Climate Politics

Van Hollen to introduce cap-and-dividend bill

Fans of carbon-pricing schemes that would return the vast majority of tax or carbon auction revenue to consumers think there’s increasing political momentum for their proposals in Congress these days. Proponents of cap-and-dividend — a carbon-pricing plan that would auction off pollution credits to industries and send roughly 90 percent of the resulting revenue to […]

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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.

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.

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.

L.A. solar vote could measure nation’s appetite for renewables

Next week Los Angeles voters will vote on an ambitious solar energy plan that would add solar panels on rooftops and parking lots across the city and require the city’s energy utility to rapidly increase the amount of solar power it uses. The vote could give a snapshot of public support for renewable energy, just […]

The myth of the universal market … debunked!

Communication among economists, other social scientists, natural scientists, and lawyers is far from perfect. When the topic is the environment, discourse across disciplines is both important and difficult. Economists themselves have likely contributed to some misunderstandings about how they think about the environment, perhaps through enthusiasm for market solutions, perhaps by neglecting to make explicit all of the necessary qualifications, and perhaps simply by the use of technical jargon.

So it shouldn't come as a surprise that there are several prevalent and very striking myths about how economists think about the environment. Because of this, my colleague Don Fullerton, a professor of economics at the University of Illinois, and I posed the following question in an article in Nature: how do economists really think about the environment? In this and several succeeding postings, I'm going to answer this question, by examining several of the most prevalent myths.

One myth is that economists believe that the market solves all problems. Indeed, the "first theorem of welfare economics" states that private markets are perfectly efficient on their own, with no interference from government, so long as certain conditions are met. This theorem, easily proven, is exceptionally powerful, because it means that no one needs to tell producers of goods and services what to sell to which consumers. Instead, self-interested producers and self-interested consumers meet in the marketplace, engage in trade, and thereby achieve the greatest good for the greatest number, as if "guided by an invisible hand," as Adam Smith wrote in 1776 in The Wealth of Nations. This notion of maximum general welfare is what economists mean by the "efficiency" of competitive markets.