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12/02/2007

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zeppenwolf

An interesting discussion, (as always). But like every analysis here, the entire exercise depends utterly on the assumptions made for discussion's sake.

In this case, I can't help but wonder whether, in a few years time, the current global warming hysteria is discredited and ignored... just as we ignore the apocalyptic threats of "global cooling" made only a few years ago.

Perhaps warming is real; perhaps it is a problem; perhaps we humans are responsible; perhaps even, given all the above, we humans can and should do something about it.

Unfortunately, as long as global warming takes the place of a faith-based religion for many of its loudest activists, (and it clearly does), and as long as global warming serves as a highly promising platform for the adherents of intra and international Marxism, (and it clearly does), my reaction is to care less, not more. Where I detect an undeniable lack of credibility, I react adversely. But that's perfectly normal, n'est-ce pas?

For myself, a more relevant and interesting discussion would be on the subject of who this hysteria promises to benefit, and at what cost to whom...

But perhaps that is not an appropriate subject for this blog.

Matt Gunn

Responding to, "Another major problem with any carbon-offset system is that activities producing the so-called 'offsets' may have happened anyway," Michael Wara at Stanford has looked extensively at the Clean Development Mechanism under Kyoto and found pervasive evidence of this plus a number of other potentially perverse incentives. For example, through the generation of CDM credits, producers of HCFC-22 (a refrigerant) could earn twice as much by destroying a by-product or production (HFC-23) than by selling HCFC-22.

paco

Dear Prof. Becker, although I agree with your analysis of the "cap and trade" mechanism for reducing carbon emissions, I want to refer you to an interesting critique of the Kyoto cap and trade system published in the Oct. 25 issue of Nature (a prestigious science journal), vol. 449, pp.,973-975.

MEL1776

Like a commenter on the Posner post, I also would prefer a carbon tax over a cap and trade system because it is an easier sell and it can be used sell an elimination or cut of an inefficient tax, such as corporate income taxes. We have to tax something; I would rather it be carbon emissions rather than corporate income with all its complexities.

Jack

Mel: Good point. Especially as one such as Greenspan mentioned "something like a $3/gal" tax on gasoline to spur what he sees as a very urgent need to lower our fuel consumption.

Back when Pres. Clinton proposed a BTU tax I thought it a far more relevant tax to begin to lower our deficit than the income tax that was later implemented. In fact, for many years before we had energy crises I've though we should move toward taxing non-renewable (irreplaceable!!) resources and lowering the taxes on very renewable labor and creativity. The trouble at this point is the regressive nature of the policy coupled with low end wages being so low that the option of a tax rebate to offset the regressivity would have to be a direct payment as so few low income folk have any tax liability.

The complaint I get from many is that of "the government telling us what to do" but of course the current mix of income and fuel taxes are incentives to take certain actions among which are moving further out of town which triggers more building of "freeways" and the consumption of yet more fuel; our average commute is the longest in history and has consumed ALL of the fuel savings that came from CAFE standards.

One hope I have of this very long campaign season is that candidates will tire of "the usual" and that Youtube and other citizen questioners will force them into actually taking on the issues. Any rational energy policy will have to lean heavily on conserving, but it's the last message any pol wants to bring to his prospective voters.

Evelyn

As a electrical power consumer, both personally and through my business, I have limited ways of signaling to the utilities that I would prefer they use more carbon-neutral production. My local utility, for example, says I can purchase green power credits, but only up to a tiny fraction of the power I use.

For my business, I purchase power through my landlord, and so have no way of getting the message through to the utility at all.

I purchase carbon credits because I want to signal with real dollars I have an interest in receiving power generated through different means. It's a weak signal, but it's all I've got.

Jack

"Eve" we need more like you to "get things started" in the right direction. More seriously, I'd bet that a poll would show more women thinking longer term on issues of sustainability than men.

Utilities are sort of a funny biz, in that most of their local income comes from administration and taking care of their delivery systems instead of mark ups on their energy. MANY of them would benefit from our lowering consumption since that saves them having to invest in new grid to bring power to them and for distribution.

I suppose the best message will come when more businesses install solar and drop out of paying them for anything. On the other hand, as solar is capital intensive and works only part of the time, and consumers are still a bit leery of its complexity, soon, I'd think we'd find the wiser utilities installing solar where it makes the most sense and leasing the equipment to the consumer. IF we could evict the current Congress that's fully owned by fossil fuel (and ethanol) lobbyists and hired some who WERE concerned about our future, they could provide tax free or even subsidized bonds to speed the implementation of solar and wind.

Keep trying! and vote NO INCUMBENTS unless you're sure they've a vision and commitment consistent with your own. Jack

Daniel

With all due respect to some of the commenters, a carbon tax is not an effective substitute to a cap and trade system. The cap is needed to reduce carbon emissions to an appropriate level principally derived at through science.

Coal fired electric plants are the principle source of US carbon emissions. A carbon tax on them will primarily be borne by electric consumers because the price elasticity of demand for their product is extremely inelastic mainly due to the extremely limited number of substitutes, most of us cannot convert our houses or apartments to wind or solar power when the electric company raises rates to pay for the tax. While it is true that they are regulated entities and do not have unlimited discretion in price, GA Power has a lot more sway with the local legislature than I do.

The above mentioned lack of substitutes means that the majority of the reduction in expenditures produced by the income effect of the tax will be on other goods, which may or may not significantly contribute to global warming

Thus while a carbon tax on driving born substantially by individually consumers may be an effective way to control carbon emissions realted to long commutes in SUVs, they are not an effective substitute for a cap and trade program to reduce emissions form major industrial sources.

Jack

Dan; w/o arguing the need for cap and trade as one method, I'd disagree to some extent about the elasticity of electrical consumption.

"because the price elasticity of demand for their product is extremely inelastic mainly due to the extremely limited number of substitutes, most of us cannot convert our houses or apartments to wind or solar power when the electric company raises rates to pay for the tax."

............ In the case of pricier coal, I'd see a better opp for utilities (or new competitors) to implement wind and large scale solar.

......... and while I think some of the more conscious beings are looking for twisty light bulbs and other means of lowering electrical consumption from a standpoint of being responsible citizens, I'd guess that higher electric bills will speed these changes at a faster pace, especially for businesses and other high users.

......... a couple examples just for fun? A year ago or so the front of a 3500' sf home was lit by six bulbs including down lights over the garage, two cans over the porch and a couple carriage lights over a small front patio. 40-60 watts was about right for them so over 300 watts when they were all lit. Changing them all to 13 watt twisties brings it down to 78 watts.

But there's more in both convenience and savings to be had at little cost. In the winter when most of us get home after dark it would be nice to have the house lit, so I've suggested to some builders we rep that we wire in a $10 photocell on most of the exterior lighting so they'll go on at dusk. Perhaps a timer is next? So the homeowner can decide how and when his home is lit, AND reduce consumption/CO2.

Several years ago in a 1200 foot office where the tasks were increasingly done on computers I found "the landlord's" lights to be brighter than we needed; taking out two of the four tubes on most of the troffers and replacing the other two with warm whites made a better lighting environment.

Savings? Two dozen 40 watt tubes for nearly 1,000 watts. This is in the midwest, of hot summers, so there is the additional savings of the A/C not having to pump the heat from 1,000 watts out of the office.

I can't help wondering how much energy could be saved had we a President who would just ask Americans to do two things for him/her?? this week: 1. check the air pressure in all of our vehicles 2. Find a couple of small energy reducing projects we could do around our home, apt, or office/shop. I'd bet on 3-5%.

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