RC’s farewell post.
H/T Eli Kintisch, ScienceInsider
Author: Tom
Reactions to Waxman Markey
My take: It’s a noble effort, but flawed. The best thing about it is the broad, upstream coverage of >85% of emissions. However, there are too many extraneous pieces operating alongside the cap. Those create possible inefficiencies, where the price of carbon is nonuniform across the economy, and create a huge design task and administrative burden for EPA. It would be better to get a carbon price in place, then fiddle with RPS, LCFS, and other standards and programs as needed later. The deep cuts in emissions reflect what it takes to change the climate trajectory, but I’m concerned that the trajectory is too rigid to cope with uncertainty, even with the compliance period, banking, borrowing, and strategic reserve provisions. So-called environmental certainty isn’t helpful if it causes price volatility that leads to the undoing of the program. As always, I’d rather see a carbon tax, but I think we could work with this framework if we have to. Allowance allocation is, of course, the big wrestling match to come.
The WSJ has a quick look
Joe Romm gives it a B+
GreenPeace says it’s a good first step
USCAP likes it (they should, a lot of it is their ideas):
USCAP hails the discussion draft released by Chairmen Waxman and Markey as a strong starting point for enacting legislation to reduce greenhouse gas emissions. The discussion draft provides a solid foundation to create a climate strategy that both protects our economy and achieves the nation’s environmental goals. It recognizes that many of these issues are tightly linked and must be dealt with simultaneously. We appreciate the thoughtful approach reflected in the draft and the priority the Chairmen are placing on this important issue.
The draft addresses most of the core issues identified by USCAP in our Blueprint for Legislative Action and reflects many of our policy recommendations. Any climate program must promote private sector investment in vital low-carbon technologies that will create new jobs and provide a foundation for economic recovery. Legislation must also protect consumers, vulnerable communities and businesses while ensuring economic sustainability and environmental effectiveness.
The API hasn’t reacted, but the IPAA has coverage on its blog
CEI hates it.
Rush Limbaugh says it’ll finish us off,
RUSH: Henry Waxman’s just about finished his global warming energy bill, 648 pages, as the Democrats prepare to finish off what’s left of the United States. Folks, we have got to drive these people out of office. We have to start now. The Republicans in Congress need to start throwing every possible tactic in front of everything the Democrats are trying to do. This is getting absurd. Listen to this. Henry Waxman and Edward Markey are putting the finishing touches on a 648-page global warming and energy bill that will certainly finish this country off. They’re circulating the bill today. The text of the bill ought to be up soon at a website called globalwarming.org. The bill contains everything you’d expect from an Algore wish list. Reading this, I don’t know how this will not raise energy prices to crippling levels and finish off the auto industry as we know it. (More here)
Time points out that the Senate could be a dealbreaker:
The effects of the already-intense lobbying around the issue were being felt across the Capitol, where the Senate the same afternoon passed by an overwhelming margin an amendment resolving that any energy legislation should not increase electricity or gas prices.
That’ll make it tough to get 60 votes.
Draft Climate Bill Out
AP has the story. The House Committee on Energy and Commerce has the draft. From the summary:
The legislation has four titles: (1) a ‘clean energy’ title that promotes renewable sources of energy and carbon capture and sequestration technologies, low-carbon transportation fuels, clean electric vehicles, and the smart grid and electricity transmission; (2) an ‘energy efficiency’ title that increases energy efficiency across all sectors of the economy, including buildings, appliances, transportation, and industry; (3) a ‘global warming’ title that places limits on the emissions of heat-trapping pollutants; and (4) a ‘transitioning’ title that protects U.S. consumers and industry and promotes green jobs during the transition to a clean energy economy.
One key issue that the discussion draft does not address is how to allocate the tradable emission allowances that restrict the amount of global warming pollution emitted by electric utilities, oil companies, and other sources. This issue will be addressed through discussions among Committee members.
A few quick observations, drawing on the committee summary (the full text is 648 pages and I don’t have the appetite): Continue reading “Draft Climate Bill Out”
Feeding Frenzy
Some admin stuff:
- I’ve started sharing items from my newsreader, here
- The SD discussion list feed never worked right for me, so I put it on FeedBurner, which fixes things. You can subscribe to that here
- There’s a FeedBurner version of this blog’s feed here, but you can also use the direct entries feed
- There’s also a FeedBurner version of my delicious bookmark feed
The Acid Bathtub
I noticed a few news items on the SO2 allowance market today, following up on the latest auction. Here’s the auction history:
The spot permit price has collapsed, from a high of $860/ton in the 2006 compliance stampede, to $62. That’s not surprising, given the economic situation. What is a little surprising is that the forward price (allowances for use starting in seven years) fell to $6.63 – a tenth of the previous low, spot or forward. What’s going on there? Do plants expect a seven-year recession? Are utilities hoarding cash? Do they expect the whole market to unravel, or to become irrelevant as climate policy imposes a more tightly-binding constraint?
Carbon Confusion
Lately I’ve noticed a lot of misconceptions about how various policy instruments for GHG control actually work. Take this one, from Richard Rood in the AMS climate policy blog:
The success of a market relies on liquidity of transactions, which requires availability of choices of emission controls and abatements. The control of the amount of pollution requires that the emission controls and abatement choices represent, quantifiably and verifiably, mass of pollutant. In the sulfur market, there are technology-based choices for abatement and a number of choices of fuel that have higher and lower sulfur content. Similar choices do not exist for carbon dioxide; therefore, the fundamental elements of the carbon dioxide market do not exist.
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On the emission side, the cost of alternative sources of energy is high relative to the cost of energy provided by fossil fuels. Also sources of low-carbon dioxide energy are not adequate to replace the energy from fossil fuel combustion.
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The development of technology requires directed, sustained government investment. This is best achieved by a tax (or fee) system that generates the needed flow of money. At the same time the tax should assign valuation to carbon dioxide emissions and encourage efficiency. Increased efficiency is the best near-term strategy to reduce carbon dioxide emissions.
I think this would make an economist cringe. Liquidity has to do with the ease of finding counterparties to transactions, not the existence of an elastic aggregate supply of abatement. What’s really bizarre, though, is to argue that somehow “technology-based choices for abatement and a number of choices of fuel that have higher and lower [GHG] content” don’t exist. Ever heard of gas and coal, Prius and Hummer, CFL and incandescent, biking and driving, … ? Your cup has to be really half empty to think that the price elasticity of GHGs is zero, absent government investment in technology, or you have to be tilting at a strawman (reducing carbon allowances in the market to some infeasible level, overnight). The fact that any one alternative (say, wind power) can’t do the job is not an argument against a market; in fact it’s a good argument for a market – to let a pervasive price signal find mitigation options throughout the economy.
There is an underlying risk with carbon trading, that setting the cap too tight will lead to short-term price volatility. Given proposals so far, there’s not much risk of that happening. If there were, there’s a simple solution, that has nothing to do with technology: switch to a carbon tax, or give the market a safety valve so that it behaves like one.
Spring has (Un)Sprung
Spring has arrived here in Montana, though there’s at least two months of snow still to come. Spring critters have arrived, as if on cue. This weekend we saw our first robin, bluebird, sandhill crane, and woolly bear caterpillar. The caterpillar found a little bit too much warmth – he’s fast becoming a fossil in a pool at Mammoth Hot Springs:
Typical Montana: in the time it took me to write this, then find & upload the photo, it’s snowed almost a foot and yet another bird (juncos) has arrived.
Having a Blast in Bozeman
I don’t often get to read about my adopted hometown in the national papers; it’s usually pretty obscure. When FAA analysts look for a small-time airport to poke fun at, we’re first on the list. However, today the NYT has covered the gas explosion that destroyed half a block of downtown, including some wonderful historic brick buildings. The blast was so powerful that we heard it from our house, 6 miles away with an intervening ridge. Sadly there’s no recovery for one person, but I hope the rest of downtown bounces back quickly.
FutureGen killing a mistake?
Via ClimateArk,
US government slammed over coal project
Basic accounting error led government department to miscalculate ongoing project costs
The document, which examines the restructuring of the FutureGen project in January 2008, found that a basic accounting error led the department to miscalculate ongoing project costs. This led it to drastically alter the nature of the project, delaying its operation by three years.
FutureGen, which was meant to begin operation in 2012, combined integrated gasification combined cycle (IGCC) with carbon capture and sequestration (CCS).
The initiative was designed to be an experimental one for emerging clean coal research, but construction prices had been escalating as material and labour costs increased. The DoE decided to withdraw support for the industry alliance that was partially funding the programme in January last year.
“Contrary to best practices, DoE did not base its decision to restructure FutureGen on a comprehensive analysis of factors, such as the associated costs, benefits, and risks,” says the report.
“DoE made its decision based, in large part, on its conclusion that construction and material costs for the original programme would continue escalating substantially in the definite future and that lifecycle costs were likely to double.”
However, the DoE’s own Energy Information Administration has pointed out that significant cost escalation for building power plants does not continue in the long run.
The department also made a fundamental mistake in assessing ongoing project costs. It said that costs had doubled from original estimates, using that as the key justification for withdrawing funds from the alliance.
But when it compared its original 2004 estimate of the project’s cost with the alliance’s 2006 estimate to reach that conclusion, it did not take into account that the first estimate was in constant 2004 dollars, whereas the latter was in inflated dollars. Had it acknowledged this difference, the project cost would only have increased by 39 per cent ($370m), according to the GAO.
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Another good reason to make sure your units balance. I find this explanation of the cancellation barely credible. There must be more to this than meets the eye.
Friendly Climate Science & Policy Models
Beth Sawin just presented our C-ROADS work in Copenhagen. The model will soon be available online and in other forms, for decision support and educational purposes. It helps people to understand the basic dynamics of the carbon cycle and climate, and to add up diverse regional proposals for emissions reductions, to see what they imply for the globe. It’s a small model, yet there are those who love it. No model can do everything, so I thought I’d point out a few other tools that are available online, fairly easy to use, and serve similar purposes.
From MNP, Netherlands. Like C-ROADS, runs interactively. The downloadable demo version is quite sophisticated, but emphasizes discovery of emissions trajectories that meet goals and constraints, rather than characterization of proposals on the table. The full research version, with sector/fuel detail and marginal abatement costs, is available on a case-by-case basis. Backed up by some excellent publications.
Ben Matthews’ Java Climate Model. Another interactive tool. Generates visually stunning output in realtime, which is remarkable given the scale and sophistication of the underlying model. Very rich; it helps to know what you’re after when you start to get into the deeper levels.
The tool used in AR4 to summarize the behavior of 19 GCMs, facilitating more rapid scenario experimentation and sensitivity analysis. Its companion SCENGEN does nice regional maps, which I haven’t really explored. MAGICC takes a few seconds to run, and while it has a GUI, detailed input and output is buried in text files, so I’m stretching the term “friendly” here.
I think these are the premier accessible tools out there, but I’m sure I’ve forgotten a few, so I’ll violate my normal editing rules and update this post as needed.