Hopefully you’ll read this entire Wizbang piece on Gore’s profligate energy usage — especially compared to George Bush’s ecofriendly Texas home. There are surprising facts here I didn’t know, such as:
Al Gore’s mansion uses more than twice the electricity in one month than the average household does in an entire year.
and on Bush’s house, from Treehugger.com
Only your dispassionate Canadian correspondent could write this without colour or favour, but is it possible that George Bush is a secret Green? Evidently his Crawford Winter White House has 25,000 gallons of rainwater storage, gray water collection from sinks and showers for irrigation, passive solar, geothermal heating and cooling. “By marketplace standards, the house is startlingly small,” says David Heymann, the architect of the 4,000-square-foot home. “Clients of similar ilk are building 16-to-20,000-square-foot houses.” Furthermore for thermal mass the walls are clad in “discards of a local stone called Leuders limestone, which is quarried in the area. The 12-to-18-inch-thick stone has a mix of colors on the top and bottom, with a cream- colored center that most people want. “They cut the top and bottom of it off because nobody really wants it,” Heymann says. “So we bought all this throwaway stone. It’s fabulous. It’s got great color and it is relatively inexpensive.” Hmm, back to that vote about the Greenest President?
A group of MIT students have started a company to commercialize their invention.
It takes about six minutes for a firefighter with a full load of gear to reach the top of a 30-story building by running up the stairs–and when he gets there, he’s tired. A group of MIT students have designed a rope-climbing device that can carry 250 pounds at a top speed of 10 feet per second. They have a contract to make the climbing device for the U.S. Army for use in urban combat zones, and they hope to make it available to rescue workers.
A Georgia redneck, a Florida redneck and a Texan were sitting around a small catfish pond and noticed some catfish. They felt it would be a good idea to have a fish fry, but they didn’t have a fishing pole or net. They started to ponder techniques to catch some fish for the fish fry, when the Georgia boy dove in the water and tried to catch one. He dove in, splashed around and after 5 minutes of no luck he got out, frustrated and sat back down. The Florida boy then got up, went to his truck and got a shotgun. He began shooting at the catfish. He expended over 30 rounds and he too was unsuccessful. Frustrated, he sat back down. The Texas boy sat for a bit, finished his beer, and cut the top of the beer can off with his pocket knife. Then he calmly stood up and walked over to the small pond and dipped his empty beer can in the water and filled it up. Then he walked to the top of the dam and poured the water on the ground on the back side of the dam. He walked back to the pond and got another can full of water and as he walked by the 2 other rednecks, he stated with a drawl, “You boys better git comfortable, this may take awhile.”
Michael Yon has posted an open letter from Command Sergeant Major Pippin — which begins with the quote above. “…this may take awhile” is the truth. The consequences of ignoring that truth are so horrible I don’t want to write about it here.
I recommend CSM Pippin’s letter to you, which closes:
The American Armed Forces has an empty beer can and the war in Iraq is like that small catfish pond. If the American people will be patient and supportive, we’ll have that fish fry.
I appeal to my colleagues in Congress to step back and think carefully about what to do next. Instead of undermining Gen. Petraeus before he has been in Iraq for even a month, let us give him and his troops the time and support they need to succeed.
Politicians much prefer increasing the cost of oil by cap and trade schemes. Why? Because it offers them a whole new sandbox for creating special goodies for special interests.
So SeekerBlog is on the lookout for objective studies comparing revenue-neutral carbon taxes to cap and trade schemes. Today I noted that Greg Mankiw has linked to this American Consumer Institute study lead by Robert Shapiro, former Undersecretary of Commerce for Economic Affairs:
Executive summary [PDF]
Full Report [PDF]
A key benefit favoring a very simple carbon tax is the predictability of energy costs which has a big impact on investment decisions. For more, read at least the executive summary, which summarizes the shortcomings of Cap-and-Trade programs this way:
Although both policy approaches result in significantly higher prices for fossil fuels, carbon taxes also are much less vulnerable to evasion and market manipulation, providing a more stable and transparent system for consumers and industry alike. A cap and- trade approach also would produce much greater volatility in energy and energy related prices, and be much more complex to administer. The ineffectiveness of the cap and trade system is currently exemplified by the European Emissions Trading Scheme (ETS), under which European CO2 emissions actually increased in 2005. The European Environmental Agency has projected that under the ETS, the EU is likely to achieve no more than one-quarter of its Kyoto-targeted reductions by 2012. Moreover, much of those “reductions” will simply reflect credits purchased from Russia or Eastern European countries, with no net environmental benefits.
The best policy would approximate a revenue-neutral trade of the new carbon taxes for existing taxes. Ideally $1 of carbon tax would be offset by $1 of investment taxes [dividends and/or capital gains]. If you don’t like reducing investment taxes, then perhaps a direct-to-taxpayer rebate of the total carbon tax takings [or offsetting regressive payroll taxes].
Yale economist William Nordhaus has probably written more on climate policy economics than any other researcher. E.g., on the topic of this post, see Life After Kyoto: Alternative Approaches to Global Warming Policies [PDF]. Like most economists, Nordhaus refers to these alternative policies as “price type” = harmonized carbon taxes, and “quantity type” = cap and trade schemes. See his section VI. Comparison of Price and Quantity Approaches where he discusses the ten key differences between the competing policies.
On the issue of rebating carbon taxes to achieve revenue-neutrality, Nordhaus writes
If the carbon constraints are imposed through taxes that are then rebated in taxes with approximately the same marginal deadweight loss as the carbon taxes, then the overall efficiency loss from taxation will be unchanged.
BTW, there is a new advocacy center called the Carbon Tax Center whose website offers lot’s of useful resources on this policy issue, including links to the Shapiro study, and to this critique of recent misleading punditry.
Hint: the answer isn’t ethanol.
This op-ed by David Victor is highly recommended. Victor discusses the three lessons to be learned from Brazil’s experience.
…Guided partly by Brazil’s apparent success, American policy-makers are crafting new mandates for ethanol, and flex fuel vehicles are now taking shape. We have the impression that ethanol is king.
In reality, ethanol is a minor player in Brazilian energy supply. It accounts for less than one-tenth of all the country’s energy liquids.
The real source of Brazil’s self-sufficiency is the country’s extraordinary success in producing more oil…
This paper may be a bit out of date, but I found the in-depth discussion of the challenges facing a cap & trade system [PDF] very illuminating:
This monograph explores the political, economic, and technical issues that policy makers must address prior to creating a complete emission trading system. It argues that, when viewed in totality, the hurdles to be cleared are so daunting that a sensible emission trading system is infeasible in the foreseeable future. It also argues that the diplomats who crafted the Kyoto Protocol have painted themselves into a corner. In Kyoto they achieved agreement by setting emission targets that would be politically impossible to implement without an emission trading system; yet they deferred discussion of all the details about how the system would operate. During their first high-level meeting after Kyoto—held in November 1998 in Buenos Aires—diplomats set a hopelessly optimistic timetable for resolving by late 2000 all 152 “elements” left outstanding in Kyoto. Individually, nearly every element—such as “compliance,” “reporting,” and “independent certification and verification”—is difficult to settle; together, the task is impossible.
…With the clock ticking towards 2008, and the fate of the Kyoto Protocol hanging in the balance, what should be done? Should political leaders soldier on, ratify the protocol, and hope for the best? Should they retain the targets and trading architecture that they created in Kyoto but stretch out the timetables to make it easier to comply? Or should they use Kyoto’s troubles as an opportunity to construct a different framework for slowing global warming?
Most governments plan to soldier on, but that option has the least to recommend it because it forces countries to select among three dead ends...
…These reasons explain why governments are now following the worst strategy—implementing all three of the Kyoto-saving devices simultaneously.
The problem with trading is that it requires solving a nearly impossible problem before trading can begin: governments must allocate the emission permits. Because no nation knows its future level of emissions or the cost of controlling emissions, no nation will know how many permits it will need. Diplomats, properly trained to protect national interests, will seek allocations based on a worst-case perspective. They will imagine scenarios where their nation’s future emissions and costs of control are much higher than expected. Each will demand a large share of the total number of permits and feel harmed by the share awarded to other countries. The difficulty of allocating benefits and burdens is hardly new to international politics; allocation will confound any collective effort to slow global warming. But emission trading makes solving the allocation problem much harder—chapter 2 explores the three reasons why.
Technorati Tags: Kyoto
Sustainable development — the notion that boosting economic growth, protecting natural resources, and ensuring social justice can be complementary goals — has lost much appeal over the past two decades, the victim of woolly thinking and interest-group politics.
This Foreign Affairs article from January 2006 is well worth a careful read:
…Yet even as sustainable development has become conventional wisdom over the past two decades, something has gone horribly wrong. Because the concept stresses the interconnection of everything, it has been vulnerable to distortion by woolly thinking and has become a magnet for special interest groups. Human rights watchdogs, large chemical companies, small island nations, green architects, and nuclear power plant operators have attached themselves to the fashionable notion only to subvert it for their own ends.
…The only way to fix the mess with sustainable development is to return to Brundtland’s fundamentals. Sustainable development must be viewed afresh, as a framework for every aspect of governance rather than as a special interest. It can be revived by following four courses of action: making a priority of alleviating poverty, dropping the environmental bias that has hijacked the entire movement, favoring local decisions over global ambitions, and tapping into new technologies to spur sustainable growth.
GREEN WITH ENVY
…The tactical success of environmentalists, especially well-organized multinational NGOs based in industrialized countries, in moving their issues to the top of the sustainable development agenda is unhealthy — even for environmentalism. Easy pickings in the UN have distracted environmentalists from the more urgent need to articulate ways in which they can contribute to the other pillars of sustainability: development and social justice.
… After being hoodwinked at Rio, the developing countries made sure that the 2002 World Summit on Sustainable Development did not include the word “environment” in its title.
… In the area of climate change, for example, the GEF’s funding strategy is to push for the development of technologies such as solar and wind-generated energy, which emit no carbon dioxide, a leading cause of climate change. These are darlings of environmentalists in the North, who claim that these exotic technologies, although currently expensive, will become cheaper with time. That argument is of dubious relevance to the 1.6 billion people who lack electricity today. For them, real progress usually comes in the form of less sexy but more cost-effective options, such as diesel generators and grid extensions.
THINK LOCAL
The third step toward recovering sustainable development is remembering that the theory works only if it is approached as a hardheaded calculation about tradeoffs… Cocktail-party visions of sustainability properly laud the benefits of electricity, for example, as a cure for darkness and a substitute for costly candles. Yet the diesel generators that bring electric lighting to the most remote areas are, in some respects, a paragon of unsustainability: diesel, which is derived from oil, is an exhaustible and polluting resource. Poor communities love diesel-generated electricity nonetheless: it has brought them television, high-quality lighting, and refrigeration, which were unavailable before. Similarly, whenever multinational environmentalists have sought to ban DDT worldwide, developing countries have resisted, wisely pointing out that the pesticide is crucial to controlling mosquitoes and other disease carriers in poor regions such as West Africa.
The last decade of UN summits propagated the myth that sustainable development can promote international harmony through “global action plans” and “universal principles.” In fact, providing sustainability is a highly political activity governed by interests and resources that vary widely from one place to another… The only way to craft serious goals is from the bottom up, focusing on responsible systems of government rather than disconnected global processes to do most of the work. But this approach, although pragmatic, is less satisfying ideologically and more demanding — and therefore ignored by cocktail-party globalists.
The current disconnect between global ambitions and local realities helps explain why efforts to curb climate change, for example, have achieved so little. Although the problem’s effects are inherently global, its causes are resolutely local. In most of the world, including many developing countries, domestic authorities choose what energy system to use, and because they decide how much fossil fuel to consume, they effectively control emissions of carbon dioxide. Globalists in industrialized countries are clamoring for “engaging” the governments of developing countries by pressing them to accept caps on emissions. But every major developing country has rejected the demand as an unfair limit on their development, leaving reform at an impasse.
TECH SAVVY
Any serious effort at sustainable development will also need to harness the technologies that most affect economic growth and mediate the consequences of growth for the environment. Unfortunately, the sustainable development apparatus has been strikingly ineffective on technological matters…
It makes me happy to see five smart profs articulating good policy [such as high oil taxes, banishing tariffs on imported ethanol, banishing subsidies on corn ethanol, and PHEVs]:
…when STANFORD gathered five faculty members to talk about the implications of U.S. dependency on foreign oil, we expected grave declarations of alarm. But their concern did not square with the growing chorus of citizens and elected officials about why reducing this dependency is so important.
On the next five pages, faculty from political science, economics, law and engineering explain why the debate about energy security is missing the point, and what they think needs to be done.
STANFORD: How would you frame the issue of dependency on foreign oil? What should we be concerned about?
David Victor: The problem is not dependence per se. In fact, dependence on a world market produces enormous benefits, such as lower prices. Nor is the problem that energy’s essential role in the economy means that dependence must be avoided. The real problem is that energy - oil, especially - doesn’t operate according to normal market principles. Something like 75 percent of the reserves of oil and gas are controlled by companies that are either wholly owned or in effect controlled by governments, and there’s enormous variation in how those companies perform. Some of them are just a disaster, like [Mexico’s state-owned oil company] Pemex, and others can work at world standards, like Saudi Aramco or Brazils Petrobrás. Some of these governments, such as Venezuela, use oil revenues for political purposes that undermine U.S. influence. High prices do not automatically generate new supply or conservation, partly because suppliers can drop prices to undercut commercial investment in alternatives. Second, we have what has become known as “the resource curse.” There’sa lot of evidence that the presence of huge windfalls in poorly governed places makes governance even worse. Revenue that accrues to oil-exporting governments is particularly prone to being misspent, often in ways that work against U.S. interests.
…Victor: I like John’s term “vulnerability,” and it leads us to various kinds of actions to reduce our vulnerability to the market rather than trying to make us completely independent. One of them has been around since the ’70s - building and coordinating strategic stockpiles so that they are supplied into a single world market. Traditionally that could be done by the major Western countries because they were the major oil consumers. One of the big challenges for policy makers today is how to get India and China to think about the operation of this world market in the same market-based way that we think about it, and to get them to build up those stockpiles and coordinate them with our own. There’s some evidence that that kind of coordination can reduce our vulnerability.
…Victor: …Although the public is seized by the high price of energy, the major energy companies are seized by concerns that prices are going to decline sharply. If there is a recession, which would dampen demand for energy, or the capacity to produce oil around the world improves, then prices will decline. It has happened in the past. That fear really retards a lot of investment because these investments have a very long capital lifetime, and you need to protect them against low prices over an incredibly long time horizon.
…Michael McFaul: …Why is Hezbollah so well armed? Because of Iran, which uses oil revenue for strategic purposes; it is not used for investing in a company or investing in the market per se. This is part of the problem of the “resource curse” David referred to. If oil is discovered in a country before democratic institutions are in place, the probability of that country becoming democratic is very low. In countries where the state does not rely on the taxation of its citizens for its revenues, it doesn’t have to listen to what its citizens want to do with that money. So instead of building roads or schools or doing things that taxpayers would demand of them, they use their money in ways that threaten the security of other countries, and, ultimately, their own.
Victor: It’s important that we not overstate the extent to which users of energy are going to respond automatically to high prices, and the personal vehicle is a great example. Fuel accounts for about 20 percent of the total cost of operating a vehicle. Traditionally it’s only been 10 or 15 percent, but we are much wealthier today than we were three decades ago when we had the [first OPEC oil embargo]. I think that helps explain a lot of the sluggishness in response in the marketplace. People are buying smaller, more fuel-efficient cars, but that trend will only go so far because there are other factors that determine what kinds of vehicles people purchase. In the United States and most advanced industrialized countries, most oil is used for transportation, where oil products have no rival. It is hard to switch…
Now we get to discussing the real energy security issues, and why high US oil taxes are a good thing [as opposed to high prices, which go to producers]. Not explained here is the fact that high taxes on oil lead to less consumption leading to lower oil prices and less income to dangerous countries.
McFaul: …The Soviet Union’s most dangerous adventures in the Third World correlated with the high oil prices in the 1970s. You can see the direct effect. And when the prices came down, the Soviet Union collapsed. The same is true with Iran today. They are being very aggressive in the region - in Iraq, in Lebanon, in Afghanistan - trying to become the Middle East hegemon. This would not be happening if they didn’t have all these clients - Hezbollah, Hamas, their friends in Iraq - that they can support with millions of dollars. Going back a few decades, where did Osama bin Laden come from? Where did support for the Taliban come from? It came from this tax that David is talking about. If we’re talking about security issues and oil, this is much more serious than supply disruption to the United States.
Victor: I agree with Mike 100 percent. If you look at where the revenues are going from Iran, Venezuela and so on, there’s a long list of folks who are doing things that are contrary to our interests with the money that ultimately is coming out of the pockets of American consumers. Dealing with that is job one.
David Victor’s testimony before the U.S. Senate Committee on Energy and Natural Resources — makes the case very well for the carbon boon of switching future Indian power generation from dirty coal to nuclear.
The debate over the India nuclear deal has been too one-dimensional. Nearly all commentary has focused on whether this proposal would undermine efforts to contain the proliferation of nuclear weapons. Dissent along these lines has been based on a series of largely overblown claims. And the singular focus on proliferation has allowed the debate to lose sight of other ways that this deal is in the interests of the United States and India alike.
Chief among those other reasons is environmental. The fuller use of commercial nuclear power, if done to exacting standards of safety and protection against proliferation, can play an important role as part of a larger strategy to slow the growth in emissions of the gases that cause global warming. That’s because nuclear power emits essentially no carbon dioxide (CO2), the most prevalent of these so-called “greenhouse gases.” While this benefit is hardly the chief reason for initiating this deal, with time it will become one of the main benefits from the arrangement. The nuclear deal probably will lead India to emit substantially less CO2 than it would if the country were not able to build such a large commercial nuclear fleet. The annual reductions by the year 2020 alone will be on the scale of all of the European Union’s efforts to meet its Kyoto Protocol commitments. In addition, if this arrangement is successful it will offer a model framework for a more effective way to engage developing countries in the global effort to manage the problem of climate change. No arrangement to manage climate change can be adequately successful without these countries’ participation; to date the existing schemes for encouraging these countries to make an effort have failed; a better approach is urgently needed.
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