Charles Komanoff – Page 8

Carbon Tax Center

Pricing carbon efficiently and equitably

“Rich people cannot have the right to combust others to death.”

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What drew me to pick up Andreas Malm’s book “How to Blow Up a Pipeline” and read it straight through over the July 4th weekend? Sure, the title was intriguing, but why exactly this book now?

Verso Books, Brooklyn, NY (2021).

It wasn’t July’s climate chaos outbreaks — Oregon’s Bootleg fire, New York’s submerged subways, floods sweeping away picturesque German villages. Those came after July 4th.

Believe it or not, helicopters may have been a factor. The incessant thwack-thwack of tourist and “commuter” heli flights pervades every lower Manhattan sanctum — Governors Island, the Hudson River piers, even my apartment rooftop. The noise is universally loathed, yet, unsurprisingly, earnest entreaties by local anti-heli advocates haven’t moved the needle. With luxury helicopter pollution impervious to public outcry, might it be time to move to direct action? Malm’s book, I thought, might be instructive.

Meanwhile, policies for turning back the climate crisis are stalling out.

June, after all, was when milquetoast moderates Manchin and Sinema gave Senate Republicans carte blanche to filibuster away President Biden’s climate infrastructure bill, thus blocking what might have been a path to carbon-pricing legislation after the 2022 midterms — an idea we spelled out in April.

Closer to home, evidence was mounting that New York Gov. Andrew Cuomo was turning skittish on the plan I had helped design to dial back automobile gridlock in Manhattan by charging drivers for causing traffic congestion — a scheme he shepherded through the state legislature in 2019.

Bright hopes, dwindling. So why not see what Malm had to say? Though I was ambivalent about the title — not just the “blow up” part, but “pipeline.”

Not even “Ruining Shakespeare in the Park” (as the NY Post’s headline put it) stops tourist helicopter flights over NYC. Heli flight map by Melissa Elstein. Photo, © Helayne Seidman, used by permission.

Here’s why. The Carbon Tax Center largely leaves disrupting the fossil fuels supply chain to others. We fight for demand destruction: crushing the “need” for carbon energy with carbon taxes. Outside of CTC I work for urban transit and practice culture change like redefining my travel wants so I can get to most places I need to reach by bicycle.

The surest way to starve and slay the carbon beast is demand destruction. If you stop a gas well or oil pipeline, another will come into being somewhere else to meet the demand. So go after the demand instead.

Malm’s book really catches fire when he addresses carbon consumption:

Why go after private consumption? Hasn’t the [climate] movement worked hard to shift attention away from consumers — the favored subjects of liberal discourse — to the production of fossil fuels? Wouldn’t pointing to the former represent a slide backwards? But consumption is part of the problem, and most particularly the consumption of the rich. [emphasis added]

At last: a voice on the left not just willing but eager to address the demand for fuels!

Taking a long-haul flight generates more carbon emissions than the average person in dozens of countries around the world produces in a whole year. Graphic + analysis by Niko Kommenda for The Guardian, 2019 (see link in text).

In his post here last week, Let’s Blow Up Luxury Carbon, journalist Christopher Ketcham offered up a few of Malm’s striking stats on luxury consumption. The visual at left, taken from a 2019 report in the Guardian, underlies another from Malm: “There are 56 countries in the world with annual per capita emissions lower than the emissions from one individual flying once between London and New York.”

To be sure, repugnant statistics such as these are by now deadeningly familiar. What I found novel in Pipeline is Malm’s way of articulating the “wanton criminality” of luxury consumption:

When the atmosphere is already glutted with CO2, extravagant excesses have directly injurious effects, which means, to skip the euphemisms, that they send projectiles flying towards randomly chosen poor people. The rich could claim ignorance in 1913. Not so now…  The main source of luxury emissions — the hypermobility of the rich, their inordinate flying and yachting and driving — is what frees them from having to bother with the consequences, as they can always shift to safer locations.

Malm goes on to contrast luxury carbon with the “subsistence emissions” of the poor:

Subsistence emissions must be overcome just as much as any other, but they have none of these features of luxury in a CO2-saturated world: wanton criminality, insulation from the fallout, waste promotion, withholding of resources for adaptation, persisting in the most odious variants and ostentatiously negating the very notion of cuts… It follows that states should attack luxury emissions with axes — not because they necessarily make up the bulk of the total, but because of the position they hold. [emphasis added]

No such state attacks are happening, of course. If anything, the opposite is true, as Malm observes. France cut back taxes on aviation at the same time that president Emmanuel Macron, “king of climate diplomacy and private luxury … targeted the cars of the popular classes,” triggering the Gilets Jaunes uprising — a point Ketcham made as well in 2019 in Harper’s magazine.

Even the New York Times’ redoubtable Ezra Klein admits he doesn’t know “how to force the political system to do enough, fast enough, to avert mass [climate] suffering.”

“Luxury emissions,” Malm writes, “are left dangling, heavy and rotten, without any state daring to touch them. Time to pick up some sticks and knock the fruit down.”

It might take attacks on luxury-emitting devices to break the spell cast in the sphere of consumption. Much like divestment has strived to remove the license from fossil fuel dividends and replace it with a stigma, the purpose here would be to hammer home another ethics: rich people cannot have the right to combust others to death. [emphasis added]

But how exactly to break the spell? We at CTC aren’t prepared to participate in or urge others to destroy property. The risks are too great, as Ketcham pointed out.

Today marks two years since Ketcham and I gathered on my Manhattan roof and, amid the din of the helicopters, understood that “the power to lord and the power to pollute are one and the same.”

Out of that came CTC’s three-pronged plan to Tax Carbon and Economic Inequality for a Green New Deal — all three elements of which the minority, Republican-controlled Senate now blocks. (Within a day of posting this, we learned that the price of G.O.P. votes for an infrastructure bill that is more highway than climate was to strike funding for new IRS capability to go after billionaire tax cheats.)

Something has to give. We don’t know what. Neither, for that matter, does New York Times columnist Ezra Klein, who, like me, this month devoted a weekend to reading Malm’s book:

To the immediate question — how to force the political system to do enough, fast enough, to avert mass [climate] suffering — I don’t know the answer, or even if there is an answer. Legislative politics is unlikely to suffice under any near-term alignment of power I can foresee.

Carbon Tax Obituary, Meet Subsidies Nonsense

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Patience, reader, we’ll get to Atlantic climate columnist Robinson Meyer’s carbon tax obituary soon enough. First, let’s take a look at how the Guardian botched its coverage of a big new report on fossil fuel subsidies from Bloomberg New Energy Finance.

The Guardian and Atlantic pieces are connected, and not just because both of them ran today. There’s also a through-line from the first to the second, as we show here.

From the Guardian’s July 20 story castigating fossil fuel subsidies. Don’t be fooled by the top two bars — the scary-looking increases are tiny, in dollar terms. Meanwhile, France, shown with a nearly 24% increase, actually dropped its FF subsidies by 22%, from $29.6 bn/year to $23.2 bn!

The Guardian piece, by environment editor Damien Carrington, carried the aggro headline, “‘Reckless’: G20 states subsidised fossil fuels by $3tn since 2015, says report.” And it led with the dramatic graphic at left.

The two bars of shame at the top belong to Australia, which increased its fossil fuel subsidies by 48 percent in 2019 over 2015, and the U.S., with a nearly 37 percent boost. Cue the breast-beating that the world might make real headway on solving the climate crisis if rich nations would simply pull their bloody fossil-fuel subsidies.

But what if we told you that in the terms that really count — dollars — those whopping percentage increases in FF subsidies amounted to a mere several billion: $2.4 billion for Australia (from $5.0 bn in 2015 to $7.4 bn in 2019 — that’s the 48 percent bump), and $4.0 billion for the U.S. (from $11.0 bn to $15.0 bn), according to the country-by-country subsidy figures in the new Bloomberg-NEF Climate Policy Factbook that prompted the Guardian story?

Graphs from the Bloomberg-NEF report show that the combined increase in Australia’s and the U.S.’s FF subsidies was a paltry $6.4 billion.

Here’s the context: the real fossil fuel subsidy — the failure to price carbon emissions to capture even a small portion of their climate and health damages — amounts to around $40 billion a year for Australia and $500 billion for the U.S. Those figures, computed on a conservative carbon price of $100 per metric ton, dwarf the respective governments’ “fossil fuel support” by factors of more than 5 (Australia) and more than 30 (U.S.).

What FF subsidies actually look like, per the Bloomberg-NEF report: Damaging and indefensible, but far from a key driver of the climate crisis. Note also the tiny height of the U.S. bar and the absence of Australia, whose $7.4 bn subsidy would be a mere speck.

To be sure, government supports for fossil fuel development, in the form of grants, targeted tax abatements, loan guarantees and the like, are destructive to both economic fairness and climate protection and should be zeroed out at once. The 10 percent drop since 2015 in such subsidies by the G-20 countries, which together account for nearly three-fourths of global carbon emissions, according to the Guardian, isn’t remotely steep enough.

But to act as if these supports are the root cause of the world’s emissions profligacy is to badly misread the facts. The G-20 nations pump out around 24 billion metric tons of CO2 annually while pricing this pollution at an aggregate average carbon price of just a few dollars a ton. The absence of a $100 per metric ton carbon price thus constitutes a “subsidy” of $2.4 trillion a year, nearly quadruple the $636 billion in G-20 governmental support for fossil fuels in 2019 shown in the graph directly above.

“Carbon Tax, Beloved Policy to Fix Climate Change, Is Dead at 47”

The heading above is what led Robinson Meyer’s Atlantic column today, pegged, as Morrissey might have sung, to nothing in particular, except, perhaps Meyer’s interest in clicks. (I can confirm receiving a bunch of notices from CTC supporters.)

“The [carbon tax] death,” Meyer intoned with mock gravitas, “was confirmed by President Joe Biden’s utter lack of interest in passing it.” Leave aside that the Biden White House would have to be certified insane to pursue a carbon tax in 2021, with paper-thin House and Senate majorities and an overriding need to cultivate popular support to ward off the usual midterm attrition.

Indeed, we said as much in our post Playing the Long Game for Carbon Fee-and-Dividend back on April 2, in which we applauded Biden and Co. for steering clear of a carbon tax in order to build legislative accomplishments that could grow the Democrats’ congressional majorities and possibly enable a carbon tax in 2023. We were followed a week later by Ezra Klein in the New York Times (“Biden and his team view the idea that a carbon tax is the essential answer to the problem of climate change as being so divorced from political reality as to be actively dangerous.”)

Meyer is right, however, that carbon taxing “won few friends on the right or left” — for reasons we’ve lamented and detailed in separate, comprehensive write-ups in the “Politics” section of our website, having to do with Conservatives, Progressives, and pursuit of Environmental Justice.

Meyer was gracious, at least, to refer in his headline to carbon taxing as a “beloved policy.” Though what should make it beloved to climate advocates of all stripes isn’t its vaunted economic efficiency but its unique capacity to make huge dents in fossil fuel use in a short period of time. The efficiency of carbon pricing, though an aspect of that, isn’t the point.

And more helpful would have been for Meyer and other climate pundits to do what we’ve attempted here: to put the lie to the idea that removing fossil-fuel subsidies would go a long way to reducing carbon emissions and slowing the climate crisis. That could have — and might still — help climate campaigners focus on the true subsidies solution: to directly, massively and equitably tax carbon and other greenhouse gas emissions.

Humanity has spent thousands of years building the social organizations and technological mastery to insulate itself from the whims of nature. We are spending down that inheritance, turning back the clock. I don’t believe this reveals our true preference for the world our descendants will inhabit. I believe it reveals our deeply human inability to take the future as seriously as we take the present.”

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New York Times columnist Ezra Klein, in It Seems Odd That We Would Just Let the World Burn, July 15.

New Senate bill would price CO2 at $54/metric ton and tax some particulates, SO2, NOx

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This post was updated, and its headline slightly altered, on July 13, 2021.

A bill introduced in June by Senators Sheldon Whitehouse (D-RI) and Brian Schatz (D-HI) envisions a hefty price on U.S. carbon dioxide emissions from all sources along with pollution charges on the three primary “criteria” air pollutants — particulates, sulfur dioxide and nitrogen oxides — from large stationary sources near environmental justice communities.

The Save Our Future Act (101-page downloadable pdf) prices CO2 emissions at $54 per metric ton, equivalent to $49 per U.S. (short) ton, starting in 2023, with the price rising each year by a percent equal to 6 percentage points on top of the rate of general inflation.

The bill also proposes to charge emissions of fine particulates, nitrogen oxides and sulfur dioxide from qualified “major sources” (a legal term defined at 42 U.S.C. 7661) located within a mile of any environmental justice community (see definition  and discussion further below). In addition, a border adjustment mechanism would prevent carbon leakage and ensure fairness for U.S. manufacturers, according to a press release from Sen. Whitehouse’s office, while an “environmental integrity mechanism” would raise the charges on CO2 and other greenhouse gases if needed to keep shrinking emissions fast enough to meet a 2050 net zero target.

Pushing the Envelope

The Whitehouse-Schatz bill pushes the envelope of carbon tax legislation. The starting price of $49/ton — pegged to OMB’s conservative estimate of the social cost of carbon — represents a new high. So does the annual increase rate of general inflation plus 6%. Both figures surpass the Climate Leadership Council’s long-standing proposal to start pricing CO2 at $40/ton and raise that price 5% faster than annual inflation (to be fair, the council’s 2017 price base translates to $45/ton or more in 2023, the Whitehouse-Schatz bill’s start year).

Modeling by CTC suggests the Save Our Future Act will cut CO2 34% below 2005 levels in 10 years (without counting ancillary charges on PM-2.5, SO2 and NOx).

The Save Our Future Act is co-sponsored by Senators Martin Heinrich (D-NM), Kirsten Gillibrand (D-NY), Jack Reed (D-RI), Chris Murphy (D-CT), and Dianne Feinstein (D-CA). The Whitehouse press release says the bill is supported by the Utility Workers Union of America, the New York City Environmental Justice Alliance, New York Lawyers for the Public Interest, The Nature Conservancy, Environmental Defense Fund, National Wildlife Federation, American Sustainable Business Council, Citizens Climate Lobby, Clean Air Task Force, and the World Resources Institute, although sources have reported that neither of the New York groups have formally endorsed it.

We ran the CO2 price in the Save Our Future Act through CTC’s carbon tax model (which you may download via this link). The results, shown above, indicate that the bill won’t fulfill its stated objective to cut carbon emissions in half within a decade, though, to be fair, our modeling doesn’t reflect additional impacts from the prices on the three localized pollutants. Nor does our model capture the likely low-hanging fruit of curbing emissions of methane and other greenhouse gases.

Still, the price-compounding built into the bill limits its efficacy somewhat; even the unprecedented proposal to raise the rate 6% faster than inflation doesn’t boost the price nearly as fast as a straight-up $10/ton annual increment. (Simple math suggests that, with 2% annual inflation, the price won’t spin off annual increments of $10/ton or more until it has reached $125/ton.)

Revenue Treatment

How carbon revenues are used has become central to carbon taxing’s equity and politics. The following four bullet points, taken from the Whitehouse press release, summarize the Save Our Future Act’s proposed treatment:

  1. Environmental justice communities: The bill would invest roughly $255 billion over 10 years in existing energy affordability, pollution reduction, business development, career training, and tribal assistance programs.
  2. Fossil fuel workers and communities: The bill would invest roughly $120 billion over 10 years in economic development, infrastructure, environmental remediation, assistance to local and tribal governments, and wage replacement, health, retirement, and educational benefits for coal industry workers who lose their jobs.
  3. Assistance to states: The bill would fund $10 billion in annual block grants to states and tribes to defray expenses associated with climate change.
  4. Checks to low- and middle-income families: Consistent with the means testing thresholds established for pandemic relief checks in the American Rescue Plan, every eligible adult would receive $800/year and every eligible dependent $300/year, distributed in biennial installments.

Provisions #1 through #3 together would absorb around $500 billion over the law’s first decade, out of the total $4 trillion in revenue that CTC’s model indicates the Save Our Future Act will generate during that time. The difference between those figures — some $3.5 trillion total — pays for the dividend checks noted in provision #4.

The proposed allocation of the vast majority of revenues to the dividends presumably is what delivered support from Citizens Climate Lobby, the national grassroots organization that for the past decade has relentlessly pursued the idea of returning carbon-tax revenues as dividends to U.S. households. Provisions 1 through 3 clearly are designed to win backing for the bill from justice-oriented climate advocates.

Local Air Pollutants

Environmental justice is also evident in the bill’s novel proposal to charge for emissions of fine particulates ($38.90/lb), NOx ($6.30/lb) and SO2 ($18/lb), with those prices rising at the rate of inflation, from qualified “major sources” (a legal term defined at 42 U.S.C. 7661) located in or no more than a mile from an environmental justice community. Our preliminary calculations suggest that all fossil-fuel power stations 25 megawatts or larger, even those with modern combined-cycle technology burning methane gas, would meet the statutory criteria, provided they are sited directly proximate to a community of color.

Other large stationary polluters such as oil refineries, chemical plants and perhaps oil and gas extraction and processing facilities might also qualify. (We are awaiting details from Sen. Whitehouse’s office.) We estimate that coal-fired power plants would be charged for their “local” pollutants at a rate averaging around 5 cents per kWh generated, a fee that would effectively duplicate (i.e., double) the direct impact of the initial $49/ton carbon tax. Gas-fired power generators, in contrast, would pay only around 2/10 of a cent per kWh, on account of their sharply lower emission rates for conventional pollutants, relative to coal. (You can see our assumptions and calculations in the Local Pollutants tab of our carbon-tax model.)

Prospects

Prospects aren’t bright for the Save Our Future Act in the current Congress. The persistence of the Senate filibuster means that 60 out of 100 senators must approve the bill; yet opposition is virtually guaranteed from almost all 50 Republican senators along with Sen. Joe Manchin (D-WV) and perhaps a few other Democratic senators. Not only that, the Biden White House is unlikely to put its muscle behind the bill, for reasons we laid out earlier this year in our post, Playing the Long Game for Carbon Fee-and-Dividend:

Razor-thin House and Senate margins simply don’t allow for hot-button measures like carbon pricing that might jeopardize other elements of the package in addition to failing on their own. Biden’s task, as he knows full well, is to pass bold, progressive, popular legislation to help Democrats expand their Congressional majorities in 2022 and 2024 and give him a thumping second-term mandate to boot. Then, and only then, can he risk a carbon tax.

Still, let’s credit the Save Our Future Act for pushing the envelope on carbon taxing on the twin key fronts of tax design and revenue treatment. Kudos to Senators Whitehouse and Schatz for seeking support from a diverse set of environmental and justice campaigners. The bill underscores the importance of solidifying a pro-climate Congress to enable such forward-thinking bills to be seriously considered during the second half of the Biden term.

This is the fundamental reason conservatives will never join in a good-faith fight against climate change. By its very structure, solving climate requires non-zero-sum cooperation, shared sacrifice, & long-term thinking. Cons oppose those things at a brainstem level.”

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Journalist David Roberts, responding to Trump Secretary of State Mike Pompeo tweeting that “If you stand for Climate Change First, you stand for America Last, ” May 30.

CTC’s Carbon Tax Model Now Incorporates EV’s and Other Electrified Transport

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We’ve just posted an update — the first in four years — to our carbon-tax spreadsheet model, CTC’s easy-to-use but powerful tool for forecasting future emissions and revenues from possible U.S. carbon taxes.

The model, which runs in Excel, accepts any carbon tax trajectory and spits out estimated sector-by-sector and economy-wide emission reductions, year by year.

The big new feature is explicit modeling of transportation’s conversion to electric propulsion. The model establishes baseline projections of electric power’s 2050 shares of car travel (60 percent), freight hauling (30 percent), and airplane seat miles (10 percent, probably by hydrogen, which, like battery power, will be produced by electricity); it then elevates these percentages in the case of robust carbon-taxing.

Our updated model also includes, as it must, the added electricity to power electric transport. This quantity is substantial, accounting for around 20 percent of all electricity usage by the 2045 end of the forecast period. Yet the resulting emissions never reach 100 million metric tons of CO2, on account of the rapid decarbonization of electricity production predicted in the model. (For comparison, note that total U.S. carbon dioxide emissions this year from burning fossil fuels are likely to be between 5,000 and 5,500 million metric tons.)

Without a tax on carbon emissions, however, electrified transport will add 200 million metric tons to annual U.S. emissions two decades from now — even though fewer cars, trucks and planes will be electric-powered, due to the absence of a carbon price signal. The higher level is because of the slower pace of decarbonization of electricity generation without a carbon tax.

A Carbon Tax Could Put Biden’s Ambitious 2030 Target Within Reach

At last month’s Earth Day climate summit, President Biden committed the United States to “a 50-52 percent reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030.” Since his target encompasses greenhouse gas pollutants like methane and chlorofluorocarbons and also appears to take credit for carbon sequestration in soils and forests, it’s possible that it assumes only a 40 percent reduction in fossil fuels’ CO2 along with very aggressive reductions in other areas.

A robust carbon tax could put a 40 percent CO2 reduction target nearly in reach. Our modeling suggests that with a carbon tax starting next year at $15 per ton of CO2 and rising by $10 a ton each year, U.S. 2030 carbon emissions from burning fossil fuels would be 36 percent less than in 2005. Without a carbon tax, the 2030 vs. 2005 reduction is limited to 14 percent — the same as in 2017. And while Biden’s laudable plans to ramp up energy efficiency and renewable electricity will cut emissions somewhat, raising the reduction figure to 20 percent is probably the limit to what the U.S. can accomplish by 2030 without a rapidly rising carbon tax.

How We Model Electrified Transport

Vehicle electrification is beginning to take off, propelled by improving battery performance, zero-emission-vehicle mandates in some states, and Biden administration plans to jump-start battery charging facilities across the country.

S-curves for electric vehicle uptake.

Like other innovative mass-market technologies — smartphones, VCR’s and microwave ovens come readily to mind — dissemination of EV’s is likely to follow an s-curve rather than a linear (straight) path. We use such a curve to represent the rate of uptake, with the halfway point assumed to be 2035.

As noted, we posit that even without a significant carbon price, electric or hydrogen propulsion will account for 60 percent of U.S. driving, 30 percent of goods movement and 10 percent of aviation by 2050. But a robust carbon tax will speed the transition, not just by widening electric vehicles’ per-mile price advantage over gasoline, diesel and jet fuels but by creating tipping points, e.g., accelerating the replacement of gas stations with charging stations. We assume that a robust price — $100 or higher (in 2020 dollars) by 2031 — will lift our 60/30/10 percentages by half, to 90/45/15.

The reductions in U.S. petroleum requirements predicted for that scenario by our model are striking. By the mid-2030s, when the penetration of electric transport is at its halfway point and kicking in fast, total oil consumption is projected to be nearly four million barrels a day (25 percent) less than in a business-as-usual, no-carbon-tax future, and nearly eight million barrels a day less than the actual 2005 rate.

Other Features of CTC’s Carbon Tax Model

Here are other defining features of our carbon-tax model:

1. It’s baselined to 2019: That’s the most recent year with available data. It’s also a more solid baseline year than 2020, when the pandemic drove down key fossil fuel use sectors, especially driving and flying.

2. Oil refining is allocated to usage sectors: “Upstream” carbon emissions from refining petroleum products are assigned to the respective end-use sectors such as driving, goods movement and aviation. The model doesn’t ignore analogous add-ons for electric transportation; we add 20 percent to the current watt-hours per mile figures for the respective travel modes to allow for electric-intensive battery manufacture.

Our familiar pie chart, updated to the last pre-pandemic year, 2019.

3. We smooth the uptake of the carbon tax: Big jumps in carbon tax levels won’t be fully reflected in fossil fuel use right away. Households and businesses need time to adapt to costlier fossil fuels. The model captures these lags through a ceiling in the tax increment that can be “absorbed” in any one year and carries over any excess. This feature is helpful for trajectories like the Whitehouse-Schatz bill, which kicks off with a bang at $45 per metric ton of CO2. Under our default setting, in which the economy in any year is assumed able to process only tax increments up to $15 per ton of CO2, the reductions from that initial $45/ton charge are spread over three years rather than, unrealistically, assigned to the first year.

4. Demand vs. supply impacts: The Summary page has a section comparing projected CO2 reductions from changes in fuels’ carbon intensities (“supply side”) versus reductions from reduced energy usage (“demand side,” e.g., lower electricity purchases, less driving or flying). Under our default carbon tax — starting at $15 per ton of carbon dioxide and rising annually at $10/ton — an estimated 64% of projected CO2 reductions are on the supply side (i.e., due to decarbonization); a substantial minority, 36%, come about through reduced demand, illustrating that subsidies-only policies miss out on huge CO2 reductions. Indeed, clean-energy subsidies undercut decarbonization by stimulating energy usage through lowered energy prices, a phenomenon we noted in our 2014 comments to the Senate Finance Committee.

5. Transparency: All model assumptions, formulas and algorithms are in plain sight. This includes our price-elasticity assumptions that translate higher fossil fuel prices into lower demand trajectories, as well as the income-elasticities that predict more driving, flying, electricity usage and so forth as incomes rise. To be sure, some hunting may be required; the model has nearly 25,000 equations, after all. But the stepwise procedures we use to calculate year-to-year changes in each sector’s activity level, fuel use and emissions are all annotated, a mighty assist to anyone wishing to get deep into the model’s workings.

6. Easy to use: For example, we just read today’s WaPo op-ed, Biden should embrace a carbon tax, by veteran Washington and Wall Street insiders Henry Paulson and Erskine Bowles. Once we got past the political tone-deafness of urging a carbon tax now (“Biden’s task is to pass bold, progressive, popular legislation to help Democrats expand their Congressional majorities in 2022 and 2024 and give him a thumping second-term mandate to boot,” we wrote last month; “then, and only then, can he risk a carbon tax”), we saw Paulson and Bowles’ claim that a carbon tax starting at $40 per ton and increasing by 5 percent per year above the rate of inflation “would reduce U.S. emissions to 50 percent below 2005 levels by 2035.” It took only seconds to plug those figures into our model and see that in year 15, which would be 2036 or later, the tax would reduce emissions by only 39 percent. While that’s a big reduction, it’s still a ways below the council’s claimed 50 percent.

The spreadsheet is user-friendly, powerful and, if you’re so inclined, captivating. We hope you’ll download it — here’s the link again — and run it in Excel. See for yourself the relative efficacy of a carbon tax trajectory that increases by a fixed amount each year, as does the Energy Innovation and Carbon Dividend Act supported by Citizens Climate Lobby, vs. one like the Climate Leadership Council’s (touted by Paulson and Bowles) that starts high but rises only by moderate, percentage-driven amounts.

As you work (play?) with the model, jot down your thoughts so you can tell us what works and what needs improving. Especially the latter, as we just wrapped the update and there are bound to be glitches. We’d love to hear from you.