Komanoff: The Time Has Never Been More Right for a Carbon Tax (U.S. News)
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Komanoff asks: If efficiency hasn’t cut energy use, then what? (Grist)
Komanoff: Senate Bill Death = Win for Climate (The Nation)
Q&A: Charles Komanoff (Mother Jones)
Yesterday I biked to Grand Central Station and boarded a commuter train to the Hudson River village of Tarrytown to participate in a forum on carbon taxes. (For readers not from the area, Westchester is the suburban county immediately north of New York City.) My co-panelists were climate organizer Iona Lutey and economist Sara Hsu.
Sara, a professor of economics at the State University of New York, outlined her research and legislative advocacy for a NY State carbon tax, while Iona delivered Citizens’ Climate Lobby’s hopeful message that persistent but collegial citizen engagement can build political will for the group’s “carbon fee and dividend” proposal, even among Republicans. I had a subtle pitch: emissions are falling in the U.S. and flattening in China without the benefit of carbon emissions pricing, yet carbon taxing is essential to accelerate and broaden progress.
I usually make that point with modeling results, but last night I brought something new: a Powerpoint page (shown below) listing a dozen complementary pathways for reducing use of fossil fuels that need the price signal from a carbon tax to. (Download my PPT here.)
All three presentations seemed to hit home with our audience of 40 or so folks, most of whom haled from nearby towns and villages. (The local paper Hudson Independent has a fine summary.) The Q&A was unusually lively. A resident of nearby Croton-on-Hudson had perhaps the most provocative question of all: why trade away the right to sue the fossil fuel purveyors and extractors, as the Climate Leadership Council is proposing in its Republican-branded carbon tax deal, when successful litigation could deliver a double-barreled victory: bankrupting the carbon barons while providing financing for the energy transition to efficiency and renewables?
The question was in response to the support I voiced for the Climate Leadership Council’s deal in my talk and in my previous post here. My primary answer then and now was that there seems to be little chance that oil, coal and gas companies could ever be made to pay more than token amounts for the ruin their products cause. But the question deserves further thought, which I kicked off this morning with this thought experiment:
What if we took all U.S. CO2 from burning fossil fuels over the past century and split “responsibility” for it 50-50, with half of the costs written off as the “fault” of consumers (who weren’t entirely innocent buyers and burners of all that gasoline and fuel-based electricity), and the other half charged to the fossil fuel producers? What magnitude of damages and reparations would that entail?
A molecule of carbon dioxide remains in the atmosphere for roughly a century, so we need to consider 100 years of fossil fuel combustion. The historical magnitude of U.S. CO2 is more or less known, but for this exploratory calculation we might rough-estimate the century’s total as 60 years worth of last year’s emissions of roughly 5 billion metric tons. To each metric ton we now apply a $50 “social cost of carbon,” though that’s almost certainly far too low, as I wrote here recently.
With these rough assumptions, the producers’ “debt” is then one-half of 60 years x 5 billion metric tons x $50 per ton, which equals $7.5 trillion. Paying that out as damages over, say 20 years implies an annual charge to the producers of $350-$400 billion. Interestingly, that’s the same as the annual revenue from a $75/ton carbon tax.
Let’s now say, improbably but hypothetically, that Congress enacted, and the courts approved, award of those damages to Americans (setting aside, for now, damage claims from the other 7 billion of the world’s people). Where would the money come from? It seems implausible that it could be clawed back from shareholders of the fossil fuel corporations. Could it come from raising the prices of the fuels over the next several decades, in which case it could function as a de facto carbon tax? But if so, why not just enact a carbon tax in the first place?
As you can see, I’m trying to wrestle with this issue. I welcome comments and suggestions.
Meanwhile, Sustainable Westchester and Westchester Power, organizers of last night’s forum, are hosting two more evening panels: Wednesday, July 19 in New Rochelle, and Wednesday, July 26 in Bedford Hills. Details here. I’ll be speaking at both.
I’m tempted to call it the decade’s most important paper on the costs of climate damage. The paper, just published in the peer-reviewed journal, Environmental and Resource Economics, upends the long-prevailing approach for estimating the social cost of carbon, potentially laying the ground for putting the SCC (in dollars per metric ton of CO2) into triple digits, from the $44 figure stipulated in rule-making by the Obama White House.
Not only that, the paper presents a trio of climate-damage functions relative to the temperature rise, that let us calculate the estimated global cost to humanity from each global warming increment. The functions vary depending on whether they include so-called “catastrophic damages” from climate change as well as estimates of climate change’s potential drag on future growth in economic productivity. Each function expresses that cost as the percent of future GDP lost per additional centigrade-degree in global-average temperature relative to the pre-industrial level. (Graph at left, with equation in bold, is the most conservative, i.e., slowest-growing, of the three graphs in the paper. All three are shown in the next graphic.)
The new paper, Few and Not So Far Between: A Meta-analysis of Climate Damage Estimates, is by Peter Howard, economics director at NYU Law School’s Institute for Policy Integrity; and Thomas Sterner, professor of environmental economics at the University of Gothenburg in Sweden. (Disclosure: Thomas and I have shared a warm personal friendship since the 1980s.) As the somewhat unwieldy title suggests, the paper combines data and results of prior analyses that sought to place a cost on future damages from climate change. In those analyses, “damages” are expressed as a percentage of future global economic product — a somewhat cold-blooded metric that nevertheless allows policy-makers to compare the impacts of climate change on human well-being to the costs of mitigation and adaptation.
The Howard-Sterner paper identifies several sources of bias in previous meta-studies of the temperature-damage relationship. There’s “duplicate bias,” by which early climate-damage models tended to be overly conservative but, because of their primacy, came to be cited multiple times, thus biasing downward the temperature-damage relationships in meta-studies. Moreover, methodological choices or constraints kept some analyses from accounting for non-market climate impacts such as reduced biodiversity or for so-called catastrophic impacts such as collapses of regional or global agriculture.
Earlier analyses also failed “to control for whether market impact estimates [of climate damages] included potential impacts on economic productivity,” write Howard and Sterner. Though it may appear bizarre, until recently many attempts to estimate the temperature-damage function deliberately excluded the prospect that climate change will erode societies’ ability to generate new wealth by inhibiting the accumulation of technological and intellectual capital, which are key drivers of economic productivity and growth. In recent years, renowned climate economist William Nordhaus, whose Dynamic Integrated Climate-Economy (DICE) model and long-time intellectual leadership have been integral to estimating the social cost of carbon, has come under criticism for excluding non-market, productivity and catastrophic climate impacts from his modeling.
As we wrote last Friday, in 2015 the Interagency Working Group (IWG) on the Social Cost of Carbon created by President Obama directed federal agencies to use a “social cost of carbon” equivalent to $37/ton in 2007 dollars. (Note that the official link to the IWG was scrubbed away by the Trump White House, in 2017.) That figure, which equates to $44/ton in 2017 dollars, was drawn in part from the “2013R” version of DICE.
In their paper’s conclusion, Howard and Sterner point out that updating DICE as per their findings “would increase the resulting SCC of the Interagency Working Group by between one-and-a-half to twofold.” While that’s true arithmetically, it’s an understatement of sorts, insofar as their conclusion states clearly that “Using the preferred [model] specification, we find that the 2015 SCC increases by approximately three- to four-fold depending on the treatment of productivity.” However, that increase is attenuated by the IWG’s decision to derive their SCC not only via DICE but with two other temperature-damage models, neither of which are addressed in the Howard-Sterner paper.
Thus, while the authors’ analysis would raise the estimate of the SCC derived solely from DICE by an estimated 209 percent, the need to average the increases for the DICE figures with the unchanged figures from the other models leads the overall increase to be considerably less, though a still substantial 63 percent. Even that lower rise boosts the social cost per ton of CO2 to $72, from the Obama administration’s $44 (both figures in 2017 dollars).
That change is important since it warrants recalibrating the panoply of cost-benefit and other calculations that carbon tax advocates, corporate carbon-cutters and others have been basing on the social cost of carbon during recent years. But there’s more, and here we return to the equation we highlighted (and graphed) in the chart at the top.
In their paper, Howard and Sterner tested various curve shapes to distill the set of temperature-damage relationships they sifted in their meta-analysis. Their most robust functional form was a simple quadratic, by which the total damage to global well-being (expressed as the lost percentage of global economic output) rises by the square of the temperature deviation from pre-industrial levels.
Quadratic curves start slowly and gather steam — much as, when an object is dropped from some height, the distance from its point of release increases more with each passing second. And so it appears with the Howard-Sterner climate-damage function, by which the additional societal damage from each new temperature increment is greater than the damage from the previous increment. (See table directly above.) In fact, the additional damage is a linear function of the temperature rise (as you calculus jocks will have noticed, since the first derivative of any quadratic function is a linear one).
The implications are obvious but nonetheless profound. Arresting climate change isn’t binary, whereby we either stop global warming in its tracks or we don’t. It is, literally, a question of degree, with the importance of reducing and stopping warming intensifying as global temperatures rise. While that appears obvious, experientially — discomfort rises more when the mercury climbs to 100F from 95F than from 90F to 95F; and what goes for heat effects should go for drowned coasts, extreme weather, ecosystem stress, and so forth — now there’s an equation to codify it.
Howard’s and Sterner’s quantification of the accelerating harm as global temperatures increasingly diverge from pre-industrial levels obliges humanity — all of us — to redouble our efforts to tax and eliminate fossil fuels and other greenhouse gas emitters at the fastest imaginable rate.
I set off a media firestorm in New York City last week.
It was Friday morning, the day after Trump repudiated the Paris Climate Agreement, and Mayor Bill de Blasio was using his weekly “ask the mayor” turn on the popular Brian Lehrer radio show (NPR) to tell New Yorkers “We’re going to step up our game” to address climate change. I called in and the screener put me through as “Charles from Manhattan.” Here’s what I said:
Mayor de Blasio, you spoke eloquently a moment ago about stepping up our game in light of Trump’s withdrawal from Paris. How about you stepping up your game, leading by example, getting out of your SUV armada, and if you need to go to the Park Slope “Y” five days a week, rather than a gym near you, why don’t you take mass transit? Or even once in awhile ride a bike, like the vast majority of your fellow New Yorkers, so you will know how we are suffering under a transit system — yes governed by the governor, not by the mayor — but you need to lead by example.
I finished with this:
One of the reasons we are in this climate crisis is because the average person sees elites not playing by the rules that elites seek to impose on everyone else. And you’re not going to be able to lead when you’re sitting in your SUV being chauffeured every day, twelve miles from Gracie Mansion to Park Slope just so that you can ride an exercise bike.
Then it was Mayor de Blasio’s turn. He defended his climate record and called my criticism “cheap symbolism,” as reported by Politico (abridged slightly here):
Charles, I understand the emotional appeal of what you’re saying but I’m just not going to take the bait, my friend.
I have instructed folks in my government to turn our fleet into electric cars. We are moving to renewables, we are retrofitting our buildings, that’s the real leadership — it’s not whether I go to the gym.
Whether I go to the gym does not affect the policies that affect millions of people. I’m going to keep going to the gym. I’m proud to say we have a hybrid. It’s a good car, it’s very fuel efficient. I use the subway when it makes sense to use the subway, and I do stay in touch with what people are going through and I knew it for years and years, because for many years I never had any car.
So it’s easy for you to say that, but it doesn’t really have anything to do with how we change the world. We change the world with policies that affect people and the policies of this city are going to lead to addressing climate change in a much more aggressive way than it’s ever been addressed in the history of New York City.
But again, the issue is not cheap symbolism here. The issue is, are we gonna take action. That’s really the motherlode of addressing emissions in this city. It comes from buildings. We’re going to be very very aggressive about that.
That was that, or so I thought. What I soon learned was that the City Hall media bullpen was going nuts. One of the reporters put my voice together with my first name, and the papers started calling for quotes. By nightfall, their stories were up, with front-page headlines in the Daily News and the NY Post branding the mayor a “green hypocrite” and even the staid New York Times putting my exchange with the mayor at the top of its Metro section.
I was able to go deeper in those interviews. My most-teachable moment came on Saturday. The NY Post was doing a follow-up and I said that transit riders “need a voice and we don’t have one,” when neither the mayor nor the governor rides a subway or bus.
There are levels galore, here. Let’s unpack them.
First, when we quantify the direct carbon consequence from the mayor’s mini-fleet of SUV’s from home to gym, we see it’s really small: just 24 pounds of CO2 per trip, which monetizes to a mere half-a-dollar’s worth of climate damage.
(Burning one gallon of gasoline releases 19.57 lb of CO2, we’ll call it 20 lb. Let’s assume two SUV’s, each averaging 20 mpg, though actual mileage is probably less. They’re going 12 miles, so we get 2 (vehicles) x 20 lb/gal x 1/20 gal/mile x 12 miles, which yields 24 pounds of CO2. In 2015 Pres. Obama directed federal agencies to use a “social cost of carbon” of $37 per ton of CO2, in 2007 dollars; that equates to $44/ton in 2017 dollars, which is just 2.2 cents per lb of CO2. So the mayor’s 24 lb per trip is imposing a direct climate cost of 53 cents (24 lb x 2.2 cents/lb).)
It’s true that the official U.S. cost of carbon (since rescinded by Trump) is a low-balled estimate, but even quadrupling it raises the direct climate cost of the mayor’s tailpipe CO2 to just two bucks — befitting the fact that global CO2 is the end-product of billions of actions that are individually insignificant but collectively fraught.
A second level of costs arises from the spatial impacts from driving in a dense city. These are experienced most acutely as traffic congestion and its attendant time cost. And here I mean not mayoral time lost to traffic (since de Blasio gets to read and talk by phone while being ferried to the gym) but the time his auto trip effectively takes from others on the roads, by virtue of occupying space and slowing them down.
As long-time subscribers to this blog may know, I’ve done a lot of analysis of traffic congestion costs in New York City, even to the point of quantifying the time costs from a single additional trip in or near the city’s Manhattan core. This analysis is embedded in the kaleidoscopic spreadsheet I maintain to model “congestion pricing” for New York (download here, Excel required; go to Delays and Delay-Costs tabs) but more conveniently summarized in Time Thieves, an article I wrote a half-dozen years ago with then-Princeton student Will Fisher.
The takeaway for our purposes is that a single mile driven by just one vehicle during ordinary congested conditions in or near Manhattan slows down other vehicles by a combined 8 or 9 minutes (think of it as hundreds of vehicles delayed by a few seconds each). Factoring that by the 24 miles in the mayor’s ride to the gym (12 miles by 2 vehicles), the cars, trucks, cabs and buses in the mayor’s “traffic field” are absorbing an aggregate slowdown of 3 to 4 hours. By any reasonable estimate of the average value of time of those vehicle users, the aggregate cost of the time taken from them by each mayoral ride from his residence to his gym is easily in excess of a hundred dollars.
That’s two orders of magnitude greater than the direct carbon cost per trip — indicative of the fact that traffic congestion manifests as an inefficiency problem far more than as a climate problem, at least directly. It also demonstrates that the mayor’s (or any other New York car user’s) promise to switch to an electric vehicles won’t put a dent in the societal costs of driving in a congested metropolis.
Yet even those several hours of extra congestion dissolve into insignificance in a city of 8.5 million people and 2 million registered vehicles. The crux of the matter — which I tried to telegraph in my radio remarks but didn’t really nail until that second NY Post interview the next day — is found in this syllogism:
- New York City is inherently green by virtue of its urban density. This idea was most lucidly distilled by the writer David Owen in his 2009 book, Green Metropolis. Density both facilitates and enforces shorter trips, non-automobile travel, and compact and contiguous living and working spaces, all of which translate directly into smaller carbon footprints.
- What makes this density possible is our mass transit (subway) system. But it is deterioriating from insufficient investment in equipment and maintenance. (The local press corps is all over this; see for example these vivid stories last month by The Times’ Emma Fitzsimmons, 1 and 2.)
- Politicians are ignoring this crisis. Neither NY State Gov. Andrew Cuomo, who controls the state-chartered Metropolitan Transportation Authority, nor Mayor de Blasio, who has a voice in running the MTA along with a bully pulpit to call out problems and demand solutions, has stepped up to take responsibility. Neither of them ever rides a subway or bus, except in a photo-op.
It’s safe to say that Mayor de Blasio isn’t steeped in this logical chain connecting density, transit and leadership. For evidence, look no further than the end of his radio rejoinder to my harangue, in which he called the city’s building stock the “motherlode” of emissions and, thus, his climate focus. While it’s true that heating and powering the city’s offices and apartments generates a good deal more CO2 than fueling our cars and trucks, that’s because extensive and efficient mass transit keeps down automobile use. Take that away — as the governor and mayor are effectively doing by turning their backs as the subways fall apart — and transportation emissions will surely rise.
But the stakes are higher still. Low-CO2 NYC can’t grow or even maintain its current population without reliable and humane transit. Businesses and families won’t suffer a city dependent on undependable transit and will locate in less inherently-green cities or suburbs instead. And while in theory leaders could care enough about transit to make it work even if they never stepped onto a train or bus, ours have shown no inclination to do so in their combined decade in office (6.5 for Gov. Cuomo, 3.5 for Mayor de Blasio).
Maybe the only way the situation gets turned around is if each of them is stuck on a jammed, sweltering, subway … or is forced to wait on a packed platform as the minutes tick and the tension mounts. And not just once, but again and again.
That, in a nutshell, is why I called up and berated the mayor. As I told The Times, I’d been pondering it for weeks. The combination of Trump’s craven Paris announcement and the mayor’s wrapping himself in the mantle of climate savior gave me an opening and also pushed me over the edge.
I’ll close with a bit of irony inspired by Nicole Gelinas, the trenchant urban affairs analyst at the Manhattan Institute and New York Post columnist. In her Monday column, Bill de Blasio is a climate change hypocrite, she noted:
People will use less carbon — eventually — not because they’re nice, but because it will be more expensive. The world’s governments could achieve this effect more quickly through a carbon tax. Why not get it over with now? Because it’s too hard, politically and practically, to change people’s behavior by making them pay the full purported cost of carbon — that is, asking you to pay for next decade’s hurricane with your gas purchase today. (emphasis added)
Yes and no. Enacting a carbon tax is hard, but not necessarily impossible. But in this case, as we’ve seen, even a stiff carbon tax wouldn’t impel de Blasio to switch to subway from SUV; and that’s probably true even if he were paying for the ride from his own pocket.
What’s needed are new social norms that will make my radio complaint so ordinary that it’s not news; and unnecessary besides, because the idea of being chauffeured 12 miles to a gym would be nearly extinct. That is where a carbon tax would help.
As the U.S. president holds the world hostage to his impending decision to accept or repudiate the Paris Climate Agreement, it’s worth noting that the United States could meet its Paris emissions pledge by adopting a Republican-branded carbon tax proposal.
That’s the so-called Baker-Shultz carbon tax devised by the Climate Leadership Council and released in February by a team of Republican luminaries headed by Reagan Secretary of State George Shultz and George H.W. Bush Secretary of State James Baker. The CLC proposal, dubbed “The Conservative Case for Carbon Dividends,” would tax U.S. CO2 emissions from fossil-fuel combustion at $40 per ton and return the revenues in equal shares to American families (thus the “dividends” in the proposal’s name).
As the Associated Press reminded us at the onset of the holiday weekend, “nearly 200 countries are part of the Paris accord and each set their own emissions targets, which are not legally binding. The U.S. pledged to reduce its annual greenhouse gas emissions in 2025 by 26 to 28 percent below 2005 levels, which would be a reduction of about 1.6 billion tons of annual emissions.”
With informed sources such as Inside Climate News and the New Republic insisting that Trump’s rescission of Pres. Obama’s Clean Power Plan puts our Paris target out of reach, we decided to run our carbon-tax spreadsheet model on the CLC proposal. The result was a bullseye: the model calculates that implementing an economy-wide charge of $40/ton of CO2 on U.S. coal, oil and gas combustion in 2018 would, by 2025, result in total CO2 emissions of 4,242 billion metric tons — a figure 27% less than 2005 baseline emissions of 5,812 billion metric tons. That’s smack in the center of our country’s pledge to reduce emissions by 26% to 28%.
Our numerical finding closely matches CLC’s own estimate of a 28 percent drop in emissions in 2025 vs. 2005 from the $40/ton CO2 charge. And while a majority of the forecasted reduction in emissions from today to 2025 would be in the electricity sector, the expected 45 percent share of reductions in the other sectors (passenger auto and air travel, freight movement, oil refining, etc.) is a big increase from those sectors’ 27 percent share of reductions from 2005 to 2015, reflecting the carbon tax’s power to reduce fossil fuels use more broadly than targeted regulations.
A few important details:
One, CLC’s modeling assumes a 2% per year real increase in the carbon tax following the initial startup at $40/ton. We’ve conservatively assumed zero increase, although our graph also shows a steeper reduction predicated on raising the initial charge by $5 per ton per year.
Two, our two curves coincide for the first few years and begin diverging only in 2021. That’s because we’ve built a “brake” into our model that limits the economy’s uptake of the carbon charge to a rate of $12.50 per ton per year; increases beyond that are carried over into future years. Thus, the full impact of the $40 initial charge imposed in 2018 isn’t felt until 2021.
Three, the U.S. Paris commitment of a 26-28 percent reduction applies to all greenhouse gases, not just CO2. But since non-CO2 GHG’s such as methane are considered to have more low-hanging fruit, on average, being able to achieve a 27% reduction in CO2 by 2025 should virtually guarantee hitting the target of 27% less greenhouse gases.
Note that we label the Baker-Shultz proposal “Republican-branded” rather than “Republican,” preferring to reserve the latter designation for current Republican office-holders. But it’s striking nevertheless that a carbon tax proposal advanced by erstwhile Republican icons — Messrs. Baker and Shultz held many other senior positions even beyond secretary of state — could enable the present Republican administration to meet our country’s Paris climate-protection targets, and to do so in a straightforward, non-regulatory, “market-friendly” fashion that was once considered a bedrock G.O.P. principle.
We’re updating our carbon-tax model to the latest (2016) baseline. Watch this space for its release in June.
Against the backdrop of a Trump administration seeking to drag the United States’ economy back to the coal age, Canada’s clean growth strategy is a breath of fresh air. Now more than ever, Canada needs to continue to innovate on decarbonizing its economy, and a central plank of that strategy is putting a price on carbon pollution.
British Columbia’s groundbreaking 2008 carbon tax introduced carbon pollution pricing to the Western Hemisphere. With 86% of Canada’s population now covered by a carbon price, and 100% to be covered by 2018 under the national benchmark, our country is well-positioned to be an international beacon of progress and a major competitor in the clean global economy.
Here are four big reasons Canada should strengthen its resolve to move forward on carbon pollution pricing.
1. Canada is not alone
Given the effectiveness of carbon pricing in reducing climate-damaging emissions, it should come as no surprise that 25% of global carbon pollution is already or about to be covered by a carbon price. That represents over 40 countries, including seven of the world’s 10 largest economies.
China has already piloted cap-and-trade in 5 provinces and 2 cities, making it the second largest carbon market in the world, after the European Union. Later this year China’s carbon pollution market is expected to go national, making it the world’s largest. Carbon pollution pricing is now a maintream approach and Canada is positioned to demonstrate how to do carbon pollution pricing well.
2. Carbon pollution pricing will help Canada become a clean tech powerhouse
The global clean tech market is currently worth $1.15 trillion and expected to more than double to $2.5 trillion in 2022, according to Analytica Advisors. Yet Canada’s share of this vital pie is shrinking (from 2.2% to 1.3% of the market over the last 10 years) as other countries outpace us in clean tech development.
Carbon pricing is one of the tools clean tech entrepreneurs cite as key to supporting innovation. By moving forward on carbon pricing and other clean growth policies, Canada can catch up and be positioned to take advantage of growing and shifting global market opportunities. Currently, 23% of Canadian clean tech exports are destined for non-U.S. markets, but this share is anticipated to increase to more than 30% in the next four years.
3. Carbon leakage and competitiveness concerns can be addressed by smart design
Identifying and mitigating competitive disadvantages must be a priority for Canada to ensure that pricing carbon pollution doesn’t result in carbon leakage and doesn’t adversely impact the economy. Canada’s Ecofiscal Commission estimates that around 5% of Canada’s economy (with variation between 2-18% depending on the province or territory) could be subject to competitiveness impacts if the country has a higher carbon pollution price than jurisdictions with whom we trade. Craig Alexander, chief economist at the Conference Board of Canada, recently argued that competitiveness impacts would be less than 0.15% of GDP and not a justification to delay.
Where impacts are felt, carbon leakage issues can be addressed by the design of the pricing framework. Any measures taken to address competitiveness concerns for emissions-intensive, trade-exposed sectors should maintain the incentive to reduce pollution, as well as be targeted, transparent, consistent, temporary and simple.
4. Carbon pollution pricing lets the market drive the solutions
Along with some 140 other countries, Canada committed 18 months ago in Paris to do its part to reduce carbon pollution sufficiently to stay well below 2 C of warming. In order to achieve that goal, government has two main levers with which to shift to a lower-carbon economy: pricing and regulation. As a market-based mechanism — with support from both ends of the political spectrum — carbon pollution pricing sets the rules of engagement and lets the market pick the most efficient and effective ways to grow the economy. It supports innovation and ensures that those technologies and solutions that deliver the best results are the ones that thrive and go on to be competitive exports to a rapidly decarbonizing global economy.
With the U.S. waffling on its commitment to the Paris Agreement, it’s more important than ever for Canada to step up to be a global leader and demonstrate that addressing climate change is how we will build a strong economy that can weather the storms to come.
Josha MacNab is the British Columbia director at the Pembina Institute, Canada’s leading clean energy think-tank. Charles Komanoff, an economist, is the cofounder and director of the New York-based Carbon Tax Center.
On the eve of China president Xi Jinping’s scheduled two-day visit with the U.S. president, we took a deep dive into data on China’s energy use and carbon emissions. With the help of Fordham University student (and CTC intern) Cristina Mendez, who drew on official Chinese government statistics along with outside sources including Carbon Brief, we find that China has essentially capped its carbon pollution emissions — far ahead of the 2030 date for capping CO2 to which China committed in the landmark 2014 agreement between President Xi and then-U.S. President Obama.
That agreement followed a year-long diplomatic offensive initiated by then-U.S. Secretary of State John Kerry, and effectively ended the “axis of denial” by which China and the United States, by far the world’s largest climate polluters, pointed to the other’s inaction to justify its own. The bilateral accord in turn paved the way for the December 2015 Paris climate agreement in which nearly 200 nations pledged to rein in their emissions of carbon dioxide and other climate-destroying greenhouse gases.
A naysayer could point out the divergence between U.S. and China carbon emissions since 2005 (a standard “baseline” year for comparisons over time). In that year, U.S. emissions of CO2 from burning coal, oil and gas were around 5,810 million metric tons (“tonnes”), just a shade below China’s estimated 6,160 million tonnes in the same year. Since then, U.S. emissions have fallen by around 800 million tonnes while CO2 from fossil fuel burning in China grew by over 3,000 million tonnes.
That’s a swing of nearly 4 billion tonnes between the changes in the two countries’ emissions, a huge difference that can’t be swept under the rug. Nonetheless, it is tempered by four key considerations.
1. China’s carbon emissions, though now nearly twice those of the United States, are well under half of U.S. emissions on a per capita basis. With almost 1.4 billion people, The population of China is more than four times the U.S. population of 325 million. U.S. per capita CO2 emissions, which we estimate at 15.4 metric tons last year, are nearly two-and-a-half times as great as China’s 6.4 tonnes per person.
2. A considerable part of China’s CO2 comes from electricity and direct fuel burning to manufacture goods exported to the United States. Those emissions far outstrip U.S. emissions to supply agricultural and other products to China.
3. Based on historical CO2 emissions — which determine the amount of atmospheric carbon pollution now trapping Earth’s heat, given the roughly hundred-year time scale for a carbon dioxide molecule to distintegrate — U.S. climate-damage responsibility is roughly double China’s, even without normalizing for population. (For that calculation we added the past dozen years of respective emissions to the World Resources Institute’s compilation of the world’s nations cumulative carbon emissions during 1900-2004.)
4. Most importantly, if we wish to look forward: The apparent capping of China’s CO2 emissions over the past three years marks a sea-change in that country’s previously inexorable rise in carbon pollution over the prior several decades. It was only in 1988 that China’s CO2 emissions from fossil fuels (along with cement manufacture, which is otherwise excluded from the data in this post) passed 2 billion metric tons, based on a terrific WRI times-series visualization. The implied annual growth rate to 2013, when the total (without cement) surpassed 9 billion, was greater than 6 percent per year. From 2005 to 2013, China’s compound average emissions increase rate was 5.3 percent. To bring emissions to a screeching halt since then, without war, famine or other cataclysm, is close to miraculous.
Two charts tell the story. The first, directly above, shows the overwhelming dominance of coal in China’s energy supply, but moderating since 2011 and falling since 2013. This is significant because coal is the most carbon-intensive fossil fuel, not to mention the most polluting in terms of “conventional” pollutants such as sulfur dioxide and fine particulates that kill several million Chinese people each year and sicken hundreds of millions more, as the New York Times has reported on multiple occasions. (See, for example, here, here and, perhaps most damningly, here.)
The second graph, below, highlights the changes in that supply over the past three years. Coal is down, while all other energy sources are up. In carbon terms (not shown in the graph), the combined increase in oil and gas use slightly more than offset the decline in coal burning, thus statistically creating a minuscule net estimated increase in CO2 of four-tenths of one percent from 2013 to 2016. Perhaps more importantly, energy output from carbon-free hydro-electric dams, non-hydro renewables (chiefly wind turbines and solar-photovoltaics) and nuclear power all increased, with their combined gain easily exceeding the net expansion in fossil fuel use.
The United States is not without its own climate triumph; as we pointed out in our recent “Good News” blog post and report, U.S. electricity-sector emissions (from power plants burning fossil fuels) fell 25 percent from 2005 to 2016 — a reduction equalling nearly four-fifths of the Clean Power Plan’s intended 32 percent drop in power-sector emissions from 2005 to 2030. (Note that our 25 percent figure is down slightly from the 27 percent reduction we reported in December, with preliminary 2016 data; both the post and report have been updated to reflect full-year emissions.)
But that’s electricity only — the “low-hanging fruit” for the U.S. and most other countries. U.S. emissions from transportation are up, as we’ll report shortly in a separate post. Far more worrisome, of course, is the Trump administration’s neanderthal assault not just on climate-related standards, regulations and research but on the very notion of energy efficiency and environmental stewardship.
The point of this data exercise is to underscore China’s historic achievement in flattening its carbon emissions. It may be premature to crown China as the new global leader in climate action, as some commentators have proposed lately. Let’s not forget that it was Germany’s pump-priming for renewable energy a decade or more ago that propelled the Chinese solar-PV industry down the cost curve. And lately the United Kingdom has been driving down carbon emissions at a remarkable rate.
But turning the corner on carbon emissions, as China apparently has done while providing material prosperity for well over a billion people, is no mean feat. The U.S. president will likely remain oblivious, but other Americans can acknowledge and celebrate China’s achievement.
Energy data for 2005-2015 are from BP, Statistical Review of World Energy, 2016, June 2016. We calculated 2016 energy data by applying year-on-year percentage changes in China Energy Portal, 2016 detailed electricity statistics, Jan. 20, 2017, and National Bureau of Statistics of China, Statistical Communiqué of People’s Republic Of China on the 2016 National Economic And Social Development, Feb. 28, 2017, Section XII. Resources, Environment and Work Safety, both accessed April 5, 2017. For coal, we applied the estimated 1.3% drop to 2016 in coal consumption stated in Jan Ivar Korsbakken & Glen Peters, A closer look at China’s stalled carbon emissions, March 1, 2017, posted to Carbon Brief, rather than the 4.7% drop asserted in NBS-China’s Statistical Communiqué. Emissions data are from BP Statistical Review (2005-2015), with 2016 calculated from the 0.3% rise to 2016 (excluding cement) estimated in Korsbakken & Peters.