Buying a stairway to heaven?
Just in the last year or so, a new type of scheme for reducing personal carbon emissions has appeared, the remarkably painless purchasing of “carbon offsets”. Carbonfund.org claims to neutralize a person’s CO2 footprint on the Earth for the low, low price of $99 per year, plus if you act now they will throw in an extra 5 tons for free! And you get a pen! Prices listed here range from $5-30 per ton of CO2 from a variety of similar organizations around the world. The average U.S. citizen is responsible for about 20 tons of CO2 release per year.
Compliance with Kyoto, a mere 5% reduction in carbon emissions, was forecast by Nordhaus [2001] to cost a few percent of GDP globally. The cost to stop emission completely and immediately may not even be calculable. Carbonfund.org promises zero net emissions, for a fraction of 1% of the average U.S. income. Can this possibly be real, or are we talking indulgences and snake oil?
The idea behind carbon offsets is built upon the foundation of carbon emissions trading established by the Kyoto Protocol, a scheme called cap and trade. Carbon emissions for industries are capped at some level by regulatory permits to emit CO2. If a company is able to cut its emissions below that level, it can sell its emission permits to another company. The cuts in emissions are thereby steered, by the invisible hand of the market, to the cheapest and most efficient means. Cap-and-trade has worked well for reduction of sulfur emissions in the U.S., that are responsible for acid rain. CO2 emission is intrinsically even better suited for cap-and-trade, because it is a truly global pollutant, so it matters not where the CO2 is emitted.
The carbon emissions market requires a certification process to verify any reduction in carbon emissions. Carbonfund.org and the other similar operations take donations from people like me and use the money to pay for renewable energy sources like solar cells or wind farms, that would not have been built otherwise. For these efforts, they receive credits for reduction in carbon emissions that are certified as valid, and therefore eligible for trade in the emissions market. Instead of trading that emission credit, carbonfund.org “retires” it, so that it isn’t used to balance higher carbon emission from another source. The certification process from the emissions market has an unintended benefit of providing an independent way to verify the carbon impact from sending money to organizations like carbonfund.org. It's a nifty idea.
The only piece of this picture that I don’t personally believe is carbon credits for land-use changes, reforestation. This was a U.S. idea in the Kyoto negotiations, back in the day when we were still pissing in the tent from the inside. It is true that forests hold more carbon per square meter than bare land does. However, estimating the exact amount of carbon in a forest is not so easy, because most of the carbon is in the soil, where its concentration is variable and laborious to measure. Could a forest that was cut and burned last year be claimed to be a carbon sink this year, as the forest grows back? What if the forest is cut again next year, will the carbon credits issued this year be chased down and revoked? To its credit, Carbonfund.org is quite up front about these sorts of concerns, and gives donors the option to invest their money in ways that are more transparent.
What I don’t understand is why entrepreneurs don’t invest in carbon reduction certificates, like carbonfund.org does, but rather than retire the certificates, sell them in the carbon emissions market. The going rate for emissions permits in the market is on the order of $20-30 per ton, while carbonfund.org claims to reduce carbon emissions for about $5 per ton. Seems like one could make a killing. I guess that's the whole point of emissions trading. But the discrepancy in prices makes me a bit suspicious.
What about the discrepancy between the huge projected costs for nation-scale carbon cuts versus these cheap fixes for the emissions of an individual? I believe what we are looking at is a situation known as “low-hanging fruit”. If everyone in the U.S. decided to become carbon neutral, the price for doing it would rise, because the easy fixes would be used up. So the CO2 emission reductions achievable by purchasing of carbon offsets, at the low, low price of $99 per year, are almost by definition small relative to the overall scale of the problem. It would take more than $99 per American to prevent global warming; for that we will have to actually reduce our CO2 emissions. Carbon offsets cannot do it alone.
Carbon offsets are beneficial in the meantime, however, because they do cut carbon emissions, and the money stimulates development of alternative energy technologies. The bottom line is, despite my deep initial skepticism, I now see how carbon offsets could actually work as advertised, enabling an individual to live a carbon-neutral life, even in the United States. This is a terrific idea. Sign me up!
Nordhaus, W.D., Climate change - Global warming economics, Science, 294 (5545), 1283-1284, 2001.
29 May 2006 at 11:56 AM
I think looking up your local sustainable farm and buying from them might be a more direct way of turning money into topsoil.
But you won’t get a free plastic disposable pen.
29 May 2006 at 12:08 PM
I completely agree with David that carbon credits for renewable energy are a good idea, but the ‘plant a tree and feel good about flying’ idea (popular in the UK) is dodgy.
The carbon sink ideas seems to have been introduced to allow nations to emit more CO2, and some of the schemes funded by the Clean Development Mechanism sound pretty bad (such as growing eucalyptus plantations on former rainforest land).
However, I think that rainforest protection and the restoration of degraded ecosystems (eg the re-flooding of Borneo’s drained peat swamps, which could reduce massive CO2 emissions from carbon fires) should benefit from carbon credits. After all, rainforest destruction is a very large source of greenhouse gas emissions, and most rainforests are in developing countries which desperately need the funds to stop their destruction. I am thinking of proposals which the Coalition of Rainforest Nations putto the UN Conference in Montreal last year. If successful, this could even draw many developing nations into a binding agreement. Meantime, there are some very good projects and organisations already which individuals and companies could fund via carbon credits, since money is desperately needed now.
29 May 2006 at 12:18 PM
Are those the same people who think thety can compress the CO2 and sequester it forever at high pressure underground [until it leaks] and still gain energy by burning coal? They don’t have any plan to get energy that will work with the society and infrastructure we now have. Solar and wind energy are neither free nor 100% safe and they don’t happen when and where needed. The only realistic thing that can be done NOW is to convert all coal-fired powerplants to nuclear. That conversion hasn’t happened because most people are paranoid about all things nuclear. The reason is that most people, including Science graduates, have never heard of background radiation, and they don’t know that burning coal puts hundreds of thousands of tons of uranium into the air. I would attach the papers if this email device had an attacher. Look at these URLs to get part of what I would like to send:
http://en.wikipedia.org/wiki/Background_radiation
http://www.unscear.org/unscear/en/publications/2000_1.html
http://www.ornl.gov/ORNLReview/rev26-34/text/coalmain.html
Note that it is not possible for a reactor which has 2% enriched uranium to explode like a bomb. A bomb requires at least 90+% enriched uranium or pure [99+%] plutonium. See the December 2005 issue of Scientific American for a reactor that consumes its own waste to generate additional power. Storage problem solved.
[Response:It’s true that nuclear has seen a resurgence of interest for the reasons you mention. To be fair to the issue, I must point out that Chernobyl had the capacity to make a large swath of the Ukrainian breadbasket, and the city of Kiev, uninhabitale essentially forever, if the core meltdown had reached the water table. Reactors don’t explode like nuclear bombs, but breeder reactors make it a lot easier for people to make bombs. David]
29 May 2006 at 12:35 PM
Thought u guys might find this interesting. the world economic forum has a prediction market for severe weather this year. currently it’s predicting over 119 events this year.
http://weforum.newsfutures.com/market/dpmlin/market.html?symbol=WEATHER
peace,
A
29 May 2006 at 12:46 PM
There are huge deserts in almost every continent of the world where solar energy is abundant and can be stored. I don’t think we are making efficient use of them.
Carbonfund.org sounds interesting.. Kind of like the least we could do.. I buy it.
29 May 2006 at 1:30 PM
I agree that making a $99 contribution towards dealing with global warming, which is basically what this is, makes a certain amount of sense, but as the article points out only for a relatively small number of people. After all, someone has to switch to non carbon sources of energy. We can’t all continue to use fossil fuels to the degree we have been and pay someone else to do otherwise. Who are the others?
With respect to comments 1 and 2, I think it is a big mistake to focus on one or two possible solutions. It seems clear we are going to have to do a lot of things, including some that may have some serious problems associated with them. With respect to nuclear power, I think those who tout it as “the solution” are fantasizing. The potential dangers and complexity of nuclear power mean that the amount of power we can expect from it is limited. Properly regulated nuclear power will be only be part of the solution, and it may be a relatively small part. On the other hand, those who think we can do it all with solar, wind, and other renewable sources are also dreaming. Like it or not, increased use of nuclear power and carbon sequestering, with their attendant poblems, are also going to be needed.
29 May 2006 at 1:30 PM
This is a timely post for me, since I taking a long-haul flight to a conference this summer, and was considering buying carbon offsets. I was initially rather skeptical about the concept myself, so it’s good to get an expert opinion. I trust climate scientists will also be sure to be “carbon neutral” when travelling to all of their conferences?
[Response:There’s a lot of CO2 in beer, I don’t know where that comes from…. David]
Perhaps in the near future scientific conferences will be conducted over the web anyway, thus removing such dilemmas…
29 May 2006 at 1:36 PM
For a very thorough overview of this issue and the current state of the market, I would counsel your readers to an excellend overview artticle at Salon.com:
Definition Clarification
Verification: the process of reviewing documents, contracts, materials to ensure that a provider has met its obligations to its customers. (CarbonFund does not have this)
Certification adherence to a standard for retail carbon offsets (no such standard yet exists).
As for your question about pricing — the reason arbitratge doesn’t happen between the markets is that Brussels uses CDM as an escape valve on a mainly allowance-based market. Credits retired by voluntary groups in the US have no hope of being included in that market.
Finally, while carbon offsets represent an opportunity to discretely reduce your carbon impact, they also represent a great way to talk about climate change, your perspective and potential solutions.
TerraPass does not include land-use changes in its portfolio and is independently verified program.
Disclosure: I run TerraPass.
29 May 2006 at 1:54 PM
In response to comment 1, see:
Nuclear energy can’t solve global warming
Other remedies 7 times more beneficial
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2005/08/07/ING95E1VQ71.DTL&type=printable
or
http://tinyurl.com/d5sdn
29 May 2006 at 2:13 PM
There is another company, that does a similar job for years now. It’s http://www.carbonneutral.com/ , formerly known as Future Forests. Although I bought one or two trees from them, I opt for own investments by now. Even if you cannot invest enough money to buy your own renewable energy facility, you can buy shares or borrow money to a company, that invests in renewables. You even get money back, eventually.
29 May 2006 at 2:14 PM
A free book about nuclear power is available online here:
http://nuclearpowervillainorvictim.engr.wisc.edu/
29 May 2006 at 2:22 PM
I think this is a great idea, it may not solve all the worlds problems but it is definitely a step in the right direction. What I don’t understand is why would they want to send everyone a pen? I can’t imagine the pen luring in indecisive donors, so it is just another piece of junk that piles up in ones home. One pen may not seem like anything much, but I think it encompasses our weakness which is driving us to doom; the affection for cool/cute objects we can hold and admire, however useless they may be.
It makes me upset that as we are striving to reduce energy consumption, we are wasting it on manufacturing junk.
[Response: Ah, but think of all the carbon sequestered in nonbiodegradable plastic pens in all the landfills around the world! Quite seriously, this does make me wonder a bit about the possibility of carbon sequestration through formation of nondegradable organic compounds like certain plastics. I wonder if that might be easier to do than artifically making limestone out of silicates. –raypierre]
29 May 2006 at 2:50 PM
I think there is some confusion here because of ambiguous use of the term “carbon offset”. Just as a grocery store gives you the option of buying an organic avocado or a convention avocado, the so-called “carbon offsets” sold by Carbonfund.org effectively give you the choice of buying “organic” renewable energy or conventional fossil-fuel energy. You can exercise your purchasing power to increase the demand for renewable energy, but the conventional energy you would have otherwise purchased is not taken off the market â�� it is still available for sale (and may be marginally cheaper because of your decreased demand for conventional energy). By contrast, if you purchase emission credits in a cap-and-trade system, and retire those credits, then you have effectively reduced the cap, and total emissions should (in principle) be reduced by the amount of your credit irrespective of how expensive energy becomes.
Of course, emission credits are not typically retired. They only have economic value because they give the purchaser the right to generate more emissions. Similarly, the Kyoto Protocol�s �carbon offsets� simply provide a mechanism for paying someone else to do your emission reduction for you. In this context emission trading and carbon offsets have nothing do to with reducing emissions � they merely function to reduce costs.
The theory of cap-and-trade is that it doesn�t matter how you achieve emission reductions, as long as the total reduction is sufficient to achieve the environmental objective. But if GHG emissions are not actually capped at a sustainable level (which they never are), trading and offsets motivate industry to focus primarily on the quickest and cheapest emission reduction strategies (e.g., �plant trees�) and to indefinitely postpone long-term investment in more fundamental energy technologies that will be required to establish a sustainable global economy.
29 May 2006 at 3:15 PM
WIll you kindly supply a source for the, ‘ … about 24 tons of CO2 … ‘, and give the units. That is, is it about 24,000 kg or about 48,000 pounds. Thanks
[Response:I think I saw that number on the carbonfund.org site. You can good info from International Energy Outlook 2003. Energy Information Administration, U.S. Department of Energy. www.eia.doe.gov. I got from there a number closer to 20 tonnes (metric) of CO2 per person. Note that carbon fluxes are often presented as gigatons of carbon, whereas here we’re talking tons of CO2. This is why chemists prefer moles to mass units. David]
29 May 2006 at 3:43 PM
The European carbon exchange can be found at http://www.europeanclimateexchange.com/index_noflash.php
The page gives access to Excel tabulations on price history of this commodity. The scheme was started only a year ago, and it appears that some improvement may be needed. Under the current system the prices are overly sensitive to quite independent short term variables like availability of hydropower, or power consumption changes due to temperature anomalies. A good example is the market crash at the end of April, when it became known that such random phenomena had produced some unexpected (but probably short-lived) declines in carbon dioxide emissions.
Some power companies made handsome profits selling their emission allowances in time, which profits they dutifully distributed to their shareholders. A year with lesser rains and they must buy back the same, and obviously recover the extra production cost from their customers.
29 May 2006 at 4:03 PM
Was it Einstein who said we cannot solve a problem with the same level of thinking that caused it? Not to be too Luddite-ish, but all solutions based primarily on using technology and continuing economic growth - even if they save us temporarily - will cause greater disaster in the future. This applies to nuclear and carbon sequestration - they will simply create more, and more dangerous problems sooner or later…but certainly sooner than we expect.
(The idea of 6.5B+ people - and growing - even striving for the developed world’s lifestyle, never mind achieving it, surely is obviously unsustainable.)
Ultimately, we must learn to find conservation and long-term thinking appealing, rather than irritating (and the population must decrease). Until that happens (or until climate change eliminates civilization and most of everything we know and love), I think carbon offsets are a great step in the right direction. Nothing wrong with grabbing the “low-hanging fruit.” I believe one can purchse tiny chunks of the rainforests through various organizations, which helps save the rainsforest, reduce carbon emissions, preserve indigenous lifestyles (and lives), saves habitat, etc., etc.
That said, if I can buy an annual carbon offset today for $99, as more people sign up, will that price necessarily increase? It could also come down as the price of alternative technologies comes down.
29 May 2006 at 5:01 PM
The only solution is to reduce the energy consumption and to switch to renewable energy, like windpower. In Germany the renewable energies produce almost 11% of the electricity consumption. The gouvernment plans to produce about 30% in the year 2020. Thats the only way which is possible to go. Nuclear power is dangerous (Three Miles Island, Chernobyl) an Uranium will run out in 60 years.
29 May 2006 at 5:55 PM
This idea could, perhaps, be good if a relative few people buy the credits and retire them. It’s a wealth transfer to those companies that reduced emissions either because they invested in cleaner technologies - or because they shut down their manufacturing facilities and laid off workers. Some of these companies selling excess credits could just be poorly run companies that no longer have a market for their products. If a hypothetical billionaire or large NGO invests a huge amount of money in buying and retiring credits, though, that would be a disaster for those countries that have signed on to participate in carbon trading.
Small changes in supply can have a large effect on price. [See, e.g. the electricity crisis in California, a la Gray Davis and Enron…] Marginally increased credit prices will, of course, greatly incentivize the application of more efficient technologies in industrial and other settings. At some point, however, there are no cost-effective solutions to increase efficiency - at least with contemporary technology. A sudden, unforeseen, retirement of too many credits is essentially equivalent to an oil embargo - with one critical exception - the government of the country affected can and will do something about it [If they want to stay in power…].
If France, say, finds itself without enough credits to go around it will have two choices: allow ~10% or more of its businesses to shut down and move to countries outside Kyoto [Like China and India, as the President keeps reminding us.], or else withdraw from the system of Carbon Credit trading altogether. They’re not going to allow the French people to go without Food, Medical care, Clothing, etc. that their G-8 economy provides. We can’t suddenly ‘wish’ enough clean, efficient technology into existence to match artificially reduced Carbon caps. Business will invest in technology as their earnings allow and the observable trend in Carbon prices dictates. It is likely that any large effort to “Buy and Retire” would kill Kyoto.
29 May 2006 at 6:27 PM
The May 2006 issue of Wired Magazine had a “CO2 footprint” calculator with a sidebar on carbon offsets. According to them, one could feel good about paying $1 for every 256 lbs of CO2 emitted per year. Honestly, this strikes me as absurd. What is the half-life of CO2 in the atmosphere? Shouldn’t we amortize the cost of our present emissions over their lifetime? What would the cost really be if we took this approach?
Just for the record, what are the best estimates of the half-life of the excess CO2 being added to the atmosphere from human sources?
[Response:Long. I wrote a post about this question here. The money is not to pay for the damage from climate change, but to pay for a decrease in CO2 emissions to offset what you have just released. I thought the Wired calculations seemed optimistic too, but they topped out at $200 per year, not that different from carbonfund.org. David. ]
29 May 2006 at 6:29 PM
I would contrast the difficult and uncertain future of a tree seedling with the certain fate of jet fuel in an engine or a ton of coal on its way to a boiler. Therefore I think the emphasis must be on debits not credits. When every country has a properly managed cap-and-trade scheme it should make CO2 intensive goods cost relatively more. It should raise the ticket price of air travel more than rail for example and make windpower more competitive with coal fired electricity. This is a pure disincentive effect uncompromised by the prospect of a questionable offset. People should plant their own trees or conserve in other ways, not buy these credits.
29 May 2006 at 6:54 PM
This source:
http://www.eia.doe.gov/pub/international/iealf/tableh1cco2.xls
gives in the table:
Table H.1cco2 World Per Capita Carbon Dioxide Emissions from the Consumption and Flaring of Fossil Fuels, 1980-2003 (Metric Tons of Carbon Dioxide)
Table Posted: July 11, 2005
Next Update: June 2006
the value of 19.95 metric tonnes of carbon dioxide per capita for the United States for the year 2003. The value has hovered around 20 metric tonnes since about 1980. I would be surprised if it has gone up by 20 percent in 2 years.
Does the value 24 tons, assuming that is 24 metric tonnes, include sources other than consumption and flaring of fossil fuels? Thanks
[Response:20 is probably right. I thought I saw 24 someplace, but looking closer, I’m finding 20 also. Forgive me. David]
29 May 2006 at 7:12 PM
I find myself puzzled by the comments that we should exclude certain solutions because we can solve the climate change problems without them. I heard John Holdren say at the China US Climate Change Forum (http://chinausclimate.org/en/) that temperatures have gone up 0.8 C, we are committed to 0.6 C more, we may reach 2 C by 2050 and 3 C or more by 2100. At 1.5 C, the polar bear and coral reefs are committed to extinction, at 2 C we may experience catastrophic sea level rise of 3 - 4 m/century, and at 2.5 C, agricultural productivity will decline pretty much everywhere on Earth.
This will be webcast soon, hopefully this week.
I hope that we try every solution. Even biofuels which are likely to have land use and water implications past a certain point.
29 May 2006 at 8:53 PM
Re David’s comment on 19. OK, now the idea of a “carbon offset” is more clear to me. And thanks for the link to CO2 half-lives. However, it is hard to imagine that the cost of carbon offsets would be less than the cost of the fossil fuels used as inputs to a typical American lifestyle. I would estimate that a more reasonable offset would cost in the thousands of dollars, not hundreds.
29 May 2006 at 9:19 PM
[Disclosure: I am the Executive Director of Carbonfund.org]
Kudos to David Archer for focusing on the ease and affordability of carbon offsets. Too often the stories are about SUV guilt when the real story of carbon neutral living is empowerment. Without any government regulation or subsidies any individual or business can reduce their climate impact to zero. Carbonfund.org believes we can also change the world.
In a country of 300 million people, imagine if just 2 million offset their carbon footprints with wind energy. They would facilitate so much wind power we believe the price of new wind would drop below that of new coal. This would change energy investment in the US and the world. Utilities would buy renewables for economic reasons and the person who never offset his carbon footprint would get more wind energy every day as the utility mix increased.
Is this possible? Absolutely. Wind makes up just .5% of US electricity so any doubling or quadrupling has enormous price implications.
Also, we are quite contrarian here but we don’t see the need for CO2 offset prices to increase. If efficiency were the only solution you’d eventually run out of low-cost efficiency reductions. But with renewable energy, as we increase supply price drops. We believe and hope $5.50 per ton ($4.30/ton to offset 23 tons) will be a highwater mark.
Regarding reforestation, we understand some people have problems with each type of offset: wind vs. birds, efficiency vs. additionality, and trees live and then die. While a well-managed forest pumps more CO2 into the soil and sequesters it, our stance is to give people the choice (hey, it’s your carbon) of projects they wish to support: wind, efficiency or reforestation.
Our apologies for the cheesy pen.
[Response:Not at all. It was the only humor I was able to work into this post. That and the line about the tent, I guess. David]
29 May 2006 at 9:35 PM
I like the idea that individuals - even if governments won’t - could obtain carbon offset certificates by subscribing to fund’s whereby they can put money to their preference for offsetting carbon emmission, ie PURCHASE or OTHERWISE PROTECT IMPORTANT NATURAL CARBON SINKS (ie rainforests in the Amazon & Borneo) PLANTING TREES FOR RE-FORESTATION (doesn’t the latest research show that establishing trees actually emit more carbon than they lock up?) or RESEARCH/BUILD ALTERNATE ENERGY SYSTEMS (wind farms, solar energy technology, tidal power etc) or RESEARCH/DEVELOPMENT OF SAFER NUCLEAR OPTIONS.
May I forcast that the contributions of millions of people all around the world joined together would make a VERY substantial difference to our otherwise poor prognosis for the future. However as the original posting pointed out…this new ‘industry’ would need to be strictly regulated & supervised to prevent scams. May I suggest that they all be authenticated and chartered by a world body of some sort, ie the UN.
29 May 2006 at 10:51 PM
Europe as an emissions allocation market, a fairly volatile one lately. In a future world of litigation, Europe, by reducing per capita emissions is in a much better positon to recover damages via trade taxes or seizure of property.
In other words, say, the state of Florida sued China to recover damages due to global warming, then China’s response would be, “What has the USA done to curb emissions?” A perfect line of defense.
Our ability to use the threat of litigation depends upon the accuracy of climate models, as well as the perceived value of a cooler planet. Hence, the CEI, “Co2 is life” campaign is an effort to persuade future jurors. CEI, however, is stuck in one sense, they already acknowedge that human’s are partly to blame, and they feel property damage litigation is the better approach to environmental problems in general.
If a natural wildlife federation bought access rights to, say, arctic polar bears or arctic fisheries, then, because of polar amplification, this wildlife federation could find easier cause for a lawsuit. Polar amplification enhances the probability of a damage award, and once the first victory comes, each new victory can squeek out another piece of the general liability.
A few victories and carbon markets will be active indeed.
29 May 2006 at 11:06 PM
I’m sorry I don’t remember the source, but I read a while back that Habitat for Humanity can now build what are called “near-zero-energy” homes–at least in the sunbelt. If they can do it, I would think that other home builders that have more than just volunteer labor could also do it. Luckily, there are some architectural firms that now design homes and small buildings toward that goal.
I would like to suggest that probably the best way to reduce CO2 is to design systems that demand less energy to begin with. Conservation is more than just turning off light bulbs in uninhabited rooms. It’s a whole new way of thinking and designing.
When a home or building is designed to minimize energy needed, it’s a lot more cost-effective to meet that demand with renewable energy. Maybe we should push for our local building codes to require super efficient designs and photovotaics on new homes built in the sunbelt? Windmills for those homes in tornado alley?
As an added benefit, the less energy we need for new homes and buidings, the less demand there will be for nuclear power, so we may be able to shelve that debate for a long time.
30 May 2006 at 3:58 AM
I didn’t read all the comments so I didn’t see if anyone mentioned.. but I know of at least one farmer here in New Zealand who got rid of most of his stock and now gets his livelihood from selling “blocks” of carbon offset from his farmland (which , from memory, is somewhere in the Marlborough Sounds area)…
It certainly does seem like an airy fairy kinda way to make a buck but he’s doing it and doing better than when he had stock on his land by all accounts!
30 May 2006 at 4:36 AM
CO2 is merely one “externality” whose social cost is not built in to the price of goods and services : there are others. Some are dealt with by forbidding their use (cigarettes in public places or CFCs, for example, which are considered to have an infinitely high cost ) and others by limiting their presence in everyday articles ( limits on pollutants of all sorts to what are believed to be tolerable levels imposing some costs on producers).
There is no suggestion to do the impossible and forbid the emission of CO2, but to impose a “carbon levy” to “cap and trade” and internationally to “cap and converge” to give developing countries similar rights to our own in the use of natural resources - those proposals which involve market based solutions seem a fair way of going about things. There has been a suggestion from Janet Kent-Mackenzie at post 25 that the U N might be used to police the market. Well, the UN doesn’t have a very good record in these sorts of things and it would take too long to put it right. An alternative proposal would be to use the existing WTO which has an experienced secretariat in dealing with international markets, and currently a good and intelligent bureaucrat running the show. If WTO resources are considered insufficient then there are plenty of people at the World Bank (currently in the throws of self-examination) or the IMF who might like to do an important job for humankind.
My guess is that policing the CO2 market will be only the start of international action on a number of related issues like, pollutants in general, river system management and water resources and the exploitation and use of so-called strategic metals and minerals.
30 May 2006 at 7:10 AM
As I see it, there are the following options for those of us who are concerned about climate change.
1. Take personal action to reduce emissions, including energy conservation and possibly carbon offsets.
2. Take political action, such as writing letters to politicians or becoming involved in a local climate project. This might include donating to an environmental group that will take political action for us.
3. Raise other people’s awareness of the problem of climate change to try to reach that “critical mass”. This could also include donating to a group (not many that I can find) that produces information or commercials about climate change.
Personally, we’ve taken steps towards efficiency and conservation in our own home, and written those nagging letters to our federal and provincial politicians. Those things are free, of course. But when it comes to shelling out money, I’m reluctant to - say - trade in our Ford Focus for a Toyota Prius, because of the huge cost involved. Considering the price difference between the two, a fraction of the money would do far more good being donated to a carbon offset fund or a worthy climate change group. (Not that I’m criticizing the Prius.)
Wish I could find a worthy recipient for advertising dollars, since I think public awareness is the biggest hurdle.
Carbon offsets seem like a cost-effective way to do something positive. Thanks for your great article.
30 May 2006 at 7:41 AM
What an absolutely fascinating, rich, and necessary discussion. The caveats about verification, certification, effectiveness, and permanence of offsets mentioned in the comments give pause, but I salute the pioneers who are creating them as well as those who use them and critique them.
I have long been a fan of efficiency and renewable energy sources, and as several commenters have pointed out, they are complimentary. The net-zero energy houses that Vincent mentioned in #27 are an excellent example, and I look forward to hearing the webcast of the China US Climate Change Forum from comment #22. Efficiency and renewable technologies are improving so quickly that when you see skeptics claim that they “can’t possibly” solve the problem, it’s hard to know exactly how out of date they are.
Simple conservation also has a role. In fact, it is the truly painless option. No matter how effiicient your light bulb is, or what percentage of its power comes from wind, when you turn it off the money you save is like tax free income.
William Nordhaus, the economist you cite, recommends a uniform carbon tax (UCT) as the best way to encourage all solutions, such as efficiency, renewables, and conservation.
As for nuclear, Tim in # 9 (linking to the Hertsgaard article) shows that it’s much more expensive than efficiency and wind. Perhaps more important, it is the one energy source that requires huge government bureaucracy, regulation, and subsidies. Efficiency and renewables are much more consistent with freedom and individual rights and responsibilities.
30 May 2006 at 12:18 PM
I thought RealClimate “doesn’t do policy”
These are the sort of discussions I was envisaging on “RealSolutions” as someone else termed the mythical website (not necessarily saying “we should do this” but “how well does this approach work?” and “what is the current state of this technology?” etc.
Anyway, and more seriously, from #2:
“but the ‘plant a tree and feel good about flying’ idea (popular in the UK) is dodgy”
My understanding is that trees take some years to soak up the CO2 so you can only really off-set against future emmissions. The extra CO2 you’ve currently emmitted is still around (in terms of quantity not actual CO2, obviously) waiting to be absorbed over the years that that tree grows. And that’s ignoring the situation (as mentioned elsewhere above) that the trees may not last that lonng and may get burnt, etc. re-releasing the CO2.
That’s not to say that planting trees shouldn’t be done. If they become a sink, then they could be an added bonus on top of not emmitting in the first place.
30 May 2006 at 12:51 PM
> 12 comment by Raypierre about nondegradable organic plastics as a sink:
Nature is too clever for us there.
One example, hearsay (no cite, not published) — when I was an undergrad, a friend was working in a faculty member’s lab where they were testing soils, hoping to select a microorganism capable of consuming DDT and producing nontoxic breakdown products. They eventually did find one — which they ended up destroying quite carefully. The one they’d selected for turned out to have a similar appetite for other common plastics including PVC (polyvinyl chloride, the common wire insulation used in our electrical distribution system, phone system, etc. — it degraded PVC into other toxics that were more mobile, not to mention the short circuits caused as the insulation broke down).
Mother nature wants her toys back.
30 May 2006 at 12:53 PM
I think Carbonfund’s so-called “carbon offsets” can be more accurately characterized as “charitable donations”. While such donations are laudable, charity and voluntary action are not going to achieve the reduction in GHG levels required for climate stabilization (e.g., 80% reduction from 1990 levels by 2050, as defined by Governor Schwarzenegger’s Climate Action initiative). There’s no evidence that Kyoto-type cap-and-trade systems can, either, unless environmental objectives take precedence over cost considerations and GHG emissions are actually capped at a sustainable level - which they never are. Climate sustainability might be attainable at acceptable cost, but trying to use cap and trade to implement a cost-constrained policy doesn’t work because you can’t predict in advance what minimum cap level will satisfy the cost constraint.
Climate policy is fundamentally a constrained optimization problem. You can construct policy to minimize costs subject to a fixed emission constraint (if environmental goals take precedence over cost acceptability), or to minimize emissions subject to a fixed cost constraint (if cost control takes precedence - which it always does). Cap and trade represents an emissions-constrained policy, whereas emission taxes are cost-constrained; but there is also a more significant difference between emission caps and taxes: Cap and trade is typically constructed to be revenue-neutral within the regulated industry (i.e., emission allowances are freely distributed, for example, in proportion to energy output), whereas taxes are not. Consequently, tax-based initiatives in the U.S. are typically “dead on arrival”. However, the difference is not fundamental: Emission allowances can be auctioned (and the proceeds used as tax revenue). Conversely, emission tax revenue can be refunded (e.g., in proportion to energy output so that the tax/refund ratio is proportional to emission intensity). The Swedish acid rain program, for example, uses a refunded tax to regulate stationary-source NOx emissions. (Swedish power plants typically exhibit much better NOx emission performance than that of the U.S. and other countries.)
I think scientists (climate scientists, in particular) could help bring a level of analytic discipline and intellectual acuity to the subject of climate policy that is currently lacking, and I would welcome more discussion of this topic on RealClimate. Here is one puzzle that RealClimate readers might ponder: Governor Schwarzenegger’s Climate Action Team recently issued a report asserting that “the Governor’s targets are achievable” and detailing specific strategies for achieving the targets (http://www.climatechange.ca.gov/climate_action_team/). Look through the report and see what evidence there is that the recommended strategies will achieve the 2050 target, which is the only target that is based on the climate science. (For what it’s worth, my own views are posted in the Climate Action Team’s public comments area.)
30 May 2006 at 1:04 PM
It does appear that nuclear power generation decreases CO2 emissions by about a third. You can clearly see this by comparing emissions from France to that from Germany and the UK. There is a short table at http://tinyurl.com/q5cml with a link back to a longer table at the UN Statistics division.
30 May 2006 at 2:31 PM
http://www.salon.com/opinion/feature/2006/05/30/muckraker/print.html
Industry plans for large new ethanol plants — fueled by burning coal, fueled the old dirty way.
US Congress plans to remove the burden of clean air regulation from companies planning new ethanol production — so it can be made fast using cheapest and dirtiest fuel source.
30 May 2006 at 2:55 PM
Re: Hank Roberts
That’s a scary story!! I didn’t think things like that happened in real life
But a very nice analogy to fiddling around with Earth’s climate. We don’t quite understand what we are dealing with when pumping CO2 into the atmosphere, and we should stop messing with a system we may not be able to control. To the skeptics: I don’t mean we should stop doing climate research or let nature take its course; I mean we should minimize emitting and find cleaner alternative enrgy resources. Fast. And actually do more research and understand the system better.
30 May 2006 at 3:38 PM
David- Kudos for raising this intresting policy subject;-)
From my perspective, it seems that carbon offsets are not quite accurately described here. The idea behind carbon offsets is both “cap and trade” but also a second approach based on the same logic behind the CDM of the Kyoto Protocol. As I understand them, carbon offsets do not reduce carbon emissions directly, but in principle, from what they would have been absent the offset investment.
The idea behind the “cap and trade” logic — as described by carbonfund.org — seems to be that where there exists a market for carbon, they will purchase (or otherwise earn) rights to emit, but not sell those rights, taking them off the market, and thus reducing supply of emissions rights, thereby in theory increasing the price (which in turn will reduce demand). Whether or not this actually has a discernible effect on real world emissions depends upon whether the buyer of carbon emissions rights can actual act as a “market mover.” If carbonfund.org is the equivalent of Warren Buffet in the carbon market, then they may be onto something. On the other hand, if they are small relative to the market, they might be more like you and me joining together to take Google shares out of the market in hope of driving up the price. Whether or not such a strategy represents anything more than a well-intentioned idea, seems open to vaild debate.
The second approach is focused on offsetting possible future emissions. For instance, to take a simple hypothetical example, carbon offset money might be used to built a wind power plant rather than a coal power plant, thereby “offsetting” the future emissions from the coal plant. This does not reduce actual emissions but reduces the possible increase in future emissions.
My sense is that carbon offsets seem like a pretty indirect and inefficient way of achieving emissions reductions. After all, where carbon markets exists one could simply eliminate the middle man and buy emissions rights directly and paricipate in the market. I wonder how it is that the organizations you linked to can gain rights to carbon emissions at far less than the market price in actual markets. Something doesn;t add up. I suppose the idea is that if enough people participate then carbon markets will move financial markets, etc.
The above is just speculation, I’d be interested to learn if there are any rigorous studies of the efficacy of carbon offsets as a policy instrument as compared with more direct means of reducing emissions.
30 May 2006 at 3:43 PM
“Uranium will run out in 80 years”.
Current reserves of U-235 may run out then. U-238 is 0.7% of natural uranium; the remaining U-238 can be used in breeder reactors, and that 80 years turns into 8000 years. And that’s the high-quality ores we know about. There’s more in seawater, and the U in the crust (accessible through mining, or in the long run through waiting for erosion and getting it from seawater) is enough for at least millions of years, possibly a billion.
http://www.uic.com.au/nip75.htm
30 May 2006 at 4:18 PM
Re #39
… and then we would have a cheap, inexhaustible and essentially limitless supply of weapons-grade plutonium. Is that the “stairway to heaven” - or to hell?
30 May 2006 at 4:42 PM
Not necessarily that cheap. Current reactor design makes Pu-240 mixed in with the Pu-239, ruining it for weapons and even harder to separate than the uranium isotopes. Some advanced designs strive for a closed-cycle: uranium in, fission fragments out, no free plutonium. OTOH pebble beds might make Pu-239 easier to get, by encouraging constant recycling and potential extraction of low-240 Pu-239.
*shrug* It’s a concern, but it hardly seems like a killer. Inspections continue to be a useful tool. And if there are tons of uranium out there, which there are, it won’t be that hard for a high-tech country to get U-235 if they want it. Or get thorium and make U-233 which should also be good for bombs.
As far as existential risks go I’m more concerned about diseases, natural or man-made.
30 May 2006 at 4:45 PM
So with nature responsible for the vast majority of CO2 emmissions who is going to pay for that? I am willing to accept $1 instead of the $99 for those willing to cover the cost that Earth releases.
30 May 2006 at 4:53 PM
The whole point is that we evolved on an Earth which has balancing mechanisms to deal with the CO2 the Earth releases. Now we are messing around with the balance by releasing more CO2 in a much shorter time frame than the balances can handle.
30 May 2006 at 5:01 PM
It is important to recognize several issues when talking greenhouse gas emissions offsets. First amongst them is “additionality.” An offset (i.e., emission reduction project) requires that you set a business as usual baseline of emissions and then estimate emission reductions relative to that baseline. These reductions are then considered additional. Setting that baseline is far from an objective process, however. Groups like Carbon Fund, TerraPass, AtmosClear, and many many others that sell offsets in the retail voluntary market use various formulas for determining additionality and then verifying the reductions achieved (other 3rd parties often do this verification such as Environmental Resources Trust).
So, if you buy offsets from someone, a smart shopper needs to be very clear on what she is buying. They are not all created equal. (Although the people working in this area, are for the most part, sincere in their goals.)
The concept of an offset assumes that the person selling the emission reduction would not have implemented the project anyway (because of regulation or other factors). So the voluntary emission offsets markets exists because we don’t have regulation (e.g., such as a cap and trade program). Once we do have such a program here in the United States, we will all be able to buy GHG allowances and have them retired just like under the SO2 trading program run by the U.S. EPA now. Voluntary efforts will not solve this problem. They will not even come close. So by all means, do your research, buy verified offsets of high quality and additionality, but don’t let it reduce by one bit your sense of obligation to press for collective action on the part of governments.
PS: CO2 from beer is biogenic. It is produced by yeast feeding on sugars in the grain. It is not a net source of GHG emissions to the atmosphere.
[Response:In good beer, no doubt. I’ll bet we in the U.S. drink Frankenbeer with fossil CO2. David]
30 May 2006 at 5:03 PM
Dear teacher ocean,
At just 2.5% of total CO2 release that humans are responsible for I find it hard that the Earth can’t cope with the increases. According to IPCC figures humans account for about 5.2GT (gigaton) of CO2 and nature accounts for about 210GT. If humans realsed double the amount of CO2 (to 10GT) this would only be an increase of 2.3%. An average volcano relases more then this during an eruption yet Earth can deal with that. Finally, absoprtion rates in the atmosphere reach saturation points and are logarithmic where additional CO2 releases account for less solar energy capture.
[Response: This contains a number of misconceptions. The volcanis source is trivial compared to human emissions (as discussed http://www.realclimate.org/index.php/archives/2006/05/current-volcanic-activity-and-climate/ and in even more detail http://www.bgs.ac.uk/programmes/landres/segs/downloads/VolcanicContributions.pdf ). The 2.5% number is just irrelevant - the actual number is 30% of CO2 - as discussed http://www.realclimate.org/index.php/archives/2006/01/calculating-the-greenhouse-effect/ and finally, logarithmic effects of increasing CO2 are very well known and incorporated into all future projections. - gavin ]
30 May 2006 at 5:26 PM
I hope the climate scientists on board will answer you with more details, but it isn’t so much about amount, as it is about the rate of release. Oceans respond slowly to perturbations in atmospheric CO2 concentration. David Archer says about 10-25% of our CO2 emissions will remain in the atmosphere for 100s of thougsands of years in his first post to realclimate and in the other current thread called “Positive feedbacks from the carbon cycle.”
So just 2.5% of release of CO2 in the atmosphere in how much time? A day, a week, a year? Volcanoes release a lot but humans release every day, all the time. So you need to look at the rate of release not just percents.
Oceans regulate atmopheric CO2 by dissolving carbonates in deep sea sediments. That takes time. Oceans circulate slower than the atmosphere, that takes time. And another question is do the oceans have enough carbonate to compensate for the large quantities of CO2 we are releasing? If they run out of carbonate sediments, the oceans will begin to exhale CO2 as well.
30 May 2006 at 5:44 PM
“At just 2.5% of total CO2 release that humans are responsible ”
Cite, please.
http://volcanoes.usgs.gov/Hazards/What/VolGas/volgas.html
gives human output as 150x that of volcanoes.
http://volcano.und.edu/vwdocs/Gases/man.html
which for comparison also has our sulfur dioxide dwarfing that from volcanoes, despite our trying to cut back on sulfur emissions, while burning more and more fossil fuels.
30 May 2006 at 5:54 PM
At the level of dissolved CO2 where the oceans become acidic enough to dissolve carbonates, that will kill the marine organisms that make their shells out of calcium carbonate, and everything above them on the food chain.
http://www.c14dating.com/shell.html
http://www.nmfs.noaa.gov/pr/species/invertebrates/
http://www.google.com/search?hs=M0q&hl=en&lr=&newwindow=1&rls=org.mozilla%3Aen-US%3Aofficial&q=%2Bmarine+%2Bcarbonate+%2Bshell&as_q=acidity+warming&btnG=Search%C2%A0within%C2%A0results
30 May 2006 at 5:59 PM
#44
John, there is much you can learn from the many posts and comments on RealClimate. PLEASE, take the time to educate yourself a bit and come back when you have. That’s my 2 cents.
30 May 2006 at 6:04 PM
Oh, and I missed the obvious.
#44, John, you say: “CO2 (to 10GT) this would only be an increase of 2.3%. An average volcano relases more then this during an eruption ”
Whose word did you rely on, that led you to believe this? What’s the source of the information you believe about this?
It’s important to track down what people believe are the true facts — where they came from, who originated the information.
I found that statement only two places, with a quick search:
http://www.washingtonmonthly.com/archives/individual/2005_10/007372.php#729373
http://dalythoughts.com/?p=4303#comment-83407
Neither of them is a reliable source in my opinion. Your source may be reliable — who is it?
30 May 2006 at 6:11 PM
Pore waters in deep sea sediments dissolve foram shells all the time, as we speak. Do you mean dissolving ALL the carbonates?
30 May 2006 at 6:58 PM
>I wonder how it is that the organizations you linked to can gain rights to carbon emissions at far less than the market price in actual markets. Something doesn;t add up. I suppose the idea is that if enough people participate then carbon markets will move financial markets, etc.
Too many problems to go into. A random glimpse:
A lot of “offsets” are produced by consultants. Example: You own a steel plant in a poor country that turns scrap metal into new steel. It is an old fashioned basic oxygen furnace (BOF), and it is finally completely worn out. A rebuild won’t do this time; it needs to be replaced. There is hydroelectric power in your area. You can save a lot of money by buying an Electric Arc Furnace (EAF), and using that for processing your scrap metal.
But, you know, that EAF is a lot cleaner and greener than your old BOF. Isn’t there some way you can get paid for this? Why yes there is.
Call in the local certified consultant from your local carbon market and pay him a nice fee. He will produce a study certifying that you could have gotten ten more years out of that old BOF, and that the only reason you are investing in a new EAF is carbon credits. Voila! The carbon market will examine the report, find it convincing, and a new annual producer of offsets is born - which a “Green” Rock Band can buy to justify burning petroleum in planes and buses.
“Mommy, where do carbon offsets come from?”
“Well you see honey when a polluter and a consultant love money very very much, they come together in a very special way to produce an extremely long piece of paper.”
30 May 2006 at 7:49 PM
Yes. It’s last year’s news.
http://www2.cnrs.fr/en/452.htm
“… Orr and co-workers first calculated current carbonate ion content of the world’s oceans from data collected in two ocean surveys. They then used computer models to calculate how future CO2 emissions would change this carbonate concentration. The model predicted that colder waters in the Southern Ocean and the subarctic Pacific Ocean would be affected more seriously than tropical “waters. Worryingly, they found that quantities of aragonite, a form of calcium carbonate made by coral to build reefs, would fall below a critical level in Southern Ocean surface waters in as little as 50 years. By 2100, this deficiency could extend throughout the entire Southern Ocean and into the subarctic Pacific Ocean. This finding was unexpected: scientists had previously believed that adequate levels of calcium carbonate ions would persist in surface waters for hundreds of years.
“The team went further; they also studied the effect of this acidification on individual marine organisms, in particular, the pteropod Clio pyramidata. Pteropods, a type of zooplankton, are winged snails, measuring several millimeters across, that swim through surface waters. Like coral, this species secretes aragonite to make its shell. The researchers compared the shells of pteropods that had swum in today’s â��non-corrosiveâ�� seawater with pteropods forced to swim in â��corrosiveâ�� seawater with a composition similar to the one expected in 2100. In the corrosive water, the shells of live pteropods started dissolving within 48 hours. This is only one exampleâ��acidification would also undoubtedly affect coral reefs, particularly those in cold waters. The result would be a disaster for the marine ecosystem, as pteropods make up the basic food for organisms ranging from zooplankton to whales, and coral skeletons provide an essential habitat for fish, crabs and sea urchins. Obviously, commercially important species, including North Pacific salmon, mackerel, herring and cod, would be among those affected….”
J. Orr et al., �Anthropogenic ocean acidification over the twenty-first century and its impact on calcifying organisms,� Nature. 437 (7059): 681-6. 2005.
30 May 2006 at 7:56 PM
Yes, thank you. I had read that actually, very interesting. I was not sure I understood your previous post.
30 May 2006 at 8:34 PM
My utility gets their energy from both coal and wind. For $5 per month per 200kw, you can “buy” wind energy from a wind farm which substitutes for the energy which would otherwise come from the local coal plant. The $5 is to pay for the differential in costs between the wind farm and the coal plant, although I suspect the local utility or the power authority may be making money off this deal since they have not reduced the marginal price over the last 5 years even though wind costs have come down.
In any case, this seems like a situation where you are really making a current offset, not just reducing future emissions.
My understanding is that Terrapass is just making projects possible by providing the margin of funds required to make the project, for example,wind, a go. That is totally different than what my local utility does, as you are truly paying for the wind related energy you use.
Is carbon fund similar to Terrapass or my local utility. Although I bought a Terrapass for my Prius, I feel more comfortable with the approach my local utility uses. Terrapss is so cheap because they are just paying marginal costs. But then someone else needs to actually sign up and buy the energy from those projects to make them truly useful.
One concern I have is that these offset programs will cause people to directly emit more carbon than they otherwise would. Gore says he’s carbon neutral despite the thousands of miles he travels by air because he participates in an offset program. I hope he’s right, but I still feel uncomfortable.
In any event, voluntary offsets don’t cut it. Our voluntary efforts will contribute trivially to the problem. After all, worldwide, there are 850 coal plants in the works. Who will be offsetting all that carbon?
30 May 2006 at 9:26 PM
#38 states that there is no need for a market where one can buy something directly. I guess that is why we don’t have a stock market, or a bond market or a vegtable market. Come, that is a bit more than naive and so easily refuted that one wonders about the reason for making the statement. Markets exist where buyers need to find sellers or visa versa. Those who make the market take their percentage.
Another point is that Berkshire is so large that Buffet does not trade much on the market anymore, but rather buys companies in toto (read his annual report if you are interested in his strategy http://www.berkshirehathaway.com/letters/letters.html). The take home is that very large organizations that can purchase all the emission rights from a particular source may not need a carbon market, but smaller ones will.
30 May 2006 at 11:41 PM
There was an enormous amount of work done on this issue the first time around, in the late 1980’s and early 1990’s. If we are serious about stabilizing carbon emissions in the US, and you look at what it costs to do that, the answer is in the $30/ton range. Carbon sequestration, the thing that coal boosters everywhere are promising to do later if we let them build the coal plants now, probably costs more. $30/ton easily buys down any cost difference between fossil fuels or nukes and, say, large-scale wind development.
As it happens, the Euro carbon market was running at about $30/ton until recently when it was discovered that a surplus of carbon emission credits had been issued, diluting the market.
31 May 2006 at 3:29 AM
Re #57:
$30/ton? What’s the 1-sigma confidence on that? The IPCC TAR puts the cost in the range of $15 to $150/ton (http://www.ipcc.ch/pub/un/syreng/spm.pdf - p 25). As for benefits, the TAR simply states that “… quantitative estimates of the benefits of stabilization … of greenhouse gasses do not yet exist” (p 22). Not that anyone cares - GHG caps are always based on cost acceptability limits, never on environmental requirements. And the caps are more often than not premised on grossly over-inflated cost projections, so when the market finds out what the costs really are the carbon market collapses (http://www.bloomberg.com/apps/news?pid=10000085&sid=agFHU6rBtNoE&refer=europe). If you try tightening the caps, then a cold winter will come along, or there will be a disruption in natural gas supplies, and then carbon prices will hit the ceiling. You just can’t win. You can’t predict the future, and you can’t use cap and trade to control costs because cap and trade is fundamentally designed to control emissions - at any cost.
The tradeoff to cost uncertainty and price instability is supposed to be that cap and trade guarantees “environmental certainty”, but it only does so in economists’ ivory-tower fantasy world. In the real world, most of the EU countries are set to miss their Kyoto commitments (http://www.ippr.org.uk/pressreleases/?id=1863), and as of 2005 Canada’s GHG emissions were already 32% above its Kyoto target - and rising (http://www.statcan.ca/english/freepub/16-251-XIE/16-251-XIE2005000.pdf). So what is the point of cap and trade?
31 May 2006 at 7:13 AM
Interesting thread and thanks to all. It may be that we are going to be stuck with a very high international “carbon levy” and those nations that dont play ball get penalised with import duties by others who do play ball, from their (the offenders) exports. Now, this may not prevent the “outlaws” dumping as much carbon on the rest of us as they like from their home market but it is a start and does to some extent deal with the natural concern that voters have, that to impose costs on locally produced goods and services, which others dont bear, reduces competitiveness. It also does encourage compliance because for example China, if it didn’t comply, would have less favoured status as an exporter of goods than it does now. After all countries sign up to the WTO rules and do in the main accept international arbitration to fix non-negotiable issues.
To avoid the impression, I may give, that China will avoid its humanitarian duties we should remind ourselves that some thousands of years ago China went through this process with over exploitation of natural resources and corrected itself (cant remember the reference) : so China has already been there and done that and there is no reason to believe that it wont be wholeheartedly behind saving the planet.
The international and domestic machinery already exists to administer this route and I dont know why we dont do it.
I think that one has to start with a best guess of how high the “carbon levy” must be to start to reduce emissions quickly and then to have some mechanism for refunding the levy to the levied without plunging us all into a long lasting economic depression which will surely bring in its wake civil disorder; and, to create markets in levy debits/credits locally or regionally to ensure the levies are used economically efficiently.
I dont see why some of the levy could not be used to pay for international organisations like the UN, it would save Mr Ted Turner having to write billion dollar cheques for a start.
31 May 2006 at 7:41 AM
Both the differential rate and total amount of carbon uptake by terrestrial primary production should be of interest here, I think.
Primary production is sensitive to atmospheric CO2 concentration. By extension so must be the subsequent release by respiration and decay.
The significant rise in atmospheric CO2, that has occurred would suggest a significant increase in primary production as a proportion of the pre industrial total and it would only have taken a small proportional increase (the total primary production rate being far greater than anthrogenic emissions) for it to have exerted a stabilising effect in the short term unless were it not for our preference for crops and pasture over trees.
So perhaps, changes in land use have acted to much diminish this effect.
I have no information on how primary production has changed for either areas with continuity of land use or for disturbed areas. Can anyone help me?
It would seem that this is precisely the sort of information that C02 traders/offsetters should have available when they make their proposals.
On the face of it, unless one can show that we can construct a world that is, in effect, by all mechanisms, creating future fossil fuels and carbonate containing rocks, and at a similar rate to which they are being reduced to CO2 and released into the atmosphere then it is not solving the problem.
What is the most productive way of producing future fossil fuels? Is it the peat production of bogs? How much could such production amount to?
Lastly, what is the most desirable (or perhaps utilitarian) level of atmospheric CO2? One way or another we are embarking on a knowing manipulation of climatic and primary production conditions. Different levels might have different winners and losers.
Polite suggestions and pointers will be welcomed.
31 May 2006 at 9:49 AM
59 re China — I think you should try hard to find that reference. The people I know who’ve worked on food production improvement in China say it’s in horrible shape because of thousands of years of shortsighted overuse, with no scientists to figure out where they were going in time to change. Perhaps some emperor did something different, but it doesn’t seem to have stuck as a policy. I’d like to know your source’s sources.
31 May 2006 at 10:43 AM
I used carbonfund.org to offset my personal CO2 emissions - and was surprised and delighted by how cheap it was.
Your comments suggest that there is a disconnect between how cheap carbonfund.org is, and how expensive it is to reduce CO2 in the market. But that is not really inconsistent. CO2 is ~$25 per ton in the European market, because they are acting under a binding commitment and have to reduce a certain amount. In the Chicago Climate Exchange, CO2 is much cheaper, ~$3 per ton. That is because there is no binding commitment in the USA, and so only the very cheapest options are used.
This is illustrated nicely in a paper by David Victor et al (Science, 2005, 309:1820).
This also suggests that we should not expect to get our whole CO2 reduced at the price in the US market now. Prices will rise as we reduce more, but hopefully, seeing that the market is active will encourage companies to innovate more.
You also questioned whether the reductions under carbonfund.org are the same as under the Kyoto Protocol. I guess the key question is if they are verified to the same standard. Let’s ask carbonfund to comment on this!
I think a lot of people should be encouraged to use carbonfund.org. People are now spending a lot of effort and money to find ways to reduce their personal CO2 emissions. Carbonfund.org makes it easy and cheap, letting our money be used to reduce more emissions.
31 May 2006 at 10:54 AM
Same old thing here: http://www.opinionjournal.com/columnists/hjenkins/?id=110008450
Repeat, lather, rinse.
31 May 2006 at 11:18 AM
FOr those that are trying to claim humans account for 30% of CO2 here is a link.
http://www.grida.no/climate/ipcc_tar/wg1/fig3-1.htm
The IPCC gives the figures for natural and human perturbation of global carbon cycle (the numbers are in Petagrams of carbon. 1 Pg = 1 Gigaton, denoted Gt. 1 Gt = 1 Pg = 109 metric ton). Human perturbation = ~5.2GtC emissions and the natural cycle roughly 210GtC emission. Humans collectively account for 5.2/210 or a shade short of 2.5% and not the 30% cited above.
[Response: You are confusing two different things. One is the gross fluxes into and out of the atmosphere, and the second is the net flux into and out of the atmosphere. The terresstrial and oceanic fluxes are large, but also largely balanced (what goes in pretty much comes out). The extra fluxes we are putting in have accumulated in the system so that CO2 levels are 30% higher than previously. It’s like a big bathtub with a lot of water coming in, and a lot of water leaving down the drain. To a good approximation what was coming in before was matched to what was leaving and the level in the bath tub was steady. Now we are adding in more water and the amount going down the drain hasn’t increased to match - hence the level has risen about 30%. The ratio of our additions to the ‘natural’ fluxes is completely irrelevant. All that matters is how much the sink increases - and it hasn’t increased enough to soak up all the extra stuff we are putting in. - gavin]
31 May 2006 at 12:01 PM
Instead of arguing about computer models CO2 percentages and so forth I ask the following. Let’s say all the following are proven to be scientific fact.
1) Man made warming is real
2) All the disaster predictions are real
3) If we give up fosil fuels we can stop it.
Does ANYONE believe that people would give up driving, air conditioning, creature comforts, etc to do this? Its not going to happen.
On the other side I ask the doomsaylers a question. For argument sake lets say the following is proven.
1) Man is warming the planet
2) This warming is offsetting a natural ice age.
Are the folks here then willing to add more CO2? Or is the natural cycle more important?
My point is that Teddy is against windfarms near his beach home. When he decides to suffer then maybe the rest of us will consider it.
31 May 2006 at 12:10 PM
I simply can not understand the $/ton prices for any of these schemes.
If they can produce carbon at those sorts of costs then I want to buy it as it seems to be the cheapest fuel around.
If someone can sell me sustainable carbon at $5.5/tonne or $30/tonne, I want to speak to them urgently.
So that is not what is going on.
So what is?
—-
I have had a look at some of the offerings and one that is not so vague as to be useless is the following.
If you take alook at the “Trees for Life” offering and, at its basis, is the proposal:
“… to plant the appropriate number of trees to absorb (over the lifetime of each tree} the CO2 produced …”.
If the life time is 100 years (I could not find a figure on their website) and you buy the approprite amount of trees/per year to eventually (100 years) become carbon neutral then after:
1 year you have but back 1% of usage so far
2 years 1.5% of usage so far
3 years 2%
4 years 2.5%
…
99 years 50%
100 years 50.5%
(at this point the trees are reaching maturity and you will simply be replacing the oldest trees)
101 years 50.99%
110 years 55%
150 years 67%
200 years 75.25%
400 years 87.63%
Basically you would never get there unless you’re cold, dead and sequestrated and the project has to continued without you.
What you really need is to buy 100 times your annual tree requirement up front to cover your ongoing emissions. As this would be rather a lot of cash then perhaps you could take out a 100 year lease on your total tree requirement and could leave the residue to your estate when you die, or more simply rent it for each year that you live and burn carbon.
The figure suggested (in ecobusinesslinks.com chart) for “Tree for Life” is $20/tonne offset.
So you would need a mortgage on a total sum of 100*$20 = $2000/(tonne/year) of offsets which with a borrowing rate of 5% that would be an ongoing $100/(tonne/year) plus capital repayments.
This is five times the headline figure of $20 and would be purely the result of interest rates being 5 times tree growth rates (1% per year assuming 100 years).
Without capital repayments one would be renting which is actually more appropriate. The cost of renting is just the $100/(tonne/year) plus a profit for the owner in the real world.
Using Carbonfund.org’s “Zero Carbon” rate of 24tons/year of offsets and neglecting the difference between tons and tonnes.
Then a rental of $2,400 per year would be the cost to be actually carbon neutral with “Trees for Life”.
Which is a lot.
—–
At the other end, where do they get land that you can rent for 100 years for $10/tree. Again based on 100 years this is 10c/tree-year. (The figure they give is UK£5/tree which is slightly less).
Where can one find land at those sort of rates?
Well in the case of “Tree for Life” it would appear to be from the UK Forestry Commission who own some/most/all of the land in question.
I can not believe that “Trees for Life” are paying anything approaching a commercial rate for the land (perhaps nothing at all). Furthermore much of the work is carried out by volunteers and almost certainly would be carried out anyway as part of a Forestry Commission plan to return the forest to a more natural habitat.
These are good people do great work but I can not see that it amounts to additional carbon reduction.
If anyone knows better please tell.
I can not calculate a figure for what it would cost to be carbon neutral but I would suggest that $200/tonne would be a lot closer the mark.
31 May 2006 at 12:43 PM
Re: #65
Premise #3 in your first argument is a false dichotomy. Dropping fossil fuels completely is not necessary, nor would it deny us the benefits of a high energy economy. There are many alternatives, including finding some efficient mechanism for rebinding the carbon in the atmosphere back into usable hydrocarbons, which if possible, would not even require much in the way of infrastructure changes.
Premise #2 in your second argument simply false: we are in an interglacial period now.
I agree that it is offensive that certain rich folks are unwilling to pay the costs of the society which they so disproportionately benefit from, but I believe that you are slandering the Senator from Massachusetts. While he may have other things to answer for, the controversy you refer to was on Cape Cod and Senator Kennedy lives on Martha’s Vineyard.
31 May 2006 at 12:49 PM
#62, thanks for the comments and support. Each verification model is slightly different, which is not to say better or worse. Kyoto applies to countries, while CCX applies to opt-in businesses. Both standards are rigorous. Green-e is slightly different than ERT. They all measure a metric ton of CO2 reductions.
The price difference has more to do with the rigidity of the market. Kyoto is mandatory and applies to all emissions in about 60 countries. No one can opt out. CCX is voluntary, and one might expect it to initially attract net sellers, not buyers of CO2. Both are highly certified and their reductions real.
Regarding long term prices of CO2 reductions, we disagree that they will go up. While efficiency gains will likely max-out, renewable energy, already less than $5.50 per metric ton of CO2, will only go down in price as supply continues to grow by 20-25% a year. Short term disruptions aside, long term increases in the cost of CO2 reductions via efficiency will compete with the dropping cost of CO2 reductions via renewables.
31 May 2006 at 12:52 PM
Hi folks. There are some people out there who have done a lot of work on this issue. Here are some links
“Marketing and Making Carbon Dumps” (2005)
http://www.thecornerhouse.org.uk/pdf/document/carbdump.pdf
“The Sky is not the Limit” (2003)
http://www.carbontradewatch.org/pubs/skyeng.pdf
“To Keep the Oil Flowing” (draft, 2005)
http://www.thecornerhouse.org.uk/pdf/document/CarbConv.pdf
“Low-Hanging Fruit Always Rots First”, in Trouble in the Air (2005)
http://www.unp.ac.za/ccs/files/CCS_ENERGYSERIES_1005_COMPLETE.pdf
“The Carbon Shop: Planting New Problems” (1999)
http://www.wrm.org.uy/plantations/material/carbon.rtf
“The Carbon Bomb: Climate Change and the Fate of the Northern Boreal Forests”
(1994)
http://dieoff.org/page129.htm
These are not of course dispassionate scientific analysis. But they are extremely careful work with a high ratio of analysis and facts to rhetoric. I highly recommend them. Many of the authors are economists; some are scientists. I would highly recommend inviting one of them to make a guest post on offsets, and on carbon trading in general - perhaps Jutta Kill.
31 May 2006 at 1:04 PM
67 > some efficient mechanism for rebinding the carbon in the
> atmosphere back into usable hydrocarbons
That would be a perpetual motion machine — to accomplish this as fast as the CO2 is being produced, which is the problem.
That would require more energy than obtained by burning the fossil fuel, to reverse the combustion.
If you allow geologic time to accomplish it, that doesn’t help with the immediate short term problem at all.
31 May 2006 at 1:22 PM
Re: #65
> Does ANYONE believe that people would give up driving, air conditioning, creature comforts, etc to do this? Its not going to happen.
Does ANYONE believe that people would give up their comfort, their time, and their hard-earned money just to help victims of a hurricane a thousand miles away?
Does ANYONE believe that protesters would risk beatings, arrest, incarceration, loss of liberty and perhaps even life, just to help people of another race achieve justice?
Does ANYONE believe that a soldier would willingly jump on a grenade, to his own near-certain death, just to save others?
Does ANYONE believe that a man would endure crucifixion just to show the world an example of the power of love?
31 May 2006 at 1:34 PM
Senator Kennedy’s opposition to the Cape Wind project has been widely reported. Google “Cape Wind” with Kennedy.
31 May 2006 at 1:35 PM
65 — John, you’re asking the exact questions from the article linked in #63, are you using that author as your source for information
31 May 2006 at 1:55 PM
Re #67
I asked for an existing proven technology. Not something that could be, might be, etc. Your solution does not exist today so my question is valid.
As for Sen Kennedy he voted against it and there are numerous reports where his contributors that live there told him to vote no or they would donate elsewhere. Bottom line is he decided his personal gain was more important then the environment. So why can’t I?
My second questionhad two criteria that we assumed for the questions sake to be true. Please either answer it trutfully or ignore the question.
31 May 2006 at 2:02 PM
Re #69
There are always examples of INDIVIDUALS giving up their life to save others. We are not talking about a few people but ALL people. In order to make it work everyone must give up a substantial amount. This will not happen.
As simple proof how many seniors were willing to give up a portion of their social security (tking away some or all SS money when income goes above $75,000). The answer was so little thatthe congress dropped it like a hot potatoe.
If you or others WANT to pay the tax and voluntarily do so then more power to you. Just don’t force me to do it, and I’m sure a mojority of Americans would also say no to this type of wealth transfer and tax increase.
31 May 2006 at 2:08 PM
Here is another point why this tax and wealth transfer won’t work. Say a US corporation makes a certain widget. Now that corporation has to pay a CO2 tax. There are two choices.
1) Raise the price of the widget and depending on price elasticity of the product people still buy it in the same quantity. This results in ZERO CO2 reductions and is ONLY a wealth transfer system.
2) Manufacture the widget in India where the CO2 tax does not apply. This also results in ZERO CO2 reductions since the consuption and energy requirments are still the same. This is a different type of transfer system.
Bottom line is that in neither case does it SOLVE the stated problem of CO2 reductions due to human activity.
The only way to reduce demand of the widget is to reduce the population that wants the widget. [edited]
[Response: The rhetoric level on this post is getting out of control. Repeating points made before, unconstructive strawmen and comments that generate more heat than light will be screened out. In response to your actual point, there is plenty of elasticity in carbon dioxide generation - BP is a good example, they reduced their company-wide emissions by 10% below 1990 levels at no net cost (in fact they saved money) by implementing an internal cap-and-trade system. http://www.climatebiz.com/sections/backgrounder_detail.cfm?UseKeyword=Emissions%20Trading -gavin]
31 May 2006 at 2:33 PM
Currently, the US transfers a very large amount of wealth from taxpayers to corporations, including farmers. (In the form of direct subsidies, tax breaks, R&D credits, “defense” spending, etc., etc.) This is a distortion of the market; combined with undue corporate influence on the political system, it means that a free market does not really exist in the US. Really, you have corporate welfarism, or something like it. [I’m Canadian, and ‘capitalism’ operates similarly here.]
This means that you, via the US government, are subsidising much of the current fossil fuel use. It is not in your short-term interest, or the government’s, or the corporations’, or the market’s, to change this, because the system has been jiggered to ignore/punish/reward certain things. Our “leaders” will react to global warming only when people - you - insist upon it.
So, should people be forced to conserve or use alternatives? I prefer no, but the longer we wait, the more likely we (globally, not just Americans) will be _forced_ to go to centrally planned economies. We will no longer be able to allow people to choose their lifestyles.
All of which leads me to wonder if the US government would actually prefer this arrangement - what government does not covet more power? And what better way to acheive that than by inducing a permanent state of climate crisis? Mother Nature/God makes an even better enemy than humans.
31 May 2006 at 2:42 PM
re: 72
You’ve skipped a possibility: the manufacturer figures out another way to make his product that involves less carbon based fuel.
31 May 2006 at 2:59 PM
73 - Hank, no I’ve been asking this of people for a few years now.
Response to #76.
Gavin, The BP expample you cite was from my option #2. They did internal trading within various business units located in different countries. By finding countires that had high levels of CO2 in 1990 they could state they reduced CO2 but not actually reduce it. Russia joined Kyoto based on this type of scenario.
This is just begging for an Enron type scheme. I set up a corporation in Inda/China/Russia that has high 1990 levles of CO2 allotment. I then move/sell my current levels to these shell companies and funnel the dollars back to the parnet corporation while claiming tax and other credits. I’ve worked in the financial industry and these type of derivitives are common. To actually trust a corporation when they claim they reduce CO2 without reducing actual energy consuption should raise red flags everywhere.
[Response: Not so. As far as I can tell, BP reduced emissions overall - not just in selected countries. Some examples are given here: http://www.bp.com/sectiongenericarticle.do?categoryId=9008205&contentId=7015200 - Emissions reductions came form reductions of flaring, efficiency improvements and sequestration. Unless you have some evidence to the contrary my point stands. -gavin]
31 May 2006 at 3:15 PM
As I could have predicted Taranto rejected my comment in favor of three Gore-bashers.
The following letter has been submitted via the OpinionJournal article response feature.
Contents of response as follows:
#—
Name: Mark A. York
E-mail: mark_y48@msn.com
City/State: Sunland, CA
Date: Wed, May 31st, 2006
Subject:
Re: Warmed Over
Comment:
“Here’s a test. What if science showed conclusively that global warming is produced by natural forces, with all the same theorized ill effects for humanity, but that human action could forestall natural change? Or what if man-made warming were real, but offsetting the arrival of a natural ice age? Would Mr. Gore tell us meekly to submit to whatever nature metes out because it’s “natural”?”
Well it may feel good to Mr. jenkins, but alas it is this statement that is fiction, not what Mr. Gore has portrayed. It shows the opposite. It’s not natural. The appeal to appropriate authority such as NASA trumps what an unpublished thinktank shill says. Yes Mr. Jenkins, the real world is tough and fake ideas get called what they earn. The warm world is already haunting us, yes even through blind eyes like those of this editorial board who keep repeating falsehoods in hope of obsfucating the Inconveinient Truth. Now do you get the title?
#—
31 May 2006 at 3:26 PM
Regarding #64 and Gavin’s response (and #46),
The bathtub analogy is better because the higher the buildup of excess water in the tub, the faster the water is shot through the drain, thereby ameliorating the problem to some degree (right?), but the idea got me wondering about other small percentage changes that would have large cumulative effects. For example, what would be the difference if the Sun’s output increased by 2.5% over its current output. Or, what if the Earth was 2.5% closer or further from the Sun. The calculations probably aren’t that difficult to do, and I think they’d show that 2.5% is actually quite a big deal. I was thinking about using mortgages as an analog, but I confused myself so that’s probably not an effective vehicle for explaining the issue.
31 May 2006 at 3:37 PM
Re: #75
> There are always examples of INDIVIDUALS giving up their life to save others. We are not talking about a few people but ALL people. In order to make it work everyone must give up a substantial amount. This will not happen.
It was INDIVIDUALS who made the decision to undertake sacrifice, in order to help victims of hurricane Katrina: Millions of INDIVIDUALS, not just in the U.S. but around the world. And their sacrifice made a difference; some would say that the efforts of those INDIVIDUALS were more effective than the efforts of the government’s FEMA.
It was INDIVIDUALS who brought about a revolution in civil rights in the U.S. They were not just black INDIVIDUALS; there were white, brown, yellow, all races, whose INDIVIDUAL efforts made a HUGE difference. Not EVERYONE helped; many hindered. But in the end, the sacrifice of INDIVIDUALS changed the world.
As for crucifixion, I was only thinking of one INDIVIDUAL. Do you think his sacrifice was in vain? Did he have no effect on the world?
The efforts of INDIVIDUALS really can change the world. But don’t worry; we won’t expect you to make any sacrifices.
31 May 2006 at 3:44 PM
Gavin or other experts.
In all sincerity I would really like to ask just one question. As you might have guessed I’m a skeptic but not from the global warming prespective. I’m skeptical about what if anything can really be done.
CO2 increases are the ressult of energy consumption or the requirement for a higher standard of living (often going hand in hand). The world has been increasing its energy demand and will continue to do so. Conservation can only slow this increase (never decrease it) since the increase is due to more people and improving standards of living. Those who claim carbon neutral or a reduction in their carbon footprint are misleading since their energy consuption hasn’t been reduced, only redirected. If their energy has not been reduced then there is no real reduction in CO2 except for the minute amounts due to some minor switching to solar or something like that. Therefore, my question is simply this:
What technology is avaiable today or alternative energy source is avaiable that will meet the current and future energy demands of the world (say for the next 25 years) while not costing substantially more then we pay today?
I don’t know of any or know of a combination that exists today that will also reduce CO2 emmissions. The one possibility is nuclear power but even that isn’t a real solution given what is going on with Iran and the other issues surronding its usage.
So can we provide the energy that is needed without heavy CO2 emissions? If this question can be answered truthfully without wealth transfers to other countries then I think most people would then back it. And isn’t this the real goal?
31 May 2006 at 3:57 PM
John, reread #53 please, and the full paper linked there.
How can you possibly not take that seriously? It’s actual lab work, it’s simple enough to understand clearly, and it’s –barely — avoidable on a global scale with quick reduction in CO2.
[rhetorical flourish excised]
31 May 2006 at 3:57 PM
Ref # 82
Dear Grant, [edited - stick to the point]
My point is that in the US this tax won’t fly till you get a substantial number of people who are willing to support it. And to do that you have to make a case for it and not just try scare tactics. People won’t buy it if its going to hurt unless there is proof that it is necessary. It comes down to a simple cost benefit anaylsis that each individual must make but can only happen if a substantial majority actually agrees with it. Due to the political setup a simple majority won’t work since a small number of politicians can block almost anything.
31 May 2006 at 4:03 PM
Gavin,
This is a quote from the BP site you linked:
“Greenhouse gas emissions from our operations in 2004 were equivalent to 81.7 million tonnes CO2. Since 2001 approximately half of our total underlying emissions growth (around 7 million tonnes) has been offset by sustainable efficiency projects.”
By their own admission half of their INCREASE in CO2 was offset. But this still means that their TOTAL CO2 release still increased. This is the point I’m making. We are not REDUCING CO2 but only reducing the increase in CO2. While this is good it doesn’t solve the problem.
[Response: Again, it’s just not so: http://www.pewclimate.org/companies_leading_the_way_belc/company_profiles/bp_amoco/browne.cfm shows that they acheived an absolute reduction of 10% below 1990 levels by 2001. However, while I do agree that this is not enough - claiming that no progress can be made is simply erroneous. - gavin
31 May 2006 at 4:17 PM
I’m not quite sure I get the idea of donating money to build wind-farms and solar panels, then retiring the credits you get. Aside from the verification advantage, why not just build them and not apply for the credits? Wouldn’t that have the same effect? If I understand this correctly, credits can be produced and are not taken from a fixed pool. Therefore, if you get credits (and trade them) for doing something other than decreasing emissions already being produced; you will increase supply of those credits, lowering their market value thereby making it cheaper for someone else to emit CO2 over their cap. That should have a net effect of increasing CO2 emissions rather than decreasing them. Wouldn’t it make more sense to buy somebody else’s emission credits and then retire them? That way, for every ton bought, somebody else won’t be able to buy the rights to emit that much. Also, by increasing demand (by adding to the pool of buyers) and decreasing supply (by taking them off the market), that will raise the price of emission credits making it that more expensive to buy the rights to exceed the cap while making it more profitable to reduce CO2 emissions from already existing sources.
I get the feeling there is something I don’t quite understand about this. Maybe because I’m assuming that people who know far more about economics than I do came up with this plan. Could somebody explain what I’m missing? Don’t get me wrong, donating money to build carbon neutral sources of energy is a great thing, it’s just the emission credit thing I don’t get.
31 May 2006 at 4:31 PM
Re #68:
“Kyoto is mandatory … No one can opt out.” (??) Would you please climb down out of your ivory tower and explain how, in particular, Kyoto will enforce Canada’s commitment, when Canada’s emissions are already about 35% over its Kyoto target and the government has made it clear that it has no intention of complying with its Kyoto obligation?
“Regarding long term prices of CO2 reductions, we disagree that they will go up.” Of course, you can always keep prices as low as you like by making the cap sufficiently high. But would you please look into your crystal ball and tell us how much it will cost, for example, for California to achieve Governor Schwarzenegger’s goal of 80% GHG reduction from 1990 levels by 2050 (which is what the climate scientists tell us is required)?
Re #76:
“Raise the price of the widget and depending on price elasticity of the product people still buy it in the same quantity.” There is an important point that your analysis is missing. The overall demand for widgets may be inelastic, but the cross-price elasticity between low-emission and high-emission widgets can nevertheless be very high. For example, suppose you apply a CO2 tax at the following level for “green” (low-emission) and “brown” (high-emission) widgets:
green widget CO2 tax: $90
brown widget CO2 tax: $110
The tax has two effects: It tends to induce an overall consumption reduction by making all widgets more expensive, and it also motivates consumers to favor green widgets over brown widgets by increasing their price spread. The two effects can be disaggregated by separating the tax into two components: a straight consumption tax, and a refunded CO2 tax, which is the balance between the CO2 tax and the consumption tax. The consumption tax is
green widget consumption tax: $100
brown widget consumption tax: $100
Assuming a 50% market split between green and brown widgets, the refunded CO2 tax is
green widget refunded CO2 tax: -$10 (negative - a profit)
brown widget refunded CO2 tax: +$10
The consumption tax has little effect because demand is inelastic, so it can be dispensed with. The refund makes it politically feasible to raise the tax rate by an order of magnitude, e.g.
green widget refunded CO2 tax: -$100 (negative - a profit)
brown widget refunded CO2 tax: +$100
So the refund basically makes the policy less consumption-restrictive but more technology-forcing. (An interesting real-world application of this policy approach is discussed in the following article: http://www.acidrain.org/pages/publications/acidnews/2000/AN2-00.pdf .)
31 May 2006 at 4:39 PM
Re 83: John -
People like Amory Lovins at the Rocky Mountain Institute (www.rmi.org ) have been pointing out ways to reduce energy use while simultaneously growing the economy since 1982 or so. Some commenters on this site, myself included, have lowered their own energy costs using RMI’s recommendations. RMI, which is free-market oriented, builds on its technical expertise to recommends ways for governments to incent all consumers to save. Ending subsidies for energy consumption would be a good start.
Gavin has cited the BP example - - BP hit its own internal Kyoto-level targets well ahead of schedule at a negative cost (i.e.they made money). There are others.
RMI’s latest book, “Winning the Oil Endgame” shows exactly how to do it in the transportation sector. It is available free online, so there is not much reason not to give it a look.
(Though I’m clearly a big booster of RMI, I’m actually not affiliated with them! Just a fan for decades.)
31 May 2006 at 4:58 PM
Re Comments #3, #11, #17, #31, #39, #40, #41
In various ways, some of these comments about nuclear power illustrate the danger of simply accepting the conventional wisdom about topics outside your areas of expertise.
David writes,”I must point out that Chernobyl had the capacity to make a large swath of the Ukrainian breadbasket, and the city of Kiev, uninhabitale essentially forever, if the core meltdown had reached the water table. Reactors don’t explode like nuclear bombs, but breeder reactors make it a lot easier for people to make bombs.”
This is just silly and bespeaks ignorance of both the Chernobyl accident and hydrology. Chernobyl, close to a worst case accident in many respects, contaminated large areas — heavily near the reactor, less so further away, and with a patchiness due to changing wind patterns during the 10-day course of the accident. The only established safety and hea