Climate & Energy

Doing the math

Are solar incentives a subsidy for the rich?

The following is a guest essay by Tom Konrad, a financial analyst specializing in renewable energy and energy efficiency companies, a freelance writer, and a contributor to AltEnergyStocks.com. ----- One of the most common arguments against incentives to help people buy solar panels for their homes is that they are a subsidy for the rich, paid for by everyone. The argument is that only the rich can buy a photovoltaic system, which, even with subsidies, costs thousands of dollars. Why should everyone chip in to help rich people buy new toys? On the surface, this argument is persuasive. Why should everyone pay if only the rich get the benefit? Basic fairness dictates that society should only subsidize activities which create societal (rather than individual) benefit. On closer examination, however, we see that the bulk of the benefit for solar goes to society rather than the homeowner/installer. Let's look at the benefits of a photovoltaic system. Numbers are for a 4-kW system, installed for $8 per peak watt with the rebates currently available in to me in Colorado, plus the federal tax credit.

BYOBlue

Wear blue for Earth Day 2008 to vote for no coal!

(high-res version here; free for distribution) Earth Day 2008 is going to be historic. We, along with numerous other groups around the nation, are calling on everyone to wear blue during Earth Day 2008 to signify a vote for no coal. Events will be happening around the world from April 19-22, so ...

A glass potentially more than half full

What’s right with the WCI?

Last week, my colleague Eric de Place dinged the Western Climate Initiative -- an effort by Western states and provinces to develop a carbon market with a strict, declining cap -- for kicking the can down the road on transportation fuels. Of course, the WCI has not ruled out the possibility of capping emissions from the transportation sector. They've just delayed a decision until they run some more economic analysis. So there's no reason to gnash our teeth over a lost opportunity -- not yet, anyway. Still, it's hard to tell whether the glass is half full (transportation fuels haven't been ruled out -- hooray!) or half empty (transportation isn't clearly in yet -- boo!). However, I listened in on a WCI climate conference call yesterday -- and I gotta say, I really like what they've done with electricity! The WCI floated a draft proposal last week. And in my view, at least, the glass is about as full as it can get:

Climate justice: yes. Carbon trading: no.

Carbon offsetting is not the best way for the global north to subsidize the global south

Okay, my last post summarized Tom Athanasiou and Paul Baers' arguments in favor of drastic cuts in emissions. They place responsibility on the rich and to some extent the middle class rather than the poor. As you might expect, I agree with both these points. I disagree with their arguments that carbon trading and even offsets are the best way for the global north to subsidize the global south. Tom and Paul's argument: the rich countries are responsible for cuts exceeding 100 percent. The only way to meet that obligation is by paying for cuts in the poor nations; Tom & Paul suggest buying offsets from them. Why use offsets? Tom and Paul argue that the size of the cuts makes it essential to use the absolutely cheapest methods, and emissions trading tends to the produce the cheapest cuts. I have argued in the past that emissions trading may be less expensive statically, but not dynamically. Compare rule-based regulation with stringency increases against a cap-and-trade with a cap that tightens.

Climate change has it out for transportation infrastructure, says report

Climate change is likely to wreak havoc on U.S. transportation infrastructure, according to a report released Tuesday by the National Research Council. Think bridge joints weakened by too-high temperatures, flooded tunnels, shipping disrupted by heavy …

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 …

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% …

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:

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