Articles by Grist staff

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.

U.S. denounces Iceland whaling move

WASHINGTON — The United States on Friday denounced Iceland’s decision to go ahead with a sharply higher whaling quota, voicing concern there were not whales to sustain the hunt. Iceland’s new left-wing government said last week it will maintain an earlier decision for a quota of 150 fin and 150 minke whales this year — […]

Green Energy Act introduced to Ontario's provincial parliament; feed-in tariffs key mechanism

The following is a guest essay by author, advocate, and renewable energy industry analyst Paul Gipe. His latest book, Wind Energy Basics, will be published by Chelsea Green in early 2009.

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On February 23, Ontario's powerful Minister of Energy and Infrastructure George Smitherman introduced into provincial parliament in Toronto Bill 150, to be known as the Green Energy Act.

The massive and far reaching bill -- the summary alone is eleven pages -- tackles renewable energy, energy efficiency, and building codes as well as streamlines project permitting.

Among its many provisions is the Ministers ability to use feed-in tariffs as a key implementation mechanism. Unlike the German Renewable Energy Sources Act, Bill 150 does not include specific feed-in tariffs. The tariffs will be determined in a separate administrative process.

Minister Smitherman is not only the Minister of Energy and Infrastructure but also Deputy Premier. As such, Smitherman is second only to Ontario's premier Dalton McGuinty in the cabinet.

In recent public presentations, both Minister Smitherman and Premier McGuinty have emphasized that they intend for the Green Energy Act to push Ontario to the forefront of renewable energy development in North America. Most ambitiously, they have said that the Green Energy Act will create 50,000 new jobs in the province within three years.

Ontario has been hard hit by the collapse of the auto industry. Before the financial crises, there were more people employed in the auto industry in Ontario than in the entire state of Michigan. Since the middle of 2008, Ontario has been shedding tens of thousands of auto industry jobs.

The government hopes to turn some of the now idle factories to manufacturing green products such as wind turbines and solar panels.

In Ontario's Westminister form of parliamentary rule, a majority government can almost guarantee passage of a bill introduced with the support of the cabinet. Amendments may be offered and debated but passage of the bill is almost certain.

Scientists find bigger than expected polar ice melt

GENEVA — Icecaps around the North and South Poles are melting faster and in a more widespread manner than expected, raising sea levels and fuelling climate change, a major scientific survey showed Wednesday. The International Polar Year survey found that warming in the Antarctic is “much more widespread than was thought,” while Arctic sea ice […]