Climate & Energy

Separating rate theory from rate fact

How will the auction vs. allocation debate affect power prices?

Last January, Rep. Ed Markey (D-Mass.) convened hearings on the ways allocation of CO2 permits under a cap-and-trade system will impact power prices and utility profit margins. The short version, drawn from the evidence of Kyoto and other systems that have given credits away for free, is that while free allocations lower power prices in theory, in reality prices rise just as much as they would otherwise -- but they increase margins for exempt generators (i.e., coal plants). Indeed, one of the great criticisms of the Kyoto Protocol has been that it has directly led to increased profits for Europe's old coal plants. Since then, there has been a growing chorus from (coal-heavy elements within) the electric sector arguing that utility regulations compel them to pass along any operating savings to the rate payers -- and therefore, that free allocations really do ensure lower power costs. (See here for more details on the "pass-throughs" innate to modern utility regulation.) So on the one hand, we have the paper trail from Kyoto, and on the other hand, we have what would appear to be a pretty robust theory based on modern utility law. Who's right? The short version: facts on the ground trump theory. The longer version is below the fold.

Canadians fear U.S. energy bill clause could disallow oil-sands exports

A clause in the recently passed U.S. energy bill could be interpreted to prevent the U.S. from sourcing fuel from Canada’s oil sands, putting Canadian officials all in a tizzy. Section 526 of the Energy Independence and Security Act prohibits the U.S. government from purchasing alternative fuels with higher lifecycle greenhouse-gas emissions than conventional petroleum. It’s a descriptor that seems to fit oil sands, which have traditionally been classified as an alternative fuel and can produce up to five times more carbon emissions than conventional oil production. But in response to Canada’s fears that the rule “could unnecessarily complicate the …

WaPo ad

An ad ran in the Washington Post a while back assuring everyone that the U.S. isn’t running out of natural gas (PDF). Indeed, North America has 120 years worth! Scarcity? What scarcity? (Note, however, 50% of the alleged future nat gas is bound up in shale. Kinda dirty.) The ad is from the American Clean Skies Foundation, which appears to be for nat gas what ABEC is for coal. (Also mildly amusing: the ad quotes me.)

The paragraphs Tom Athanasiou left out of his last post

A brief summary of Tom & Paul’s approach to international climate justice

In Tom Athanasiou's recent post, "The greening of the global south," he describes an article in U.K. magazine The Prospect as "honest," "well-informed," and "criticizing the alternatives to trading." I actually think these objections are pretty easy to answer, but in order to do so, I have to present the objections first. The article begins by adopting some of points Tom and Paul present in their book The Right to Development in a Climate Constrained World:

Australia’s ratification of the Kyoto Protocol comes into force

Australia’s ratification of the Kyoto Protocol came into force on Tuesday. While the Aussies have the second-highest greenhouse-gas emissions per capita in the developed world, Prime Minister Kevin Rudd waxed optimistic, saying the country is on track to meet its Kyoto-suggested emissions-reduction targets. “From today, Australia officially becomes part of the global solution on climate change, not just part of the global problem,” Rudd announced. Still part of the global problem: the United States, the last industrialized country to hold out on Kyoto.

Media enable denier spin, part three

Please stop calling them ‘skeptics’

What name can we possibly use for the people who are working feverishly to convince the public to ignore the broad scientific understanding of global warming and delay taking serious action, action needed to avert a very grim fate for our children, their children, and so on? I suspect future generations will call them "climate destroyers" or worse, since if we actually (continue to) listen to them, that pretty much ensures carbon-dioxide concentrations will hit catastrophic levels -- 700 to 1000 -- this century, as explained in part two. But what should we call these people in the meantime, while we still have time to ignore them and save the climate? In this post I will explain why "skeptics" is certainly the wrong term, discuss why the current favorite among advocates (including me) -- "deniers" -- doesn't work (except maybe in headlines), and offer a new alternative. (Tomorrow I'll give you the reaction of a genuine skeptic to the new alternative.) For now let's call them "delayers," since that is their primary, unifying goal -- delaying action. As the NYT's Revkin explained about the recent skeptic denier-delayer conference in New York, "The one thing all the attendees seem to share is a deep dislike for mandatory restrictions on greenhouse gases." What unites these people is their desire to delay or stop action to cut GHGs, not any one particular view on the climate.

Coal: getting expensiver

More details on the new, really-really-expensive AEP coal plant in West Virginia. It seems like just yesterday that I wrote that the 17 percent rate increase announced by AEP would not be the last one, given the cost of this plant. Two days later, here they come. Specifically, "Customers could start paying as early as next year with rate hikes starting at $1 per month in 2009 and eventually climbing to $7.70 per month. AEP customers could pay nearly $160 million during construction and $116.23 million per year after that to fund the new plant." And why do we need those rates? Because this plant will be "the single most expensive utility project in the state's history." And why do we need the coal plant? Because ... [drum roll] ... coal is cheap! Full story from Greenwire ($ub. req'd) below the fold.

Waxman and Markey introduce bill to ban new dirty coal plants

House Representatives Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) have introduced the “Moratorium on Uncontrolled Power Plants Act of 2008,” which would do pretty much what it sounds like: prevent new coal plants in the U.S. unless they’re built with advanced pollution controls. Says Waxman, “The altemative is senseless — locking in decades of additional global warming emissions and requiring greater emissions reductions across the U.S. economy to compensate.” Somehow we imagine the coal lobby won’t see it the same way.

What price the future?

No sensible warming response can exclude carbon pricing

Jim Manzi, with whom I have debated warming policy responses before, has a problem with The Washington Post‘s coverage of new studies on climate change. He writes: The premise of the story by Juliet Eilperin is well-expressed by its headline: “Carbon Output Must Near Zero To Avert Danger, New Studies Say”. Eilperin prominently quotes Carnegie Institution senior scientist Ken Caldeira, co-author of one of the studies promoted by the article, who says: “The question is, what if we don’t want the Earth to warm anymore?” Well, that’s a question, but it’s certainly not the question, and is not even a …

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