Archive for the ‘carbon pricing’ Category

"The Climes, They Are A-Changin`"; Or, Dylan Does Copenhagen

December 6th, 2009 No comments

Apologies, but I can`t resist:

I saw a news item earlier today – “Copenhagen climate summit borrows Dylan’s voice” – that indicates that the COP 15 organizers (the 15th Conference of the Parties to the UN Framework Convention on Climate Change, to which Pres. George H.W. Bush & Congress made US a party) are making informal use of Bob Dylan`s “A Hard Rain is Gonna Fall” as a conference theme (“UN to release ‘Hard Rain’ film with Bob Dylan tune on eve of climate talks | Spero News“). 

Well, a different Dylan song popped into my head; tweaked very slightly, it goes like this:

The Climes They Are A-Changin’

Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone.
If your time to you
Is worth savin’
Then you better start swimmin’
Or you’ll sink like a stone
For the climes they are a-changin’.

Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won’t come again
And don’t speak too soon
For the wheel’s still in spin
And there’s no tellin’ who
That it’s namin’.
For the loser now
Will be later to win
For the climes they are a-changin’.

Come senators, congressmen
Please heed the call
Don’t stand in the doorway
Don’t block up the hall
For he that gets hurt
Will be he who has stalled
There’s a battle outside
And it is ragin’.
It’ll soon shake your windows
And rattle your walls
For the times they are a-changin’.

Come mothers and fathers
Throughout the land
And don’t criticize
What you can’t understand
Your sons and your daughters
Are beyond your command
Your old road is
Rapidly agin’.
Please get out of the new one
If you can’t lend your hand
For the climes they are a-changin’.

The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is
Rapidly fadin’.
And the first one now
Will later be last
For the climes they are a-changin’.

Dylan`s original, The Times They Are A-Changin` is here.

I intend no offense here to anyone; those with different predilections on climate and the problem of government and rent-seeking will see this and other Rorshach Blots differently.

But for readers that have made it this far, I note the following:

Republicans (Sen. Lindsey Graham & others) give Dems a climate deal? In exchange for streamlining for nukes, "clean coal" subsidies, offshore drilling, carbon price ceiling & import taxes

October 12th, 2009 No comments

Senate Dems, who lack sufficient votes on their own to approve a cap-and-trade bill over a possible Republican fillibuster, have sought help from sympathetic Republicans, who have apparently used this leverage to broaden the bill and to extract key concessions on various issues; such  concessions are sure to please a wide range of lobbying groups, and it looks like there may be a good chance that they will be sufficient to slip a cap-and-trade bill past opposition from coal-producing and -burning states.

The framework of the bi-partisan package was spelled out on Sunday, October11, in a joint NYT op-ed, “Yes We Can (Pass Climate Change Legislation)”,  by liberal Senator John Kerry (D-Mass.) and conservative Senator Lindsey Graham (R-SC).

While details are sketchy (and details sure to still be fought over), it looks like Pres. Obama will have, if not final legislation, then at least high prospects for a cap-and-trade bill that he can use for the negotiations that will start in a few weeks in Copenhagen (over the shape of a global climate treaty to replace the expiring Kyoto Protocol).

Excerpts from the Kerry-Graham op-ed are here (emphasis added; with a few comments in brackets):

Many Democrats insist on tough new standards for curtailing the
carbon emissions
that cause global warming. Many Republicans remain
concerned about the cost to Americans relative to the environmental
benefit and are adamant about breaking our addiction to foreign sources
of oil
[Republicans are so easily jerked around over “energy security”].

However, we refuse to accept the argument that the
United States cannot lead the world in addressing global climate
change. [but do China, India and others want to follow?] We are also convinced that we have found both a framework for
climate legislation to pass Congress and the blueprint for a
clean-energy future that will revitalize our economy, protect current
jobs and create new ones, safeguard our national security and reduce
pollution. …

First, we agree that climate change is real and threatens our
economy and national security. That is why we are advocating aggressive
reductions in our emissions of the carbon gases
that cause climate
change. We will minimize the impact on major emitters through a
market-based system that will provide both flexibility and time for big
polluters to come into compliance without hindering global
competitiveness or driving more jobs overseas. [cap-and-trade]

Second, while we
invest in renewable energy sources like wind and solar, we must also
take advantage of nuclear power, our single largest contributor of
emissions-free power. Nuclear power needs to be a core component of
electricity generation if we are to meet our emission reduction
targets. We need to jettison cumbersome regulations that have stalled
the construction of nuclear plants in favor of a streamlined permit
that maintains vigorous safeguards while allowing utilities to
secure financing for more plants. We must also do more to encourage
serious investment in research and development to find solutions to our
nuclear waste problem

Third, climate change legislation is an
opportunity to get serious about breaking our dependence on foreign
. For too long, we have ignored potential energy sources off our
coasts and underground. Even as we increase renewable electricity
generation, we must recognize that for the foreseeable future we will
continue to burn fossil fuels. To meet our environmental goals, we must
do this as cleanly as possible. The United States should aim to become
the Saudi Arabia of clean coal.
For this reason, we need to provide new
financial incentives for companies that develop carbon capture and

In addition, we are committed to
seeking compromise on additional onshore and offshore oil and gas
— work that was started by a bipartisan group in the Senate
last Congress. Any exploration must be conducted in an environmentally
sensitive manner and protect the rights and interests of our coastal

Fourth, we cannot sacrifice another job to competitors
overseas. China and India are among the many countries investing
heavily in clean-energy technologies that will produce millions of
jobs. There is no reason we should surrender our marketplace to
countries that do not accept environmental standards. For this reason,
we should consider a border tax on items produced in countries that
avoid these standards
. This is consistent with our obligations under
the World Trade Organization and creates strong incentives for other
countries to adopt tough environmental protections
.[probably just a signal to China & India; any bill would have to leave flexibility to the Administration.]

Finally, we
will develop a mechanism to protect businesses — and ultimately
consumers — from increases in energy prices. The central element is the
establishment of a floor and a ceiling for the cost of emission
This will also safeguard important industries while they
make the investments necessary to join the clean-energy era. We
recognize there will be short-term transition costs associated with any
climate change legislation, costs that can be eased. But we also
believe strongly that the long-term gain will be enormous. …

If Congress does not pass legislation
dealing with climate change, the administration will use the
Environmental Protection Agency to impose new regulations. Imposed
regulations are likely to be tougher and they certainly will not
include the job protections and investment incentives we are proposing. 

The message to those who have stalled for years is clear:
killing a Senate bill is not success; indeed, given the threat of
agency regulation, those who have been content to make the legislative
process grind to a halt would later come running to Congress
in a panic
to secure the kinds of incentives and investments we can pass today.
Industry needs the certainty that comes with Congressional action.

Joe Romm on the left applauds the proposed deal (though there is sure to be disagreement about support for coal, nuclear power and offshore oil & gas exploration), and Bill Scher says “Sen. Lindsey Graham Crosses the Climate Rubicon” and thus “made a deal all but inevitable”.

On the right, Michelle Malkin reports that she was right to warn about Republican turn-coats, the National Review `s Gore-haters are dispirited, and MasterResource, the coal-funded “free market” energy blog by libertarian Rob Bradley, has nothing to say.

Political scientist Roger Pielke, Jr. notes the lack of precision and suggests that Republicans now have the upper hand in negotiating the bill.

More reaction and background that readers may find useful is here:

Let’s Try This Again: Are There GOP Senators Who Will Back The Climate Bill? (Bill Scher, Campaign for America`s Future, October 7, 2009)
Senators link drilling with cap-and-trade (Houston Chronicle, October 6, 2009)
Is Lieberman at it again? (Politico,


On the Climate Bill Fence: How Sen. Graham Got There by Bill Chameides (Dean of Duke U`s school of the environment) | Aug 27, 2009

– More on other senators by Bill Chameides

From a libertarian perspective, I ask other libertarians and those on the right whether it is not too late to get a leaner climate/energy bill, that would:
  • instead of a cap-and-trade program (that hands out emissions permits free to existing fossil fuel users, with costs being borne regressively by energy users), use upstream carbon taxes, with the revenues rebated per capita to all Americans;
  • allow limited use of offsets in lieu of taxes (effectiveness of eligible offsets to be insured for a period of 50 years) by Lloyd`s of London);
  • eliminate subsidies for all energy technologies (including ethanol and biofuels)
  • provide that at least half of all revenues taken in by the federal
    government and state government for offshore oil & gas leases and for coal leases will be paid per capita to citizens (and state residents);
  • allow nuclear fuel reprocessing and breeder plants, while eliminating federal insurance for nuke plants;
  • eliminate the grandfathering of dirty coal-burning plants under the Clean Air Act;
  • allow immediate tax deduction of a ll capital expenditures (eliminating multi-year amortization limits);
  • eliminate mandates that public utilities increase use of green, renewable fuels, in favor of the removal of antitrust protection for the grant of local monopolies (and other measure that introduce real competition into the retail power sector), and application of Commerce Clause protection to those who want to sell power out-of-state;
  • establishes energy efficiency targets, as opposed to mandates, with awards to category winners, and publishes results;
  • privatize the TVA (by distributing shares per capita to all who are served by TVA);
  • publish information on the locations of coal fly-ash storage sites;
  • make it clear that federal and state licenses for energy facilities and mines are not licenses to pollute, do not extend any immunity for actual damages caused, and do not prevent injunctions for facilities identified as causing particular damage; and
  • to dampen NIMBYism, establish compensation schedules for federally-licensed facilities, and encourage states to do the same (based on distance and like wind and water flow).

Ringside seat on the fight to steer the Chamber of Commerce`s climate bus

October 7th, 2009 No comments

On the heels of my post about Apple leaving the U.S. Chamber of Commerce, here are a few more links and excerpts for eager readers (who have been spared a longer post that vanished into the ether as pixie dust crashed Mozilla and my prior unsaved draft) (emphasis added).

1.  The Chamber`s opaque policy-making mechanism on climate, and the trigger for the wave of departures from the U.S. Chamber of Commerce;

see long article at NYT:

U.S. Chamber of Commerce staff decides the trade group’s climate and
energy policy positions without approval from the board of directors,
Nike Inc. charged as it formulated a plan to call for greater chamber

Nike, which last week left the chamber’s board of directors but decided
to remain a chamber member
, described a lack of transparency at the
group that conflicts with how the chamber describes its operations. …

“We just weren’t clear in how decisions on climate and energy were
being made,” said Brad Figel, Nike’s director of government relations.
“They’re not being made at the board-of-director level, because we’re a
member of the board of directors. We were not consulted. We’re
convinced that’s not really where the action on climate change is being

The chamber reaches its positions through a “democratic
process” that is “driven by members,” chamber spokesman Eric
Wohlschlegel said yesterday. …

“Policy is developed and recommendations are made to the whole
board,” spokesman Wohlschlegel said yesterday. “It’s an open and
voluntary process, and it’s formulated by a majority of our members
that represents the broader business community’s perspective and not just the interests of one sector, one energy sector … or one sector of the economy.”

would not address Nike’s statement, however, that while it had
representation on the board of directors, the board did not vote on
climate policy positions. Wohlschlegel would not say when the board
last took a vote on its position on climate legislation. …

“They told us these decisions were made by staff [and not pursuant to the Board`s committee system],” Figel said. He
said that Nike was told that “this is a longstanding chamber policy,”
and that “once the policy is established, a lot of these decisions can
be made at the staff level.”

Last spring, Figel said, Nike told
the chamber that it wanted to be consulted on climate issues. After
that, he said, “there were several decisions that were made by the
chamber that we weren’t consulted on.”

In particular, Figel said, Nike recoiled at a chamber official’s
call for an EPA trial similar to the Scopes Monkey Trial on
evolutionary theory
[regarding EPA`s steps to employ regulatory authority affirmed by a Supreme Court decision during the Bush administration].

“That’s not helpful in any way,” Figel said. “That put a lot of companies on edge, how they phrased that.”

statement this summer by William Kovacs, a chamber senior vice
president, that the science of global warming should face a public
trial similar to the Scopes Monkey Trial thrust the trade group into a
new realm, [Kenneth] Green [resident scholar at the American Enterprise Institute] said.

“That was beyond the pale in terms of
aggressiveness that I’ve seen in a trade association
,” Green said. “At
that point, they were really inserting themselves into the political
process in an extremely visible way, not just a matter of lobbying for
their companies but really engaging in the bigger cultural argument. I
wouldn’t be surprised if that wasn’t what scared some people away.”

Note (from Marc Gunther at Salon in April):  ” Nike—along with Starbucks (SBUX), Levi Strauss, and Timberland
(TBL)—helped form a green-business coalition to lobby for strong
federal actions on climate. The coalition is called BICEP: Business for
Innovative Climate and Energy Policy

From blog of Marc Gunther (who is a Fortune contributing editor):

To be sure, the chamber, which calls itself “the voice of business”
and spent about $62 million lobbying Congress last year, also has lots
of members from the oil, coal and energy-intensive industries who
oppose federal regulation of greenhouse gases. Its 122-member board
includes executives from Consol Energy, Massey Energy, Peabody Energy,
and the Southern Co.

The smart thing for the chamber to do would be to stay neutral—to
admit that business is divided on the issue and to leave lobbying up to
individual companies. Instead, some chamber officials offered up
reasonable arguments against the bills pending in Congress and others
went off the deep end. In a remark that was ill-advised at best and
downright dumb at worst, William Kovacs, the chamber’s senior vice
president for environment, technology and regulatory affairs, called
for a public trial about climate science that he said would be “the Scopes monkey trial of the 21st century.”

2.  Who dissents from the Chamber`s long-standing opposition to climate change legislation? (with links to statements)

Quit the Chamber: Exelon, PNM Resources, PG&E, Apple.

Quit the Chamber`s Board: Nike.

Says Chamber doesn’t represent their views on climate:

– seven Board members from companies that are part of the U.S. Climate Action Partnership, a wide business coalition pushing for passage of climate
legislation: Alcoa, Caterpillar,
ConocoPhillips, Dow Chemical, Duke Energy, Siemens and Xerox

General Electric, General Motors, Ford, Shell, DuPont, American Electric Power, and John Deere also support mandatory controls on greenhouse gas emissions.

ExxonMobil favors a carbon tax (as I have noted several times).

Entergy, a New Orleans-based utility also on the board

General Electric,

Johnson & Johnson,

San Jose Chamber of Commerce.

Note: Those expressly in favor of the Chamber`s go slow approach on climate appear to be limited to coal firms Peabody Energy, Massey Energy Corp.,
and CONSOL Energy, and freight shipper Con-Way Inc.  As noted previously, Chamber CEO Tom Donohue is closely tied to coal shipper Union Pacific.

3.  In a move that shows how little the Chamber cares about the opinion and positions of its dissenting members, CEO Tom Donohue took at jab at Apple in this October 6 letter that he addressed to Apple CEO Steve Jobs in response to Apple`s announced resignation from the Chamber (with editorial comments):

Dear Mr. Jobs:

am sorry to learn of Apple’s resignation from the U.S. Chamber of
Commerce. It is unfortunate that your company didn’t take the time to
understand the Chamber’s position on climate and forfeited the
y to advance a 21st century approach to climate change. [Needless, to say, Apple quit because it fully understood and was fed up with the Chamber`s actual position – unrelenting intransigence; PG&E said in its letter to the Chamber announcing its withdrawal: Extreme rhetoric and obstructionist tactics seem to increasingly mark
the Chamber’s public stance on this issue.

U.S. Chamber of Commerce continues to support strong federal
legislation and a binding international agreement to reduce carbon
emissions and address climate change.
[The Chamber has no consistent expressed approach; it has opposed all federal legislation, and opposes provisions that would penalize foreign countries not adopting similar legislation. It is simply trying to put lipstick on a pig.] Furthermore, we believe that
Congress should set climate change policy through legislation, rather
than having the EPA apply existing environmental statutes that were not
created to regulate greenhouse gas emissions. This is also the stated
position of the President and Congressional leaders. [The regulatory threat exists only because the Bush administration and Republican Congress refused to act, and because the Chamber has exercised no leadership in outlining constructive legislation.]

letter states that “Apple is committed to the environment and the
communities in which we operate around the world.” So is the Chamber
but we are also committed to preserving the competitiveness and
prosperity of the communities and businesses in our nation. [Particularly the competitiveness and prosperity of the Chamber members that mine, transport and burn coal.]

we do support legislation to address climate change [the Chamber continues to take the position that even an average 3 degrees C increase over the next century would bring net benefits], we oppose
legislation such as the Waxman-Markey bill that numerous studies show
will cause Americans to lose their jobs and shift greenhouse gas
emissions overseas, negating potential climate benefits. An effective
climate change response must include all major CO2 emitting economies,
promote new technologies, emphasize efficiency, ensure affordable
energy for families and businesses, and defend American jobs while
returning our economy to prosperity.

“The American business
community that we proudly represent is the single largest investor and
innovator in clean energy solutions and remains committed to a strong
economy and clean environment. … The Chamber believes that the
business community will continue to be the catalyst for reducing
greenhouse gas emissions and we support efforts to tackle climate
change in a way that will strengthen our economy, protect American
jobs, and benefit our environment.

“Climate change is a global
problem that requires a global solution. The Chamber supports an
international agreement that will set realistic and achievable goals,
ensure global participation, protect intellectual property rights and
remove trade barriers to environmental goods and services.

would have hoped that Apple would have supported our efforts to improve
environmental stewardship
and keep Americans at work and our economy
competitive. As the world’s largest business federation representing
more than 3 million businesses and organizations of every size, sector,
and region, the Chamber is leading the way to support the innovation
needed to transition to a lower carbon future, including the
elimination of barriers to the deployment of clean energy technologies.
Supporting innovation and technology is at the very heart of our
efforts to combat climate change, and we will continue to fight for an
approach that embraces their merits.
It is a shame that Apple will not be part of our efforts.” [Yes; the Chamber will just have to “lead” with fewer followers, fewer resources, and less prestige. And it appears that Tom Donohue is trying to “lead” the way to even fewer Chamber members; Dale Carnegie`s “How to Win Friends and Influence People,” anyone? ]

4.  More ongoing insightful (if skewed) commentary on the Chamber of Commerce here by Peter Altman, “Climate Campaign Director” of the mainstream enviro group NRDC (which largely “depend[s] on the kindness of rich people to stay afloat.” Its board and
major donors “come from Wall Street, corporate law firms and big

5.  It`s clear that we are looking not merely at a clash of preferences, but a clash of preferences over how government is used – and in whose favor. This would look like classic “rent-seeking”, but for the fact that it relates to the management of an un-owned, open-access commons that affects all of us – the atmosphere and climate system – and the fact that Coasean bargaining on an international scale cannot, in any practical sense, be conducted without involving states.

Bob Murphy spins shallow "Blockbuster study" by coal lobby on cap and trade bill

October 2nd, 2009 No comments

The coal- and utility-funded “free-market think tank” Institute of Energy Research has a just released another study that tells us the obvious about the regressive consequences of the Waxman-Markey cap-and-trade bill and the benefits likely to flow to its corporate supporters, while masking its own agenda. As an added benefit, the press release includes some one-sided and unsupportable over-statements by Bob Murphy.

A few points:

IER:  “cap-and-trade would precipitate a financial windfall for well-connected
special interests and politically-favored companies.”

me:  No dispute here. It`s perfectly fair to point out who will benefit from the cap-and-trade bills.  But let`s not ignore that coal investors have long benefitted from being able to shift pollution costs to people downstream, under the perverse “rights to pollute” enabled under the Clean Air Act, and under state and federal mining licenses that allow mining firms to force out local residents.

IER:  “The study … details how shareholders,
not ratepayers, will be the primary beneficiaries of cap-and-trade’s

me:  Sure, just like how it was shareholders in coal producers and utilities who are the primary beneficiaries of the externalities permitted by the status quo.

Bob Murphy[The] analysis … illustrates just how flawed and skewed this
legislation is toward rent-seeking special interests.

me:  Sure, but the interest of the coal lobby is that the legislation doesn`t benefit them enough. Do coal investors care MORE about what`s good for the average Joe than do other “rent-seeking special interests”?

Bob Murphy:  “secondly, and more important, [the analysis] shows that cap-and-trade, as
outlined in Waxman-Markey, is nothing more than a transfer of wealth
from the poorest to the richest among us.

me:  Oh really?  Does the analysis really conclude that Waxman-Markey does “nothing more” than transfer wealth? You mean Waxman-Markey wouldn`t actually raise prices of carbon-based energy or affect consumption and investment decisions by industry, businesses and consumers?

Bob Murphy:  “These new findings should send a clear message to the American people cap-and-trade helps the powerful and hurts the rest of us.

me: The message is fine and important. But are coal firms and investors “the rest of us”, not powerful and only concerned about the average Joe, or are they trying to protect their own privileged position? Further, are there any alternatives to cap-and-trade that coal investors support, such as carbon taxes, or even undoing their favored treatment under federal clean air laws and mining laws?

Bob Murphy:  And as Congress’ corporate allies receive the bulk of the benefits
Waxman-Markey has to offer, our environment, along with our struggling
economy, will suffer for years to come. Congress needs to get out of
the business of picking winners and losers and allow the market to
determine which energy and electricity sources should power our

me: Ahh yes, forgive me; I forgot that coal firms were a part of the enviro lobby!  But aside from that, I agree strongly that Waxman-Markey is poor policy.  Do coal investors agree with Exxon that rebated carbon taxes would keep Congress “out of the business of picking winners and losers and allow the market to determine which energy and electricity sources should power our economy”?

Thanks, IER for showing us how “political capitalism” works!


* “Political capitalism” is Rob Bradley`s term for “rent-seeking”

Confirmation bias, rent-seeking and the rush to print the latest climate science "scoop" (Lindzen-Choi)

September 4th, 2009 1 comment

Since I`m in Tokyo and deprived of Bob Murphy`s enviable access, via talk radio, to cutting-edge climate science, I thank him using his blog to bring it to the attention of his audience (which occasionally includes me). Says Bob (emphasis added):

Chip Knappenberger explains
the significance (and remaining holes to be plugged) in the recent
Lindzen-Choi paper that’s got talk radio in such a tizzy
. The opening
sentence: “MIT climate scientists Richard Lindzen and collaborator
Yong-Sang Choi soon-to-be published paper (Geophysical Research
Letters, American Geophysical Union) pegs the earth’s “climate
sensitivity”—the degree the earth’s temperature responds to various
forces of change—at a value that is about six times less than the “best
estimate” put forth by the Intergovernmental Panel on Climate Change

Well, well, if talk radio is covering a new article that purportedly downplays climate risks, then others who have invested time in casting doubt

I`ve blogged previously about my various conversations with Chip Knappenberger, who is employed by the self-described “advocacy” group of Pat Michaels, New Hope Environmental Services.

I went to pay a visit to his post at Rob Bradley`s pro-coal, “free market” MasterResource blog, which I have discussed on any number of occasions here – especially after Mr. Bradley unceremoniously withdrew the welcome mat for libertarian critics (yours truly) while in mid-conversation with (and without notice to) several of his guest bloggers.

I reviewed Chip`s precis of the Lindzen-Choi paper and attempted to leave comments at MasterResource, but they were “disappeared” as soon as they were posted, so I forwarded a copy of my comments by email directly to Chip, which I copy below (with minor edits):

Chip, I couldn`t resist trying to comment on your post at MR, and
checking to see if Rob still has his blog set up to automatically
exclude all of my comments. Unfortunately, he still seems to be
convinced that a principled and libertarian approach (or his clients`
needs) requires maintaining his echo chamber by excluding me.

To check the sophistication of his method, I have for the first time
just tried commenting anonymously (I have until stayed away and simply
hoped Rob would change his mind), and to my surprise the comment went
through – though it is “awaiting moderation”. [update: this post has now received immoderate , “echo chamber” moderation]

I thought I would give you a head`s up on my pending comment, which I
do not expect to see published – but who knows?  Strange things
sometimes happen, such as Rob quoting with approval a link to a
comment that I have made:

My comment is below; I will wait until tomorrow before cross-posting
at my own blog.



[comment left at MasterResource]
“It is too early to tell whether Lindzen and Choi’s findings will
prove to be the end-all be-all in this debate.”

But it`s not too early for you, for others who act as paid mouthpieces
for fossil fuel and others who wish to avoid policy action, to trumpet
this as yet unpublished paper all over the intertubes, is it Chip?

By the way, continuing studies on the “sensitivity” of temperatures to
GHG increases should not lead us to ignore either the problem of ocean
acidification from our accelerating CO2 build-up or the very exquisite
sensitivity of the Earth`s climate and ecosystems to the 0.6 C average
temp increase that we have experience over the past 50 years
(remaining stuck at a peak for the past 10).  The Arctic and temperate
zone glaciers continue to rapidly thaw, and other changes affecting
ecosystems and human livelihoods are still underway.

I note I have seen very preliminary remarks by James
, and by

Schmidt here

“a waste of time and effort”

More directly, don`t you mean that such efforts would cost your clients money?

Sure, there are reasonable grounds to dispute practically any use of
government (though I note that Exxon and Margo Thorning of the ACCF
are both expressly advocating carbon taxes), but let`s not pretend to not

that those speaking most loudly in support of our radical, ongoing
planet-wide “experiment” on the affect of GHG emissions and albedo
changes are precisely the investors and firms (and their mouthpieces)
who benefit from the status quo (leaving all of these activities
unpriced), while it`s the world`s populations more generally who end
up with all of the risks.

This climate experiment and those paid to provide it cover are hardly
a “conservative” or “libertarian” enterprise.

I note that Bob Murphy is no climate expert, but simply posting blindly about something that he thinks cuts in the direct he wants; in a similar vein, Knappenberger also evidently is puffing the importance of a scientific article that is hot off the presses, but can`t be troubled to link to any articles providing additional context. (A recent blog post and comments by Steve McIntyre at Climate Audit also point out the difficulties in reaching conclusions from the new research.)

I also note, as I have previously, that not only Chip but Bob as well – when he has on his “economist for IER” (which is a coal and public utility front group that was de-funded last year by Exxon) hat – are, at least in part, being compensated to undercut climate change policy.

In this context, we all are prone to note evidence that fits into our existing world view, while discounting contrary information, such “confirmation bias” is readily apparent in the internet and radio coverage of this piece.  While climate change and climate policy are certainly hot topics, it doesn`t seem to me that the so-called “skeptics” are at all taking this new study skeptically, but are instead eagerly lapping it up, assume it is good news, are are loudly trumpeting it. Now who`s fooling whom?  Many “skeptics” look just like the “alarmist” “global warming cult” “believers” whom they abhor.

Unfortunately, while it`s impossible to know what Rob and Chip are actually thinking and why, it`s clear that a dangerous mix of self-deception, confirmation bias and rent-seeking permeates the tribal conflicts that we are seeing in current over the use of government, not the least in the case of climate change, which is a difficult scientific and policy issue.


A note to Joe Romm about big, bad, carbon-tax-supporting Exxon and the API

August 28th, 2009 No comments

Joe Romm has a post up at Climate Progress that is highly critical of the U.S. oil industry, his ire no doubt triggered by the news that the American Petroleum Institute (API) is coordinating a series of “Energy Citizen” rallies by oil industry employees that target U.S.
Senators in 21 states

Romm`s post largely focuses on past efforts by Exxon to influence the debate by emphasizing Exxon`s PAST role in funding others to cast doubt on the science of climate change – a campaign that Exxon appears to have abandoned – and the greater part of the post consists of a requote of a recent commentary by Bloomberg reporter Eric Pooley, “Exxon Works Up New Recipe for Frying the Planet“.  It seems to me that neither Romm nor Pooley has done a good job of establishing a case for laying their current ire at the foot of “carbon-tax” Exxon.

I left the following comment at Romm`s blog, and look forward to his response after it slips through moderation:

Joe, I understand your suspicions of Exxon, but even as they are convenient whipping boy, they are not coal firms, which I`m sure you understand are a much greater climate threat and which are treated so favorably under Waxman-Markey.

Moreover, you and Pooley paint over your lack of substantiation with very broad brush strokes that are more fairly directed to other members of the API. Granted Exxon is a bit late, but:

– they have expressly agreed that climate risks merit mitigation policies,

– CEO Rex Tillerson has specifically advocated carbon taxes (for which he is good company with Jim Hansen, most economists – and now even Margo Thorning of the ACCF!),

– they are making substantial investments in climate research and biofuels; and

– they are not supporting the API`s fake “citizens” meetings.

Why is Exxon still Public Enemy #1 for you, and not Peabody and other coals firms – and the states and US government, who are hooked on royalties?

I agree with the many economists who strongly prefer a rebated carbon tax. I would love to hear your scientific and political calculation that leads you to favor cap and trade.

Categories: carbon pricing, Exxon, Joe Romm Tags:

Margo Thorning / ACCF to WVa. Conservative Foundation: we need a carbon tax and other policies to reduce greenhouse gas emissions

August 28th, 2009 No comments

Margo Thorning, Chief Economist and SVP at the influential American Council for Capital Formation (and director of research for its tax and environmental policy think tank (ACCF Center for
Policy Research) and managing director of its new international affiliate, the International Council for Capital Formation) has been a persistent and vocal long-term opponent of most climate change policy, so much so that she`s got her own “ExxonSecrets FactSheet” (alongside similar ones for ACCF). 

She`s also the author of widely-quoted studies of the costs of climate change legislation, and has been busy explaining the study jointly released earlier this month by ACCF and the National Association of Manufacturers that assesses the potential impact of the Waxman-Markey Bill on manufacturing, jobs, energy prices and our overall economy,

(The rollout of the study, executive summary, etc. are here; criticisms of the study`s assumption are here, here, here, here, here and here.)

All of which makes her remarks on August 25 at a “Cap and
Trade Town Hall meeting”
sponsored by the West Virginia Conservative Foundation (and reportedly the West Virginia Manufacturers Association as well) – to the effect that we DO need federal and global policies to reduce GHG emissions and to prepare to adapt to changes that we will be unable to forestall – even the more remarkable. 

I quote below from an August 27 report of Thorning`s remarks in the online version of The State Journal (emphasis added):

Thorning believes that climate change is happening, that it is at least
in part caused by human activity and that some type of policy to reduce
greenhouse gas emissions is warranted.

But while climate scientists recommend keeping atmospheric
concentrations of greenhouse gases below 450 parts per million to avoid
the very worst effects of climate change, Thorning said it’s too late
for that.

“We’re probably, because of China and India and developing countries,
going to have to adapt to a higher level of CO2 concentrations in the
atmosphere,” Thorning said in an interview before the event. “We might
be able to keep it to 550, but I think we better focus on adapting to a
changing environment.”

There is no rush in Thorning’s mind.

“CO2 stays in the atmosphere 100 years,” she said. “I think we can afford to take a thoughtful approach.”

Congress currently is considering a cap-and-trade program that would
place a cap on carbon emissions, issue permits that companies could
trade in an emissions market and then ratchet the cap down over time to
ensure emissions reductions.

Rather than a cap-and-trade program, Thorning advocates a carbon tax
that would put a price directly on greenhouse gas emissions and would
rise over time.

Now this might have startled her audience and readers here, but close observers might have noted that Thorning made a similar statement two years ago when, as I previously reported, she said in an interview that “Senator Lieberman and Warner are to be commended for their
efforts to reduce greenhouse gas emissions, because I think we’re all
united that that’s a goal we need to put a lot of resources into.

Thorning spoke further in West Virginia about why a carbon tax is preferable to cap and trade:

In general, economists say, a cap on greenhouse gas emissions gives
certainty about emissions but uncertainty about the price of emissions,
while a tax on the emissions gives certainty about the price but not
about the quantity.

Companies need that price certainty, Thorning said, so they can make investment decisions.

A study sponsored in part by the ACCF and released earlier this month
found that the program Congress is considering could reduce U.S. Gross
Domestic Product between 1.8 and 2.4 percent from a baseline projection
in 2030.

It did not compare the effects of a carbon tax.

Thorning also spoke of the need for revenue.

President Barack Obama initially planned to auction the cap-and-trade
emissions permits and to direct some of the proceeds to the development
of renewable energy sources and carbon capture and storage technology.

However, as the program has come to be structured, the permits would be
given for free to emitters in at least the first decade of the program.

A tax, Thorning said, would bring in those revenues and enable the
government to support the development and deployment of important

From a broader perspective, Thorning underlined the growth of emissions
in China, India and other emerging economies. She champions the
exchange in both directions of the most effective technologies to
reduce greenhouse gas intensiveness.

She pointed to the Major Economies Initiative housed in the U.S.
Department of State to foster cooperation among 17 countries that
represent 85 percent of greenhouse gas emissions.

The initiative can help promote business-to-business transactions like
one in which Caterpillar Inc. is turning methane captured at 60 Chinese
coal mines into electricity,
she said.

“So Caterpillar is making money on that, and we’re suppressing a gas
that’s even more harmful than CO2 — and the Chinese are getting
electricity,” she said. “There are about eight key areas like that that
have been identified in this Major Economies Initiative.”

Thorning believes that a gradually increasing U.S. carbon tax combined
with international cooperation on best practices is the least
economically disruptive approach to reducing greenhouse gas emissions
over time.

“Remember that economic growth and stronger economies allow people to
adapt to a changing environment,”
she said. “We have to keep our eye on
the bigger picture.”


What else does Thorning want to see done on climate policy?  In a presentation in June to the Midwest Energy and Climate Policy Conference in St. Louis, Thorning argued that practical strategies for reducing global greenhouse growth would include the following steps:

  • Use cost / benefit analysis before adopting policies
  • If U.S. puts a price on carbon emissions, a carbon tax is preferable to cap and trade
  • Reduce cost of U.S. energy investment through tax code improvement and incentives for non profits
  • Remove barriers to developing world’s access to more energy and
    cleaner technology by promoting economic freedom and market reforms
  • Increase R&D  for new technologies to reduce energy intensity, capture and store carbon, and develop new energy sources 
  • Promote nuclear power for electricity
  • Promote truly global solutions and consider expanding the Asia
    Pacific Partnership on Development with its focus on economic growth
    and technology transfer to other major emitters

These prescriptions expand on her November 2007 interview:

Q:So, if you were given the opportunity
to sort of write your own proposal of how the U.S. should reduce
emissions and not hurt itself economically, you’d go with the carbon

Margo Thorning: I would go with the
carbon tax and more incentives for new technology development. And I
would change the U.S. tax code, because we have the slowest
depreciation allowances for new energy investment of 12 countries that
we compared recently. We have very high capital costs for new
investment because depreciation is so slow and our effective tax rate
is very high, because our corporate tax rate is the highest in the
industrial world. So our companies are disadvantaged vis-à-vis our
trading partners because of our tax system.

This would seem to align Thorning`s views fairly closely with those of the still-villified Exxon, which has been a generous supporter of ACCF, and whose CEO Rex Tillerson is an express advocate of carbon taxes.  The nail-biting question is whether these voices are too little and too late in the game to steer the cap and trade pork train on to a more productive track.

Categories: ACCF, carbon pricing, Exxon, Thorning, Tillerson Tags:

On Bob Murphy`s narrow attack on Krugman`s support for the Waxman-Markey climate bill

June 12th, 2009 No comments

I just stumbled into Bob Murphy`s June 8 post at the LvMI Daily site, and submitted a few comments.  As it looks like my links prevented my comments from posting, I`ve copied them here (with a few typo tweaks and links added):

Bob, I didn`t realize you had put a post up here.

Allow me first to copy here a few points that I made on your related post at MasterResource, but which freedom- and open-debate-loving Rob Bradley blocked (your truly has been banned there for the past few months):

“The below is copied from MasterResource, where I remain on permanent moderation – IOW, banned – even though Bob and the authors of various threads seem perfectly interested in engaging me.

“TokyoTom { 06.09.09 at 12:53 am }

A few comments, if I may (in the hope that springs eternal that even the “unclean” will be allowed to post): [Note to readers:  rest easy; that the final “I`ve been banned!” reference.]

1. “Cost/Benefit Analysis Cannot Justify Waxman-Markey’s Aggressive Targets”

Why this headline, which is completely unsupported in the post?

You do link to a prior post, where you try to draw the conclusion that “If the whole world adopted the stringent emission cutbacks in Waxman-Markey, then the costs to the global economy would far outweigh any reasonable estimate of the benefits (measured in avoided climate damage)”, but both there and here you fail to address Weitzman, much less more fundamental problems regarding the validity of CBA (aggregating preferences across persons situated vastly differently, ignoring the problems of frustrated preferences, enrtrenched rent-seeking and the continuing lack of property rights or other mechanisms to manage an important commons).

And far from “agree[ing] with you”, the RFF paper much more fairly illustrates some of the complexities in applying CBA to the moving ball of international negotiations.

2. “the costs to the global economy would far outweigh any reasonable estimate of the benefits (measured in avoided climate damage)”

“Yet mainstream models of the global economy and climate system show that worldwide adoption of Waxman-Markey would be foolish as well. It takes heroic assumptions both of lurking climate catastrophes and of international dipomacy to justify support for the current bill.”

Again, you offer conclusions not established here or elsewhere. You appear to acknowledge your overstatements when you say: “If proponents of aggressive government measures want to say the benefits justify such costs, fair enough; but let’s not kid ourselves that this is going to be cheap.”

3. “RFF study, which says the cumulative cost through 2050, expressed today in present-value terms, is up to $43 trillion worldwide.”

Actually, don`t the RFF authors make clear that this estimate is based on universal adoption worldwide and least-cost reductions – 70% of which would take place in developing countries – with a clear indication that such countries are not likely to act agressively for decades? Accordingly, the RFF study implies that global costs will fall below the straight estimate.

4. It is interesting to me that you ignore the dynamics of the international context of climate policy and negotiations. Why no comment on the observations in the RFF paper that likely “leakage” of carbon-heavy industry to developing countries and dampening Western demand for fossil fuels will constitute net subsidies that spur development in poorer parts of the globe?

Your comment is awaiting moderation.”

Thanks for putting these up at your own blog.

Further, let me note:

1.  Your criticism of W-M on conventional CBA grounds is limited to W-M, and doesn`t address the many CBA analyses that conclude (as Nordhaus has done weakly for decades) that carbon pricing mechanisms are now justified.  Economist Richard Tol last year summarized the economic literature as follows:

Firstly, greenhouse gas emission reduction today is justified. Even the most conservative assumption lead to positive estimates of the social cost of carbon (cf. Table 1) and the Pigou tax is thus greater than zero. Yohe et al. (2007) argue that there is reason to reduce greenhouse gas emissions further than recommended by cost-benefit analysis. The median of … peer-reviewed estimates with a 3% pure rate of time preference and without equity weights, is $20/tC. …. The case for intensification of climate policy outside the EU can be made with conservative assumptions. … Secondly, the uncertainty is so large that a considerable risk premium is warranted. With the conservative assumptions above, the mean equals $23/tC and the certainty-equivalent $25/tC. More importantly, there is a 1% probability that the social cost of carbon is greater than $78/tC. This number rapidly increases if we use a lower discount rate—as may well be appropriate for a problem with such a long time horizon—and if we allow for the possibility that there is some truth in the scare-mongering of the gray literature.  Thirdly, more research is needed into the economic impacts of climate change—to eliminate that part of the uncertainty that is due to lack of study, and to separate the truly scary impacts from the scare-mongering.”

[Cato`s Jerry Taylor has a good summary of Tol`s review here.]

2.  Granted that you focussed narrowly on W-M, but by doing so you completely fail (a) to acknowledge the atmosphere/climate system as an open-access commons under growing infuence by man, and (b) to put forward a “free market” agenda that would serve as a win-win response to the wide array of people, firms, institutions and nations that are concerned about man`s role in ongoing climate change and about the likelihood of future climate change stemming from the growing use of fossil fuels and other human activities.

Are you indeed interested in addressing people`s legitimate preferences regarding climate, and pushing for freer markets?  This is a question that I have asked Rob Bradley at his self-declared “free market” MasterResource blog any number of times.

Rob has stated there in response to me [before he banned me] that: “a free-market approach is not about “do nothing” but implementing a whole new energy approach to remove myriad regulation and subsidies that have built up over a century or more”, but he and his co-bloggers (including you) haven`t  seen fit yet to actually recommend ANY free market approaches to climate concerns!

Failing any effort to actually offer policy suggestions, is it unfair to wonder whether you guys are, consciously or not, simply providing cover for the rent-seekers who benefit most by generating pollution and other risks in the manner permitted by current regulations?  (Why did Exxon stop funding Rob`s Institute for Energy Research, BTW?) 

[It`s very clear that Joe Romm and others perceive you this way; are you not seeking to persuade them?]



PS:  Your chief post doesn`t actually link to the comment thread, which readers have to search for.  You might want to fix that.


Jim Hansen on Freeman Dyson on climate change

March 29th, 2009 No comments

I received the following in an email from NASA climate scientist James Hansen (whom I`ve mentioned a number of times), in connection with today`s New York Times Magazine article (“The Civil Heretic”) on Freeman Dyson, which is now making its way through the “skeptosphere”.  My short and unfair take on Dyson?:  Short Freeman Dyson: Yep, it`s warming; I LIKE vast uncontrolled experiments with climate, and who needs fish in the ocean anyway!

Dyson is rather critical of Hansen, but it`s not at all clear that he understand`s Hansen`s position.  But why attack Hansen, when Exxon  and its CEO Rex Tillerson are now explicitly pushing carbon taxes?  If any firm ought to understand fossil fuels – and the problems with government actions – it`s Exxon.  Hansen is a vocal scientist, but he represents no particular special interests.

In any case, Hansen`s mail is fairly brief, so I thought I`d just post it as if for all you open minds out there:  

            Tomorrow’s NY Times Magazine article (The Civil Heretic) on Freeman Dyson includes an unfortunate quote from me that may appear to be disparaging and ad hominem (something about bigger fish to fry).  It was a quick response to a reporter* who had been doggedly pursuing me for an interview that I did not want to give.  I accept responsibility for the sloppy wording and I will apologize to Freeman, who deserves much respect.

            You might guess (correctly) that I was referring to the fact that contrarians are not the real problem – it is the vested interests who take advantage of the existence of contrarians.

            There is nothing wrong with having contrarian views, even from those who have little relevant expertise – indeed, good science continually questions assumptions and conclusions.  But the government needs to get its advice from the most authoritative sources, not from magazine articles.  In the United States the most authoritative source of information would be the National Academy of Sciences.

            The fact that the current administration in the United States has not asked for such advice, when combined with continued emanations about “cap and trade”, should be a source of great concern.  What I learned in visiting other countries is that most governments do not want to hear from their equivalent scientific bodies, probably because they fear the advice will be “stop building coal plants now!”  These governments are all guilty of greenwash, pretending that they are dealing with the climate problem via “goals” and “caps”, while they continue to build coal plants and even investigate unconventional fossil fuels and coal-to-liquids.

            I will send out something (“Worshiping the Temple of Doom”) on cap-and-trade soon.  It is incredible how governments resist the obvious (maybe not so incredible when lobbying budgets are examined, along with Washington’s revolving doors).  This is not rocket science.  If we want to move toward energy independence and solve the climate problem, we need to stop subsidizing fossil fuels with the public’s money and instead place a price on carbon emissions.

            My suggestion is Carbon Fee and 100% Dividend, with a meaningful starting price (on oil, gas and coal at the mine or port of entry) equivalent to $1/gallon gasoline ($115/ton CO2).  Based on 2007 fuel use, this would generate $670B/year – returned 100% to the public (monthly electronic deposit in bank accounts or debit cards), the dividend would be $3000 per adult legal resident, $9000/year per family with two or more children.  This is large enough to affect consumer product and life style choices, investments and innovations.  Of course all the other things (rules re vehicle, appliance and building efficiencies, smart electric grid, utility profit motives, etc.) are needed, but a rising carbon price is needed to make them work and move us most efficiently to the cleaner world beyond fossil fuels. 

Jim Hansen

*             The reporter left the impression that my conclusions are based mainly on climate models.  I always try to make clear that our conclusions are based on #1 Earth’s history, how it responded to forcings in the past, #2 observations of what is happening now, #3 models.  Here is the actual note that I sent to the reporter after hanging up on him:

 I looked up Freeman Dyson on Wikipedia, which describes his views on “global warming” as below.  If that is an accurate description of what he is saying now, it is actually quite reasonable (I had heard that he is just another contrarian).  However, this also indicates that he is under the mistaken impression that concern about global warming is based on climate models, which in reality play little role in our understanding — our understanding is based mainly on how the Earth responded to changes of boundary conditions in the past and on how it is responding to on-going changes.  

If this Wikipedia information is an accurate description of his position, then the only thing that I would like to say about him is that he should be careful not to offer public opinions about global warming unless he is willing to first take a serious look at the science.  His philosophy of science is spot-on, the open-mindedness, consistent with that of Feynman and the other greats, but if he is going to wander into something with major consequences for humanity and other life on the planet, then he should first do his homework — which he obviously has not done on global warming.  My concern is that the public may assume that he has — and, because of his other accomplishments, give his opinion more weight than it deserves.

      (emphasis added)      

Categories: carbon pricing, Exxon, Jim Hansen Tags:

[Fixed] Exxon/Rex Tillerson: No longer willing to be "conservative" on climate risks, advocates carbon taxes and invests in carbon-lite tech

March 7th, 2009 No comments

most of my excerpts of Tillerson`s speech weren`t included in my first try; there`re here
this time.]

It may still seem novel to some, but Exxon
Mobil Corporation
began throwing its weight behind carbon pricing
than two years ago

Subsequently, Rex
Exxon`s Chairman and CEO, has
number of speeches
Exxon`s actions (and cost savings) in reducing its own GHG emissions, its
investments in energy technologies that further improve energy efficiency and
GHG efficiency, and Exxon`s views on climate risks and preferred policy
options.  Why is this worth mentioning?  Simply, Exxon is an
excellent, well-run company that knows the energy business and climate risks
well (its scientists have been sitting on the IPCC panels fromtheir inception),
so it has some credibility (in this vein, Rob Bradley`s MasterResource
“free-market” energy blog has a post up toda,
similarly remarking on Exxon`s credibility
as well-run, principled and
“the consumer’s friend and the taxpayer’s friend;” Rob just
conveniently fails to mention Exxon`s pro carbon-tax stance).

Tillerson made another such speech on February 17, on the occasion
of a visit to the Stanford
Climate and Energy Project (GCEP)
, the world`s largest privately-funded
effort to conduct basic research on energy technologies that will further
reduce GHG emissions.  Exxon has has committed $100 million to
GCEP over ten years and has been the lead funder of GCEP since its
establishment in December 2002.  The punchline of Tillerson’s remarks?

is rare that a business lends its support to new taxes. But in this
case, given the risk-management challenges we face and the alternatives
under consideration, it is my judgment that a carbon tax is the best
course of public policy action. And it is a judgment I hope others in
the business community and beyond will come to share.”

full speech here
is worth a look; I excerpt a few portions below – climate
policy comments are largely at the end (emphasis added):

GCEP’s research program, like ExxonMobil’s, is shaped to fit the contours of what has been termed the “grand challenge” before us. It is, in fact, a dual challenge — supplying the energy essential to global economic growth, while at the same time reducing greenhouse gas emissions and managing the risks of climate change. …

However, the world economy will recover. History shows that human ingenuity and productivity cannot long be suppressed. And when the world economy recovers, so will world energy demand.

Growing populations in developing countries who are seeking higher standards of living will drive this increased energy demand, which is expected to be 35 percent higher in the year 2030 than it was in the year 2005, despite the current and temporary economic conditions.

Meeting this growing long-term societal demand requires that we develop all economic and environmentally sound sources of energy. This includes hydrocarbon energy sources like oil and natural gas, which are abundant, available, versatile and affordable.

Huge investments over many decades have enabled oil and natural gas to meet close to 60 percent of the world’s enormous energy needs today, and projections are that oil and natural gas will account for a majority of the world energy demand through at least the year 2030. They are simply indispensable and irreplaceable at scale.

This global energy demand challenge is matched by a global environmental challenge — curbing greenhouse-gas emissions and addressing the risks of climate change. Thanks to greater energy efficiency and growing use of cleaner energy such as natural gas for power generation, greenhouse-gas emissions levels are expected to decline in some developed economies. …

The challenge for developing economies is more daunting, where energy demand is increasing as growing populations strive for higher standards of living. For example, by the year 2030, China’s carbon-dioxide emissions will be comparable to those of the United States and Europe combined — even recognizing that China’s energy use and emissions will be much lower on a per-capita basis — rising from 4 metric tons per capita in 2005 to 5.8 metric tons per capita in 2030.

Nonetheless, the net effect of these countervailing trends will be a sizeable increase in greenhouse-gas emissions worldwide. Even with dramatic gains in efficiency, rising demand for energy will continue to push related carbon-dioxide emissions higher through the year 2030 — an increase of 28 percent from the year 2005. …


To develop these integrated solutions, we will need to find the best ways to unlock new technology. Energy innovation — led by private enterprise, furthered by independent research, spread by free markets, and supported by sensible and stable public policy — will be essential to enabling us to achieve each of these aims. It is the key to a more prosperous, more secure, and more sustainable energy and environmental future.

It is important to remember, however, that gains in efficiency and technology occur over time.

The most dramatic changes will not happen overnight, due to the sheer complexity of the technologies we develop and the enormous scale of the global energy market. Technological transformation takes time.

The history of energy over the last century helps put such transformation into perspective. For example, it is estimated that at the beginning of the 20th century, coal and wood provided more than 95 percent of the world’s energy needs. From that point, it took more than half a century for petroleum — a cleaner and more versatile alternative — to surpass coal as the world’s largest energy source. It took nearly 50 years more to develop the technologies and build the global infrastructure so that natural gas, an even cleaner-burning source, could play a sizable role in the world’s energy mix.

This reality about timeframes is another reason why we need energy policies that allow for long-term planning and consistent, disciplined investments that lead to technological advances.

National and state governments can play a helpful role in this vital enterprise.

By creating a stable, long-term policy framework for investment in academic and commercial research efforts, government can be a partner in the short-, medium-, and long-term technological transformations we need.

One of the areas where government can provide needed stability is by implementing simple, transparent, and predictable policies to mitigate greenhouse-gas emissions. Throughout the world, policymakers are considering a variety of legislative and regulatory options. In our view, assessing these policy options requires an understanding of their likely effectiveness, scale and cost, as well as their implications for economic growth and quality of life.

Consistent with that view, we believe that a carbon tax would be a more effective policy option to reduce greenhouse-gas emissions than alternatives such as cap-and-trade. Pricing carbon through a direct and transparent tax could incentivize the search for lower-emissions energy solutions while also providing the stability and predictability industrial companies need to make long-term, capital-intensive investments in equipment and research.

To ensure revenues raised from this tax are indeed directed to investment, and to assist those on lower incomes who spend a higher proportion of their income on energy, a carbon tax should be offset by tax reductions in other areas to become revenue neutral for government.

It is rare that a business lends its support to new taxes. But in this case, given the risk-management challenges we face and the alternatives under consideration, it is my judgment that a carbon tax is the best course of public policy action. And it is a judgment I hope others in the business community and beyond will come to share.

Categories: Bradley, carbon pricing, Exxon, Tillerson Tags: