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Congestion pricing, coming soon to New York City, could bode well for carbon-taxing.

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Externality pricing is coming to New York City in a big, barrier-busting form known as congestion pricing. Judging from how it’s unfolding, it might just be bold enough to give a much-needed boost to the cause of U.S. carbon pricing.

In a long-awaited step, New York’s Metropolitan Transportation Authority this week unveiled its prospective tolls to drive a car or truck into Manhattan’s central business district. Barring a last-minute reversal, the Western hemisphere’s first congestion pricing program, and the world’s biggest by far in terms of revenue, will begin next June, just six months from now.

NY Gov. Kathy Hochul (top) and CTC director Charles Komanoff (below) speaking at Dec. 5 Union Square rally celebrating the march toward congestion pricing in NYC.

The plan took half-a-century to legislate and another four-and-a-half years to flesh out, culminating, for now, in its formal approval by the MTA board on Wednesday. Autos will be charged $15 to drive into Manhattan south of 60th Street between 5am-9pm weekdays and 9am-9pm weekends and holidays. Night-time tolls will be 75 percent lower, at $3.75. Trucks will pay more than cars, and for-hire vehicle trips that touch any part of the 8-square-mile congestion zone will be surcharged $1.25 (for yellow cabs) and $2.50 (for “ride-hail” vehicles, largely Ubers). Peak-period car trips to the zone via tunnels under the Hudson and East Rivers, which already pay double-digit round-trip tolls, will get $5 off, but other exemptions or discounts will be few except for low-income residents of the zone and commuters to it. (Many details here, by the author; and here, by the MTA’s toll-setting panel.)

The 2019 state legislation authorizing the tolls requires that they generate $1 billion a year net of administrative costs — a revenue stream sufficient to bond $15 billion in transit investments. Eighty percent of that, $12 billion, is earmarked for subway improvements such as station elevators to increase accessibility and fully digital signals to allow more frequent train service; the other $3 billion will be invested in expanding commuter rail service between the suburbs and Manhattan.

[Click here to watch/hear Gov. Hochul’s remarks depicted above. Click here for Komanoff’s.]

Revenue Most Visible

The billion-dollar a year take from New York congestion pricing puts it in the same league as the Northeast states’ Regional Greenhouse Gas Initiative, which currently reaps $1.2 billion a year from sales of carbon emission permits for burning fossil fuels to make electricity. Yet “RGGI” is largely invisible to the public. So too are California’s economy-wide carbon cap-and-trade program, which started in 2013, and British Columbia’s 2008 carbon tax as well as subsequent cap-and-trade schemes elsewhere in Canada, .

Those other mechanisms rest on what former CTC staffer James Handley habitually derided as “hide the price” subterfuges. Congestion pricing, in contrast, hides nothing. Motorists know full well what they’ll soon have to pay to drive into the nation’s most gridlocked (and transit-rich) district. True, the surcharges on for-vehicle trips can be tricky to track — they add to rather than replace incumbent FHV surcharges of $2.50 and $2.75 for “taxi zone” trips in yellows and ride-hails, respectively. But congestion pricing’s main event is the fees for private car trips.

And “main event” is putting it mildly. Though the $15 peak car toll is many times less than the socially optimal toll (per Paul Krugman, whose July encomium to congestion program relied indirectly on my traffic-cost modeling) or the congestion costs imposed by a single car trip, which is nearly the same thing, it’s still a gut-punch for diehard drivers. Not only that, imposing a hefty price on car travel to capture externality costs rather than merely to pay for infrastructure provision is, let us say, deliciously transgressive in the USA. Kind of like taxing carbon emissions.

The point being: successfully implementing congestion pricing in New York — not simply putting it in place but having it deliver tangible benefits like more-reliable travel, more-livable streets and re-invigorated public transportation — conceivably could burnish carbon pricing not just in New York but nationwide.

Enacting Carbon Taxes Remains Devilishly Difficult

Let’s be clear, though. As if getting New York congestion pricing within inches of the goal line hasn’t been hard enough, enacting a national, i.e., federal carbon tax worthy of the name — one that hits triple digits within a half-dozen years or less — will be devilishly more difficult. Consider these differences between New York congestion pricing and national carbon taxing:

    1. The economic incidence of NY congestion pricing is far more income-progressive than national carbon pricing. A bulwark of CP advocacy here has been unstinting support from the Community Service Society — the city’s and nation’s oldest antipoverty NGO. It’s hard to picture comparable support for nationwide carbon pricing. Not even “dividending” carbon revenues, which CTC strongly supports, can guarantee that millions of U.S. households won’t pay more in higher fuel costs than they’ll get back in monthly carbon dividends. Inevitably and unfortunately, some will slip through the dividend’s safety net, allowing opponents to cast even the most judicious revenue treatment for carbon taxing as insufficient to protect the poor.
    2. NY congestion pricing comes with a natural route for managing the congestion revenues: investing them in long-term mass transit improvements. It was this facet, more than the promise of lessened auto traffic, that brought the city’s rich tapestry of transit advocates into the fore of the congestion pricing campaign. Even motorists — some of them, anyway — grasp improved transit’s value to them as a means of dissuading others to invade “their” road space. National carbon pricing has no such obvious path for distributing or investing its revenues. Sure, spending carbon revenues on renewables and efficiency, particularly in historically disadvantaged communities, has a nice ring, but in practice there’s no clear carbon revenue spending path that won’t disaffect vast numbers of stakeholders. Now factor in the orders-of-magnitude difference in annual dollars — a billion or so in the case of NY congestion pricing vs. half-a-trillion for a comprehensive triple-digit U.S. carbon tax. Talk about a donnybrook gap!
    3. America’s geographic vastness and cultural separateness make it nearly impossible for citizens to consistently find common ground, as evidenced by our red-vs.-blue and urban-vs.-rural polarization. Even as New York City’s sense of conjoined fate has frayed somewhat, many residents still manage to cultivate a sense of connectedness to each other. Nationally, that ship has sailed. Woody Guthrie’s “This Land Is Your Land” anthem is 80 years old. Fond hopes from the 1990s or early 2000s that combating climate change might re-invigorate Americans’ shared humanity seem almost as distant.

Antidotes

To these three difficulties we have three antidotes.

Over the prior decade, the wealthiest U.S. household quintile spent 3.3 times as much on gasoline as the poorest — evidence of the power of carbon dividends to more than offset the natural regressivity of higher energy prices.

The first is the power of carbon dividends. Even if they can’t keep whole every single low-income U.S. household — there are, after all, 65 million below-median-income families, each with its own consumption profile — the vast majority of those households will reap more in dividends than they’ll pay with the carbon tax. Not just that, the dividend approach bypasses political fights over where and how to invest the revenues.

A second possible antidote is the exigency of the climate crisis itself. Unlike NYC traffic congestion or failing transit, which public policies like congestion pricing can vanquish going forward, climate collapse can’t be reversed. This ineluctable fact could, or should, motivate climate advocates to re-evaluate their largely ideological objections to robust carbon pricing (which we discuss elsewhere in terms of climate justice campaigners and self-identified progressives). Given that people of color, whether in the U.S. or the Global South, are disproportionately vulnerable to climate chaos, hope remains that carbon-pricing opponents may reconsider their antipathy to the most efficacious policy for slashing emissions and actually protecting the populations they profess to care about.

The third, as always is organizing. Carbon-taxing proponents need to keep up the pressure. We also need to expand our tent, as we wrote about last month in Gainsharing: Carbon Taxes Can Put Clean Energy Back in the Black. We’ll have more to say soon on that score.

Gainsharing: Carbon Taxes Can Put Clean Energy Back in the Black

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Note: This post distills and extends ideas from our Nov. 1 post, The Carbon-Tax Nimby Cure.

From the East Coast to Idaho’s high desert, big green-energy investments are foundering.

Composite of (top) first U.S. SMR complex (NuScale facility, artist’s depiction) and (below) offshore wind farm (Orsted’s UK Hornsea facility). Neither was in line for more than token revenues tied to displaced carbon emissions. Both have been cancelled.

Just in the past week, Danish wind giant Orsted scuttled the 2,248-megawatt Ocean Wind farm it was developing off New Jersey’s Atlantic coast, while NuScale scrapped its planned 462-MW complex of six 77-MW small modular reactors (SMRs) near Idaho Falls.

Both ventures were viewed as door-openers to new forms of large-scale U.S. carbon-free green power. They would have contributed mightily to decarbonizing their respective grids, taking the place of fossil fuel electricity now spewing nearly 4 million metric tons of carbon dioxide each year.

Their demise, along with dimming prospects for Equinor’s 2,076-MW Empire Wind farm off Long Island, NY, suggest that the vaunted crossover point at which big green-energy investments will come seamlessly to fruition fast and hard enough to rapidly decarbonize our grids is receding.

The 1983 title denoted “hard energy” facilities like giant power stations and LNG terminals. Nowadays it also seems apt for big green-energy projects.

The causes are no mystery: supply bottlenecks, spiraling materials costs, 40-year-high interest rates, Nimby obstruction. Not all of these will necessarily persist, but suddenly the combination looks daunting. Big energy projects, once derided as “brittle” by energy guru Amory Lovins, are rife with negative synergies. Nimbys stretch project schedules and impose punishing interest costs, particularly on big wind farms, a phenomenon we wrote about a week ago in The Carbon-Tax Nimby Cure.

Alas, Joe Biden’s Inflation Reduction Act is not a panacea. IRA incentives primarily lift EV’s, rooftop solar, heat pumps, batteries and factories. By themselves they’re not going to refloat stalled clean power projects. The big push will have to come from somewhere else.

What a Robust Carbon Price Could Do for Green Energy

A robust carbon price could do the trick. Not a token price like RGGI’s $15, which is the per-metric-ton (“tonne”) of CO2 value of the 4Q 2023 permit price in the northeast US Regional Greenhouse Gas Initiative electricity generation cap-and-trade program; but $50 or more per tonne of carbon dioxide, preferably $100.

I’ve been calculating how much profit a robust carbon price could inject into clean-energy bottom lines. The numbers are so astounding that I checked and rechecked them. Here’s one: A $100/tonne carbon price in NY would allow Empire Wind to charge an additional $200 million or more each year for its output. How? Because the tax would raise the “bid price” for natural gas-generated electricity, the dominant power source and thus the price-setter on the downstate grid by so much — $30 to $35 per MWh, I estimate — that Empire Wind’s 7.25 million MWh’s a year could extract an additional $240 million in its power purchase agreement with the NY grid operator.

Lots to see here. The dollar figures, including the $/MWh bottom lines, are derived off-screen. Added revenues will be less if gas generators lower their grid prices somewhat, but will be more if the methane fee enacted as part of the 2022 IRA comes into play.

Same goes for NuScale. I estimate that its Idaho SMRs could command an additional $100 million a year (less than for Empire Wind because the project is smaller and not all of its output will replace fossil fuels). This additional value equates to $29 per MWh — nearly the same, coincidentally, as the $31/MWh climb in costs since 2021 that triggered NuScale’s cancellation, according to a report by the anti-nuclear Institute for Energy Economics and Financial Analysis.

These added payments to clean-energy developers are not “subsidies.” They arise by slashing ongoing subsidies now enjoyed by fossil fuel providers and processors — in this case the methane-gas extractors and the electricity generators that burn the fuel — by subjecting these fuels to carbon pricing. The added payments will come about as the carbon price forces the gas generators to raise their sale price to the grid (to recoup their higher price to purchase the gas), which then creates room for Empire (or NuScale) to raise its prices.

Every cent of the carbon tax revenues will remain fully available for public purposes, whether to support low-income ratepayers, or invest in more clean energy or community remediation, or, our preference at CTC, as “dividend” checks to households. None of it needs to be earmarked to Empire or NuScale for them or other clean-power generators to rebuild their profit margins. The gainsharing comes about through pricing carbon emissions, not disbursing the carbon revenues.

Adios, Nimbys?

The Not In My Back Yard crowd wasn’t an apparent factor in NuScale’s downfall. (“Regulatory creep” was, but that’s a story for another time, not to mention one I dissected 40 years ago for the peer-reviewed journal Nuclear Safety.) But they certainly were for Ocean Wind in NJ and will be in NY if Empire Wind goes down the drain.

But here’s the thing: Not only would the added revenue allowed by the carbon price help return Empire Wind to the black. It would give Equinor, the developer, the wherewithal to spread so much largesse among the residents of Long Beach, LI (my hometown!) that they could subdue the Nimbys who have been able to hold up permitting by spreading scare stories about the routing of the project’s power cables underground. Nimby-ism solved, not by suasion (a fool’s errand) but by motivating the masses in the middle who evidently require more tangible inducements than saving the climate (or their beaches or homes).

Let’s Think Big

Ocean Wind, Empire Wind and NuScale are just a few examples of carbon-free projects that could again pencil out with robust carbon pricing. The question remains, how do we get there?

The point of this new analysis isn’t so much to tie clean energy to carbon pricing, but to enlist the political power and prestige of clean-energy entrepreneurs and developers on the side of carbon-tax advocacy.

As we noted in our previous (Nov. 1) post, during headier carbon-pricing times (2007 to 2011) the Carbon Tax Center attempted, alongside allies like Friends of the Earth, the Friends Committee on National Legislation, and Citizens Climate Lobby, to induce the American Wind Energy Association, the Solar Energy Industry Association and other green-tech trade groups to join us in advocating carbon taxing. We put out similar feelers to the Nuclear Energy Institute and the American Nuclear Energy Council. Getting the U.S. nuke lobby behind carbon taxing should have been a no-brainer, given that carbon taxes that monetized the climate value of nuclear power plants’ combustion-free electricity could have supplied mega-dollars to keep extant reactors solvent.

2010 redux: Equation at left signifying “Renewable Energy cheaper than Fossil Fuels” was a cleantech meme. Button on right, created by then-CTC senior policy analyst James Handley, was less prevalent. Time to meld the two?

No dice. We weren’t granted even one conversation with the nuclear folks. The wind and solar people, for their part, insisted that unending cost reductions through increased scale and efficiency, along with green power’s inherent magical appeal, would propel them past any obstacle. Why besmirch our Randian aura with energy taxes, they seemed to say, when our tech is going to usher in energy abundance and spare earth’s climate?

Things look different now. Big, carbon-free power ventures — the ones that everyone from governors and ambassadors to scientists and schoolkids are counting on to get us off fossil fuels — are beset by troubles: financial, logistical, cultural.

Without genuine carbon pricing that accords clean energy the economic rewards to which it’s entitled, too many large-scale green energy projects are going to come up short. As we asked in that earlier post: Will clean-power developers look at this week’s NJ and Idaho losses, among others, and decide that they need a carbon tax every bit as much as the climate does?

The Carbon-Tax NIMBY Cure

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NY Gov. Kathy Hochul last month vetoed a bill that could have expedited a huge wind farm in the Atlantic Ocean off Long Island. Her veto imperils not just the project, called Empire Wind, but New York State’s hopes to decarbonize its electric grid and validate its claim to national climate leadership.

I’ll argue here that a state or federal carbon price — one more substantial than the relative pittance of $15 per ton now being charged for electricity sector emissions under the RGGI compact — could have helped the developers beat back the NIMBYs whose rabble-rousing helped force Hochul’s hand. Let’s review the project and then explain how its difficulties are connected to the absence of robust carbon pricing.

Empire Wind Will Be Large

There will be 138 turbines, identical and gigantic. At 387 feet, each turbine blade will be the length of a football field including the end zones. The distance from water surface to blade tip at full height will be 886 feet, roughly the extent of two celebrated Manhattan towers that a century ago were the world’s tallest buildings: the 792-foot Woolworth Building (#1 from 1913 to 1930) and the 1,046-foot Chrysler Building (1930-1931). An even funner fact, from the developer’s spec sheet, is this: just one complete rotation by one turbine’s three blades will “power a New York home for about 1.5 days.”

The anticipated annual electrical generation from Empire Wind 1 and 2 combined is 7.25 TWh (or, if it’s easier, 7,250,000,000 kilowatt-hours),assuming a 40% yearly capacity factor. Here are four alternative ways of visualizing the significance of that output:

  • Empire Wind’s 7.25 TWh is half again as great (i.e., 1.5x as large) as the entire production by New York State wind turbines in 2022 (that figure was 4.8 TWh);
  • 7.25 TWh is 5 to 6 percent as great as all electricity generated from all state sources in 2022 (130.5 TWh);
  • 7.25 TWh is one-sixtieth (1/60) as much as all U.S. wind-generated electricity last year (435 TWh), a figure that itself constituted a tenth of U.S. electricity production from all sources;
  • 7.25 TWh is close to (12 percent less than) the average annual 2010-2019 output of either of the twin Indian Point reactors in suburban Westchester County that until their recent forced retirement were downstate New York’s lone large-scale source of carbon-free electricity. (The entire Indian Point station’s average annual output over its final decade, 2010-2019, was 16.5 TWh.)

Putting aside that last benchmark — which is intended as a reminder of the carbon disaster of shutting Indian Point (and a cautionary tale against shutting its West Coast doppelganger, Diablo Canyon) — Empire Wind looms large in New York state’s goal of attaining a 70 percent carbon-free grid in 2030.

The state’s 2022 carbon-free electricity share was just 48 to 49 percent, down from 60 percent in 2019, before Indian Point’s closure commenced. If Empire Wind’s output were available today, the statewide share would stand at 54 percent, indicating that this single (albeit two-part) project can close a quarter of the gap from the current clean percentage to the 2030 target.

Hochul and the NIMBYs

Along with infusing the grid with billions of clean kilowatt-hours, building and servicing Empire Wind 1 and 2 is expected to create 1,300 permanent onshore jobs — 300 to manufacture turbine components at the Port of Albany, and 1,000 in operation and maintenance at the South Brooklyn Marine Terminal, according to Equinor, the developer. These numbers, along with the clean electricity, ought to be catnip for any Democratic politician.

Why, then, did Hochul on Oct. 20 veto a bill that could have cleared the path for the Empire Wind 2 power cable to run under Long Beach and connect to the electric grid in Oceanside?

There’s no shortage of possible rationales. Long Island flipped from shaky blue to all red a year ago, as Democrats lost all four Congressional races and a number of state legislative seats while Hochul herself was outvoted there in her unnervingly close re-election. She may be seeking to preserve political capital for a possible renewed push to undo exclusionary zoning that that keeps housing in Nassau and Suffolk counties unaffordable for newcomers or those without generational wealth. Moreover, Empire Wind itself has faced financial headwinds due to supposed supply chain bottlenecks and spiraling financing costs, with the latter due in no small part to the regulatory delays.

Whatever the reasons, Hochul  went all NIMBY-friendly. Her veto message faulted Equinor for running roughshod over Long Beach residents (see pull quote at left) rather than calling out the obstructionists for teeing up a replay of 2012’s Superstorm Sandy that devastated the very communities that now are clamoring for the wind project to go away.

In her message, the governor ignored the tinfoil-hat essence of most anti-wind opposition, which one observer, a former New York City chief climate policy advisor, characterized as combining “propaganda from the fossil fuel industry, rumor mongering in local communities, and basic nimbyism.” As NY Focus helpfully reported in Long Island Politicians Claim Victory for Hochul Wind Power Veto, objections to the Empire Wind farm and cables run the gamut from shopworn (ocean views sullied by turbines 15 miles offshore) to debunked (health-harming electromagnetic radiation from the power cables) to chronologically impaired (“We’ve had a huge number of [dead] whales that are showing up on our beaches,” a state senator fretted, yet not even a single offshore wind turbine has begun operating on the Atlantic Coast).

Entire cable route through Long Beach is underground. Yet NIMBYs are holding hostage a not-quite-in-their-backyard project that would more than double NY wind power production. Incidentally, I was born and grew up in a house on Washington Blvd, just a few blocks past the left edge of the map. Equinor map adapted by CTC.

Hochul and her staff seem unaware that there is no placating NIMBYs, whether their sights are trained on giant offshore wind projects or small-bore items like transit-friendly higher-rise housing or bike lanes. To the naysayers, any palpable change in their way of life is either Armageddon in itself or a pathway to purgatory. The only way to deal with them is to give pro-development, pro-change forces the strength to vanquish the NIMBYs outright — which is where carbon pricing comes in.

Would You Like $240 Million in (Annual) Carbon Benefits With Your Order?

Offshore wind’s chief virtue — in some respects, its true raison d’être — is its ability to take the place of dirty, fossil-fuel electricity generation in the grid. This asset is particularly salient in the case of Empire Wind, insofar as the downstate New York grid, with only modest interconnections to greener grids upstate or elsewhere, obtains more than 90 percent of its annual electricity by burning methane (“natural”) gas.

As a result, nearly every kilowatt-hour from Empire Wind will directly displace a kWh from burning fracked gas. And though the 90% share will decline when the new Champlain-Hudson Power Express transmission line enters service, perhaps in 2026, nearly all of the “incremental,” hour-by-hour power production actually avoided by generation from Empire Wind will still be gas-fired when the project’s two parts come on line in 2028 and 2029.

Now picture a federal or state carbon tax — or “price” if you prefer. Set it at $100 per metric ton (“tonne”) of CO2, which is both a round number and the level the Carbon Tax Center has been advocating since our inception, to be reached after a ramp-up taking half-a-dozen years. Now apply the carbon tax to the CO2 emitted from one kWh generated by burning gas. You’ll find that the carbon tax associated with each such kilowatt-hour is 3.9 cents.

Calculations: 659 x 10^6 tonnes (CO2 emissions from 2022 U.S. gas-fired electricity) divided by 1.689 x 10^12 kWh (U.S. electricity generated with gas in 2022) multiplied by 10^4 ¢ charged per tonne yields 3.90¢/kWh.

Let’s bring that figure down to earth: With a $100/ton (okay, tonne) carbon tax, each gas-fired kWh in competition with Empire’s offshore wind would cost 3.9 cents more to generate than at present. (To keep the discussion simple, I’ve refrained from counting an additional tax on methane.) We trim that to 3.3¢/kWh because the Regional Greenhouse Gas Initiative (RGGI) already charges a carbon price on fuels used to generate electricity in New York and neighboring states; in the most recent (September) quarterly auction, that price reached $13.85 per short ton, equivalent to $15.25 per metric ton, which we deduct from our aspirational $100/tonne carbon price to avoid double-counting, reducing it by just over 15 percent.

The hypothetical 3.3¢/kWh additional carbon charge for gas-generated electricity (stemming from the $100 carbon price) multiplied by Empire Wind’s 7.25 TWh annual output yields $240 million per year. Those dollars represent a first estimate of the additional annual revenue Equinor could have sought in its 2018 and 2020 bids responding to NYSERDA’s solicitations to prospective developers of offshore wind projects. (See text box further below.) With a robust NY carbon price, in other words, Equinor’s Empire Wind venture would enjoy a far higher profit margin.

Offshore Wind’s Missing Carbon Price

Imagine what Equinor might have done with $240 million a year in additional Empire Wind revenue. It could have banked, say, half that amount to offset the price escalation and higher interest costs that this year lowered its prospective profit margins and compelled it to appeal to NY State to grant a higher price for its production. (Incidentally, the NY Public Service Commission’s Oct. 12 order denying Equinor’s petition seeking renegotiation of its power contract with NYSERDA provides a good capsule summary of NY state offshore wind activity; it can be found via this link; search for Cases 15-E-0302 and 18-E-0071.)

The other $120 million, or a good chunk of it, could have been used  — and might still be — to provide economic benefits to Long Beach and other communities that consider themselves “affected” by Empire Wind’s turbines or cables.

Empire Wind website paragraph about Taxes makes no mention of payments — voluntary or mandatory — to Long Beach and other communities.

As a thought-experiment, consider that $120 million distributed equally to Long Beach’s 11,700 households (assuming the city’s 35k population resides 3 per household) could provide recurring yearly dividends of around $10,000 per household, once the electricity began to flow. Perhaps more practical would be to set aside $75 million as a one-time payment to retire the so-called Haberman Judgment holding Long Beach financially responsible for blocking a proposed real-estate venture near the boardwalk and ocean beach several decades ago (see City of Long Beach 2023-2024 adopted budget, pages ii-iii).

Of course there are any number of other “improvements” that Long Beach, Island Park and Oceanside might elect to be funded by Equinor “payments in lieu of taxes.” I was surprised that Empire Wind’s online materials do not mention any such payments.

The idea is not to “win over” the NIMBYs — I consider that a fool’s errand — but to neutralize and politically overpower them by appealing to the larger community’s enlightened self-interest. Not so much the members of the Long Beach city council — who apparently (and astoundingly) went from 5-0 in favor of permitting the cable route to 0-5 between spring and fall of 2023 — but the citizenry that holds sway over them.

This isn’t my first time linking carbon pricing to big, hence potentially intrusive, green-energy projects. I struck that note in 2006, in Whither Wind, a long-form piece on wind and other green power for Orion magazine:

[I]if carbon fuels were taxed for their damage to the climate, wind power’s profit margins would widen, and surrounding communities could extract bigger tax revenues from wind farms. Then some of that bread upon the waters would indeed come back — in the form of a new high school, or land acquired for a nature preserve.

The urgency now is far greater. Today, as I was wrapping this post, the New York Times reported that the Danish offshore wind company Orsted canceled an equally large (2248 megawatts) wind farm, Ocean Wind 1 and 2, it was developing off New Jersey’s Atlantic coast. Orsted cited the same combination of faltering economics and local opposition (which of course weakens the economics further through delays) now besetting Equinor and Empire Wind. Note too that even though Empire Wind 1’s interconnection to the grid, also under the seabed but through Brooklyn, is not (now) threatened, the economics will almost certainly kill Part 1 if Empire Wind 2 through Long Beach goes down.

Long-time CTC followers will recall my standing frustration over wind and solar entrepreneurs’ lack of interest in pushing carbon pricing. Efficiency gains, cost reductions and the magical appeal of green power would carry them over any and every threshold, they imagined. Will today’s NJ offshore wind defeat and the one looming in NY be enough to convince clean-power developers that they need a carbon tax every bit as much as the climate does?

Grounding Helicopter Luxury

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Extinction Rebellion takes on heliports in Manhattan during a week of climate action.

This post, written by renowned eco-journalist Christopher Ketcham and commissioned by and published in Truthdig on Sept. 15, describes an action I helped organize and participated in, two days earlier. We repost it here, with permission, because it highlights a rare climate protest that targets fossil fuel “demand” rather than supply. And not just ordinary fuel usage but an egregiously selfish and exclusive one: helicopter travel. 

“Helicopters are a pestilence to New Yorkers and a rotten pinnacle of an economic system that places decadent pleasure over planetary survival,” I declaimed in the XR press release. True externality pricing would shut down the vast majority of helicopter transportation. Absent, or alongside that, last week’s direct action was an attention-getting way of connecting the climate crisis to luxury emissions.

    — Charles Komanoff, Sept. 20, 2023.

* * * * * * * *

The Extinction Rebellionists mustered south of the heliport on the west side of Manhattan at around 2 p.m., just as the sun emerged following a flurry of rain. It was hot when the crowd of 40 people moved as one to stop the howling machines based at Blade Lounge West, a commercial heliport on 30th Street along the Hudson River Greenway. The outsized carbon footprint of those who used the heliport was “obscene,” said the organizers. The afternoon’s goal was to make as much trouble for its operations as possible.

One of the organizers of the action, a 75-year-old energy economist named Charles Komanoff, was prepared to be arrested. He told me he had been feeling unsteady that morning, jittery and fearful, as he handed me his rain slicker and water bottle and backpack to hold.

Months earlier, he had explained his reasons for wanting to shut down helicopter traffic in his native city. “New Yorkers hate helicopters,” Komanoff wrote in an email to Extinction Rebellionists:

Tourist helicopters, Hamptons helicopters…. They hate the noise, the fumes… the arrogance, the power to pollute, the power to act as lords. I hate them too, for those reasons, plus this: helicopters epitomize luxury carbon. They are the essence of the consumption that must disappear *now* if we aim to protect Earth and preserve climate.

Now, Komanoff and his fellow Rebellionists picketed at the vehicle entry to the Blade Lounge West, which is owned and operated by Blade Air Mobility, Inc. They unfurled a banner that said LIFE OR DEATH, and waved XR flags that whipped in the wind, and one pushed a stroller with three baby dolls in it, with a note that read, “Will we have enough food to eat? Can crops survive the heat?” They chanted Helicopters, private planes, your emissions are insane. (They are also profitable: Blade Air Mobility’s $61 million in revenue in 2023 was up 71% on the year.)

Komanoff and I had written an editorial together in 2022 about the absolute need to kill luxury emissions as the stuff of gluttony and entitlement. “‘Keep it in the ground’ protesters confine their blockades to energy supply infrastructure and studiously ignore the demand half of the equation,” we wrote. “This has been a shortcoming of the climate movement for too long, as it passes up one opportunity after another to rouse millions against the class that, even more than the corporations of Big Carbon, perpetuates the climate crisis: the world’s wealthy.”

The protest unfolded in the genteel way of these things. There were cyclists and joggers on the greenway, and tourists walking, and in the glint of the sun off the rippling water, many passersby stopped and asked what was happening.  Two elderly women wanted to participate.  One of the women, 72-year-old Mireille Haboucha, an Egyptian, told the protesters, “We agree with your action. This is what we all need to do.” The friend with whom she was strolling, Barbara Schroder, 75, told me, “We had never thought about luxury emissions, but it makes sense to stop it.”

I asked a 29-year-old lawyer named Dominique why she was there. It was her first climate action, and she asked that her last name not be used. “I’m morally obligated,” she told me.  In that feeling of obligation there was great anger. “There are 30 million people in Pakistan homeless because of floods that happened there a year ago. Thirty million that are homeless because people like the assholes we are seeing today need to take helicopters.”

Dominique was reminded of Hannah Arendt’s observation, in “Eichmann in Jerusalem,” a book about the Nuremberg Trials, that complacency seemed to be the main evil which allowed the Holocaust to happen — the world, and especially Germans, just not caring enough to stop the Nazis. “Part of the moral obligation for me is that we are on the brink of, are already in, mass climate genocide,” she told me. “I do not want to be the modern-day equivalent of a complacent 1930s German.”

The night before, at an XR body blockade training event in Brooklyn, a 56-year-old retired schoolteacher told me that, on her farm in Wallkill, in the Hudson Valley, the entire oat crop had failed. First there was drought, in April, then flooding in June.  That was one of many reasons she was at the heliport. She’d been arrested seven times since 2019 for similar actions.

The helicopter traffic did not cease, although the protesters succeeded in blockading the entrance to the parking lot. The CEO of Blade Air Mobility, Rob Wiesenthal, a dapper little man who makes $11.9 million a year, seemed shocked that his poor heliport had been targeted. The executive stood and watched the protesters with a look of despair on his face.  A chopper came blasting in, touching down with a monstrous flatus sound and carrying with it the stink of jet fuel.  Then another and another arrived, their disgorged passengers forced to cut through the crowd of flag wavers and shouters of chants to waiting mammoth SUV taxis that were blocking road traffic because they couldn’t enter the parking lot. (Climate action should involve stopping the SUVs, too, I thought to myself.)

I screamed a question to Wiesenthal over the racket. He smiled and said he had nothing to say to the media on the record. His employees were enraged.  One of them got in a scuffle with a press photographer on hand for the event, trying to grab his camera, cursing and threatening him.  A scowling heliport attendant named Anthony Smith told me, “I called my boys from uptown and they’re gonna take care of this real quick. You’ll see.”

The skies cleared fully, and the sun blazed down, and the protesters knitted their sweaty brows in the heat. Still they picketed and chanted and sang and hurled slogans. A National Guard helicopter, enormous and looking like a black metal buzzard, swooped in, bathing us in poisonous fumes. “Those your boys?” I asked Smith.  “Oh yeah,” he said.  But the black chopper touched the tarmac for less than a minute, then powered up again and was gone in a fury of rotor wash and noise. More helicopters came, Hueys from JFK Airport ($225 one way) and Newark International ($245) and the Hamptons ($1,025).

After an hour and a half, 40 or so officers from the New York Police Department’s Strategic Response Group arrived bristling with zip ties. Warnings were issued to cease blocking the way, and some of the protesters — the green and yellow teams, as they were called — stepped aside. The red team, which included Komanoff, a 75-year-old woman named Alice, a 60-year-old woman named Heidi, a third woman, Shoshana, and two young men — stood firm, for their intent was to be arrested in symbolic revolt. The cops turned them around, zip-tied their wrists and off they went in a cramped police van. The protesters dispersed. Wiesenthal breathed relief. His faithful employees bumped fists.

What was accomplished? Morale-boosting, the fostering of solidarity and sense of unity of purpose; the building of a community, ready for more action. When the six arrestees were released from the 7th Precinct, they were smiling and proud, and a group of fellow protesters was waiting for them at a nearby restaurant and filled the place with wild applause as they entered. My thought was this crowd needs to gather on a daily basis at West 30th Street. Pain should be felt over and over at Blade Lounge West until its operations become untenable, until Mr. Wiesenthal’s despair is permanent. It’s either that, or what some in the movement say is the next needed step: monkeywrench the choppers and destroy them on the tarmac.

NYC Climate March: Unsettling but Inspiring

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Sunday’s March to End Fossil Fuels in midtown Manhattan was big, loud and vibrant. The organizers put the tally at 75,000. While that may have been over-generous, the march was far and away the largest U.S. climate assemblage in some time.

It was also an occasion to ponder the goals and tactics of the climate movement.

The customary signs and chants denouncing Big Oil and its funder banks were out in force. What felt new, and unsettling, was the vitriol directed at President Biden. Last year’s passage of the Inflation Reduction Act, with its promise to hasten the transition from fossil fuels by accelerating wind and solar and electrification, might as well have been an hallucination.

This photo by Sarah Blesener ran above the fold in the New York Times’ print edition the next day. The paper’s online caption caught the focus of the march: “Protest organizers used Sunday’s event to send a message to President Biden as he begins his push for re-election: Do more if you want our votes.”

Ganging Up On Joe

The signs and chants castigating the president flowed like a river. Biden: Declare a climate emergency … Cancel Willow … I didn’t vote for fires and floods.

Yikes. Whatever happened to the Inflation Reduction Act’s nearly half-a-trillion dollars worth of tax credits and other subsidies paying down the cost of renewable electricity from solar and wind farms while also cutting consumer costs to purchase electric vehicles, electric heat pumps, and home and commercial electric battery storage?

The intent of the IRA’s myriad and synergistic incentives isn’t just to grow the U.S. green manufacturing base with good-paying green jobs. It’s to displace fossil-fuel use by retiring petrol-fueled engines and furnaces and simultaneously “greening the grid” by speeding the rate at which wind and solar power usurp electricity generation from coal and methane gas.

As the IRA was snaking through Congress last August, energy analysts were scoping the potential carbon and methane reductions from those displacements, along with estimates of increased emissions from new federal oil and gas leasing that Biden committed to expedite to win the tie-breaking Yes vote from West Virginia Senator Joe Manchin. One leading think tank, Energy Innovation, concluded that “The bill’s clean energy measures will yield 24 times more emissions reductions than its fossil fuel provisions will increase emissions.” (The firm subsequently raised its 24-to-1 emissions ratio to 28-to-1.)

Seven months later, Biden held up his end of the deal, issuing a permit okaying ConocoPhillips’ $6 billion Willow oil-and-gas drilling venture on Alaska’s North Slope — and threw away the climate good will due him from the IRA. Never mind that the additional carbon emissions from the Biden-Willow “hydrocarbon bomb” will only negate a fraction of the emission reductions from his legislation’s clean electricity and end-use electrification, as I pointed out back in March. Even more poignantly, those additional emissions are more properly estimated to be close to zero. Why? Because what actually burns the carbon fuels and puts the CO2 into the atmosphere is fossil fuel consumption, not supply. If Biden had rejected Willow, the same supply would have been called forth from Nigeria, or Kuwait or some other oil region or state to fill U.S. cars, planes and trucks.

In other words, Willow or any new U.S. drilling activity is nearly irrelevant from a climate standpoint because, as we wrote then, “demand finds a way to create supply,” rather than the reverse.

As we marched, I asked a smattering of anti-Biden sign-holders if the president merited praise for the green energy unleashed by his IRA, rather than criticism for okaying Willow or the other contentious project, the Mountain Valley Pipeline through West Virginia. The typical response was No, we’re in a climate emergency. Any new fossil-fuel infrastructure is too much.

To be sure, trade-offs are hard to wrestle with even in calm moments, much less among a big crowd on the move. But the blank stares about the IRA and occasional flashes of venom against Biden were disquieting, nonetheless. The Times‘ headline for its print report on the march was all too accurate: “Fingers Pointed at President, Protesters Demand End to Fossil Fuels.” Left unsaid is whether protesting Biden climate bombs will seed electoral bombs in 2024, placing our democracy as well as climate in irredeemable peril.

Who’s Really Funding Fossil Fuels?

If the anti-Biden sentiment was novel, the anti-big banks rhetoric was old hat. Blaming the climate crisis on Big Oil and demanding that universities, pension funds and the like “divest” by dumping fossil fuel securities from their holdings, has been a staple of climate organizing for nearly a dozen years, as I decried a year-and-a-half ago, in Exxon doesn’t care if you divest. Neither does climate:

When the writer and climate activist Bill McKibben kicked off the [divestment] 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.

A climate marcher with Third Act helpfully displayed the biggest U.S. banks’ fossil-fuel financing over the past seven years.

That path has proven to be a dead-end, I concluded in my post. One piece of evidence was a simple graph showing that Exxon-Mobil’s share price had outperformed the stock market as a whole since the onset of the Covid pandemic. More evidence, if any were needed, was available in the wonderfully wonky signboard at left that was borne by one of yesterday’s marchers, a vibrant senior citizen affiliated with the McKibben-inspired Third Act.

The amounts that the four banks — Chase, Citi, Bank of America, and Wells Fargo — have funneled into fossil fuels since the start of 2016 sum to an impressive-seeming $1.27 trillion ($1,270,000,000,000). Yet over the same period, consumption of petroleum products by U.S. families and businesses earned the oil companies a revenue haul nearly three-and-a-half times as great: an estimated $4.29 trillion ($4,290,000,000,000).

[I calculated that figure from the average 19.9 million barrels per day of gasoline, diesel fuel, jet fuel and other petroleum products  kerosene and so forth consumed per day over the same seven years, 2016-2022. (See Energy Information Administration, Monthly Energy Review, Table 3.5 Petroleum Products Supplied by Type.) Factoring in (1) there are 42 gallons of petrol per barrel, (2) the seven years total 2,555 days (365 x 7), and 3) an average retail price per gallon sold of $2.00 — a conservative markdown from the actual $2.82 average retail price of gasoline over that period — yields $4.29 trillion.]

Who’s really funding fossil fuels? American households, businesses and institutions, locked into grotesque consumption levels that U.S. climate activists studiously ignore.

To be sure, my dollar comparison has apples-and-oranges elements. Only some of the $4 trillion or more in petrol sales is available for investment in exploration and other petroleum infrastructure. And other banks beyond the Big Four also fund oil investment. On the other hand, U.S. consumption of methane gas and coal fossil fuels now exceeds consumption of petroleum on a Btu basis by 20 percent, suggesting that total fossil fuel revenues over the past six years was probably in the vicinity of $8 billion rather than the $4.3 billion from petroleum products alone.

My point is that bank financing is a much weaker linchpin for creating new fossil fuel infrastructure than most climate activists suppose. What really makes fossil supply possible is the lock-in of consumption of fossil fuels themselves, in billions of routine purchases that, day in and day out, fork over many more dollars to the fossil fuel industry than do the banks.

(Owens was responding to a Cameron Murray, PhD, who was decrying the idea of asking Americans to take some responsibility for their personal carbon footprint.)

Or, as Darrell Owens, an analyst with CA YIMBY (Yes In My Back Yard), the pro-housing group that has spearheaded the recent revolution of expansionary zoning in California, put it recently on Twitter, “Oil drilling [and such] isn’t for fun, it’s in service of carbon intensive demand that can be stopped.” Stopped how? By undoing automobile dependence, incentivizing smaller vehicles, densifying suburbia, introducing congestion and road pricing, and of course, federal-level carbon taxing, as I detailed last year for The Nation magazine (The Climate Movement In Its Own Way).

Uprooting the Source: Carbon Consumption

Happily, some at Sunday’s march saw past Biden and the banks and critiqued the structures of consumption that enforce dependence on fossil fuels, whether directly at the gas pump or the furnace or stove, or indirectly in purchases of products whose manufacture and transportation entail massive quantities of fuel, or in inefficient or indulgent use of electricity, most of which is still made by burning coal or methane gas.

These included stalwarts from Citizens Climate Lobby, including an enthusiastic contingent from Pittsburgh as well as folks from across the Northeast; and individuals whose handcrafted signs called out U.S. car culture not only for its gasoline profligacy but for its stifling of human life and health.

Some marchers saw beyond Biden and bankers to demand enduring solutions: carbon fee-and-dividend and liberation from automobiles.

“Tax Pollution, Pay People” packs so much into four words, I said to the sign-holder, a CCL member from Pittsburgh,  who told me his name, which I failed to write down. When I told him mine, he nearly jumped out of his shoes and shouted it to his fellow CCL’ers as if I was Greta Thunberg and Steelers legend Franco Harris rolled into one.

I started to apologize for CTC’s relative quiescence over the past year or two and to explain that I’ve been consumed with helping get NYC’s congestion pricing plan across the goal line. He stopped me short, thanking me for CTC’s work and insisting that, together, we’ll win a nationwide price on carbon before it’s too late.

So there’s my take. Singling out Biden for attack felt excessive and worrisome, since any falloff in enthusiasm will crimp the chances of small-d democratic, climate-aware outcomes in the elections next year. Similarly, more than a decade’s worth of targeting Big Oil and the banks doesn’t appear to have moved the needle for effective climate policy. Going after “luxury carbon,” as Extinction Rebellion did in a small but resonant climate action last week that I helped organize, feels to me like a more empowering path, one that might capture both the populist moment and climate urgency in a single stroke.

But notwithstanding the mis-directions, it was uplifting to be amidst tens of thousands with a like mind: A better world is possible. A better world is necessary. I want a fossil-free president. Amen to that!

New York Times congestion-pricing table-setter bodes well for carbon taxing

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The New York Times yesterday published my op-ed, There’s Only One Way to Fix New York’s Traffic Gridlock, co-written with Columbia University climate economist Gernot Wagner.

Our essay is a meticulous and extensive (1,300 words) brief for making drivers feel the pocketbook costs of their vehicles’ traffic-jam causation, via the policy measure known as congestion pricing. In our telling, not only is this policy guaranteed to generate immense benefits for New Yorkers; as the title suggests, we declare it to be the only way to “free … drivers from the traffic snarls that pollute the air and crush the soul.”

From the Times’ home page, June 8, 2023.

The essay was nearly a month in the making and the product of extensive argument-shaping and fact-checking by the Times’ op-ed staff, bespeaking the paper’s commitment to presenting congestion pricing in a positive light. Its appearance broke the mold of the paper’s hesitant past coverage in two important respects:

1. It explicitly rests on the “comprehensive spreadsheet model” of New York traffic and transit I began developing in 2007 (coincidentally, the year I launched the Carbon Tax Center).

2. It let Gernot and me voice the inconvenient assertion that the regional transit agency charged with designing and administering congestion pricing — the Metropolitan Transportation Authority — “through a few fateful, faulty assumptions, underestimated drivers’ propensity to switch trips from cars to other transit options.” These flubs have tied congestion pricing advocates in knots, forcing us to rebut objections of environmental justice impacts that don’t stand careful scrutiny, although they understandably resonate with communities that historically have borne hugely disproportionate damages from highways, energy facilities and other polluting infrastructure.

It’s only a modest stretch to view the Times’ twin breaks with tradition as the Grey Lady’s version of Andrew Cuomo’s bombshell announcement in August 2017 that “congestion pricing is an idea whose time has come” — itself a rupture that set in motion passage of the state statute authorizing congestion pricing in March 2019.

They suggest that the Times may be lying in wait for the right political winds to let advocates of carbon pricing make a parallel case with respect to climate. Not that a carbon tax is “the only way to fix America’s carbon crisis” but, rather, that it’s a complementary policy tool to last year’s Inflation Reduction Act, and an essential one to ensure that green energy actually replaces rather than merely supplements use of fossil fuels.

For the benefit of non-subscribers blocked by the Times’ paywall, and also to enable comments as well as add a few graphics, we present Gernot’s and my op-ed in full.

— C.K., June 9, 2023

The plan to charge drivers to enter Manhattan south of 60th Street, which last month moved closer to federal approval, will deliver two notable gifts to New York and the region when it begins, perhaps as soon as next April.

The first is that congestion pricing will cut traffic not just within the so-called charging zone but on the hundreds of streets and highways that cars use to go to and from that zone. This reduction of almost two million miles traveled in the region each day will free many drivers from the traffic snarls that pollute the air and crush the soul.

Using a detailed benefit-cost analysis that assumes a pricing structure of $15 at peak times, $10 as traffic begins to thicken and $5 at off-peak times, we calculate that the value of those projected time savings to drivers and truckers amounts to nearly $3 billion a year, with time saved in the boroughs and counties surrounding Manhattan exceeding those on the island.

These estimates are based on a comprehensive spreadsheet model of the region’s traffic, developed by one of us (Mr. Komanoff). State officials used that model to write the statute authorizing congestion pricing, which the New York State Legislature passed in 2019.

The other gift will be the $1 billion a year in congestion pricing revenue that the Metropolitan Transportation Authority will use to secure $15 billion in bonds to pay for improvements to mass transit in the city. Those upgrades will reduce waiting times and onboard delays — and the precious time subway passengers lose as a result.

Either outcome would be a godsend. The combination has the potential to be transformational for New Yorkers.

Our op-ed rests on the benefits and costs summarized in the chart.

Why, then, do many people seem anxious about, if not downright opposed to, congestion pricing? Entitlement plays a part: Why should we suddenly be forced to pay for something that had been free? Another reason surely is disbelief. Many people don’t believe that the revenues — the $1 billion a year from drivers — will actually improve mass transit services. The M.T.A. is a money pit, people say.

They may have a point. But the subway, bus and commuter rail services that the M.T.A. operates are also a marvel and a necessity. After the pandemic lockdowns, the system still delivers 2.5 times as many people a day into the Manhattan core as cars and trucks do, though that is down from four times as many before Covid struck. Still, the M.T.A. must build and manage far more effectively. The same political will that got congestion pricing written into law must be marshaled to eliminate layers of consultants, to bring work rules into the 21st century and to make design-build contracting, in which the project designer and the contractor work together under one contract from the beginning, the rule.

People are also unconvinced that congestion pricing will, in fact, cut congestion. Urban gridlock has come to appear immutable in the United States, perhaps nowhere more so than in the Manhattan core, where travel speeds were averaging a maddening 7 miles per hour before the pandemic. Why should congestion pricing succeed where a century of other remedies — like widening roads to only then narrow them again — has failed?

This question is even more salient after the M.T.A.’s environmental study of congestion pricing, released last summer, which concluded that Manhattan traffic will diminish only because trips that now pass through the city’s center would divert around the island, possibly adding traffic and air pollution to parts of the Bronx, Staten Island, Nassau County on Long Island and Bergen County in New Jersey.

We believe that the M.T.A., through a few fateful, faulty assumptions, underestimated drivers’ propensity to switch trips from cars to other transit options. We don’t say this idly — our estimation is based on decades of studying traffic in and around Manhattan and on basic economic principles.

How much traffic will diminish will depend on the toll design selected by the civic leaders who make up the city-state Traffic Mobility Review Board. They’ll be aiming for the same sweet spot that London, Stockholm and Singapore have attained through their successful congestion pricing programs: 15 to 20 percent fewer car trips into the zone, a cut big enough to reduce the many negatives traffic brings and enough to reap the targeted $1 billion a year in revenues to improve the subways, buses and commuter rail systems. (New Jersey Transit rail and bus and PATH would not share in these revenues.)

The congestion charges have not been set. But the M.T.A.’s model and ours agree that if exemptions are kept to a minimum, it could be as little as $15 for a rush-hour trip into Midtown and $5 to $10 during off-peak hours for E-ZPass holders. (In  London, drivers pay 15 pounds during the day, or nearly $19.)

The benefits of congestion pricing — faster, less stressful travel above and below ground and safer, healthier streets and communities — don’t negate the distress of drivers who understandably don’t want to pay where they now drive free, but they assuredly eclipse it.

In addition to the nearly $3 billion worth of saved time for drivers, we estimate that the myriad other benefits add up to an additional $2.5 billion. Those benefits include fewer crashes, better health from cleaner air and more walking and biking, and time saved for transit riders, thanks to improvements enabled by the congestion pricing revenue. Subtracting the $1 billion drivers will pay to enter the congestion zone, the result will be over $4 billion in annual net benefits, or almost $12 million each day.

Moreover, only a small slice of area residents habitually drive into the Manhattan core. Very few are among the working poor, as the Community Service Society of New York, one of the nation’s oldest antipoverty organizations, found when it endorsed congestion pricing in 2019 and again last year. Many drivers, too, may come to feel less of a sting from paying the toll once they actually experience the less-snarled roads.

Schroon River in New York’s Adirondack region on May 12, photographed moments before Gernot called to suggest we pitch an op-ed pegged to the week-earlier removal of a key hold-up to congestion pricing. Our first draft began there.

Last month, the Federal Highway Administration tentatively approved an M.T.A. report that identified how to alleviate possible harm to disadvantaged communities. Now the public has until Monday to review it.

To opponents of the plan, we say:

The M.T.A. is responding to public concerns. To hasten federal approval, the agency has committed to toll discounts for frequent low-income drivers into the zone and also to encourage pollution reductions such as electrifying diesel-powered refrigeration trucks at the Hunts Point Market in the South Bronx and expanding New York City’s clean trucks voucher program to help pay to electrify diesel trucks elsewhere. These commitments followed public feedback on earlier versions of the plan.

Every car is causing congestion. Stalled highways and jammed streets aren’t just the fault of Uber or U.P.S. or bike lanes or public plazas. Everyone driving to or in New York’s central business district (except in the wee hours) adds to congestion. We estimate that right now, a single round trip by car from Sheepshead Bay in Brooklyn to Radio City Music Hall in Midtown during most of the day causes $100 to $200 worth of additional delay for everyone else. That makes a prospective $15 or even a $20 peak congestion toll a downright bargain in comparison.

Congestion pricing is the only durable antidote to persistent traffic congestion. The Columbia University economist and Nobel laureate William Vickrey demonstrated 60 years ago that there’s no way out of gridlock without making drivers pay for taking up limited street space. Otherwise, there will always be more car owners wanting to use the available space than there is space to accommodate them.
Drivers all over the city and well beyond stand to gain from this plan. Yes, it will be painful to pay for something that has been free. But it is even more painful to spend hours idling in traffic, knowing that a better path beckons.

Charles Komanoff is a transportation analyst in New York. Gernot Wagner is a climate economist at Columbia Business School.

For Long-Term NY Transit Funding, Look to a State Carbon Tax

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The New York City public affairs site Gotham Gazette today published my essay, For Long-Term MTA Funding, Look to a State Carbon Tax. I’ve cross-posted it here to allow comments and to bring it directly to the Carbon Tax Center’s readership.

 — C.K., May 4, 2023

That huge sigh of relief from New York City mass transit advocates last weekend was for the state budget handshake to tack more than a billion additional dollars a year onto a key MTA funding stream, the Payroll Mobility Tax. According to both my calculations and an announcement from Gov. Kathy Hochul, the agreed-to 75% rise in the tax rate on employee salaries paid by businesses in the five boroughs will add $1.1 billion to the PMT’s ongoing annual $1.8 billion take.

(The numbers prorate imperfectly because the rise in the tax rate, to 60/100 of one percent, applies only in the city; the rate in the seven suburban MTA counties remains 34/100 of one percent.)

The upward bump in the PMT is part of the package to avert a fare hike and service cuts that would have jolted the entire metro region. Raising the same $1.1 billion via the subway farebox, for example, would have required a whopping 35% jump in fares, a calamity that would have triggered enough new car, cab, and Uber trips to slow vehicles in Manhattan by 5% and boosted city and regional carbon emissions by nearly 400,000 tons of CO2 a year — enough to negate the climate benefit of 90 new large wind turbines, according to my modeling. And these figures don’t include lost jobs and commerce from worsened transportation. Reducing service to save the same amount would have produced similar bad outcomes.

Score a big win, then, for transit and New York. But the new revenue comes with a downside: taxes on payrolls discourage hiring and compound our area’s anti-business aura. Moreover, this revenue infusion will almost certainly be not the last but the first in a series the MTA will require throughout the decade to limit future fare hikes and improve service even as ridership continues to lag pre-pandemic volumes. Counting on raising the PMT next time, and the time after that, will be a fool’s errand. There has to be a better way.

I believe there is: enact a modest statewide carbon tax and dedicate a third to a half of the revenue to shoring up public transportation budgets around the state, though principally in New York City.

Reappraising Carbon Taxes

On January 1, Washington state launched its carbon-pricing program, the nation’s second all-sectors carbon charge, with a starting price around $20 per ton of CO2, though most of the emission allowances fetched even higher prices in the first carbon auction, in March. I estimate that the same $20 price applied to all fossil fuels burned in New York State could generate revenues of $3 billion a year (see table).

Dedicating a third of those proceeds to the MTA would add a billion dollars to the authority’s annual revenue. Other slices of the revenue could cure deficits at smaller transit systems around the state.

Even with these allocations, roughly half of the new $3 billion in annual carbon revenues would remain available for a range of purposes from home weatherization to rebates offsetting higher fuel costs for lower-income rural New Yorkers.

Of course, no new tax is ever welcomed with open arms. In recent years, moreover, carbon taxing has lost political standing with left and right alike. Right-wingers, in thrall to fossil fuels, denigrate the very idea of climate concern. Opinions on carbon pricing on the left, while far more nuanced, tend toward an “eat your peas” quality, seeing the promised revenues but not the powerful tides unleashed by the increased fuel prices.

Could a state carbon tax have a chance in New York this time around? I believe so, if only because MTA deficits are untenable and a statewide carbon tax looks like the least-bad long-term antidote.

Consider:

  1. New York wouldn’t be the first state to price all carbon emissions. California has done so for a decade, and, as noted, Washington just followed suit.
  2. Two-thirds of the $3 billion in carbon tax revenue could go to other, non-MTA uses across the state.
  3. Nearly half of the revenues would come from charges on fossil (natural) gas, the very fuel that climate activists are targeting in order to electrify heating and cooking while also shrinking climate-damaging methane leaks from pipelines, wells, and buildings.
  4. Carbon taxing’s regressive bias (it takes more dollars from the rich but more proportionally from the poor) would be blunted by its helping keep a lid on transit fares.
  5. The affluent suburban counties that will be on the hook for the carbon tax caught a big break by their exemption from the increase in the Payroll Mobility Tax. Moreover, some pro-climate suburbanites might even support a climate-helping carbon tax.
  6. Upstate households will be cushioned from the tax by the region’s preponderance of low-carbon electricity from nuclear, hydro, and wind power.
  7. Aid to transit could be packaged as an urban corrective to suburban- and rural-facing Inflation Reduction Act federal subsidies for solar panels, electric vehicles, and heat pumps. (Notably, the IRA does not fund urban-friendly mass transit and e-bikes.)
  8. Left-leaning climate-justice advocates who shy away from carbon pricing might warm to a policy that cuts emissions by attracting car trips to buses, trains, and subways.

This panoply of advantages points to diverse potential sources of support for a transit-benefitting state carbon tax:

  • NYC transit and “livable streets” advocates;
  • Economic-justice advocates who recognize affordable transit’s value in combating poverty;
  • Climate campaigners who see carbon pricing as a complement to other carbon-cutting policies;
  • Suburbanites concerned that future hikes in the Payroll Mobility Tax will come for them;
  • “Electrify-everything” proponents working to eliminate fossil gas from residences and other buildings;
  • Developers of low-carbon electricity — not just solar and wind providers but proponents of retaining the state’s four upstate reactors and building new ones;
  • Energy-efficiency engineers, contractors, and workforces;
  • Labor unions whose members fabricate, erect, and maintain the spectrum of green energy projects that a carbon tax will help make more abundant by making fossil sources costlier.

Competing Claimants?

Electricity producers in New York already pay a carbon fee under the multi-state Regional Greenhouse Gas Initiative (RGGI) cap-and-trade program. In addition, Governor Hochul and the statewide climate coalition New York Renews have advanced competing carbon pricing concepts, both of them, somewhat confusingly, dubbed cap-and-invest. Hence, an MTA-focused carbon tax, which would employ a carbon-based charge on fossil fuels extracted or imported into New York State rather than a carbon cap enforced through sales of emission permits, wouldn’t arrive on a blank slate.

RGGI currently charges electricity producers around $14 for each ton of CO2 their generators emit. This levy is generating $365 million of statewide revenues a year, paid as surcharges on power bills, which goes to support investments in energy-efficiency and renewable electricity. While in theory the RGGI charge could be netted against the new carbon tax, the relative ease and importance of decarbonizing electricity production make it preferable to retain it and add the carbon price on top.

Cap-and-invest presents a trickier set of issues, partly because neither the governor’s prospective program included in the new budget nor NY Renews’ more elaborate plan has been fully fleshed out. In addition, the latter is the fruit of years of deliberation and consensus-building among the coalition’s hundreds of participant grassroots groups, who now constitute a formidable host.

At this writing, NY Renews envisions applying $10 billion in carbon revenues over several years in no less than 73 individual spending buckets grouped in four uber-categories: Climate Jobs and Infrastructure includes elements like aiding electric bus manufacture ($100 million) and offshore wind power supply chains ($300 million). Energy Affordability earmarks $1 billion to wipe out utility customer debt and $2 billion to support building electrification. Community & Worker Transition Assistance devotes $600 million to the “just transition” from jobs in carbon fuels to positions in renewable energy. And Community Directed Climate Solutions sets aside $2 billion to unspecified projects in historically underserved and overburdened urban neighborhoods and rural areas.

The NY Renews plan should be seen, then, as a holistic roadmap to make over not just how energy is supplied in the state but how it is consumed and governed. Billion-dollar-a-year allocations to the MTA aren’t the kind of investment its members have envisioned. Nevertheless, exploratory calculations suggest that the carbon payoff from service improvements paid for by a state carbon tax would be impressive.

As an illustration, I have calculated that an average 20% speed-up in subway trips achieved by running more trains at higher speeds would save straphangers and drivers each around 100 million hours a year (the latter from car trips switching to trains) while reducing car and truck emissions by 900,000 tons a year. Even more CO2 would be eliminated because of New York City’s improved competitive advantages vis-a-vis less “inherently green” suburbs and exurbs.

To be sure, so striking a gain in subway performance would almost certainly carry a price tag well over a billion dollars a year. Still, the prospective benefits underscore both the carbon-cutting potential of infusing new funds into subway service and the need to score competing claims for their climate value.

Broader Considerations and Next Steps

Over time, the carbon tax’s revenue base will shrink as its price incentives kick in and other carbon-cutting policies also gather steam. The resulting loss in tax revenues could be counteracted by periodically raising the per-ton tax rate. New York City could supplement the tax through revenue-generating street-management measures such as curbside pricing and other forms of road pricing.

Earlier this year, Community Services Society CEO (and MTA board member) David R. Jones and Riders Alliance executive director Betsy Plum proposed expanding New York City’s Fair Fares program to allow an additional 772,000 lower-income New Yorkers to qualify for half-fare transit passes. The cost, which they put at $142 million a year, should be a candidate for the carbon spending package.

This discussion has centered on the carbon tax’s creation of a new funding pot to maintain and improve transit affordability and performance. But taxing carbon emissions stands to benefit society in two other major ways. It will diminish financial incentives propping up carbon fuels and also support societal paradigms promoting care over harm.

A carbon tax is more than just a pay-for, in other words. Simply making it more expensive to buy and burn carbon fuels discourages fossil fuel use in a multiplicity of ways. Moreover, the very act of pricing carbon emissions can spur “externality taxing” in other realms, from congestion pricing to taxing the sugar content of soft drinks. Making New York the third U.S. state with broad-based carbon pricing will also add momentum to long-sought federal carbon emissions pricing.

Shoring up MTA finances, while reason enough to enact a state carbon tax, isn’t the lone consideration. The crisis of transit funding should be seen as a catalyst to pricing fossil fuels more closely to their true societal costs — a vital goal in its own right.

The next MTA funding crisis-as-opportunity will be upon us soon. The Legislature should move swiftly to study the benefits of taxing carbon emissions as a way to hold the line — and more — on transit fares and service, well in time for next winter’s budget negotiations. Transit and climate advocates and their counterparts in the Hochul administration should consider integrating a transit-focused carbon tax into their agendas.

Taking $3 billion a year for any public purpose, no matter how noble, is no small matter. The time to start selling a transit-supporting state carbon tax is now.

A Bitcoin Mining Exposé Strengthens the Case for a Carbon Tax

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The Nation magazine this morning published my essay, A Bitcoin Mining Exposé Strengthens the Case for a Carbon Tax. I’ve cross-posted it here to allow comments and add tables and graphics.

 — C.K., April 20, 2023

Clean electricity, the backbone of the Biden administration’s strategy for slashing carbon emissions, is becoming daunting to expand.

US wind farms, which last year generated more electricity than all hydropower and solar panels in the 50 states combined, often face years of contention. The entire mid-Atlantic offshore region, an area brimming with wind potential, could be proscribed by Pentagon fretting over interferences with aircraft deployment, Bloomberg News disclosed this week.

But if red tape for green power is a bother, why not get the benefits with none of the fuss? Send commando teams to the 34 large-scale Bitcoin mining sites in the United States that were identified in a New York Times front-page exposé this month. In synchrony, have them sever the facilities’ power cables, which combined demand some 3,900 megawatts of electricity—nearly as much as 3 million households combined.

In a flash, legions of electricity-gulping, combination-seeking computers in Texas, New York, and 13 other states would cease whirring. Like a power surge but in reverse, the fossil-fuel generators energizing so-called cryptocurrency mining—literally, trillions of combination-seeking calculations every second—would dial down. The corresponding drop in carbon emissions would be the same as if thousands of new industrial-size wind turbines could be instantly erected and connected to grids, supplanting electricity now furnished by burning coal and methane gas.

Data adapted from NY Times April 9, 2023 story. Link in text above. FF% is estimated percent of *incremental* power demand supplied from coal or methane gas.

Fanciful? Consider the numbers. The Times helpfully enumerated each Bitcoin mine’s fossil-fueled draw on state and regional power grids along with the associated carbon emissions. It took only a few further steps for me to translate those emissions into generic megawatts of clean power that would defray them. Using today’s customary 300-foot-tall, 3.6-megawatt wind machines as my standard, I calculated a staggering 3,700 turbines.

There you have it: The US Bitcoin industry is single-handedly neutering the entire climate benefit from nearly 10 percent of US wind energy. That’s more electricity than is generated with wind in any single state, save Texas and Iowa.

This raises two uncomfortable questions for the climate movement: Why isn’t it rallying against Bitcoin mines and other parasitic users of carbon fuels? And why isn’t it taking the obvious step of calling for a tax on carbon emissions to reduce those usages while simultaneously extracting revenues from them?

Second question first. Generating the electricity consumed by those 34 Bitcoin mines causes 16.4 million tons of carbon dioxide emissions each year, according to the Times. If the United States had a $100 per ton carbon tax—the current price of carbon emission permits in the European Union’s cap-and-trade system—the carbon levies at the mine mouth and wellhead would be extracting $1.5 billion a year from the fossil fuel companies that power the Bitcoin operations, and depositing it into the Treasury.

To be sure, that money would only fund a mere 2.4 hours of federal spending a year—barely a single baseball game’s worth, under the new hurry-up-and-pitch rules. On the other hand, the tax moneys are twice what Fox News will pay Dominion Voting Systems under the settlement reached this week. And they’re recurring.

But it would not be extinguished. That’s where the climate movement comes in.

Had the tax been in place a decade ago, as I and others urged, the extra expense might have stopped some cyber-currency ventures from the git-go. But if it were put into place today, a robust carbon tax could at least impel Bitcoin miners to economize on electricity, charge more for transactions, or actually contract with greener power providers rather than merely pretending to, as the Times found.

Although no one can pinpoint precisely how a carbon tax would shrink Bitcoin mining’s carbon footprint, let alone any single sector’s, abundant empirical evidence suggests that total US carbon emissions would be around a third less with a triple-digit national carbon tax than without. Bitcoin would not be exempt.

The movement has targeted banks and pipelines for more than a decade, with not much to show in the way of lesser carbon emissions. Why isn’t it disrupting Bitcoin mining and other bloodsucking machines—helicopters, private jets, yachts, super-sized SUVs—that feed on fossil fuels and are predominantly playthings of plutocrats? Why isn’t it going all out to stop highway expansions and eliminate restrictive zoning that lock in energy waste for generations?

Yes, climate activists stopped Keystone XL. They won a ban on fracking in New York. They’re fighting to drive oil drilling out of Los Angeles. Valiant, heroic work. But these and other keep-it-in-the-ground victories are creating little climate benefit. Why? Because the same underlying demand, largely unaffected by those protests, is met by supplies from elsewhere.

The bank protests seem even less focused. Conoco doesn’t need financing from JPMorgan Chase or Wells Fargo to drill in the National Petroleum Reserve in Alaska. The only “bank” it requires is the collective fuel tanks of America’s 280 million motor vehicles, plus aircraft, off-road vehicles, and pleasure boats.

Marching on Citibank does send a message, and activating seniors who might otherwise sit at home posting about their grandkids is soul-stirring. But if divestment and bank-shaming were going to slow the assault on climate, we would have seen bigger results by now.

“If the world wants to limit warming,” Norwegian energy researcher Espen Erlingsen told the Times this month, “it will have to limit demand for oil and gas because [the] industry can deliver this kind of volume for many more decades.”

Amen. The climate movement’s strategy isn’t working. Trying to bottle up supply instead of throttling demand is whack-a-mole without end, chasing after but never stopping capitalism’s dynamism from erupting in crypto mining and 1,001 other climate-destroying products and technologies.

By itself, a carbon tax won’t cure that. But it would at least start to steer innovation and cultural norms away from endless new climate horrors.

Addendum: My concluding sentence — perhaps too subtle a literary reference — is elucidated in Brian A. Oard’s delightful Mindful Pleasures website. Please note that the ultimatum was uttered not by Sabbath but by his lover, Drenka. — C.K.

Climate Sound and Fury, Signifying What, Exactly?

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(This post was amended on March 31 to include rebuttals of our criticism of the Montana climate-change lawsuit from two distinguished participants.)

Climate agitation was much in the news last week. The Guardian reported on a forthcoming Harvard Environmental Law Review paper suggesting that fossil fuel companies could be held liable for homicide from deaths caused by climate change. A New York Times front-page story previewed a courtroom trial to determine if Montana policies promoting fossil fuels violate that state’s constitutional protections of a healthful environment. And in dozens of cities, activists assembled by noted climate author-organizer Bill McKibben tore up their Chase, Citi, Wells Fargo and Bank of America credit cards to spotlight the big banks’ financing of $1 trillion in fossil fuel projects over the past five years.

In other climate news, however, suburban legislators are contesting a bold initiative from New York Gov. Kathy Hochul to compel New York City and surrounding counties to expand housing supply. New York City’s public transit provider is scrounging for revenues to shore up declining subway and bus farebox receipts stemming from the triple-whammy of residual Covid worries, violent-crime fears, and working-from-home. Around the country, meanwhile, just about all of the gargantuan road-widening projects listed in U.S. PIRG’s most recent Highway Boondoggles report are proceeding apace.

“States’ rights” have become “local control.” L: Wallace for President rally, 1972, courtesy Google Images. R: Ryan Lowry for the NY Times, accompanying March 22, 2023 opinion essay, “NIMBYs Threaten a Plan to Build More Suburban Housing,” by Times editorial writer Mara Gay. Photo was captioned, “Legislators protested Gov. Kathy Hochul’s housing plan in Albany on Monday.” Faces and demographics in the two photos, taken more than half-a-century apart, are hard to distinguish.

Yes, we’re juxtaposing.

The three just-noted happenings threaten to lock in place profligate fossil fuel consumption and associated carbon emissions. Highway widenings engender more driving (“induced demand,” it’s called). Fare hikes and service cuts to transit in NYC and elsewhere will do the same. And bottling up housing supply, as New York’s suburbs and my own borough of Manhattan, along with affluent cities and towns all over the U.S. have been doing for decades, guarantees urban stasis and its evil twin of exurban sprawl, with its accoutrements of carbon-spewing SUV’s, manses and subdivisions — not to mention segregation.

Litigating for Climate

These carbon accelerants might be more bearable if the climate agitation mentioned at the top had genuine prospects for cutting emissions. Do they? Not likely.

Indicting, much less convicting, officers of fossil fuel companies for killing people via their emissions-induced climate change is the definition of quixotic — to my untutored eye, anyway. In court, Big Oil will simply point to the tens of billions of lives uplifted by the fruits of their fuels. And they won’t be spouting nonsense. The raising up of most of humankind out of subsistence, and the resulting cradle-to-grave lengthening of human lifespans, could not have happened without the carbon-fueled Industrial Revolution. Set against those numbers, the millions — if that — of lives provably lost because of climate change will appear as a mere rounding error.

To be sure, the still-rising use of fossil fuels globally has now burst past the point of positive net benefits, especially with the advent, at last, of scalable non-carbon ways to power civilization. But actually effectuating the transition seems a matter for politics, with or without judicial support.

And even if some clarion guilty verdict were rendered in some court, what would be the remedy? Would the fossil fuel industry be made to dismantle itself? What about the billions of motorists, manufacturers and other consumers and producers who would clamor for more. Sorry, there’s no bypassing the messy work of using pricing, regulation and innovation to get off fossil fuels.

I’m almost as skeptical re the Montana litigation — notwithstanding the earnestness of the young plaintiffs, including two brothers who not only are the sons of firearms-industry apostate Ryan Busse but who were motivated to join the lawsuit by the climatological deterioration of their beautiful corner of northwest Montana.

I identify with Lander and Badge Busse. Melting snow in nearby Glacier National Park helped trigger my ecological awakening, but in an opposite fashion from theirs. On a long-ago day in July, driving on the park’s Going-to-the-Sun Road with my grade-school pal, I parked our tiny Renault auto to fetch water dripping from roadside snowbanks. We filled our canteens and started walked uphill toward the source. An hour later, we were a thousand vertical feet above the roadway and following real-life mountain goats under an impossibly blue sky. Bookending our hike into the Grand Canyon a week earlier, that day became my gateway into love of wildness, defense of clean air, and a career in environmental policy analysis and activism.

Most of Glacier’s glaciers are now diminished if not gone, making the lawsuit, Held v. State of Montana, painful as well as valiant. Yet even if the brothers and their co-litigants win their case, what exactly is the remedy? The Montana Supreme Court possesses no magic button whose pressing can end the burning of fossil fuels. Stop drilling or mining in Montana, and producers will up their output from Wyoming. Stop it in all 50 states, and the same suppliers will boost production overseas. Sure, impeding fuel extraction will incrementally drive up fuel prices and take a bite out of demand, but that’s just a sideways blow at best. The solution, as CTC has argued since our founding in 2007, lies in throttling demand for carbon, not stoppering supply.

Montana litigation supporters weigh in

Shortly after this post went up, CTC received this brief rebuttal from a long-time supporter of the Montana suit and the larger Our Children’s Trust campaign to enshrine a legal right to a safe climate:

The Montana climate suit seeks to build case law affirming a right to a stable, livable climate. I liken it to the long-term legal struggle to secure equal treatment under the law for women and people of color.  For example, the legal battle to desegregate schools was a long one built on case law. I agree that any individual state has limited ability to impose a price on emissions, but the Juliana vs. U.S. suit does. It seeks a science-based reduction in emissions sufficient to maintain a stable, livable climate, and proposes a carbon tax as the single most effective policy to achieve that goal.  Likely the courts will only impose emission reductions. Politicians will then be tasked with submitting a plan that is affordable and effective. The Montana and other suits build case law affirming the damage caused by fossil fuel emissions and a right to a livable climate. Courts act more on evidence and less on short-term political pressure.

We also received this note from noted environmental attorney and climate-law expert Michael Gerrard, who directs the Sabin Center for Climate Change Law at Columbia Law School and was featured in the New York Times story noted at the top of this post:

I think we need to attack both the demand side and the supply side. No one action will affect the supply on a macro scale, but cumulatively many could. Montana is one of the nation’s largest fossil fuel suppliers, and if the courts shut down some of that, it would be a good thing. The judge, at least, is taking the case seriously. Whether or not the Montana Supreme Court upholds a decision for the plaintiffs, the case will cast a harsh light on the fossil fuel companies. Most of these campaigns are largely aimed at delegitimizing the fossil fuel companies and reducing their political clout. That is having some effect in blue states, where quite a few strong climate laws are being enacted over the opposition of the fossil companies. And keep in mind that each new coal mine, each new gas-fueled power plant,  and so forth, creates a constituency for its long-term preservation; that needs to be resisted.

CTC collage from two separate photographs on Third Act website, snipped on March 30, 2023.

Banks and Climate

We come now to last week’s bank protest that Bill McKibben organized with his new “Community of Americans,” Third Act.

As much as I admire Bill’s unflagging zeal and his Third Act cohorts’ earnest willingness to put themselves out there, I strongly question targeting banks as a cause of fossil fuel exploitation and a locus for climate activism.

How will bank reformation impact the use of cars, trucks and planes in the U.S. or elsewhere — use that requires purchases of gasoline, diesel and jet fuel that in turn provide both the financial wherewithal and the political muscle to drill, extract, refine and transport petroleum products whose combustion releases the carbon dioxide that is wrecking our climate?

Should not Third Act and indeed the entire climate movement be organizing and demonstrating for demand-cutting policies and developments such as mixed-use and dense housing, functional-or-better public transportation, bikeable and walkable streets, fuel-economy standards without “light truck” loopholes, and the like? Wouldn’t their energies accomplish more, both short- and long-term, if they were to swarm Albany and other state capitals to demand upzoning, no more highway widenings, and permitting reform to circumvent anachronistic regulations hindering wind farms and solar homes?

In response, Bill would probably say “We need to remind people of the connection between cash and carbon. Literally, somebody who has $125,000 in those banks [Chase, Citi, Wells Fargo, Bank of America] is producing more [carbon] because it’s being lent out to pipelines and frack wells than all the cooking, flying, heating, driving, cooling that the average American does in a year. Five thousand dollars in [those banks] produces more carbon than flying back and forth across the country.”

How do I know? Because that’s exactly what he said on Democracy Now on the morning of the protests (quoted segment begins around 37:45). Try as I might, I can’t follow the logic.

Coda

Notice I haven’t mentioned carbon pricing, except tangentially. Here at CTC we’re laying low on carbon taxing for the time being. U.S. politics still aren’t ready, what with climate-averse Republicans occupying half of Congress, and Democrats wary of the difficult politics. We focus on what’s possible in the here-and-now.

Last year it was the praiseworthy (if imperfect) Biden-Schumer Inflation Reduction Act. This year we’re continuing to do what we can to bring congestion pricing for New York City into being. We’re also quietly nurturing a promising new avenue to advance a New York State carbon price. Please stay tuned!

Where We Are, Now that Biden’s Climate Change ‘Revolution’ Isn’t Coming

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A New York Times post this week, Biden’s Climate Change ‘Revolution’ Isn’t Coming, caught our attention with its trenchant look at climate policy’s low ebb in the wake of two crushing setbacks in just three weeks: the June 30 Supreme Court ruling blowing up EPA’s carbon-regulating authority under the Clean Air Act, and Joe Manchin’s coup de grace to the remnants of President Biden’s Build Back Better climate package.

Drawing on fellow Times writers, opinion editor Spencer Bokat-Lindell painted an unsparing portrait of U.S. — and global — climate stasis as dangerous heat was enveloping Britain, much of Europe and large swaths of the U.S. Here we reprint his post in full, with our commentary as counterpoint.

Biden’s Climate Change ‘Revolution’ Isn’t Coming.

Introduction

When President Biden took office, one of the first things he did was make a pledge: The United States, he vowed, would finally “meet the urgent demands of the climate crisis” through “a clean energy revolution.” That revolution was to be set in motion by a $2 trillion plan for putting the country on a path to 100 percent carbon-free electricity by 2035 and to net-zero greenhouse gas emissions by 2050, in line with the Paris agreement’s goal of keeping global warming well below 3.6 degrees Fahrenheit above preindustrial levels. (It now stands at 2.2 degrees.)

But after more than a year of negotiations, compromises, deal-making and belt-tightening, that plan appeared to collapse last week when Senator Joe Manchin, a conservative Democrat from West Virginia and a key swing vote in Congress, announced that he would not support funding for climate or energy programs.

What does the collapse of Biden’s agenda mean for the domestic and global politics of climate action moving forward? Here’s what people are saying.

Biden’s Plan, Though Not Revolutionary, Was Bold.

Introduction

Even a fully intact Biden plan would have fallen short of its goals. Nevertheless, its scope and reach would have far surpassed any climate program by any major nation. Build Back Better’s carbon reductions and climate benefits would have been numerically substantial and would also have triggered parallel policies in other countries.

(Chart is from CTC Sept 2021 post, Without a Carbon Tax, Don’t Count on a 50% Emissions Cut.)

1. The climate deal that wasn’t

As my colleagues have reported, experts generally agree that there are two ways of reducing greenhouse gas emissions at the speed and scale required. The first is making fossil fuels more expensive by ensuring that their environmental costs — global warming, for one, but also the staggering harms of air pollution — are reflected in their price. While widely championed by economists, carbon taxes have proved politically unpopular: A carbon tax by ballot referendum in Washington State has failed twice.

Biden hoped to take the other approach: reducing emissions by driving down the cost and improving the efficiency of low-carbon energy sources, like wind, solar and nuclear power. Initially, the centerpiece of his plan was a clean energy standard, which would have legally required utilities to draw 80 percent of their electricity from zero-carbon sources by 2030 and 100 percent by 2035. But when Manchin — who made millions from his family coal business and took more campaign money from the oil and gas industry than any other senator — pulled his support from that scheme in October, Democrats pivoted to a $300 billion package of tax credits to encourage the adoption of renewable energy and electric vehicles.

Now, both avenues to decarbonizing the country have been all but closed off. Even before Biden’s plan was whittled down, there was some debate about whether it was sufficient to meet his ambitions. But now that the president’s most powerful tools for reducing emissions have been confiscated by Congress (and the Supreme Court, which last month limited the power of the Environmental Protection Agency to regulate power plant emissions), “We are not going to meet our targets, period,” said Leah Stokes, a professor of environmental policy at the University of Santa Barbara, California, who has advised congressional Democrats on climate legislation.

Manchin’s reason for scuttling the negotiations, according to his spokeswoman, was his desire to “avoid taking steps that add fuel to the inflation fire.” But in The Atlantic, Robinson Meyer argues that, in addition to being “extraordinarily bleak for the climate,” Manchin’s reversal will actually worsen inflation: By reducing long-term demand for oil, Biden’s plan would probably have lowered gas prices, and an earlier version of the package would have led to hundreds of dollars in annual energy cost savings for the average U.S. household by 2030, according to an independent analysis from researchers at Princeton.

“America’s climate negligence endures,” Meyer writes. “That is not just due to Senator Manchin’s negligence, of course. It is also the collective responsibility of the Republican Party, whose 50 senators are even more resolutely against investing in clean energy than he is.”

1. The long shadow of Washington state’s failed carbon tax referendum

Bokat-Lindell could have said, about carbon taxes, that they are widely championed by economists and others who judge robust carbon taxing as uniquely capable of delivering big emission cuts quickly. Still, his characterization of carbon taxes as politically unpopular was fair.

He was also on solid ground in pointing to the failed Washington State carbon tax referendum. Perhaps even more than Donald Trump’s concurrent electoral win over Hillary Clinton, the 2016 defeat of Initiative 732 put a hurt on U.S. carbon tax organizing and advocacy. After all, if a carbon tax couldn’t garner an electoral majority in a certified blue state — one with a strong outdoors-nature ethic to boot — it was likely to be a tough sell almost anywhere else.

During the run-up to that vote we published a raft of posts calling out progressive icons like Naomi Klein, Van Jones and Mary Kay Henry for willfully distorting I-732 — labelling as a tax cut for the wealthy its swap of the carbon revenues to cut regressive sales taxes, for example. Their high-profile drive-by opposition also encouraged environmental justice groups to view I-732’s revenue-neutral design as a ploy to block green investments in disadvantaged communities rather than a design to offset lower-income households’ higher fuel expenses. Mainstream environmental groups mostly stayed on the sidelines, as did climate champion Bill McKibben. Their neutrality contributed to the 59-to-41 electoral wipeout which poisoned the well for a Green New Deal-style reboot effort in 2018.

Fast-forwarding to 2021-2022, it’s also fair to ask why climate activists trained virtually all of their fire on Joe Manchin, perhaps not grasping that his personal and political indebtedness to fossil fuels — duly noted by Bokat-Lindell — placed him beyond their reach. As The Atlantic’s Robinson Meyer notes, 50 Republicans blocked Biden’s climate package no less than Manchin. Protests in their home states might have moved the legislative needle or at least thrown down a marker to preserve Democrats’ control of Congress in the coming midterms.

2. A domestic defeat with global consequences

Because the United States has spewed more greenhouse gases into the atmosphere than any other nation, it plays a uniquely prominent role in global climate politics. (It’s worth noting that on an annual basis, China is now the world’s largest emitter, having surpassed the United States in 2006, though America’s per capita emissions still far exceed China’s.)

Given the United States’ historical “climate debt,” many lower-income countries have made their climate commitments contingent on those of the United States and other rich countries. Especially after Donald Trump withdrew from the Paris agreement, many world leaders were hopeful that Biden would arrive at the Glasgow climate talks last year having secured some legislative achievement as a mark of political seriousness. That, of course, did not happen.

Now, the United States’ international climate credibility is even more damaged, which will in turn impede global decarbonization efforts, The Times’s Somini Sengupta writes. “Manchin’s rejection and the recent Supreme Court ruling dealt a heavy blow to U.S. climate credibility,” Li Shuo, the Beijing-based senior policy adviser for Greenpeace East Asia, told her. It underlines what many people abroad already know, Li said: that “the biggest historical emitter can hardly fulfill its climate promises.”

The U.S. climate envoy, John Kerry, is expected to attend the next round of climate talks, in November in Egypt, but will once again have little to show for it. The United States “will find it very hard to lead the world if we can’t even take the first steps here at home,” said Nat Keohane, the president of the Center for Climate and Energy Solutions, an environmental group. “The honeymoon is over.”

2. Goodbye to the myth of U.S. global leadership on climate

We noted upfront that in addition to their sheer numerical weight, Build Back Better’s carbon reductions would have triggered parallel policies in other countries. Bokat-Lindell articulates this well, with framing that, appropriately, prioritizes U.S. climate stewardship as “necessary” rather than merely “sufficient.”

What would translate almost automatically from the domestic sphere to the global is U.S. federal-level carbon taxing. The simplicity of a national carbon price alone makes it child’s play to replicate it in any other country — in marked contrast to the welter of tax credits, rules and line items embodying Biden’s climate plan that would be devilishly hard if not downright impossible to copy elsewhere. Moreover, the logical companion piece to a national carbon tax — a Carbon Border Adjustment Mechanism — would powerfully incentivize non-carbon-taxing countries to enact their own in order to capture for themselves carbon tax levies that otherwise would be collected by their carbon-taxing trading partners.

That said, the various stories and authorities cited in the Times column have it exactly right. The heavy weight of America’s outsize cumulative carbon emissions, combined with what now must be seen as chronic federal government inaction — aptly summarized by Greenpeace as (“the biggest historical emitter can hardly fulfill its climate promises”) — expose the U.S. as climate laggard rather than leader.

Unfortunately, that fact didn’t keep U.S. Senator Lindsey Graham (R-SC), who once supported carbon pricing via cap-and-trade (see this 2009 op-ed in the New York Times), from uttering this arrant nonsense this week: “I don’t want to be lectured about what we need to do to destroy our economy in the name of climate change.”

3. Where the politics of climate action go from here

The Biden administration will have to rely on its less powerful arsenal of executive actions to make progress on its decarbonization efforts, however short of its initial targets. As The Times’s Coral Davenport explains, the White House could use its regulatory authority to increase vehicle emissions standards, potentially catalyzing the transition to electric vehicles; to compel electric utilities to slightly lower their greenhouse emissions without falling afoul of the Supreme Court; and to plug leaks of methane — an extremely potent greenhouse gas — from oil and gas wells. Biden may also use his pulpit to push for action at the state level, where climate policy has assumed new importance in the absence of federal leadership. “States are really critical to helping the country as a whole achieve our climate goals,” Kyle Clark-Sutton of the clean-energy think tank RMI told The Times. “They have a real opportunity to lead. They have been leading.” Both California and New York, for example, have committed to reaching net-zero emissions by no later than 2050.

As far as national electoral politics are concerned, The Times’s David Leonhardt argues, the fact that a single Democratic politician was able to derail Biden’s climate agenda should prompt Democrats to redouble their efforts to increase their Senate majority, particularly by winning over more voters in red and purple states. “It is clear that many blue-collar voters don’t feel at home in the Democratic Party — and that their alienation is a major impediment to the U.S. doing more to slow climate change,” he writes.

It is also possible that the government’s sclerosis could spur interest in less conventional and extra-electoral avenues to addressing climate change, among them nuclear power (the promise and drawbacks of which have been explored in this newsletter; the “degrowth” movement; speculative technological fixes such as solar geoengineering; and mass movements of civil and uncivil disobedience, as the ecologist Andreas Malm called for in his book How to Blow Up a Pipeline.

As the Colorado River reservoirs dry up, as the death toll from the record-setting heat waves and wildfires scorching Europe rises, and as more than a billion people in South Asia recover from a season of heat extreme enough to test the upper limits of human survivability, “this moment feels interminable,” Meyer of The Atlantic writes. “But what is unsustainable cannot be sustained. If one man can block the industrial development of what is, for now, the world’s hegemon, then its hegemony must be very frail indeed.”

But then, climate change seems to remain a relatively minor concern among the U.S. electorate: Just 1 percent of voters in a recent New York Times/Siena College poll named it as the most important issue facing the country; even among voters under 30, that figure was 3 percent.

That is just one poll. But it would perhaps be premature to rule out another direction the politics of climate change might take, one that could prove familiar to those who have witnessed how the American public has processed other cumulative traumas, like the drug overdose crisis or gun violence or the pandemic: a resigned acceptance of mass suffering, punctuated by moments of shock that serve only as reminders of how the unimaginable became normal.

3. The impasse at the abyss

Bokat-Lindell packed many leads and ideas into his closing section. We’ve touched on a lot of them in the past year.

Our high points:

A. The “arsenal” of potential executive actions is terribly meager vis-a-vis the task at hand. Stronger CAFE standards, for example, are badly undermined by light trucks’ takeover of the automotive fleet, and are assumed in most climate emission scenarios anyway.

B. States-as-climate-loci is also overblown. A full two dozen are solidly red, i.e., fossil fuel dominated. Even in blue states, policy is circumscribed by federal authority and bureaucracy; the holdup of New York’s congestion pricing program by federal highway officials is one case in point. Moreover, visions of 2050 net-zero or 2035 grid decarbonization by California and New York are almost certainly way out in front of actual commitments and have been made needlessly more difficult by nuclear power plant shutdowns.

C. Securing a true Democratic Senate majority and retaining the House this November are indeed vital.

D. Like Andreas Malm, we believe that direct action in defense of climate and earth needs to come to the fore, as we proposed in two posts last summer inspired by Malm’s book: Christopher Ketcham’s essay, Let’s Blow Up Luxury Carbon, and my own “Rich people cannot have the right to combust others to death.” Both are worth your attention.

E. The low primacy of the climate crisis among voters is both real and arguably not fatal. The U.S. is beset by so many crises that even so committed a climate scientist as Peter Gleick declared this week his greater alarm over incipient fascism.

A greater cause than insufficient ardor of the U.S. failure to enact “revolutionary” or even strong, incremental climate policies is an unproportionate and cumbersome political system that puts up multiple roadblocks to systemic change.

Alas, that isn’t poised to change. More and more, it looks like achieving genuine climate action will require passionate and creative direct action. Targets abound: helicopter commuting, crypto “mining,” obstructionists of wind farms or dense housing or congestion pricing, to name a few. Successful actions will be those that harness broad-based and truly intersectional campaigns attacking not just emissions but privilege and wealth.

We have an idea or two up our sleeve. Perhaps you do as well. We wish you luck. We still insist that carbon taxing is revolutionary — how can tackling a fundament of fossil fuel dominance be otherwise?