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It is a strange but not uncommon experience for youth to hear veterans of the 1960s disparage protest. Youthful protest, it is implied, can never hope to achieve the cultural and political breakthroughs of the civil rights and anti-Vietnam era; it's nothing more than nostalgic play-acting by those too young to know what the '60s were all about and too naive to understand a changed and nuanced world, where simplistic slogans and confrontational tactics are at best a waste of time and probably do more harm than good.

This is hogwash.

What power environmentalists do have was wrested from a complacent society by determined, principled confrontation, and this is spent rather than increased by polite advocacy. It is also worth noting that the peak of environmental protest was the surge of Greenpeace USA led actions in the early 1980s.

The strength of public commitment to environmental action and climate crisis intervention (as opposed to the breadth of public opinion, a fickle product of ADD mass-media news cycles) is directly proportional to our conviction and moral clarity -- for which protest, or the lack thereof, serves as a convenient civic barometer. Without thinking about it, most Americans gauge how bad things are by whether there are people in the streets (or Zodiacs).

What percentage of auction revenue is rebated?

In my original post about Obama's budget, I looked at the issue of how much of the auction revenue ought to be rebated directly to taxpayers and how much should be devoted to investments in green infrastructure, etc.

The Center on Budget and Policy Priorities found that with 55 percent of auction revenue, those in the bottom 60 percent of incomes in the U.S. could have their increased energy costs entirely offset. That's pretty much all of lower-income and middle-class taxpayers.

So what is Obama proposing to do with the revenue?

The short answer is: $15 billion a year goes to green investments and the rest goes to "Making Work Pay," i.e., offsetting payroll taxes. (See p. 3 of the Summary Tables [PDF].) That stays true over the next ten years, which means that the percentage of revenue rebated rises steadily.

So, in the first year, out of $78.7b in revenue, $63.7b is rebated -- roughly 81 percent. In 2019, out of $83b in projected revenue, $68b is rebated -- about 82%. But it's important to note that the $15b in investments is held steady, regardless of total revenue. If revenue rises faster and farther than these projections -- and these are extremely conservative projections -- then the percentage rebated could get up to 85, 90, 95 percent.

That is, in my humble opinion, bad policy. But there it is.

International mercury pact shows that India and China will follow our lead

The news that the Obama administration is on board with an international pact to significantly decrease mercury use is fantastic for those of us committed to switching from dirty coal power to clean, renewable energy sources.

This is a bold step for the U.S. -- one that is a long-time coming for coal-fired power plants. Coal plants are one of the largest sources of man-made mercury pollution in the U.S.

Mercury pollution causes brain damage and other developmental problems in unborn children and infants, and it has been linked to a greater risk of coronary heart disease in men. A Centers for Disease Control and Prevention study found that 8 percent of women had mercury blood levels exceeding the level deemed safe for unborn children by the Environmental Protection Agency. Our mercury regulations should be strict to protect public health and the environment.

Yet it was this quote from the Washington Post article on the international mercury treaty that stuck out to my colleagues and me: "Once the administration said it was reversing the course set by President George W. Bush, China, India and other nations also agreed to endorse the goal of a mandatory treaty."

For too long we've heard the regulation nay-sayers use the excuse that whatever restrictions and regulations we introduce will only hurt the U.S. economically because China and India will not do the same. This mercury treaty shows the reality: If the U.S. acts first, then China and India will follow.

This bodes well for carbon legislation. The U.S. must act first on carbon regulation. China and India will follow our lead.

American Lung Association teams with enviros on clean air policy

The American Lung Association would like to remind you that air pollution is not only warming the planet, but it’s also bad for your health. The group released their Agenda for Clean Air [PDF] on Wednesday with a coalition of environmental groups, including Clean Air Watch. The report comes just a day after the association […]

Washington's cap-and-trade legislation gutted by Senate committee

So remember how I was all "your days are numbered, pollutey companies of Washington state! mwahaha" because the cap-and-trade bill "whizzed" through the House committee? Yeah, I might have spoken too soon, because not so much with the Senate version.

The Committee on Environment, Water, and Energy yesterday passed a version of the bill that makes the program voluntary, which kinda defeats the purpose, doesn't it? Still, hopeful enviros are quick to note that it's a "work in progress." Sigh.

Coen brothers shoot an ad busting the ‘clean coal’ myth

The Reality Coalition is at it again. This time, they recruited the Coen Brothers to shoot an ad debunking the “clean coal” myth: The Coens are also shooting a second ad for the campaign, due out soon.

Cap-and-trade rebates to taxpayers favor efficiency over equity

UPDATE: There are two important updates at the bottom of this post.

Another striking feature of the way cap-and-trade is treated in Obama's budget: rebates to taxpayers are administered through a payroll tax deduction. This is interesting stuff indeed.

The question of how to rebate auction revenue back to people (to offset the increased costs of energy under a cap) reveals a tension between equity and efficiency.

If the goal is equity, the payroll tax rebate is probably not the way to go. On one hand, it's far more progressive than an income tax rebate (about a third of U.S. workers pay no federal income tax at all). On the other hand, there's reason to believe it's less equitable than a simply writing an equal check to every citizen. That's what a recent report from the Center on Budget and Policy Priorities recommends. (Technically it recommends refundable tax credits, more or less the same thing).

CBPP says flat rebates would be more equitable than income or payroll tax cuts -- the latter would less regressive, but regressive nonetheless:

CBO found that if all the revenue from auctioning emissions allowances were used to reduce payroll tax rates, households in the bottom 60 percent of the distribution would get a smaller benefit from the tax cut, on average, than they would lose from higher energy prices. Those in the next 20 percent would come out even and the top 20 percent of the population would get a tax cut that exceeded their increase in energy costs. [my emphasis]

In addition, "seniors and others without earnings would receive no rebate" -- no pay, no payroll tax.

To solve the first problem, you could put a cap on payroll tax rebates, so higher income workers don't get a windfall. To solve the second problem, you could make seniors, the disabled, and other folks with no earnings eligible for a special tax credit. But if you're going that route, why not just use the same tax credit for everyone?

If your goal is efficiency, however, the payroll tax rebate is better. Efficiency here means emission reductions with the least macroeconomic impact. A cap-and-trade refunded through payroll taxes effectively raises one tax (an fossil energy tax) and lowers another. The idea is to get less of what you're taxing (fossil energy) and more of what you're taxing less (work). That's why Obama's people are calling it the "Making Work Pay" measure.

Still, the CBPP says it's not worth it:

The efficiency gains are largest -- although still quite small -- when the rebate comes exclusively in the form of a payroll tax cut. But that approach leaves millions of low-income and senior households out in the cold.

Guess efficiency beat equity in the Obama budget team. That would be Summers and Orszag at work. Yay economists!

UPDATES: Two important notes to add:

First, there is a cap on the payroll tax deduction: the tax credit offsets payroll taxes "up to the first $6,450 of earnings." So that does reduce the regressivity somewhat. Thanks to Kate for pointing this out.

Second, it might not be clear in the post that the tax credit's effect is to offset payroll taxes, but the credit itself is administered via the income tax. Those who pay payroll tax but no income tax will just receive an income tax credit -- a check. The payroll tax is the target but the income tax is the instrument. Why this is, I'll leave for people who know way more about the tax code than me.

When the season’s first edible weeds poke through, it’s time for gumbo z’herbes

You can’t beat them, you might as well eat them. Here in central North Carolina, the harbingers of spring have arrived. No, not daffodils. I’m talking about my favorite wild greens: pepper cress and dandelions. Just this week, I’ve tucked handfuls of these herbs into sandwiches, topped pizza with them, and folded some into soft […]

Congressional leaders call for capitol plant to can coal days before big protest

Several thousand people are expected to gather on Monday for a massive protest at the coal-fired plant that provides power to the U.S. Capitol. Organizers from Chesapeake Climate Action Network, Rainforest Action Network, and Greenpeace anticipate that it will be the largest display of civil disobedience against global warming in United States history. Today, however, […]

The projected revenue from cap-and-trade auctions is strikingly low

Hey, look, the New York Times and the Washington Post have decided it's significant that Obama's budget includes carbon auction revenue! I guess people are allowed to talk about it now. A good start might be reading my post on the subject from three $%@^! days ago. (Yes, I'm aware bitterness is unattractive.)

There are a few notable features of the treatment of cap-and-trade in the just-released budget proposal. I'll break it up into a few posts.

First, the projected revenue seems strikingly low. Partly this is a function of the fact that the targets themselves, particularly in the short term, are fairly weak -- 14 percent under 2005 levels by 2020, 83 percent by 2050. (Sane climate policy would reduce emissions 20 percent below 1990 levels by 2020, at least.)

Still, the proposal explicitly says that the administration expects 100 percent of the permits to be auctioned off. As Kate noted, the CBO estimated (PDF) that "the value of those allowances could total between $50 billion and $300 billion annually (in 2006 dollars) by 2020." The administration's estimate -- $83 billion a year by 2020 -- is well at the bottom end of those projections.

My guess -- apparently confirmed by "senior White House officials" who don't invite me to their conference calls -- is that this is simple conservatism. The inclusion of any carbon revenue at all is sure to spark controversy, so they're simply being cautious not to lay too ambitious a marker. It's possible both the targets and the revenue could be boosted in the course of Congressional sausage-making, though color me somewhat pessimistic about that.