Energy & Environment

Henry Paulson Calls for a Carbon Tax

Henry Paulson, writing in the New York Times, declares that, just as “we failed to rein in the excesses building up in the nation’s financial markets …. we’re making the same mistake today with climate change. We’re staring down a climate bubble that poses enormous risks to both our environment and economy. The warning signs are clear and growing more urgent as the risks go unchecked.”

“We need to act now, even though there is much disagreement, including from members of my own Republican Party, on how to address this issue while remaining economically competitive. They’re right to consider the economic implications. But we must not lose sight of the profound economic risks of doing nothing.”

“The solution can be a fundamentally conservative one that will empower the marketplace to find the most efficient response. We can do this by putting a price on emissions of carbon dioxide — a carbon tax.”

“With [the 2008 financial crisis] experience indelibly affecting my perspective, viewing climate change in terms of risk assessment and risk management makes clear to me that taking a cautiously conservative stance — that is, waiting for more information before acting — is actually taking a very radical risk. We’ll never know enough to resolve all of the uncertainties. But we know enough to recognize that we must act now.”

“At the same time, all fossil fuel — and renewable energy — subsidies should be phased out. Renewable energy can outcompete dirty fuels once pollution costs are accounted for.”

 

How McCarthy’s New Role Could Affect Energy Policy

Will energy policy be affected by Rep. Kevin McCarthy assuming the role of House Majority Leader?

Michelle Hackman in the Wall Street Journal: “Two days before Mr. Cantor’s primary defeat, Mr. McCarthy said in an interview with the Wall Street Journal his top priority this upcoming session is to address energy issues. Chief among his targets, Mr. McCarthy has said, is the Obama administration’s decision to regulate greenhouse gases without congressional approval. Mr. McCarthy also plans to introduce legislation that would allow states to buy back federal land in their jurisdiction, which would spur greater energy development by bypassing federal regulations.”

Jason Plautz in the National Journal comments on McCarthy’s views on the EPA:

“The Environmental Protection Agency is already facing a war on multiple fronts as it works to review its smog standards this year … And now Eric Cantor’s upset loss has put one of the ozone rule’s congressional critics—House Whip and presumed next Majority Leader Kevin McCarthy—in position to keep fighting it from the top.”

Nick Juliano at Green Wire adds that wind power could be threatened: “A source close to McCarthy told Greenwire he is not in favor of renewing the production tax credit, which expired at the end of last year. Extending the $23-per-megawatt-hour credit has been the top priority for wind, geothermal and other energy companies that warn their businesses could collapse without the credit.”

Texas Utility Announces it Will be Coal-Free by 2016

Think Progress: “Thanks to new investments in natural gas and utility-scale solar energy, El Paso Electric, a Texas utility with nearly 400,000 customers, announced on Monday that its electricity mix will be free from coal by 2016.”

“Thanks to successive investments in large solar projects, EPE has doubled its utility-scale solar portfolio in less than one year.”

“Deciding ‘it is in the best interest of its 395,000 customers,’ EPE plans to sell off its seven percent stake in the Four Corners coal plant, located on Navajo Nation land near Farmington, New Mexico. The plant came in at number 15 on Environment America’s list of the nation’s top 100 dirtiest power plants, emitting 13.8 million tons of carbon dioxide emissions per year.”

“El Paso Energy’s announcement that it is ‘well-positioned for the Environmental Protection Agency’s new [carbon emissions] regulations … came on the same day Texas governor Rick Perry joined eight other Republican governors saying the rule will cost millions of jobs and slow economic growth.”

Why Mainstream Republicans’ Best Climate Solutions are Still Bad

Jonathan Chait comments on the difficulty of “right-leaning intellectuals” to prod their Party toward taking constructive action on climate change.

“They find themselves caught between their pragmatic impulses and a Party moving farther and farther from any semblance of reality. The reformicons are attempting to formulate a coherent line on climate change that can straddle this widening gulf. They are rapidly settling upon an agreed-upon solution: new technology.”

“And yet, even though they have moved a fair distance from mindless Republican climate orthodoxy, the reformicons remain well short of grappling with reality.”

“The deeper problem with the technology-first line is that the reformicons seem to have no specific idea about how their proposal would work, or even what current technology policy is.”

“You might wonder why a group of policy wonks would rally around a proposal without having a clear idea of what they want or even whether it currently exists. The answer is that reform conservatism is designed to produce a policy agenda for the next Republican candidate. This is a worthy project, but unfortunately imposes the significant constraint that any proposal must be acceptable to the GOP and unacceptable to Democrats.”

Berkeley Weighs Global Warming Warning Labels

National Journal: “Air pollution could soon come with a warning label.”

“At least if you live in Berkeley, Calif. The city is weighing a proposal that requires gas-station owners to attach air-pollution warning labels to gas pumps. The labels alert customers that gasoline consumption releases carbon dioxide, which in turn contributes to climate change.”

“And they don’t mince words. ‘GLOBAL WARMING ALERT!’ a mock-up of the labels screams in all capital letters.”

Berkeley climate change warning label

Majority Back New EPA Rules Even if it Means Higher Utility Bills

President Obama’s job approval rating may have plummeted to a low of 41%, but Americans back him on climate change policies.

The latest NBC/Wall Street Journal poll finds that “more than six in 10 Americans said they believe climate change is either ‘a serious problem’ requiring ‘immediate action’ or a big enough concern that ‘some action should be taken.'”

“In addition, 57% said they would favor a proposal to curb greenhouse gas emissions, even if it results in higher energy bills. And two-thirds of those polled said they either ‘strongly’ or ‘somewhat’ support new rules outlined by Mr. Obama to set strict emissions caps on coal-fired power plants to significantly reduce carbon emissions by 2030.”

Cap-And-Trade: A Cheaper Option Than Regulatory Policies?

Think Progress: “According to a new study, a price on carbon could be easier to attain economically than previously thought.”

“The study, authored by two MIT researchers and published in Energy Journal, compared ‘traditional regulatory approaches’ to cut carbon, such as a country-wide clean energy standard and a fuel economy standard for new vehicles, with a cap-and-trade system that set a price on carbon. The researchers found that there were significant cost differences between approaches that aimed to limit emissions from one sector — such as electricity or transportation — and approaches that aimed to broadly cut emissions from all sectors. They looked at cost differences across different U.S. regions, sectors and income classes, and found that, if emissions-reducing regulations on the electricity sector and a fuel-economy standard were implemented, the two combined would cost more than a single cap and trade system.”

Co-author Valerie Karplus: “With a broader policy, like cap-and-trade, the market can distribute the costs across sectors, technologies and time horizons, and find the cheapest solutions.”

U.S. emissions under different regulatory scenarios.

Spring 2014 Was the Hottest on Record Globally

Think Progress: “The Japan Meteorological Agency (JMA) reported Monday that March-May was the hottest in more than 120 years of record-keeping. It was also the hottest May on record. This is especially noteworthy because we’re still waiting for the start of El Niño.”

“It seems all but certain more records will be broken in the coming months, as global warming combines with an emerging El Niño.”

JMA-Spring

Koch Brothers Gear Up for Multi-Million Dollar Energy Initiative

Daily Beast: “In the face of expanding energy regulations, stepped-up Democratic attacks and the ongoing fight over Obamacare, the billionaire Koch brothers and scores of wealthy allies have set an initial 2014 fundraising target of $290 million which should boost GOP candidates and support dozens of conservative groups—including a new energy initiative with what looks like a deregulatory, pro-consumer spin.”

“The new energy initiative is the handiwork of Freedom Partners Chamber of Commerce, the Koch network’s central fundraising hub, which was established in late 2011 as a trade group … In 2012, the fledgling group —which claims some 200 members who each kick in at least $100,000 yearly— funneled over $230 million dollars to numerous other non-profits in the Koch ecosystem according to the group’s 2012 tax returns.”

According to an email from Koch fundraising “honcho” Kevin Gentry, the “new multi million dollar campaign by environmentalists is arguably an effort to distract from the failures of Obamacare. But you and I know energy is a critically important issue for the United States.”

“The details and scope of the new energy initiative, which has not been announced, aren’t clear yet, but it’s expected to cost in the seven figures and be a topic at the Koch donor conference this weekend …Two sources familiar with Koch donor world told The Daily Beast that a new nonprofit group is being formed to help run the new energy initiative.”

Reducing Emissions Hasn’t Stunted Economic Growth in These States

Despite “cries of protest” over Obama’s carbon emissions reduction plan, Justin Gillis and Michael Wines of the New York Times write that “cuts on the scale Mr. Obama is calling for … have already been accomplished in parts of the country.”

And, “their strides so far have not brought economic ruin. In New England … residential electricity bills fell 7 percent from 2005 to 2012, adjusted for inflation. And economic growth in the region ran slightly ahead of the national average.”

“Maine, Massachusetts, New Hampshire and New York cut their power-sector emissions more than 40 percent from 2005 to 2012, according to the Georgetown Climate Center, with Maryland close behind at 39 percent.”

“That has allowed them to dial down coal-burning power plants and dial up gas-fired plants … It is likely to lock in a growing dependence on natural gas to generate electricity.”

But there are risks associated with this approach: “In the past, gas prices have been more volatile than coal prices,” and “the Obama plan effectively puts the administration on the side of increased fracking.”

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Majority Willing to Pay to Curb Climate Change

Bloomberg: “Americans are willing to bear the costs of combating climate change, and most are more likely to support a candidate seeking to address the issue.”

“By an almost two-to-one margin, 62 percent to 33 percent, Americans say they would pay more for energy if it would mean a reduction in pollution from carbon emissions, according to the Bloomberg National Poll.”

“‘It is a rare poll where people responding will stand up and say ‘tax me,’ said J. Ann Selzer, founder of Des Moines, Iowa-based Selzer & Co., which conducted the poll.

“A majority of Americans see climate change as a threat, with 46 percent classifying it as a ‘major’ threat and 27 percent as a ‘minor threat.’ Half would like the federal government to adopt policies to combat it in the next decade.”

 

Stop Whining: Regulations Always Spur Innovation

Daniel Gross of Slate: “The Obama administration’s new emission standards … have inspired predictable backlash from industry lobbyists, Republican officeholders, and the dwindling corps of coal-country Democrats. The regulations will hurt jobs, damage the economy, raise electricity prices, and generally have a poor economic benefit.”

“Over the past century government efforts to improve vital commercial and economic systems have always incited reaction that was as apocalyptic as it turned out to be incorrect.”

Gross cites numerous examples of regulations that have seen resistance but ultimately have been successful: new lighting industry standards, car mileage standards, Clinton’s truck emissions rules, and efficiency standards for home appliances.

“Part of this is the expected behavior of people who don’t like change, or who find the status quo profitable, or don’t believe the government should be in the business of demanding that industry and consumers set their sights higher. Reactionaries gonna react. But it betrays a stunning lack of historical awareness and an unseemly lack of faith. Time and again, American businesspeople and engineers have figured out new and improved ways of doing things. More often than not, higher standards, far from being punishments, are a spur to innovation.”

Beyond the Rhetoric: Red States Take Action on Dirty Coal

The EPA’s new carbon regulations, according to Ronald Brownstein, threaten to deepen the “Red-Blue divide” with red states apparently resisting “through every means available.”

According to The New York Times, however “beyond the campaign rhetoric, even here in Kentucky, which ranks No. 1 in the nation in carbon emissions per unit of electricity produced from all sources, others more quietly are saying that doom may not be at hand. In drafting its regulation, the Environmental Protection Agency listened to energy-rich states like Kentucky and offered wide flexibility to meet its requirement … Despite cries of a ‘war on coal’ that echo through mining country in eastern Kentucky, the region is already taking hardheaded steps toward a post-coal economy.”

“John Lyons, Kentucky’s assistant secretary for climate policy, is cautiously optimistic that the carbon limits will not raise electric prices sharply enough to drive out manufacturers, who set up in the state for rates that are among the lowest in the country.”

Representative Harold Rogers, a Republican from eastern Kentucky, “did not minimize the impact of the carbon emissions rule, which he called devastating. But he pointed out that coal jobs had been in decline for decades.”

Anti-Intellectualism Main Obstacle to Climate Policy

Paul Krugman questions why, when it comes to global warming, it’s so hard to take action.

“I’ve been looking into that issue and have come to the somewhat surprising conclusion that it’s not mainly about the vested interests … The monetary stakes aren’t nearly as big as you might think. What makes rational action on climate so hard is something else — a toxic mix of ideology and anti-intellectualism.

“Consider, in particular, the much-hyped ‘war on coal.’ … What’s rarely pointed out is how few such jobs still exist … Coal employment has fallen by two-thirds, not because output is down — it’s up, substantially — but because most coal now comes from strip mines that require very few workers.”

“At this point, coal mining accounts for only one-sixteenth of 1 percent of overall U.S. employment.”

“Or put it this way: The real war on coal, or at least on coal workers, took place a generation ago, waged not by liberal environmentalists but by the coal industry itself. And coal workers lost.”

“So why is the opposition to climate policy so intense?… It doesn’t matter how market-friendly you make the proposed intervention; this is a direct challenge to the libertarian worldview.”