Kamarck: Gore’s Carbon ‘Tax Shift’ Beats Cap-and-Trade (Roll Call)
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Kamarck: Gore’s Carbon ‘Tax Shift’ Beats Cap-and-Trade
Kamarck: Gore’s Carbon ‘Tax Shift’ Beats Cap-and-Trade (Roll Call)
Back to Plan A: The Revenue-Neutral Carbon Tax
“If we can design a policy that is transparent and easy for people 
to understand, puts an effective price on carbon, and reimburses average Americans for all or nearly all of their increased energy costs, we have a chance to reverse climate change in a timely manner.” So concludes political scientist Elaine Kamarck, PhD, lecturer in public policy at the Kennedy School of Government, and former head of the national performance review “reinventing government” (1993-97) in the Clinton Administration.
Kamarck’s new paper, “Addressing Climate Change: The Politics of the Policy Options,” begins by reviewing three decades of evolving public consciousness about global warming. She reminds us that cap-and-trade didn’t start as the front runner. In his 1992 book “Earth in the Balance,” Al Gore proposed a carbon tax with revenue used to reduce other taxes, an approach backed by most economists and policy analysts. But two events changed this; the apparent success of the acid rain (SO2) cap-and-trade program written into the 1990 Clean Air Act, and the political failure of Clinton’s BTU tax.
Kamarck points out the key factors behind the success of the acid rain cap-and-trade program: only a few hundred sources had to be “capped,” SO2 scrubber technology was readily available, and deregulation of rail freight prices slashed the cost of western low-sulfur coal. She notes that these factors don’t apply to carbon emissions. Curbing CO2 will require a vast array of new technologies at both the energy production and user levels, along with widespread behavioral changes. Beyond the technology differences, the number of entities regulated in a carbon control system would be many times larger than for acid rain.
Kamarck concludes that policymakers have taken the wrong lesson from the failure of the BTU tax proposal. The measure was complex, for example, taxing gasoline at a higher rate than other fossil fuels without a clear rationale. Policymakers could not answer basic questions about its effect, specifically about its cost to consumers. Kamarck says politicians incorrectly concluded they couldn’t touch tax policy; in fact, we generally accept the idea of “sin” taxes, for example on cigarettes, as both good health policy and an appropriate way to generate revenue.
Complexity, exceptions and inability to demonstrate effectiveness are very serious political disadvantages of cap-and-trade that began to surface as the Lieberman-Warner bill failed in the Senate. Kamarck observes that these drawbacks are becoming even more glaring as the Waxman-Markey bill works its way through the legislative process. Whereas politicians must be able to answer constituents’ question What will this cost me?, the complexity of cap-and-trade invites opponents to make outrageous claims about the cost that are almost impossible to persuasively refute. Moreover, in the wake of the collapse of the financial system, the public is extremely wary of trading systems that appear capable of wreaking financial havoc.
The public is also properly skeptical about a policy whose effectiveness requires the rest of the world to follow suit. Since cap-and-trade systems depend on well-developed regulatory and enforcement systems that are far beyond the capacity of many governments, the prospects for an international system based on cap-and-trade are tenuous, Kamarck concludes. In contrast, most nations have a reasonably effective tax collection system that could be used to administer a carbon tax.
Under any carbon pricing system, revenue recycling is essential, Kamarck concludes, not just for the poorest quintile as Waxman-Markey provides, but for virtually everyone, in order to put the policy on a broad political footing. She refutes cap-and-trade architect Robert Stavins’ assertion that giveaways of allowances don’t affect the integrity or effectiveness of an emissions cap. She cites the European Union’s experience where emitters overestimated past emissions to garner more free allowances which led to a very loose cap. That, in turn, brought about virtually negligible carbon prices with virtually no effect on emissions. Indeed, investment in new coal-fired power plants has increased in the EU, a sign that investors expect carbon permit prices to remain low.
Don’t assume that Waxman-Markey can be made effective, fair and transparent enough to be enacted, Kamarck warns. She suggests we start now to work out an effective system under which we can answer the question How much will it cost? with enough certainty to win enactment. Her, and our “Plan B” is, of course, a revenue-neutral carbon tax which as she points out was the original “Plan A.”
Imagine: A Harmonized, Global CO2 Tax
“For more than 20 years, I have supported a CO2 tax, offset by an equal reduction in taxes elsewhere. However, a cap-and-trade system is also essential and actually offers a better prospect for a global agreement, in part because it is difficult to imagine a harmonized global CO2 tax. Moreover, I have long recognized that our political system has special difficulty in considering a CO2 tax even if it is revenue neutral.” — Al Gore, quoted in New York Times, House Bill for a Carbon Tax to Cut Emissions Faces a Steep Climb, March 7.
Let’s examine Mr. Gore’s points:
Harmonization: Mr. Gore has raised a crucial concern: Any carbon-reduction policies the U.S. enacts must quickly go global. Acting alone or counter to other nations’ efforts will not suffice.
In their seminal report last February, “Policy Options for Reduction of CO2 Emissions,” Peter Orszag (now Budget Director) and Terry Dinan of the Congressional Budget Office meticulously compared cap-and-trade with carbon tax options. They concluded that a carbon tax would reduce emissions five times more efficiently, primarily because of price volatility under a fixed cap.
CBO had no difficulty “imagining a harmonized global carbon tax.” Chapter 3 of the Orszag-Dinan report, “International Consistency Considerations,” describes straightforward ways to harmonize carbon taxes. If nations choose different carbon tax rates, border tax adjustments permitted under World Trade Organization rules authorize higher-taxing nations to enact tariffs to equalize tax rates on imported products to the same levels applied to similar domestically-produced products.
Indeed, Rep. John Larson’s new carbon tax bill employs precisely this strategy. In effect, the U.S. would collect and retain the revenue generated by equalizing carbon taxes on products imported from countries that haven’t enacted their own or whose carbon tax rate is lower than ours. That will provide a powerful incentive for our trading partners to follow our lead.
In contrast, under cap-and-trade, harmonization would require determining the implicit carbon price in a system where carbon prices are hidden and fluctuating. The CBO report observed, “Linking cap-and-trade programs would… entail additional challenges beyond those associated with harmonizing a tax on CO2.” The report noted, for example, that linked cap-and-trade programs could create perverse incentives for countries to choose less stringent caps so they could become net suppliers of low-cost allowances.
Or, the report continued, if a country that did not allow borrowing future allowances linked with a country that did, firms in both countries would have access to borrowed allowances. CBO concluded that “[O]ther flexible design features — such as banking, offsets, and a safety valve — would be available to all firms in a linked system should any one country allow its firms to comply in those ways.”
In short, national cap-and-trade systems would be nearly impossible to harmonize globally because different countries are likely to enact cap-and-trade systems with differing features that when linked would tend to defeat or de-stabilize each other. On the other hand, harmonization of domestic carbon taxes using border adjustments is a familiar and straightforward process for international trade and tax law experts under WTO.
Political Feasiblity: Gore also lamented that “our political system has special difficulty considering a carbon tax even if it is revenue neutral.” He has a point. After decades of anti-tax propaganda from the likes of Grover Norquist, Congress is understandably inclined to hide carbon pricing under a name like “cap-and-trade.” But when that first cap-and-trade price spike hits a public that was sold cap-and-trade as the un-tax, won’t its superficial naming advantage evaporate like morning dew? Will “cap-and-trade” still sound better than “revenue-neutral carbon tax” when we’re stuck with a slow, complex, costly and ineffective system?
Moreover, unlike cap-and-trade, a national carbon tax is showing signs of bipartisan support. One reason is that a carbon tax dispenses with the protracted drafting and wrangling inherent in cap-and-trade. British Columbia implemented its carbon tax in five months.
Cap-and-trade is “also essential”: Perhaps to newly-unemployed derivatives traders. But not for the rest of us. The Larson bill assures specific emissions reductions (as surely as with any other system) without the inherent problems of trading carbon derivatives. The bill automatically bumps up the carbon tax rate if emissions stray from an EPA-certified path to cut emissions by 80% from 2005 levels in 2050.
Yes, we can imagine, and yes, we must enact, a harmonized global carbon tax system. Al Gore and Jim Hansen persistently warn us: curbing the menace of uncontrolled climate change requires aggressive world-wide incentives to usher in efficiency and renewables. Price transparency and incentives for other nations to enact carbon taxes are crucial.
Rep. Larson has defied the naysayers; he has put the “t” word back on the table. Not a moment too soon.
Photo: Flickr / pbo31
At Last, It Begins: Real, Substantive Debate on 2009 Climate Legislation
(This post first ran in the Huffington Post on November 25.)
Before President-elect Obama’s cabinet is named — even before we know who the next Senators from Minnesota or Georgia will be — jockeying for position on 2009 climate legislation is well underway on Capitol Hill. Detailed intellectual cases and functioning coalitions are getting built now, not just for the idea that we need robust climate legislation fast – that’s already widely accepted and anticipated in Washington – but for which specific mechanisms will deliver the biggest, fastest impact on carbon emissions and the economy.
Significantly, these discussions aren’t all taking place behind closed doors, but in full public view, for example at a public Hill briefing December 9 with carbon tax supporters like NASA scientist James Hansen, economists Gilbert Metcalf and Robert Shapiro, Canadian public affairs expert James Hoggan, and Rep. John B. Larson (D-Conn., 1st district), who has just been elected chair of the House Democratic Caucus, and who introduced an early piece of carbon tax legislation into the House. The public can attend, along with Congressional members and staff — details here.
If introducing a new tax on carbon seems like a quixotic political battle in a time of historic economic and fiscal crisis, then you’re out of touch. The economic crisis has in fact given it a big boost, and in this crisis-ridden political environment, the carbon tax is an increasingly formidable competitor to cap-and-trade schemes.
The latter work by creating trillions of dollars’ worth of complex, tradeable instruments, and public faith in market gurus to make such trading efficient, or in government agencies to regulate them, is at an all-time low.
Critics point out lots of places to hide in the cumbersome trading scheme, witness 800-pages of special interest potlatches in the DOA Warner Lieberman bill, whereas a carbon tax is as inexorable as… taxes.
Crisis-driven volatility in oil prices has proven what advocates of gasoline taxes and energy taxes have said all along: price spikes may come and go, but if we don’t somehow tax wasteful use of carbon fuels, the highs will just put windfalls in the pockets of oil producers and do nothing for American interests, either for energy independence or for getting control of our emissions. A carbon tax would put an effective floor under the price of gas, help smooth volatility, cut into the windfall profits of producers during price spikes, and as prices fall off the highs, keep oil consumers from going, as President-elect Obama recently said, from shock back into trance.
Perhaps most appealing of all amid the economic crisis is the fact that a carbon tax could be kept revenue-neutral. That would allow us to pay as we go to curb emissions; and wouldn’t entail any huge government outlays or bureaucracies to get addicted to the revenue. Along with the increase in energy prices, carbon tax revenues would be big, but the money would be given right back to taxpayers, whether in the form of direct payments like Alaskans get for oil production, or in the form of a progressive tax cuts like cutting or eliminating payroll taxes, as progressives like Al Gore and even conservatives like T. Boone Pickens have proposed.
Payroll taxes are the biggest, most regressive taxes 80% of Americans pay, and a big drag on employment since they artificially raise hiring costs. Cutting them would both put money back into the pockets of middle-class and working-class families, and take the self-imposed brakes off job creation.
If you’re President-elect Obama and you’ve promised to create 2.5 million jobs by 2011, and to lower taxes on families making less than $250,000 a year, while finding the means for a meaningful economic stimulus and major reductions in carbon emissions, that has got to sound good.
If you’re a concerned citizen who has been waiting for years for the political static to clear, and some real, productive grappling with meaningful climate legislation to begin, this is your moment. You can weigh in, sign petitions, write letters to Congress, attend that Hill briefing, and generally be part of substantive, small-d democratic debate about serious climate legislation at the Price Carbon Campaign
Photo: Flickr / Afagen.
A Question of Balance: Finding the Optimal Carbon Tax Rate
Guest Post by James Handley
Economists are virtually unanimous: Raising the price to emit carbon is essential for reducing greenhouse gas emissions and staving off climate disaster. But how high should that price be set? And how steep a trajectory should be chosen to get there? Here, we look at what several leading economists have said about carbon tax rates, as well as their preferences for the use of carbon tax revenues.
One of the most forceful and respected advocates of carbon taxation is Yale economist William Nordhaus. In his new book, A Question of Balance, Weighing the Options on Global Warming Policies, Nordhaus employs a complex model of the U.S. economy to determine the "optimal" carbon tax rate – the rate that would cost the economy no more in reduced productivity than the climate damage it would prevent. He writes:
According to our estimates, efficient emissions reductions follow a "policy ramp" [with] modest rates of emissions reductions in the near term, followed by sharp reductions in the medium and long terms. Our estimate of the optimal emissions-reduction rate for CO2 relative to the baseline is 15 percent in the first policy period, increasing to 25 percent by 2050 and 45 percent by 2100. This path reduces CO2 concentrations, and the increase in global mean temperature relative to 1900 is reduced to 2.6°C for 2100 and 3.4°C for 2200." (p. 14)
Nordhaus assumes that, at least in the near term, Earth’s climate system will respond predictably to rising levels of greenhouse gases. He thus distances himself from the more aggressive stance of Al Gore and Sir Nicholas Stern who advocate steeper carbon pricing policies to avoid triggering irreversible "tipping points" in the climate system. Nordhaus also assumes a far higher "discount rate" than Stern, which leads to greater emphasis on present costs than distant benefits. With these assumptions, Nordhaus concludes that a carbon tax starting at $7.40/ton of CO2 is optimal, so long as it increases by 2-3% a year in real terms (after inflation) until 2050, with steeper increases after that.
Nordhaus suggests revenues "be used to soften the economic impacts on lower-income households, to fund necessary research on low-carbon energy, and to help poor countries move away from high-carbon fuels." (p. 24) He calls internationally "harmonized" carbon prices the most efficient way to induce emissions reductions worldwide.
Another forceful advocate of carbon taxes is Gilbert Metcalf of Tufts University. In his paper, A Green Employment Tax Swap: Using A Carbon Tax to Finance Payroll Tax Relief, published jointly by the Brookings Institution and the World Resources Institute, Metcalf recommends a carbon tax just under $17/ton of CO2. This would nearly double coal’s price, reducing its use by 32%, while petroleum products would increase in price by nearly 13% and natural gas by just under 7%. Metcalf also advocates dedicating carbon tax revenues to eliminate the payroll tax on the first $3,660 earned by each worker. He calculates that this equates to an average 11% reduction in payroll taxes, with greater percentage reductions for the lowest-paid workers.
Metcalf’s rationale for reducing payroll taxes is simple:
"In general, taxes on labor supply discourage labor and create economic losses to workers over and above any taxes collected. Workers forego opportunities to work longer hours or engage in training that increases their productivity and wages. Moreover, workers may choose not to enter the labor force in response to taxes on wage income. Tax reductions can encourage additional labor supply either on the intensive margin (hours worked) or the extensive margin (the decision to enter the labor force). The Green Employment Tax Swap encourages additional labor supply on the extensive margin." (p. 2)
Greg Mankiw, Harvard economist and former economic advisor to President Bush, has written in the New York Times in support of Metcalf’s proposal.
A third prominent carbon tax advocate is Robert Shapiro, former undersecretary of Commerce in the Clinton Administration and now head of SonEcon a Washington, DC consulting firm, and co-chair of the U.S. Climate Task Force. In his recent report, Addressing Climate Change Without Impairing the U.S. Economy, Shapiro begins with the science:
"…a range of scientific studies has concluded that the world’s current climatic conditions can be sustained if atmospheric CO2 concentrations do not exceed a general range of 450 to 550 ppm over the long term. Stabilizing carbon dioxide concentrations at those levels will require sharp reductions in net global emissions of CO2 for the next several decades." (p. 2)
Shapiro’s optimal carbon tax would
reduce carbon emissions at the rate and levels required to move to a path that will stabilize future atmospheric concentrations of CO2, so they do not produce destructive climatic changes, and in ways that impose the least marginal social and economic costs. Because climate science is still developing, scientists cannot say with certainty what the marginal cost of CO2 emissions is today, and consequently at what precise point a carbon-based tax — or the cap in a cap-and-trade program — would achieve this goal.
Shapiro continues:
One of the most comprehensive surveys of these issues, conducted by a leading European expert, Dr. Richard S.J. Tol, assessed 103 published estimates of the marginal costs of CO2, including 43 studies published in peer-reviewed journals. Among these more rigorous analyses, the average or mean value of this measure was $50 per metric ton of carbon or $13.64 per metric ton of CO2." (p.15)
Shapiro accepts this figure and uses the U.S. Energy Department’s NEMS model to predict the effects of gradually increasing to that carbon tax level. He concludes:
… Americans’ use of the least carbon-intensive forms of energy, renewable fuels, would rise sharply (up 220 percent by 2030) while the use of coal, the most carbon intensive fuel, would fall correspondingly (down 54 percent by 2030). Much of this shift would occur in the fuels used to produce electrical power. By 2030, these shifts would drive down U.S. annual CO2 emissions by about 30 percent, compared to what they would be without a climate change program, or about 6 percent less than current emissions." (p. 18)
Shapiro recommends recycling 90% of the carbon tax revenue, with the balance dedicated to research and development of low-carbon energy:
This policy then would return to workers, businesses or households nearly $3.6 trillion of the $4 trillion collected by the tax. These recycled revenues would be sufficient to reduce, on average, the annual payroll tax rate for workers and businesses by two percentage points, or exempt from payroll tax the first $10,066 in a worker’s earnings (or exempt the first $5,033 from the payroll taxes paid by both workers and their employers), or provide every working person a rebate payment of $1,080 each. [Alternatively,] these revenues also could be returned as flat payments to every household averaging $1,275 per year, per household, from 2010 to 2030. These payments would more than offset the direct tax related costs for the majority of American households, since the $1,563 in direct costs applies to the "average-income" household. (p. 21)
The Carbon Tax Center advocates establishing a $10/ton CO2 tax and increasing it at that rate each year for at least a decade. Using a simple but transparent model, CTC estimates that this more aggressive approach would reduce U.S. CO2 emissions relative to their expected growth curve by a third, if ramped up for 10 years and then held constant, and by almost half if the incrementing is extended over a second decade. This would put the U.S. on a trajectory to meet the recommendations of the Fourth Assessment by the Intergovernmental Panel on Climate Change to reduce emissions by 80% from projected "business as usual" levels by 2050. As for use of carbon tax revenues, CTC is agnostic between tax-shifting and pro-rata "dividends," provided the tax is kept revenue-neutral.
The table below summarizes the four sets of carbon tax recommendations:
| Source | Initial tax, $/tonCO2 | Annual Tax Increment | Tax Rate in 10 yrs | Tax Rate in 20 yrs |
Revenue treatment |
| Nordhaus | $7.40 | 2 – 3% | $9 – 11 | $11-13 |
offsets for poor, low-carbon energy R&D, assistance for LDCs |
| Metcalf | $16.60 | 0 | $16.6 | 16.6 | payroll tax shift |
| Shapiro | $15 | $2 | $35 | $55 | payroll tax shift |
| Carbon Tax Center | $10 | $10 | $100 | $100-200 | payroll tax shift/dividend |
All four sources propose starting with modest carbon taxes. CTC recommends predictable, step-wise increases to create clear expectations, while two others recommend gradual increases but concede that adjustments in carbon tax rates may be needed to meet emissions targets.
Two recommend that a fraction of carbon tax revenue be devoted to research and development of low-carbon energy. All recommend "recycling" most or all carbon tax revenue over targeted subsidies to energy industries, because price signals would more effectively spur individuals and firms to develop and implement conservation and alternative energy technologies. "Revenue recycling" would improve the overall efficiency of the economy and provide stimulus that could more than offset income effects of a carbon tax on middle- and low-income families, always a salient point but particularly now, as a deep recession looms.
Guest Column: Behind the Cap-and-Trade "Safety Valve"
This post reprints in its entirety a column today by veteran Washington reporter Darren Samuelsohn of ClimateWire, a new on-line news service published by E&E News. Samuelsohn’s column focuses on the controversial “safety valve” mechanism that would release additional CO2 permits whenever the price of carbon emissions overshot some set limit. The column, while lengthy, is essential reading for anyone seeking to understand the “devilish details” in carbon cap-and-trade proposals. Note that links to documents in the article are available only to ClimateWire subscribers. — CTC
Behind ‘safety valve’ debate resides 30+ years of history
Tuesday, March 11, 2008
By Darren Samuelsohn, ClimateWire senior reporter
Congress’ effort to pass passing global warming legislation faces many sticking points, but few are as sticky — or as wonky — as the battle over whether a cap-and-trade system for greenhouse gas emissions should include what is called a “safety valve.”
What started as an obscure, almost monastic dispute among economists three decades ago has now emerged as a potential make-or-break point for the proposed legislation. Tracking its tangled history may now be essential to outsiders who want to understand this issue — and the huge economic stakes involved — as champions on both sides of the political arena saddle up to do battle over it.
In recent years, New Mexico Democratic Sen. Jeff Bingaman has become the lawmaker most linked to this cause. His version of the safety valve emerged in 2005 in a legislative proposal that created a price cap on carbon. It would guarantee that American companies pay no more than $12 for every ton of carbon dioxide they release into the atmosphere. This rate would go up five percent annually beyond inflation.
Rallying against him are environmental groups and commodity traders who are concerned his plan would stifle investment in new low- and zero- carbon energy technologies. Meanwhile industry and labor unions are forming up their ranks behind Bingaman.
Finding a compromise to settle this feud won’t be easy. It has been brewing since 1974 when Martin Weitzman, then an economist at Massachusetts Institute of Technology, lit the fuse for the first salvo. An expert on how socialist governments distributed goods, Weitzman published “Prices vs. Quantities.” In it, he examined the best way to set a government policy where there is considerable uncertainty over a potential regulation’s costs and benefits.
Weitzman’s work didn’t have global warming specifically in mind. In fact, it touched only tangentially on environmental issues. But as many other academics have since noted, his findings helped to trigger the debate over how to minimize costs while reducing heat-trapping emissions.
Essentially, Weitzman found that government is best positioned to regulate by stepping in to manipulate prices when there is uncertainty about the net environmental benefits of taking action. But when the chances for an environmental catastrophe are high, Weitzman said, it’s better to tackle a problem with a quantity-based target.
“It’s without a doubt one of the most heavily cited papers in environmental economics,” said Joseph Aldy, a former White House economist now working as a fellow at the Washington-based Resources for the Future think tank. “And one of the most widely cited in economics.”
Engaging President Clinton
Building off Weitzman’s work, Mark Roberts and Michael Spence, who would go on to win a Nobel prize in 2001 for his work on information flows and market development, came up in 1976 with a “hybrid” system for reducing pollution. The Harvard economists premised their paper on the concept that a government could set up a cap-and-trade program to control pollution in the most cost-effective manner.
But because of uncertainty over those costs, Roberts and Spence suggested regulators could withhold some of the credits in this system and only release them if compliance prices exceeded a fixed trigger point.
Several more economists followed with their own complex formulas, but it wasn’t until the 1990s that the safety valve idea blossomed in government policy circles. In this case, it was the Clinton administration preparing for the 1997 United Nations climate negotiations in Kyoto, Japan.
Australian economist Warwick McKibbin and Peter Wilcoxen, then based at the University of Texas-Austin, published a paper in 1997 suggesting a ceiling price on carbon dioxide emissions permits.
Their work was followed by Billy Pizer, Raymond Kopp and Richard Morgenstern of RFF. The trio argued a few months later that climate change can’t be regulated with any specificity to prevent damage to the environment. Building off Weitzman’s work, they suggested a “safety valve” that provides a price guarantee for industry.
Among some members of the Clinton administration, the RFF paper sounded like a perfect fit. Clinton was still bruised from Congress’ rejection of his proposed energy tax on the carbon content of fossil fuels. Officials from the Treasury Department and Clinton’s own Council on Economic Advisers pushed for the cost containment measure. They said it was the best method for dealing with climate change absent an outright tax on carbon emissions.
Others in the administration urged Clinton not to meddle with future carbon prices. They insisted there would be an “announcement effect”: once the government revealed its climate plans, companies would undertake new technological innovations.
This debate entered the public arena two months before the Kyoto negotiations, when Vice President Al Gore asked about the price ceilings during a daylong forum that Clinton hosted at Georgetown University.
Alarmed by Gore’s question, environmental groups quickly pounced. Seventeen nonprofit groups, led by Environmental Defense Fund and the Sierra Club, sent Clinton a letter warning him against using what they dubbed a “relief mechanism.”
“This proposal would weaken, if not eliminate, any incentive for private sector innovation and investment in clean technologies that … is the key to successfully addressing the global warming problem,” they wrote.
Clinton decided to leave the safety valve out of the U.S. position going into Kyoto.
“The ED letter had a big effect,” recalled Rafe Pomerance, a top State Department official at the time. “It was basically dropped.”
Joseph Romm, a safety valve opponent who ran the Energy Department’s renewable lab office during the Clinton administration, said Aldy, then working for the White House, handed him a note after one high-level meeting following Clinton’s decision. It read: “Economists 0, Romm 1.”
But neither side could claim victory. John “Skip” Laitner, a top U.S. EPA economist from 1996-2006, explained: “They didn’t take the safety valve, but we didn’t win either. Because to win meant we had to come in with some really good domestic policies that would allow the market to be given a clear signal about the slow transition needed and to give the market greater capacity to respond.” Laitner is now director of economic analysis at the American Council for an Energy-Efficient Economy.
Courting Bush, McCain, Bingaman
Proponents of the safety valve pushed on. As President Bush arrived in Washington, Pizer shifted to the White House Council of Economic Advisers, where he served as a fellow under Chairman Glenn Hubbard. “He had a significant insider role,” said Pomerance.
There, Pizer recommended Bush use a safety valve as he advanced a campaign pledge to regulate carbon dioxide emissions from power plants. Bush, however, soon backed away from his pledge.
Attention turned next to Sens. John McCain (R-Ariz.) and Joe Lieberman (I-Conn.), who emerged in the fall of 2001 as lead authors of an economy-wide bill to cap U.S. greenhouse gas emissions.
After he left the Bush administration for a job on the Columbia University faculty, Hubbard sent McCain a letter urging him to consider the safety valve in his climate legislation. He was joined by fellow Columbia colleague Joseph Stiglitz, a top Clinton administration economist who had also won the Nobel Prize with Spence.
“Our support for the safety valve stems from the underlying science and economics surrounding the problem of global climate change, and is something that virtually all economists — even two with as politically diverse views as ourselves — can agree upon,” they wrote in their 2003 letter. “The climate change problem is a marathon, not a sprint, and there is little environmental justification for heroic efforts to meet a short-term target.”
McCain, no fan of Hubbard, threw the brief in his waste basket.
But ideas are hard to kill. The safety valve idea emerged again in a widely publicized 2004 report from the bipartisan National Commission on Energy Policy. The commission, a collection of industry officials, politicians and environmentalists, was asked to offer solutions that could help end the stalemate over U.S. energy and environmental policy. Their study recommended Congress pass legislation with a cap-and-trade system and a safety valve that didn’t allow CO2 prices in the first year to go beyond $7 per ton.
Such a price “reflects a judgment about the political feasibility of establishing a federal framework for reducing greenhouse gas emissions in the near term,” the NCEP report said.
A year later, Bingaman, then the ranking member of the Senate Energy and Natural Resources Committee, floated draft legislation with the safety valve as a centerpiece. Last summer, Bingaman introduced a formal version of his bill with a trio of high-profile Republican cosponsors: Pennsylvania Sen. Arlen Specter and Alaska Sens. Ted Stevens and Lisa Murkowski.
The legislation captured attention because he had won over three GOP senators who previously had not supported mandatory limits on greenhouse gas emissions. Major labor groups and the chairmen and CEOs of PNM Resources, Exelon, American Electric Power and Duke Energy Corp. also appeared at Bingaman’s press conference when he introduced the bill.
‘The worst case is X’
Safety valve advocates base their argument on one of Weitzman’s principal theories: that a price mechanism is best when there’s uncertainty over environmental benefits. Global warming is a byproduct of greenhouse gas concentrations built up over decades and centuries, and any one year’s emissions won’t push the climate over the tipping point.
Also, they claim a price limit will guarantee the new U.S. climate program won’t lead to a volatile market in the short-term. They also like being able to tell cost-conscious senators and congressmen exactly what the bottom line is.
“Ph.D.s, all of them, can make very reasoned-sounding presentations that reach shockingly different conclusions,” said Jason Grumet, executive director of the National Commission on Energy Policy. “Legislators don’t have the ability to differentiate among those.”
If he’s asked the worst-case scenario for energy or coal prices, Grumet said he can turn to the safety valve for a simple answer. “We didn’t have to start our response with, ‘Well, we think’ or ‘Our models project.’ We could simply say, ‘The worst case is X.'”
Labor groups, including the AFL-CIO, see the safety valve as a must have, though they’ve recently signalled a willingness to negotiate. So too do many industries.
“The way [Bingaman’s] come at it is the only way you can do this,” said Fred Palmer, senior vice president for governmental affairs at Peabody Coal. “There’s a big group in Congress who thinks we’re paying enough for energy now.”
“If you think that cap-and-trade is the best way to go, then the safety valve is your insurance policy,” said Aldy. “The reason you buy insurance is because the future is uncertain. We want to protect against the things we can’t currently imagine. This is a way to do it.”
Weitzman, who moved to Harvard in 1990, said he would prefer Congress impose a carbon tax of $50 per ton on the fossil-fuel content of energy sources.
But he also acknowledged that the political reality suggests lawmakers will go with cap-and-trade legislation. He’s open to that too, but said it must include a safety valve. “A very strong safety valve is equal to a tax,” he said. “If you don’t allow the price to vary very much, it’s the equivalent to taxing it.”
Counterattacks
Opponents say a safety valve would undermine the very nature of a cap-and-trade program. “Those who have taken global warming seriously have never supported something like a safety valve,” said Romm, now a senior fellow at the liberal Center for American Progress.
Indeed, the safety valve’s critics have lined up a number of political players to reject the idea, including Clinton, Gore, 2004 Democratic presidential nominee Sen. John Kerry and Sen. Barbara Boxer (D-Calif.), the chairwoman of the Senate Environment and Public Works Committee.
“There are a number of no-gos and poison pills, and safety valve would be among those,” explains Brent Blackwelder, president of Friends of the Earth. He added that any effort to add a safety valve would lead sponsors of the Lieberman-Warner bill to pull it off the floor.
Jonathan Pershing, director of the Climate, Energy and Pollution Program at the World Resources Institute, cautioned that none of the major U.S. environmental trading programs — for nitrogen oxides and sulfur dioxide — include a safety valve. The European system for greenhouse gases also avoided it.
Pershing said the safety valve doesn’t fit with the growing scientific warnings associated with global warming that call for near-term actions.
Europeans are weighing in too. “You can also pretty much forget about a global carbon market,” said Damien Meadows, a top climate official from the European Commission. “If Europe linked to America, and the price cap was reached, and we were just sending money across to the U.S. Treasury, that would be a major issue just as if American companies were paying Europe to do nothing because you reached our price cap.”
Meadows added, “Nobody has actually explained to me how that is overcome. And when people tend to think about, they tend to go ‘Oh yeah, I see.'”
Several proponents of the safety valve envision Europe adopting a cost ceiling to match up with the United States. “A cap sends the message that you really are prepared to wimp out of this,” counters Romm. “It sends the message to all the businesses that if they just whine enough that you can stop whatever it is you’re doing.”
A ‘Fed’ compromise?
A bill from Lieberman and Sen. John Warner headed for the Senate floor doesn’t include Bingaman’s safety valve. But it has several provisions designed to dampen the costs to the economy. One piece supported by environmental groups would allow companies to bank away extra emission credits they haven’t used. Another lets them borrow against future years, with interest.
Duke University’s Nicholas School for Environmental Policy Solutions also came up with a program added to the Lieberman-Warner bill that establishes a Carbon Market Efficiency Board. It would monitor the new U.S. climate market and release carbon credits when the cost gets too high, much as the Federal Reserve uses its powers to influence interest rates.
Under the Lieberman-Warner bill, the president appoints the board’s seven members to 14-year terms. Tim Profeta, a former Lieberman aide and the Duke school’s director, acknowledged that the concept falls distinctly on one end of Weitzman’s equation. “I think the Fed itself is a middle ground,” he said.
Harvard economist Robert Stavins disputes any correlation between this plan and the Federal Reserve, which, he notes, carries “a tradition of political independence,” a research board staffed by 200 Ph.D.s in Washington and reserve banks across the country.
Sponsors of the Lieberman-Warner bill are now on the hunt for additional compromises — and House members are only beginning to grasp this slippery subject. To find a middle ground will require movement from all sides. Grumet thinks that’s not impossible. “I’ve never seen a number in Congress that’s non-negotiable,” he said.
Photo: Monceau / Flickr.
Presidential Candidates on Carbon Taxes
During last night’s Democratic Presidential Candidates Debate in New Hampshire, Charles Gibson, ABC-TV News Anchor, noted that none of the candidates on the stage favor a carbon tax and asked whether it’s a bad idea or just too politically unpalatable. No one would ‘fess up to lacking political courage, courage previously demonstrated by Senator Dodd (no longer a candidate), Senator Gravel (not present at the debate), and Mayor Bloomberg (possible candidate). Governor Richardson criticized a carbon tax for passing costs on to consumers and disingenuously implied the same isn’t true for cap-and-trade, Senator Obama was intellectually honest and corrected Governor Richardson. Senator Clinton avoided the question in her response and Senator Edwards didn’t say anything.
MR. GIBSON: All right. Let me turn to something else.
Reversing — you invoked the name of Al Gore a few moments ago.
Reversing or slowing global warming is going to take sacrifice. I’m
sort of sorry Chris Dodd isn’t here because he’s talked a lot about a
carbon tax in this election. Al Gore favors a carbon tax. None of
you have favored a carbon tax. Is it a bad idea? Or is it just so
politically unpalatable that you guys don’t want to propose it?GOV. RICHARDSON: It’s — can I answer? You know, I was Energy
secretary. It’s a bad idea because when you have a carbon tax, first
of all, it’s not a mandate. What you want is a mandate on polluters,
on coal companies, on — on — on those that pollute to reduce
greenhouse gas emissions by a certain target — under my plan, 30
percent by the year 2020, 80 percent by the year 2040. It takes
international leadership.The better way to do it is through a cap-and-trade system, which
is a mandate. Furthermore, a carbon tax, that’s passed on to
consumers. That’s passed on to the average person. That’s money you
take out of the economy. So it’s a bad idea. Cap-and-trade is
mandate, but it’s also going to take presidential leadership. It’s
going to take all of us here, every American, you know, to think more
efficiently about how we transport ourself, what vehicles we purchase,
appliances in our homes.It’s going to take a transportation policy that doesn’t just build
more highways. We have to have commuter rail, light rail, open
spaces. We got to have — we got to have land use policies where we
improve people’s quality of life.MR. SPRADLING: Senator Obama?
SEN. OBAMA: Well, I agree with Bill, that I think cap-and-trade
system makes more sense. That’s why I proposed it because you can be
very specific in terms of how we’re going to reduce the greenhouse
gases by a particular l level. Now what you have to do is you have to
combine it with a hundred percent auction. In other words, every
little bit of pollution that is sent up into the atmosphere that
polluter is getting charged for it. Not only does that ensure that
they don’t game the system, but you’re also generating billions of
dollars that can be invested in solar and wind and biodiesel.I do disagree with one thing, though, that Bill said, and that is
that on a carbon tax the cost will be passed onto consumers and that
won’t happen with a cap-and-trade. Under a cap-and-trade there will
be a cost. Plants are going to have to retrofit their equipment, and
that’s going to cost money, and they will pass it onto consumers. We
have an obligation to use some of the money that we generate to shield
low-income and fixed-income individuals from high electricity prices,
but we’re also going to have to ask the American people to change how
they use energy. Everybody’s going to have to change their light
bulbs. Everybody’s going to have to insulate their homes. And that
will be a sacrifice, but it’s a sacrifice that we can meet. Over the
long term it will generate jobs and businesses and can drive our
economy for many decades.SEN. CLINTON: Charlie, let me make a connection here that I
think is really important.I think the economy is slipping toward a recession — the
unemployment figure on Friday hitting 5 percent, the $100 a barrel oil
that we also hit this week, the fall of the dollar.There’s a lot of pressures on middle-class families, and the kind of
costs that they have to keep up with have all gone up astronomically.
I mean, you know, the energy costs of the typical family in New
Hampshire since George Bush has been president have tripled, and
that’s far beyond what — the cost of the tax cuts that they got from
George Bush.So what we’ve got to do is use energy as an opportunity to
actually jump-start economic recovery. We need to quickly move toward
energy efficiency. We should require the utilities to begin to work
for energy efficiency and conservation, costs that will be shared and
decrease the pressure on families. We need a weatherization and low-
income heating emergency program that is out there now helping
families in New Hampshire and elsewhere to cover their costs. And we
need to look at how doing what is right about energy is not only good
for our security and good for the fight against global warming, but it
will be essential in dealing with the economic challenges that we
face.
Imagine Mayor Bloomberg had been on the stage and had repeated what he said at the United States Conference of Mayors in November:
Both cap-and-trade and pollution pricing present their own challenges —
but there is an important difference between the two. The primary flaw
of cap-and-trade is economic — price uncertainty. While the primary
flaw of a pollution fee is political, the difficulty of getting it
through Congress. But I’ve never been one to let short-term politics
get in the way of long-term success. The job of an elected official is
to lead – not to stick a finger in the wind. It’s to stand up and say
what we believe — no matter what the polls say is popular or what the
pundits say is political suicide.
Or, Senator Dodd might have repeated his earlier statement that "The American people handle the truth very, very well. What they don’t handle well is people in public life promising results without talking about what has to be done to get those results." Senator Gravel might have repeated his earlier response to the statement that some people say supporting a carbon tax would be political suicide, "I back it in any case."
Political courage is hard to find in a presidential campaign. Fortunately, the real decisions on how to address climate change will likely be made after the November elections when Congress and the new Administration will be able to focus more on economics and good policy.
Gore Affirms Support for Carbon Tax
Here’s how Greenwire led its story on former Vice-President Al Gore’s appearance this morning before the House Committee on Energy and Commerce:
In a historic hearing appearance today before two House subcommittees, former Vice President Al Gore urged Congress to immediately freeze U.S. greenhouse gas emissions and reduce them 90 percent by mid-century.
Gore also called on lawmakers to tax the carbon content of fuels as a way to put the global warming issue before Americans.
"I fully understand that this is considered politically impossible, but part of our challenge is to expand the limits of what is possible,"
Gore said.
Gore also suggested that the United States push for the next global warming treaty to begin in 2010, two years before the expiration of the Kyoto Protocol.
By using 2010 as a start point for the next treaty, the next U.S. president could "use his political chits" to get the country in an "all-out sprint" to reduce its own emissions.
Congress should also set up a "carbon neutral" federal mortgage company to support "green" homes, ban sales of incandescent light bulbs and impose a moratorium on new coal-fired power plants built without the technology to capture and sequester carbon dioxide.
Gore’s appearance before the House Energy and Commerce and Science and Technology subcommittees drew standing-room-only crowds. It also filled several overflow rooms to
watch the testimony of the Tennessee Democrat.In a 40-minute opening statement, Gore described what he said is a budding political movement for new climate change policies. He presented 516,000 online signatures he had gathered on his Web site and touted 100 new contacts per second in the last few days since soliciting comments in anticipation of his House testimony.
"This is building, and it’s building in both parties," Gore said.
Gristmill’s David Roberts has a handy summary of Gore’s 10-point legislative proposal here. Gore’s #2: Start a long-term tax shift to reduce payroll taxes and increase taxes on CO2 emissions. His #3: Put aside a portion of carbon tax revenues to help low-income people make the transition. (#1: An immediate "carbon freeze" that would cap U.S. CO2 emissions at current levels, followed by a program to generate 90% reductions by 2050.)
Small world dept: Not so many years ago, geophysicist grad student Kevin Vranes and I were part of an intrepid band of New Yorkers marking sites where pedestrians and cyclists were run over by car drivers, as part of a campaign against vehicular dominance of the streets. Now we’re both in the thick (?) of the climate debate. Kevin has published a terrific account of reactions to Gore’s testimony today before the Senate Environment & Public Works Committee, in the Colorado University Science blog Prometheus. Note particularly his recitation of the keen interest in carbon pricing and taxing shown by Montana Democrat Max Baucus and New York Democrat Hillary Clinton.
My one correction to Kevin’s valuable report: Keivn, this may have been the first time you heard Gore urge a tax on carbon emissions, but the former V-P has been calling for a carbon tax (with a tax-shift out of payroll taxes) for some time. See details here.
Photo: flickr / Oscar H Mataquin
War, oil, and carbon taxes: A primer
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:
- Is the backlash against high pump prices an argument against pursuing carbon taxes?
- How big a hit are U.S. consumers taking from the higher fuel prices?
- Is demand for gasoline sensitive to the price at the pump? If so, how much?
- 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.
The wealthiest U.S. household quintile spends 3.3 times as much on gasoline as the poorest. So dividing the revenue pie equally among all households yields a big net plus to lower-income families.
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.
Imagine the benefits from impounding vehicles like these for the duration of the Ukraine War — or the climate crisis!
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:
- 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.
- U.S. gasoline demand isn’t entirely price-inelastic, though it is nearly so in the immediate (short) run.
- 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.
- 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.
I produced this U.S. oil-saving plan in early 2002, hoping to rally post-9/11 public opinion to slash U.S. oil dependence.
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.
Pages 1 & 2 from “Ending the Oil Age.” Link to the report is in the last text paragraph, above.