First, the Supreme Court blows up EPA’s carbon-regulating authority under the Clean Air Act. Then Joe Manchin torpedoes President Biden’s Build Back Better package.

Climate policy is on the ropes. Is carbon pricing’s moment at hand? Can it move forward in the face of Republican opposition and Democratic indifference?

No federal legislation with a price on carbon has advanced to a floor vote since the “Waxman-Markey” American Clean Energy and Security Act cap-and-trade bill died in the Senate in 2010. Now Senator Sheldon Whitehouse (D-RI), perhaps Congress’s most outspoken climate hawk, is seeking to tax manufacturers of steel, aluminum, cement and other industrial commodities to the extent that the carbon intensity of their manufacturing process exceeds U.S. averages.

If coupled with a carbon border adjustment mechanism, this approach could establish a U.S. beachhead for carbon emissions pricing at the federal level. The key is its potential to benefit American industry. As Whitehouse puts it, his Clean Competition Act (S. 4355), would “give American companies a step up in the global marketplace while lowering carbon emissions at home and abroad.”

The concept resembles the European Union’s carbon border adjustment mechanism (CBAM) proposal. The Clean Competition Act would charge manufacturers of widely used basic industrial commodities a fee based on their carbon emissions intensity. Firms whose carbon intensity is greater than the U.S. average for that industry would be charged, however, along with importers of goods whose carbon intensity exceeds that of its U.S.-produced counterpart.

Manufacturing and Climate Change

Industrial production is a major generator of climate change. Iron and steel manufacture is responsible for around 8% of global CO2 emissions, according to McKinsey, and aluminum production for around 2%, with cement and ammonia close behind. Current laissez-faire trade policies favor carbon-intensive imports and thus incentivize production in regions with lax emission standards, a phenomenon noted recently in a commentary in Science by 35 academics, mostly from the European Union though including a handful from the U.S. Although raw materials and intermediate goods tend to have high CO2 emissions per unit of value added, they typically face lower tariffs than more finished products with lower carbon intensities.

Whitehouse sees his bill as a way to use U.S. trade policy to drive climate action. He also views its potential to boost U.S. industrial competitiveness as a way to attract bipartisan support. Holcim U.S., whose parent company, Lafarge Holcim, is America’s largest cement manufacturer, supports Whitehouse’s bill.

In its current form, the Clean Competition Act is more conceptual than prescriptive. Should it pass Congress, it will fall to the U.S. Treasury Dept. to codify regulations through administrative rulemaking, which could be complex.

U.S. industrial facilities currently report greenhouse gas emissions to EPA. The bill would use these data and also require submission of electricity use and product weight of covered goods.

So far, so good. Data reporting could be trickier for imported goods, however. Whitehouse’s bill states that, absent specific data, the carbon intensity of an imported good shall be that country’s GDP divided by its “production-based greenhouse gas emissions,” i.e., its economy’s overall carbon intensity. While country-level fossil fuel emissions and GDP data are available, translating those figures to a country’s CO2 emissions per unit of product could be contentious.

Carbon Intensities Compared

Whitehouse and colleagues argue that the U.S. economy is only around half as carbon-intensive as our trading partners’, on average — two-thirds less than China, and three-fourths less than India. While these differences hold promise for attracting domestic political support, they’re not stand-ins for industry-specific data, especially insofar as ratios for specific industrial sectors appear to be less steep.

Steel

According to a recent analysis, U.S. manufacture of steel in blast furnaces and basic oxygen furnaces (BF-BOF) is estimated to emit an average of 1.9 tons of CO2 per ton of crude steel. The respective factors for China and India are 2.1 tCO2/t and 2.9 tCO2/t. Since the U.S. also produces steel in efficient electric arc furnaces utilizing scrap metal, these differences may understate the U.S. advantage. Another study, by the Climate Leadership Council (CLC), found that indeed, the prevalence of electric arc furnaces, the relatively low carbon footprint of U.S. electricity production, and a greater reliance on natural gas rather than coal give U.S. steel production a significant advantage over virtually all major trading partners.

Aluminum and other commodities

U.S. aluminum manufacturers also fare well, with an average carbon intensity of just under 8 tCO2/t vs. nearly 13 tCO2/t for China and 15.5 tCO2/t for India. With cement, however, U.S. production is less energy-efficient on average than in China and India, which have newer factories. However, those countries’ greater coal-dependence for electricity generation may tip the carbon intensity scale in favor of the U.S. For ammonia, the U.S. is likely less carbon-intensive than coal-reliant China, which emits an estimated 45% of that sector’s worldwide CO2 emissions while producing only 30% of the product.

Another factor to consider in evaluating the performance of U.S. industry vs. trading partners is the country of origin. According to the USGS Mineral Commodity Summaries, most U.S. steel imports come from Canada, Brazil and Mexico, while most of our imported cement comes from Canada and Turkey, and most of our imported aluminum from Canada.

Still, China dominates world production of steel, and if CBAM should become established with the European Union or, better yet, with a “climate club” including the U.S., Canada, the UK, the EU and Japan, China’s CO2 emission liability could motivate it to reduce its emissions rather than be disadvantaged in international markets.

Outlook

Could America’s overall carbon superiority over our trading partners help Sen. Whitehouse’s Clean Competition Act attract support from House and Senate Republicans? Climate Leadership Council V-P Catrina Rorke, in a June 13 presentation to Citizens’ Climate Lobby members, cited interest among Republican senators in connecting trade and greenhouse gas emissions. In an August 2021 letter to President Biden, 19 G.O.P. Senators led by Kevin Cramer (R-ND) and Dan Sullivan (R-AS) called on the U.S. to work with EU and other trading partners to design a common approach to climate and trade policy.

While bipartisan action would fly in the face of a dozen years of untempered Republican opposition to climate policy, Sen. Whitehouse is to be commended for pursuing his novel approach. For the climate’s sake, let’s hope his efforts aren’t unrequited.

Note: This post was amended on July 6 to include @bobinglis’s June 30 tweet, shown below.

Maybe we’re grasping at straws. But we see a possible silver lining in this week’s grievous Supreme Court ruling striking down US EPA’s authority to regulate carbon emissions via the Clean Air Act.

The gleam of hope is not that the decision didn’t dismember the federal government’s entire “administrative state” apparatus — you know, the tapestry of rules, regulations and procedures designed to further societal health, safety and accountability. We fear investigative journalist Amy Westervelt may be right that the ruling is a harbinger of steps in that very direction.

What I’m not seeing a lot of people get is that the West Va v EPA verdict is a harbinger. It’s the first step not the death blow. Overstating it obscures that, leaving people thinking it’s all over and ill-prepared for what comes next.

— Amy Westervelt (@amywestervelt) July 1, 2022

Rather, our thin beam of optimism is the opening the ruling could provide for carbon tax proponents to persuade our fellow climate advocates to lean less on fraught, slow and even quixotic approaches for tackling climate change, and to instead turn increasingly toward carbon taxing as a more-holistic and bulletproof way to bring down stubbornly high carbon emissions, both in the U.S. and worldwide.

In recent years, this space has done battle with what we’ve regarded as inadequate or even illusory climate strategies.

* We’ve criticized the decade-long campaign to divest financial and social institutions from fossil fuels, arguing in our posts and on our evergreen pages that capital will easily find ways to finance whatever legal product consumers demand, especially a product so economically and psychologically fraught as gasoline.

* We’ve hit back at the IMF’s unfortunate labelling of fossil fuels’ vast externality costs — both climate damage and immediate human-health harms — as “subsidies,” for fostering the fantasy that citizens need only stop their governments from bestowing public tax dollars on fossil fuel companies, and Big Carbon will crumble and wither away.

* We’ve even questioned the keep-it-in-the-ground movement, arguing, heretically, that “Oil that doesn’t flow to refineries through the Dakota Access Pipeline [to take one example] will instead come from somewhere else – Kuwait or Texas or a hundred other places – to be burned in cars, trucks and planes.” Our movement’s focus, we’ve argued, must be demand, not supply.

* And we’ve looked long and hard at the climate value of environmental regulation — the very approach the Supreme Court threw under the bus yesterday. Look at how, a year ago, we contrasted the fabulous success of the 1970 Clean Air Act and its 1977 and 1990 amendments in  slashing concentrations of particulates and other harmful pollutants in “ambient air,” with the less-technology-amenable issue of carbon emissions:

These and similar successes have led many climate advocates to urge similar regulatory pathways to curb carbon emissions. [Yet] regulatory approaches may offer only modest prospects for controlling and reducing emissions of carbon dioxide and other greenhouse gases, for several reasons. For one thing, the absence of antipollution devices for capturing or lowering CO2 emissions limits the scope of technology-forcing regulation. For another, promulgation of regulations is necessarily piecemeal and reactive. Moreover, the regulation-setting and administering process itself is cumbersome, delay-prone and subject to legal challenge by carbon interests.

We backed up that argument with reasoning from a penetrating paper by Case Western University law professor Jonathan Adler. The sidebar at right has Prof. Adler’s own “key takeaways” from the summary version he published on the Niskanen Center’s website. We highlighted two: A, climate regulations that aren’t clearly authorized by legislation will be particularly vulnerable to legal challenges — as we saw this week, when the six right-wing justices took advantage of the absence of explicit mentions of climate or carbon in the Clean Air Act and its amendments. And B, compared to emission-control regulations, a Congressionally enacted carbon tax should be less vulnerable to such challenges.

This isn’t to say that a carbon tax is just around the corner. We readily admit that a path to enacting a meaningful federal carbon tax — not a token, Exxon-style levy that damages coal but not oil or gas, but a robust carbon price that can reach triple digits in a half-dozen or fewer years — is almost impossible to discern.

Rather, now that essentially all of the prominent alternatives have been eviscerated or emasculated, it’s time for climate advocates to rethink, and, hopefully, relinquish, their anti-carbon-pricing positions.

The Carbon Tax Center has strived to be a climate team-player. At least since the start of the Trump administration, we’ve acknowledged the near-impossibility of passing a federal carbon tax in the current political configuration, and have instead pulled for less-ambitious but more-achievable (or so they seemed) incremental steps.

Just last fall, we wrote that “There’s logic in refraining from the one overarching policy that could lead the way to the deep cuts Biden is seeking: an economy-wide carbon tax. Giving businesses and households money to go green [instead] is more palatable, though less potent, than charging them for burning carbon.”

But we’ve also strived to be truth-tellers. That’s why we called that 2021 post, “Without a Carbon Tax, Don’t Count on a 50% Emissions Cut.” And it’s why we’re a little less inclined than some of our climate comrades to go into full mourning over yesterday’s Supreme Court decision .

Supreme Court leaves it up to Congress to act on climate change. That’s OK because Congress can enact a carbon tax and a carbon border adjustment that can make the solution go worldwide. Tax pollution. Un-tax income. Conservatives in Congress, here’s your chance! We need you!

— Former Rep. Bob Inglis (@bobinglis) (R-SC) June 30, 2022

Please also note that unlike the indefatigable Bob Inglis, who bravely fought for carbon pricing as a six-term Member of Congress (1993-1999, 2005-2011) from South Carolina’s 4th District, we’re not calling on “Conservatives in Congress” to push for carbon taxing. We would love it if even a few did, but that ship sailed over a decade ago, as we’ve summarized on CTC’s Conservatives page.

To sum up: Yes, the Supreme Court ruling was ignorant. Yes, it was destructive. Yes, it’s almost certainly a harbinger of worse. But it didn’t demolish policies that were on course to rescue our planet and make Biden a climate hero.

Yesterday’s decision did damage, but maybe it pulled some wool from our eyes as well.

(As published today in NYC-based Gotham Gazette. Footnotes appear at end. — C.K., May 13, 2022)

Like time in Steve Miller’s classic-rock song, New York’s decarbonization targets keep slipping into the future.

Highway widenings are spurring more driving. Suburban resistance to upzoning is locking in energy-demanding sprawl. Electricity from the state’s wind turbines shrank last year,¹ even as climate advocates, relying on dodgy U.S. Energy Department modeling, overstate future carbon reductions from “electrifying everything.”²

Promising developments like offshore wind leasing and new transmission to carry hydroelectricity from Quebec barely compensate, if at all, for carbon emissions unleashed by closing the Indian Point nuclear plant. As I have pointed out elsewhere, shutting existing zero-carbon power sources means that new ones don’t actually cut emissions; at best, they keep us running in place, punching huge holes in pledges to achieve a carbon-free power grid by 2040.

To this dreary picture, add crypto mining — enormous networks of electron-eating computers running 24-7 so that digital currencies like Bitcoin and Ethereum can maintain virtual “coins” or “tokens” in encrypted ledgers that bypass traditional third parties like banks.

From Buffalo and the Finger Lakes to the state’s northern tier, crypto entrepreneurs are building new generators or firing up retired ones to power their crypto mining operations. Other crypto sites draw on the grid.

Self-sourced or not, the requisite electricity ends up forcing additional burning of fossil fuels, as Sierra Club researchers documented in extensive comments this week to the President’s Office of Science and Technology Policy, pushing the state’s ambitious decarbonization goals further out of reach. To what end?

In Uber’s Footsteps

Enigmatic, opaque, futuristic — crypto-currency cries out for historical analogues. Here’s one: Uber.

Uber burst on the scene in the early 2010s not as a new form of transportation but a new kind of network enabling a reconfiguration of transportation. Its appeal was tailored around three promises: it would enhance traffic efficiency by eliminating cruising for fares; it would extend convenient for-hire vehicle service outside Manhattan; and it would end service refusals to people of color.

The packaging — sleek and app-enabled — augured a frictionless, digital future. With a few taps New Yorkers could summon a chariot.

The results were mixed. We now know that stockpiling of Ubers in Manhattan has wrought even more gridlock than taxi cruising. But Uber did broaden access to for-hire vehicles, even as it bled ridership from the MTA and, worse, rained economic ruin on the incumbent yellow-cab industry.

Bitcoin and other crypto-currencies come with their own glossy promises, though these are more chameleon-like. (Earlier this year New York Times columnist Paul Krugman disparaged them as “word salad.”) Among them, as Annie McDonough reported recently in City & State, is the prospect of liberation from ingrained discriminatory banking and lending by U.S. financial institutions.

“[Crypto backers] see the technology as an economic equalizer,” writes McDonough. “A tool not just for the rich to get richer, but for people who have been discriminated against by banking institutions or locked out of investment opportunities, including people of color and low-income communities.”

Really? In New York, and almost certainly anywhere else, unbanked households overwhelmingly lack the requisite credit history or liquid assets — bank accounts, debit cards, credit cards — to purchase cryptocurrency tokens. Moreover, scammers and grifters are finding crypto fertile territory for high-tech swindles, as New York Times columnist Farhad Manjoo noted this month. An arguably safer and more effective way to root out credit segregation would be to speed Biden administration rulemaking to add teeth to the Community Reinvestment Act — the 1977 law intended to repair decades of redlining.

The emergence of crypto-front groups like the National Policy Network of Women of Color in Blockchain demonstrates the industry’s readiness to exploit deep-seated bitterness over legacy redlining. So does the participation in crypto lobbying of Bradley Tusk, the one-time Mike Bloomberg consigliere who a decade ago deftly deployed Black fury over persistent taxi discrimination to help Uber eradicate cabbies’ exclusive right to pick up street hails in Manhattan and subsequently helped fend off serious regulation of the app-ride industry for several crucial years.

Let’s Burn Up The Grid

There is no registry of electricity consumed by crypto mining in New York State. Worldwide, though, crypto burns through an estimated 91,000 gigawatt-hours (or, 91 billion kilowatt-hours) of electricity annually, according to a New York Times survey of crypto last September. Some 16% of that, or 15,000 GWh, is said to be consumed in the United States.

While New Yorkers are accustomed to thinking of our state as resource-poor, crypto miners are now exploiting half-a-dozen hydro power sites and formerly boarded-up fossil-fuel plants in northern and western New York. One industry source cited by City & State estimates that 13-14% of his company’s U.S. crypto mining takes place in our state. Extrapolating that share across the industry, crypto is annually consuming 2,000 GWh of electricity in New York State — a figure that could grow not just with increased transactions but with ever-more complex digital encryption.

Even holding at 2,000 GWh, that’s a lot of juice: more than the electricity generated last year from all the solar panels on residential buildings in the state, or more than what will come from the first 100 promised offshore wind turbines once that industry launches (see graph below). And, though crypto in New York consumes less electricity than all current solar or wind, that comparison is of no comfort, as those renewable sources need to be displacing fossil fuels (primarily fracked gas) from the state’s grid — which they can’t do if their output is effectively being consumed mining Bitcoin.

The operative word, “effectively,” encompasses two distinct but complementary dynamics. Grid dynamics dictate that any new locus of demand such as Bitcoin forces utilities to draw more heavily on fossil-fuel generators, because the non-carbon sources — nukes as well as renewables — already run as flat-out as they can. The climate dynamic is that from a statewide perspective, additional use of fossil-fuel generators negates the carbon-reduction benefits that wind and solar and nuclear would otherwise provide.

This perspective casts a harsh light on claims that a particular crypto installation is being renewably sourced. Connecting crypto to a refurbished hydro dam or solar or wind farm may sound green, but all those whirring hard drives are really siphoning off carbon-free electricity that now “won’t be available to power a home, a factory or an electric car,” as the Times’ 2021 story put it. (One hopes that the irony of crypto adherents miscounting green electrons doesn’t carry over to their currency bookkeeping.)

Carbon Tax vs. Crypto?

A stiff New York State carbon tax could slow and even reverse the rise of cryptocurrency here (likewise nationwide).

The rise in electricity prices would undermine whatever competitive advantage Bitcoin miners gain from locating in New York. Some miners would leave, new ones would stay away, and those who stay would endeavor to blunt the impact of the tax by upgrading their efficiency.

Not only that, crypto miners seeking zero-carbon generation increasingly would find themselves competing with non-crypto businesses seeking to contain their power costs. Other businesses, less power-intensive per dollar of revenue, would be in position to outbid the crypto companies.

The prospective flight to other jurisdictions could help build momentum to tax carbon emissions there as well, as more states and countries come to conclude that crypto jobs and revenues aren’t worth straining their grids, not to mention trashing their air-sheds and stealing their quiet.

This isn’t to hold out carbon taxing as a one-bullet crypto killer — we need many bullets for that, the bigger the better — but to illustrate its broad potential to stop frivolous (and in this case imbecilic) new uses of electricity before they can gain a foothold.

Why not regulate crypto away? That battle would consume years, tying down policy resources while emissions continued to spew. Worse, we have neither the time nor the ability to see around corners required to enact, piecemeal, restraints on each new locus of energy demand.

Even as energy-efficiencies continue to do wonders — total U.S. electricity use last year was just a few percent higher than in 2005³ — underpriced electricity elicits new hellspawns of needless use that undo much of that progress.

Carbon taxes by themselves can’t solve everything that ails climate. But they could, for a change, get the solutions out in front of the problems.

***
Charles Komanoff, long-time New York policy analyst and environmental activist, directs the Carbon Tax Center. On Twitter @Komanoff.

¹US Energy Information Administration, “Electric Power Monthly,” Table 1.14.B, “Utility Scale Facility Net Generation from Wind,” shows 4,522 GWh in New York State in 2020 and 4,387 GWh in 2021.

²To estimate future carbon reductions from the December 2021 New York City ban on gas heating and cooking in new buildings, the law’s proponents and the Dec. 15, 2021 New York Times story reporting on it both cited a Dec. 10, 2021 post, Stopping Gas Hookups in New Construction in NYC Would Cut Carbon and Costs, by the consultancy RMI. The RMI authors note that their calculations employed future electricity grid emission factors modeled by U.S. DOE’s National Renewable Energy Lab’s “Cambium” dataset. Examination of that dataset reveals, inter alia, that it assumes a non-existent five-fold increase in New York State on-shore wind-generated electricity from 2020 to 2022.

³Figures from US Energy Information Administration, “Electric Power Monthly,” Table 7.2a Electricity Net Generation: Total (All Sectors)” supplemented by Table 10.6 (“Electricity Net Generation from Distributed Solar”) indicate total U.S. electricity generation of 4,164,565 GWh in 2022 and 4,055,785 GWh in 2005. For those interested, the implied compound annual average growth rate over those 17 years is a minuscule 0.17 percent.

Correction: This post was amended on May 26 to reflect the fact that New York’s estimated 13-14% share of U.S. crypto mining applies to a single crypto company rather than industry-wide. The extrapolation to other companies is the author’s, not the source’s.

May 16 addendum: We strongly recommend How crypto made me fall in love with carbon pricing all over again, an April 27 essay by Frontier Group energy analyst Tony Dutzik covering the intersection of crypto mining, carbon pricing, energy demand and Jevons Paradox.

 

The Nation magazine today published my essay, The Climate Movement In Its Own Way. I’ve cross-posted it here to allow comments and offer context.

It’s a follow-on to my April 4 essay, also in The Nation, The Case Against Closing Nuclear Power Plants, which I posted here under the title, For Climate’s Sake, Don’t Shut U.S. Nukes. 

The new piece calls on progressives in the climate movement — a bulwark of the magazine’s readership — to move beyond ideology and make the climate movement more pragmatic and holistic by supporting carbon pricing.

In introducing my April 4 post, I wrote:

[This post] implicitly embodies a hope that my willingness to examine my own deeply-held convictions in a new light may encourage others to do likewise with their own climate dogma. Reconsideration of ideologically-based objections to carbon pricing by self-proclaimed progressives would be a good place to start.

Consider today’s post an explicit expression of that hope. 

  — C.K., April 30, 2022

PS: The new post had to be shoehorned into a tight word count. The version below restores a half-dozen phrases cut from the version in The Nation.

The Climate Movement In Its Own Way

After decades of critically documenting nuclear power’s outsize costs, I finally admitted to myself that the carbon benefits from continuing to run US nuke plants are substantial, and in some respects irreplaceable. I made the case for keeping them open in an April article on TheNation.com.

Closing New York’s Indian Point reactors last year was a climate blunder, I wrote. Not just because fracked gas is now filling the breach, but because the need to replace the lost carbon-free power means that new wind and solar farms won’t drive emissions down further. California, facing the same equation, should shelve its plan to shutter the Diablo Canyon nuclear power plant in 2024, I said.

“Total bullshit,” a lifelong anti-nuker wrote me. “You should be ashamed.” More representative of the comments, though, was this: “Continued reliance on nuclear power going forward now is part of the price of our collective past failures.”

Amen. The failures propping up US carbon emissions are multiple. Not just Senator Joe Manchin, who torpedoed President Biden’s Build Back Better clean-energy legislation. Not just the Senate Republicans, any one of whom could have cast the critical 50th vote. And not just Big Carbon, whose dark money and disinformation perpetuate climate inaction.

Through its own poor choices, the climate movement is failing as well.

Too many of our climate campaigns are ill-considered. Too much of our legislative agenda is narrow-gauged. Too often, our lens for assessing climate proposals is ideological rather than pragmatic.

Consider the decade-long campaign to induce pension funds and banks to divest their fossil-fuel holdings. Exxon-Mobil’s share price wobbled for years, but since early 2020 Exxon’s stock has risen faster than the market average. Is Big Oil shamed and starved for new capital today? Not with roaring demand for oil and gas. US motorists’ insanely over-powered, super-sized vehicles account for about a tenth of worldwide petroleum consumption. Yet challenges to American motordom come mostly from outgunned cycling and transit campaigners, not the climate movement.

Now, with most federal action blocked, climate activists sought and won a ban on gas heat in new buildings in New York City, though they failed in their first push for a statewide ban.

The drive to “electrify everything” is laudable, given that electricity can be decarbonized whereas gas furnaces and stoves cannot. Yet trying to take the ban statewide elbowed aside bolder ideas, such as legalizing accessory dwelling units and stopping highway widenings.

To be sure, not everyone is ready to admit that fatter highways and pastoral, exclusive suburbs are carbon disasters. But only broader campaigns can link climate to other pressing concerns like homelessness, housing unaffordability, costly gasoline, and traffic violence.

The granddaddy of US climate failures, of course, is the absence of the one policy that economists believe could unlock the vast emissions reductions needed to meet the Paris Agreement goal of limiting global warming to 1.5 degrees Celsius: national carbon taxation.

A straightforward “price on carbon” — administered not via easily gamed cap-and-trade schemes but through “upstream” levies on the carbon content of fuels — was once thought appealing to left and right alike. It is now abjured by both.

The right, of course, is both repellently all-in on fossil fuels and hyper-aware that its wealthy base of profligate carbon consumers would pay the most through a carbon tax. Which makes the left’s antipathy to carbon taxes not just surprising but downright bizarre.

This hesitation has multiple strands: seeing carbon pricing as another contrivance of the predatory capitalism that built white wealth off the land and labor of Indigenous and African-descended peoples; suspicion that carbon pricing lets polluters avoid reducing local emissions by purchasing “offsets”; a misplaced conviction that carbon pricing in California has worsened disproportionate pollution burdens on disadvantaged communities; and excessive faith that a regulatory approach can untangle the multiple strands that enforce fossil-fuel dependence.

Economic models abound to show how fast carbon taxes will shrink the use of fossil fuels. Models aren’t life, but they agree broadly that a robustly rising federal tax could, within a decade, dial back US emissions by about a third.

To turn our backs on carbon reductions on that scale is, I believe, suicidal.

Our worsening climate stalemate led me to abandon my silence as existing nuclear power plants were extinguished. A similar rethink on carbon taxes by progressives won’t win over climate denialists. In time, though, with a more far-sighted left ascendant, it could become a stepping stone to climate progress.

Charles Komanoff, a longtime environmental activist and expert on nuclear power economics, directs the Carbon Tax Center.

The campaign to combat climate change by inducing pension funds, universities and other prominent fiduciaries to dump their fossil-fuel holdings has failed. Ten years into the divestment project, it’s time to move on.

When the writer and climate activist Bill McKibben kicked off the campaign in a July 2012 Rolling Stone article, Global Warming’s Terrifying New Math, the rationale was three-fold: (1) dry up capital and make it harder for the fossil fuel industry to create new mines, wells, pipelines and terminals; (2) weaken the industry’s social and political standing so it couldn’t easily block pro-climate policy; and (3) by hanging a “Dump Me” sign around Big Oil, amp up climate organizing. Not for nothing did McKibben subtitle his Rolling Stone article, “Make clear who the real enemy is.” It was Exxon and its brethren.

How’s it going, ten years on? Not well. The clearest indication is Exxon-Mobil stock’s new-found attractiveness to investors. From Feb. 1, 2020 to Feb. 1, 2022, a two-year period that predates Russia’s invasion of Ukraine and brackets the Covid-19 pandemic, Exxon’s stock price climbed 75 percent, outpacing the 55 percent rise in the S&P 500 index.

While non-U.S. oil giants Saudi Aramco and BP have appreciated less than the S&P benchmark, the #2 and #3 U.S. oil companies, Marathon Oil and Valero Energy, have matched Exxon’s faster-than-average share price rise. Unsurprisingly, Exxon’s market-beating performance accelerated since Feb. 1, as the oil industry reaps the fruit of high prices without yet suffering much contraction in demand.

It is true that Exxon and other oil majors under-performed the market from 2012 to 2020. So why are oil stocks now so buoyant? The answer lies in robust demand for petroleum products, both in the U.S. (about a fifth of world usage, with half of that in motor fuels) and globally. Until Russia attacked Ukraine, disrupting trade and dampening near-term economic expectations, world petroleum consumption this year was headed to near-record levels.

More importantly, considering that stock prices essentially embody investors’ expectations of future earnings streams, the lords of capital are betting on the oil and gas business to stay profitable for some time.

Reserves will not stay in the ground, in other words, unless and until consumption shrinks. It ought to be obvious that oil consumption drives production, not the other way around. The same “whack-a-mole” syndrome that made “keep it in the ground” campaigns ineffectual from a climate standpoint (as I lamented in this 2016 post) also afflicts efforts by socially responsible investors to starve capital flows to fossil fuel corporations.

No matter how far divestment penetrates bank boardrooms or Ivy League endowments, a world intent on using fossil fuels can always count on a vast array of wealth holders to finance their resupply.

McKibben admitted as much last fall, shortly after the New York Times reported on meticulous research by the Private Equity Stakeholder Project that found that private equity funds for a decade had been investing $100 billion a year in fossil fuel energy. In an October 2021 Times op-ed (see headline above), he admitted the real purpose of divestment campaigns: to build the climate movement and erode the social and political standing of the fossil fuel industry (what I earlier called aims #2 and #3):

Since most people don’t have oil wells or coal mines in their backyards, divestment is a way to let a lot of people in on the climate fight, because they have a link to a pension fund, mutual fund, endowment or other pot of money. When we began the divestment campaign, our immediate goal was, as we put it, to “take away the social license” of Big Oil. (emphasis added)

Movement-building is vital. Eroding the social standing of fossil-fuel extractors and purveyors is overdue. But what happens when divestment activists discover that moving their college or municipal pension fund out of fossil fuels hasn’t visibly changed the material world of energy production and consumption?

In the 2021 op-ed, McKibben added that divestment campaigning “was a vehicle to let people know the essential truth about the fossil fuel industry, which is that its oil, gas and coal reserves held five times as much carbon as scientists said we could safely burn.” That 5-fold incongruity, in fact, was the titular “new math” in his archetypal 2012 Rolling Stone article.

The math is unassailable. McKibben’s new metric demonstrated, ingeniously and incontrovertibly, the incompatibility between oil industry health and planetary health. Yet divestment, as a tactic, hasn’t delivered.

Divestment campaigners have a world of actions and organizing to do instead. For the next six months, though, they need to focus on political action. Electoral action.

Odds be damned, the Democrats have got to hold onto Congress this November. Political commentator Jamelle Bouie reminded us why recently when he was asked why “the Democrats can’t seem to get traction on [climate and other progressive policies] that enjoy broad support”:

In terms of getting policies through Congress, they just don’t have the votes. [But] I think this picture would look very different if there was one more or two more [Democratic] senators. If Cal Cunningham in North Carolina had won [in 2020], if Susan Collins’s opponent in Maine [Susan Gideon] had won, we’d be looking at a very different situation.

Needless to say, a very different situation, of the opposite sort, is what we’ll be looking at if the other, climate-denying, democracy-wrecking party prevails in the midterms. Between now and Tuesday, Nov. 8, not just divestment but probably all climate-focused organizing needs to yield to, or at least be subsumed by, electoral campaigning.

If your state or district is competitive, start electoral organizing now. If not, these resources can plug you in:

• People’s Action has both electoral and non-electoral volunteering.
• Swing Left has local chapters to connect you for phone-calling, post-carding, donating, etc.
• For down-ballot electioneering (which also brings people to vote for up-ballot races): Sister District.
• For Spanish-speaking calling in AZ, connect to Mision por Arizona via Mission for Arizona.
• To donate $$ to grassroots rather than party organizations: Movement Voter Project.

Last weekend I bicycled to Long Beach, the Long Island town where I grew up. From the boardwalk, squinting into the sun, my riding partner Dave and I could make out a dozen freighters strung in a long line in the Atlantic Ocean, stacked up like aircraft waiting to land.

Giant ships offshore weren’t something you saw often from Long Beach in the last century. A solitary ordinary freighter was noteworthy. The dozen big ships last Saturday doubtless were a symptom of some downstream jam-up in the supply chain. But they were also a telltale of the vast expansion of global trade since globalization took rise several decades ago and made Asian factories the prime U.S. source of consumer goods.

As coincidence would have it, both Dave and I had read Paul Krugman’s day-before NY Times column, Putin May Kill the Global Economy. “There are good reasons to worry that we’re seeing an economic replay of 1914,” Krugman wrote, referring to “the year that ended what some economists call the first wave of globalization, a vast expansion of world trade made possible by railroads, steamships and telegraph cables.”

Krugman envisages Russia’s invasion of Ukraine triggering a replay of 1914. Not just the withdrawal from trade of Russian hydrocarbons and Ukrainian wheat but a “partial retreat from globalization,” i.e., a shrinkage in the “world-spanning supply chains” that now constitute global manufacture.

“What Putin has taught us is that countries run by strongmen who surround themselves with yes-men aren’t reliable business partners,” Krugman says, eyeing China above all. “So if you’re a business leader right now,” he writes, “surely you’re wondering whether it’s smart to stake your company’s future on the assumption that you’ll keep being able to buy what you need from authoritarian regimes. Bringing production back to nations that believe in the rule of law may raise your costs by a few percent, but the price may be worth it for the stability it buys.”

Who can disagree? What Krugman didn’t consider, though, is that the simplification and shortening of global supply chains as an antidote to irrational autocracy could become the political equivalent of carbon taxes on international shipping.

I’ve long harbored the notion that a sufficiently airtight regime of global carbon taxes might put a damper on world trade by making ocean-going shipping more expensive. Much trade would remain, of course, although the extent would depend on the magnitude of the tax. At the margin, though, the enormous movement of raw materials and goods across thousands of miles of ocean (or, more expensively, via air freight) would slow and perhaps even decline.

The resulting cut in global carbon emissions would be no small thing. Global shipping accounts for 2.2 percent of greenhouse gas emissions worldwide, Time magazine reported recently, a figure that encompasses methane and other GHG’s and thus probably equates to 3 percent of worldwide CO2.

Deglobalization’s salutary effect on domestic manufacture might ripple even wider. Automation notwithstanding, relocating the making of goods for the U.S. market to the United States would raise factory employment and the number of stable, high-wage jobs. That in turn might restore a semblance of cohesiveness and meaning to the vast hollowed-out regions of middle America that since the Great Recession have turned in despair to opiates — pharmaceutical and political.

To be sure, this can sound very pie-in-the-sky, until you remember the pre-eminent role that dignified, well-paying manufacturing jobs played in U.S. progressive politics in the last century. Starting with Franklin Roosevelt and continuing until Reagan, labor and political organizing in America’s industrial unions played a vital part in furthering racial and economic equality through policies like progressive taxation and civil rights legislation, as historian Michael Kazin recounts in his latest book, What It Took to Win: A History of the Democratic Party.

It’s not a huge stretch to triangulate from Kazin’s history of mid-century democratic capitalism and Krugman’s prognosis of deglobalization to imagine a resurgence in the kind of working-class progressivism that has largely been missing from the push for a Green New Deal. The victory last week through nontraditional, grassroots organizing by the worker-led Amazon Labor Union in Staten Island, NY, points in this direction. Over time, rising labor power accompanying renascent domestic manufacturing could help deliver the electoral wins and legislative energies needed to help the U.S. transit from fossil fuels to green energy.

Of course this is my take, not Krugman’s. What worries him about deglobalization isn’t the prospect that “wealthy, advanced economies will end up slightly poorer” as cheap imports recede. It’s the possible brake on economic advancement in “nations like Bangladesh that have made progress in recent decades [due to] access to world markets.”

Curiously for a columnist who frequently invokes climate change, Krugman didn’t mention the other, more dire prospect facing Bangladeshis: that continued “progress” in the form of fossil-fueled growth will lead to massive destruction of their country as the sea overwhelms it, monsoons fail, crops collapse, and desperate migrations of biblical numbers ravage the inland. Unless some thing or combination of things creates a different future.

In his 2020 novel, The Ministry For The Future, the “speculative fiction” writer Kim Stanley Robinson conjured a distinctive deus ex machina: “crash day” — an anonymous worldwide action causing jetliners to fall from the sky, killing passengers and crews but bringing down the curtain on hydrocarbon-fueled, climate-damaging aviation (zero-carbon airships take their place) and catalyzing, finally, a rapid global turning from fossil fuels.

After a decade of pining for a global carbon tax to reverse American deindustrialization, constrain global shipping, and then some, Krugman’s forecast of an autocrat-driven but nonviolent trade slowdown can look mighty attractive.

Addendum, May 9: A May 4 NY Times story, The Era of Cheap and Plenty May Be Ending, about the new logistical fragility of global supply chains, noted: “More firms reported moving their supply chains out of China to other countries, and American executives were more positive about bringing more manufacturing to the United States.”

The Nation magazine this morning published my essay, The Case Against Closing Nuclear Power Plants. I’ve cross-posted it here to allow comments and offer context.

The piece had its genesis in a more expository post I published in 2020 in the NYC-based Gotham Gazette, Drones With Hacksaws: Climate Consequences of Shutting Indian Point Can’t Be Brushed Aside. In that essay, I dismantled the assurances of reactor-shutdown advocates that bountiful infusions of efficient and renewable energy will take the place of the nuclear-powered Indian Point plant’s carbon-free electricity. The problem wasn’t simply the slow rate at which new green energy is being added, but that when green energy sources must replace a standing power source that itself replaces fossil fuels, their effective climate value is zero. 

I believe my essay in The Nation is noteworthy on several grounds.

First, it adds the weight of my long experience questioning nuclear power’s economic viability to a Feb. 1 letter from climate pioneer Jim Hansen, Nobel laureate and former U.S. energy secretary Steve Chu, and 77 other distinguished personages to California Gov. Gavin Newsom that, in effect, urged the state to avoid duplicating, on the West Coast, the grievous error of shutting a similarly questionably-sited reactor complex (Indian Point) on the East.   

Second, the essay advances a more systemic view of the climate consequences of extinguishing extant zero- or low-carbon energy facilities whose operation is already keeping fossil fuels in the ground and carbon emissions out of earth’s atmosphere.

Third, it implicitly embodies a hope that my willingness to examine my own deeply-held convictions in a new light may encourage others to do likewise with their own climate dogma. Reconsideration of ideologically-based objections to carbon pricing by self-proclaimed progressives would be a good place to start.

  — C.K., April 4, 2022

The Case Against Closing Nuclear Power Plants

On a bright spring day in 1979, before thousands who were propelled to Washington, D.C., by the Three Mile Island reactor meltdown, I pronounced nuclear power’s rapid expansion disastrously unaffordable. My remarks drew on years of work chronicling reactors’ skyrocketing capital costs.

Forty-three years later, in February, in the wake of the failed Glasgow climate summit, I wrote to California Gov. Gavin Newsom, urging him to defer the planned shutdown of the state’s last nuclear plant. Closing Diablo Canyon, a Reagan-era complex near San Luis Obispo, would damage the state’s climate leadership as it strives toward zero-carbon energy, I argued.

I sent my letter just days before Vladimir Putin’s tanks rolled into Ukraine and thrust nuclear power back in the news, in typical ambiguity.

On one side are legitimate fears that Russia’s seizure of the giant Zaporizhzhia reactor complex in southern Ukraine, the largest in Europe, and the stricken Chernobyl plant in the north, near Belarus, could precipitate massive releases of radiation.

On the other is the stomach-churning awareness that Germany’s reactor closures over the past decade deepened its dependence on Russian gas, helping keep the Kremlin supplied with Western cash while slowing its own progress to climate-safe energy.

In America, meanwhile, the nearly one hundred nuclear plants that have ridden out the post-Three Mile Island cancellations and post-Fukushima shutdowns operate under the radar, their climate and pocketbook benefits taken for granted. It’s time we paid attention.

Electricity rates in New York City were jackknifing even before Russia’s assault on Ukraine. The blame is falling on spiking prices for fracked natural gas. Left unsaid is that, as in Germany, the closure last year of the area’s lone nuclear plant, Indian Point, is making utilities draw more heavily on the very gas-fired generators whose costs are spiraling. Also largely unremarked, amidst hosannas over wind and solar power’s falling costs, is the halting pace at which green power is actually filling the breach, belying promises by “safe energy” advocates who helped engineer Indian Point’s closure.

Worse, it is illusory to say that by ramping up renewable energy and energy-efficiency we can pick up the climate slack from closing Indian Point. Why? Because with climate chaos bearing down, every green-energy addition needs to bring about the demise of equivalent fossil fuels. If those additions replace a standing power source that itself replaces fossil fuels, their climate value is zero.

These considerations dim the glow from last month’s record leases for ocean wind farms off Long Island and New Jersey. The need to make up for Indian Point’s energy output will nullify half or more of the hoped-for 7,000 megawatts of offshore wind, badly undermining the legislative commitment to rid the New York grid of carbon emissions by 2040.

On the opposite coast, the twin Diablo Canyon reactors have for decades provided 2,200 megawatts worth of round-the-clock climate benefit by obviating the need to draw on fossil fuel generators. Shutting them down by 2025 will relegate California’s next 7,000 megawatts of renewables and efficiency (the higher figure is from differences in operability) to stand-ins for Diablo’s lost climate benefit.

The deficit won’t be transitory. Not until every kilowatt on the West Coast comes from zero- or ultra-low-carbon sources can Diablo’s canceled climate benefit be considered superfluous. Until then, the California grid will continuously emit more carbon than it would with Diablo operating.

That moment is approaching but it remains far away. According to data from the US Energy Information Administration, 50 percent of California’s electricity still comes from burning carbon fuels. Hearteningly, this share is 12 points less than it was in 2015, with most of the carbon shrinkage coming from increased solar-photovoltaic supply. But that solar rise, amounting to more than 15 billion kWh annually, is no greater than the amount of carbon-free electricity that shutting Diablo Canyon will take away (17 billion kWh a year, based on 2016-2020 production).

We cannot assume that California’s next solar wave will replace Diablo’s climate benefit, for the simple reason that those solar gains are counted on to push out fossil fuel-burning in buildings, vehicles, and the state’s power grid.

I can hear the objections. Diablo Canyon needs to run at full bore, whereas demand fluctuates. But any excess output can be put to use recharging the millions of batteries California is adding to anchor its grid. Diablo lies atop an earthquake fault. But much of its huge sunk cost went for unprecedented seismic protection that the plant’s owner, Pacific Gas & Electric, failed to budget. (I know this from serving as an expert witness for the California Public Utility Commission’s Division of Ratepayer Advocates in the 1989 proceeding that barred the company from fully recovering its cost overruns.) Guarding Diablo against mishaps or malfeasance takes money. But going forward, the cost of staffing and fuel will be much less than the climate damage its operation prevents.

As an energy-policy analyst, advocate, and organizer for fifty years, I have fought for bicycle transportation, congestion pricing, wind farms, and carbon taxes, in large part to reduce the destructive imprints of coal, oil, and gas.

The climate crisis has exploded ahead of schedule, not as distant warnings but as actual fires, floods, and the global sea-level rise. Meanwhile, Diablo and other US nuclear plants long ago shed their teething problems to become solid climate benefactors, faithfully churning out electricity without combusting carbon fuels.

Others can debate whether to build new nuclear plants to combat the climate crisis. But no one can deny that letting existing reactors like Diablo Canyon remain in service keeps fossil fuels in the ground and their carbon emissions out of our atmosphere. We ignore that benefit at our peril.

Komanoff, author of the treatise Power Plant Cost Escalation, represented New York State and California consumer agencies in opposing rate hikes to pay for reactor cost overruns in the 1970s and 1980s.

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Note: The day after posting this, I talked about my Nation article with Left Business Observer’s Doug Henwood on his weekly podcast. (My part starts at 30:18 and goes for a little over 20 minutes.) The conversation is lively and adds further context to the importance of and rationale for continuing to run functional U.S. nuclear power plants.

If Gov. Newsom is willing to just toss our emissions goals by rewarding car ownership and gas tax holidays for no reason other than to get re-elected in the safest blue state then it’s settled that California leaders were just virtue signaling about global warming the whole time.

— Darrell Owens (@IDoTheThinking) March 25, 2022

Of the myriad motorist giveaways now being rushed into place around the U.S., none sting like California’s. I share Darrell Owens’ tweeted dismay, not just because California is so reliably blue but because Gov. Gavin Newsom’s proposed car-cash payments point to a troubling fragility in the state’s clean-energy leadership.

The specifics of the so-called relief plan are still being worked on. But the basic shape is expected to hew to the contours posted by Newsom’s office this past week and shown further below: $9 billion in payments to households of $400 per registered car (limit of 2 per family) and just $2 billion to make transit cheaper.

While a per-vehicle stipend isn’t quite as environmentally  loathsome as the gas and diesel tax “holidays” already rolled out in Georgia and Maryland and being readied elsewhere (NPR has a useful digest), California’s nearly 50-year record at the forefront of cleaner energy might have suggested other, greener approaches.

I know that record well. Not long ago, I did a study comparing California’s rate of decarbonizing its economy to the rest of the country’s. I found that from the mid-1970s to 2016, California drove down its use of fossil fuels per unit of economic activity nearly 20 percent faster than the other 49 states. Had those states matched California’s pace, I calculated, the country would now, each year, be eliminating 1,200 megatonnes of CO2, an amount equivalent to the carbon emissions from our entire fleet of passenger cars.

Those findings became the basis of a 2019 report for the Natural Resources Defense Council, California Stars: Lighting the Way to a Clean Energy Future. My NRDC co-authors and I credited a host of actors: Gov. Jerry Brown (1974-82, 2010-18), for imbuing an energy-efficiency ethic throughout the machinery of state government; Gov. Arnold Schwarzenegger (2003-10), who lent “Terminator” cred and financial support to solar power; and, above all, the thousands of resourceful and devoted state employees who developed and oversaw a kaleidoscope of performance standards that embedded energy efficiency into appliances, equipment and buildings.

Alas, California’s energy record also had an un-stellar part: automobiles. “Passenger vehicles continue to be a weak point,” we noted dryly in “California Stars,” as the state’s consumption of motor fuels grew faster than the rest of the country’s during 1975-2016 (albeit a tad more slowly per unit of GDP). We listed many factors but omitted the most fundamental: California’s vaunted green ethos didn’t include recognition of, and resistance to, car-dependent transportation.

Consider that the day before yesterday, in New York, a coalition of transit, environmental and economic-justice organizations declared their opposition to a possible statewide gas tax holiday “because it does little to help those New Yorkers most hurt by rising prices, takes revenue away from needed road and transit investments and completely contradicts New York’s climate goals.” The groups, who have long worked in concert for safe streets, congestion pricing and better transit, pointed to rising prices for energy (electricity and heating fuels, not just gasoline), food and housing and called for targeted state aid to lower-income households.

If similar noises are being made in Los Angeles or San Francisco, they aren’t yet audible in New York. Nor do we know what California’s iconically green ex-governors would have done in the face of $5 or $6 gasoline. (The state’s anti-smog rules and carbon cap-and-trade program lead to unusually pricey motor fuels.) I’d like to believe they would have used the gas-price “crisis” as an opportunity to speak inconvenient truths about driving, fossil fuels and climate stewardship. Perhaps Brown would have harkened back to his seventies self and encouraged Californians to voluntarily curtail the share of their driving that is particularly mindless and unnecessary. Schwarzenegger, who earlier this month made an extraordinarily empathic antiwar video appeal to Vladimir Putin’s subjects (“I love the Russian people. That is why I have to tell you the truth.”), might have connected less driving and fuel conservation to patriotism and manliness.

While Newsom lacks those predecessor’s strong personal stamps, he doesn’t lack for imaginative staff. Think of the good the state could do for economic justice and climate protection with the $9 billion he’s handing car-owners.

The most obvious scheme is to apply that money to reduce the state sales tax, a stunningly regressive tax. California’s 7.25% state sales tax brings in around $45 billion annually, according to Tax Foundation figures ($42.7 billion in FY 2020, the most recent figure available), suggesting that $9 billion worth of lower sales taxes would enable the state to cut the rate by one-fifth, to a little under 6%. That change would give relief to every Californian, and disproportionately to poor and working families, without rewarding automobile use and dependence. And it would align nicely with The Economist’s insistence yesterday that “Governments should support household incomes instead … of cutting fuel taxes.”

(Sales tax swaps aren’t exactly novel in environmental discourse. Washington state’s I-732 initiative would have used revenue from a $20/ton carbon tax to cut the state sales tax — the nation’s steepest — by one percent; it was defeated, in 2016, when some climate hawks derided it as, somehow, pro-corporate. Two decades earlier, I published an op-ed calling for a nickel-a-mile charge on driving in Long Island, NY, with the proceeds paying for a 3 percent cut in Nassau and Suffolk Counties’ sales tax.)

In a different vein, folks in the bicycling circles I inhabit are touting free e-bikes rather than car-based giveaways as a means to cushion the pain of high gas prices while helping spur people away from automobiles. The same $9 billion would allow Sacramento to issue e-bike rebates of $300 each to of the roughly 30 million Californians of bicycling age (say, 10 to 80). Making the rebates tradeable would bend to two realities: not everyone can or will use a bike — even one with electric assist — and supplies are constrained. The latter factor suggests that the rebates should remain valid for several years.

Doubtless, there are other productive ways California could distribute $9 billion in economic relief. What makes the planned automobile giveaway so dispiriting is that for half-a-century the state has done so much in green energy and electricity, outside of the transportation sector, that is pro-climate, pro-consumer and innovative. Gov. Newsom’s rush to invest $9 billion in a one-shot that pulls in the opposite direction is damaging in itself and also indicative of the fragility of California’s supposed green ethos.

Call me a neigh-sayer, but the pretty horses decorating yesterday’s NY Times story about Argo Blockchain, Inc.’s “Green Bitcoin” venture can’t hide the oxymoron that lies beneath: no matter how many wind turbines and solar panels Bitcoin miners build or buy to run their ravenous processors, crypto is fundamentally filthy.

The reason is straightforward: all the new green energy we can capture from the air and the sun needs to serve a higher purpose: replacing fossil fuels. Wind farms and photovoltaic arrays stop the combustion that’s causing climate change only when they take the place of coal- and gas-fired power plants. If they’re hooked up to Bitcoin computers, they can’t substitute for anything. The net gain for climate is zero.

To be sure, it’s better to run Bitcoin machines with renewables than with fossil fuels. But even 100%-renewable Bitcoin isn’t climate-positive, since the land supporting the new green stuff powering the Bitcoin mining is perforce unavailable to aid the climate. At some point — a year from now, five years on, ten — some other entrepreneur, one focused on renewables rather than crypto-currency, could have built the same arrays and dedicated their output to the grid. That would actually push out fossil fuel generation and achieve the carbon cuts the climate needs.

If it helps, think of the difference between the engineer’s perspective and the climate economist’s. The engineer counts X many kilowatt-hours of wind and solar feeding Bitcoin computers that draw the same X kWh’s and calls it a wash: “carbon-neutral.” The climate economist sees those figures but also debits the Bitcoin operation for the opportunity cost of its computer banks whose voracity renders the green kWh’s unable to take the place of fossil-fuel kWh’s. The “wash” that the engineer touts is actually the persistence of coal- and gas-fired electricity generation that will keep spewing carbon.

What I call the climate economist’s perspective is something I’ve cultivated lately, since I started rethinking the climate consequences of the closure of the Indian Point nuclear power plant, in New York City’s far-north suburbs. In 2020, in a post I called Drones With Hacksaws, I equated shutting a large source of essentially carbon-free electricity such as Indian Point to unleashing a swarm of hacksaw-wielding drones to lay waste to a hypothetical giant offshore wind farm by lopping off its thousand or more turbine blades. The climate consequences of the two acts were, I argued, identical, since both involved doing away with steadily-functioning zero-carbon power sources whose operation obviated the need to run carbon-fuel-burning power plants.

Applying this perspective to Argo Blockchain helps us see that from a climate perspective, its wind turbines (and promised solar arrays) add up to nada. The potential climate good from the company’s green power sources is squandered in powering an artificial and unnecessary service. From a climate standpoint, Argo’s wind and solar arrays at best break even, rather than provide a net benefit.

The Times story missed a lot of details: how much electricity Argo Blockchain’s Bitcoin mining facility outside Lubbock, in northwest Texas, will consume; how much of it will come from the row of wind turbines visible in the distance; how much of world Bitcoin “demand” the facility will satisfy. But it did include these helpful pointers:

Crypto mining does not involve any picks or shovels. Instead, the term refers to a verification and currency creation process that is essential to the Bitcoin ecosystem. Powerful computers race one another to process transactions, solving complex mathematical problems that require quintillions of numerical guesses a second. As a reward for this authentication service, miners receive new coins, providing a financial incentive to keep the computers running.

In Bitcoin’s early years, a crypto enthusiast could mine coins by running software on a laptop. But as digital assets have become more popular, the amount of power necessary to generate Bitcoin has soared. A single Bitcoin transaction now requires more than 2,000 kilowatt-hours of electricity, or enough energy to power the average American household for 73 days, researchers estimate.

Earlier this year, the New Yorker magazine writer David Owen used crypto mining as an object example in his Jan. 15 article, How The Refrigerator Became an Agent of Climate Catastrophe. After citing a 2011 U.S. Energy Department (D.O.E.) study touting massive carbon reductions from federal regulations upgrading refrigeration efficiency, Owen trenchantly pointed out that “In 2011, the D.O.E.’s forecasters presumably didn’t anticipate that improvements in energy efficiency would make it increasingly economical to power and cool the server farms that mine and manage cryptocurrencies.”

Owen’s article, which is well worth reading for its narrative power and climate relevance as well as its iconoclasm, was his latest exposition of Jevon’s Paradox, the phenomenon by which increases in energy efficiency lower the price of “energy services” and thus lead to more use, undercutting the efficiency gain. The antidote, of course, is to ensure the energy services — cooling, travel, lighting, and so forth — don’t plunge in price by raising the price of energy provision, as I pointed out a decade ago in a post in Grist, If efficiency hasn’t cut energy use, then what?

We could do that, of course, with a carbon tax.

When it comes specifically to blunting Bitcoin and other cryptocurrencies, there are three broad ways that carbon taxing could help.

Carbon taxing can at least nudge greenward the mix of power sources used by Bitcoin miners: less coal or gas firing, more wind and solar. That won’t make Bitcoin green, but it will lessen its climate-destructiveness.

Second, carbon taxing could cut into Bitcoin’s growth by increasing electricity distribution companies’ economic incentives to bid green power supplies away from cryptocurrency manufacturers, thus making Bitcoin mining cost more.

Last, carbon taxing could conceivably strengthen social-shaming of Bitcoin entrepreneurs and users by reframing crypto as a refuge for losers.

This notion, though admittedly speculative, would be the most enduring. There’s a range of consuming activities that need to be deemed off-limits on account of their unsustainability, destructiveness and uselessness: helicopter flights, driving giant SUV’s, monster-size homes. Crypto belongs on that list.

Prices of gasoline and other petroleum products as well as methane (“natural”) gas were already unusually high in the U.S. before Russia invaded Ukraine on Feb. 24. Less than two weeks on (March 9), they’re at levels not seen since 2008, prompting the usual motorist grumbling but also creating hardship for squeezed families. Here we shed light on four key questions:

1. Is the backlash against high pump prices an argument against pursuing carbon taxes?
2. How big a hit are U.S. consumers taking from the higher fuel prices?
3. Is demand for gasoline sensitive to the price at the pump? If so, how much?
4. How much could the U.S. cut oil demand, right away?

Q1: Is the backlash against high pump prices an argument against pursuing carbon taxes?

A1: No.

Joseph Majkut explains:

Things that are not the same:
A carbon price with transfers to households and oil price increases from supply shocks.

— Joseph Majkut (@JosephMajkut) March 8, 2022

Let’s unpack the tweet from Majkut, former Senate staffer and Niskanen Center climate specialist now with the national security think tank CSIS.

Supply shocks, like today’s, exact monies from businesses and consumers and transfer it to the oil industry — extractors, refiners, traders, brokers, insurers.

Carbon pricing, in contrast, is imposed by governments. And though it leads, deliberately, to higher fuel prices, the tax monies are collected by government and become revenues that can be used for public purposes. The “canonical” outlet — the one increasingly urged by carbon-pricing advocates in NGO’s and government — is to distribute (“transfer,” in Majkut’s phrase) the revenues as equal “dividends” to households.

This fee-and-dividend approach, pioneered by Citizens Climate Lobby, is income-progressive because lower-income households spend fewer dollars on fuels (directly plus indirectly) than wealthier households. Fuel price shocks, on the other hand, are regressive because lower-income households spend a larger share of their budgets on fuel.

If these points appear contradictory, please study the donut chart at right, or consult our page, Ensuring Equity. It’s the dividend that makes carbon pricing progressive, and the lack of a dividend that makes oil shocks regressive.

Q2: How big a hit are U.S. consumers taking from the higher fuel prices?

A2: A pretty big one, though it’s probably transitory.

In 2019, the last pre-pandemic year, the U.S. consumed 32.2 quads of methane (“natural”) gas and 43.5 quads of petroleum products. (A quad, or quadrillion Btu, is a standard metric for characterizing enormous energy quantities.)

Methane gas is used for power generation, heating of homes and commercial buildings, and as process heat for industry. Petroleum products encompass not just gasoline but home heating oil, diesel fuel burned by large trucks and machinery, kerosene for aircraft, residual oil for large commercial ships, propane for heating (largely in rural areas that aren’t connected to gas lines) and lubricants. Non-gasoline fuels typically account for a little over half of petroleum usage, with gasoline a bit less than half. (CTC’s carbon-tax model breaks down a lot of these uses.)

On a per-btu basis, i.e., for an equivalent amount of heat or energy, petroleum products are far more costly than methane gas. Gasoline at $4.00 a gallon, the approximate national average pump price in early March, equates to $32 per million Btu; whereas during 2016-2020 methane gas averaged only a little more than $2 per million Btu at the wellhead and $6 delivered to the average customer. (Yes, refining crude oil into petroleum products is really costly.)

We made a back-of-the-envelope estimate of what the disruption of global energy markets due to the Russian invasion of Ukraine is costing U.S. consumers. We assumed a 15 percent rise in petroleum-product prices, along with a 50 percent rise in the wellhead price of methane gas as profit-maximizing owners diverted some supplies to LNG tankers bound for Europe. With these assumptions, the impacts on U.S. consumers — businesses along with households — are in the neighborhood of $400 million a day for higher petroleum fuels and $100 million a day for costlier methane gas. (Gasoline accounts for “only” $150 to $200 million of the $500 million total.)

Mathematically, the total, around $500 million a day, works out to around $4 a day in added costs for an average U.S. household. With a robust carbon tax in place, the supply shock would be far smaller. Households wouldn’t be consuming as much oil, and the increased slack in the world oil business would shrink the opportunities for profiteering by oil owners and traders.

Q3: Is gasoline use sensitive to the price at the pump?

A3: More than most people think, though less than we wish.

We examined the price-elasticity of gasoline in 2015, in a post, What an Energy-Efficiency Hero Gets Wrong about Carbon Taxes. The post presented a linear regression model that correlated year-to-year changes in U.S. gasoline consumption with changes in economic activity (GDP) and in the real (inflation-adjusted) price of gasoline. Here’s what we wrote then:

We “regressed” the annual percentage changes in U.S. gasoline consumption from 1960 through 2014 on three independent variables: (i) the same year’s percentage change in economic activity (GDP); (ii) the same year’s percentage change in the average real retail price of gasoline; and (iii) the average percentage change in that price over the 10 years prior to the current year. The third variable was intended to reflect lags inherent in Americans’ responses to changing gasoline prices, insofar as automobile purchases and location choices that affect usage tend to change over years rather than weeks or months. The parameters may be referred to as income-elasticity, immediate price-elasticity, and lagged price-elasticity, respectively.

This week we updated the model with gasoline consumption and price data through 2021. Here’s what we found:

• The  income-elasticity of gasoline consumption is a little over 0.5 (0.53, to be precise), meaning that a 1 percent rise in GDP is associated with a 0.5 percent rise in gas use.
• The immediate price-elasticity of gasoline consumption is (minus) 0.11, meaning that it takes nearly a 10 percent hike in the average price at the pump to bring about an immediate 1 percent drop in usage; this validates the perception that in the short run. gasoline use is only barely responsive to price changes.
• The lagged price-elasticity of gasoline consumption is (minus) 0.19. The sum of the immediate and lagged price-elasticities is (minus) 0.30, indicating modest sensitivity of usage to price over a longer time horizon. A sustained 10 percent hike in gasoline prices would tend to elicit a 3 percent drop in usage.

(Incidentally, this 3-variable model — actually, we used 5 variables, including “dummy” variables to isolate gas use in 2020 and 2021, the pandemic years — explains nearly 80 percent of the year-to-year variation in U.S. gasoline consumption.)

Here are four takeaways from our modeling:

1. Holding prices constant, gasoline usage in the U.S. has been partly decoupled from economic activity, since two units of economic growth lead to only one unit of growth in gasoline use.
2. U.S. gasoline demand isn’t entirely price-inelastic, though it is nearly so in the immediate (short) run.
3. Over a longer period, demand for gasoline displays some price-sensitivity, suggesting that by raising pump prices, carbon taxes can have some sway over usage.
4. Still, the relative price-inelasticity of gasoline indicates that even robust carbon taxes won’t have a big direct effect on usage; the bigger impacts will come from speeding the transition to electric vehicles and, we hope, fostering turns in the culture that promote and valorize reduced fuel use

Q4: How much could the U.S. cut oil demand, right away?

A4: By a lot. (But we won’t.)

In early 2002, not long after the Saudi-enabled attacks that destroyed the World Trade Center, I published a blueprint for achieving an immediate (“overnight”) 5% cut in U.S. oil consumption, with the reductions reaching 10% within six months.

Given the reality that changes in capital stocks that underlie oil consumption — the cars people own, the cities and towns where they live — can’t change overnight, the booklet’s guiding idea was to “collectively change individual behaviors” that added up to the 19.3 million barrels of petroleum products being consumed daily in the U.S.

My thinking then was that behavior changes away from petroleum consumption could finally explode from niche to commonplace if the changes were hitched to a higher purpose — national security and patriotism, in this case. Bicycle commuting, carpooling, thermostat setbacks, electricity conservation would become widespread as their aura changed from fringe-y to patriotic.

Sadly, this never caught on. Our declaration “that we face a choice between love of oil and love of country” and our call to the Bush administration “to break with past policies of subsidizing oil consumption and treating every oil-consuming activity, no matter how discretionary or wasteful, as essential,” fell on deaf ears.

Today, U.S. oil consumption is greater than it was on 9/11. U.S. households, businesses and industry consumed an average of 20,540,000 barrels of petroleum products in 2021, around 5 percent more than the 19,700,000 barrels used daily in 2000.

If anything, calls to alter individual behavior to cut down on consumption of oil and other fossil fuels, whether for geopolitical purposes (to shrink Russian government and oligarch cash reserves) or for climate (to dial back carbon emissions), are frequently derided on the left as “lifestyle-shaming” and diversions from the “urgent task of system decarbonization.” In a New Yorker magazine profile of Sunrise Movement organizers earlier this month, for example, one activist dismissed Al Gore’s exhortation in 2006 to replace electricity-gulping lights because “even if you change all the light bulbs in the country, you don’t come close to preventing catastrophe.” In fact, multitudes of bulb swaps since then have helped flatten U.S. electricity demand, keeping hundreds of millions of tons of coal in the ground — this country’s biggest climate triumph to date.

We conclude this post with a screenshot of the opening pages of “Ending the Oil Age.” The full 44-page report may be downloaded here (pdf). Readers with an historical bent, take note: The report also proposed hefty taxes on gasoline and jet fuel that, in my telling, could replace the patriotic impulse to conserve petroleum as the murderous, petro-dollar-fueled attack on the World Trade Center began to recede into the past.