NewEnergyNews: THE CASE FOR A CARBON TAX

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge: To make every day Earth Day.

YESTERDAY

  • THE STUDY: THE COST OF ADDING SOLAR TO A UTILITY’S OPERATIONS
  • QUICK NEWS, 7-21: U.S. WIND, SOLAR TO GROW THROUGH 2020; NEW GEOTHERMAL RISING; CHINESE HAVE RIGHTS IN OREGON WIND BUY
  • THE DAY BEFORE

  • Weekend Video: Colbert Gets Into Coal Rolling
  • Weekend Video: How Solar Power Plants Store And Use Solar Energy
  • Weekend Video: A Story About People And Wind Energy
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    THE DAY BEFORE THE DAY BEFORE

  • FRIDAY WORLD HEADLINE-THE CLIMATE CHANGED WORLD IS NOW 5 TIMES MORE DANGEROUS
  • FRIDAY WORLD HEADLINE-THE MONEY IN SOLAR, Q2 2014
  • FRIDAY WORLD HEADLINE-EU STILL GROWING OCEAN WIND
  • FRIDAY WORLD HEADLINE-$109MIL FROM GERMAN BANK BACKS KENYA GEOTHERMAL
  • THE DAY BEFORE THAT

    THINGS-TO-THINK-ABOUT THURSDAY, July 17:

  • TTTA Thursday-THE PREMATURE EVACUATION FROM CLIMATE CHANGE EXCITEMENT
  • TTTA Thursday-NEW ENERGY TO SUSTAIN BIG GROWTH – EIA
  • TTTA Thursday-SOLAR’S COST TO UTILITIES
  • TTTA Thursday-HOW UTILITIES CAN EVOLVE IN A NEW ENERGY WORLD
  • AND THE DAY BEFORE THAT

  • THE STUDY: HOW TO PROTECT A CAP AND TRADE PROGRAM
  • QUICK NEWS, July 16: 88% OF NEW U.S. POWER IN MAY WAS NEW ENERGY; THE FIGHT FOR WIND IN OHIO; U.S. CRITICAL SYSTEMS REGULARLY BREACHED
  • THE LAST DAY UP HERE

  • THE STUDY: THE COSTS AND BENEFITS OF NET ENERGY METERING FOR DISTRIBUTED RENEWABLES
  • QUICK NEWS, July 15: THE SMART GRID IS COMING; LA UTILITY WANTS A SOLAR FEED-IN TARIFF, NOT NET METERING; FORESEEING A SELF-DRIVING VEHICLE MARKET
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    Anne B. Butterfield of Daily Camera and Huffington Post, is a biweekly contributor to NewEnergyNews

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT)

    November 26, 2013 (Huffington Post via NewEnergyNews)

    Everywhere we turn, environmental news is filled with horrid developments and glimpses of irreversible tipping points.

    Just a handful of examples are breathtaking: Scientists have dared to pinpoint the years at which locations around the world may reach runaway heat, and in the northern hemisphere it's well in sight for our children: 2047. Survivors of Superstorm Sandy are packing up as costs of repair and insurance go out of reach, one threat that climate science has long predicted. Or we could simply talk about the plight of bees and the potential impact on food supplies. Surprising no one who explores the Pacific Ocean, sailor Ivan MacFadyen described long a journey dubbed The Ocean is Broken, in which he saw vast expanses of trash and almost no wildlife save for a whale struggling a with giant tumor on its head, evoking the tons of radioactive water coming daily from Fukushima's lamed nuclear power center. Rampaging fishing methods and ocean acidification are now reported as causing the overpopulation of jellyfish that have jammed the intakes of nuclear plants around the world. Yet the shutting down of nuclear plants is a trifling setback compared with the doom that can result in coming days at Fukushima in the delicate job to extract bent and spent fuel rods from a ruined storage tank, a project dubbed "radioactive pick up sticks."

    With all these horrors to ponder you wouldn't expect to hear that you should also worry about the United States running out of coal. But you would be wrong, says Leslie Glustrom, founder and research director for Clean Energy Action. Her contention is that we've passed the peak in our nation's legendary supply of coal that powers over one-third of our grid capacity. This grim news is faithfully spelled out in three reports, with the complete story told in Warning: Faulty Reporting of US Coal Reserves (pdf). (Disclosure: I serve on CEA's board and have known the author for years.)

    Glustrom's research presents a sea change in how we should understand our energy challenges, or experience grim consequences. It's not only about toxic and heat-trapping emissions anymore; it's also about having enough energy generation to run big cities and regions that now rely on coal. Glustrom worries openly about how commerce will go on in many regions in 2025 if they don't plan their energy futures right.

    2013-11-05-FigureES4_FULL.jpgclick to enlarge

    Scrutinizing data for prices on delivered coal nationwide, Glustrom's new report establishes that coal's price has risen nearly 8 percent annually for eight years, roughly doubling, due mostly to thinner, deeper coal seams plus costlier diesel transport expenses. Higher coal prices in a time of "cheap" natural gas and affordable renewables means coal companies are lamed by low or no profits, as they hold debt levels that dwarf their market value and carry very high interest rates.

    2013-11-05-Table_ES2_FULL.jpgclick to enlarge

    2013-11-05-Figure_ES2_FULL.jpg

    One leading coal company, Patriot, filed for bankruptcy last year; many others are also struggling under bankruptcy watch and not eager to upgrade equipment for the tougher mining ahead. Add to this the bizarre event this fall of a coal lease failing to sell in Wyoming's Powder River Basin, the "Fort Knox" of the nation's coal supply, with some pundits agreeing this portends a tightening of the nation's coal supply, not to mention the array of researchers cited in the report. Indeed, at the mid point of 2013, only 488 millions tons of coal were produced in the U.S.; unless a major catch up happens by year-end, 2013 may be as low in production as 1993.

    Coal may exist in large quantities geologically, but economically, it's getting out of reach, as confirmed by US Geological Survey in studies indicating that less than 20 percent of US coal formations are economically recoverable, as explored in the CEA report. To Glustrom, that number plus others translate to 10 to 20 years more of burning coal in the US. It takes capital, accessible coal with good heat content and favorable market conditions to assure that mining companies will stay in business. She has observed a classic disconnect between camps of professionals in which geologists tend to assume money is "infinite" and financial analysts tend to assume that available coal is "infinite." Both biases are faulty and together they court disaster, and "it is only by combining thoughtful estimates of available coal and available money that our country can come to a realistic estimate of the amount of US coal that can be mined at a profit." This brings us back to her main and rather simple point: "If the companies cannot make a profit by mining coal they won't be mining for long."

    No one is more emphatic than Glustrom herself that she cannot predict the future, but she presents trend lines that are robust and confirmed assertively by the editorial board at West Virginia Gazette:

    Although Clean Energy Action is a "green" nonprofit opposed to fossil fuels, this study contains many hard economic facts. As we've said before, West Virginia's leaders should lower their protests about pollution controls, and instead launch intelligent planning for the profound shift that is occurring in the Mountain State's economy.

    The report "Warning, Faulty Reporting of US Coal Reserves" and its companion reports belong in the hands of energy and climate policy makers, investors, bankers, and rate payer watchdog groups, so that states can plan for, rather than react to, a future with sea change risk factors.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    It bears mentioning that even China is enacting a "peak coal" mentality, with Shanghai declaring that it will completely ban coal burning in 2017 with intent to close down hundreds of coal burning boilers and industrial furnaces, or shifting them to clean energy by 2015. And Citi Research, in "The Unimaginable: Peak Coal in China," took a look at all forms of energy production in China and figured that demand for coal will flatten or peak by 2020 and those "coal exporting countries that have been counting on strong future coal demand could be most at risk." Include US coal producers in that group of exporters.

    Our world is undergoing many sorts of change and upheaval. We in the industrialized world have spent about a century dismissing ocean trash, overfishing, pesticides, nuclear hazard, and oil and coal burning with a shrug of, "Hey it's fine, nature can manage it." Now we're surrounded by impacts of industrial-grade consumption, including depletion of critical resources and tipping points of many kinds. It is not enough to think of only ourselves and plan for strictly our own survival or convenience. The threat to animals everywhere, indeed to whole systems of the living, is the grief-filled backdrop of our times. It's "all hands on deck" at this point of human voyaging, and in our nation's capital, we certainly don't have that. Towns, states and regions need to plan fiercely and follow through. And a fine example is Boulder Colorado's recent victory to keep on track for clean energy by separating from its electric utility that makes 59 percent of its power from coal.

    Clean Energy Action is disseminating "Warning: Faulty Reporting of US Coal Reserves" for free to all manner of relevant professionals who should be concerned about long range trends which now include the supply risks of coal, and is supporting that outreach through a fundraising campaign.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    Author's note: Want to support my work? Please "fan" me at Huffpost Denver, here (http://www.huffingtonpost.com/anne-butterfield). Thanks.

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    Anne's previous NewEnergyNews columns:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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    Your intrepid reporter

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  • Friday, March 21, 2008

    THE CASE FOR A CARBON TAX

    Former Mexican President Ernesto Zedillo argues that global climate change presents an urgent need for mitigation requiring ethical choices about who will pay and when. He convincingly shows that only universal action will be effective and asserts that a carbon tax, left to each nation to administer in its own way, is the easiest and fairest way to reach that end and thinks other approaches too complicated: “If you're worried about climate change but don't like carbon taxes, think about the messy or even impossible alternatives!”

    President Zedillo advocates a tax that is flexibly administered: “…each country could then decide what to do with the tax revenue. Some might make their carbon tax revenue-neutral by reducing other taxes. The regime would allow countries (or associations of countries such as the EU) to comply with the internationally agreed-upon carbon price by means of their own national cap-and-trade systems. It would also let poor countries move toward the agreed trajectory of carbon prices more slowly than rich countries…”

    President Zedillo makes good sense except for the universally acknowledged problem of an emissions tax: Electorates don’t like taxes and they don’t like politicians who advocate taxes.

    President Zedillo may also be underestimating the messiness of a tax and overestimating the messiness of a cap-and-trade system.

    The subject is thoroughly worked at
    The Carbon Tax Center

    Putting a price on emissions takes two subsidies away from fossil fuels. (slide from the Carbon Tax Center - click to enlarge)

    Carbon Prices, Not Quotas
    Ernesto Zedillo, March 24, 2008 (Forbes)

    WHO
    Ernesto Zedillo, former President of Mexico/director, Yale Center for the Study of Globalization

    President Zedillo's proposal is more eloquent and less specific than this one from The Carbon Tax Center. (click to enlarge)

    WHAT
    Zedillo makes the case for universal action to mitigate climate change and argues that a tax is preferable to a cap-and-trade system.

    WHEN
    - Zedillo argues that the world community must act now to prevent harm to future generations but climate change presents a particularly difficult matter to get universal action on because the harm and potential benefits are in the far future.
    - Other occasions of unified world action were in times of immediate danger and short term resolution: The formation of the UN after WWII; The General Agreement on Tariffs & Trade (GATT) after the protectionism of the 1930s; The IMF after international monetary chaos; Actions against diseases and pandemics.

    A concrete proposal from The Carbn Tax Center. (click to enlarge)

    WHERE
    Zedillo acknowledges that nations do not like to forego sovereignty but there is a need for universal action on this matter.

    WHY
    - Zedillo asserts that there is scientific consensus on climate change and a need for universal action to mitigate it.
    - There are complicated ethics involved, weighing the needs of the future against the present and the rich against the poor.
    - Only an absolutely universal price on emissions will work. If any nations are allowed to opt out, it would cause “leakage” of emissions-intensive activity and likely result in trade wars.
    - Complicated systems are likely to fail.
    - Systems with costs too low to incentivize the development of New Energy are likely to fail.

    A tax is more complicated, and cap-and-trade more workable, than The Carbon Tax Center makes it seem but it's an important debate. (click to enlarge)

    QUOTES
    - Zedillo: “The reality is that a sacrifice of some sort will have to be incurred by the present generation for the sake of people who will exist many years from now, in richer societies than ours and, most probably, in countries not our own.”
    - Zedillo: “Frankly, a Kyoto-type framework--one with global quantitative emissions targets allocated among countries--that meets [all the necessary] conditions is not feasible…”

    2 Comments:

    At 3:22 PM, Blogger Richard Douthwaite said...

    The point that voters don't like taxes is well made. They particularly don't like taxes which will have to be increased each year to get emissions down, eventually, to close to zero. In Ireland, it has been estimated that a carbon tax would have to be somewhere between €200 and €400 per tonne of CO2 to bring about a 3% annual emissions reduction, the rate being required of Ireland by the European Commission.

    A much more politically feasible solution is a version of Cap and Trade called Cap and Share in which each person receives an equal share of the revenue received from selling carbon emissions permits to fossil fuel producers. Peter Barnes' Sky Trust has proposed this in the US and there is a very good chance that the Irish government will announce that it is to use Cap and Share to reduce the country's road transport emissions in its budget in December this year. If Cap and Share proves itself, it is then likely to be extended to all other Irish greenhouse emissions apart from those already controlled by the EU's Emissions Trading System.
    See www.capandshare.org

     
    At 9:04 PM, Anonymous Anonymous said...

    NewEnergyNews is honored to have a comment on this post from world-renowned economist Richard Douthwaite. He re-emphasizes Peter Barnes' Cap-and-Share alternative to cap-and-trade, an idea proposed to NewEnergyNews last week (see the post below) by Hazel Henderson.

     

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