What’s Your Idea?

If you ran the world…how would you fix climate change? What would be your plan to implement clean energy? What renewables would you focus on, and how would you put a price on carbon?

Personally, I am more in favour of a carbon tax than cap-and-trade. It just seems simpler, more difficult for businesses to find loopholes around, and easier to gradually increase over the years. However, I would be happy with either of these two competing propositions…just as long as we can put a price on carbon, so that its true costs are finally reflected in goods and services.

From there, I would leave it to businesses to reduce their emissions through whatever method they wanted…no strict rules. When carbon has a cost, the invisible hand will be able to sort out the best methods. Businesses have spent centuries saving money and maximizing profit. Carbon would just be another form of currency, and we would take a fiscally conservative approach to spending it.

I believe that a multi-faceted approach to renewable energy is essential. At this point, no one technology will be able to replace fossil fuels. In combination, though, it would be possible. Lots more nuclear energy, supplemented with wind and solar (geographically suited to the area – in the future, though, a smart grid for better transport and storage of the energy would be ideal). We could use biomass from sustainable sources – algae looks quite promising, as it grows quickly, has a high content of oil, and its harvesting would have the benefit of reducing eutrophication in affected watersheds. Geothermal power is well worth developing, and in the meantime, it could be used for heating and cooling.

Continuing to burn natural gas, in the place of coal and oil, would be a very acceptable intermediate step. Collecting methane from landfills and farms would provide us with a carbon-neutral substance that’s chemically identical to natural gas.

Improved efficiency standards and cogeneration of heat and electricity could make a big dent in our energy usage, even before changing the source.

That’s what I advocate for – how about you? Leave your responses in the comments.

Advertisements

21 thoughts on “What’s Your Idea?

  1. I mostly agree with you, except I don’t think nuclear is cost-effective. I’d focus more on concentrated solar thermal, wind (both onshore and offshore), and geothermal, but also tidal, some natural gas, some nuclear, solar PV, etc. The more diverse, the better.

    I agree in an ideal world, a carbon tax would probably be slightly preferable to a cap and trade system, but either would work as long as there’s a price on carbon.

  2. I agree with the carbon tax and the multifaceted approach to clean energy. What I think is the most underused source of energy is geothermal. There is a geothermal gradient (increase in heat with depth) everywhere on Earth and it varies with geography and geology. It could be the ultimate source for energy and is already being used in areas where the gradient is high, e.g., Iceland, parts of California and other places. With enough investment in the technology, it could be made cost-effective in many parts of the world.
    Tom
    .

  3. I’d keep it simple. If you price carbon correctly then things like efficiency standards aren’t necessary; the market will take care of that.

    A carbon tax seems the simplest to me, and if it were up to me I would make it revenue neutral.

    On the international stage, I would abandon caps and targets and focus on establishing a universal price on carbon (at fist there could be different prices for developing and developed countries, but there would have to be a clear timeline for price parity). This overcomes a lot of stumbling blocks (money can stay within national boarders) and gives governments flexibility on how to implement the price on carbon (carbon tax, cap and trade or something else).

    As for helping poor countries with adaptation, that can be handled separately, by sending aid directly (in much the same way aid is currently sent). This solves the problem of mitigation being labeled as a wealth transfer scheme, and separates the problems of sending aid ( of which there are many), from the essential requirement of mitigation.

    But simplicity is key. The more complex the system the greater probability of loopholes.

  4. The world runs on fossil fuels and will continue to do so until costs become prohibitive. We are rapidly approaching or have already reached peak oil and gas, which is the point where the easy half has been used up and the more difficult and costly second half will progressively be obtained more slowly and painfully. On the downhill side of peak oil, look for dirty coal and tar sands to fill in some of the voids. http://en.wikipedia.org/wiki/Peak_oil http://www.energybulletin.net/node/53510 Increased reliance on dirty coal and tar sands will not help to mitigate climate change.

    So, as leader of the pack, what would I do? That is a very difficult question, and it would take several books to answer properly. Most important is that actions must be based on all issues facing the world, not just on a few fossil fuel and climate change issues. The following is just the tip of the iceberg, and would certainly be biased against many countries, because of my severe lack of world knowledge.

    Of utmost importance is world economic and political stability. The easy availability of fossil fuels has allowed world population to grow at an astounding rate of 1.7% annually http://dieoff.org/page112.htm. At that rate, population would double again in a little over 40 years. But a number of uncontrollable events such as wars over dwindling energy resources; massive crop failures caused by reduced fertilizer production and climate change; and mass suffering and death due to world economic collapse, anarchy, wars, epidemics, starvation, and other factors will not only substantially reduce this phenomenal growth rate but eventually reverse it. World population will shrink to match the energy and food available to support it. http://www.lifeaftertheoilcrash.net/Archives2008/HeinbergFiftyMillion.html

    So, if I were the big honcho today, I would immediately place a $trillion dollar tax on fossil fuels devoted exclusively to world-wide research of alternative energy sources and development of infrastructures to support it. I would speed up R&D of fusion reactors, http://www.iter.org/, an excellent source of huge amounts of clean energy. I would mandate energy efficient, natural heating and cooling methods for all residences. Wherever possible, residences, public and private buildings, and businesses would be required to have sufficient solar water heating and electric panels, or windmills, or other sources of renewable energy tied to an intelligent grid that minimizes transmission losses and surge energy requirements.

    I would implement a world-wide mass transit system and outlaw all personal vehicles, except those that require no energy from nonrenewable resources. I would impose progressive distance taxes on all products, including food; the farther an item travels to the consumer, the higher its transportation tax. This will encourage local production and consumption.

    While too complex to detail here, I would implement procedures to reverse urban sprawl. Through various popular and unpopular means, people would be encouraged to coalesce into more sustainable communities, where travel distances to work, shopping, and entertainment would be reduced. The idea is that walking, cycling, limited mass transit, and short-distance commutes in renewable-energy vehicles would be the main sources of transportation.

  5. I think you have opened a big can of worms Kate!

    Referring to Danas comment…

    I have doubts about nuclear, partly because I think it is probably an elitist energy system (energy guzzling nations see it as an easy solution). It is technically complicated and fuel is an issue.

    I am not actually impressed by concentrated solar thermal when land use is looked at. The current projects seem to be less productive than a wind farm covering the same amount of land, and wind farms use second hand solar energy! Which makes the poor efficiency of concentrated solar thermal even more astonishing. Having said that, the location where such solar plants are put, may not be suitable for alternatives.

    I like the idea of personal carbon quota systems because it gives freedom to how you use them and a ‘greener’ person could trade their unused quotas, it also means a greater carbon accounting of all the processes and activities that we participate in. However there are obvious management issues to be solved.

    Combined Heat and Power (CHP) seems to be missed. If you are going to use gas, then CHP is an excellent way of using it. The main product of CHP is heat (because that is the main product of most power stations, but most waste it), electricity is a secondary product. But also what many people fail to recognise is that CHP can also provide cooling and chilling services (for summer).
    I don’t know if CHP could be combined with carbon capture, there maybe efficiency and cost problems?

    Wind turbines are being improved all the time and there is a lot of activity here in the UK in developing offshore wind technology. Tidal energy is another area where a lot of effort is being made.
    Bio-gas is also something that should be exploited, although I am concerned that using waste food as a feed stock for anaerobic digesters tries to cover up the supermarkets waste food problem, which is a result of their business model.

  6. I like Jim Hansen’s idea of “Cap and Dividend”, where carbon is taxed at source or at the point of import. The money collected is divided among the citizens to spend as they please – on gas, if they wish. An alternative, actually implemented in British Columbia, is to use the money to offset payroll taxes, thus creating employment. The tax has already survived the tough test of a general election.

  7. Yes to a carbon tax, no to prone-to-exploit cap-and-trade.

    If I ruled the world, I’d also make all currency have a basis – on ergs. Energy is so crucial to our way of life that there should be a reward for generating it, and discovering new ways to do so.

  8. The Ville said, “I like the idea of personal carbon quota systems because it gives freedom to how you use them and a ‘greener’ person could trade their unused quotas, it also means a greater carbon accounting of all the processes and activities that we participate in.”

    I assume The Ville means that the rich American CEO with fifteen cars and a 15,000 square foot house and a yacht and a private jet will get the same personal carbon quota as the poor African farmer with a cart and a 100 square foot hut and a cow and some goats.

    The question was, “If you ran the world…how would you fix climate change?” We are all in this world together, and we all share the responsibility for saving the world for future generations. If I ran the world, everyone would be treated equally. No “Cap and Trade.” Period!

    Let’s take a look at two paragraphs in http://dieoff.org/page112.htm

    “A few simple calculations show why we believe it imprudent to count on technological innovation to reduce the scale of future human activities to remain within carrying capacity. Employing energy use as an imperfect surrogate for per-capita impact, in 1990 1.2 billion rich people were using an average of 7.5 kilowatts (kW) per person, for a total energy use of 9.0 terawatts (TOO; 10 12 watts). In contrast, 4.1 billion poor people were using 1 kW per person, and 4.1 TW in aggregate (Holdren 1991a). The total environmental impact was thus 13.1 TW.

    Suppose that human population growth were eventually halted at 12 billion people and that development succeeded in raising global per capita energy use to 7.5 kW (approximately 4 kW below current US use). Then, total impact would be 90 TW. Because there is mounting evidence that 13.1 TW usage is too large for Earth to sustain, one needs little imagination to picture the environmental results of energy expenditures some sevenfold greater. Neither physicists nor ecologists are sanguine about improving technological performance sevenfold in the time available.”

    Before continuing, let me correct the symbol usage in the above paragraphs. I believe the authors intended to use kWH instead of kW units to represent daily energy usage. Watts and kilowatts have units of power or joules/second, not units of joules which represent energy. Typically electrical energy is measured in kilowatt-hours, where one kilowatt-hour is 3,600,000 joules or 3,600 kilojoules. That is, one kilowatt-hour would be equivalent to applying one kilowatt of power continuously for one hour or for 3,600 seconds, which is obtained from the product 1000 joules/second X 3600 seconds/hour x 1 hour. The appropriate symbol for energy consumption would then be kWH, TWH, etc. For illustration purposes, illuminating a single 100 watt bulb for 10 hours would consume 1000 watt-hours or one kWH of energy. Please keep this example in mind when reading the next paragraph.

    Everyone wants to live like Americans. According to the above cited paragraphs, in 1990 the average poor man consumed 1 kWH per day (equivalent to one 100 watt bulb burning for 10 hours,) the average rich man consumed 7.5 kWH per day, and the average American consumed 11.5 kWH per day. And with increasing numbers of people around the world moving from poor to middle class, the world can no longer support the increased energy demands. Will Americans continue to consume 11.5 kWH and the rich 7.5 kWH per day?

    A fair world leader would insure that everyone gets an equal slice of the limited energy pie. No “Cap and Trade,” where Americans and the rich consume as usual and hand out worthless trinkets to the poor and newly minted middle class for the energy they don’t use.

    OK, so a fair world leader isn’t likely win a popularity contest with Americans and the rich.

  9. The problem with decarbonizing the (short distance (<50 mi) transport is not so large as decarbonizing the agriculture and forestry. I'm advocating biochar for rural areas and for urban-suburban I'm quite along the same lines as you. Essential is to strictly limit the nutrient runoff to oceans and recycling the so called waste to higher ground, doesn't really much matter where as it eventually ends up on the fields on lower grounds… Ocean acidification is a problem here. As more and more fish of the world's foodstock are produced in the fish farms, the instructions should be to strictly limit the feeding in fish farms, which isn't very likely to happen. The overall problem is so huge the multifaceted approach is a must. Unless of course the plants in the biosphere have some mode of metabolism, that hasn't been found yet, of vastly increasing their productivity. Just think of it, the CO2 has risen by 1/3, if there was a linear relationship between plant growth and CO2(g) this would mean all the plants should be 1/3 larger. Have you seen this happen in your neighboroughood?

  10. Roger said: “I assume The Ville means that the rich American CEO with fifteen cars and a 15,000 square foot house and a yacht and a private jet will get the same personal carbon quota as the poor African farmer with a cart and a 100 square foot hut and a cow and some goats.”

    Indeed. However obviously if they did have the same carbon quota, if is unlikely the American CEO would have 15 cars, big house, yacht and jet. Also the ‘poor’ African farmer would have spare credits to sell so that they could upgrade their hut to a house over time.
    If global population went up then personal carbon quotas would go down.
    Technology would be factored in because improved technology efficiency would allow individuals to use their quotas more effectively. Reduced personal quotas due to increased global population would create incentives to improve the energy efficiency of technology and systems.

    The problem is management of such a system. But having said that, we have money which is managed in a similar way for individuals by banks etc. but isn’t directly linked to carbon use. So we have the technology to do it and some people are voluntarily taking part in such ideas:

    http://www.carbonrationing.org.uk/

  11. There are 3 approaches to reducing industrial CO2 emissions …

    1 – Regulation – This is essentially Cap without the Trade option. The government sets a cap on each participant by either saying CO2 must be reduced to some lower level or saying certain mitigating measures must be adopted (perhaps sequestering or using renewable energy). If an industry can pass on its added costs (which depends on competitive factors), industry complies. If they can’t, they shut down. It probably requires a larger government bureaucracy to administer as different rules are needed for different participants (coal, oil, gas) – i.e. more micromanaging – and general taxes need to increase to pay for this bureaucracy. Regulation forces resources to be spent on already efficient participants when they might be better applied to very inefficient players. There is some risk that government will be pressured to make too many exceptions due to the political influence some industries have inside the government.

    2 – Cap & Trade – This is similar to regulation but the government sets an overall cap rather than a cap on each participant. The participants must bid for their share of the overall cap and they may sell their excess share if they can reduce CO2 below the share they purchased. Similarly, they can purchase someone else’s share if they can’t reduce enough, or if it is more cost-efficient for another participant to reduce. Again the high-emitters costs go up, so they may just opt to shut down. If all participants fall behind overall targets, CO2 shares rise in price. Shares fall in priice if many participants become efficient. Industry doesn’t like this option because costs are unpredictable; they depend on the market price. Environmentalists like this option because there is an absolute ceiling on emissions. Governments like this option because it’s easier to sell than taxation. Because shares are traded in an open market, some people fear market manipulation, speculation and trading agencies getting rich. Also, the overall cap needs to be meaningful or shares will be inexpensive and no industry will really reduce. The shares must be bought initially (not awarded) or their value will not be real or initial participants get an unfair advantage.

    3 – Taxation – This is straight-forward – more CO2 emissions = more taxes paid. If a participant is average efficient, they will be competitive with other participants that need to pay the tax as well. Depending on consumer options and the difficulty of becoming efficient, a whole industry might just continue the status quo and pass on costs. That is the major disadvantage of taxation – there is no guarantee that CO2 emissions will go down, only that costs will go up. If taxes are too low or gradually introduced, they just become a cost of doing business. They need to be heavy and they need to be ramped up quickly to be effective. The question then remains, where do the taxes go? If they go into general revenue or into reduction of other taxes, then that capital is not directly available for CO2 reduction initiatives.

    Some hybrid schemes have been proposed where the market price has a ceiling after which taxes cut in instead. These schemes tend to have the advantages and disadvantages of whatever is being blended.

    If taxation means taxing the CO2 released by both the production and consumption of a given energy rather than taxing energy based on the energy’s delivered CO2 content, then taxation versus cap and trade are relatively equivalent. Oil sands sourced energy will be at a disadvantage either way – CO2 taxation or cap and trade.

    Those in the oil patch who prefer taxation may be hoping taxation will be based just on the delivered CO2 content. Since it will all be commingled at the consumer end, this will allow CO2 intensive oil sands energy to hide under the cloak of cleaner energy. If that happens, an incorrect price signal will be pushed through the energy market.

  12. Oddly only SoundOff mentioned regulation, which has a good track record (e.g. with vehicle efficiency standards). IMHO the whole emphasis on market solutions is a huge propaganda success on the part of the right wing. People should question their assumptions.

    Interestingly, in Australia where the public is being faced with this issue in real time, polling shows that the public thinks regulation is not such a bad idea.

    Re bureaucracy, there’s no evidence that more is required for regulation.

  13. Steve Bloom said, “…IMHO the whole emphasis on market solutions is a huge propaganda success on the part of the right wing. People should question their assumptions.”

    People should question their integrity. When every single Republican candidate for the U.S. Senate is in denial about global warming and climate change, any sane person would know that this cannot be based entirely on assumptions. When 75% of the U.S. news media deny or are skeptical of (paid for by big oil and business) global warming and climate change, and 75% of the general U.S. public, presumably from reading the biased news, also deny or are skeptical of global warming and climate change, then Republican candidates would be stupid to “believe” otherwise, else they would not be elected come November 2.

  14. @ Steve Bloom

    “IMHO the whole emphasis on market solutions is a huge propaganda success on the part of the right wing. People should question their assumptions.”

    When I look at the market, I see something that works amazingly well in most situations, though it is the areas where this is not the case that we continuously hear about. But this shouldn’t deter from the fact that the market works amazingly well.

    When it comes to regulation, people can point to well designed and implemented regulations, but it is very easy to see examples of bad regulation. Or as is frequently the case, unintended consequences. In regards to climate and carbon (two things that affect a large amount of stuff) depending on regulations seems dangerous. Just think how Exxon will try and create loopholes in any proposed regulation.

    And then we get into the whole ‘efficiency paradox’, where efficiency results in us doing more, rather than emitting less. A price on carbon solves that problem nicely.

    And finally, IMO just because something is ‘right wing’ doesn’t mean it is problematic. No side of the political spectrum has a monopoly on good ideas.

  15. @ScruffyDan “When I look at the market, I see something that works amazingly well in most situations, though it is the areas where this is not the case that we continuously hear about. But this shouldn’t deter from the fact that the market works amazingly well.”

    I’d agree that the market works amazingly well in achieving its own goals; but since the market (deliberately) externalises so many costs (and therefore places no economic value on factors such as quality of life, environment, biodiversity) in the bigger picture it can surely be argued that the market works incredibly badly.

  16. Colin, just because a system fails to work because human understanding of the environment has changed (or humans have rediscovered the environment), doesn’t mean it should be dumped. It probably needs to be modified to take into account a new understanding.

  17. I think experience from around the world shows that cap and trade is too vulnerable to special interests. in the EU, it was recently reported (by sandbag i think) that the european cap and trade has only mitigated a piddling 80M tonnes of carbon.

    have you seen the story of stuff’s brilliant expose on cap and trade?

    http://www.storyofstuff.com/capandtrade/

    Apparently, British Colombia have implemented a tax-and-dividend approach that works well, championed strongly by James Hanson:

    http://www.abc.net.au/environment/articles/2010/09/24//3021174.htm

  18. British Columbia’s (where I am from) Carbon tax is similar to James Hansen’s idea (ie a revenue neutral carbon tax), but here in BC revenue neutrality is archived by reducing Income tax. Hansen’s idea involves mailing cheques to people. In BC only low income families get rebate cheques since they don;t pay much income tax.

    And as an extra incentive to ensure that the carbon tax remains neutral the finance minister receives a paycut if the government collects more that it returns.

  19. I’m not sure how so much of the environmental community became convinced that a cap-and-trade plan is more easily exploited than a carbon tax. Think about all the subsidies for fossil fuels. Think about what happens when politicians respond to public anger over fuel prices by asking why we even need a gas tax when we can cover the transportation budget with the carbon tax. Think about how much time the House spent making sure the Waxman-Markey act was especially friendly to those dependent on coal power (the same will happen if you try a tax approach.) The crucial difference between the policies is that with cap-and-trade, so long as the cap is the cap, all this can happen and politicians can try to get more subsidies for industries hit hard by the cap, and it doesn’t undermine the effectiveness of the policy — it only undermines the economic efficiency. Make it easier for one to pollute, someone else has to cut back at a higher cost. With a carbon tax, politics will still happen, but it will undermine the effectiveness of the policy.

    That said, I’ve been considering the regulation approach more seriously since Bill Gates endorsed a mostly regulation approach in a recent interview — I forget where I read it. He believes the correct emissions target is zero. If he’s right on that I do think that changes things somewhat in favor of regulation. If the target is a 50% reduction, a market based approach means this plant doesn’t need to reduce emissions if this other plant can do it more cheaply, but if the target is 0 the market has less to offer. And a policy of making gas literally so expensive no one can afford it is a political non-starter.

    I think a pure regulation approach would work fine for electricity. The way I would do it is have a national target for Kilowatt-hours-per-ton-CO2 that rose exponentially over time, and very quickly to the point that plants would have to be carbon neutral in less than two decades, but have the limit apply only to new plants and upgrades of old ones, so basically existing coal plants could remain in service without any special taxes for their 30 year lives but they would be phased out. It’s harder for me to imagine a regulation approach to cars though — it’s not clear at this point whether you get to zero by getting people out of cars, with electric or hydrogen powered cars, or carbon neutral biofuels possibly from algae. And I’m not sure how I’d write a regulation that would encourage any of these to happen and make it likely to be whatever turns out to be cheapest.

    I would also add that we should continue to improve things like efficiency standards regardless of whether we do a market or regulation based approach. It is a big mistake to model consumers as these accountants considering the full lifetime costs of their purchases with appropriate discount rates — no matter how beautiful and simple this makes economic theories, this is empirically not the case. Leaving these out of the picture because “hey, now that we’ve made the market price things correctly this is taken care of anyway!” means companies still sell cheap, inefficient appliances because most people will buy them and then go on to grumble about rising energy prices and any taxes or regulations seen as responsible. Things like CAFE standards and appliance efficiency standards and home insulation standards have shown themselves to be effective ways to save people money.

    I would like to change the CAFE standards to be based on average gallons-per-mile rather than miles-per-gallon, but require more efficient vehicles in either case!

  20. nuclear is not carbon neutral, and will produce [citations needed] due to uranium extraction from poorer ores. it’s very hard to do renewables and nuclear at the same time too, as they don’t interact nicely.

    from reading your article, i was wondering if you could find Raj Patel’s book “the value of nothing” interesting.

    cheers!

    peter hartmann

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.