Economically safe ways to cut carbon use....

Today’s post: Wednesday, 3-11-2009

I. First the bad news.:

A. We may be running out of time to deal with C02 and other causes of man-made global warming.

One scientist said recently that we need to cut the current 385 ppm of CO2 to 350 ppm, which is a 10 % drop, to avoid severe economic dislocations due to unfavorable climate change within the lifetimes of many of the children being born today. Meanwhile we are actually still releasing MORE CO2 each year into the air than will allow this drop to happen though the rate of increase has slowed somewhat due to the global recession and some efforts to stop building coal-fired power plants and to install more renewable energy sources.

His take is that the only way likely to be effective to cut CO2 release fast enough is to immediately tax carbon that is burned for fuel.

B. Right now, most of our economies in the world get over 70 % of their energy from carbon fuels.

So adding to their cost now, while the world is trying to recover from a severe recession might prolong it or make it worse.

II. Clearly the have your cake and eat it too strategy is to initiate carbon taxes and cap and trade procedures now; but to minimize their near term economic costs in the near future AND to invest massive amounts of money adding renewable sources of energy, increasing our energy efficiency, and since it has political support and replaces carbon fuels, do our very best to build more nuclear plants that reuse their uranium input, so called breeder reactors, while making them as close to 100 % terrorist proof and radiation leak proof as possible.

This IS probably the wrong time for reversing the recession to add a dollar a gallon carbon tax to gasoline; and comparable taxes on burning diesel and jet fuels, coal, and natural gas –OR to initiate cap & trade rules that would incur similar costs.

However, we CAN:

a) Initiate feed-in tariffs to ALL utilities that generate electricity in the United States to support the building and financing of renewable energy sources of electricity.

That does increase costs slightly in the near term. But it increases cost moderately over the long term and very little in the first few years. That will create thousands of jobs as Germany’s use of feed-in tariffs proved already. And, while we are getting out of the current recession the increases in electricity cost will be low enough, there will be almost no drag on the economy.

b) Immediately create jobs doing inexpensive things like weatherizing homes to make them more energy efficient.

c) Where there ARE energy efficient choices already available, tax the less energy efficient choices enough to cause them to cost 10 % MORE than the energy efficient choices. That will cause little economic drag in the short term & will actually net out economic INCREASES within a year or two.

d) We can discontinue allowing companies to leave the real cost of their fuels unpaid -- such as by outlawing environmentally destructive coal mining practices and no longer allowing new coal fired plants to be built that allow ANY smoke or particulates to escape into the air.

e) Go ahead and set up carbon taxes and a cap and trade system NOW -- BUT make it contingent on the economy and the availability of renewable or nuclear substitutes in terms of when and how fast it kicks in.

They should kick in a tiny bit now to get people used to operating with them in existence and to build their payment infrastructure.

But, the base rate should be modified by the availability of noncarbon energy sources and the unemployment rate; and the base rate should go up very gradually at first.

For example, we may want and need to impose a combination carbon tax and cap & trade system to add $5 a gallon to the cost of burning gasoline or diesel fuels made from petroleum by the year 2039. But it clearly would a disaster to start with that now.

But we could add 5 cents a gallon now and likely do no harm. That would initiate these taxes.

Then, once commercial quantities of algae based biofuels are available in commercial quantities and plug in hybrids and electric cars are 40 % of all cars on the road and unemployment is again below 7 % nationally, it may make sense to start increasing the tax by 5 cents a month. Getting to those favorable conditions might take 5 to 10 years. But once we start this tax increase period, the taxes will reach a point where fossil fuels will cost MORE than the alternatives readily available with further tax increases on fossil fuels still to come. Even though that may take 15 to 20 years to completely happen, ramping these taxes up gradually in this way will make it economically safe to do. And by 25 years from now, CO2 levels in the world’s air will begin to actually go down.

Why pay $10 a gallon for gasoline when algae based fuel is $3 a gallon and running your car on solar generated electricity costs the equivalent of $1.50 a gallon? Once you can run your car on these sources, you won’t mind $10 a gallon gasoline as much as you would $4 a gallon gasoline now.

I think this IS doable.

My ideas sketched out here are not as clearly thought out as would be needed for actual legislation. But I think they contain the principles that will enable an economically safe transition that starts the taxes now but only allows them to begin to kick in fully as we bring alternatives online and our economy is recovering enough to overcome any of its short term negative effects.