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Obama's budget contains carbon auction revenue, but how much will be rebated to consumers?

A source close to Obama once told me, when I asked how serious the White House is about getting a climate bill this year, to watch the budget. If permit auction revenue is included, that should send a clear signal that this was no empty campaign promise.

Obama's budget outline won't be released until Thursday, but the New York Times has an early preview that includes this:

On energy policy, Mr. Obama's budget will show new revenues by 2012 from his proposal to require companies to buy permits from the government for greenhouse gas emissions above a certain cap. The Congressional Budget Office estimates that the permits would raise up to $300 billion a year by 2020.

This is fairly sketchy. It doesn't say anything about the amount of new revenues projected by 2012, which would be a tip-off about the strength of the targets and the percentage of auctioned permits the administration expects. Perhaps on Thursday we'll get a clearer picture. But at the very least, this is an unmistakable sign that they're serious about a cap-and-trade program with (some) auctioned permits, and soon.

Now, here's a part I'm not as thrilled about:

Since companies would pass their costs on to customers, Mr. Obama would have the government use most of the revenues for relief to families to offset higher utility bills and related expenses. The remaining revenues would cover his proposals for $15 billion a year in spending and tax incentives to develop alternative energy.

There are lots of fans full rebating (sending back 100 percent of tax or auction revenue to taxpayers) in the Grist community. I am not one of them. I am not even particularly a fan of rebating "most" of auction revenue. The fact is, we need enormous public investments in green energy and infrastructure -- far beyond $15 billion a year. Rebates should be the minimal necessary to compensate those hardest hit by higher energy prices, and the rest of the revenue should go to investments in a green economy. After all, the best way to provide long-term relief to American consumers is to accelerate the clean energy transition.

Two encouraging signs that global climate treaties might be having the intended effect

Although rumors of its death may be exaggerated, the Kyoto Protocol hasn't so far been anyone's idea of a rip-roaring success. The question remains: is the international treaty fundamentally flawed, or is it a fixer-upper that bureaucrats are slowly tweaking into an effective carbon-fighting regulatory framework?

Two pieces of recent evidence boost the fixer-upper view. The first is a report from a prominent research group suggesting that a large part of the European Union's drop in carbon emissions last year are attributable to the cap.

EU emissions dropped by 3 percent in 2008. According to New Carbon Finance, 40 percent of this drop is due to Kyoto. Another 30 percent is due to the recession. Much of the drop came from a switchover from coal to natural gas.

To be sure, this is a modest improvement. The drop itself is small, and natural gas is still a fossil fuel. Nevertheless, this is how a carbon price works: gradual, steady pressure yields incremental movement toward cleaner technologies. The mechanism appears to be sound, and legislators are presently engaged in the political task of making the cap more stringent.

Life advice from the Oscars

"All my life, I've had the choice between love and hate. I chose love. And now I'm here."

-- A.R. Rahman, winner of two Academy Awards for his music in Slumdog Millionaire

Monbiot on nuclear

George Monbiot writes a column about nuclear power and conditions under which he would not oppose it.

1972 Datsun dominates drag strip

I put up a post in March of 2007 titled Electric cars: Going nowhere fast. It contained photos of electric cars available at the time. Erik Hoffner sent me this link in an email the other day. Coincidentally I ran across this same clip while channel surfing on TV that same night.

Conversions may outstrip production cars in the not too distant future, if somebody out there would just give us the battery we need at prices that we can afford. I've got my eye on this company.

Also, we need new resources …

"The time for implacable opposition, for going it alone, has passed. We need new approaches and greater adaptability if we are to achieve acceptance of fossil fuels as sustainable resources."

-- ConocoPhillips CEO James Mulva [PDF]

Geoengineering what?

China fires chemicals into the clouds to try to stimulate rain to end the drought. Days later, a huge and unexpected snowfall closes the highways into and out of the northern provinces, effectively shutting off economic activity.

Discuss.

How biotech companies control research on GMO crops

Recently I wrote about the dwindling faith the American people seem to have in science, seemingly choosing to either ignore or disregard the latest research on global warming. Why has science lost its place in the hearts and minds of America? Has the media been a culprit? Did the Bush administration dismiss one too many scientific reports? But now, a recent article leaves me wondering if science has not only taken a backseat to American thoughts, but a backseat to industry influence as well.

In Thursday's New York Times, Andrew Pollack reported on how crop scientists throughout the country have been unable to perform adequate testing and research on biotech crops, because of the strong hand of biotechnology companies. Pollack was likely alerted to the story after a group of 26 corn insect scientists from 16 different states anonymously submitted a statement to the EPA on a docket regarding the evaluation of insect resistance risks with a brand of Pioneer Hi-Bred biotech corn. In their statement the scientists noted that they chose to remain anonymous because "virtually all of us require cooperation from industry at some level to conduct our research."

Remaining anonymous allowed the scientists to fully express their real concern with biotech crop research controlled by the industry through technology and stewardship agreements, required to be signed for the purchase of genetically modified seeds. Such agreements are the same that farmers must sign before purchasing seeds, which prevent them from replanting seeds or thus risk legal action. The scientist coalition noted that such agreements "explicitly prohibit research" and "inhibit public scientists from pursuing their mandated role on behalf of the public good unless the research is approved by industry." The effects were clearly stated -- "no truly independent research can be legally conducted on many critical questions regarding the technology." Yet the scientific research community has not always been this way. Before patents were granted for life forms, the Plant Variety Protection Act passed by Congress in 1970 allowed farmers to save and replant protected seeds and gave scientists the right to research protected varieties.

European climate program reduces emissions

A few years back, Europe's cap-and-trade system, called the ETS, was taking a beating in the press. Some of the criticism was legit: the program really did make some silly missteps in the early years.

The biggest bungles were tied up with how the ETS handed out emissions permits. First, they decided to give them out for free -- which, as Sightline has discussed ad nauseum, was a recipe for windfall profits for the firms that got free permits. And second, for lack of reliable emissions data, the ETS handed out more permits than firms actually needed. Ultimately, the glut of permits led to a collapse in the price of carbon, and very little progress in reducing emissions.

But the good thing about making a mistake is that you can learn from it. And that's just what the ETS has done. To fix the windfall problem, nations participating in the ETS have begun auctioning off permits rather than handing them out for free. And now, there's evidence that the ETS has really begun to reduce emissions. The New York Times reports:

In a boost for the system ... a prominent research company, New Carbon Finance, said its calculations showed that the largest cause of a reduction in emissions in the European Union last year was attributable to the trading system -- because it had encouraged greater use of gas in power generation rather than dirtier fuels like coal.

European emissions dropped by roughly 3 percent in 2008.

So it took a little while, but Europe's cap and trade system is having the intended effect: by putting a price on carbon emissions, it's made a meaningful dent in climate-disrupting pollution.

Heading to Denmark in December? Book a room now

The average December in Copenhagen has 17 days of rain and a temperature of 2 to 4 degrees Celsius. So, those readers planning to travel there for the U.N. Climate Change Conference at the end of this year will want to book a warm, dry bed for recovering from all the talking, negotiating, talking about […]