Earth’s climate is changing, bringing disruption and pain. 2015 was the globe’s hottest year on record, exceeding the previous record set the year before. Fifteen of the sixteen warmest years on record have all come in this century, as this NOAA graphic shows.
 
Climate at a Glance_ Time Series _ National Climatic Data Center (NCDC)

Even with the amazing strides in renewable-energy technologies, the transition from climate-wrecking fossil fuels to energy efficiency, sunlight and wind power is taking far too long. The #1 obstacle: the market prices of coal, oil and gas include almost none of the costs of carbon pollution.
 
A briskly rising U.S. carbon tax will transform energy investment, re-shape consumption, and sharply reduce the carbon emissions that are driving global warming.

  • A carbon tax is an “upstream” tax on the carbon contents of fossil fuels (coal, oil and natural gas) and biofuels.
  • A carbon tax is the most efficient means to instill crucial price signals that spur carbon-reducing investment. Download our spreadsheet (Excel file) to input your own tax levels and see how fast U.S. emissions will fall.
  • A carbon tax will raise fossil fuel prices — that’s the point. The impact on households can be softened through “dividends” (revenue distributions) and/or reducing other taxes that discourage hiring and investing (“tax-shifting or swapping”).
  • Carbon taxing is an antidote to rigged corporate energy pricing. Unlike cap-and-trade, carbon taxes don’t create complex and easily-gamed “carbon markets” with allowances, trading and offsets.

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Answering Krugman: Renewables Alone Won’t Stop Climate Disaster

February 3, 2016 by Charles Komanoff Comments (0)

“Climate change just keeps getting scarier,” Paul Krugman rightly pointed out in his biweekly New York Times column yesterday. But fear not, he instructs. A “renewable-energy revolution” is brewing in America — one that won’t require threading a carbon tax through the climate-denying GOP Congressional majority.

This “remarkable technological progress in renewable energy,” which Krugman partly credits to Obama administration stimulus and tax breaks that helped wind and solar scale up and drive down costs, has “put the cost of renewable energy into a range where it’s competitive with fossil fuels.” The U.S. will soon be “leading the world” down the low-carbon path, promises Krugman, so long as the presidency, and Obama’s Clean Power Plan, stay out of Republican clutches.

Krugman-RenewablesLeaving aside the fact that the global renewables revolution already has a leader (hint: it’s Europe’s largest economy), there are many reasons to question Krugman’s implicit suggestion that the U.S. and the world can banish carbon fuels fast enough to avert catastrophic climate change without a serious carbon tax in the policy mix. Here are a few:

Demand matters (not just supply) — A renewables-only revolution leaves intact the demand side of the carbon equation. Yet human appetites for energy have proven so boundless that, absent robust prices on carbon emissions, energy demand will invariably outrun the output of even optimized solar and wind power systems — at least during the 50-year time horizon in which our climate fate will be decided.

There’s a new climate villain: cheap oil — With gasoline again going for two bucks a gallon, driving is up and fuel economy is down. Even the Obama administration’s vaunted CAFE standards can’t hold back such powerful price signals. Last year’s bump in U.S. cars’ and trucks’ emissions — the CO2 equivalent of nine good-size coal-fired power plants — will be just the beginning, unless we raise fuel taxes.

Scaling up wind and solar isn’t child’s play — To underscore the first point, take a look at the 100%-renewables plan drawn up for New York State (where both Krugman and I happen to live) by a crack team of physicists and engineers from Stanford. Their zero-carbon and zero-nuclear plan requires 17,000 giant offshore and land-based wind turbines to power just half of the state’s transportation, heating, industry and electricity. (The other half of the energy would come from masses of rooftop solar cells, solar PV and thermal plants, plus existing hydro dams.) Cutting that very tall order down to manageable size cries out for a carbon tax.

Tax breaks cost money — Fiscal-scolding isn’t our thing, but someone must pay for Krugman’s touted solar investment tax credits and wind production tax credits — not to mention ethanol mandates. Moreover, energy subsidies are notoriously hard to dislodge (notwithstanding Sen. Ted Cruz’s victory in yesterday’s Iowa Republican caucuses despite his attacks on ethanol subsidies). And it isn’t necessarily the wealthy who foot the bill, as we showed two years ago in our paper comparing carbon taxes with clean-energy subsidies.

We get that Krugman, an implacable foe of Republican know-nothingism since at least the 2000 elections, thinks it’s essential to keep a Democrat in the White House this November. We also appreciate his “tipping point” argument that “Once renewable energy becomes an obvious success and, yes, a powerful interest group, anti-environmentalism will start to lose its political grip.” And we don’t necessarily insist that every climate commentary begin and end with carbon taxes.

But Krugman, a Nobel laureate in economics, surely knows that in the race to eliminate fossil fuels, raising their prices will go much further than making renewables cheap. We hope his columns will again make this clear, soon.

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How a Carbon Tax Would Cut Emissions from Shipping and Aviation

January 30, 2016 by James Handley Comments (1)

On Feb. 8, 2016, shortly after we put up this post, the International Civil Aviation Organization, the United Nations’ aviation agency, announced an agreement with the global aviation industry to impose binding limits on CO2 emissions for all new airplanes delivered after 2028. The New York Times reported on this development here. — Editor.

Shipping and aviation combined account for only an estimated five percent of global CO2 pollution. But some experts project this share doubling or even tripling as globalization accelerates. How can those emissions be reduced, and would a carbon tax help?

Shipping, which is believed responsible for 3% of world CO2, is already the most energy-efficient large-scale way to move cargo, pound for pound and mile for mile. Moreover, shipping fuel costs already comprise about half of operating costs, and efficiency standards for new large ships took effect last year. How would a carbon tax on maritime fuel (primarily residual fuel oil, a/k/a bunker fuel) spur further efficiency and innovation? Air carriers also have incentive to conserve fuel since it accounts for about one-third of ticket prices. How would a carbon tax on aviation fuel lead to reduced emissions in that sector?

A good starting point is two recent pieces by New York Times science reporter Henry Fountain describing design and operating innovations underway in shipping and aviation.

Shipping

The simplest and most immediate way to improve ships’ efficiency is to slow down. “Slow steaming” — reducing speed by at least several nautical miles per hour — can slash fuel consumption and thus CO2 emissions. Efficiency can also be raised through advanced engine design and by reducing drag by polishing propellers, coating hulls with algae-inhibiting paint, reshaping bows and adding fins or ducts to propellers. One promising new device called “Silverstream” cuts water friction by laying a carpet of tiny bubbles along the hull so it rides mostly on air.

Maersk Ship

A rising carbon tax would steer shipping technology and practices toward greater efficiency.

Then there’s fuel choice. The single largest force in reducing U.S. CO2 emissions in recent years has been displacing electricity generators powered by dirty, high-carbon coal, with lower-Btu and lower-CO2 combined cycle plants burning natural gas. Similarly, new ships fueled by liquefied natural gas (LNG) are beginning to replace freighters and tankers powered by dirty tarlike bunker fuels, reducing CO2 emissions by 15-20%. The climate downside to this trend is methane “slip” — emissions of unburned methane, a far more potent greenhouse gas than CO2 (per pound), a problem that marine engine manufacturers are beginning to tackle.

Perhaps the biggest pathway through which carbon taxes could cut greenhouse gas emissions from shipping would be by altering the cost equation between distant imports that must be transported thousands of miles, and domestically produced goods. The resultant reduced demand for shipping would translate not only to less CO2 (and methane) but less air and water pollution, fewer megaports and, perhaps most importantly, retention or creation of domestic manufacturing jobs. The potential job-producing impacts of a carbon tax covering shipping should interest those building “blue-green” alliances and clearly deserves further study.

Aviation

A month after his article on shipping innovations, Times reporter Fountain tackled aviation, reporting on innovative aircraft designs, new lighter materials and more efficient air traffic practices. Composite materials, which now comprise about half of the airframe of the new Boeing 787, have made new planes much lighter. More efficient jet engines are being installed on existing aircraft. And operational measures like altering flight paths to glide downward and better management of air traffic, both at airports and in the air, can further reduce emissions.

Distributed Propulsion lifts efficiency

“Distributed Propulsion” gives a lift to airplane efficiency

There’s more. New flexible aircraft wings are being tested to reduce drag. “Distributed propulsion” — locating an array of electric motors at the leading edge of aircraft wings for takeoff and landing, while using jet-fueled engines at the wingtips for cruising – is reportedly showing promise to reduce fuel consumption and resultant CO2 emissions. Of course, research and adoption of innovations like these depend heavily on rising fuel prices, which makes the 2015 price plunge so concerning.

In addition to driving new technology, a carbon tax would soften demand for air travel. The pull of a carbon tax would add impetus for more and better ground transportation alternatives, particularly high-speed inter-city and regional rail services to supplant short-hop flights. Technology such as video-conferencing can curb travel needs while saving time and money for businesses and individuals; a carbon tax would encourage such behavior to become our cultural norm. And even absent direct substitutes, costlier air travel would lose market share to other discretionary activities, almost all of which would be less carbon-intensive.

Culture Change?

We return to the questions posed earlier: with fuel costs already their single largest expense, why should fuel price increases spur changes in shipping and aviation designs, equipment and practices?

For one thing, whereas unrelenting fuel price volatility undermines incentives to conserve and innovate, a predictably-rising carbon tax would be more likely to ensure that investments in nascent shipping and aviation technologies actually pay off. The best ideas will move off the drawing boards and into practice faster and more widely.

More broadly, a carbon tax would not just move shipping and aviation down the fossil fuel demand curve; it would create a new, lower demand curve by boosting every substitute for, and every alternative to, high-carbon activity. In layman’s terms, a global, economy-wide, briskly-rising carbon tax would induce a culture change.

The need for a broad, all-inclusive price signal raises another key point. Not only was the December Paris climate accord mute about the best economic tool to achieve emission targets; the agreement left out international shipping and aviation altogether.

Climate activists are urging a carbon tax on shipping and aviation not only to spur reductions in climate pollution but as a revenue source to finance global climate mitigation. A new report from the International Monetary Fund suggests that a carbon tax of $30/ton of CO2 on offshore maritime and aviation emissions alone could generate $25 billion of revenue a year, while noting that national governments may have only weak claims to that revenue. Dedicating it to global climate finance might help resolve a thorny issue in climate negotiations while closing a gap in the Paris framework.

Photos: Flickr, New York Times

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Cheap Oil’s Peril and Promise in the Fight against Climate Change

January 26, 2016 by Charles Komanoff Comments (1)

Clifford Krauss and Diane Cardwell have a front-page story in today’s New York Times about the challenge that cheap oil poses to the Paris climate agreement. The way that governments respond could make or break the agreement, they say, with huge ramifications for the global fight to stop climate change:

For the climate accord to work, governments must resist the lure of cheap fossil fuels in favor of policies that encourage and, in many cases, require the use of zero-carbon energy sources. But those policies can be expensive and politically unpopular, especially as traditional fuels become ever more affordable.

“This will be a litmus test for the governments — whether or not they are serious about what they have done in Paris,” said Fatih Birol, executive director of the International Energy Agency.

The Carbon Tax Center has repeatedly highlighted this challenge over the past twelve months, particularly in economic terms. Cheap oil has meant cheap gas, which has encouraged more driving and a reversion to gas guzzlers. We calculated last month that increased gasoline consumption in the U.S. alone in 2015 produced carbon emissions equivalent to a year’s worth of emissions from nine coal-fired power plants. That’s equivalent to the entire annual emissions from burning all fossil fuels for all purposes in Denmark or Ireland.

Want more driving? Cheap gasoline will do the trick.

Want more driving? Just pour on cheap gasoline.

We concluded that cheap oil risks making a “mockery of just about every scenario to move the U.S. and other countries decisively off carbon fuels.” But that’s not the end of the story. Cheap oil paradoxically presents an historic opportunity to pivot away from oil — and all fossil fuels — for good.

As we wrote last January, cheap oil brings a host of positives, like more jobs in most economic sectors, and negatives, like increased fuel use. The trick is how to safeguard the positives while neutralizing the downside. From a policy perspective, this actually isn’t hard to do, and oil’s low price makes it that much easier (as well as more imperative). The real question is whether we have the political will to do so.

The policy solution is a revenue-neutral carbon tax, beginning with a refundable tax on oil. The government would collect the tax at ports and wellheads and distribute the revenues equally to households each month, just like in Alaska. Because tax dollars stay in circulation, the amount of money families have to spend doesn’t fall and the economy benefits. Most families of limited means will come out ahead because on average they spend fewer dollars on oil than they will receive in their monthly revenue check.

By simulating higher fuel prices, we can preserve incentives to get more fuel-efficient. As a result, motorists will buy higher-mileage cars and drive them somewhat less, manufacturers will build more-efficient vehicles and aircraft, and cities and counties will be less inclined to  dial back public transit. The same goes for freight movement — goods produced nearby will be advantaged, boosting local agriculture and domestic jobs. You can read more about our proposed oil tax here.

As we and others, including former Treasury Secretary Lawrence Summers, have argued over the past year, the current cheap oil environment is ideally suited for the implementation of a carbon tax. The question remains: do we seize the moment to lock in the good while neutralizing the bad? Or do we instead continue fighting climate change with one arm tied behind our backs?

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Just How Scary Is 2015’s Temperature Record? We Count the Ways.

January 21, 2016 by Charles Komanoff Comments (0)

Even for folks hardened by decades in the trenches fighting climate change, the release yesterday of 2015 planetary temperature data was still shocking. The “global land and water temperature” didn’t just set another record last year, it changed the rate at which those records are being set.

Another record smashed.

Another record smashed. (Full temp chart is on CTC home page.)

This morning we downloaded the official NOAA/NCDC global temperature dataset of temperature anomalies — that’s each year’s deviation from the trend increase averaged across the 20th Century. Here’s what we saw when we ran the stats:

    • The 2015 anomaly was 0.90 degrees Celsius (1.6 degrees Fahrenheit; except for graph excerpt at right, all figures here are Celsius); in other words, last year’s global average temperature was almost a full degree above the 20th Century average.
    • The 2015 temperature anomaly was 0.16 degrees greater than the anomaly for 2014, making last year’s increase the biggest since 1997 — even though the 2014 anomaly had just set a new record.
    • The trendline we drew through 1975-2015 temperature data has a nearly 4 percent steeper slope than our year-earlier trendline for 1975-2014 data. Adding 2015 data in effect lifts the prior trend from its moorings, like an earthquake, tilting it upward.

Here’s how climate scientist Michael Mann characterized the new data, as reported by the New York Times:

Michael E. Mann, a climate scientist at Pennsylvania State University, calculated that if the global climate were not warming, the odds of setting two back-to-back record years would be remote, about one chance in every 1,500 pairs of years. Given the reality that the planet is warming, the odds become far higher, about one chance in 10, according to Dr. Mann’s calculations.

(The entire Times article, which led the paper’s Jan. 21 print edition and was written by the paper’s superb climate reporter, Justin Gillis, is well worth reading.)

Here’s one more way of grasping how the rate of temperature rise is accelerating:

Not only is our planet much hotter, the pace of warming is much faster.

Not only is our planet much hotter, the pace of warming has gotten much faster.

The trendline running through the entire 1880-2015 NOAA/NCDC dataset yields an average rate of temperature rise of 0.0668 degrees per decade; it’s probably easier to multiply that by 10 to derive a per-century rise of two-thirds of one degree. However, a trendline on just the most recent 40 years, 1975-2015, gives an average rise of 0.1664 degrees per decade, or one-and-two-thirds of one degree per century. Over the past 40 years, temperatures have risen 2.5 times as fast as they have over the entire 135-year record.

(NB: Our 1880-2015 slope matches the slope reported by NOAA/NCDC. Our choice of 1975 as the start year for our recent trendline has no particular significance; a regression on 1995-2015 yields a similar slope. For those interested in methodological issues in temperature measuring, the Niskanen Institute posted a useful primer earlier this week.)

In his State of the Union Address last week, President Obama sent a message to senators and representatives on the GOP side of the aisle:

[I]f anybody still wants to dispute the science around climate change, have at it. You will be pretty lonely, because you’ll be debating our military, most of America’s business leaders, the majority of the American people, almost the entire scientific community, and 200 nations around the world who agree it’s a problem and intend to solve it.

It’s hard to discern the extent to which the denialism running through the Republican Party is driven by ideology or by politics, especially since the two are strongly intertwined. At some point, reality will come into play. Temperature data can help that happen. So can election returns.

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Washington-State Advocates Drop Signatures to Dump Carbon

January 19, 2016 by Matt Gordon Comments (0)

On December 30, a crowd of climate activists trooped to the office of Washington’s Secretary of State in Olympia, hauling boxes of signatures with a message from hundreds of thousands of Washingtonians: We want Washington to enact a carbon tax and make our state a U.S. leader on climate action. By filing the signatures before the year-end deadline, the group ensured that Washington must consider a carbon tax, either by a vote of the legislature or as a ballot measure in November.

We first reported on Carbon Washington’s I-732 initiative last June, when the grassroots group had collected 50,000 signatures. Since then their campaign grew exponentially, gathering a total of 362,000 signatures and gaining prominent endorsements both locally and nationally.

The scene in Olympia, the WA capital, on Dec. 30, 2015.

The scene in Olympia, the WA capital, on Dec. 30, 2015.

The signature total far surpassed the 246,372 valid signatures required to advance the initiative to the legislature. In fact, it puts I-732 in Washington State’s all-time top 10 by most signatures collected. This is especially impressive given that Carbon Washington relied on volunteer labor and grassroots donations, disproving skeptics who said collecting the necessary signatures was impossible without at least $1 million to hire paid petitioners.

Now Washington’s divided state legislature will consider the measure — the 2016 session runs from January to March. I-732 was designed to meet fiscal conservatives halfway; it is revenue-neutral, pledging carbon tax revenues to reduce the state sales tax. But while the measure has been endorsed by some prominent Republicans, including Harvard economics professor (and former Romney advisor) Greg Mankiw, it has yet to win support from Republican legislators.

If the legislature doesn’t enact I-732, the measure will appear on the ballot in November, alongside what will almost certainly be a hotly contested presidential election. Advocates hope this will lead to higher voter turnout, especially among younger voters, which might boost the measure’s chance to pass.

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