

And again a carbon price isn’t going to solve the problem by itself.  You need a bunch of complementary measures that complicate the legislation.  I have been meaning to write about a recent Carnegie Mellon University report that came to that exact conclusion, but until I get around to that, you can look at the Green Car Congress piece on it, “CMU Paper: Market-Based Mechanisms for CO2 Reduction Will Be Insufficient to Attain Mid-Century Goals.”

Hansen sort of acknowledges this:

But ultimately, an effective response to climate change will require a variety of actions, he argued. That includes a new, much stronger international agreement, action by U.S. lawmakers to finally put a price on carbon through a tax, and new policies designed to ultimately phase out fossil fuel consumption.

“We’re going to have to make the decision to leave coal in the ground” or burn it only at power plants utilizing carbon capture and sequestration technology, Hansen said. “Perhaps the best chance is in the courts,” he added.

Courts?  Yeah, that’ll get it done in the time frame needed.

Fine, “we need new policies designed to ultimately phase out fossil fuel consumption.”  Waxman-Markey isn’t perfect, but it has some of those policies and it’s a start.

3.  A carbon tax is woefully inadequate and incomplete as a climate strategy.  Let me just focus on one issue here — the need for targets and timetables.  A climate bill must have binding targets and timetables if it is to achieve any desired emissions or concentration goal.  That is especially true because we need to have a credible piece of legislation to convince the rest of the world that we are serious about emissions reduction.

Thus the “simple carbon tax” bill would have to have binding, specified targets and timetables similar to (if not stronger than) Waxman-Markey.  It would have to have some sort of mechanism for constantly adjusting the tax to make sure emissions goals were being met.  The obvious mechanism is to simply auction the permits and let the market decide what the price is.  Otherwise, you have to develop an equally complicated bureaucracy that keeps changing the carbon price based on past performance and that keeps trying to guess what future price is needed to achieve the binding targets and timetables.

So again, whatever this carbon tax bill would be — at the end of the day it would probably look a lot like a cap-and-trade system with exceptions and allocations for certain industries, international and domestic offsets, various complementary measures like energy efficiency standards, and some complicated oversight board but constantly adjusted the price.

I can appreciate Hansen’s frustration with the politics and bureaucracy surrounding a cap-and-trade.  But I think that is far more an inevitable outcome of the nature of this legislation and the nature of our political process than it is inherent in the policy measure.  And the notion that the political system would somehow accept a much higher price of carbon through a tax bill but not a cap-and-trade bill is, again, naive.

The Climate Wire story notes:

Public remains apathetic about climate Hansen also said climate activists need to be more vocal and strategic in getting the public to lobby harder for action to reduce emissions of CO2 and other greenhouse gases. He pointed to recent public opinion polls showing that among Americans’ concerns, climate change ranks nearly last in the order of priority, well behind the economy and the United States’ dependence on foreign oil.

“It’s hard for people to realize that we have a crisis, because you don’t see much happening,” he said. “If people understood the implications for their children and grandchildren, they would care.”

Well, again, a surefire way to make sure that you don’t see much happening is to keep campaigning against Waxman-Markey, because that is the only serious comprehensive energy and climate legislation around.

Hansen also urged conference participants to press the United States to negotiate a robust international agreement by the final negotiating round of U.N. climate change talks this year at Copenhagen. He said the new agreement has to be much more far reaching than the Kyoto Protocol, which he deems to have been entirely ineffective, and the Copenhagen talks should emphasize action by the United States and China.

I can’t argue with that, except to say that the world would be much happier — much more willing to join us in climate action — if we passed something like Waxman-Markey than if we passed the imaginary simple carbon tax.

No, Waxman-Markey won’t get us to 350-450 ppm, but it takes us off of the business as usual path, which is the most important thing, and it accelerates the transition to a clean energy economy, which is the second most important thing, and it establishes a framework that can be tightened as reality and science render inevitable.  That is, after all, the same way we saved the ozone layer.  The original Montr©al protocol provisions would not have done so.  But they got tightened overtime.

Hansen is right that it can take a few years (not decades) to establish a cap-and-trade system.  That’s why we need to start now.

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71 Responses to Memo to James Hansen: Your opposition to Waxman-Markey is ill-conceived and unhelpful. There isn’t going to be a carbon tax nor should there be. Get over it and move on.

  1. 1. Great post. It’s really important to keep in mind that the science is relatively simple, and that the human behavior (policy = large scale behavior?) is complex.

    2. Best use of the word “friggin” in a serious context.

  2. paulm says:

    mmm… its worth watching this interview…

    Time to grasp the reality of climate threat
    http://www.guardian.co.uk/environment/cif-green/2009/may/05/climate-change-carbon-emissions
    The scientific case has been made but politicians and the public are arguing over the facts of global warming

  3. David C says:

    That’s by far the best argument I’ve seen against a carbon emissions tax.

  4. Jim Beacon says:

    First of all, Cap and Trade is a form of taxation — we’re just calling it something else. And it is not only the most complicated tax scheme one could imagine, but will be the least effective. Its biggest impact will be to create a bunch of paper-trading millionaires. The least effect it will have is to achieve significant CO2 reductions anytime soon.

    Hansen is right on every point in his statement. Everyone should read it again, very carefully. The fact that neither Congress nor the President are willing to bite the bullet and do the right thing with a straightforward and severe carbon tax does not change that. It is not “impossible” to do it. A simple and effective carbon could be enacted if this President would get behind it and make sure it stayed simple and effective. It would take commitment, strength and public support, but what doesn’t? To state that this is “impossible” is to admit defeat and give up on the goal of holding total CO2 concentrations in the atmosphere under 500 PPM.

    This blog tells us every day that we must seriously reducing carbon emissions right now if we are to avoid catastrophe. Cap and Trade will not do that — and none of the projections for the scheme claim that it will any time soon. It will allow CO2 business-as-usual for at least 10 to 20 years with industry, particularly coal-fired power plants, paying only a tiny extra fee which they will pass on directly to their customers and so have no incentive to clean up their acts quickly. Giving away perhaps 40% of the initial emission allotments for free as Obama seems to be suggesting makes the plan even less effective — who will get the most free allotments, those who currently put out the most CO2, right? And once the allotments start to sunset (if they ever really do… remember how the deadlines in the Clean Air Act kept getting pushed back every time they got close?) the worst polluters will simply pay a little more each year and pass that on as well. Even if sunsetting happens, by the time the biggest emitters can’t pay for permission to pollute any longer… maybe 30 or 40 years from now… it will be too late.

    The biggest “success story” for cap and trade programs is the one implemented in the U.S. in 1990 to reduce sulfur dioxide emissions in power plants. But — according to the EPA reports at http://www.epa.gov/airmarkt/progress/arp07.html — after 17 years, the SO2 cap and trade scheme has only reduced SO2 emissions by 43% from 1990 levels — and we all know that reducing SO2 from the emissions was a cake walk compared to getting the CO2 out. That’s why I believe the best we’ll get from CO2 cap and trade would be, maybe, a 23% reduction over the next 20 years. Maybe.

    That’s simply no enough to do the job. We need genuine, quick action on significant CO2 emission reduction within the next 10 years and that means REAL PAIN — for both industry and the public. But as you keep telling us, today’s pain will be nothing compared to the pain we will all be feeling 20 years from now when Cap and Trade has only reduced total global carbon emissions by maybe 23%, if it even does that much.

    Oh, except for the people who made millions trading carbon allotments. They won’t be feeling any pain, then or now.

  5. paulm says:

    Congress needs to be overruled.

  6. mauri pelto says:

    Jim Beacon well put post. I disagree with the success of the SO2 program since the goal was a 30% reduction initially, guess what we met the goal. Cap and trade aims for a target and moves towards that target incrementally. As a glacier scientist I do not pretend to be able to determine with my background whether cap and trade or a simple tax is better, but the smartest people in the field seem to be saying Cap and Trade and we have a model for it that has worked.

  7. Rick Covert says:

    Joe,

    Excellent post! For the first time I got a better understanding of Cap and Trade then I have in the past.

    Now if you could answer two more questions for me please.

    First why did the EU Cap and Trade system fail?

    Second, this part you wrote, “A price isn’t what is needed to stop building any new coal plants and shut down every existing one in 10 years in rich countries and 20 years everywhere else — and replace all that power (plus growth) with carbon-free generation and efficiency,” actually got me optimistic. Is it possible to shut all of these coal plants down in 10 years in the rich countries with Cap and Trade?

  8. Lewis says:

    Seems to me what Hansen is really after is a greater sense of urgency. I don’t think he cares what the mechanism to reduce dependence on coal is he cares that it starts YESTERDAY.

    [JR: I only wish you were right. Sadly, and for reasons I don't understand, he seems to care far too much about the mechanism.]

  9. Theodore says:

    There is hardly a line of this article that I don’t disagree with. I could take it all apart and tell you why James Hansen is right, but you most likely would throw out all my hard work, so I won’t bother.

  10. Leland Palmer says:

    I’m on the other side of Hansen, actually. I think we just need to seize or nationalize the coal fired power plants, and convert them to carbon negative power plants by fiat.

    It turns out that NETL has been developing a concept called HIPPS (for the last 30 years!) that can be added to existing coal fired power plants, and can increase their overall thermal efficiency greatly:

    http://www.netl.doe.gov/technologies/coalpower/combustion/IFPS/ifps-utrc-hipps.html

    The hold-up? A high temperature heat exchanger. United Technologies has recently built a heat exchanger consisting of a ceramic protected high temperature alloy that is successful, or at least successful enough to have a huge impact. But the development process (not to mention the conversion process!) is still very slow.

    This is the normal cycle, it seems. Emphasize the difficulties and go slow during Democratic administrations, and outright kill programs that might change the profitable status quo during Republican administrations. Delay, lie, lie, lie, confuse the issue, and then defend the lies – this is the standard technique, it seems.

    Mr. Rogers of Duke Energy and his ilk, and the hugely rich investors that have gotten rich by destabilizing the climate, have lost any legitimacy to their ownership of coal fired power plants.

    Multi-megawatt coal fired power plants are much more dangerous than nuclear weapons, it appears. Private individuals and corporations should not own or control coal fired power plants. If efficiency, flexibility, and ability to incorporate technological change are the justifications for keeping these power plants in private hands, private ownership has failed miserably in all of these areas.

    Nothing is more important than the future of the biosphere, be it private property rights or “political reality”.

    Political reality is just a subset of reality itself, and it looks like reality is on track to destroy the biosphere as a self-regulating system, unless we do something drastic, and do it now.

    Doing something, like Obama and Waxman/Markey, is better than doing nothing.

    But Hansen is right that Waxman/Markey is quantitatively insufficient to halt what appears to be runaway global warming, IMO.

    Forget carbon credit trading, and a carbon tax. We need a Manhattan Project style program, run by the military or by something similar to NASA. In this emergency, these our OUR coal fired power plants – the current ownership has abused those rights and has lost them, IMO.

    There has never been a clearer case of eminent domain.

  11. Aaron says:

    Personally I feel a carbon tax would be a better means to an end. A carbon tax would take out some uneeded complexity inherent to cap and trade. The tax code like joe said, is complicated, though I still think a cap and trade approach does not create enough incentive to drastically reduce emissions. Politically, a carbon tax its is less feasible, but any form of carbon legislation isn’t a cake walk.

  12. tidal says:

    With respect to carbon emissions, urgency and scale trump “ideal” solutions.

    We need to get a meaningful price on emissions. NOW. It looks like cap&trade is the most likely to get broad support, near term. So that’s what we go with.

    The CO2eq-emissions problem is going to be with us for decades and centuries. We are not going to be locked-in to the “first” solution. Or even an “either-or” choice.

    If/when we actually “get it”, we will realize that we are having to deal with a large number of “externalities”. CO2, SOx, NOx, mercury, lead, CFC’s-HCFC’s-HFC’s-NF3, etc., etc., etc.

    Hunch? For those that are predominantly long-life “stock” problems – CO2, heavy metals, etc. – and in particular those we might need to actually try to “draw down”, we’ll likely want to emphasize “cap”-based solutions. For those that may be more “flow” problems, which can dissipate more quickly – e.g. SOx? CH4? – we may want to emphasize “tax”-based protocols. I think some of the “trillion-ton” logic in the “The Exit Strategy” in Nature Climate by Allen, Meinshausen, et al., strongly hints that the underlying problems lead in that direction (although they certainly don’t articulate it that way.)

    There must be a better metaphor than McLuhan’s “the medium is the message”, but longer term I think that the nature of the problem(s) will drive the nature of the solutions. But we aren’t there yet. What we need NOW is a MEANINGFUL price, and cap&trade can get us there quickest.

    Where I think Hansen – and many others – are vitally correct is that these programs need to be as simple as practicable. I think the “tax” or “cap” needs to applied at point source – ports, wellheads, etc. As few as possible… And the revenues need to rebated/dividended as widely as possible… We don’t want to layer in levels of complexity on top of so-called “wicked” problems…

  13. paulm says:

    Lewis hits it on the head….

    Seems to me what Hansen is really after is a greater sense of urgency.

  14. Dean says:

    Regarding:

    1. Lot’s of things we need to do on this issue seem to be DOA. It seems like a deadend to get China and India to respond in time. It seems like a deadend that the US and other advanced industrial countries can accept their responsibility for getting this started, a necessary step to getting China and India to respond. We could just go and party before the compost hits the fan, particularly for those of us who will only be around for the initial impacts. On this issue, if you’re trying, you’ve got no choice but to support the plan that you think is required, whether or not it seems practical at the moment. Most issues don’t have positive feedback tipping points, so the attitude that let’s just get something going, and we can improve on it later, doesn’t work here.

    2. Really an extension of #1. If business-as-usual sausage-making for legislation plays out, it won’t be simple. But if business-as-usual sausage-making is what happens, I don’t see any plan being adequate to the task at hand. A tax is not guaranteed to be simple, but it could be if we rise above ourselves. I don’t see how cap-and-trade can be simple no matter how much the normal legislative process steps out of itself for this issue.

    3. Yes, a carbon tax is an incomplete strategy. For a problem of this scope, there is no single/silver bullet. The question is what is the key strategy to create the foundation for action.

    I think that cap-and-trade could be a modest complement to a carbon tax, and I think it’s greatest contribution, in theory, could be early on, if in fact a good one can be created. So I wouldn’t call for defeating it. But I can’t see it as nearly adequate, let alone more effective than a carbon tax.

  15. paulm says:

    Leland Palmer – need to seize or nationalize the coal fired power plants

    Beautifully. That is surely the best solution I have come across so far. We need to start thinking radically here.

    Has this been mentioned elsewhere? This option needs to be debated at the highest level.

  16. Is climate change a serious enough problem that it trumps representative government?

  17. PaulK says:

    Why oh why do even smart people like NASA’s James Hansen think that there is such a thing as “simple carbon tax”? Perhaps because we already have a carbon tax on gasoline, heating oil, and natural gas. And because, Hansen requires a pricing mechanism that guarantees the people’s dividend.

    As Jim Beacon says, the defense of the horrid Waxman-Markey cap/auction plan is unconvincing. The principle criticism of the plan is that it will not work.

    The concluding argument that even though Waxman-Markey won’t get us to 350-450 ppm, support it because “it takes us off of the business as usual path, which is the most important thing” is not a good one. Doing the wrong thing is very often more harmful and counterproductive than doing nothing. BAU means tremendous increase now happening in alternatives and efficiencies without any artificial pricing.

  18. hapa says:

    it trumps the power of representative government… as much as some would like us to believe we can legislate the behavior of GHGs in the atmosphere… “that’s not how the world works”

  19. Mark Shapiro says:

    Joe,

    Some minor edits:
    ” . . .with the BUT tax . . .” s/b ” . . . with the BTU tax . . .”
    ” . . .get to right some of the rules . . .” s/b ” . . .get to write some of the rules. . ”

    Jim Hansen is our friend and ally (as you reminded us). We all want clean energy here. Let’s convince the dead-enders that it’s good for them, good for us all.
    (“Tax-free income! Better security!”)

    Thanks for the post.

    [JR: Thanks! Voice dictation software strikes again!]

  20. David B. Benson says:

    Leland Palmer — RIght on! Keep on slugging. I’m with you and you also seem to have paulm.

  21. Steve Bloom says:

    Joe: “(W)e didn’t accomplish the WWII mobilization through a pricing mechanism.”

    Actually we very much did, by means of price controls and rationing, with war bonds as the means of directing excess wages and profits back to the war effort.

    Hmm, come to think of it, what about something like “Clean Energy Bonds”, e.g. to fund the new national grid?

  22. Martin Hedberg says:

    If we really want to cut the anthropogenic emissions by x%, then:

    1. Convince the oil-, gas and coal industry to cut the MINING of carbon by x%. (whatever incentive you try on the consumers, it has to, in the end, lead to a cut in the extraction of carbon from the ground. Don’t try to convince me that they will dig it up and store it for hundreds of years.)

    2. Find a way to deal with the geopolitical and economical consequences of (1).

    3. Find a way to gain welfare, given that you succeed with (1) and (2). (This should be the genuine reason/incentive to develop renewable energy, low energy light-bulbs etc).

    I can understand that 1 and 2 is a difficult task, but it is necessary (but may not be sufficient).
    As V. Ramanathan (Scripps Inst) said at a seminar in Stockholm last week: “We tend to talk about what we can do, not what we have to do, to mitigate climate change”.

    All the best.
    /Martin

  23. Jim Beacon says:

    Here’s a simple and do-able way to reduce CO2 emissions from existing coal plants by 50% very quickly. Since burning natural gas emits roughly 50% less CO2 than burning coal ( see http://www.eia.doe.gov/oiaf/1605/coefficients.html ) pass a law saying ALL coal-fired power plants in the U.S. must convert to burning natural gas within 5 years (or 10 if you insist). This is an existing technology, several coal-fired plants have already been converted to burn natural gas. It is pricey, but not back-breaking. Government could provide some of the money to help pay for it. It would cost less that the $700 billion we gave away to the Wall Street bankers.

    We’ve got plenty of natural gas in the U.S. to use for s a transitioning application like this while we ramp up theo renewable, clean engery sources. Bingo: You don’t have to nationalize anything. You don’t have to shut down the coal plants. You reduce CO2 emissions by 50% in 5 years — not the 30 or more years it will take to do it with Cap and Trade.

    Only then, after you’ve achieved a 50% reduction from the coal plants by converting to natural gas, do you go ahead and implement Cap and Trade to eventually phase out the gas-fired plants over the next 15 years. The power companies don’t lose money — they make more money. The gas companies make money. We reduce CO2 emissions very quickly. Even the paper traders get to make their millions on the Cap and Trade that gets implemented *after* we reduce power plant emissions by 50% first. Everybody wins, except the coal industry. Well, sorry about that, but you can’t make an omelet without…

    But I guess this idea is too simple and easy and effective to ever be implemented.

  24. Mark Shapiro says:

    Jim B.,

    Natural gas is simple and easy, but not available in the quantities and prices needed.

    Martin H.,

    “1. Convince the oil, coal, and gas companies to mine less” — that is exactly the goal of cap and trade (or a carbon tax). You cannot “convince” huge, successful, profitable companies to stop succeeding in our system.

  25. Aaron Lewis says:

    It does need to be cap and trade so that economic and techical goals are promptly established. However, the caps need to low enough that for a good while, the system will be effectively a pure carbon tax.

    However, such a tax with enough teeth in it to be effective would bite all the big industries, and would thereby be opposed. Or rather, it will not get passed until it is too late. Eventually it will get passed, but by then it will be too late.

    We should have passed such a cap and trade law within 30 years of passing 350 ppm of CO2 in the atmosphere; that is sometime before 1998.

    Like a teenager that stays out all night drinking, at some point we are going to have a real headache. We have been having quite a party for the last 50 years and we will pay for it. You think going to jail for D&D is bad; try having “Mother Nature” waiting up for you try to go home.
    Remember what she did to the dinosaurs.

    Yes, climate change is likely to a serious enough problem . . . .

  26. Len Ornstein says:

    Cap and trade is horribly complicated and can’t cope with those kinds of biomass use which have almost as large CO2-footprints as fossil fuel (e.g., corn-ethanol and palm-nut diesel). Not only fossil fuels, but wasteful bio-fuels must be taxed at the source. Otherwise markets forces and ‘gaming’ will accelerate deforestation and land abuse to make money from them.

    Trying to reduce atmospheric CO2 by constructively manipulating market mechanisms is analogous to trying to reduce the volume of a rubber balloon filled with gas, by applying external pressure. Unless pressure is applied evenly over the balloon surface, the balloon will simply bulge asymmetrically, with minimal reduction in volume. I don’t believe applying ‘even pressure’ can be managed by manipulation of cap and trade. Although complicated, it should be manageable, with carbon taxes.

    The most effective and least costly reduction of atmospheric CO2 [about 8 GtC/yr (8 wedges/yr)] could be achieved by afforestation of vast regions of barren land – like the Sahara and the Australian Outback. This can be accomplished with the mature technologies of reverse osmosis desalination of seawater and irrigation.

    Although it would be nice to be able to return the entire carbon tax as dividends ‘to the people’, investing part of it as subsidies for WWII-scale afforestation projects could substantially accelerate reaching a goal below 350 ppm CO2.

    Shame on you, Joe;-) Neither business as usual nor politics as usual should be used as excuses to accept bad or unworkable solutions for the urgent threats of AGW!

  27. Alastair Breingan says:

    I understand that the governing elites, who are as we all know at least “a little too close to the business elites” (and sometimes indistinguishable), claim that a tax is not possible (for all sorts of reasons).
    However I fear that Hanson (who has a near 100% record of being on the “correct” track) has done it again. Cap and trade will allow “speculation” (the extracting of money for no or little “real production”) and is therefore prone to the sorts of distortions that have just caused the financial collapse. Europe’s experience with cap and trade has shown that these can be serious enough to derail the whole system.
    We don’t have enough time to fight though the complexities to make this work. We need something simple, even if it would not get past the current legislators.
    I am ashamed to admit to being Australian and you only have to look at the knots our mob are tying themselves in to be friendly to the entrenched industries, to see the sorts of problems that will occur.
    I’m afraid we are probably screwed (technical term).
    Also see the great Throbgoblins cartoon strip on the subject http://throbgoblins.blogspot.com/2009/04/elective-deafness.html

  28. danl says:

    Joe,
    Very good points. However, I cannot understand how you reached the conclusion:
    “price….is probably of the order of $1000 a ton.” Looking at the economics, there should be the same emissions reduction from a market / tax, so long as the tax matches the price created by the cap. A carbon tax/ cap and trade are simply different mechanisms for influencing the same behavior.

    Do you mean to claim that Hansen doesn’t support renewable portfolios / transmission lines / any supplementary policy mechanisms? An “all-inclusive” tax policy would certainly be much higher.

  29. paulm says:

    At some point we are going to realize that this is an emergency.

    All the debate about how to price coal out of use is going to be irrelevant. It has to stay in the ground.

    The quickest way to convince everyone that this HAS to be so (and to ensure that is stays in the ground) is basically to take over the industry and shutdown the plants in as orderly manner as soon as possible/practicable.

    What Obama has to do is ensure he can get a few other nations to sign up to this approach and then implement it.

    The way things are going, with the EPA making CO2 a pollutant is possitioning things to ensure that this can happen. Watch this space.

    I am feeling a bit more cheerful now. Thanks Leland.

  30. PaulK says:

    Is climate change a serious enough problem that it trumps representative government?

    The quickest way to convince everyone that this HAS to be so (and to ensure that is stays in the ground) is basically to take over the industry and shutdown the plants in as orderly manner as soon as possible/practicable.

    Dictatorship is never the solution to any problem, no matter how daaunting.

  31. Memo to Joe Romm:

    You are seriously misinformed about the similarities and differences between carbon tax and cap and trade. The only mechanisms by which cap and trade will reach its goals are either as a wildly variable tax, but not called that, when companies buy permits, or, we assume, a still higher “tax” or penalty when someone emits more than they are allowed. All of these functions can be built into a carbon tax with greater predictability and simplicity.

    The “cap” as carbon pledge is simply that, a virtual pledge that hovers in the air unless we have either the price or the penalty phase.

    Your support for cap and trade is baffling because: you are generally right about the technologies and processes that we need but you support an instrument that would interfere greatly with companies’ and organizations’ abilities to assess the value in carbon terms of these investments. There are ways that cap and trade is being jury-rigged to dampen price volatility but you are still loading on to economic actors a level of market “game-playing” that takes their eyes off assessing which technologies are going to cut carbon the most. This game-playing is harmful to everybody except people who in your terminology, have committed themselves to the “Ponzi scheme”. It’s not good for green business or the greening of businesses and the economy.

    I am under no illusions that a carbon tax alone will suffice but cap and trade does not build your low-carbon public goods and infrastructure for you either. I’ve been plugging a “Comprehensive Climate and Energy Policy” within which a pricing system, hopefully a carbon tax, can help drive the market.

  32. James Newberry says:

    If the US government now owns some parts of the transnational investment banks then, guess what. The taxpayer is now the proud owner of some of the fossil fuel infrastructure financed by these banks, including coal generating stations. This might be explored as a mechanism for negotiated, planned, coordinated and gradual phaseout of these coal plants.

  33. Gail says:

    Below is an excerpt of my note to a fellow poster here at CP. Joe, you’re my hero, but this blog was painful to read. I’m no economist and don’t pretend to understand the complexities of taxes, but with apologies here were my thoughts (and Leland, well spoken, I’m with you):

    Joe’s column today slamming James Hanson is very depressing to me. It feels like people on the same side are attacking each other, basically because there is no way forward that will work in time. This is so bleak that I am utterly uninspired to post a comment.

    It reminds me that I don’t see really how it CAN’T be, that we have already passed the tipping point where we are going to have disastrous climate change. Too many things are happening so much faster than expected, any one of which would be enough to seal our fate. Melting glaciers and polar ice, rising seas, ocean acidification, drought, fire…I really think we would have had to put on the brakes 40 years ago, or at the very least 20, to avoid catastrophic famine and resource wars.

    Even though I see the signs of ecological decline all around me, still there is enough valiant effort of the trees that spring is so lovely, it makes my heart ache. Where I live, I can see miles of rolling, wooded hills, and the flowering trees are festooned with blossoms, in a last ditch effort to reproduce. Around my home, the floor of the woods is carpeted with violets, swamp lilies, and pale pink spring beauties. There aren’t as many birds, or spring peepers, as I can recall from years past, but their voices are just as sweet.

    Life is so precious. I try to balance despair with savoring each minute I and those I love are allotted.

  34. Lou Grinzo says:

    Joe, you sure know how to throw a party.

    One thing I would like to gently remind everyone here is that “perception is reality”. In other words, if virtually all the politicians see “tax” as a toxic word, then we won’t have a true tax, period. All the arguments about which is better or simpler or more efficient or whatever do not matter one iota.

    Similarly, arguing about the urgency of the situation means nothing unless you can convince the lawmakers in power of that urgency. Right now, I suspect that a small percentage of them get it, right down to their DNA, and a much larger portion think they get it but don’t truly appreciate the seriousness of the situation. That’s a very bad situation, but it’s all we have. If anyone in the US reading this doesn’t like that, then get involved politically and do everything you can to convince your representatives that the you-know-what is quickly approaching the fan, or fight like heck to replace them with people who do get it.

    And for the record, I am an economist and I think a cap and trade system is slightly preferable to a tax, even aside from the political considerations, mostly for Joe’s reason #3, the direct nature of CaT. With a tax you have a layer of indirection between the policy instrument (the tax) and the desired effect (reduction in CO2 emissions), so you’re constantly guessing what the effect of adding or subtracting $X/ton from the tax will have.

    As for the potential for misdeeds in the trading aspect–of course that’s a possibility, especially if we’re stupid in how we implement it. With enough thought put into the details I’m reasonably confident that Obama and his brain trust can come up with something that will minimize people gaming the system.

  35. Leland Palmer says:

    Hi all-

    We need to seize the coal fired power plants, and convert them into biocarbon/ oxyfuel / HIPPS / CCS “carbon negative” power plants.

    To see the potential effectiveness of the overall strategy, see the following link:

    Holistic greenhouse gas management:
    mitigating the threat of abrupt climate change in the next few decades.

    P. Read* and A. Parshotam**

    *Department of Applied and International Economics, Massey University, New Zealand (corresponding author e-mail P.Read@massey.ac.nz )
    **Institute of Fundamental Sciences, Massey University, New Zealand.

    http://ips.ac.nz/publications/files/6e811fc9e32.pdf

    Later stages, more costly – as needs may be in response to possible future precursors of imminent abrupt climate change – would involve linking CO2 capture and sequestration to bio-energy, yielding a negative emissions energy system. Illustrative calculations point to the feasibility of a return to pre-industrial CO2 levels before mid-century.

    Check out Figure 1 to see the potential impact of carbon negative energy strategies. Figure 1 shows the atmosphere down to about 250 ppm by 2060. Even if the positive feedbacks we talk about and fear on this blog kick in, we still may be able to hold CO2 even or even turn the corner and reduce it- if we act massively and immediately.

    Step by step:

    Biocarbon is carbonized biomass, compressed to a density in which it has similar properties to coal. Biocarbon, being practically identical to coal in most properties, should be able to completely replace coal in coal fired power plants. Any coal plants converted to biocarbon plus massive replanting to replace lost biomass become carbon neutral. Biomass could be gotten by fire protecting the forests, cutting firebreaks and clearing them of combustible undergrowth to protect them from the huge wildfires we have been seeing. Biomass to make into biocarbon could also be gotten from agricultural waste, municipal waste, and so on. Oak Ridge National Laboratory has identified 1.2 billion tons of “waste” biomass that is equivalent to about 300 million tons of biocarbon, that could be collected each year in the U.S. In this emergency, with massive replanting and forest protection, we should be able to double or triple this, and make up any shortfall with imported biocarbon. Transformation into biocarbon makes biomass as transportable as coal. Huge biocarbon log pipelines could be constructed to carry biocarbon hundreds, or potentially thousands of miles, when transportation by ship is not possible.

    Oxyfuel is one form of carbon capture, that offers the potential of greatly increasing Carnot efficiency by raising combustion temperatures. Post combustion CO2 capture combined with HIPPS (see below) could also do this, but does not have the huge potential of higher Carnot efficiency and integrated pollution control that oxyfuel combustion does. Oxyfuel combustion can be retrofitted to existing power plants. Jupiter Oxygen Corporation and NETL have done this successfully with a 2 MW coal fired power plant. Oxyfuel combustion produces a nearly pure stream of CO2, which can be cleaned up easily for compression and deep injection of the CO2 into the earth.

    HIPPS, also being pursued by the National Energy Technology Lab (NETL) can also be added on to existing power plants. HIPPS passes combustion gases through a high temperature heat exchanger, and heats air in the high temperature heat exchanger. HIPPS constitutes a “topping cycle” which can be retrofitted to existing coal power plants. This hot air can then be run through a gas turbine at temperatures of 1200 degrees C or so, increasing the Carnot efficiency of the coal combustion process greatly. The exhaust air from the turbines can then go on to run the lower temperature steam cycle. The main obstacle to HIPPS has been development of an effective and durable heat exchanger. United Technologies has recently developed and tested a refractory ceramic protected alloy heat exchanger, which is certainly good enough to be used in this emergency, even if we have to replace these five years into the future. Also, biocarbon is unlikely to have the severe corrosion problems associated with coal, because biocarbon is much, much cleaner and lower in sulfur than coal. HIPPS and oxyfuel can provide enough efficiency to pay for the energy cost of cryogenic separation of oxygen and subsequent compression of the CO2 for deep injection. This increased efficiency can pay for the conversion, and give us essentially free carbon capture.

    Finally, the captured CO2 can be stored by deep injection, until we are able to work out economical geologically stable sequestration by mineral carbonation.

    Carbon negative strategies can be hugely synergistic, because they simultaneously displace fossil fuel use, generate useful electricity, put carbon back into the ground, protect the forests from wildfires, and decrease methane production by carbonizing biomass that might otherwise decay.

    This program, or some similar “carbon negative” strategy could be our “heavy armor” in our war against climate change, IMO. Carbon negative energy strategies that couple biomass power with carbon capture and storage are capable of actually turning the corner on climate change, even if there are significant positive feedbacks ignited by climate change. Carbon negative energy strategies can be our “magic bullet” against climate change, if they are done scientifically and correctly, IMO.

    Are carbon taxes and cap and trade good ideas, along with stabilization wedges and son on? Sure, if applied to small and medium sized business and individuals, IMO. Carbon taxes and cap and trade approaches could be our small carrot and small stick, to reward small entities and innovators that welcome change, and discourage waste and inefficiency.

    But energy producers like Duke Energy have huge monopoly power and financial resources, which can be used to slow progress. They don’t appear to want to change. For them, we need a BIG stick. Nationalization of the coal plants and forced conversion could be our BIG stick, along with huge civil lawsuits for damages from the climate crisis, and legal changes that allow legal action against stockholders in corporations as well as the corporation itself.

    We need to just seize the coal plants, and turn them over to either the military or to an agency modeled on NASA, and force their universal conversion to either carbon neutral power plants (biocarbon) or carbon negative power plants (biocarbon / oxyfuel / HIPPS / CCS).

    Then, we need to have a little talk with India and China, and make sure they do the same. Tariffs on imported goods would certainly get their attention, and protect jobs too. If they get stubborn, we could always nuke a power plant a day until they get the message.

    I think the Chinese and Indians are anxious to solve the problem, too, and would cooperate willingly if we lead, and come up with a technological solution that both captures CO2 and has the same or greater efficiency as current coal plants.

  36. Martin Hedberg says:

    Mark Shapiro:
    I don’t think cap & trade or a tax will “convince” the fossil industry either.

    My point is that whatever we do it has to result in a reduction of the mining of fossil carbon. This is testing weather or not the incentive will work or not.

    So far none of the incentives humanity has tried out has actually resulted in less emissions. Look at the Keeling curve: Still rising! The collapse of Soviet union made a small dip, that year, but otherwise… still increasing.

    Locally we reduce the emissions, but globally…not. The one thing that will do have an impact is Peak Oil. That will make us use less oil. But since there are loads of coal still accessible, we will use that as well.

    We have to do better than this. So: Whatever incentive (tax, regulation… whatever): does it make the humanity bring up less fossil carbon from the ground (and less deforestation)? If not: Then the incentive will not work.

  37. john says:

    Great post. For a guy who gets the science, Dr. Hansen is clueless on policy, for all the reason Joe articulated so well. I wonder why the good doctor can’t simply look at the run-up in gas prices and see that the point at whcih consumer behavior began to change was equivalent to a $400 a ton tax — and that’s only when it began to change. god know how high it would have to be to alter behavior enough to get anywhere near the 350ppm Dr. Hansen says is necessary.

    Having said that, I believe Markey/waxman is a C+ or possibly a B- bill when what we need is a A+. It could be improved dramatically by incorproating some of financial mechanisms Chris Van Hollen has proposed.

  38. This discussion seems to have totally abandoned the scientific requirements for reducing CO2 emissions.

    You are discussing politics, not climate. Neither a Cap nor a Tax means anything if they don’t radically drop emissions immediately. Cap and Trade totally misses because it is doomed to ignore the cap – which must be absolute and immediate.

    This is economic squabbling and it bothers me to read this dispute. Science should drive policy… because policy alone is not going to change climate. The more failure we have, the more radical we must act in the future. These lame, politically palatable attempts now will fail and assure a technical totalitarianism in the future. And when things gets bad, then it will be welcomed.

  39. Dan Galpern says:

    Joe,

    I usually greatly benefit from your insights. Here, frankly, I am exceedingly frustrated with the tone of your criticism of Dr. Hansen.

    Serious shortcomings in the Waxman-Markey (W-M) measure, some of which you have illuminated, coupled with the nature of the climate crisis, which you have done so much to publicize, easily could lead persons to support an alternative. While your ear may be finely tuned to Washington-insider realpolitik, it is not true that every proposal not already supported by this administration is off the table. Indeed, the W-M draft retains gaping holes with respect to auctioning, use of revenues, and so on. A full-throated debate about this legislation remains necessary and relevant.

    Just six weeks ago experts testifying before the Ways and Means Committee noted that there are ways to design a climate measure that can incorporate the beneficial features of both cap-and-trade and an emissions tax. Doing so could maintain the purported certainty of an emissions cap while reducing price volatility, including guarding against a price collapse, and so provide a reasonably secure horizon for renewable energy investments and a continuous incentive for GHG reductions (even during economic downturns). These opportunities have not been taken up in the W-M draft.

    You are the preeminent climate issue educator of our time. Dr. Hansen is our preeminent climate scientist. If you two can’t agree upon the fundamentals of necessarily far-reaching new climate policy, we are sunk.

    I suggest you and he get together and discuss the issues. Schedule it for a period of 3 hours. I think that you would achieve fundamental agreement on most critical policy issues, and I am certain that all would benefit from the attempt. I’m willing to help make this happen, including mediation, moderation, whatever, here, there, or anywhere.

    Dan Galpern, Attorney
    Western Environmental Law Center
    Eugene, Oregon

  40. djrabbit says:

    Thus the “simple carbon tax” bill would have to have binding, specified targets and timetables similar to (if not stronger than) Waxman-Markey. It would have to have some sort of mechanism for constantly adjusting the tax to make sure emissions goals were being met.

    Make it like the Federal Open Market Committee which “constantly adjusts” the nation’s baseline interest rates every four months in order to reach a target (low inflation). Think about it: changes to the interest rate directly effect every homeowner, every business, and every debtor and creditor in the country — and yet the system has been remarkably stable over its 80+ years of existence.

    A Climate Tax Committee could be insulated from political pressure just like the Fed. Cmte., and could increase the tax rate (and thus the dividend rate) if emissions targets are missed (or projected to be missed) based on the best available science.

  41. Michael d says:

    Thanks Joe.

    It seems the Waxman-Markey will undergo the same tortuous policy/politics problems that the Australian emissions trading scheme (“Carbon Pollution Reduction Scheme”) legislation is now going through.

    The big question that we are also grappling with is whether a compromised ETS with free permits to trade-exposed industries and high emissions generators early in the scheme, lots of offset provisions and weak targets is better than nothing at all.

    We also have had a range of people cite the benefits of a carbon tax as though getting a new tax through legislation is just as easy as a CPRS.

    A non-compromised carbon tax beats a compromised cap and trade,
    but a compromised cap and trade is better than a compromised carbon tax for the simple reason: you are much closer to guranteeing emissions reduction.

  42. davew says:

    The simplicity of a carbon tax is that you only need to apply it at one place, the mine entrance or wellhead, based on the amount of CO2 (and other GH stuff like carbon particles and methane) that will be released by mining the fossil carbon. After that the tax amount is built in to the product. It should start out low so you barely notice the first year but increase by a percentage each year so you start noticing in by 3-4 years and you’re really noticing it by 10 years and it becomes cost prohibitive in the 20-30 year range. You could vary the percentage increase by tying it to reductions in fossil carbon emissions. Once alternatives become cost competitive with fossil fuels we will switch.

    Of course you could never get something so simple through Congress so I guess for the time being it’s cap & trade which is at least a start.

    It seems like the problem with a carbon tax is mostly the word tax.

  43. paulm says:

    Deborah Fisher said – Is climate change a serious enough problem that it trumps representative government?

    Absolutely! And it depends what you mean by trumps. Coal fired plants have bankrupted the climate.

    The government did not hesitate (too much) in pretty much nationalizing the banks and now the car industry. The climate change issue is much greater than that.

    Obiously Obama can not just plow in without disregard for the system. This is where leadership in the true sense comes in to play.

    He has to be the Churchill of this century, convincing us, and then ensuring, that the coal stays in the ground. And he has to do this over the next couple of years.

  44. As long-time environmental enforcement attorneys, my husband, Allan Zabel and I would certainly support cap-and-trade, if we believe it would be effective. However, our experience (more than 20 years each of public sector environmental enforcement attorneys, including Allan’s 18 years of experience in working on cap-and-trade and other emissions trading programs) shows that it will not be effective, and precious time will be lost if Waxman-Markey is passed. Please see our discussion paper at http://www.carbonfees.org/home/Cap-and-TradeVsCarbonFees.pdf

    In our discussion paper, we demonstrate why the Acid Rain Program is completely inapplicable (a simple fuel switch at existing facilities; a readily available, affordable substitute for high sulfur coal was available in the low sulfur coal found in the Powder River Basin coal; extremely accurate continuous emissions monitoring systems). In contrast, climate change requires massive investment in an entirely new energy infrastructure. In the case of the U.S. response to the Montreal Protocol, there is substantial evidence that the tax on the ozone-depleting substances, rather than cap-and-trade element of the program, caused the majority of the rapid switch to non-ozone depleting substitutes. See http://www.epa.gov/history/topics/montreal/04.htm (“On January 1, 1990, a new tax went into effect in the United States, a tax on the manufacture of CFCs. This tax exceeds in value the cost of CFCs themselves and it will rise steeply in the years ahead, raising $400 million in new revenues this year, and raising $5 billion over the next five years. This added cost of CFCs sends a powerful signal: it says bring on the substitutes fast! And it reduces the comparative economic advantage CFCs would otherwise enjoy over the more expensive substitutes. This tax on CFCs has already caused the United States to reach the agreed targets for reduction earlier than required.” – Statement of William Reilly, EPA administrator, to the Second Meeting of the Montreal Protocol Parties)

    It is true that carbon fees (or carbon tax as some continue to call it) alone cannot create the conditions for reducing fossil fuel usage and moving to a clean energy economy, but it can correct the market failures and perverse incentives that are currently preventing that transition. Equal per capita rebates to all adults (less for kids) with some regional adjustments can cushion the impact on consumers and create much-needed incentives for energy efficient solutions in all aspects of our economy. Carbon fees would be applied at the 3,000 to 4,000 choke points where fossil fuels energy our economy and is already accurately measured for sale, These fees can be phased in over 10-15 years until they insure that clean energy alternatives are price-competitive with fossil fuels.

    Further, the arguments used in the above article are not persuasive in view of the over-powering failure of cap-and-trade in Europe and in RECLAIM (Los Angeles) to deliver the promised reductions.

    Unofrtunately, it is not true that a program that contains declining caps will “guarantee” promised reductions. Overallocation, fraudulent offsets and a lack of continuous emissions monitoring in the capped sectors will work together to prevent true reductions.

    Ouside-Offsets are inherently flawed because “additionality” is a key but unmeasurable concept. No one can know what would have happened in the absence of an offset payment, and hence whether any particular off-set represents real net reductions. Waxman Markey would allow up to 2 billion metric tons of offsets per year (out of a total of a little over 7 billion metric tons that we are currently emitted in the U.S. per year.

    In addition, price volatility and a lack of a predictable time frame within which clean energy will become competitive, will delay clean energy investments. Already enacted renewable portfolio standards, such as in California, have produced paper agreements for clean energy, but have not actually brought the allegedly-required, substantial amounts of clean energy online. Only a true, predictable and enforcable increase in the price of fossil fuels, making clean energy cost-competitive in a known time frame, can motivate this change (along with a new transmission system “dc backbone”/smart grid).

    Waxman-Markey is likely to deliver the appearance rather than the reality of reductions. Using fraudulent and overblown offsets can make it look like the program is causing reductions in emissions, while emissions in fact continue to increase.

    Cap-and-Trade as envisioned in Waxman-Markey will not only fail to guarantee reductions, it will set up a system of creative financial instruments without integrity, similar to the creative financial instruments that caused the recent economic meltdown. It is an inherently flawed approach that cannot be fixed.

    We wish it were otherwise, but need to tell the truth.
    Politics or no politics, there is no point in sugar-coating the reality of our situation in favor of denial.

    Feel free to contact us with any questions at williams.zabel@gmail.com.

    Thank you!

  45. Mark Shapiro says:

    I think I like what Dan Galpern said above.

  46. Gail says:

    I agree with Dan Galpern as well. We should get on the same page. Ask Chris Matthews to report on it:

    http://www.huffingtonpost.com/2009/05/05/mike-pence-descends-into_n_197243.html

  47. Paul M Said:

    “Deborah Fisher said – Is climate change a serious enough problem that it trumps representative government?

    Absolutely! And it depends what you mean by trumps. Coal fired plants have bankrupted the climate.”

    Do you realize that you’re using the same argument that Bush and Cheney did to make legal arguments for torture?

    Rule of law, as complicated and patience-trying as it is, is as natural as AGW, and just as real, and just as much of a force that must be reckoned with. It’s not nature v. humans any more than it’s Christianity v. Islam, or Good Pepole v Terrorists.

    Dictatorial language from the environmental movement is legitimately scary to people. I am on your side, and what you are saying scares me.

  48. Lewis says:

    I’ve often been told that change is painful and that people don’t change until the status quo becomes more painful than changing.

    The status quo needs to become VERY painful for everyone –EVERYONE– or the meaningful changes to save a livable climate will not occur. A price on carbon must IMPACT everyone swiftly or there will be NO CHANGE.

    Cap and Trade seems barely an inconvenience.

  49. This is a very long post that only makes one relevant point.

    A carbon tax, particularly one capable of deep emissions reductions quickly, is a political dead end (because Congress and the President are already committed to cap-and-trade).

    Otherwise, the only way you can make your points is to spend a great of time holding Hansen to a much higher standard than you hold yourself. And I’d make the same argument that others have made… you’ve just provided fodder for the forces you’d like to discredit.

    Cap-and-trade has the potential to work, and so does a carbon tax. The US has decided on the former, so this ship has sailed. Now let’s get to work making it the best that it can be.

  50. Lewis says:

    Deborah Fisher Says:

    May 6th, 2009 at 7:30 am
    Paul M Said:

    “Deborah Fisher said – Is climate change a serious enough problem that it trumps representative government?

    Absolutely! And it depends what you mean by trumps. Coal fired plants have bankrupted the climate.”

    Do you realize that you’re using the same argument that Bush and Cheney did to make legal arguments for torture?

    But it isn’t the same is it? We aren’t talking about removing the rights of a person and injuring them because they might know something about something that might happen are we?

    Isn’t it more like quarantining someone with a highly contagious and typically fatal virus? Few will argue that person should just be left to go about their business.

    Every time we switch on the lights we’re transmitting the virus of global warming. The question is do we think of the ‘global warming virus’ as AIDS or Ebola?

    This is not meant as anti-gay as bigoted as it will sound but folks with AIDS are left to go about their business and AIDS is still around and we fret about what an epidemic it is and continue to watch the destruction it wreaks. Personal liberty is conceded to because the danger isn’t considered grave enough.

    Granted you probably couldn’t walk out of the hospital having contracted Ebola but they’d sure stop you wouldn’t they? There are no concessions to personal liberty if the danger is considered grave enough.

    Is the danger of climate change grave enough to warrant the limiting of personal liberty?

  51. Toby Heaps says:

    Nothing new here. Those with faith in targets and timetables as a fait accompli unto themselves are hard to convince. I prefer to put my faith in prices.

    US Congress will make a carbon tax or anything else tricky. But the scope for trickiness is orders of magnitude higher with cap and trade (instead of jdebating a price, you’re debating base year, per cent auction, offset qualifications, ect)

    If Gordon Campbell wins his election in BC staked out on the carbon tax, is a carbon tax still a political dead end? Subprime Wall Street suspender-wearing traders are not trusted. There are a number of Republicans who won’t support cap and trade because they think it is a hoodwink, but they will support an straight up revenue neutral carbon tax. Not that it’s my first choice, though I don’t understand why it is impossible to make a carbon tax 80 per cent revenue neutral.

    Internationally, putting aside that a carbon tax is the only comprehensive pricing mechanism that can be aligned with China in the next 5-10 years, there is no reason that a domestic carbon tax in the US cannot be complemented by standards (no new dirty coal, fuel efficiency, rps, feed ins, ect) that enable targets to be hit.

  52. seven says:

    As a psychologist, the talk towards solutions seems to be loaded with revenge and torture. What is with trying to punish people you hate merely because the sell you electricity that is reliable, economical and produces CO2 just like you do.

    I know that alternative energy sources have no incentive if they are subsidized. Obama uses the same business model as did enron. Enron was long ago a pioneer in building windfarms in california for power. They also went to far in secretive financing and reporting. Yesterday I googled may wind driven utlilities and couldn’t find a single one that reported price per kilowatt hour. They also do not report federalist subsidies. On welfare, they have no incentive to be lean producers of electricity.

    Don’t get so hysterical. Get efficient.

  53. Gail says:

    Well, seven, first of all, the coal industry does NOT produce economical electricity, because the cost of environmental degradation through mining practices, the cost of cancer and other illnesses from pollution, and most especially the cost to future generations of inheriting an unlivable climate characterized by rising sea levels, billions of climate refugees, the expansion of tropical diseases, death, injury and habitat loss from massive wildfires, famine from drought, floods, and quite likely the collapse of social order due to all of the above, JUST ISN’T FACTORED IN to the cost of burning coal.

    DUH.

    Second, I don’t know where on this blog you detect revenge, torture or hysteria for that matter. I also don’t know where you got a degree in psychology because whatever institution of higher learning it was, it must have pretty loose standards when it comes to grammar, spelling and composition.

  54. paulm says:

    Like I said earlier, many now recognize the bad climate change happening, but don’t realize how bad and how quickly it’s occurring (tipping action).

    We have like yesterday to sort this out.

    If we don’t, it’s not democracy in the US that will collapse – its global civilization (along with the extinction of many (more) animal species).

    An effort equal or greater to the war effort is required at this point. This is a defining moment, 2009.

    Did America choose to join WW2?

    We really don’t have a choice here. Well Americans did – they elected Obama and that was the exercised democracy. The outcome of this awful situation does really (almost) entirely depends on Obama – his choices and his leadership.

    Now we just have to leave the coal in the ground and convince everyone that this has to be done within the next 2yrs.

  55. Wes Rolley says:

    After reading all the good logic that Joe writes, I still have the feeling that those who argue for cap and trade are still in love with credit default swaps. How much regulation will they put into the bureaucracy to make this work? Not enough.

    Just stop to think that Hansen may just be right. People have argued that we need more science in our public policy and more input from scientists. Then, when we get that input, we tell the scientists to go back to their labs, or, as Dave Roberts so elegantly put it, to STFU. That says more about Roberts than it does about Hansen.

    I wonder what would have been the situation now had not Hansen started to step outside the lab 20 years ago. All of that time, and no one on capital hill listened. Now, they listen but continue to ignore.

    As for the political view?
    The Green Party of Canada supports the carbon tax.
    The Green Party of the US supports the carbon tax.

    British Columbia has implemented a partially effective tax on carbon but not the carbon that it exports. Bad choice.

  56. paulm says:

    This gives you an idea of the drastic reduction and cap that’s required…

    How much fossil fuel can we burn?
    http://www.guardian.co.uk/environment/georgemonbiot/2009/may/06/carbon-emissions
    Governments need to cap the amount of coal, gas and oil we extract if they are serious about fighting global warming

    Or, using Meinshausen’s figure, we can burn only 33% between now and 2050. Sorry – 33% minus however much we have burnt between 2000 and today.

  57. Robert Nagle says:

    Seven, in Texas, all the electricity rates are published and updated regularly . You can even filter to results that are 100% renewable. As it turns out, at the moment, one of our 12 month green plans is cheaper than most coal plans.

    Unbelievably, the coal plans are still popular in Texas because they are better advertised.

  58. The distance between what Seven is saying and what Robert Nagle is saying is instructive.

  59. First, I’ve been a public power advocate for 7 years. Of course we can nationalize coal…but why only that? But you can’t “convert them to non-carbon generation by fiat”! You do it with a technology and the only *conversion* that can take place is Gen IV nuclear which is at least a decade away. It’s a technology, not a political, issue.

    Secondly, carbon tax CAN work if you combine it with mandates. You all seem to make weird assumptions and adapt to the current political proposals from Congress instead of coming up with your own. A tax on carbon on THEIR PROFITS would certainly work, implemented incrementally with “lower your carbon or lose it”.

    Cap and trade allows utilities to shift their carbon concentrations to one particular area if they want to, meaning more deaths from particulate. The idea of actually “trading” this is sick.

    David Walters

  60. Leland Palmer — Eminent domain sounds like a good idea, if it is limited to the grid. That is truly “interstate commerce” within the power of Congress to regulate and appropriate. The big obstacle to grid overhaul seems to be the environmentalists, who are a litigious lot. Speculation on motives I’ll leave for others. My point is that unless the grid is modernized and connected with sources of renewable energy, such as wind, geothermal, and solar, all of the punishment of coal will just cripple our power.

    Gail and Dan Galpern — I agree that ad hominem squabbling among the leaders is demoralizing to the troops. Enjoyed your posts.

    Michael d — You pose the problem nicely: “The big question that we are also grappling with is whether a compromised ETS with free permits to trade-exposed industries and high emissions generators early in the scheme, lots of offset provisions and weak targets is better than nothing at all.” It’s hard to come back to a problem after you have put in place a half-solution. The question becomes: what is Congress really trying to do with W-M, cut CO2 emissions or pretend that they’ve done something? A point source carbon fee, with revenues dedicated to grid modernization, might be acceptable. Something small, to demonstrate success in a particular way. A big, vague, gameable system like cap-and-trade will probably lead to something like Europe.

    Laurie Williams — Thanks for that great post in support of carbon fees. Your experience is a valuable guide. I especially like: “correct the perverse incentives that are currently preventing that transition.” If we had a clearer idea of what those perverse incentives are, and who benefits, a wise legislative solution might become evident. But when we approach the problem of CO2 with “free market” blinders on, and don’t honestly confront the rip-offsets and Wall Street swindling, then cap-and-trade will die in agony, and we will become too disheartened to put together a better plan, based on fees for point source polluters.

    Toby Heaps — I hope you will explain “80% revenue neutral.” Is that good, and why?

    First, there has to be some legislative consensus on a price per ton of CO2 emitted by point sources such as power plants, cement plants, and steel factories. What is the cost of CO2 capture and storage or conversion, given what we know today? Let’s be honest about that cost. That’s what industry is waiting for — some certaintly of the cost, however huge it is, so they can plan for the next 20 years.

    Second, there has to be a firm NO to offsets. Planting trees, etc. should not erase emissions liability, however good an idea it might be.

    Third, a tax break for power generation should be on the table. Everybody else is getting a bailout, so why not the people who keep your computer powered up?

    Unfunded mandates from the government are a sore point, especially if the mandate is backed by a punitive tax or fee, and even more especially if there is no scalable post-combustion CO2 capture and storage or conversion to point to as economical means for compliance. You can’t command the power companies to do the impossible.

  61. Gail says:

    Planting trees, especially, should not erase emissions liability, because they AREN’T GOING TO GROW. They are losing biomass, not increasing it. In other words, they are contributing to CO2 emissions, not eating them up. Kind of like the oceans. Sigh.

  62. Allouchsit says:

    The idea that ANY law passed by Congress will have any effect whatsoever on the temperature of the earth is the purest fantasy. You might as well pass a law repealing the law of gravity or prohibiting the sun from shining. Sorry to see so many otherwise rational people so committed to such a pointless piece of legislation.

  63. Greg Robie says:

    When the town is DC, isn’t an argument that something is “the only game in town,” almost the same as conceding that the approach being defended is wrong headed; wrong hearted; non-rational?

    Doesn’t Hansen have current science and math behind his argument? Doesn’t the experience gained with cap and trade (and now this weakening version of that concept that is being signaled to be acceptable) prove that it doesn’t work? When cap and trade was initially proposed–I believe–by the Dutch in the ’80s, wasn’t cap and trade meant to be a means of transferring the old wealth from the “haves” to the “have nots,” so the “have nots” could skip the dirty stage of development, and the planet, together, could be saved by a new paradigm of wealth: a shift from competition to cooperation to create/sustain wealth (a healthy planet–as far as this relates to homo sapiens)?

    That systemic goal of that cap and trade concept (justice) has long been abandoned, in deference to the more “pragmatic” goals of global capitalism, to greed and more “wealth” creation for the “haves.” As I read Geithner’s op-ed in the NYT today, I read in it that the town of DC calls saving the banks: protecting the FDIC from too rapid a run on the government’s credit. Haven’t the large banks been “saved” by government intervention to be bought up and taken over by sovereign and hedge funds to spare the government a run on its credit; its creditability? If so, what has been saved, and for whom? How can a town of such doublespeak be right about climate change mitigation with a political solution” that “makes sense”/”works” in its mindset? Thirty years from now Hansen will, again, be proven to be more right than the current “enlightened right” (though I still argue that, systemically, the central bank controlled, fiat currency system feeding the capitalistic economic model needs to be replaced with currencies coined in carbon credits so that our greed focuses us on being sustainable, rather than hoping to become less greedy so that we somehow become such; Abraham Maslow did not get it right with his hierarchy of needs modeling!).

    In any event, a tenacious and doggedly faithful effort to be “right” and get the “right” thing done is an opening for motivated reasoning to get in the way; to leave us lost to a “hope” for a better past.

  64. Ronald says:

    seven,

    Not to just pile on (I will do that anyway), but is the most important part of a product the initial cost? How about if we replace all psychologists with teenagers because they will work cheaper? Maybe there will be consequences in the future with (maybe) fewer people being curied of mental health problems or any of the other things psychologists do being done less well, but it’s the cost that counts, not the consequences.

  65. Sarah R says:

    I’ve been very impressed overall with your blog but not with this particular entry. I found it a little short-sighted and, yes, even a little offensive.

    The extent to which you lose patience with people who hold out hope for a carbon tax is matched by an opposing concern and irritation that to continue to say a tax is unviable is a self-fulfilling prophecy. Many people believe that pricing or taxing carbon when it enters the economy and not when it enters the environment is a “cleaner” and more efficient way to control emissions.

    I particularly disliked your paragraph saying, in so many words, that if everyone else is playing chess and you’re playing checkers prepare to be criticized and left out. Wow! I can’t disagree with you more here. This sounds like intimidation and bullying. Why shouldn’t Hansen hold true to his beliefs and ideals. All my neighbors drive SUVs and clear their yards and sidewalks with leaf-blowers. They criticize me for using a rake. Ohhh, maybe I should throw it in the bin and pick up a super loud and polluting leaf blower just so I can be in the game (please!)

    There are a lot of other points I’d like to make, but I’ll end by encouraging you to review of basic economics. In theory, the potential to reduce carbon emissions is about the same whether one employs a C&T system or a carbon tax as long as the cap is set correctly or the tax or price on carbon is set correctly. In theory, price has a great baring on supply and vice-versa.

    [JR: "Intimidation and bullying"? My post is mild stuff compared to Hansen writing that supporters of cap-and-trade are "worshiping at the Temple of Doom."

    I have zero problem with Hansen holding true to his beliefs and ideals. He is the one who trashed those who disagreed with him. So your rake analogy doesn't stand. And, as I've explained at length, a tax would not get us close to 350 ppm, so his proposal isn't true to his beliefs.

    I don't "lose patience with people who hold out hope for a carbon tax." I lose patience with people who trash cap-and-trade because they think a tax is vastly superior and politically plausible anytime soon.]

  66. JR — I see you are monitoring this very lively thread, so I’ll ask here the key question: what price for a ton of CO2 emissions?

  67. Leland Palmer says:

    Hi David Walters-

    Of course we can nationalize coal…but why only that? But you can’t “convert them to non-carbon generation by fiat”! You do it with a technology and the only *conversion* that can take place is Gen IV nuclear which is at least a decade away. It’s a technology, not a political, issue.

    You’re right, it is a technology issue. If you combine biomass fuel sources with carbon sequestration, it is possible to transfer carbon from the atmosphere, where it causes global warming, and put it into the ground where it does not cause global warming, and generate electricity at the same time.

    Lets do a thought experiment:

    Suppose you take 1.2 billion tons of biomass, and convert it into 300 million tons of biocarbon. Suppose that 300 million tons of biocarbon is burned in a coal plant converted to carbon capture and storage, and that 300 million tons of carbon ends up stored in geological formations deep in the earth.

    Now replant the biomass.

    Now do this cycle of replanting, harvesting, and carbon storage every year.

    The net result is 300 million tons of carbon being transferred from the air into the ground, every year.

    In addition, 300 million tons of carbon from coal are kept out of the air, by doing this.

    In addition, useful electricity is generated that can be used to run electric cars, keeping perhaps another 200 million tons of carbon per year out of the air.

    In addition, the biomass could come partially from forest thinning and fire protection efforts, keeping perhaps another 100 million tons of carbon out of the atmosphere per year.

    So, add it up. What’s the swing, the difference from the status quo?

    It adds up to about 900 million tons of carbon per year, kept out of the atmosphere.

    Instead of 300 million tons of carbon going into the atmosphere from coal, you end up with 600 million tons of carbon being kept out of the atmosphere – a 900 million ton swing per year, every year.

    These carbon negative energy ideas are a way of transferring carbon out of the atmosphere and storing it in the earth, while generating useful electricity.

    Why coal? Because coal is almost pure carbon, and all of that carbon ends up in the atmosphere now. Because coal is carbon, not hydrocarbon, no fuel value comes from hydrogen like it does from other fossil fuels like oil and natural gas. All of the energy comes from carbon, and all of that carbon is now dumped into the atmosphere.

    Also, we need to move a lot of carbon back underground. So far, nothing on earth has the ability to move carbon from one source to another that the coal fired power plants have.

    We just need to reverse the sources and sinks, and transfer carbon out of the biosphere and back underground.

    It’s about carbon sources, and carbon sinks.

    Think about it.

  68. jyyh says:

    I’m pretty convinced cap and trade will go in well among windfall victors.

  69. NorthCackalackey says:

    Watching the pie get carved-up this past week in the House, I’m growing increasingly sympathetic to Dr Hansen’s argument. After all the polluters get their windfalls, poor folks only get 15% of the allocation?

    I think a carbon tax may be more politically feasible than we thought a few months ago: On Saturday I heard a member of the House Ways and Means committee say that he believes a majority of his fellow committee members would prefer a carbon tax over the mess that’s being carved up in the name of Cap&Trade.

  70. NorthCackalackey says:

    http://www.eenews.net/EEDaily/print/2009/05/21/2
    CLIMATE: Dem chairmen preview a summer of maneuvering on global warming bill (05/21/2009)
    Darren Samuelsohn, E&E senior reporter

    Three key House Democratic committee chairmen signaled yesterday that they too want to take a swing at the sweeping global warming package that Energy and Commerce Chairman Henry Waxman (D-Calif.) is trying to pass out of committee this week.

    Offering perhaps the biggest road block to a floor debate, Ways and Means Chairman Charles Rangel (D-N.Y.) told reporters that he plans to put President Obama’s health care reform agenda ahead of Waxman’s global warming bill. “We have to deal with health care first,” Rangel said.

    Asked for a time frame on the health care legislation, Rangel replied, “As long as it takes.” Rangel later conceded, “Maybe at some point we can do both at the same time. But health being first is a priority.”

    The New York Democrat also said he continues to consider a carbon tax to curb greenhouse gas emissions, rather than the cap-and-trade approach that Waxman has been busy marking up since Monday in H.R. 2454 . Several senior members of Rangel’s committee support an outright carbon tax, while others back a different method for distributing emission allowances compared with Waxman’s bill.

    “It’s on the table,” Rangel said of the carbon tax. “Of course it is. How can it not be on the table?”

  71. Larrys notes says:

    Will James Hansen lose his NASA job after his jail time in WV?