You might think an A-list business reporter for the NY Times would know basic economics. But not in the case of Joe Nocera.
On Monday, I finally spoke to Hansen. His knowledge and sincerity are easy to admire, even if his tactics are not. He told me he would like to see oil companies pay a fee, which would rise annually, based on carbon emissions. He said that such a tax could reduce emissions by 30 percent within 10 years. Well, maybe. But it would also likely make the expensive tar sands oil more viable. If you really want to eliminate expensive new fossil fuel sources, the best way is to lower the price of oil, which would render them uneconomical. But, of course, that wouldn’t exactly lower demand either.
#FAIL. Just how admirable is it to interview a world-class expert, mis-state his position, get the economics of his plan exactly backwards, and then disparage his tactics in the pages of the NY Times?
Hansen, as I would assume everyone knows, wants all fossil fuel providers to pay a fee, not just oil companies. Further, Hansen has published what he emailed Nocera:
An economic analysis indicates that a tax beginning at $15/tCO2 and rising $10/tCO2each year would reduce emissions in the U.S. by 30% within 10 years. Such a reduction is more than 10 times as great as the carbon content of tar sands oil carried by the proposed Keystone XL pipeline (830,000 barrels/day). Reduced oil demand would be nearly six times the pipeline capacity, thus rendering it superfluous.
How precisely would a high and rising CO2 tax make the dirty tar sands more viable? In an epic blunder of basic economics, Nocera has apparently confused a higher market price for oil — which would make the tar sands more viable — with what Hansen has actually proposed, a higher price to the consumer and businesses for using carbon-based fuels (but no direct change in the market price).
Ironically, Nocera’s economics are so backwards that he fails to realize that his final lines of snark are also utterly dead wrong. The carbon tax Hansen proposes would clearly lower demand for oil overall, and thus lower the price of oil, which would also undermine the tar sands viability.
And as Brad Plumer notes in his debunking, “No, a carbon tax wouldn’t be good for Canada’s tar sands,” tar sands oil “would be at an even greater disadvantage” since it “is more carbon-intensive than other types of crude, creating 14 percent to 17 percent more greenhouse-gas emissions over its lifespan.”
It is a sad commentary on the state of (lack of?) basic editing at the NY Times that it ran this error-riddled piece.
Finally, if you were seduced by Nocera’s “maybe” into wondering whether a CO2 price rising to $115/tCO2 in 2023 would cut U.S. CO2 emissions by 30%? Well, the Energy Information Administration says that a mere $25/tCO2 would cut CO2 emissions 20% in 10 years. So I think it is rather obvious that another $90/tCO2 on top of that would easily cut emissions 30% (especially since Hansen doesn’t want to stop the CO2 price rise after just 10 years).
As Hansen writes:
Joe Nocera was polite, but he does not understand basic economics. If a rising price is placed on carbon, the tar sands will be left in the ground where they belong.
Hansen explains why he posted his email to Nocera: “Joe Nocera quoted a private comment from a note explaining that I could not promise I would be back in New York to meet him. But he did not mention the contents of the e-mail that I sent him with information about the subject we were to discuss. The entire e-mail is copied below.” In a cover email, Hansen explains, “Apologies to Bill McKibben for the comment that could be misconstrued — I do not question the efforts to wake up the public to the situation at hand, and pressure elected officials to serve the public interest, not special interests.”
Last year, Nocera took exception to my saying he joined “the climate ignorati,” asserting that I was casting him as a “global warming denier.” But as I noted at the time, the ignorati are, as Google reveals, “Elites who, despite their power, wealth, or influence, are prone to making serious errors when discussing science and other technical matters.” The shoe fits.