unger@hrtwd.com

Get The Energy Sector Off The Dole

January 4, 2011 By unger@hrtwd.com Leave a Comment

In “Get The Energy Sector Off The Dole“, clean energy investor Jeffrey Leonard offers a great way to make renewable energy more competitive, reduce pollution and greenhouse gas emissions and help restore our economy to some rationality and health.

The title says it all. Leonard suggests ending all direct subsidies, tax advantages, hidden subsidies in special regulatory treatments and other “externalized” subsidies for all energy industries.

Some choice quotes:

“Government statistics show that about 70 percent of all federal energy subsidies goes toward oil, natural gas, and coal. Fifteen percent goes to ethanol, the only renewable source of energy that consistently gets bipartisan support in Congress (think farm lobby and Iowa). Large hydro-power companies—TVA, Bonneville Power, and others—soak up another 10 percent. That leaves the greenest renewables—wind, solar, and geothermal—to subsist on the crumbs that are left.

None of these estimates account for continuing support to the nuclear industry, estimated to be about $1 to $2 billion, much of it to promote research and development efforts on new nuclear technologies and waste disposal methods. There are plenty of hidden subsidies, too. We place a cap on liability for accidents (like the BP oil spill). We offer the nuclear industry large loan guarantees. And, of course, we maintain an immense military embroiled in the Middle East and elsewhere as it tries to secure access to energy resources around the globe………..”

“We can waste money and distort the market by subsidizing all of these forms of energy. Or we can just call it quits on the waste. Disarm completely. Kill all the subsidies—yours and mine,,,,,,,,,,,.”

“So we find ourselves in a new political moment when for the first time it is possible to imagine an alliance of GOP libertarians, disaffected environmentalists, and budget hawks coming together for a grand deal that would sweep away sixty years of bad energy policy. Obama should seize the moment to bring this coalition together in support of a single objective: to eliminate all government subsidies and tax credits on production of all primary sources of energy.”

Filed Under: energy policy, Renewable Energy Tagged With: energy policy, subsidies, tax policy

Replace ALL Federal Government Revenue With A Simple Energy Tax

October 17, 2010 By unger@hrtwd.com 2 Comments

America needs a new answer regarding energy, economics and the environment. Our current systems are failing and the solutions currently on the table won’t work. And everybody knows it.

We also need to rethink how we fund our government. The current tax system discourages work, productivity, free enterprise, job creation and almost every other goal and value our economy is purported to be based upon. The anger growing across America is in large part inspired by the complexity and irrationality of our tax system.

It is increasingly obvious that it isn’t enough trying to address the massive challenges that confront our nation by making minor adjustments to the sclerotic patchwork of contradictory public policies that has emerged over the decades. And recent efforts at government micromanagement of the entire econ0my are clearly not going to work. It is pretty clear from the polls that most Americans are fed up with Congress, the federal government and with politicians from both parties.

But one real solution to address many of our most fundamental challenges is astoundingly simple, clear and bold. It is a solution that can be strongly supported by people across the entire political spectrum of America – once we overcome our profound fear of sensible change.

I propose that it is time that we replace 100% of our federal government revenues with an energy tax and in doing so completely unleash our society from the burdens and distortions of our current counterproductive tax system.

That sounds completely impossible at first thought, but as shown below, the numbers work. It is actually a far more realistic proposal than all counterproductive pseudo-solutions to the daunting problems our country faces that make their way through Congress these days.

After the failures of the Copenhagen Climate Conference and the Cap and Trade corporate welfare scheme in the Senate, the environmental and clean energy communities are regrouping to figure out what’s next.

Many environmentalists are now jumping on board with the Breakthrough Institute and others who are calling for massive new government research and development for clean energy solutions on the order of the Manhattan Project or NASA’s mission of the 1960’s to put a man on the moon. Surely better technology will be welcome. But after all the recent waste our federal government has been involved in and the massive deficits we already face, it is highly doubtful that Congressional or public support for such a huge government effort will be forthcoming.

Others have long argued that if we are serious about reducing pollution from our wasteful energy system, making renewable energy cost competitive, spurring the growth of dynamic new energy industries, creating bountiful new job opportunities, reducing our dependence on foreign oil, improving our balance of trade deficit and all sorts of other notable goals – then we clearly need to raise the price of petroleum. And we should do it simply and completely transparently through an oil tax. But up until now everyone, including me, has been talking about timid energy tax solutions that are unlikely to be enough to either do the job or garner adequate public support.

Upon reflection, I’ve come to realize conventional solutions aren’t nearly enough. Neither a modest energy tax or significantly increased public investment in clean energy technology, while infinitely better than corrupt proposals like Cap and Trade, are bold enough solutions. Facing continuing economic stagnation, as we pass the crest of the era of peak oil production, it’s time to completely re-imagine political possibilities and get serious about transforming our economy and restoring our nation’s economic productivity.

Replacing 100% of our federal government revenues with an energy tax is a transformative proposal that can inspire the American people and appeal across the political spectrum, while igniting an unprecedented era of economic prosperity.

Look at the numbers:

According to the US Energy Information Agency, our country currently consumes 19,498,000 barrels of petroleum a day, which is the equivalent of 298,904,340,000 gallons of petroleum a year.

All federal revenues for fiscal year 2010 are projected to be about $2,165,000,000,000. That includes all individual income tax, corporate income tax, investment taxes, social security tax, disability insurance, hospital insurance, unemployment insurance, excise taxes, fees, energy and transportation taxes, and every other form of federal government revenue other than debt.

So doing the math, if we were to replace every single source of government revenue with a tax on petroleum, that tax would only be $7.24 per gallon. And if you add in the full recent cost of gasoline of about $2.60 a gallon nationally, not even discounting for the federal and state taxes already built into that price, the total price on gasoline and other petroleum based fuels would be $9.84 a gallon.

According to the US Energy Information Agency, that isn’t significantly more than average European gas prices in March of this year: Belgium-$7.18, France-$6.98, Germany-$7.12, Italy-$7.06, Netherlands-$7.68. And those countries are burdened with massive taxes on top of high energy prices.

On average according to the US Energy Information Agency, along with paying far more for petroleum, Europeans paid about twice what Americans paid for natural gas and coal in 2009. So if we added to the energy sources being taxed to offset current federal revenues both the over one billion short tons of coal consumed each year in the US, along with the 23 trillion cubic feet of natural gas we consume annually, the overall level of fuel taxes could be around the same as European energy prices, while completely replacing all other forms of federal taxation and government revenue.

Most sensible people would jump at the opportunity to trade a European level of energy prices in exchange for no IRS, no income taxes, no payroll taxes, no business taxes, no inheritance taxes, no government fees and no government interference with our personal lives and business revenues.

For those who will inevitably scream this level of energy taxation will make American industry uncompetitive, the one other revenue source the feds should have is a tariff on goods from countries that don’t implement similar levels of taxation on energy. That unilateral action will do far more to spur other countries toward responsible energy policy than complicated well intentioned, but unenforceable climate treaties. At the same time it could further reduce our energy taxes, or perhaps help offset the federal budget deficit.

Of course change this profound couldn’t happen overnight and would need to be phased in. And inevitably in the transition, the winners and losers will all be lobbying madly in Washington to turn a simple idea into the inevitable compromised and complicated sausage making that is all Congress seems able to produce. But if we insist that simplicity and transparency are fundamental to success, perhaps a bold proposition like this could gain enough public support to overcome the corrupting influence of lobbyists.

Is this whole idea completely crazy? ….. Maybe.

Or maybe its so obvious and simple that the only reason not to consider it is all the special interests that will be completely upended by the elimination of our current corrupt and senseless tax system. Lets face it, this kind of change would impact every single American in a major way and will scare the hell out of many. But in the end, anyone honest will recognize that it would be a far more rational and sensible way to fund our government than the increasingly untenable ways we do so today.

Think of the business and investment potential it would unleash. Think of the truly free economy unfettered by manipulations of the tax code. Think of the productivity gains when businesses make decisions based on common sense rather than tax consequences. Think of the rebirth of American industrial opportunity when advantages are eliminated for cheap products from China being subsidized by their low cost energy, lack of environmental standards and the low cost of wasting fuel in transport. Think about the jobs created when we no longer impose punishing taxes on working and on productive investment. Think of the jobs restored to this country when we eliminate the insane tax subsidies for shifting industrial productivity overseas and eliminate the payroll tax penalties on hiring people. Think about the time, money and talent it would free up when we no longer have to spend countless hours and dollars reporting our personal business to the IRS. (According to CNS news: The Internal Revenue Service estimated that about 7.75 billion hours of human labor went into completing all of the 2009 tax forms and that doesn’t begin to count the huge amounts of time and money wasted figuring out how to game the system and avoid taxes). Think of the personal freedom and productivity regained for everyone when we eliminate the entire irrational tax code.

Many will argue that people will start to conserve energy with high price signals, thus putting government revenues at risk. Radically reducing energy waste and pollution is one of the two fundamental propositions of the whole idea. And yes, significantly reducing the size and scope of the federal government is the other fundamental goal and benefit, one that would be a welcome relief to the vast majority of Americans.

Most Americans fundamentally trust and favor transparent market oriented solutions and don’t want the government meddling in our lives and in our economy. Watching the sales of fuel efficient cars after the 1973 Oil Embargo, the 1979 Iranian Oil Crisis and the huge spike in gasoline prices in the summer of 2008, as well as the lack of interest in such vehicles when oil prices dropped, nobody should question the reality that unlike government programs, price signals actually work to inspire the goals clean energy advocates hope to achieve.

This proposal is a real test for environmentalists, as well as political liberals and conservatives alike.

Are environmentalists really concerned about the environment, or as opponents often suggest, are environmental issues merely excuses for increasing the power of elitist bureaucrats to exercise government control over every aspect of our lives?

Are conservatives really interested in political freedom, economic efficiency and free markets, or is all their rhetoric really just a cover for protecting the special privileges and loopholes for increasing the wealth and power of the already wealthy and powerful corporate oligarchies in our country?

Liberals are bound to hate the idea initially because it removes all the redistributionist “progressive” aspects of our tax code. But based on the accelerating levels of wealth disparity in our country, the impenetrable complexity of the tax code and the hypocritical shenanigans that many prominent liberal politicians get caught using to avoid the tax burdens they want to impose on the rest of us, maybe its time for everyone to just admit that the current system is completely failing to meet those idealistic goals, which are negated by all the special loopholes embodied in the unreadable thousands of pages of the tax code. The reality is that when one includes payroll taxes in the overall calculation, our current tax system is neither progressive, fair or in any way rational.

Rather than everyone just pointing fingers and blaming the other guys for our problems, if we focus on finding solutions simple enough, bold enough and sensible enough to actually garner broad support, maybe maybe there is a possibility of rediscovering consensus in our society.

Lets start taxing waste and pollution instead of using the tax system to punish people for working, creating jobs and making productive investments. Let’s actually try real market based solutions and restore the economic competitiveness our nation enjoyed before every aspect of the economy was micromanaged by the government and manipulated for tax reasons. Let’s encourage the prudent conservation of our limited fossil fuel reserves so we don’t impoverish our children and grandchildren with our prolifigate waste. And yes less sensibly prune back the over-reaching size and scope of our federal government.

Why single out fossil fuels for taxation? Energy is the lifeblood of a modern economy. The highly concentrated energy available from fossil fuels is a precious resource both for us and for future generations. Unlike metals and other minerals that can be readily recycled in a prudent society, once mined and burned, the concentrated energy in fossil fuels is dissipated and unavailable for future use. Arguably, those concentrated energy resources stored over millions of years shouldn’t be squandered, but rather should be husbanded wisely, as higher price signals would encourage. Balance of trade, foreign policy, pollution and a variety of other reasons which almost everyone is aware of, further contribute to the selection of fossil fuels as the sensible focus for taxation.

Perhaps as this fundamental idea of tax shifting gets refined, we will find consensus to add other wasteful, dangerous or polluting industries to the mix of appropriate consumption taxes, so we can begin to balance our federal budget and pay down our out of control federal debt, while also making our nation a safer, healthier and saner place to live.

But we should start the conversation recognizing how surprisingly affordable it could be to align rational revenue policy with sensible market mechanisms that would encourage economic prosperity, job and business growth, broadly shared environmental and clean energy goals along with the basic principles of freedom and liberty that our country was founded upon.

Let’s fundamentally reform the American economy with a government funding system that no longer undermines the most essential ideals and principles of our national heritage. Let’s support an idea bold enough, simple enough and compelling enough to actually work.

Filed Under: energy policy, US Legislation Tagged With: energy policy, sustainability, tax policy

You Can't Make This Stuff Up

June 30, 2010 By unger@hrtwd.com 3 Comments

The world is watching in disbelief as we blunder through the oil spill cleanup in the Gulf of Mexico. Lawrence Solomon’s “Avertible Catastrophe” in the Canadian publication Financial Post, describes the most ridiculous kind of bureaucratic inflexibility imaginable in the reasons used to reject effective technology and help from the Netherlands and other countries in cleaning up the spill and protecting the Gulf Coast.

“Three days after the BP oil spill in the Gulf of Mexico began on April 20, the Netherlands offered the U.S. government ships equipped to handle a major spill, one much larger than the BP spill that then appeared to be underway. “Our system can handle 400 cubic metres per hour,” Weird Koops, the chairman of Spill Response Group Holland, told Radio Netherlands Worldwide, giving each Dutch ship more cleanup capacity than all the ships that the U.S. was then employing in the Gulf to combat the spill.”………..

“Why does neither the U.S. government nor U.S. energy companies have on hand the cleanup technology available in Europe? Ironically, the superior European technology runs afoul of U.S. environmental rules. The voracious Dutch vessels, for example, continuously suck up vast quantities of oily water, extract most of the oil and then spit overboard vast quantities of nearly oil-free water. Nearly oil-free isn’t good enough for the U.S. regulators, who have a standard of 15 parts per million — if water isn’t at least 99.9985% pure, it may not be returned to the Gulf of Mexico.”

In Solomon’s article there are more disheartening details of well intentioned bureacrats turning the accident in the gulf into a far worse disaster than it should have become.

“According to Floris Van Hovell, a spokesman for the Dutch embassy in Washington, Dutch dredging ships could complete the berms in Louisiana twice as fast as the U.S. companies awarded the work. “Given the fact that there is so much oil on a daily basis coming in, you do not have that much time to protect the marshlands,” he says, perplexed that the U.S. government could be so focussed on side issues with the entire Gulf Coast hanging in the balance.”

As Logan Penza suggests at The Moderate Voice: “Seriously, You can’t make this stuff up”

Yet some folks still wonder why Americans are increasingly skeptical of ever expanding bureaucratic regulatory solutions and their inevitable unintended consequences.

Filed Under: US Legislation Tagged With: bureaucracy, EPA, oil spill, regulation

Videos on Sensible Climate and Energy Policy

April 25, 2010 By unger@hrtwd.com 1 Comment

The media page for the Price Carbon Campaign has several great videos available that explain from a wide variety of perspectives why a simple clear revenue neutral carbon tax is the best solution to climate, economic, environmental, employment and national security challenges that are all interrelated. Another important video is “The Huge Mistake” by attorneys Laurie Williams and Allan Zabel which explains clearly why the solutions generally favored in Washington really are a huge mistake. Then there is this good summary of the issues from a forum sponsored by The Carbon Tax Center, Climate Crisis Coalition, Citizens Climate Lobby, Friends Committee on National legislation, Friends of the Earth, Progressive Democrats of America, The Clean Coalition, We Act for Environmental Justice and the Price Carbon Campaign.

For those who care seriously about these issues and do not want to see wasteful and ineffective solutions substituted for clear simple and real solutions, spending an hour or so watching these videos could be a great investment of your time. It would also be great for every member of the senate to watch them all prior to taking a position on legislation.

These videos provide compelling video regarding the fundamental problems of the convoluted corporate welfare schemes like the Kerry Graham Lieberman bill now making its way to the senate. With clearly far better bipartisan bills already drafted, like the Cantwell Collins “Carbon Limits and Energy for America’s Renewal (CLEAR) Act” and the Inglis Flake Lipinski “Raise Wages, Cut Carbon Act”, we can only hope that these clear messages of common sense have more impact than all the special interest lobbyists that generally drive policy in Washington.

Filed Under: US Legislation Tagged With: cap and trade, carbon tax, climate change, energy policy, global warming

Climate Politics

March 26, 2010 By unger@hrtwd.com 5 Comments

To assure sustainable prosperity, we need the market place to account fairly for the long legacy of subsidy and economic externalities that distort energy markets in favor of incumbent polluting industries. We need to establish public policies that enable such accounting in a direct, transparent and dependable manner.

I have long been an advocate of a tax on incumbent energy resources. There are compelling national security, economic and environmental reasons for a revenue neutral tax that shifts taxation away from productive activities like creating jobs, and instead taxes polluting, non-renewable energy resources. Such a strategy could win broad based support across the political spectrum.

But I believe the focus on climate change, favored by many in the environmental movement, is a significant liability in the political effort to create sensible energy policy. Recently, my apprehensions regarding such focus have been proven well founded.

When it comes to addressing climate issues through public policy, there are a wide spectrum of views which, while not supporting the recent policy orthodoxy of climate politics, are not based on denial of the issue or its potential ramifications. Many people recognize that current politically favored solutions to climate change would not only be ineffective, but could potentially create worse problems then those they are intended to address.

Those advocating for complex convoluted public policy responses to the threats of climate change have seen serious setbacks over the last few months, not the least of which was the failure of the Copenhagen conference to achieve any meaningful results.

It is also becoming more clear recently that the science of climate change is being heavily influenced by political agendas. But contrary to the concerns of many in the environmental movement that it is “right wing” interests which are corrupting the science, it appears that it is largely those pushing an agenda of climate change alarmism who have had the most significant influence on the scientific reporting. Crony capitalists have been more than willing to go along as the politics of climate have been co-opted by Wall Street interests and others who stand to benefit immensely from the convoluted economic distortions embedded in solutions to climate change now favored by many politicians.

Especially since the release of e-mails and other documents from the University of East Anglia Climate Research Unit in November, the press and public have become more skeptical on the issue and there have been increasing numbers of questions raised regarding the quality of the UN sponsored 2007 IPCC Fourth Assessment Report on Climate Change.

Respected conventional news outlets of all political persuasions, many of which have in the past been supportive of an aggressive climate policy agenda, have been publishing articles and editorials with titles like: Climate change: this is the worst scientific scandal of our generation , ClimateGate: Was Data Faked? , How Climate-Change Fanatics Corrupted Science , The Death of Global Warming , UN wrongly linked global warming to natural disasters , Conning the climate: Inside the carbon-trading shell game , Alarmists’ credibility melting , How Wrong Is The IPCC? and What happened to global warming?

Though here in the US the traditional press has been less prone to cover the story than in Britain, Australia, India and elsewhere, there is increasing controversy regarding many of the findings in the 2007 IPCC Fourth Assessment Report, which won its authors the Nobel Prize along with Al Gore. Of most concern in the report are elements of the Summary for Policy Makers.

It has been reported than when asked in advance of publication to review the draft of the summary for Chapter 9 which attributes global warming to man made causes, Dr. Andrew A. Lacis, a climate researcher at the NASA Goddard Institute for Space Studies had this to say:

“There is no scientific merit to be found in the Executive Summary. The presentation sounds like something put together by Greenpeace activists and their legal department. The points being made are made arbitrarily with legal sounding caveats without having established any foundation or basis in fact. The Executive Summary seems to be a political statement that is only designed to annoy greenhouse skeptics. Wasn’t the IPCC Assessment Report intended to be a scientific document that would merit solid backing from the climate science community – instead of forcing many climate scientists into having to agree with greenhouse skeptic criticisms that this is indeed a report with a clear and obvious political agenda. Attribution can not happen until understanding has been clearly demonstrated. Once the facts of climate change have been established and understood, attribution will become self-evident to all. The Executive Summary as it stands is beyond redemption and should simply be deleted.”

Dr. Lacis suggestion was unfortunately rejected. It is now coming out that significant portions of the IPCC report were not based on peer reviewed science at all and several findings of the report have been confirmed to be erroneous.

Public support for action on climate change is waning. A study from Yale University offers an interesting analysis of attitudes on the subject. The Pew Research Center shows climate change being a very low public priority.

A good friend of mine and passionate advocate for climate change policy action suggested that:

“The surveys and editorials are interesting reflections of public opinion, but they don’t undermine the science. Don’t forget that a little over half of Americans don’t believe in evolution either.”

But contrary to Al Gore’s proclamations and the views of many people I respect, the science is not settled. Some evidence of that is the Petition Project, which claims the signatures of 31,486 American scientists who have all endorsed a petition that states:

“There is no convincing scientific evidence that human release of carbon dioxide, methane, or other greenhouse gasses is causing or will, in the foreseeable future, cause catastrophic heating of the Earth’s atmosphere and disruption of the Earth’s climate. Moreover, there is substantial scientific evidence that increases in atmospheric carbon dioxide produce many beneficial effects upon the natural plant and animal environments of the Earth.”

Dr. Judith Curry, the Chair of the School of Earth and Atmospheric Sciences at the Georgia Institute of Technology recently wrote:

“No one really believes that the “science is settled” or that “the debate is over.” Scientists and others that say this seem to want to advance a particular agenda. There is nothing more detrimental to public trust than such statements.”

Personally I feel absolutely certain that humans must be having some influence on climate, just based on the scale of influence that 6.8 billion people have on everything on the planet. Very few people would disagree with that premise. But clarifying how the many human and natural factors impacting climate will interact, how those factors will manifest themselves in complex climate systems, how significant our human influence will be and whether changes will have positive or negative impacts on agriculture and other critical aspects of human society, are all determinations that unfortunately are outside any clear understanding or real consensus in the scientific community at this time.

Perhaps most significant of the recent clarifications regarding the science of climate change has been the BBC interview with Phil Jones, who was the director of the University of East Anglia Climate Research Unit.

When asked: Do you agree that from 1995 to the present there has been no statistically significant global warming: Dr. Jones answered a qualified “yes”. In details supporting his answers, he showed that the warming trend from 1995 to 2009 of 0.12 degrees centigrade per decade is matched by the cooling trend of 2002 through 2009 of -0.12 degrees centigrade per decade.

In discussing the warming periods:1860-1880, 1910-1940, 1975-1998 and 1975-2009 Dr Jones states clearly that:

“the warming rates for all 4 periods are similar and not statistically significantly different from each other.”

When asked : when scientists say the debate on climate change is over, what exactly do they mean – and what don’t they mean? Dr. Jones answered:

“It would be supposition on my behalf to know whether all scientists who say the debate is over are saying that for the same reason. I don’t believe the vast majority of climate scientists think this. This is not my view. There is still much that needs to be undertaken to reduce uncertainties, not just for the future, but for the instrumental (and especially the palaeoclimatic) past as well.”

His answer on the so called Medieval Warming Period from 800–1300 AD makes clear that current levels of scientific understanding of historic climate data can’t determine conclusively if warming trends since the industrial revolution are unique or unusual.

Recently, Tom Ward, the publisher of the Valley Breeze, a local newspaper here in Rhode Island, published an editorial entitled Inconvenient truth. In it, he suggested that:

“Climate change, formerly known as ‘global warming,’ is a fraud. The science is junk.”

One member of an environmental organization I am involved with issued a call to respond suggesting:

“Some might say its hopeless to answer such extreme positions, but the far right-wing repeats similar stuff every day on cable, talk radio and the like.”

I pointed out to the group that while his rhetoric is harsh, the important conclusion of his editorial is something we can all largely support when Mr. Ward suggests:

“As Americans, we must embrace energy conservation in the short term, and generate more home-grown nuclear, natural gas and wind power in the longer term, to keep our money here and create tens of thousands of well-paying jobs. With those goals achieved, we can power our cars and trucks with U.S.-made electricity and natural gas, and stop sending $800 billion a year overseas, money that funds our enemies.”

While I strongly disagree with Mr. Ward regarding nuclear power (a subject for another posting), I fully agree with him on conservation, wind energy and on using natural gas as the critical transition fuel on our way to a clean energy future.

If the environmental community embraced the energy independence, national security, economic development, employment and balance of trade arguments that Mr. Ward champions, we could be much further along in addressing the challenges of climate change than we are today. Instead of condemning them, we should be reaching out to potential strong policy allies like Mr. Ward who, like most Americans, would favor rational energy policy.

As I have suggested here before, everything that Mr. Ward argues for could be achieved through a Pigouvian tax on non-renewable energy resources. That solution would actually be effective in directly and immediately curbing carbon dioxide emissions, unlike the leading solutions being pushed in Congress. If we all embraced the idea that such tax should be 100% revenue neutral, offsetting payroll taxes and income taxes that discourage job creation and working, Americans of all political persuasions would support such solutions as prudent economic, jobs and tax policy.

It is not smart politics to be looking for enemies among our potential friends. Rather than blaming the “right wing” or “a well-funded disinformation machine” for the lack of progress, we should take responsibility for the narrow partisan political strategy of the environmental community on these issues.

If the climate change rhetoric from the environmental community were less extreme, it wouldn’t provide such tempting targets for ridicule and harsh criticism and we wouldn’t see the backlash we have. We don’t need to blow the scariest possible outcomes for climate change out of proportion in order to gain broad based political support for effective measures to curb carbon emissions. In fact, overblown climate rhetoric from the environmental community has significantly set back political prospects for sensible energy and climate policy.

The IPCC has done significant disservice to those concerned with climate change by becoming an imprudent advocate rather than the professional scientific organization that it was chartered to be.

Environmental scientist, James Lovelock is the author of the original “Gaia Hypothesis”, the theory of how the earth’s interrelated feedback mechanisms act as an integrated single organism. He has been described as “The Prophet of Climate Change” . He offers some important perspective:

“I think you have to accept that the skeptics have kept us sane — some of them, anyway. They have been a breath of fresh air. They have kept us from regarding the science of climate change as a religion. It had gone too far that way. There is a role for skeptics in science. They shouldn’t be brushed aside. It is clear that the angel side wasn’t without sin.”

Phil Jones, Andrew Lacis, Judith Curry, James Lovelock and other reputable climate scientists have come to realize that it is best to clearly and honestly present known facts along with the uncertainties surrounding this very complex science. Its about time the rest the environmental community does too. We should accept the political reality that with current levels of actual scientific understanding and consensus, most rational people would be reluctant to totally transform the world economy or create the worlds largest derivatives game for Wall Street in convoluted schemes like Cap, Trade and Offset.

I expect that acknowledging the scientific uncertainties regarding the long held beliefs of many of my friends in the environmental movement may result in some calling my integrity and intentions into question. The best answer I can offer them is that unlike those supporting ineffective convoluted answers currently favored in Washington, I am serious enough in my concern on these issues to advocate for policy solutions like H.R. 2380, The Raise Wages, Cut Carbon Act that puts an immediate, real and dependable price on carbon emissions. That bipartisan legislation would also address our economic and unemployment problems as well as our energy and environmental concerns and it wouldn’t add a penny to our monstrous federal debt. That’s the kind of solution the vast majority of Americans would support and that credible politicians should also support if they are really more serious about solving problems than they are about handing out pork to their special interest benefactors.

All the reasons Tom Ward cites in encouraging our nation to move to a clean energy economy have been more than adequate inspiration to spend my career doing green building and renewable energy work for the last three decades. Terrorism funded by our exported petro-dollars, pollution, the economic mess our oil dependency has helped cause, the war in Iraq and our other military adventures to secure oil supplies, and all the other symptoms of our fossil fuel dependency are plenty of inspiration for good policy.

Effective public policy response to climate change and all those other challenges would be clear, simple and easily understandable by everyone so that everyone participating in the economy can anticipate impacts and respond in rational ways. All these inter-related issues are too important for the typical corrupt political horse trading between politicians and lobbyists we have come to expect from Washington. We need real leadership at the grass roots level advocating for sensible policy.

Rational climate policy wouldn’t be based on adding vast new convoluted complexities to the economy that are easily vulnerable to the distortions of Wall Street’s financial engineering manipulations. Nor would they be based on legislators and bureaucrats anointing winners and losers in the economy. Instead we need the kind of policy that directly puts a real and dependable price on the “economic externalities” that are currently hidden subsidies for incumbent energy industries – a revenue neutral carbon tax.

Its far past time for everyone concerned with climate change to seek out alliances around sensible energy policy by focusing on the issues that all Americans can readily agree on. We should align our political agenda with those who are more concerned with other issues like the economy, jobs, trade deficits, national security, terrorism and our government’s unsustainable ballooning levels of debt and unfunded liabilities. Effective solutions to climate concerns can also address all those issues and should be politically framed to do so in a manner that appeals across traditional political boundaries. This shouldn’t be a partisan or politically divisive issue. We need a broad political coalition which will only be achieved by being far less dogmatic about our politics.

The most prudent and sensible advice I have seen regarding the politics of climate policy is from Mother Jones magazine, which quotes a perhaps unexpected ally, Republican pollster Frank Luntz:

“It doesn’t matter whether you call it climate change or global warming,” he said. “The public believes it’s happening, and they believe that humans are playing a part in it.” In fact, Luntz warned that if Republicans continue to dispute climate science it could hurt them politically. Instead, he said, the GOP should be engaging in the debate over how to solve America’s energy problems……….

Luntz suggests less talk of dying polar bears and more emphasis on how legislation will create jobs, make the planet healthier and decrease US dependence on foreign oil. Advocates should emphasize words like “cleaner,” “healthier,” and “safer”; scrap “green jobs” in favor of “American jobs,” and ditch terms like “sustainability” and “carbon neutral” altogether. “It doesn’t matter if there is or isn’t climate change,” he said. “It’s still in America’s best interest to develop new sources of energy that are clean, reliable, efficient and safe.”

Luntz’s polling suggests The First Rule of Fighting Climate Change: Don’t Talk About Climate Change.

Filed Under: Renewable Energy, US Legislation Tagged With: cap and trade, carbon tax, climate change, energy policy, global warming, Politics, sustainability

Cape Wind, The Rule of Law And The Choices We Make

January 30, 2010 By unger@hrtwd.com 28 Comments

Secretary of the Interior Ken Salazar has announced that he will make a permitting decision regarding Cape Wind by April. He has requested public comment on the project before February 12. Comments can be sent here and here.

The long saga of Cape Wind’s permitting efforts has proven to be a classic example of how well intended environmental regulations can be abused and hypocritically turned against very environmentally responsible projects.

The story of Cape Wind should be taught in Law Schools as an example of how the rule of law guaranteed by our constitution and precedent in law at least back to the Magna Carta can been manipulated and abused by politically connected cynics.

Starting in 2001, Cape Wind was subject to an exhaustive four year permitting process coordinated by the US Army Core of Engineers under the National Environmental Policy Act (NEPA) and involving seventeen state and federal permitting agencies. When the results proved conclusively that the project would have no significant negative impacts of any kind, powerful politicians from both parties got the regulations changed so that the water views from their friend’s mansions on the Cape Cod would not be impacted.

A new regulatory process required the NEPA process to start completely over under the purview of the US Department of Interior’s Minerals Management Service. After another four or five years of intense study by multiple agencies, again the project was proven conclusively to have only positive impacts on the environment, on the economy and on our future. The MMS staff and all the reviewing agencies recommended the project be approved.

Recently, project opponents working with members of local Native American tribes have tried to derail the project again claiming that the waters in which the Cape Wind is to be built were once dry land which may contain ancient burial sites and that their religion requires unobstructed views of these sacred waters. It is perhaps telling that these objections were never raised to block marinas, pleasure boats and all sorts of other modern offenses that might blight these sacred views. And one might also wonder about the religious impact when oil spills have polluted those waters making fuel deliveries to the Cape’s only power plant.

Of course cultural and historic heritage issues are considered fully and very carefully as part of the NEPA review process and should have been raised much earlier. It’s not as if those making these claims were unaware of the permitting process which has now been done twice and which provided them every possible opportunity to intervene in a timely and appropriate manner. What new information is now being brought to bear and why wasn’t it provided earlier? If there is nothing new being presented, then why should the Department of Interior effectively reopen the permitting process to review these matters?

The delay that has already been granted in issuing the permits to build Cape Wind in order to consider these late concerns is the most flagrant kind of abuse of the rule of law that is fundamental to the preservation of our civilized society. If such claims are allowed to derail Cape Wind at this late date, then what is to stop any opponent of any project ever proposed anywhere from hiring a couple of Native Americans after the permitting process is completed to claim the project is on their sacred grounds or blocks their sacred views? What is to prevent anyone alleging any other religious beliefs to assert that anything that they don’t happen to personally like should be stopped in its tracks and claim government protection against whatever may happen to offend their purported religious heritage?

The Constitution grants us all freedom to practice religion as we wish, but not at the expense of the Constitutional rights of others, nor at the expense of the fundamental rule of law in our land.

If we allow the regulatory goal posts to continually shift after a project is proposed, based on arbitrary environmental, religious or any other kind of claims, then we will have all lost the protection of the rule of law that our nation and our prosperity is based on. The corruption inherent in abuses such as that now underway in this obstruction and that which Cape Wind has earlier been subjected to, undermine our freedom and every constitutional protection we are granted as Americans.

Regulators from all the state and federal agencies overseeing this project have done their job very well – twice. From their comprehensive reviews, it is very apparent that the only real issue ever seriously in question is the subjective aesthetic impact of the project.

But the aesthetic question is not a question of Cape Wind vs. a pristine world. The question is far larger than the aesthetic impact of a few wind towers barely visible over the horizon. Like the rest of America, the Cape and Islands need energy. Aesthetic blights from mining, refining, delivery and disposal of fuels for oil, gas, coal and nuclear power plants, and the larger impacts of those technologies on our society, should be given serious consideration in evaluating Cape Wind. The rights, aesthetic concerns and religious sensibilities of those impacted by the entire systems delivering energy to Cape Cod and the Islands must be give equal weight to the concerns of the Cape Wind opponents.

The craziest part of all this is that from the closest shores, Cape Wind will be barely visible just a couple degrees above the horizon, and only on a clear day.

As NESEA’s official organizational position on Cape Wind suggests:

“The choice we face goes far beyond local aesthetics. Will we choose to continue our dependence on polluting fossil fuels from the Middle East? Will we choose a future plagued by international conflict, terrorism and climate change implicit in fossil fuel dependence? Will we choose to forgo a golden opportunity to provide clean energy and good jobs for the region? The real question is whether we will choose a compromised future or the tremendous potential of sustainable prosperity.”

Perhaps those opposing Cape Wind are not willing to make the choices necessary for our nation to remain a free and prosperous. But as a nation, we have real choices to make.

We can choose to get serious about creating clean renewable energy solutions at home and exporting those solutions of peace, hope, and prosperity abroad, or we can continue to waste our treasure and send our troops off to die fighting for oil in places like Iraq. Many Cape Wind opponents say they support renewable energy. But empty words do not solve the problems our addiction to oil has caused. Words alone do not help the families of the brave Americans sent to make the ultimate sacrifice in the Persian Gulf.

Today, wind power is cost competitive with conventional power plants. The wind industry has grown about forty percent each year for over a decade. Wind projects do not cause air pollution or oil spills, and they do not depend on an everlasting stream of imported oil and gas. Cape Wind is as good as any significant solution to our energy needs can possibly be.

A lack of seriousness about developing real solutions like Cape Wind will doom our children to a future enormously complicated by international conflict, climate change, terrorism, diminishing economic prospects and compromised freedom. Our lack of wisdom and vision will cause more brave Americans to die in future wars that could be prevented.

For too long, we have compromised our proud heritage with bad decisions. Our leaders need to face realities that ordinary people see clearly. We cannot allow our regulatory process to be hijacked and violate the rule of law at the arbitrary whim of a few.

The NEPA process has been followed fully for Cape Wind – twice. The conclusions are absolutely clear. It is long past time for public officials to act responsibly, put a stop to the cynical games and allow the project to get built.

Building Cape Wind will be a symbol of our commitment to the rule of law and our commitment to a peaceful and prosperous future.

Please make sure Secretary Salazar hears from you.

Cape Wind and NESEA Historical Context:

Back in 2001, as the NESEA Board of Directors was exploring the priorities of the organization, then NESEA Treasurer Tom Hartman brought the discussion into very clear focus when he suggested: “For now, NESEA should have three priorities – Cape Wind, Cape Wind and Cape Wind”

A couple years later I was privileged to chair a subcommittee of the Board drafting the following official NESEA Board position document on Cape Wind, which was unanimously endorsed by the Board, signed by numerous prominent NESEA members and presented as testimony at Army Corp of Engineers hearing in December 2004:

Northeast Sustainable Energy Association Urges Strong Support for Cape Wind

For over thirty years, the Northeast Sustainable Energy Association has been promoting real solutions for a better energy future. In our view, Cape Wind is the most important and positive energy development ever proposed in the Northeast. We urge you to support Cape Wind.

The US Army Corp of Engineers’ comprehensive three year project review involved seventeen federal and state regulatory agencies and resulted in the Cape Wind Draft Environmental Impact Statement. By all criteria these agencies studied, Cape Wind is overwhelmingly positive, with no significant bird, navigational or ocean ecosystem impacts. They have concluded that Cape Wind will provide significant environmental benefits by offsetting other major sources of pollution, while stabilizing electricity pricing and reliability for the region by reducing dependence on imported fuels. And Cape Wind will help create new jobs and new economic opportunity for southeastern New England.

The Cape Wind turbines will provide the equivalent of seventy five percent of the electrical power needs for Cape Cod and the Islands, while producing no emissions or pollution. From the closest shores they will be barely visible on a clear day, just a few degrees above the horizon.

In an era of rapidly rising world wide demand for energy, we must make real choices. Wind power is an established and reliable solution. It is the fastest growing energy source in the world. Wind is the lowest impact and most cost competitive energy source available. Yet some local opponents are still trying to stop Cape Wind. The environmental impact studies have shown their concerns to be generally unfounded. The only issue seriously in question is the subjective aesthetic impact of the project.

Like the sailing ships that brought prosperity to New England with their graceful beauty in earlier times, modern wind turbines are an elegant solution for today. Worldwide, in nearly every locale where wind power is in widespread use, the aesthetics of wind generators find overwhelming acceptance. Locally, in the town of Hull, Massachusetts, a wind machine located right on the shore has been embraced. A huge majority of the townspeople want to build more.

Nantucket Sound has been polluted by spills from oil tankers bringing fuel to the power plant on Cape Cod Canal. Other areas have also been polluted in providing power for Cape Cod and the Islands.

Ignored in most discussions of Cape Wind are the real alternatives and the aesthetic impacts of oil, gas, coal and nuclear power plants. Aesthetic blights from mining, refining, delivery and disposal of fuels for these plants, and the larger impacts of those technologies on our society, should be given serious consideration in evaluating Cape Wind. Current energy use patterns will lead to more environmental degradation, international tension and economic uncertainty.

The choice we face goes far beyond local aesthetics. Will we choose to continue our dependence on polluting fossil fuels from the Middle East? Will we choose a future plagued by international conflict, terrorism and climate change implicit in fossil fuel dependence? Will we choose to forego a golden opportunity to provide clean energy and good jobs for the region? The real question is whether we will choose a compromised future or the tremendous potential of sustainable prosperity.

The Northeast Sustainable Energy Association chooses sustainable prosperity, and we urge you to do the same.

Filed Under: Uncategorized Tagged With: Cape Wind, energy policy, regulation, Renewable Energy, Rule of Law

James Hanson On Copenhagen

November 27, 2009 By unger@hrtwd.com Leave a Comment

Newsweek is out with a good interview of world famous NASA Climate Scientist James Hanson regarding Copenhagen and the recent release of controversial e-mails from the Climate Research Unit at the University of East Anglia.

Hanson brushes off the significance of the dust-up over the e-mail release:

Do the e-mails indicate any unethical efforts to hide data that do not support the idea of anthropogenic global warming or to keep contrary ideas out of the scientific literature and IPCC reports?

They indicate poor judgment in specific cases. First, the data behind any analysis should be made publicly available. Second, rather than trying so hard to prohibit publication of shoddy science, which is impossible, it is better that reviews, such as by IPCC and the National Academy of Sciences, summarize the full range of opinions and explain clearly the basis of the scientific assessment.

On the question of Copenhagen and current US policy , Hanson is even more clear:

How serious a setback would it be if no agreement on a climate treaty is reached in Copenhagen, where 192 countries are meeting starting Dec. 7?

It’s not a setback at all if it allows a careful reassessment of what is needed. The cap-and-trade scheme [that the Copenhagen negotiations were working toward] is just not going to be effective at controlling greenhouse emissions. Political leaders have to realize that the fundamental problem is that fossil fuels are the cheapest form of energy, so they will continue to be burned unless we put a gradually increasing price on carbon emissions [through a carbon tax]. That’s a much better approach than national goals for emissions reductions, which will probably not be met.

What do you think of the climate bills now before Congress?

They’re disasters. We can’t allow the polluters to write the bill, but that’s what happened. What’s needed is putting a price on carbon, not cap-and-trade.

Hanson is even more clear in his editorial about Copenhagen in The Guardian “Is There Any Real Chance of Averting A Climate Crisis?” in which he suggests:

Absolutely. It is possible – if we give politicians a cold, hard slap in the face. The fraudulence of the Copenhagen approach – “goals” for emission reductions, “offsets” that render ironclad goals almost meaningless, the ineffectual “cap-and-trade” mechanism – must be exposed.

I can’t agree with Hanson when he calls for increased use of nuclear energy, for all the reasons cited here.

But in general, Hanson has it exactly right on how to address climate and energy issues through public policy – put a real price on fossil fuels through the tax system and offset that tax with reductions in regressive taxes like the payroll tax which stifle our economy and discourage jobs creation.

Hanson is absolutely right in his assessment of on our current policy efforts in Congress and on his hopes for Copenhagen.

Filed Under: Uncategorized Tagged With: cap and trade, carbon tax, climate change, energy policy, James Hanson, Waxman Markey

Kerry-Boxer Senate Climate and Energy Bill – Another Congressional Failure

October 24, 2009 By unger@hrtwd.com 5 Comments

The U.S. Senate is starting debate on energy and climate policy.

We should all welcome Congress finally getting serious about these issues. But as with all policy issues, details matter. Unfortunately, the lead sponsors, Senators Kerry and Boxer are starting out from the same controversial and seriously flawed basis as the Waxman-Markey House legislation which narrowly passed over the summer.

As a business owner who has worked successfully in the clean energy field and green building field for three decades, I have serious reservations regarding the Kerry-Boxer “Clean Energy Jobs and America’s Power Act”.

The current political climate in which anyone opposing these flawed solutions is being decried as an obstructionist and “climate change denier” points out how degraded our political climate has become. Such shallow accusations and name calling are completely uncalled for, no matter how prominent the person who engages in it. One isn’t in denial of the problem, just because of opposition to a proposed “solution” which is not a solution at all. Obstructing seriously flawed policy that would create major problems is a commendable public service that we should encourage all Senators to engage in.

The political consensus, that virtually everyone recognizes, is that we will be moving to a carbon constrained world. The questions being debated are not questions of climate science about whether or not to constrain carbon emissions, but rather policy questions of how to effectively and efficiently constrain carbon emissions.

Rather than being “climate change deniers” opposed to clean energy solutions, knowledgeable serious proponents of clean energy solutions know that there are better, less risky and more efficient ways to get to the carbon reduction and clean energy goals of the proposed legislation.

Most critical of the core problems in the Kerry-Boxer bill is Cap and Trade, a multi-trillion dollar financial derivatives market being created for trading limited government permits to emit greenhouse gasses. Such schemes will set back real solutions to our energy challenges and hugely exacerbate our economic problems, while having no meaningful climate impact.

Better climate solutions would increase economic prosperity. Cap and Trade mechanisms favored in Washington are inefficient and will create huge unnecessary risks and burdens on the economy. The unintended or at least unstated consequences of Cap and Trade will further consolidate and centralize corporate power at the expense of small business. The unmitigated costs of Cap and Trade further weaken our currently fragile economy.

It is completely inappropriate to create what US Commodities Future Trading Commissioner Bart Chilton predicted will become “the biggest of any derivatives product in the next four to five years”. The proposed carbon derivatives and unverifiable offsets clearly invites what Friends of the Earth has described as a looming “Sub-prime Carbon” financial crisis. We can’t afford to put our economy at further risk with these idealized speculative schemes that are really just additional huge hand outs to Wall Street masquerading as a green energy and climate solution.

For those who prefer to watch than read, environmental attorneys Laurie Williams and Allan Zabel have supplemented their written critiques of Cap and Trade with an excellent short video, “The Huge Mistake”.

To buy votes, the Senate bill is even worse than the house bill in at least one fundamental way – supporting nuclear power. No matter what your stance on climate issues, it is hard to suggest it is a real solution to expand the the nuclear industry, with its super toxic and radioactive byproducts lasting thousands of years, providing terrorist targets and fissile materials for nuclear weapons. The ridiculous economic costs of nuclear power; the lack of any accepted waste disposal after more than half a century of government effort; the huge liabilities of nuclear power that are pawned off to tax payers; the obvious avenues for nuclear power to lead to nuclear weapons proliferation as now demonstrated once again in Iran and North Korea; and the fundamentally immoral legacy of leaving our world littered with plutonium and other dangerous nuclear materials; is neither a responsible energy solution nor a responsible climate solution.

Like supporting the spread and proliferation of nuclear technologies, supporting the creation of a speculative derivatives market even huger than the sub-prime mortgage fiasco and based on even less verifiable underlying assets, is putting at serious risk the prospects of a peaceful and prosperous future. These measures being advocated in Congress are simply irresponsible.

Contrary to the pleadings of numerous environmental organizations , we should ask our Senators to block passage of the Kerry-Boxer bill and instead insist on responsible debate and votes on the good components worthy of passage.

The Senate should act responsibly and break up these monstrous omnibus energy bills into smaller logical components. Each component should be debated and voted on its merits.

There are very valid solutions for energy efficiency, renewable energy and other matters buried in these giant bills that we all should support. But we can’t support a bill including Cap and Trade schemes or nuclear power.

We should call on the Senate to consider very practical, economically rational solution to the challenges of climate policy in the House legislation sponsored by Representatives Inglis, Flake and Lipinski, described below, which has also been advocated here.

Below is an article I recently published in the current issue of the Northeast Sun, the journal of the Northeast Sustainable Energy Association. The article analyzes the Waxman-Markey bill in the House. The same core flaws are also in the Kerry-Boxer Senate bill. The article also describes the Inglis, Flake and Lipinski legislation – a real solution to our energy challenges:

A Serious Solution For Energy Policy

Every president since Richard Nixon has proclaimed energy policy a national priority. They have all failed to provide any lasting solutions.

We are headed toward failure again. The Waxman Markey American Clean Energy and Security Act (ACESA) passed by the House of Representatives could set back real solutions to our energy problems by decades, while exacerbating economic problems facing our country.

What matters is not intentions but results. Despite the rhetoric, ACESA won’t reduce carbon emission in a meaningful way or create what clean energy solutions need to be successful – a real price on the “economic externalities” of our fossil fuel addiction.

The American Clean Energy and Security Act Has Major Problems:

1) The Carbon Cap Is Ineffective

The core of the ACESA is a new derivatives market for government permits to emit greenhouse gasses, along with offsets, which provide credit for activities such as planting trees or protecting forests, which mitigate impacts of emissions.

Scientists argue the carbon caps in ACESA are too low to impact climate change, while economists and practical observers suggest they are so subject to manipulation they are unenforceable. By allowing billions of tons of unverifiable offsets, many from international sources, no carbon emission reduction would even begin in the United States for at least a decade if all the offsets provided in the congressional bill were utilized.

2) New Derivatives Market Threatens The Economy

The Financial Times quotes US Commodities Future Trading Commissioner Bart Chilton predicting carbon markets would become “the biggest of any derivatives product in the next four to five years.”

ACESA credits and offsets create a volatile multi-trillion dollar carbon derivatives market that could impact financial markets much like the recent crash in mortgage-backed derivatives. The inclusion of unverifiable international offsets makes markets harder to understand or regulate, inviting market manipulation and fraud.

In the Friends of the Earth report “Subprime Carbon”, Michelle Chan cautions: “today speculators do the majority of carbon trading, and they will continue to dominate as carbon-trading markets grow.”

Unlike existing SOx and NOx emission trading markets, with limited sets of players and clear rules, the proposed carbon markets promise pay for impossible to verify assets to unlimited numbers of players.

In a CNBC video, “The Carbon Challenge”, former Vermont Governor Howard Dean declares, “I am terrified of a Bernie Madoff in the cap and trade business who is selling stuff that doesn’t exist.”

3) ACESA Is The Largest Corporate Welfare Program In History

Their campaign position paper declares: “Barack Obama and Joe Biden’s cap and trade system will require all pollution credits to be auctioned. A 100% auction ensures that all large corporate polluters pay for every ton of emissions they release, rather than giving these emission rights away for free to coal and oil companies.”

Waxman Markey gives away 85% of the permits for free

In his March Congressional testimony White House Budget Director Peter Orszag said: “If you didn’t auction the permit, it would represent the largest corporate welfare program that has ever been enacted in the history of the United States.”

While creating a huge derivatives market for Wall Street, ACESA gives billions in free carbon credits and offsets to coal companies, oil refiners and the utility industry. In “The Cap-and-Trade Giveaway”, Alan Viard suggests: “under a system of free permit allocation, the stockholders of companies that receive free permits would receive windfall gains. A cap and trade system with freely allocated permits is equivalent to a carbon tax in which the tax revenue is given to stockholders.”

In a report on cap and trade, the Congressional Budget Office estimated that some recipients of free credits could see their market capitalization double or triple instantly.

Harvard economist Greg Mankiw succinctly blogged: “Cap and trade = Carbon tax + Corporate welfare.”

4) ACESA Undermines EPA Authority And Successful Policy At The Regional, State And Local Level

ACESA eliminates EPA’s existing authorization to regulate greenhouse gas emissions under the Clean Air Act and prohibits successful state and regional programs like the Regional Greenhouse Gas Initiative. It imposes federal control over matters like building codes, traditionally the constitutional purview of the states.

Successful state Renewable Energy Portfolio Standards (RPS) are complicated by ACESA. The minimum compliance payments in the proposed Federal RPS are too low to spur markets for renewables. And ACESA allows technologies like waste incineration to compete in renewable energy credit markets with real renewables

5) Massive ACESA Financial And Regulatory Interventions Delay Real Solutions

Along with cap and trade, ACESA involves hundreds of new regulatory and economic prescriptions, distorting markets based on political calculus and favoring entrenched interests. In a guise of offsetting higher consumer prices, billions of dollars of carbon credits are free to utility companies, undermining competitive energy markets. ACESA further encourages failures like corn-based ethanol, disrupting agricultural markets while providing no net energy or environmental benefit. Regulatory provisions micromanage virtually every sector of the economy, stifling innovation.

6) ACESA Fails In Pricing “Economic Externalities” Of Our Fossil Fuel Dependence

The Wall Street Journal quotes President Obama saying in March: “If you’re giving away carbon permits for free, then basically you’re not really pricing the thing and it doesn’t work — or people can game the system in so many ways that it’s not creating the incentive structures that we’re looking for.”

By giving away 85% of carbon credits, establishing ineffective carbon caps and allowing offsets, ACESA doesn’t provide price feedback in energy markets and in the economy generally that are essential for making clean energy cost-competitive.

Volatile price swings undermine investor ability to put a predictable value on alternatives to incumbent energy systems. The speculative derivatives markets inherent in ACESA encourage volatility. The Wall Street Journal reported that in Europe, “prices for carbon permits have whipsawed from a high of 30 euros a ton to a low of 2 euros a ton.”

7) ACESA Undermines Political Viability Of Real Solutions

In a presentation at Dartmouth College, NASA climate scientist James Hansen declared: “Cap and trade is not going to work……in Europe it has been completely ineffective.” His conclusion is confirmed by Euractiv.com reports of European governments proposing new carbon taxes, effectively acknowledging the failure of their cap and trade program.

In their Philadelphia Enquirer editorial “Cap-and-Trade Does More Harm Than Good”, environmental attorneys Laurie Williams and Allan Zabel state: “The Waxman-Markey approach would not only guarantee a decades-long failure in the United States; it would also undermine U.S. credibility in international negotiations on climate change.”

Ex-Secretary of State George Shultz, speaking to the International Association for Energy Economics suggested of Waxman Markey: “it is going to be so obviously corrupt it is going to discredit the whole idea.” Having negotiated the Montreal Protocol, the most successful international environmental treaty in history, Shultz suggests a straight carbon tax would give the US far more credibility in negotiating climate treaties.

Greenpeace summarizes: “the Waxman-Markey bill sets emission reduction targets far lower than science demands, then undermines even those targets with massive offsets. The giveaways and preferences in the bill will actually spur a new generation of nuclear and coal-fired power plants to the detriment of real energy solutions. To support such a bill is to abandon the real leadership that is called for at this pivotal moment in history.”

ACESA will inevitably increase costs throughout our economy, but does not provide effective mechanisms for average people to cover those costs. With all of these problems and no credible prospect of meeting its stated goals, if we allow ACESA to pass, it could be decades before voters trust Congress to attempt any meaningful solution to our fossil fuel addiction.

What An Effective Solution Would Look Like – Revenue Neutral Carbon Tax

On January 26, President Obama made his first major policy address on energy. He described our energy challenge clearly: “At a time of such great challenge for America, no single issue is as fundamental to our future as energy. America’s dependence on oil is one of the most serious threats that our nation has faced. It bankrolls dictators, pays for nuclear proliferation and funds both sides of our struggle against terrorism. It puts the American people at the mercy of shifting gas prices, stifles innovation, and sets back our ability to compete.”

A simple carbon tax addresses all the challenges President Obama cites. And if implemented in a revenue neutral manner by replacing payroll taxes or providing direct rebates to all citizens, a carbon tax also addresses the serious economic problems we are facing.

Strong price signals from a carbon tax would shift markets and do not require the risks and inefficiencies of excessive regulation or huge speculative derivatives markets Today we tax work and productive investment while encouraging waste and pollution with subsidies and tax breaks for oil, coal and other entrenched industries. It’s time to think rationally about using this powerful lever of government to discourage what we don’t want, like wasting energy, while encouraging work, job creation and sensible investment.

Williams and Zabel suggest: “While cap-and-trade-and-offsets will enrich special interests and delay the transition away from fossil fuels, carbon fees with monthly rebates could be the centerpiece of an affordable, equitable, rapid transition to a clean-energy future.”

Waxman Markey is not the only energy bill in Congress.

Representatives Inglis (R-SC), Flake (R- AZ) and Lipinski (D-IL) worked across party lines proposing H.R. 2380, The Raise Wages, Cut Carbon Act of 2009. Their bill puts inescapable prices on carbon emission immediately that are far greater then the EPA and Congressional Budget Office estimate Waxman-Markey will provide ten years from now. Instead of Waxman Markey’s hundreds of billions of dollars in corporate welfare, H.R. 2380 would reduce regressive payroll taxes while providing increases to people receiving social security to directly offset the economic impacts of the tax. Congressman Inglis’ suggests website “By reducing payroll taxes and taxing carbon dioxide, we can turn an environmental fix into a decisive, economy-expanding national security fix.”

The Miami Herald reports that that H.R. 2380, “would initially impose a tax of $15 a ton of carbon dioxide on the producers and distributors of gasoline, natural gas and coal, with the tax rising to $100 a ton over three decades.” Such clear policy signals allow businesses throughout the economy to plan effectively and make long-term investments.

Inglis, Flake and Lipinski propose that, “the tax applies to fossil fuels as they enter the economy: at the mine mouth, the oil refinery and the natural gas pipeline. This upstream application of the tax will make it easy to implement and reduce administrative costs.” They suggest, “consistently applying the same tax to all domestic and imported products will keep this border adjustment in compliance with existing WTO agreements.” And they are willing to take political risk and treat voters honestly, publicly predicting that customers of coal-fired utilities would see cost increases of 83.5% in the first year.

In “Show Us The Ball”, Thomas Freidman reports that: “Representative John B. Larson, chairman of the House Democratic Caucus, circulated a draft of a similar bill that would impose a per-unit tax on the carbon-dioxide content of fossil fuels, beginning at a rate of $15 per metric ton of CO2 and increasing by $10 each year. The bill sets a goal, rather than a cap, on emissions at 80 % below 2005 levels by 2050, and if the goal for the first five years is not met, the tax automatically increases by an additional $5 per metric ton. The bill implements a fee on carbon-intensive imports, as well, to press China to follow suit. Larson would use most of the income to reduce people’s payroll taxes.”

Revenue neutral carbon tax solutions offer a rational market oriented solution by putting a real price on carbon emission. They are favored by the vast majority of economists on all sides of the political spectrum. By effectively discouraging petroleum use, such taxes address our trade imbalances and enhance our national security interests while stimulating markets for clean energy, energy efficiency and fuel-efficient vehicles. Plus, these taxes are good economic policy, reducing the penalties on work and job creation in regressive payroll taxes.

We need to dependably get the “economic externalities” of fossil fuels accounted for directly in the real economy. A simple carbon tax is the most effective way to do that.

Make Sure The Senate Hears Us

Willem Buiter, former chief economist of the European Bank for Reconstruction and Development, summarizes the political challenges in “Carbon Offsets: Open House for Waste, Fraud and Corruption”. He notes that politicians “prefer cap and trade because it hides/obscures the fact that for it to work, it must be equivalent to a tax; however, it does not look like a tax and will not show up in conventional tax burden calculations. Also… you can hand out the credits free of charge to your friends (including the heavy historical polluters).…The amounts of money involved are vast and the opportunities for graft, bribery and corruption limitless.

Before suggesting Waxman Markey is about the best we can expect from Congress, in “Just Do It”, Thomas Friedman summarizes the bill well: “It is too weak in key areas and way too complicated in others. A simple, straightforward carbon tax would have made much more sense than this Rube Goldberg contraption. It is pathetic that we couldn’t do better. It is appalling that so much had to be given away to polluters. It stinks. It’s a mess.”

NESEA members are practical idealists. We cannot settle for ACESA as the best Congress can do. We cannot accept politically expedient “solutions” that we know are bound to fail. If we support legislation that does far more harm than good, then we become part of the problem, rather than part of the solution.

Political challenges facing a carbon tax are certainly no more formidable than the practical problems with ACESA. It is time to move beyond political horse-trading to a serious solution. Willams and Zabel argue: “Those who favor Waxman-Markey as a political best-case scenario lack faith in the American people.”

We need government policy that makes environmental and economic sense. Lets call on our Senators to reject Waxman-Markey and implement a simple carbon tax that puts a significant and inescapable price on carbon emissions – right now.

Filed Under: Uncategorized Tagged With: Add new tag, cap and trade, climate change, energy policy, Kerry-Boxer, regulation, Renewable Energy, Waxman Markey

The Passing of Norman Borlaug

September 13, 2009 By unger@hrtwd.com Leave a Comment

The world has lost a true hero today – the man credited with saving more human lives than anyone else in history.

Norman Borlaug was dubbed the “Father of the Green Revolution” for his work creating high yielding varieties of wheat and rice which massively increased agricultural productivity in Latin America and Asia. Borlaug’s work is credited with saving over a billion people from starvation.

According to Salon.com, Borlaug was the recipient of :

–Nobel Peace Prize, 1970
–Election to the U.S. National Academy of Sciences, 1970
–Aztec Eagle, Government of Mexico, 1970
–Outstanding Agricultural Achievement Award, World Farm Foundation (USA), 1971
–Presidential Medal of Freedom (USA), 1977
–Jefferson Award, American Institute for Public Service, 1980
–Distinguished Achievement Award in Food and Agricultural Sciences, Council for Agricultural Science and Technology (USA), 1982
–The Presidential World without Hunger Award: Educator/Scientist category (USA), 1985
–The Americas Award, The Americas Foundation (USA), 1998
–Jefferson Lifetime Achievement Award (USA), 1997
–Altruistic Green Revolution Award, Indian Council of Agricultural Research, 1998
–Recognition Award for Contributions to World Wheat and Maize Research and Production, Republic of El Salvador, 1999
–Dedication of Norman E. Borlaug Center for Southern Crop Improvement, Texas A&M University, 1999
–Vannevar Bush Award, National Science Foundation (USA), 2000
–Memorial Centennial Medial of the N.I. Vavilov Research Institute of Plant Industry (Russia), 2000
–Public Welfare Medal, National Academy of Sciences (USA), 2002
–The Rotary International Award for World Understanding and Peace; Barcelona, Spain, 2002
–The Philip Hauge Abelson Prize, American Association for the Advancement of Science, 2002
–Award for Distinguished Achievements to Science and Medicine, American Council of Science and Health, 2003
–National Medal of Science (USA), 2004
–Padma Vibhushan in Science and Engineering, awarded by the Government of India, 2006
–Norman Borlaug Institute for International Agriculture created as part of the Texas A&M University System, 2006
–Congressional Gold Medal, received 2007
–Texas A&M University honorary doctor of letters degree, 2007 (Borlaug received more than 50 honorary degrees in his career.)

Borlaug was also the inspiration behind the World Food Prize, “the foremost international award recognizing — without regard to race, religion, nationality, or political beliefs — the achievements of individuals who have advanced human development by improving the quality, quantity or availability of food in the world.”

New York Times coverage here.

I couldn’t agree more with the Wall Street Journal’s conclusion in their tribute to Borlaug: “In saving so many, Borlaug showed that a genuine green movement doesn’t pit man against the Earth, but rather applies human intelligence to exploit the Earth’s resources to improve life for everyone.”

Filed Under: Solar, Uncategorized Tagged With: Agriculture, Borlaug, Food, Starvation

Ninety Years Of Progress – 3 MPG

August 22, 2009 By unger@hrtwd.com 9 Comments

New Scientist reports a pretty amazing set of statistics in “US vehicle efficiency hardly changed since Model T “:

“The average fuel efficiency of the US vehicle fleet has risen by just 3 miles per gallon since the days of the Ford Model T, and has barely shifted at all since 1991.”

“Those are the conclusions reached by Michael Sivak and Omer Tsimhoni at the University of Michigan Transportation Research Institute in Ann Arbor. They analyzed the fuel efficiency of the entire US vehicle fleet of cars, motorcycles, trucks and buses from 1923 to 2006.”

“They found that from 1923 to 1935 fuel efficiency hovered around 14 mpg (5.95 km/l), but then fell gradually to a nadir of only 11.9 mpg (5.08 km/l) in 1973. By 1991, however, the efficiency of the total fleet had risen by 42 per cent on 1973 levels to 16.9 mpg (7.18 km/l), a compound annual rate of 2 per cent.”

“Progress has stalled since then, though, despite growing environmental concerns. From 1991 to 2006 the average efficiency improved by only 1.8 per cent to 17.2 mpg (7.31 km/l).”

After all the good intentions of politicians and environmentalists, all the legislation, all the regulation, for all those years – one has to wonder if a simpler solution might have made more of an impact on fuel economy. If instead of micromanaging the auto industry with mandates, congress had instead tried taxing petroleum to account for the “economic externalities” of our fossil fuel addiction, consumers might have placed some value on efficiency and we wouldn’t have squandered a precious resource while despoiling our environment. And we perhaps wouldn’t have lost the American auto industry to competitors who recognized the value of both efficiency and competitive enterprise.

Filed Under: Uncategorized Tagged With: Add new tag, carbon tax, fuel efficiency, regulation

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