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One last foray into the economics discussion

The guys at Environmental Economics replied to my post on economics and climate here and here. Read if you like. I would protest that "the extreme position by some environmentalists that economics is evil" has nothing to do with me or what I wrote, and that if there is some war between Environmentalism As Such and Economics As Such I want nothing to do with it, but ... feh.

I just want to make one final point, somewhat abstracted from the details of this oh-so-illuminating back and forth. In the course of decrying the pointlessness of a battle between greens and economists, Ryan Avent defends me from Tim Haab's charge that I'm an idiot:

Roberts is very smart on these issues and has a very sophisticated, and for the most part correct (in my view), outlook on carbon pricing.

First, thanks!

Now, not to look a gift horse in the mouth, but note the evidence offered that I'm not an economic philistine: I respect carbon pricing. I don't want to make too much of a passing comment, but this strikes me as endemic to these debates: the notion that when it comes to environment and energy issues, "economics" means "market-based policy" means "pricing."

This seems like a weirdly constrained use of economics to me -- reflective of the narrow range of economics visible in America's public conversation -- and it's made for a weirdly constrained debate. Economists themselves aren't necessarily guilty -- see here -- but it's true of many people arriving newly to climate/energy policy debates. They discover that Economic Science says one thing and fuzzy headed advocates say something else, so of course they want to be Sensible and side with Economic Science (don't want to get patouli on you!). Thus you get a weird kind of zealotry around pricing from people who know very little about the specifics of environmental history or regulation or technology, whereby they wildly overstate the potential of pricing and proclaim confidently that Economic Science has discredited the alternatives. (*cough*carbon tax advocates*cough)

Seems to me, though, economic thinking could go both more micro and more macro than carbon pricing.

A closer look at PG&E's immensely promising solar proposal

Last Tuesday, PG&E, the second largest utility in California, announced a major new solar initiative: 250 megawatts (MW) of utility-owned, distributed generation solar, and a further 250 MW to be built by private solar developers, under fixed-price contracts, at the utility's cost of service.

This is very good news, with implications I predict will reverberate through the solar policy community for quite awhile.

First, let's take the issue of utility involvement in the distributed generation solar market. I co-wrote an article on this last fall with my colleague Kevin Fox. The upshot: utility involvement in solar brings the opportunity for new economies of scale, but can also raise concerns about the potential of monopoly power crowding out private solar developers and stifling competition. The future of solar is dependent on nurturing a competitive workforce throughout the value chain, and healthy competition to foster a robust market and bring costs down for consumers.

Our suggested cure: utility involvement in the distributed generation solar industry should be conditioned on opening access for private solar companies to provide the same value to ratepayers. On first look, PG&E's application appears to meet this standard. The program maximizes the benefits of utility involvement while minimizing the potential drawbacks.

PG&E's solar program follows on the heels of similar announcements from Southern California Edison, San Diego Gas & Electric, and Los Angeles Department of Water and Power. SCE and LADWP's approaches contained efforts to limit markets and exclude participation, and as a result have been met with robust challenges.

The second policy implication concerns discussions around feed-in tariffs. While this is not a classic feed-in tariff in that it doesn't contain a must-take element (developers will submit projects to PG&E under standard contract and prices, winners will be selected based on assessed project viability and other elements), this proposal will re-introduce the spirit of competition when discussing fixed price contracts. More on this later.

Finally, we are going to see a lot of discussion on the price. PG&E projects that its cost of service will be the equivalent of $0.246/kWh, plus time-of-delivery adder, totaling $0.295 kWh. Given that the San Francisco Public Utilities Commission just signed a contract for 5 MW at $0.235 in one of the least sunny places in California, and Austin Energy signed a 30 MW contract for a reported $0.165 c/kWh, I believe this is a case of PG&E underpromising so as to overdeliver. We'll see once they make their actual bid. In any event, it's sunny days for the California solar industry.

What is Obama’s proposed price on carbon?

This is a guest post by Chaz Teplin [ChazTeplin@gmail.com], who works at the National Renewable Energy Lab developing cheaper materials for efficient photovoltaics. His opinions are his own and do not represent the views of his employer.

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The new Obama budget is striking because a cap and trade program is specifically called out and, critically, actual numbers are offered for the revenue raised from the program.

For years environmentalists have argued over the tradeoffs between a carbon tax and cap-and-trade, but either approach, if well-implemented, forces energy users to pay a price for carbon emissions. The actual price is crucial. A high carbon price financially motivates companies and individuals to increase energy efficiency and switch to carbon-free energy sources. With a low carbon price, the incentive for change is small.

So what is the Obama carbon price?

Obama's proposed budget anticipates about $80 billion in auction revenue in 2011 (Table S-6). Starting from this figure and some reasonable assumptions, its quite simple to get an approximate carbon price. (While we can hope for dramatically reduced emissions before the first year the plan takes affect, it seems unlikely.) The Obama plan explicitly calls for auctioning off 100 percent of the emissions permits, so we can get an approximate price of a permit by dividing the $80 billion auction revenue by current U.S. emissions.

With 2006 numbers for CO2 emissions, the Obama carbon price is $14.30 per metric ton of CO2. I don't know about you, but I don't buy my energy by the ton of CO2. Here is what $14.30 per ton would do to common energy costs*:

Effect of the Obama carbon price**

• Petroleum fuels: adds 15¢/gallon
• Electricity: adds 0.8¢/kWhr (compare to 7-10¢/kWhr residential rates)
• Natural gas: adds 8¢/therm (compare to 85¢/therm residential rates)

In other words, energy prices would increase by about 10 percent. Its a start, but a very slow one.

For wind energy, the added cost to burn coal would be a small help because wind is already cost competitive. For solar, the increase in competing electricity prices would be irrelevant in comparison to existing federal subsidies. Considering the recent volatility in oil prices, I doubt many drivers would even notice the 15¢/gallon.

Of course, these numbers are just for 2011. But the Obama budget anticipates only small increases in auction revenue through 2020 and the stated goal is only to hit "14 percent below 2005 levels by 2020." Assuming this target is achieved, the Obama carbon price would remain below $20/ton.

I doubt that such small carbon price signals will significantly impact energy choices. Perhaps the administration is relying on the recessionary economy and a smaller GDP to reduce emissions.

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* Using commonly available data on the emissions intensity of various fuels and electricity generation. (Calculations available in this spreadsheet [XLS].)

** These numbers will not be exact, but they should be as close as anything else in a projected budget.

NAIOP releases disinformation study downplaying building efficiency

I was wondering when it would happen: a building sector disinformation campaign launched by vested interests.

Well it's here. The campaign hit the New York Times on Saturday, and it comes from NAIOP, the Commercial Real Estate Development Association. It appears just as the country has come to grips with the fact that buildings are responsible for over 50% (50.1% to be exact*) of all the energy consumed in the U.S. It comes at a time when Americans are trying to reshape their energy policy and wean themselves from dependence on foreign oil, dwindling natural gas reserves, and dirty conventional coal.

This disinformation campaign is obviously meant to stall, confuse, and distort. The first salvo, a spurious study (PDF) and press release, was issued two days before the Senate Energy and Natural Resources Committee held a hearing on improving building energy code standards.

It is clear from a simple analysis of the study that NAIOP commissioned a building energy efficiency analysis to support predetermined results. They contracted with ConSol, an energy modeling firm, and asked them to analyze five (yes, only five) efficiency measures for an imaginary square-shaped, four-story office building with completely sealed windows and an equal amount of un-shaded glass on all four sides of the building.

In other words, analyze an energy hog.

They conducted the analysis for different cities and climates -- Newport Beach, Chicago, and Baltimore -- without changing the design to respond to these very different climates. They did not study changing the shape of the building, its orientation or form, or redistributing windows or using different windows to take advantage of natural light for daylighting or sunlight for heating. (Office buildings are day-use facilities.) They did not study shading the glass in summertime to reduce the need for air-conditioning, using operable windows for ventilation (not even in Newport Beach with its beautiful year-round climate), using landscaping to reduce micro-climatic impacts, employing cost-effective solar hot water heating systems, employing an energy management control system, or even study the impact of using inexpensive energy saving occupancy sensors in rooms to turn off lights.

In other words, NAIOP intentionally kept out of the analysis all the readily available low-cost, no-cost, and cost-saving options to reduce a building's energy consumption. This deliberate omission is glaringly apparent in their press release and in the NYT article. In fact, they take so many inexpensive energy-saving options off the table that it is impossible for the imaginary building to reach commonly achievable energy-consumption-reduction targets. They then add an inflammatory headline to their press release -- "Results show efficiencies unable to reach 30 percent mandates" -- and state that, "The study provides an unbiased insight into the energy targets practical to commercial development today."

Using this pseudo-analysis as their baseline, NAIOP goes on to report, without any objective basis, that "reaching a 30 percent reduction above the ASHRAE standard (a commercial building energy code standard) is not feasible using common design approaches and would exceed a 10-year payback." They conclude, "achieving a 50 percent reduction above the standard is not currently reachable."

Clearly, this study is meant to confuse the public and stall meaningful legislation, insuring that America remains dependent on foreign oil, natural gas, and dirty conventional coal.

The U.S. peaked in oil production in 1970 and natural gas in 1973. Our reserves are in steep decline and 70 percent of the remaining world oil and gas reserves are located in the Middle East, an area stretching from Saudi Arabia and Iran to the Islamic republics of the former Soviet Union. This type of activity by NAIOP not only hurts our country, it is also a disservice to their membership and all those in the building sector who work hard to deliver a high-quality, energy-efficient building products.

NAIOP touts itself as advancing responsible commercial real estate development and advocating for effective public policy. This pseudo-study and misleading campaign accomplishes none of these goals.

The American public deserves better.

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* To create a U.S. Building Sector, the Residential buildings (operations) sector, Commercial buildings (operations) sector, Industrial sector-building operations estimate, and the Industrial sector-annual building construction and materials embodied energy estimate were combined.

New all-liquid battery holds promise of easy scalability and high current capacity

For the tech nerds out there, check out this intriguing article in the new Technology Review.

It's about a new kind of battery in which all the active materials are liquid (molten metals and molten salt) rather than solids. This gives it several advantages over the whole range of solid-state batteries now available. It's cheap and easily scaleable, and most importantly, it can handle very high currents. It looks like an incredibly promising solution for utility-scale storage of intermittent resources like sun and wind.

You can hear this all explained by MIT's Donald Sandoway in the nerdtastic video at the link.

As always, it's all about cost-effective scale. No sense celebrating yet. But every scrap of hopeful news on energy storage is worth sharing.

On climate, how should progressives respond to the conservative strategy of 'obstruct and delay'

When I first read the E&E News PM story ($ub. req'd), "Boxer eyeing bold move to thwart GOP filibuster on emissions bill," I was skeptical of the strategy described:

The chairwoman of the Environment and Public Works Committee is considering a bold budget move aimed at passing global warming legislation in the Senate without having to deal with an expected Republican filibuster.

Sen. Barbara Boxer (D-Calif.) said that she is researching the use of the budget reconciliation process as an avenue for passing cap-and-trade legislation now considered a key agenda item for President Obama.

"We're certainly exploring it as a possibility," Boxer said of budget reconciliation, a bill that cannot be filibustered and therefore does not require meeting the 60-vote threshold that has consistently been a key hurdle to passage of global warming legislation.

After all, the climate bill will be among the consequential pieces of legislation ever considered by Congress given that failure to solve the climate problem will grievously harm the health and well-being the next 50 generations of Americans (see here). Shouldn't that issue be debated extensively?

But then I read William Kristol's Thusday op-ed, which argued Republicans need to "find reasons to obstruct and delay" (see here) Obama's agenda. I guess that's why they I call it the conservative movement stagnation.

Conservatives have no strategy for averting catastrophe. Indeed, they have chosen to tie the fate of their entire movement stagnation to humanity's self-destruction (see here). It is now taken for granted that one must get 60 votes for every piece of legislation because it is taken for granted that conservatives will filibuster anything Democrats tried to do, including trying to pass legislation aimed at preventing the unimaginable horror of 5.5° to 7°C warming and 850 ppm.

I still think Obama and his team must actively work to explain to the public the urgent need for action and the availability of myriad affordable solutions (see here). But I think Boxer's strategy may be worth considering. Here are more details:

Raising rates to afford cheap coal

"It allows us to continue to use coal, even though the cost of coal is going up."

-- Jeri Matheney, corporate communications manager for Appalachian Power, defending his utility's request for a substantial rate hike in West Virginia

Authors of economic collapse advise us to stick with coal

The Competitive Enterprise Institute, a right-wing think tank, has announced it is holding a counter-protest to the Capitol Climate Action, the biggest civil disobedience on climate issues in U.S. history. They're calling it the "Celebrate Coal! and Keep Energy Affordable" rally.

A better name might be the "Celebrate 24,000 Dead Americans!" rally, because that's how many people toxic pollution from coal-fired power plants kills every year, costing Americans $167 billion in additional health care costs.

Other titles CEI could have chosen:

Celebrate Unemployment! Coal kills jobs. Investments in energy efficiency create more than twice the number of jobs as investments in coal, according to the latest numbers from Professor Robert Pollin and Heidi Garrett-Peltier at the University of Massachusetts. Every dollar sunk into a coal plant, even if it's spent making it marginally cleaner, is a job creation dollar almost half wasted. New coal plants are so expensive that they actually cost jobs.

Celebrate Economic Collapse! As the biggest U.S. source of global warming pollution, coal is a major contributor to the $271 billion annual drag on the economy global warming is projected to cause by 2025 (it's already causing a multi-billion drag). Unless we solve the climate crisis, it's going to be that much harder to overcome our economic woes.

Celebrate Weather Disasters! Expect more intense (and possibly more frequent) hurricanes like Katrina and Rita in a global warming world -- and many more climate refugees.

Celebrate Species Extinction! According to the journal Nature, "New analyses suggest that 15-37% of a sample of 1,103 land plants and animals would eventually become extinct as a result of climate changes expected by 2050."

Celebrate Mercury Poisoning! Coal-fired power plants are the largest source of man-made mercury pollution. Mercury from coal pollution can interfere with the development of babies' brains and neurological systems. One in six babies born in America (as well as Jeremy Piven) have elevated levels of mercury in their blood, putting them at risk of learning disabilities, developmental delays, and problems with fine motor coordination.

If it was up to CEI, we would still have lead in our gasoline, no seatbelts in our cars, and more pesticides in children's food. These are the guys who backed deregulation of Wall Street CEO's -- and are now opposing action on climate to get the economy back on track.

If Congress listens to CEI and Big Coal, we won't be able to solve global warming, switch to clean energy, and create the millions of green jobs we need to put people back to work and restore prosperity.

You can help make sure they don't by signing up for the Capitol Climate Action here.

The Washington Post lets George Will reassert all his climate falsehoods plus some new ones

[The NYT's Andy Revkin has a very good debunking of Will with detailed comments from leading cryosphere experts, "Experts: Big Flaw in Will's Ice Assertions." Sadly, Andy continues his refusal to correct the harm he did to Gore by equating him with Will. In a day or two, I will attempt to untarnish Gore's reputation to make clear that he did nothing whatsoever wrong -- intentionally or unintentionally -- as opposed to Will who has done multiple things wrong intentionally.]

"When a reputable newspaper lies, it poisons the community; every newspaper story becomes suspect," declared a New York Times editorial. "Great publications magnify the voice of any single writer. Thus, when their editors or publishers want or need to know a source for what they print, they have to know it and be able to assure the community or the courts that they do. Where this is not now the rule, let this sad affair at least have the good effect of making it the rule." That editorial was published on April 17, 1981 about the transgressions of a Washington Post reporter named Janet Cooke [who fabricated a story, which the Post later submitted for a Pulitzer Prize "despite the growing signs of problems" with the story's veracity].

Incomprehensibly, the Washington Post -- after being roundly criticized for having senior editors and fact-checkers (and then their ombudsman!) sign off on (and then defend) George Will's error-riddled global warming column -- has allowed George Will to reassert in a new column (here) that every single one of his falsehoods was factual. [For a point-by-point debunking of the original February 15 piece, see CP and Wonk Room [PDF] and this joint letter to WP].

And in what seems to be Alice-in-Wonderland journalism, a senior editor at the Washington Post now asserts it is perfectly reasonable for a non-scientist Post writer to reinterpret a prestigious source's scientific data to support his or her conclusion -- after those sources have repeatedly stated that their data is consistent with the exact opposite conclusion and without telling readers of that disagreement. And not only did Will do that multiple times in his first piece -- the Post still let him do it again after he was called on it by multiple writers (see Washington Monthly and here).

Much as I would like to spend my time writing about the strategies needed to prevent business-as-usual warming of 5°C to 7°C, both of my parents were award-winning professional journalists, and I think this story is simply too important not to focus a maximum spotlight on.

I will go through Will's new and old falsehoods at length here because, as I noted above, the NYT editorialized on the Post's infamous Janet Cooke scandal, "When a reputable newspaper lies, it poisons the community; every newspaper story becomes suspect." Just as with the Janet Cooke scandal, this is about a major Washington Post writer fabricating and misusing sources.

Media Matters saw Will's column in advance and debunked it here, showing how Will doubled down on his previous global warming distortions and cited a document on sea ice trends as evidence against human-caused global warming when that "document actually states that the sea ice data are consistent with the outcomes projected by climate-change models." And Will cited the U.N. World Meteorological Organization [WMO] -- with no source citation -- saying "there has been no recorded global warming for more than a decade," when, as Media Matters showed, as recently as January 7, Agence France-Presse quoted WMO secretary general Michel Jarraud as saying, "The major trend is unmistakably one of warming." I have similar quotes from WMO in my original post.

The abuse of sources in Will's columns -- signed off on and defended by the Post's editors (and ombudsman) should be a cautionary tale equal to the Janet Cooke story. One can only assume, sadly, that given the controversy, Will's new piece was as at least as fact-checked as the original, which, according to the Washington Post ombudsman was "checked by people he [Will] personally employs, as well as two editors at the Washington Post Writers Group, which syndicates Will; our op-ed page editor; and two copy editors" (see here).

And yet the fact-checkers let through a lie so egregious that it would seem to utterly vitiate the credibility of the Post all by itself. Will was allowed to publish the following statement:

Friday music blogging: Dark Was The Night

The Red Hot Organization is a nonprofit devoted to battling AIDS by mobilizing pop culture. Among other things, this has meant a long series of music compilations featuring popular artists.

Most pop music compilations tend to be less exciting than they sound at first blush, but Red Hot's have been unusually high quality, certainly well above the genre's average.

The latest is Dark Was the Night, a compilation of cover songs and unreleased tracks from a who's who of indie luminaries, from The National to Iron and Wine, The Decemberists, Feist, Sufjan Stevens, Arcade Fire, and on and on. It's excellent.

Tough to pick a track, but what the hell, here's The New Pornographers covering a song by Destroyer, a band led by Canadian artist Dan Bejar, also known as a prominent member of ... The New Pornographers.