Technology Review
A bill before Congress may prove a costly way to reduce greenhouse gases.
Experts are applauding a sweeping energy bill currently before the United States Congress, saying that it could lead to significant cuts in greenhouse-gas emissions and improve the likelihood of a comprehensive international agreement to cut greenhouse gases. "It's real climate-change legislation that's being taken seriously," says Gilbert Metcalf, a professor of economics at Tufts University. But many warn that the bill's market-based mechanisms and more conventional regulations could make these emissions reductions more expensive than they need to be.
The bill, officially called the American Clean Energy and Security Act of 2009, is also referred to as the Waxman-Markey Bill, after its sponsors, Henry Waxman (D-Ca.) and Edward Markey (D-Mass.). The legislation would establish a cap and trade system to reduce greenhouse gases, an approach favored by most economists over conventional regulatory approaches because it provides a great deal of flexibility in how emissions targets are met. But it also contains mandates that could significantly reduce the cost savings that the cap and trade approach is supposed to provide.
In a cap and trade system, the government sets a cap on total emissions of greenhouse gases from various industrial and utility sources, including power plants burning fossil fuels to generate electricity. It then issues allowances to polluters allowing them to emit carbon dioxide and other greenhouse gases; total emissions are meant to stay under the cap. Over a period of time, the government gradually reduces the cap and the number of allowances until it reaches its target. If companies' emissions exceed their allowances, they must buy more.
Economists like the system because companies can choose to either lower their emissions, such as by investing in new technology, or buy more allowances from the government or from companies that don't need them--whichever makes the best economic sense. It is meant to create a carbon market, putting a value on emissions.
In the proposed energy bill, the government will set caps to reduce greenhouse-gas emissions by 17 percent by 2020 (compared with 2005 levels) and by 80 percent by 2050--targets chosen to prevent the worst effects of climate change. Setting caps will make electricity more expensive, as companies turn to cleaner technologies to meet ever lower caps or have to spend money to buy allowances from others with lower emissions. But the bill has some provisions for cushioning the blow, especially at first. For one thing, it gives away most of the allowances rather than charging for them, and it also requires that any profits gained from these free allowances be passed on to electricity customers. It also allows companies to buy "offsets" that permit them to pay to reduce emissions outside the United States.
If the program is designed right, there are fewer allowances than the total emissions when the program starts. At first, when the caps are relatively easy to meet, the prices for allowances on the carbon market will be low. But eventually, they will get higher as the allowances become scarcer. In an ideal world, companies will predict what the price of the allowances will be, and plan accordingly.
Increasing mileage standards to 54.5 mpg won't require major new technologies, say experts.
Obama considers nuclear power and offshore drilling, backs off from cap and trade.
Climate deal could deliver incentives to grow nascent energy technologies.
Unfortunately, the legislation is unlikely to stimulate investment into new nuclear power technologies that can actually solve our environmental problems. Companies like GE and Westinghouse have invested billions in developing the current Gen III+ power plants, yet have not been able to recoup these investments by selling them (in the US). The next generation of power plants will require technology research and development that can only be accomplished in national nuclear facilities such as at Oak Ridge and Idaho National Labs. Until the US government provides stable funding to university, industry, and national laboratory researchers, the promising new technologies will blossom then wither with the political whims of the Congress.
One example of such a technology is the liquid fluoride thorium reactor (LFTR), which can provide energy cheaper than from coal -- the only way to dissuade all nations from burning coal; the developing nations will never agree to carbon taxes that impede their growth and aspirations to lifestyles of the OECD nations. The LFTR is fueled by inexhaustible thorium, produces <1% of the long-lived radiotoxic waste of today's nuclear power reactors, and can even consume the nuclear waste by existing plants.
For a tutorial introduction to the technology and benefits, please visit
http://rethinkingnuclearpower.googlepages.com/aimhigh
and watch the Google Tech Talk at
http://www.youtube.com/watch?v=VgKfS74hVvQ
or just Google "aim high thorium" for more information.
If these thorium reactors produce cheaper energy than coal, why isn't China building them instead of coal plants?
1. Perhaps thorium nuclear reactors produce energy more cheaply than from burning coal CLEANLY, but less cheaply if one doesn't care at all about pollution.
2. Nuclear is higher tech, which may presently be beyond China's day-to-day abilities, country-wide (e.g., quality control throughout entire supply chain, large numbers of properly trained engineers with zero tolerance for mistakes, expertise in system of systems integration, etc.). We're not just talking about a few showcase reactors (which I'm sure China could handle); we're talking about running the whole country on nuclear.
Cap & trade seem to have one virtue - the buying and selling of phantom assets can be done at a profit, without any obligation to ever deliver goods of value. Much like the swaps...
Each state is going to be assessed for its power generation and use and then have their credits assigned to them? If the Feds are going to allocate Carbon Credits to each state, then each state must have a system in place to allocate the Carbon Credits to each facility. Sounds like a system just begging for abuse and polical quid-pro-quo.
The Administraton can reward "good" states and punish "bad" states. State regulators can also then reward "good" companies and punish "bad" companies. All depends on how you defind "good" or "bad".
Companies in different states will have to manage different allocations to similar facilities. Politicians can "help" large donar organizations and hinder those that support the opposition. All in the name of "clean air".
Aside from the techical aspects of this issue, a government bureaucrat will decide who gets how many credits. Sounds like the perfect system to breed corruption.
Government programs are neither effective or efficient. This will be another massive government lead disaster which we will have to pay for.
Do you think we will have a chance to read the legislation before it gets passed, or will the crisis be too pressing to permit the time?
The bill can be read here:
http://energycommerce.house.gov/Press_111/20090331/acesa_discussiondraft.pdf
But it will be going through changes before it moves to the House floor. And then more later before it becomes law, if it gets that far.
Here's a link to a summary of the bill.
http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1635:committee-releases-updated-summary-of-american-clean-energy-and-security-act&catid=122:media-advisories&Itemid=55
Since carbon dioxide isn't polution
You have to follow the money. Who stands to gain from the sale of phantom assets? Companies like Generation Investment Management are only in existance to profit from this made-up industry. If you care to learn more there is a ton of information readily available on the internet. One such source is here: http://www.humanevents.com/article.php?id=22663
You can find others if you want to know what is really going on. If you don't then you can stick your head in a cloud of CO2 and pretend it is killing the planet. By the way, sticking your head in a cloud of CO2 is only good if you are a tree or anything else GREEN. Use a bucket of water instead but follow the link provided so you are aware of the dangers of doing so first: http://www.dhmo.org/
Not Cap & Trade - Ration & Tax
Good points above.
Nuclear energy is a major part of the equation. We can just buy/license the technology from France if we had the will. France now produces >75% of their electricity from nuclear. Source: http://www.world-nuclear.org/info/inf40.html
What are we afraid of that the French aren't?
Cap & Trade is a political bureaucracy to exploit a tangential aspect of a hypothetical problem. Recent reports indicate the Earth moving farther away from the sun in its orbit. Anybody suggesting buying more SUVs to prevent the inevitable cooling? No? Then perhaps they weren't the problem to beging with.
Ration & Tax is the name of the game. Just like the playground pusher, the government is giving away the allocations for free. Once the junkie is hooked, Bingo! up go the prices. Rewards for the "good" states and industries with higher allocations and lower tax rates. Equate "good" with higher campaign contributions and politically correct business conduct. "Bad' equals contributing to the opposition party or criticizing government policy, or just being in the cross-hairs of the media/propaganda wing of the government central planners. And this plan won't reduce any pollution, just give the government more money.
As PJ O'Rourke famously said, "Giving politicians power and money is like giving teenage boys whisky and car keys."
Re: Not Cap & Trade - Ration & Tax
What if we designed a fleet of Nuclear Reactors Ships which are like portable nuclear reactors. This way when states like California realize horrible blackouts, they can contract these ships to provide them with power?
Just a Weird thought.
The premise of cap and trade--that CO2 drives global warming--is based on United Nations' climate reports that are tainted by politics and agenda. The reports don't pass the smell test -- see www.energyplanusa.com . Plus, there's been a lot of new climate discoveries since the UN's Kyoto Protocol that are largely omitted from the reports.
America needs our own scientific assessment of global warming. I am a Democrat who for the past 20 years believed global warming was caused by CO2. But now after reading the UN reports I suspect the fix was in. The UN reports contain much good science, but in the end, the UN is a political organization where politics trump science. We need our own objective climate commission to think through global warming and determine whether it's driven by CO2. ...before we heavily burden our economy with CO2 taxes.
Just because we don't have our own all encompassing government report on climate change, doesn't mean there isn't a multitude of both reports, and peer reviewed publications by scientists in the US supporting this theory.
You say that politics trumps science, which largely I would agree with. Fortunately for once, what the science is pointing to, and the legislation being proposed to address these scientific findings, at least agree on the fundamental causes of climate change.
Want clean power? Get government off the backs of those trying to install minihydroelectric projects. The permitting and study cost is at least half the entire project cost for small <1gW projects. We could install many of these (without affecting fish migration) if FERC and other government agencies had a simple process.
Kevin, first you should have started with "Some experts". You also should differentiate between Greenhouse Gases (GWGs) and not fall into the trap that they are all alike. N2O is a GWG and 296 times more effective as a GWG than CO2. Methane (CH4) is 22X more effective than CO2 and results from such activities as letting good wood rot in the forest. CO2 is a good gas, essential for all plants on Earth, and yet has decreased 94% since animals started roaming Earth 540 million years ago. When we get down to about 97% reducion (150ppm), nearly all plants on Earth will die. Kevin, why not write an article on how global CO2 concentrations have decreased over geological time, and that by sequestering it, we may hasten the end of life on Earth? Why not include how increased CO2 increases crop production, and by trying to lower it, we will reduce crop production? The consequences of this CO2 knee-jerk reaction is potentially global starvation.
1) Global GHG trading programs are aimed at various gases and not just CO2.
2) The US has had success in trading such matters before, see what happen with acid rain.
3) Rampant GHG emission (of which CO2 is one) is PART of our concern. As such CO2 is part of the problem.
The general reader feeling on cap and trade from these comments is clear. It is more a tax ploy.
I feel the same, and think it will greatly hurt the USA's competitiveness in a horrible economic downturn. It is also very clear that countries like India and China are never going along with this, no matter how much the environmentalist email them!
Also, the second you give politicians the right to tax something, it is very hard or close to impossible to take that way. Unfortunately, the voices of concerned business owners are muted because their constituents are not being represented in the congress.
It seems like we are headed again down a rock road, much like the anti nuclear movement of the 1970s which in retrospect was super dumb.
What a shame, I expected more out of my government.
Dr. Brian Glassman US citizen
Why do you suppose China and India are installing windfarms for power generation?
Good point, I hope India and China they are concerned about the mass pollution they are putting into the atmosphere, because on my travels there I saw how bad it was.
Quick question, how many wind mills were they putting up? Because if it is a substantial number that may show a commitment to going towards a green path, however, if it is only a few small fields, it may be done simple because some remote areas electrical needs are best served by smaller capital investments of a set of windmills.
http://www.chinadaily.com.cn/english/doc/2005-11/07/content_491859.htm
The above link is Old news, I hope the project is moving ahead in this bad economic times.
Yet again, if cap an trade is not signed globally, it at best will be a one sided tax on companies in fully developed countries. \
Brian Glassman
Whats wrong with the US and other countries moving forward with C&T or a carbon tax and over time others can/may join such a scheme. But to wait for some global unanimity doesnt make sense.
You say that cap and trade is "an approach favored by most economists over conventional regulatory approaches" but fail to point out that a (revenue-neutral) carbon tax is favored by most economists over cap and trade. So why C&T rather than a carbon tax? Because 1) there's no political power in a carbon tax, and 2) the C&T scheme is not revenue-neutral. This is just the (U.S.) Democratic Party acting like they always have. The fact that they are not pushing nuclear CLEARLY shows that this is not about global warming.
1) There is a market incentive with C&T that isnt there with carbon tax.
2) Poorer nations and poorer individuals would suffer far greater from a carbon tax and far great displacement/hardship could result
and
3) I think a combination system with a sliding C&T/carbon tax offers far better coverage. We/government could set metrics and allow for the two systems to be applied. It may be that in certain places adherence to C&T yields more energy efficients and/or reduction in GHGs while other areas may respond more favorably to a carbon tax.
1. It is ridiculous to say that there "is a market incentive with C&T that isnt there with carbon tax." Carbon tax adds to the final cost, just like C&T. Reduce the carbon use, and you reduce the carbon tax, which allows you to sell more cheaply and/or make more profit.
2. It is similarly ridiculous to say, "Poorer nations and poorer individuals would suffer far greater from a carbon tax and far great displacement/hardship could result." To the consumer, the final result of C&T is indistinguishable from a carbon tax. Oh, except that C&T will cost the consumer MORE, thus hurting the poor WORSE.
Anyway, I have repeatedly proposed a large carbon tax, combined with greatly increased personal exemptions to mitigate the impact on the poor.
3. C&T = lobbying, special interests, and speculation. Carbon Tax = fairness, no middle-men getting rich, and stability that favors long-term research and investment in reducing C release. Why poison a carbon tax scheme with any C&T whatsoever? This smacks of special interest lobbying.
I wish there was a like button. I read through all the comments looking for someone who figured that out. Thank you for your contribution to society.
My gut reaction that the size of the carbon tax law is filled with "one liners", which will allow everybody to game the system. This has been the record of congress for the, who knows, how long,
Can I buy an inefficient large carbon producer, crank it up for one day, close it down the next, and become a millionaire selling carbon credits?
Can I cheat on how much carbon I emit… You betcha. Or worse yet, many countries will simply, say "NO WAY".
Why is nuclear power plants off the table?
Why is global warming always bad? I can see many benefits. Are not we due for a new ice age? That's what some computer modals show. And lastly, computer modals are not a proven scientific technique, it's a guess at best. Unconscious bias, is very difficult to eliminate, and likewise, how can computers "control" the experiment?
How can anyone predict the wind patterns, fifty years from now with global increasing global warming?
I suggest we all reread or read "Atlas Shrugged" . The premise is that Government attempts to correct the problems it created but only make the problems worse. And my gut feeling today, that is what is happening today with the financial crisis.
Ron Hansing…. I enjoyed the discussions. Thanks for the topic.
Cap n trade are based off how much the industry produces, not what the company did the year before the it was introduced.
Global warming will create unstable weather with temperature extremes on both sides. It will cause a rise in sea levels. Most people on islands live on the low lying coast. It will cause drought in some places and floods in others. Some people use glaciers as a water reserve.
Computer models are fairly accurate educated guesses. They're how we predict the weather, aerodynamics, and how much to raise or lower prices to sell about all of a retailers inventor .
I'd expect unconscious bias to be against eco-friendly since it requires we sacrifice.
Computers won't control, bias, or effect the experiment because they have no will.
Manufacturing in the United States is in trouble. That's bad news not just for the country's economy but for the future of innovation.
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wcfloyd
13 Comments
China
We will ham-string ourselves and our economy on this cap& trade law, and meantime "underdeveloped" countries like China open a new coal fired power plant every week. I recently read someone's calculations that to achieve the 80% overall reduction in total carbon footprint would require going back to the level of Native Americans before the settlers came over. If this bill goes through as currently written, I fear we may one day become China's newest province.
Reply
briang1621
173 Comments
Re: China
I Totally agree.
Reply
MadScientist
5 Comments
Re: China
I would rather struggle to be more energy efficient and incorporate elements of cap & trade into our economy THAN live with the environmental hazards that China has/will have as it continues with old energy technology.
Reply
mkogrady
425 Comments
Re: China
Seeing that China has such strict safety laws and protects it's citizens like a mother hen, it's fair to say that this may be an intentional way to take care of their long term over population issues.
By increasing the likelyhood of the workers getting sick by noxious fumes, unsafe conditions and generally a slow poisoning process the Chinese Government will be able to safely reduce their long term liabilities AND increase their standard of living for the survivors.
Where's the US in all this? Probably standing on the side lines because getting the Chinese to weaken their Communist ideals, we reduce the chances of going to war with them.
Why fight, when converting your enemy is easier and safer overall?
Reply
Curt2004
90 Comments
Re: China
"I recently read someone's calculations" That's a very compelling argument... *sigh*
Reply