Carbon tax more acceptable than cap-and-trade?

(Photo of coal-burning plant near Kenosha, Wisc., from Flickr and photographer James Jordan )


Who'da thunk it? Cap-and-trade was the way to go the past few years because a carbon tax was politically impossible. Now, suddenly, that's turned on its head. A carbon tax -- or at least "a price on carbon" -- seems to have the best chance.

Climate legislation may not be dead after all, but cap-and-trade is. The odd triad – Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) – are preparing to release the main points of their “compromise” legislation to the Senate sometime this week or next -- and it doesn't include cap-and-trade.

They don’t have the 60 votes yet, haven’t even drafted the language yet, but are ready to work the crowd of uncertain senators and interested lobbyists to see if they can reach consensus.

President Obama says he’s willing to be flexible as long as the plan puts a price on greenhouse gas emissions and cuts them about 17% (below 2005 levels) by 2020, as he promised the rest of the world.

The three say their plan can do that.

Other important points:
• Three different mechanisms will be used for three different sectors.
• Power plants will go first and their emissions will be priced and capped and made more stringent over time.
• Industries, such as chemicals, cement and paper, will be able to wait several years, but will eventually be included.
• Motor fuel will have a price attached to carbon (that's right, a carbon tax) with at least some of the revenue going to transportation projects and helping auto companies becom more fuel-efficient.
• Nuclear power will be supported – Obama already took a step in that direction, announcing $8.3 billion in loan guarantees for two reactors in Georgia.
• R & D for carbon capture and sequestration will get support too.
• With emphasis on reducing dependence on foreign oil, plans for offshore drilling for oil and gas here are included.

Cap-and-trade a non-starter
The GOP has tagged cap-and-trade as “cap-and-tax” and has scared people into thinking energy costs will rise. The term is now political poison. Not to mention distrust of Wall Street and any trading mechanism.

What seems to be taking its place is “cap-and-dividend,” in which proceeds from a “price” on carbon (whatever form it takes) would go back to consumers to help them pay higher utility costs. The advantages are two:
• Voters won’t blame their Senators for sticking them with higher costs in a bum economy,
• Utilities will be able to raise prices to pay for the changes they have to make.

Can it pass?
It’s impossible to satisfy every politician, voter and interest group, but the triad is sure trying. Graham said even climate change skeptics can support this bill, which will provide jobs and reduce dependence on oil from unstable parts of the world. It's also a way for the GOP to appeal to young voters, he told Tom Friedman of the New York Times.

The three are running up against a serious time crunch in a Senate still preoccupied with health reform and jobs -- and an election that has incumbents very nervous. (Note that John McCain is very much absent from this effort by his two amigos.) And Graham suggested if the Dems pass health reform by reconciliation, all bets are off.

Once the bill's details are worked out, the EPA would need about a month to do its analysis, and other departments would have to weigh in. If it is in fact possible to get 60 votes, we still have a problem – similar to the one in health care.

The House has already passed a bill, HR 2454 (last June – did you forget about that?) and it is based on cap-and-trade. So, will the two chambers be able to reconcile their differences before election season heats up?

It seems like a tall order.

(Sources: Reuters, E&E Daily, PlanetArk , New York Times)

Chicago Climate Action Plan here after long delay, calls for massive community effort to cut GHG

(Photo of Chicago skyline from Flickr and photographer Atelier Teee/Terrence Faircloth)

Weekly Angst: Finally, the long-awaited Chicago Climate Action Plan is here. Mayor Daley unveiled it last week, apparently after convincing the power structure in the city to go along with it.

In many ways it is very ambitious. The goal is to reduce greenhouse gases 80% below 1990 levels by 2050, with an interim marker of 25% reduction by 2020. But success will depend on the actions of business, labor, civic leaders and individual residents, so buy-in is important. And someone will need to be pushing the agenda.

CCAP is more comprehensive than many city plans, covering everything from retrofitted buildings to biking to roof gardens to power plants and beyond. Yet it is sparse on numbers.

The plan calls for a 30% increase in mass transit ridership and suggests some ways that could happen, but offers no dollar amounts or specific numbers. Likewise it calls for more efficient motor vehicle fleets, but gives no specifics – unlike New York City, which seeks a total turnover of taxis to hybrids in 5 years.

There are some numbers in the plan, and I’ll list some of them here. I like numbers because you can measure progress against them.

Strategies to reduce GHG
Overall, the 4 strategies for reducing greenhouse gases call for:
• 30% of the savings to come from making buildings more energy efficient
• 34% to come from clean and renewable energy sources
• 23% from transportation and
• 13% from reduced waste and industrial pollution.

Some other numbers
The plan calls for the following:
• Retrofit 50% of the commercial and industrial building stock (that’s huge if you think about it)
• Improve efficiency at 50% of residential buildings (also major, in a city of 3 million people)
• Upgrade or re-power 21 power plants
• Procure enough renewable energy to reduce electricity emissions 20%
• Double household-scale renewable electricity
• Increase roof gardens to cover 6,000 buildings and plant 1 million trees
• Recycle 90% of waste by 2020.

This last – recycling – is a sore point for Chicago. The blue bag system never worked well and is slowly being shifted over to a suburban-type blue cart system, ward by ward. The plan calls for all blue carts by the end of 2011, and in the meantime, there will be communal recycling boxes throughout the city, within a mile of any residents who don’t yet have blue carts. The plan also touts the city’s toxic and electronic waste center, which is open three days a week for disposal.

City government plans to upgrade building codes and have energy audits for its 500-plus buildings, including schools, with the goal of reducing energy costs 30-40%. The Department of Water Management will put solar panels on the filtration plant and Park District employees will be taught to install solar panels.

Programs and tools
The plan emphasizes tools and programs to help businesses and individuals retrofit their buildings and take other steps to cut emissions. Among them are a “one-stop shop” for financing and technical assistance in retrofitting buildings. The city and CTA have a task force to encourage transit-supportive neighborhoods. Businesses will compete with one another to reduce CO2. And a Chicago Offset Plan will invest in renewable energy, trees and retrofitting.

Do it yourself
The plan also lists steps businesses can take to reduce their emissions, including (a favorite of mine) turning off the lights when they’re not in use, switching to efficient CFL bulbs, lowering the thermostat 3 degrees in winter and raising it 3 degrees in summer, turning off electronics in off-hours, reducing auto trips and driving the most fuel-efficient cars available, using videoconferencing instead of travel, buying green products and recycling.

There’s also a list for residents, which includes: switching to public transit (getting rid of a car could save $400/month) or at least keeping your car tuned up and tires inflated, re-using shopping bags, using CFLs and turning off lights and unplugging electronics when not needed, and planting or adopting a tree.

The plan, available for download at http://chicagoclimateaction.org, includes information about current emissions, expected impacts from climate change and a strategy for adaptation to extreme weather and ecosystem changes that are inevitable.

All-in-all it’s a good blueprint for reduction of greenhouse gases. Now it needs to be implemented. That will require a huge community effort by business, labor, government and residents -- and most of all, leadership from the mayor, just as Mayor Bloomberg is pushing for major change in New York City. A powerful mayor should be able to make it happen.

EPA regulation of GHG would harm Bush legacy, Cheney, oil interests thought: report

Washington Report 1: President Bush dumped an EPA plan to regulate greenhouse gas emissions from power plants, refiners and autos at the urging of White House insiders, who feared it would hurt the president's legacy, a former EPA official told a congressional committee this week. The administration's efforts to respond to the Supreme Court's April 2007 decision, calling on EPA to regulate heat-trapping emissions, were outlined by Jason Burnett, a former adviser to Administrator Stephen Johnson, who spoke to the House Select Committee on Energy and Global Warming. Committee Chair Ed Markey (D-Mass.) concluded, in a report that combines Burnett's closed-door testimony with documents obtained by subpoena, that the president backed down after hearing arguments from the office of Vice President Dick Cheney, the Office of Management and Budget, the Transportation Department, Exxon Mobil Corp. and others in the oil industry. (Source: E&E Daily)

One more try to extend renewable tax credits so wind, solar growth doesn't lose power

(Photo of wind turbines from Flickr and photographer Nick Atkins.)

Washington Report 2: A new effort to assure continuation of renewable energy tax credits got the green light yesterday from the House Ways and Means Committee. The proposal backs off on paying for the $16.9 billion in credits by rolling back breaks for oil and gas, instead paying for them with totally unrelated tax changes for offshore and multinational companies. The Senate had objected to a tax hit on Big Oil but the House wanted to pay as you go. So it seems this may satisfy both, which would salvage the incentives that keep renewable energy viable. The three times since 1999 that wind credits were allowed to expire, installations dropped 70%, according to the American Wind Energy Assn. The new bill extends wind production tax credits till the end of 2009, biomass and geothermal credits for 3 years, and the solar energy incentive 6 years, also doubling the solar credit cap to $4,000. The bill also provides incentives for cellulosic biofuel and renewable diesel, installation of E85 pumps, and buying plug-in cars, as well as allowing $1.4 billion for coal and gasification projects that store carbon. (Source: E&E Daily)

Freight trains on a roll -- guess why?

(Photo of freight train in California from Flickr and photographer Michael Patrick)

News Update: Railroad companies are investing more in infrastructure, in large part to carry Asian imports from U.S. ports to major cities. Since 2000, some $10 million has gone into expanding and improving tracks, and buying locomotives, with another $12 million planned. With the high price of gasoline and concerns about carbon emissions, railroads are competing successfully with truckers because they use one-third less fuel. “We’re finally making money and can put it into infrastructure,” the CEO of Norfolk Southern said. No mention of high-speed rail, though. (Source: Greenwire)

New report touts efficiency as best way to cut energy demand
The most economical way to cut growing energy demand and reduce greenhouse gas emissions is to get more productivity from energy, says a report from the McKinsey Global Institute, released last week. Until now, the emphasis has been on increasing supply. The report “identified huge opportunities to reduce energy demand and carbon emissions through efficiency,” Diana Farrel, director of the Institute told Reuters. Squeezing waste out of industry and cars could cut the growth of demand in half from its current 2.2% a year. It would require an initial investment of $170 billion a year, but would pay for itself in savings, the report said. (Reuters PlanetArk)

Nuclear developers drawn to South, despite energy surplus there
Fifteen of the 21 filings for new reactors before the Nuclear Regulatory Commission are for sites in the south, despite the fact that many natural gas power plants there are idle much of the year. Attracted by the prospect of future growth, and possible state incentives above and beyond generous federal tax credits, the utilities are ignoring the fact that existing plants can meet the region’s needs for the next 20 years, critics say. There’s also the issue of cost overruns. Entergy’s Mississippi customers are still paying $12 a month for overruns at a 20-year-old plant. Utilities don’t like the high, and fluctuating, cost of natural gas, but the price of nuclear reactors has skyrocket 200% since 2000, according to Cambridge Energy Research Associates. (Source: PlanetArk)

Envirocab hybrid taxi company rolls out in Arlington, Va.
A taxi company that bills itself as “carbon negative” has started with 15 hybrid vehicles in the Washington, D.C., metro area. It will buy offsets from Carbonfund.com to counteract the emissions it does release -- and then some. The company aims to have 50 hybrid Priuses, Camrys, Escapes and Highlanders on the street by the end of March. The cabs will help Arlington County meet its goal of reducing GHG 10% by 2012. The county also bought Priuses for one-third of its fleet. (Source: Associated Press)

Etc.: Dirty tar sands crude is expected to raise global warming emissions from Midwest refineries 40% in the next decade … Colorado's Xcel Energy says it will double renewable energy by 2015 and close 2 coal-fired power plants … owners of gas-guzzlers will have to pay $50 to drive them into central London … a Dutch tax on fuel-inefficient cars would add a whopping $28,000 to the price of a Hummer … hunters and fishermen support the Lieberman-Warner cap-and-trade bill and other global warming proposals that give money for wildlife protection.