June 12, 2008

Willem Buiter Weighs in, Favors Carbon Tax

It is nice to see that Willem Buiter shares my skepticism about Cap and Trade Carbon schemes relative to Carbon Taxes. It is nice because his London School of Economics credentials eclipse mine, and those are just the beginning of why he is held in high esteem in both financial and economics circles. After showing why Cap & Trade and Carbon Taxes are equivalent in theory under restrictive assumptions regarding uncertainty and/or market efficiency. Buiter explains in Today's Financial Times why he favors a simple Carbon Tax over Cap & Trade. Go read it! Here's a snip:

Cap & Trade is a tax on carbon emissions - fortunately! Willem Buiter, Ft.com, June 12, 2008: … An argument in favour of carbon taxes over cap & trade is that cap & trade requires an efficient secondary market. As we know from recent experience, financial market efficiency cannot be taken for granted. While the instrument that is traded in the secondary market under cap & trade is relatively simple, compared to Residential Mortgage-Backed Securities based on US subprime mortgages, cap & trade does have this additional link in the chain, and is therefore vulnerable to all the familiar financial market pathologies, from market manipulation to illiquidity.

The economic equivalence of carbon taxes and cap & trade is exact only in a world without uncertainty, or in a world with uncertainty but with complete contingent claims markets for risk trading. In the real world, where there is uncertainty and markets are incomplete ….

Why then do politicians and outfits like BP prefer cap & trade to a carbon tax? The politicians prefer it because the cap & trade scheme, while economically equivalent to a tax, will not count as a tax in the traditional record-keeping manuals. It does not add to the official 'tax burden' the opposition likes to bash you around the head with. You can present cap & trade in a way that hides/obscures the fact that for it to work, that is, for it to reduce emissions, it must be equivalent to a tax by increasing the marginal cost of emitting CO2E; however, it does not look like a tax and will not show up in conventional tax burden calculations. Lack of transparency means absence of accountability. That is why non-transparent arrangements are universally valued by politicians.

A second reason is that with cap & trade, you can distribute the shadow tax revenue associated with the cap & trade scheme (that is the amount of revenue you would be able to obtain for the permits in a transparent, competitive auction) in a non-transparent manner. Give-aways through explicit grants or subsidies are not as easy. There are parliamentary committees scrutinizing revenues and outlays; there may be institutions like the UK National Audit Office that can ask bothersome questions.

Life is easier with the initial allocation of permits. You can, for instance, hand out the permits free of charge to your friends (including the heavy historical polluters). This is also the reason, I believe, that the heavy emitters, including BP, favour cap & trade over taxes. They believe that the initial allocation of free permits will favour them. There is this crazy notion that past heavy polluters should not be hit too hard by schemes to reduce CO2E emissions, and that they should therefore be given gratis allowances of permits that are related to their recent past emissions record. I can see no efficiency reason in favour of this, and many a fairness argument against it, but the argument carries weight in the unreal real world.

When the problems associated with running an efficient secondary market for CO2E emissions permits and the political economy of the non-transparent initial allocation of the CO2E emissions permits are taken into account, I believe that, on balance, explicit carbon taxes are better than cap & trade.

May 23, 2008

Gas Prices Not 'Outrageous'

On mainstream news this morning I heard our Utah Governor declare US gas prices "outrageous". Memorial Day national news coverage labeled them "sky high." Wrong! Gas prices only seem outrageous to we Americans who George W. Bush correctly noted are "addicted to oil".

Europeans, by contrast, have lived with high gas prices for years, using proceeds to fund social programs, re-build infrastructure, etc. In addition, as noted in a May 21 Senate-side Congressional hearing Exploring the Skyrocketing Price of Oil (3 hrs), Europeans used gas tax differentials to correctly steer transportation systems toward diesel and away from gasoline, which proves ever-more important now that clean diesel is available. And to steer transportation system toward mass transit and away from single-vehicle transportation. Meanwhile we Americans sat around watching TV and partying until world market forces pushed prices upward, allowing most of the recent 'surplus' to be captured as record profits, record CEO compensation, etc. by what I'll call the Petrochemical Industrial Complex. Finally, Europeans are now beginning to look toward a future free of dependence on petrochemicals and their commingled carbon-loading propensities.

Even though we Americans are just now beginning to face the reality of high gas prices, the prices themselves are not the problem. In fact "sky high" prices are finally getting us to pay attention, however feebly, to alternative sources of energy that are compatible with global climate systems and human survival. As noted in the Congressional hearing, planet Earth is not in jeopardy, rather it is we humans (along with myriad other species) who are at risk. The Earth has worked its way through five Great Extinctions in the past and arguable done remarkably well. But it is in no way clear that we humans will survive the Sixth Great Extinction. Tragically, we humans may be contributing to our collective demise by clamoring for lower gas prices.

This is not to say that all is well in petrochemical industrial complex, medical industrial complex, financial industrial complex, military industrial complex America. But that is a story for another post (or several hundred posts). In the meantime 3 hours are well-spent viewing the hearing. If you want a sneak peak, go to 2:15 in the videocast and watch Senator Charles Schumer (D-NY) in action, followed by others as the hearing winds up.

April 18, 2008

The Air Car?

Until a few days ago I had no idea that people were playing with the idea of using compressed air to power vehicles. Now it looks like we may see some within the next few years. Add in a hybrid gas engine to compress more air and compressed air vehicles might go further than just city driving.

But even if just for the city, and particularly if power sources come increasingly from solar and wind, the idea just might be a life saver not only for those living in very polluted cityscapes, but also for the rest of us as air pollution is a global problem.

And the idea isn't limited to cars. The video below highlights both a rather conventional but all-aluminum piston engine from France, and a much smaller rotary engine design from Australia. The latter shows much promise for small vehicles, but also for recreation vehicles, lawnmowers, golf carts and much more. Take a look:

Compressed Air Vehicles

Hat tip: Barry Ritholtz at The Big Picture

See also: Compressed-Air Car at Wikipedia

OK.. Now that I've got some all hyped up, let's let the naysayers have a say. I just did a bit of after-the-postup Googling and found that Celsius blog ran this thing about a year ago. In Nov, Celsius reader Mark offered this up:

November 9th, 2007
This car is for the naive. The energy density of compressed air at 300 Bar, the pressure at which it is advertised for the MDI car, is 4 MJ/Kg. The energy density of gasoline is 47 MJ/Kg, almost 12 times greater than compressed air.

On the only published test they did, the car got only 4.5 miles on a full tank of air. In order to get the range of a normal car, the air tanks in such a car would have to be the size of a moving truck. Even then, the filling up process will take hours, which, like electric cars, means that they will not be practical solutions for transportation. As for heating the car, well I’m not sure how you heat a car with compressed air, but if you can, you will need to drain the energy from the tanks to do it. With fossil fuel cars, heat is a waste product so no energy penalty is required to heat the vehicle. This is a significant, perhaps fundamental, stumbling block to all-electric or all-air cars in cold climates, range and power aside.

This is no breakthrough.

And earlier:
Eric says:
April 4th, 2007
I first read about this car in about 1995. It was then due to go into production “within a year”. It still is. I don’t see any sign of progress whatsover. You may even note that the FAQ on the website of www.theaircar.com hasn’t even been udpated since 2005! (Where as usual it indicates that the car is just around the corner!). I remember when this car was called the ZEV, when it was called Air Car, when it became the CAT.. I’m sorry. But I just don’t believe in it any more.
ps. I’m an engineer and I know that technically it works.

But other Celsius readers are more hopeful
John Gauthier says:
May 30th, 2007
I’m an engineer, and a skeptic. I pulled out my thermodynamics textbook and checked the math. I confirmed that they can produce the energy that they advertised (about 41 MJoules per 300 liter tank).

While it sounds too good to be true, you have to consider what they have working for them. Yes, the energy density is a lot lower than that of gasoline, but their tank is about four times as large as the average gasoline tank and the energy efficiency of the engine is a lot higher than a combustion engine, which discards an incredible amount of energy as heat.

As far as the naysayers that continue to discredit the idea of using power from the electric grid to charge the car with a compressor, it’s a lot better alternative than personally pumping hundreds of pounds of CO2 into the atmosphere every year. Besides, you can take advantage of power sources that don’t produce CO2 that are only practical on a large scale, like nuclear power.

Hope springs eternal! Where does reality lie?

March 11, 2008

China's CO2 Emissions Staged to Get Even Worse

Via Brad DeLong who says, "This is, I think, very good work--and the worst news about the human future I have learned in months." :

Forecasting the Path of China's CO2 Emissions Using Province Level Information, Maximilian Auffhammer and Richard T. Carson (2008)

ABSTRACT: Our results suggest that the anticipated path of China's Carbon Dioxide (CO2) emissions has dramatically increased over the last five years. The magnitude of the projected increase in Chinese emissions out to 2015 is several times larger than reductions embodied in the Kyoto Protocol. Our estimates are based on a unique provincial level panel data set from the Chinese Environmental Protection Agency. This dataset contains considerably more information relevant to the path of likely Chinese greenhouse gas emissions than national level time series models currently in use. Model selection criteria clearly reject the popular static environmental Kuznets curve specification in favor of a class of dynamic models with spatial dependence.

January 25, 2008

Exclusively Renewable Energy by 2050: Germany Says Yes!

Can you envision a country that plans to rid itself of both Coal and Nuclear Energy source-dependence? Germany is on track to do so:




Germany's Plan on video (8 minutes)
Germany is looking to integrate wind, solar, and biofuel natural gas to supply 100% of its power generation needs by 2050 (40% by 2020). Germany plans to phase out both Nuclear and Coal-fired power generation.

Hat Tip: Brad Ewing, Environmental Economics & Sustainable Development

December 14, 2007

Global Forest & 'Env. Justice' Groups Condemn Bali Carbon Trading Schemes

Today, the Global Forest Coalition and the Global Justice Ecology Project strongly condemn—on both human rights and environmental accounts—recent carbon trade announcements/resolutions at the UN Bali Glogal Climate Change Conference. "They are going to use the failed model of carbon trading to supposedly protect forests, but just like agrofuels, the Forest Carbon Partnership Facility [3] is going to exacerbate deforestation at a faster rate, worsen human rights abuses and do nothing for the climate but make it less inhabitable", Dr. Miguel Lovera, Chairperson for the Global Forest Coalition.

14 December 2007
What's missing from the climate talks? Justice!

Bali Forest Outcomes Trample Indigenous Peoples' & Local Communities' Rights
False "Solutions" to Climate Change Condemned at the UNFCCC

Nusa Dua, Bali, Indonesia-As the UN Framework Convention on Climate Change ends, Global Forest Coalition expresses great concern that market-based mechanisms promoted here do not give enough guarantees to indigenous peoples and forest dependent peoples to ensure their rights.

Global Forest Coalition's Managing Coordinator, Simone Lovera stated, "The outcomes of the forest negotiations here in Bali do not include any guarantee that the rights of Indigenous Peoples and local communities regarding their forests, which have been enshrined in the UN Declaration on the rights of Indigenous Peoples, will be respected. Instead, this entire process is dominated by the corporate interests of logging, soy and palmoil companies that have started to demand compensation for every tree they don't cut down. Carbon offset projects financing such compensation schemes do not contribute anything to mitigating climate change, they are no more than a convenient lie to subsidize some of the most destructive industries on earth. Considering the crisis we are in, carbon offsets are unacceptable: We desperately need both forest conservation AND policies that cut emissions at source."

"Indigenous peoples and women are the traditional caretakers of the forest," said Anne Petermann, Co-director of Global Justice Ecology Project. "The fact that they are being ignored and excluded in this process is typifying for the way in which we are moving in the wrong direction."

The International Forum of Indigenous Peoples on Climate Change, expressed their profound concern in a statement [1] read inside the UNFCCC about Reducing Emissions from Deforestation in Developing Countries (REDD):

REDD will not benefit Indigenous Peoples, but in fact, will result in more violations of Indigenous Peoples' Rights. It will increase the violation of our Human Rights, our rights to our lands, territories and resources, steal our land, cause forced evictions, prevent access and threaten indigenous agriculture practices, destroy biodiversity and culture diversity and cause social conflicts. Under REDD, States and Carbon Traders will take more control over our forests.
Victoria Tauli-Corpuz, Chair of the UN Permanent Forum on Indigenous Issues added, "It is countries in the North that have caused the climate problem and now they are promoting projects like agrofuels [2] to supposedly address this problem, the impacts of which will be shouldered by the countries and indigenous peoples of the South."

To worsen matters, World Bank President Robert Zoellick announced their latest scheme called the Forest Carbon Partnership Facility, stated Dr. Miguel Lovera, Chairperson for the Global Forest Coalition. They are going to use the failed model of carbon trading to supposedly protect forests, but just like agrofuels, the Forest Carbon Partnership Facility [3] is going to exacerbate deforestation at a faster rate, worsen human rights abuses and do nothing for the climate but make it less inhabitable," he said. [Iverson: Notes edited lightly]


notes:

[1] Statement from the International Forum of Indigenous Peoples on Climate Change (IFIPCC) at the 13th Session of Conference of the Parties to the UNFCCC--SBSTA 27, concerning agenda item 5/REDD. See www.globalforestcoalition.org [Iverson: Specifically see this news release.]

[2] The term 'agrofuels' is a more accurate label for the production of fuel from industrially produced agricultural crops (and is also used by the FAO). The term 'biofuels' gives a false impression that these fuels are environmentally friendly, when they are in fact environmentally and socially destructive.

[3] The Forest Carbon Partnership Facility is the World Bank folding the carbon
storage potential of forests into their carbon trading scheme as another way to
avoid emissions reductions from polluter countries.
["notes" lightly edited]

See also:
1. Biofuels: Another False Solution to Global Warming, from Global Justice Ecology Project

2. Advance copy of a major new report from Global Forest Coalition and Global Justice Ecology Project that reveals the social and ecological impacts of large-scale production of agrofuels. The True Cost of Agrofuels: Food, Forests and the Climate [specifically details the threats on forests and forest-dependent people that are resulting or are predicted to result from the production of agrofuels from food, oil and cellulose crops.] The report is available online (English version [PDF: 74 pp.])
http://www.globalforestcoalition.org/img/userpics/File/publications/Therealcostofagrofuels.pdf
and (Spanish [PDF: 80 pp.])
http://www.globalforestcoalition.org/img/userpics/File/Spanish/Elverdadocostodelosagrocombustibles.pdf


December 13, 2007

Bloomberg Blasts Carbon Trading at UN Bali Conference

Bloomberg: Carbon tax should replace carbon trading, CHARLES J. HANLEY, AP Special Correspondent, Newsday.com, Dec. 13: … "[Cap and trade is] a very inefficient way to accomplish the same thing that a carbon tax accomplishes," [NY Mayor Michael Bloomberg] said. "It leaves itself open to special interests, corruption, inefficiencies." …

November 27, 2007

Japan Set to Buy Carbon Credits on the Cheap

Folks at Globalization and the Environment provide evidence as to why I've been so skeptical about the Carbon Trading game. Japan is staging up to buy its way out of Koyoto commitments with no pain — buying from willing Eastern European sellers who find themselves with a surplus of credits. To their blog:

Nov 23: Today's FT reports that Japan is looking to hoover up shed loads of carbon credits on the cheap to meet its Kyoto agreements.

Such a move, whilst entirely legal is not entirely politically desirable. This article explains why.

This issue of course is that Japan promised to reduce its emissions 6% below its 1990 figure and it is now 8% above. The problem with buying carbon credits is that it does not necessarily reduce emissions by a single tonne of CO2. What then is the point exactly?

The collapse in eastern European heavy industry means they have an excess of credits to sell (and is one reason why Russia signed up in the first place despite dragging its heals for many years). …


November 20, 2007

US Congressional Budget Office Favors Carbon Tax

At a Nov. 16 Congressional Budget Office "Director's Conference on Climate Change", CBO Director Peter Orszag argued in favor of a carbon tax relative to an at-least-for-now inferior alternative of a cap-and-trade policy [Issues in Climate Change, Statement of CBO Director - PDF]. Here is a snip:

… Any effort to limit CO2 emissions would have two principal effects: It would produce long-term economic benefits by avoiding some future climate-related damage, and it would impose immediate economic costs by reducing the use of fossil fuels. Employing incentive-based policies to reduce emissions would help minimize the cost of reducing emissions by any given amount because they would use the power of markets to identify the least expensive sources of emission reductions. Thus, they can better accommodate technological advances, differences between industries or companies in their ability to make low-cost emission reductions, and changes in market conditions.

Two alternative incentive-based approaches for reducing CO2 emissions are to tax them or to establish a cap-and-trade system for them. Either a tax or a cap would be most efficient (that is, would best balance expected benefits and costs) if it was designed to gradually become more stringent over time—meaning the tax would gradually rise or the cap would become tighter. Such an approach would best reflect the present value of avoided future damage (the benefit of reducing a ton of emissions), which would take on greater weight as larger potential damage became closer in time. Further, such an approach would allow a smooth transition to a less carbon-intensive economy, allowing firms and households time to gradually replace capital equipment with alternatives that are more efficient, use less carbon intensive fossil fuels (such as natural gas rather than coal) or use renewable energy sources (such as wind or solar).

Efficiency Advantages of a Tax on CO2 Emissions
Although both types of incentive-based approaches are significantly more efficient than command-and-control policies, studies typically find that over the next several decades, a well-designed and appropriately set tax would yield higher net benefits than a corresponding cap-and-trade approach. A tax creates relative certainty about the cost of emission reductions each year, because firms will undertake such reductions until the cost of decreasing emissions by another ton just equals the tax on an additional ton of emissions. A cap-and-trade program, by contrast, creates relative certainty about the total quantity of emission reductions each year, because the cap limits total annual emissions. In terms of the impact on the climate, however, it does not matter greatly whether a given cut in emissions occurs in one year or the next.

From that perspective, a tax has an important advantage: It allows more emission reductions to take place in years when they are relatively cheap. Various factors can affect the cost of emission reductions from year to year, including the weather, the level of economic activity, and the availability of new low-carbon technologies (such as improvements in wind-power technology). By shifting emission reduction efforts into years when they are relatively less expensive, a tax can yield a given quantity of emission reductions at a lower cost than can a cap-and-trade program with specified annual emission levels. In addition, by avoiding the potential volatility of allowance prices that might result from a rigid annual cap, a tax could be less disruptive for affected companies. Provided that the tax was set at a level that reflected the expected benefit of reducing an additional ton of CO2 emissions, the tax would provide a motivation for firms and households to reduce emissions up to the point at which the cost of doing so was equal to the resulting expected benefits.

The relative advantages of a tax and a cap-and-trade program could change over time as new information became available. For example, because a cap creates relative certainty about the level of emissions, it could become more efficient than a tax if scientists determined that additional emissions were likely to trigger a sharp increase in damage, or if new technologies offered the opportunity to make extremely large cuts in emissions at a low and fairly constant cost. Analysts who have tried to define more precisely the conditions under which a cap would be more efficient than a tax have found those conditions to be quite narrow and not likely to be relevant in the near term. Specifically, scientists would need to have fairly precise knowledge about the level of an emissions threshold—beyond which additional emissions would trigger a sharp increase in total global damage—and such a threshold would have to be sufficiently close that policymakers would want to make very large cuts in emissions each year to avoid crossing it. In the absence of those conditions, a tax offers a more efficient approach for reaching a multiyear emission-reduction target.

Although a tax is generally a more efficient policy, the efficiency of a cap-and-trade approach can be enhanced by various design features. In addition, some participants in the policy discussion believe that analytical comparisons of a tax and a cap-and-trade system ignore the idea that policymakers may be more inclined to set a tight cap than a correspondingly high tax. … [footnotes omitted]

HT: Greg Mankiw

November 15, 2007

US Forest Service and Carbon Offsets: Perspective

Writing in High Country News, Rick Craig suggests that the US Forest Service's entry into the carbon offsets game is ill-advised. Here's a snip:

Salvaging the Atmosphere: The Forest Service Joins the Carbon Offsets Game, Rick Craig, High Country News, Oct 15: … On July 25, Forest Service Chief Gail Kimbell announced the launch of the Carbon Capital Fund, which will sell carbon offsets to fund tree planting on national forests. … The idea sounds logical enough. In fact, the theory that forests can suck up excess carbon and cool the planet helps drive a market that doubled its revenues last year to $110 million. But the Forest Service's entry into the carbon offsets game comes as doubts about tree planting mount. Scientists are skeptical about its benefits, and the honesty of the unregulated market has been questioned in congressional hearings. Worst of all, critics feel, is the tacit permission offsets give buyers to continue their carbon-emitting lifestyles.

Visit the Web site of the National Forest Foundation, the Forest Service's nonprofit arm, and its Carbon Footprint Calculator can tell you how many metric tons of CO2 emissions you are responsible for. If the result leaves you feeling guilty, don't worry. For just $6, the fund lets you offset 1 ton of carbon by supporting tree-planting projects on the national forests. The transaction is based on the theory that forests act as "carbon sinks," soaking up the greenhouse gas from the atmosphere.

But in temperate forests, the concept has not held up well to scientific analysis. Forests do take carbon out of the atmosphere temporarily, but they don’t remove it from the active carbon pool, because their carbon is released when they rot or burn. Cambridge botanist Oliver Rackham, author of a history of Britain's forests, has said that telling people to plant trees to stop global warming is like telling them to drink more water to keep down rising sea levels. …

For an agency with increasingly stretched budgets, however, selling that commodity makes a difference. … And with the agency's million-acre reforestation backlog, there's no shortage of places for consumers to relieve their carbon guilt. [NFF hypertlink added]

See also:
Privatization by Many Means: Carbon Offsets Edition, Forest Policy …, Aug 27
Carbon Offsets: Modern Day 'Indulgences'?, Ecological Economics, Feb 20
Cross-posted from Forest Policy …

Tom Friedman Jumps on the Gas Tax Bandwagon

In the NY Times, Tom Friedman wonders aloud why politicans are so afraid of the "T-word" when it comes to what he considers very good rationales for imposing a gas tax sooner rather than later — with sooner being sometime, say, prior to 9/11/01.

November 09, 2007

Monboit: Biofuels as 'Crime Against Humanity'

Be sure not to miss George Monboit's latest, thought-provoking rant against biofuels. Here's bit of it as posted on his blog:

An Agricultural Crime Against Humanity, George Monbiot, from the Guardian Nov 6: Biofuels could kill more people than the Iraq war. … In principle, burning biofuels merely releases the carbon they accumulated when they were growing. Even when you take into account the energy costs of harvesting, refining and transporting the fuel, they produce less net carbon than petroleum products. The law the British government passed a fortnight ago - by 2010, 5% of our road transport fuel must come from crops - will, it claims, save between 700,000 and 800,000 tonnes of carbon a year. It derives this figure by framing the question carefully. If you count only the immediate carbon costs of planting and processing biofuels, they appear to reduce greenhouse gases. When you look at the total impacts, you find that they cause more warming than petroleum.

A recent study by the Nobel laureate Paul Crutzen shows that the official estimates have ignored the contribution of nitrogen fertilisers. They generate a greenhouse gas - nitrous oxide - which is 296 times as powerful as CO2. These emissions alone ensure that ethanol from maize causes between 0.9 and 1.5 times as much warming as petrol, while rapeseed oil (the source of over 80% of the world's biodiesel) generates 1-1.7 times the impact of diesel. This is before you account for the changes in land use.

A paper published in Science three months ago suggests that protecting uncultivated land saves, over 30 years, between two and nine times the carbon emissions you might avoid by ploughing it and planting biofuels. Last year the research group LMC International estimated that if the British and European target of a 5% contribution from biofuels were to be adopted by the rest of the world, the global acreage of cultivated land would expand by 15%. That means the end of most tropical forests. It might also cause runaway climate change. … (footnotes omitted here)


November 05, 2007

Greg Mankiw: Several Billion plus One Favor Carbon Taxes

For more than a year, Greg Mankiw has formally/strongly advocated for Carbon Taxes. Mankiw also keeps tabs on who else supports such. Lately he adds, by reference, several billion new members to his Pigou Club:

Several Billion Join the Pigou Club, Greg Mankiw, Nov 5: The BBC World Service [PDF] reports that a majority of people in most countries favor higher energy taxes if the tax revenue is either rebated by lowering other taxes or used to finance energy-related government programs….

Another Member, Greg Mankiw, Nov 2: New York Mayor Michael Bloomberg joins the Pigou Club.


November 04, 2007

Go Green! Without "Corporate Giveaways"

Pro Football's Philadelphia Eagles are not only green in color but "green" in commitment and action, voluntarily reducing their environmental footprint and providing a much-needed precedent in the sports arena. This is the right way to go: no big government inducements, no notions that somehow government and industry are "partners" in regulation. Instead we have an enterprise doing things because people involved think it right and necessary.

Big banks and big timber companies, on the other hand, seem to be fishing for big payoffs from cap-and-trade carbon legislation, to allow them to profit from both their extant ventures and from the very "market-based" regulatory schemes they are petitioning for — the type that are currently being debated as cap-and-trade on Capital Hill in Washington DC. This seems to me to be the wrong way to go.

Environmentally aware cap-and-trade advocates continually stress moving, through time, away from corporate giveaways, else starting without corporate giveaways from the beginning. Still, most legislative proposals allow for some carbon credits to be given to polluter firms as does this week's spotlight bill, the Liberman/Warner sponsored America's Climate Security Act. (S.2191)

Cap-and-trade v. carbon tax was debated in two important forums this week. On Oct 30, The Brookings Institution's Hamilton Project hosted a very lively and informative debate of carbon tax v. cap-and-trade. Policy papers included:

It isn't clear where any of this is headed in the US: even if a legislative proposal emerges in either form, there is a big question of whether it gets past a G.W. Bush Presidential Veto. Still it is worth the effort to read the policy papers, and even the transcript (pp 1-62 or 103 [PDF]).

Since I advocate for carbon taxes over cap-and-trade, I'll post up this one comment from the transcript, from panel moderator Sebastian Mallaby (Council of Foreign Relations):

… [I]f people focus in on [the debate over "carbon tax" and "cap and trade"] more and they perceive the cap and trade mechanism as being partly a way to distribute free vouchers to industry, as consumers wake up to that, they may prefer the tax system with a rebate that Gib [Metcalf] is talking about. So the political dynamic could flip when consciousness goes up.
On Nov 1, Amy Goodman, Democracy Now hosted Carbon Trading: Practical Solution to Global Warming or Corporate Greenwash? A Debate. Goodman engaged Annie Petsonk (International counsel with Environmental Defense) and Daphne Wysham (Fellow at the Institute for Policy Studies). The debate gives us some insight into why both sides strongly support their positions. Supporters, like Petsonk believe that carbon taxes and cap-and-trade leglislation without some "give" to corporate pollutors are non-starters.

Dissenters, like Wysham (and me) believe that cap-and-trade while well-intentioned will never get to desired results due to the overly-complex nature of the proposals and the inability to ratchet up the "caps" through time, and ratchet down the "corporate giveaways" through time. Here are Snips from the "debate":

… ANNIE PETSONK: We've had great experience with cap-and-trade for controlling air pollution in this country since 1990, when Congress passed the Clean Air Act amendments. We put a cap on acid rain pollution and adopted this kind of system to cut acid rain pollution from coal-fired power plants. So, in that program, we essentially put the training wheels on the bicycle and learned how to ride the bicycle. That program has cut acid rain pollution far faster than industry and many environmentalists predicted could be done. And it's done so at a fraction of the cost that people projected.

Setting up a carbon trading system for the world and for the United States is more complicated. There are more polluters. I agree with Daphne that companies should not be allowed to get credit in a developing country which has no caps on emissions for doing what they were supposed to do anyway. … [O]ne of the reasons why we're looking forward to the markup [of the Liberman/Warner "America's Climate Security Act"] in the Senate Environment and Public Works Committee today is that the bill now being considered there doesn't create that system. It's better than that. …

DAPHNE WYSHAM: I tend to disagree with that perception, as do quite a few number of groups. Friends of the Earth has recently produced an analysis on the windfall profits in the Lieberman-Warner global warming bill [FOE Press Release], and according to their calculations, 38% of the giveaways, the free giveaways in this bill, would benefit the fossil fuel industry over the lifetime of the program. That's — and roughly $268 billion of that would go directly to the coal industry alone. …

[O]ne of the failures of the EU emissions trading system is that they essentially — the governments essentially gave the right to pollute to certain industries. They set the tap high, and as a result industry was able to emit as much as they had been emitting in the past and make a profit buying and selling these emissions rights. Similarly, in this — and there was no auctioning.

Now, in the current Lieberman-Warner bill, there is some auctioning, but about 50% of all of the permits are just being given away for free. Now, these permits are valuable. They are basically being turned into a commodity. So now what we have is essentially the most carbon-intensive of the fossil fuels, the coal industry, is one of the largest beneficiaries of the Lieberman-Warner bill. And an additional $522 billion will potentially go to what they call zero and low carbon energy technologies. Now, if we are optimistic, we would say, "Wonderful! That's going to go to renewables." However, the legislation is vague. It could go to either the fossil fuel industry for carbon capture and storage, which is a very expensive and unproven technology, or it could go to the nuclear energy. And that is not specifically ruled out in this legislation.

So we have problems with this also because it essentially is a tax on the working poor. It's not a tax on the very corporations that are causing the problem.

AMY GOODMAN: How is it a tax on the working poor?

DAPHNE WYSHAM: Well, because we will see the windfall gains. Instead of having those go to, say, subsidize an increase in the price of power or to public transportation or to other incredibly important solutions to the climate problem, we will see billions and billions of dollars worth of profits going back to the very industries that are causing the problem.

AMY GOODMAN: Annie Petsonk?

ANNIE PETSONK: We believe that the Americas Climate Security Act that's going to be voted on this morning in the Environment and Public Works Committee is a very good first step. Is it perfect? No. Are senators moving to improve it? Yes. Senator Lautenberg announced yesterday he wants to broaden the coverage of the bill so that more parts of the economy come under that cap on fossil fuel emissions. …

DAPHNE WYSHAM: … I think it's important to take some specific examples. I think it’s instructive to look at, for example, the World Bank, which I have been monitoring for over ten years now. Now, they have invested over fifteen times as much in fossil fuels as renewable since 1992. Originally, it was a hundred to one. Now, they are getting into the carbon trading market. The US Treasury back in 1997 said this is a clear conflict of interest for a financial institution to both profit from financing fossil fuels and profit from carbon trading. They're actually charging somewhere on the order of 13% commission on all carbon trading transactions. Now, what the World Bank could have done and should have done instead of getting into the carbon trading market is they should have set a higher energy efficiency standard, they should have stopped subsidizing fossil fuels, they should at the very least be calculating their climate footprint, which they are not doing. So they're calculating the carbon credits, but they're not calculating the carbon debits.

Now, if you globalize that particular model and look at how that would play out with bank after bank, whether it's Citibank or the European Bank for Reconstruction and Development or other public or private banks, you see how these banks are going to be gaming the system. They will be profiting from selling — from giving loans to the likes of Chevron, and then they'll be profiting again from charging a commission on the CO2 that is captured from those operations in developing countries or potentially in the US.

So, you know, what I think people need to understand is, yes, the time is urgent. We need to take action very soon on this issue. However, we need to learn the lessons from the failures of the EU emissions trading system. And the bill that's on the Senate floor this morning is not the best way to move forward. It's a corporate giveaway, and we need to do better. Boxer needs to hear from people on this

AMY GOODMAN: Last word, Annie Petsonk, on this. Is this just a corporate gift, a subsidy, a giveaway?

ANNIE PETSONK: If America doesn't take the lead, beginning to tackle our global warming pollution — excuse me — other nations won't either. I strongly support getting rid of fossil fuel subsidies for big coal-fired power plants in China and India and in the US. We've got to start. We cannot afford to delay. This bill is not a corporate subsidy or giveaway. It's a first step in getting America on a track to a cleaner energy future and a safer climate.

AMY GOODMAN: Fifteen seconds, Daphne Wysham, then what's your alternative, since you are so critical of this?

DAPHNE WYSHAM: Well, I think, you know, what we have is a political opportunity here. We know that the President is going to veto any kind of legislation that comes from the Senate. He has made clear his opposition to any kind of legislation —

AMY GOODMAN: Even Lieberman and Warner?

DAPHNE WYSHAM: Even Lieberman and Warner. So why aren't the Democrats — why are they just — why are they kowtowing to Bush? Why aren't they pushing forward the most aggressive piece of legislation that they can get as a benchmark and say this is what we're going to be pushing for in the next administration? And, you know, we can do better. We should be debating these issues. We should be setting much more stringent targets, at least 80% below 1990 levels by 2050. This bill gets us nowhere near that. And so, that's my concerns with it.


October 24, 2007

Carbon Trading Schemes Backed by Big Banks

If the big banks are pushing for cap-and-trade carbon trading schemes ought we not to be a bit skeptical? Aren't they the ones who have led us down a primrose path with "subpime" and other messes? Big banks are pushing cap-and-trade, reports the NY Times. And yet, many big environmental groups support cap-and-trade legislation over carbon taxes. Why?

I'm still on the carbon tax bandwagon. But what do I know, relative to these economists who, as members of the Union of Concerned Scientists are on record in favor of cap-and-trade systems. Questions linger: Do economists like Joseph Stiglitz favor cap-and–trade over carbon taxes, or do they endorse cap-and-trade as a second-best resolution to the carbon problem relative to extant institutional arrangements? Of course we all know—or should—that it is difficult to know, at least in the Theory of the Second Best what really constitute a "second best". Then again, said "theory" doesn't apply here. What does? To the NY Times:

Banks Urging U.S. to Adopt the Trading of Emissions, JAMES KANTER, Sept. 26: PARIS, Sept. 25 — A group representing some of the world’s leading banks will urge the United States and other industrial nations this week to move quickly to introduce a lightly regulated system for trading carbon emissions permits.…
See also: World Betting the Farm on Carbon Trading?, Youth Climate Movement,Sept 4

October 23, 2007

Peak Oil Update

I usually let The Oil Drum deal with oilpatch news, but I found this to be both informative and compact:

Peak Oil is Now . RGE Economonitor, Mikka Pineda, Oct 22: German-based Energy Watch Group released its October Oil Market Report [PDF] which claims "peak oil is now"
-Looking at the countries outside of the Former Soviet Union and OPEC, it can be noticed that their total production increased until about the year 2000, but since then total production has been declining.

-Only a very limited numberof countries will still be able to expand production, particularly Brazil and Angola.

-King Abdullah of Saudi Arabia: "The oil boom is over and will not return. All of us must get used to a different lifestyle."

-World's biggest fields in decline.

-Based on the analysis of the world's giant oilfields peak oil will happen somewhere between 2008 and 2018 [Robelius 2007 [RGE $] ].

-Growth of production has come to a standstill and production now is more or less on a plateau despite historically high oil prices.

-The historical maximum of oil discoveries after some time has to be followed by a maximum of oil production (the "peak"), which was in May 2005

-33 of the 48 largest oil producing countries have already passed peak [Chevron 2007].

-IEA projections are not a very reliable basis for planning the future.

Another update from The Oil Drum shows a peak oil plateau starting in 2006 and ending in the middle of 2009, falling-off thereafter.

September 27, 2007

Dingell Drafts Carbon Tax Legislation

The Carbon Tax Center endorses Congressman John Dingell's Carbon Tax Legislation, set to be introduced later this year. Dingell is chairman of the US House of Representatives Committee on Energy and Commerce. The Carbon Tax Center says of the proposal, "we think the bill is terrific." Here's more from CTC:

… The current version would phase in, each year for five years, a charge of $10 per ton of carbon content of coal, oil and natural gas; plus an additional 10 cents/gallon for gasoline and jet fuel (kerosene). By the end of the five-year period the charges would reach $50/ton of carbon plus 50 cents/gallon of gasoline and jet fuel. These equate to 63 cents a gallon of gas and 90 cents for one hundred kilowatt-hours assuming the nationwide average fuel mix. …

We examined a 20-year ramp-up — starting Dingell's "10/10" tax in 2008 and continuing through 2027 to a level of $200 per ton of carbon plus $2/gallon on gasoline and jet fuel. Here's where the U.S. would be in the representative year 2025:

  • Carbon dioxide emissions would be down by 1.55 billion metric tons from projected levels, a 20% drop — a decrease equivalent to current emissions from England, France and Italy combined.
  • Petroleum consumption would be 4.5 million barrels a day less than otherwise, an 18% decrease from projected usage, and more than 10% greater than Iran's current production.
Moreover, these reductions could be supplemented by savings from other targeted policies and programs to reduce use of petroleum, natural gas and coal-fired electricity. (Indeed, a companion section of Dingell's bill will call for phasing out the federal tax deduction on mortgage interest on very large homes, thus ending a subsidy through which middle and working class families subsidize gargantuan sprawl homes for the wealthy.) No other single policy measure — not broader CAFÉ standards, not a national Renewable Energy Standard, not a massive biofuels push, and certainly not a new generation of subsidized nuclear power plants — can produce nearly the carbon and petroleum savings promised by the Dingell hybrid carbon tax, provided it extends beyond the initial five-year period.

The brilliant touch in the Dingell bill is the supplemental tax on gasoline and aviation fuel. …

Maybe this will take some heat off Dingell, who some environmentalists have criticized as not "on board" on environmental issues. Or maybe not.

I'll echo The Carbon Tax Center's concluding comment: Let Dingell and others know how you feel on this issue.

… We urge you to read Dingell's Web statement and post a comment on his site and at other sites that cover climate, energy, oil, national security, and politics. Having a legislator of Dingell's stature even float a carbon-tax trial balloon is a very important and positive development — possibly a breakthrough. There's a lot riding on it. Be heard.
See Also:
Newsweek, Web-Exclusive Interview, 'This is Going to Hurt', Sept. 27: A defender of the auto industry proposes a carbon tax that will cause everyone pain. Is the country ready for shared sacrifice to combat global warming? …

Daily Kos, Dingell: A dingbat proposal re Global Warming?, A. Siegel, Sept. 26

Econospeak, Economists v. Politicians, Michael Perelman, Sept. 26: … [T]he Wall Street Journal has chimed in reporting that economists as a whole agree that carbon taxes are the way to limit global warming, yet politicians are just as adamant in supporting the cap and trade. Nobody wants to get blamed for raising taxes. Rep. John Dingell (Dem, GM; i.e. General Motors) is still supposed to introduce a carbon just to prove how unpopular such a tax might be. …

NY Times, What is John Dingell Really Up to?, David Leonhardt, Sept. 5

September 05, 2007

Auctioning Off Carbon Permits: Better than Carbon Tax?

Over at the promising new blog Econospeak, Peter Dorman argues that auctioning off permits for rationing carbon is a better strategy than either a carbon tax or the much-maligned 'cap and trade' system. I'm not yet convinced, still leaning toward a tax. But at least Dorman has it out there for discussion. Here is Dorman:

Tax Carbon?: The New York Times has a story today about John Dingell's change of heart on climate policy. … [A] carbon tax "is the climate solution that economists and environmentalists have long dreamed of" [says NY Times David Leonhardt] and that the only alternative is cap-and-trade, giving away emission permits to longstanding polluters. The third approach, and by far the best, is setting up a permit system and auctioning off each one of them.

There are two reasons why permits rule. (1) There is great uncertainty about the future relationship between carbon prices and pollution levels (long run elasticity of demand for fossil fuels). Taxes place the burden of this uncertainty on the environment (the amount of pollution); saleable permits place it on costs faced by energy users (fossil fuel prices). (2) Politically, if we go the tax route, we end up in a discussion about taxes. … If we center the policy on permits the debate is over how much greenhouse gas emissions we are willing to tolerate. That's the discourse we need.

Folks, this is a very important issue at a very important time. In the next year the contours of the national debate over climate change policy will be set. Huge ecological consequences — and gobs of cash — are on the line. It is essential to start off in the right direction. I'd like to see enough clarity and truculence in the activist community that journalists are forced to take notice

Background, from Leonhardt's article:
… Devised correctly, a cap-and-trade system could certainly work. But there are enormous complexities. As Gregory Mankiw, the Republican economist, has pointed out, companies that use the most energy today are likely to be given the largest number of permits, essentially rewarding them for their prior pollution. Some companies may even deliberately use more energy in the next few years, to assure themselves additional permits. Given all the issues, a cap-and-trade system could end up being "ineffective or even counterproductive," Lawrence Summers, who was a Treasury secretary under Bill Clinton, has warned.

A solution that relies at least partly on a carbon tax would be simpler, and the revenue it generates would go to the government, rather than to companies. The government could then turn around and cut, say, payroll taxes to cushion the blow of more expensive gasoline and home heating. …


August 02, 2007

Fundamental Theorem of Carbon Taxation

Greg Mankiw serves up what he calls the Fundamental Theorem of Carbon Taxation:

… Economists recognize that a cap-and-trade system is equivalent to a tax on carbon emissions with the tax revenue rebated to existing carbon emitters, such as energy companies. That is,

Cap-and-trade = Carbon tax + Corporate welfare. …

Yet one more nail in the coffin for rationalizations for "cap and trade" and one more endorsement for setting up "carbon tax" schemes. Or is it? Differing opinions?

June 04, 2007

Say No to Liquid Coal?

"Liquid coal will NOT move America toward a clean energy future." So says Julie Waterman of SaveOurEnvironment.org in an email today:

According to the Department of Energy (www.fueleconomy.gov), a Honda Civic produces 5.5 tons of CO2 per year and a Hummer H3 produces 10.6 tons of CO2 per year. According to Williams et. al., Princeton University, coal-to-liquids produces 50 lbs CO2/gal gasoline equivalent and conventional gasoline produced 25 lbs. CO2/gal.
Where is the countervailing evidence? I can find none. But that doesn't mean there is none. Help!

Here's more on the case against Liquid Coal:

NRDC Feb. 2007: Why Liquid Coal Is Not a Viable Option to Move America [PDF]
Earthjustice, April 2007: Liquid Coal: Undermining the Fight Against Global Warming!

May 11, 2007

What's Best? Carbon Trades or Carbon Tax?

Market Failure in Everything: The Carbon Emissions Edition, Economist's View: What's the best approach to limiting carbon emissions, cap and trade or a carbon tax? Many economists will tell you a carbon tax is best. Political consultants, for the most part, will tell you something else:
Getting on a low-carbon diet, by Ronald Brownstein, Commentary, LA Times … Skeptics…point to the troubles of the cap-and-trade system the European Union has used since 2005... Under pressure from industry, European governments gave away too many credits to polluters; the result was that the price of the credits collapsed, undermining the incentive to cut emissions or use cleaner fuels. ... A second round ... scheduled for next year could ameliorate the problem, but at the least, the European experience suggests that designing a successful cap and trade is an enormously complex undertaking which may require some trial and error before it works. …

May 10, 2007

UN-Energy on Biofuels and Sustainability

UN Report Urges Caution on Biofuels, Naked Capitalism, May 10: In an underreported story (no mention in the Financial Times or the New York Times, and the Wall Street Journal reference was in its energy blog, far from prime time), the United Nations said in essence that biofuels could create as many problems, via environmental damage and higher food prices, as they solve. …
U.N. raises doubts on biofuels, Nicole Winfield, Associated Press, May 8: … In an agency-wide assessment, the U.N. raised alarms about the potential negative impact of biofuels, just days after a climate conference in Bangkok said the world had both the money and technology to prevent global warming blamed in part on greenhouse gas emissions.

Biofuels, which are made from corn, palm oil, sugar cane and other agricultural products, have been seen by many as a cleaner and cheaper way to meet the world's soaring energy needs than with greenhouse-gas emitting fossil fuels. …

The report said bioenergy represents an "extraordinary opportunity" to reduce greenhouse gas emissions. But it warned that "rapid growth in liquid biofuel production will make substantial demands on the world's land and water resources at a time when demand for both food and forest products is also rising rapidly."

Changes in the carbon content of soils and carbon stocks in forests and peat lands might offset some or all of the benefits of the greenhouse gas reductions, it said.

"Use of large-scale monocropping could lead to significant biodiversity loss, soil erosion and nutrient leaching," it said, adding that investments in bioenergy must be managed carefully, at national, regional and local levels to avoid new environmental and social problems "some of which could have irreversible consequences."

It noted that soaring palm oil demand has already led to the clearing of tropical forests in southeast Asia.

In addition, the diversion of food crops for fuel will increase food prices, putting a strain on the poor, as evidenced by the recent steep rise in maize and sugar prices, the report said.

"Liquid biofuel production could threaten the availability of adequate food supplies by diverting land and other productive resources away from food crops," it said, adding that many biofuel crops require the best land, lots of water and environment-damaging chemical fertilizers.

While bioenergy crops can create jobs in impoverished rural areas where the bulk of the world's poor and hungry live, creating biofuels favors large-scale production, meaning small-scale farmers could be pushed off their land by industrial agriculture.

It suggested that farm co-ops, as well as government subsidies, could help small-scale farmers compete.

Such concerns have been raised by Greenpeace International and other environmental groups worried that the biofuel fad is being driven by big agricultural interests looking for new markets.

"More and more, people are realizing that there are serious environmental and serious food security issues involved in biofuels," Greenpeace biofuels expert Jan van Aken said. "There is more to the environment than climate change. Climate change is the most pressing issue, but you cannot fight climate change by large deforestation in Indonesia." …

UN-Energy: Sustainable Bioenergy: A Framework for Decision Makers [PDF], April 2007


April 26, 2007

Financial Times weighs in for Carbon Taxes

Financial Times Editorial in Favor of Carbon Taxes (via naked capitalism) : … A Financial Times investigation today reveals that carbon markets leave much room for unverifiable manipulation. Taxes are better, partly because they are less vulnerable to such improprieties. …

So far, the preferred method has been tradeable permits. Creating markets for carbon has political advantages. They are easy to sign into law and even easier to execute. Instead of the optimal method of auctioning permits, governments have given them away. It is no wonder that energy producers are keen to participate in these schemes.

While short-term politics favour markets, taxes would be better in the long term, because industry needs certainty for investments years hence. A government committing to painful taxes signals the seriousness of its intentions. …

Both carbon taxes and markets put undue burden on the poor. Governments should counter such regressive carbon taxes by lowering taxes on labour. Yet most of the political appeal of markets is that they hide the true costs to consumers. That is why carbon markets exist in the first place. For this reason it is unlikely that governments would offset the invisible burden of markets by changing visible taxes.

Smart market design could overcome most problems with tradeable permits: price caps could prevent undue harm to the economy; and intelligent regulatory regimes could prevent other forms of gamesmanship. Yet markets are bound to be more complicated than taxes. When in doubt, keep it simple. Markets for carbon are potentially good. But taxes would be better

And it gets better:
Financial Times uncovers "widespread Carbon Trading fraud" (via naked capitalism) …[W]hat the FT has found is even worse than what we had imagined, worse in the sense that the abuses are so widespread. We hope you will read the stories in their entirety ….

April 11, 2007

The Case for Carbon Taxes and Against Cap-and-Trade

(via Greg Mankiw)

In a comment on a previous post, reader James offers a good reason why, if the government is to do something about climate change, a carbon tax is better than a cap-and-trade system:
This just occurred to me, so maybe I'm missing something but there seems to be another big advantage for taxes: they probably are much more likely to be both tax-burden and progressivity neutral.

Here's why: Both carbon taxes and cap-and-trade would affect consumers by raising energy costs. (Approximately equally, although to the extent that cap-and-trade imposes more administrative costs, you might need to add more to the price of energy to achieve equivalent carbon emissions.) Taxes raise the after-tax prices directly; cap-and-trade raises the price indirectly by forcing producers to purchase credits, which raises the cost of producing, and thus purchasing, energy. Raising energy costs harms the poor most, because they spend more of their budget on energy.

The regressive effects of a carbon tax are obvious because they are direct, so it should be relatively easy to convince Congress to make the tax revenue and progressivity neutral by instituting income tax cuts (and hikes in the earned income tax credit) weighted toward the poor. (And there's a great bargain to be struck here between conservatives and liberals. Liberals can say, "We'll keep it revenue neutral as long as you keep it progressivity neutral.")

But this will be much more difficult to do for cap-and-trade programs. The main reason that Congress might choose such a program over a carbon tax is the fiction that, unlike a tax, it does not impose costs on consumers. This fiction ignores the indirect cost imposed on consumers when the program increases the price of producing energy. Given that animating fiction, it seems like Congress would be less likely to make progressive changes in the tax code to offset the regressive effects of cap-and-trade. (Congress couldn't argue that they were just offsetting the costs of cap-and-trade because their choice of cap-and-trade was based on denying that those costs exist.)


February 20, 2007

Carbon Offsets: Modern Day 'Indulgences'?

Much has been made of Carbon Offset schemes. I have remained skeptical. Today I find this, to reinforce my skepticism:

(via Carbon Trade Watch): NEW PUBLICATION: "The Carbon Neutral Myth - Offset Indulgences for your Climate Sins" [PDF]

Carbon offsets are the modern day indulgences, sold to an increasingly carbon conscious public to absolve their climate sins. Scratch the surface, however, and a disturbing picture emerges, where creative accountancy and elaborate shell games cover up the impossibility of verifying genuine climate change benefits, and where communities in the South often have little choice as offset projects are inflicted on them.

This report argues that offsets place disproportionate emphasis on individual lifestyles and carbon footprints, distracting attention from the wider, systemic changes and collective political action that needs to be taken to tackle climate change. Promoting more effective and empowering approaches involves moving away from the marketing gimmicks, celebrity endorsements, technological quick fixes, and the North/South exploitation that the carbon offsets industry embodies.


February 16, 2007

Time to Reconsider Nuclear Power?

Former Greenpeace chief Patrick Moore thinks so, and his views have sparked controversy:

[Fuel Fight, ERICA HERRERO-MARTINEZ, Wall Street Journal Online, 2/12//2007] …"During my nearly 40 years as an environmentalist and student of sustainability I have only changed my position on one major issue: nuclear energy," [Dr. Patrick Moore, past director of Greenpeace, International] says.

His change of heart, however, has infuriated many of his former colleagues — and is symbolic of the wider debate raging between supporters of nuclear power and its critics. The late Robert Hunter, another founding member of Greenpeace, once referred to Dr. Moore as an "eco-Judas." Another fellow Greenpeace founder, Paul Watson, was even less restrained, calling him an "eco-whore" for switching to work for the nuclear industry.

Dr. Moore, 59 years old, shrugs off the attacks. "I am often confronted by the assertion that I am not an environmentalist because I support nuclear power…or whatever they don't agree with," he says. "I respond by saying that they are not in charge of giving out credentials for who is an environmentalist."

Dr. Moore, who left Greenpeace in 1986, insists he still holds true to almost all the policies Greenpeace initially pursued: banning nuclear testing, whale killing and toxic discharge. "I left Greenpeace because my fellow directors were drifting into policies that I did not believe had any basis in logic or science," says Dr. Moore, now chairman and chief scientist of Greenspirit Strategies Ltd., a Vancouver consulting firm. One such policy, he says, was a campaign for a global ban on the use of chlorine in drinking water, he says. (Greenpeace says it has no record of a campaign to ban chlorine in drinking water.)

Greenpeace, meanwhile, continues to fight against the construction of more nuclear reactors. "There is always that risk of a catastrophic disaster," says Mike Townsley, an antinuclear campaigner at Greenpeace in Amsterdam. "No one in the world has resolved the issue of nuclear waste." Another objection to nuclear power, Mr. Townsley adds, is that, if it spreads, so, too, will the technology for nuclear weapons. …

Dr. Moore was certainly a believer in the past. In 1976, for instance, he had written as part of a Greenpeace report that aside from nuclear warheads, nuclear power plants were "the most dangerous devices man has ever created" and that their proliferation wasn't just irresponsible but "criminal."

So what made him change his mind? Dr. Moore traces his metamorphosis to a day trip he took seven years ago to Devon in southwest England. There he met another controversial figure, British scientist James Lovelock.

"I had always been fascinated by [Lovelock's] Gaia hypothesis [which argues that the Earth functions as a kind of superorganism]...and when I found out he supported nuclear power I was even more intrigued," Dr. Moore says. "We spent an entire day walking, lunching, supping and into the evening discussing Gaia, climate, nuclear energy."

"Lovelock matter-of-factly said he would gladly take a bundle of used nuclear fuel, put it in his swimming pool and use it to heat his home," Dr. Moore recalls. "This shook my brain into realizing that nuclear waste is no more dangerous than many other chemicals. The trick is to keep it contained and limit our exposure to it."

Dr. Lovelock is considered by other scientists and environmentalists who favor nuclear energy as the pioneer who has helped pave the way for a movement, which sees nuclear power as a potential savior of the environment, as opposed to the dangerous poison it has traditionally been viewed as by mainstream environmentalists.

Drs. Lovelock and Moore aren't alone in embracing nuclear power as the answer to environmental ills. French scientist Bruno Comby in 1996 set up an independent and nonprofit organization, Environmentalists for Nuclear Energy. Members include Dr. Lovelock and former antinuclear activist Simone Weiss. In the U.S., Stewart Brand, an environmentalist and author of the Whole Earth Catalog, has also voiced his support for nuclear power, while in 2004 the late British Bishop Hugh Montefiore was forced to step down from the board of Friends of the Earth after promoting the use of nuclear power in the fight against climate change. …

Hat Tip: John Schrock, A Better Earth.
See also: Beyond Peak Oil: Teaming up Wind with Nuclear Power

Update, 2/17:
From Sourcewatch.org [hyperlinks/notes not carried forward here]: Patrick Moore, grew up on Vancouver Island in British Columbia, Canada where his family was involved in the fishing and logging industry. His father, Bill Moore, was past president of the B.C. Truck Loggers Association and past president of the Pacific Logging Congress.

After completing a Bachelor of Science in forest biology at the University of British Columbia and a PH D in ecology on the administration of environmental law relating to the mining industry, Moore became involved first in the Western Canada branch of the Sierra Club and later Greenpeace. His involvement in Greenpeace between 1971 annd 1986 spanned roles as a campaigner in Greenpeace Canada against whaling, uranium mining, sealing, toxic waste and nuclear warships.

He was President of Greenpeace Canada between 1977 and 1986 and as Director of Greenpeace International.

From 1984 he became involved in a family business, Quatsino Seafarms Ltd, farming salmon on Vancouver Island. Until 1991 he was President of the company and between 1986 and 1989 was President of British Columbia Salmon Farmers Association.

Following claims by the United Fishermans and Allied Workers Union about pollution by the industry generally, the Vancouver Sun reported "Moore called the union's concerns 'phoney' saying that we are not causing pollution and there is no such thing as genetic pollution”.(1)

In 1990, PR consultant James Hoggan (who had worked for Western Forest Products) told a meeting of forest executives that the industry was wasting millions on ineffective PR. He said he and Patrick Moore had designed a “green audit” program to sell to industry.(2)

Subsequently, Moore and two others formed Greenspirit to help business and government "incorporate the environmental agenda".(3)

In 1991, the year Moore created Greenspirit, he became a member of the Board of Directors of the timber industry created Forest Alliance of B.C.

In 1991 Moore was appointed as Director of the British Columbia Forest Alliance which was described by O'Dwyer's PR Services Report, as "a Burson-Marsteller created group, bankrolled by large timber companies", which "is waging a PR war with environmentalists upset with the logging of rainforests in western Canada.”(4)

Burson Marstellar employee, Gary Ley, was the Executive Director of the BC Forest Alliance in 1991. Ley subsequently headed up the Vancouver office of National PR, which B-M had a stake in. National PR had the BC Forest Alliance account.

Tom Tevlin, who was part of the initial Forest Alliance team and later succeeded Ley as Executive Director and then President at the Alliance, is now President and CEO of Greenspirit Strategies Ltd.

Burson Marstellar had worked for the Argentinian junta to "improve [its] international image" and boost investment. [Joyce Nelson, interview with Harold Burson (founder of Burson Marstellar) fall 1981, New York]. B-M's work for the Argentinian government occurred at the time that 35,000 people were disappeared by death squads.

In July 1991 Moore was asked by a Canadian journalist about B-M’s work for the Argentinian junta. "Forest Alliance Director, Patrick Moore, argues that Burson Marsteller's contract was with Argentina's economic ministry and its non-political role was to encourage foreign investment", Stephen Hume wrote. "It [B-M] has a record of truth in public relations as its bottom line," Moore said, citing the company’s role in the Tylenol recall.

Moore went on to object to the juxtaposing the reality of state murder of political opponents with Burson Marsteller's strategy for marketing the perception of Argentina's stability. Besides, Moore argued, "people get killed everywhere".(5)

In August 1993 Moore was part of the delegation that lobbied a US foundation, the Pew Charitable Trust, against a decision to fund British Columbian environmental groups. Following the meeting, the Chair of the BC Forest Alliance, Jack Munro, told the Vancouver Sun “we are not opposed to them giving money to environmental groups. We are opposed to money filtering into protectionists like the people protesting the Clayquot”, he said.(6)

In January 1994, Moore claimed in an interview that while Greenpeace had acted within the law in all matters relating to the International Whaling Commission that they may have funded travel expenses for some delegates to the Commission. "This statement was in error", Moore wrote in a retraction several days later. (7) Download apology as a PDF document "

Two months later, Moore was criticised for claims that he made that Greenpeace "blackmail" had forced the rejection of The Times of London of an ad from the BC Forest Alliance. The Times rejected Moore claim: "The Times had not even received the art work for the ad from the alliance … we do not even know what this ad is supposed to look like so we can hardly be accused of censorship or bias". (8) See also these articles from Greenpeace's other founder Paul Watson of the Sea Shepard Society on Moore [3].

In 2000 Moore went to the Brazilian Amazon rainforests for the filming of a documentary by Marc Morano for American Investigator, According to an interview in the New York Post, Moore dismissed concerns about the impacts of logging, mining and clearning for agriculture on the Amazonian rainforests. "All these save-the-forests arguments are based on bad science ... They are quite simply wrong. We found that the Amazon rainforest is more than 90 percent intact. We flew over it and met all the environmental authorities. We studied satellite pictures of the entire area," he said.

"They are just about the healthiest forests in the world. This stuff about them vanishing at an alarming rate is a con based on bad science ... Anyone who has been in the jungle knows that if you want to live there, you'd better take a few machetes. Otherwise, it'll take it all back," he said. [4]

In October 2002, Moore was a keynote lunch speaker at the Best Practices in Communications: Wood Products and Forests, organised by the Wood Promotion Network conference in Vancouver. Moore's speech was titled "Declaration in Support of Protecting the Environment by Growing More Trees and Using More Wood". [5]

In October 2003 Moore endorsed the launch by The Hudson Institute's Center for Global Food Issues (CGFI) of "Earth Friendly/Farm Friendly" Seal of Approval for the food and dairy industry. Monsanto, Dupont, Kraft/Phillip Morris, and the nuclear industry have funded the Hudson Institute.

In late January 2004 Moore was the key speaker at a 'teach-in' organised by Paul Driessen and hosted under the name of the Congress of Racial Equality on 'eco-imperialism' at the Sheraton New York Hotel and Towers. The environmental movement I helped found has lost its objectivity, morality and humanity ... The pain and suffering it inflicts on families in developing countries can no longer be tolerated," he said.

January 24, 2007

Key Questions on Energy

We dabble a bit in "energy" here. Over at The Oil Drum they adress energy squarely and thoroughly. Here is a teaser:

Key Questions on Energy Options (and Thoughts on the SOTU), by Robert Rapier 01/24/2007: A question was recently posed here: What is the most important question concerning ethanol production? That got me to thinking about important questions regarding not only ethanol, but all of our energy sources. There are a number of issues that we must carefully consider for any of our potential energy sources.

In my opinion, they are:

1. Is the energy source sustainable?
2. What are the potential negative externalities of producing/using this energy source?
3. What is the EROEI?
4. Is it affordable?
5. Are there better alternatives?
6. Are there other special considerations?
7. In summary, are the advantages of the source large enough to justify any negative consequences?

Go there for answers and commentary.

January 23, 2007

Are Biofuels Moving Us in the Wrong Direction?

As the political fuel behind biofuels propels us forward, is it time to take a step back for reflection? Craig Mackintosh says yes. Here is a glimpse of his very good work:

Biofuels from the Frying Pan to the Fire? Craig Mackintosh, 12/29/06:…When we take into account the scale of our past, present, and future transport requirements - are biofuels going to cut it? Do they hold the promise of securing our futures — nationally, economically, and ecologically? … Grist has an excellent collection of articles on the Biofuel subject …. Given the rate and scale of biofuel developments, I think it’s appropriate for me to bring their 'Not so fast: Issues and Implications' section to your notice. …

Throughout tropical countries like Indonesia, Malaysia, Brazil, and Colombia, rainforests and grasslands are being cleared for soybean and oil-palm plantations to make biodiesel, a product that is then marketed halfway across the world as a "green" fuel.

In Southeast Asia, and increasingly in the Amazon, plantations of the African oil palm have become wildly lucrative. After monocropping the palms on recently cleared rainforest land, growers press the palm fruit and kernel for oil that can be used in both food and industrial applications, including — and increasingly — as biodiesel.

The palm oil industry is booming: global exports increased more than 50 percent from 1999 to 2004. To meet the growing demand, producers in Malaysia and Indonesia have ramped up production by clearing thousands of square miles of rainforest for new plantations.

In Indonesia, rainforest loss for oil palms has contributed to the endangerment of 140 species of land animals, while in Malaysia animals like the Sumatran tiger and Bornean orangutan have been pushed to the brink of extinction. Fish kills have become common in waterways surrounding plantations and palm-oil mills, as soil erosion from the cleared land and mill effluents have left waterways clogged with sediment and unviable.

The boom hasn't been limited to Southeast Asia. In one of the most disturbing examples of the biofuel hype’s hidden effects, right-wing paramilitary groups in Colombia — a country mired in a four-decade-old civil war — have in recent years begun planting oil palm plantations over wide swaths of the territory they control. …

Farther south, another biodiversity hotspot is being rapidly cleared to plant a biodiesel crop. Nearly 80 percent of Brazil’s Cerrado region — a woodland savanna mix — has been cleared for agricultural production, mostly for soybeans, according to a Conservation International report.

Despite being home to thousands of endemic plant and animal species, the Cerrado has been promoted as "the last agricultural frontier" by green-revolution hero and Nobel Peace Prize winner Norman Borlaug. Low land and labor costs and high yield potential have sent investors from as far away as Iowa scrambling to buy up these Brazilian grasslands, frequently in collaboration with U.S. agribusinesses like Archer Daniels Midland, whose first Brazilian biodiesel production facility is currently in the works.

Tad Patzek, a professor in UC-Berkeley’s Department of Civil and Environmental Engineering who's known primarily as a critic of corn ethanol, says what's happening in tropical ecosystems is much more serious than the biofuel situation in the U.S. "We've already destroyed the prairie, and the topsoil in the Midwest is going, going, gone," Patzek says. "But the expensive noise we’re making here is being translated there into the total obliteration of the most precious ecosystems on earth." — 'What about the Land?'

I'd like to stimulate some discussion on this topic, as its importance cannot be underestimated. If we are considering using every available piece of land on the planet (and taking down our most valuable forests in addition) to fuel a ballooning population of vehicles, then discussion is the least we can do. …

I’m fairly sure the world still has serious issues with food and water shortages . As it stands, our dietary habits have us using more land per capita than the rest of the world (and not just our own land…). Combine this with the insatiable appetite our vehicles have, and will we not be taking this already out-of-proportion ratio into the realms of the obscene, and absurd? …

In the meantime, biofuel plants are going up everywhere and politicians are setting biofuel quotas into law. I guess I'd like to ask, where are we going with this? Are we not jumping straight from the frying pan into the fire? …

For a bit of hope (maybe?) re: Biodiesel from algae, see our earlier post on the subject, as well as another very good Mackintosh post titled As Corn Ethanol Threatens, Algae Makes Promises, 1/7/2007.

{Update Feb. 1}: Here's the latest on the Palm Oil mess, from The Oil Drum, Jan 30

January 12, 2007

Biodiesel from Pond Scum

I should never trust things I see on local TV. Or maybe, sometimes, I should. Last night I saw my old alma mater, Utah State University, unveil an ambitious plan to build a large scale production facility to convert pond scum into biodiesel. I wondered, Is this the next big Utah embarressment in the wake of the cold fusion debacle in 1989? Or is this really a possibility? Being a biodeisel skeptic. I thought I'd at least air this, and maybe do a Google search and a Google blog search to see what I might find. Here is the TV feed:

Pond Scum Offers Promise for Biodiesel, Ed Yeates, KSL.com: …Utah State University researchers are looking at biodiesel fuel made from pond scum. That's right, the green, slimy stuff that grows virtually anywhere appears to produce as good, if not a better, quality biodiesel fuel than soybeans.

Lance Seefeldt , USU Biofuels Program: "For soybeans, you get about 48 gallons per acre. And right now, the idea is for algae, we could get about 10-thousand gallons of oil per acre. So you can see it's about 200 times more oil per acre compared to soybeans."

Instead of prime agricultural land needed for soybeans or corn, pond scum can be grown rapidly on meshes or grids inside huge structures, fed by rooftop solar dishes. It's not a refinery, but a bioreactor.

Bright light comes through fiber optics from one single solar dish on the roof of the lab. Now, imagine what thousands of dishes could do in a massive bioreactor. Bioreactors built not on productive farmland, but on remote desert soils with thousands of