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Posts Tagged ‘renewable energy’

Westar Energy’s Proposal to Increase Rates on Solar Customers

Tue ,16/05/2017

Westar Energy is proposing a rate increase for customers who install solar panels or other distributive energy sources. Those Net Energy Metering (NEM) customers would have to choose between an additional $50 a month energy charge, or a $15 fixed fee plus a per-kilowatt rate demand charge based on the previous month’s maximum usage. If approved, Westar’s rate proposal will increase the payback time for installing solar panels from 12 years to more than 20 years, greatly discouraging solar installations.

As a Westar stockholder, I am opposed to additional fees or higher charges on Net Energy Metering customers. The NEM customers should be seen as a resource rather than a liability and should be encouraged. They should be treated just as any other customer when they draw energy from the grid, and just as any other supplier for the net energy they produce. Does it really matter if Westar buys energy from NEM customers or from the Southwest power pool?

Westar’s website  says it will “support public policies and initiatives to accelerate the development and use of environmentally beneficial and cost effective strategies for energy efficiency programs for both customers and Westar’s own operations, zero – or low – emissions generation technologies, and renewable energy resources.”  That is a good policy, but this proposal is inconsistent with it.

One of the biggest future costs to Westar would be to build additional power plants, so Westar encourages energy conservation.  If I cut my electricity usage by 50% by installing more insulation and storm windows, I am applauded for following Westar’s conservation guidelines. If I cut my electricity usage by 50% by installing solar panels, I would be charged a higher electric rate. That is irrational, as NEM customers would help reduce the need for new power plants just as energy conservation does.

Westar should not be concerned about losing revenue from solar customers. Residential customers pay a customer fee, an electricity fee, a fuel charge, a distribution fee, an environmental fee, an energy efficiency charge, and even Westar’s property taxes. Last June, our bill was $24.95 for electricity, but our total bill came out to be $53.27 after the fees were added. NEM customers will pay less for energy charges, but will still pay the other fees. If Westar makes it too expensive, then potential NEM customers may install extra battery  capacity such as a Powerwall, and withdraw from the grid entirely.

Distributive generation should be seen as a resource. Westar has been proactive in developing wind and solar energy and now gets 51% of its energy from noncarbon sources. In the future, Westar will need to replace some of its coal power plants and may need to reduce its use of natural gas to cut its greenhouse gas emissions. Distributed generation would help replace the energy they produce without requiring capital investment from Westar.

NEM customers will help reduce pollution and environmental degradation. Westar has three coal-fired power plants which operate without scrubbers. Those plants should be phased out immediately and Westar should begin phasing out its other coal-fired power plants to reduce its greenhouse gas emissions. Though natural gas is cheap now, that may not be true in the future. There is a link between fracking and earthquakes, and fracking activities are being curtailed. This will lead to higher gas prices. Though natural gas produces 2 ½ times as much energy per mole of carbon dioxide produced, it has a global warming potential 82 times that of carbon dioxide. If even 4% of the natural gas used for energy is leaked during production and transportation, then any advantage of using it for fuel will be lost

Coal-fired power plants release mercury, chromium, lead, cadmium, arsenic, sulfur oxides, nitrogen oxides, carbon dioxide,  particulates, and radioactive isotopes. Burning  coal releases millions of tons of pollutants into the air and leaves several hundred million tons behind in the coal ash. Some pollutants stay in the air and others eventually find their way into the water, the food chain, and into us. The heavy metals are carcinogenic and accumulate in tissue. Even exposure below the allowed levels increases the chance of cancer over time. The sulfur oxides, nitrogen oxides, and carbon dioxide released by coal combustion harm plants, produce acid rain, and increase the greenhouse gas concentrations. Switching to renewable energy would greatly reduce these pollutants and help preserve the environment for future generations.

Encouraging NEM will benefit Westar and its customers.  A study by Crossborder Energy in 2014 found NEM allows utilities to avoid costs of generation and fuel, maintenance and upgrade of transmission and distribution infrastructure, transmission losses (which account for 7% of losses), capacity purchases, and compliance with renewable energy standards. The study concluded,” The cost which utilities avoid when they accept NEM power exported to their grid shows that NEM does not produce a cost to nonparticipating ratepayers; instead it creates a small net benefit on average across the residential markets.” While it does cause power companies to have to adjust their loads accordingly, NEM reduces peak loads, transmission losses, and the need for new power plants.  In California, the study found NEM “delivers more than $92 million in annual benefits to non-solar customers”.

Similar research studies in Vermont, New York, California, Texas, and Nevada also concluded that net metering provided a net positive benefit for utility companies and their customers. A 2015 study done in Missouri is relevant to Kansas. A cost-benefit study of net metering in Missouri arrived at the same conclusion as the other studies, “ Net metering provides a net benefit. “ Missouri has 6000 net metering customers while Westar now has approximately 300. Westar certainly should encourage more.

This proposal to impose a fee or higher rates on NEM customers is the result of short-term thinking. It will harm Westar and its stakeholders in the long run. Investing in clean energy protects the environment, reduces deaths and disease from air pollution, and creates good, local jobs. Westar  must develop policies to encourage the development of renewable energy investments and energy conservation. Our energy needs will best be served by a mixture of traditional and alternate energy sources, but we must be proactive in developing our renewable energy resources as quickly as possible.

 

(c) 2017 – J.C Moore

Carbon Fee and Dividend: Legislative Action Needed

Mon ,10/10/2016

Sen. Jerry Moran, R-Kan., was certainly right when he told a group of energy executives that cheap energy was necessary for our economy to be competitive and that legislation is needed to keep energy costs low (Wichita Eagle, Oct. 1 Business).

Fossil fuels provide cheap energy because they do not pay their external costs, which include cost to people’s health, the environment, and to the economy. Renewable energy is becoming less expensive and does not have the external costs that fossil fuels do.windmill4

The best solution is legislation that would favor a shift to renewable energy.

The effect of rising energy costs on the economy could be offset by a carbon fee and dividend system, in which a fee would be added to fossil fuels at the source to cover their external costs. All the money collected would be distributed equally to every household as an energy dividend. Those who switch to renewable energy or who save energy would have more to spend, which would stimulate the economy.

We should all hope that the legislation that Senator Moran is considering would be a carbon fee and dividend system, as it uses market principles to reduce air and water pollution while protecting the economy from rising energy costs.

 

(c) 2016  – J.C. Moore

We Must Switch to Renewable Energy

Mon ,25/07/2016

We must switch to renewable energy for health reasons, economic reasons, and environmental Temp pathsreasons.

Health reasons: The American Lung Association estimates that there are 26,000 deaths and 1.5 million cases of acute bronchitis and aggravated asthma caused by small particulates, much of it emitted from coal-fired power plants and from coal ash disposal. They estimate the economic benefits of reduced exposure to particulates alone could reach as much as $281 billion annually. Recently, fine particles have been implicated as a cause of Alzheimer’s and Parkinson’s disease and new research has revealed a troubling link between mental illness and air pollution that seems to particularly effect children.

Economic reasons: Besides reducing health care costs, a switch to renewable energy will help keep our future electric rates low. Wind and solar are falling in cost and are now competitive with energy from coal-fired power plants. Recently AEP/PSO in Oklahoma purchased 800 MW of wind energy saying the cost was now less than building new coal fired plants, and that the purchase will save an estimated $53 million in the first year and even more thereafter. Kansas currently has 27,000 jobs in the clean energy sector. Of those jobs 75% are in wind energy, and are growing at a rate of 2.3% per year.  By the end of 2016, 32% of Westar’s retail electricity will come from the wind.

Environmental reasons: Coal is 65 to 95 % carbon. What about the rest? Burning coal releases mercury, chromium, lead, cadmium, arsenic, sulfur oxides, nitrogen oxides, carbon dioxide,  particulates, and radioactive isotopes. Burning  coal releases millions of tons of pollutants into the air and leaves several hundred million tons behind in the coal ash. Some pollutants stay in the air and others eventually find their way into the water, the food chain, and into us. For comparison, mercury is 100 times as toxic as cyanide, arsenic is 20 times as toxic, and chromium(VI) is 4 times as toxic. These three are also are carcinogenic and accumulate in tissue. Even exposure below the allowed levels increases the chance of cancer over time. The sulfur, nitrogen oxides, and carbon dioxide released by coal combustion harm plants, produce acid rain, and increase the greenhouse gas concentrations. Switching to renewable energy would greatly reduce these  pollutants and help preserve the environment for future generations.

Summary: Investing in clean energy protects the environment, reduces death and disease from air pollution, and creates good, local jobs. We must develop policies to encourage the development of renewable energy investments and energy conservation. Our energy needs will best be served by a mixture of traditional and alternate energy sources, and we must be proactive in developing our renewable energy resources.

(c) 2016 J.C. Moore

Climate Change: Science and Solutions

Thu ,21/04/2016

This presentation was given at the Great Plains Conference on Animals and the Environment at Fort Hays State University for Earth Day 2016.  The first part of the program presents the evidenceccl1 for climate change and explains the urgency for taking action. The second part of the presentation explains the Citizens’ Climate Lobby’s  proposal to reduce our carbon emissions below 1990 levels by 2035.  The plan, with broad bipartisan support, would place a fee on carbon at the source and allow market forces to encourage reduced emissions, energy conservation and investments in renewable energy.

Science and Solutions 

Please click on the link above. You will need a PowerPoint program to view the slides – or you may  download a free viewer here. The slides will display as set in your viewer. The slides were meant to be somewhat self-explanatory, but if you have questions you may email the author or post your questions in the comment section. The slides were  prepared by Darrel Hart, Mark Shobe, and J.C. Moore.

Who Wants to Kill the Electric Car?*

Fri ,13/01/2012

 Who wants to kill the electric car? Apparently, a lot of people do. During the 1920’s, the Milburn electric cars were popular, particularly with the ladies who didn’t like cranking gasoline engines to start them.  In 1928, General Motors bought the Milburn out and it disappeared. In 1996, the EV1 electric cars appeared on roads in California. They were quiet and fast and produced no exhaust fumes. They were manufactured by GM under a mandate to reduce vehicle emissions. Ten years later, these futuristic cars were almost completely gone. A documentary, Who Killed the Electric Car , determined that the batteries were not the problem but that the culprits were mainly oil companies who stood to lose enormous profits if EV sales took off and GM, who didn’t think they would make enough profit from the car. If GM had developed and improved the EV1, they might not have gone bankrupt.

House Of Cards: Much of the damage to the EV1 was done by misinformation directed at politicians, regulatory agencies, and the consumer. The same campaign is being used against the new crop of electric cars. In a Seeking Alpha article, Why The Electric Vehicle House Of Cards Must Fall, John Petersen continues the tactic. First, Mr. Petersen determines the value of an electric car by using an “analysis that starts with a $19,000 gasoline powered vehicle, deducts the costs of unnecessary internal combustion drivetrain components and then adds the incremental costs of necessary electric drivetrain components.” This analysis found a $38,800 cost for an electric vehicle. That cost is not unreasonable but the analysis is something like taking a conventional oven, stripping it, and adding parts to convert it to a microwave. There are many hybrids and electric cars on the market that have an MSRP much less than $38,800, such as the 4 passenger Mitsubishi MiEV which is rated at 112 MPGe and listed at $21,625. The price of the vehicles will certainly come down, as Department of Energy Secretary Steven Chu said at the Detroit Auto Show he expects the cost for electric car batteries to drop from a whopping $12,000 in 2008, to $3500 by 2015 and $1500 by 2020. Currently there are waiting lists to purchase many electric cars and hybrids because of high demand, so there is little chance for price negotiations.

The article goes on, “Electric drive proponents are selling a house of cards based on fundamentally flawed assumptions and glittering generalities that have nothing to do with real world economics. Their elegant theories and justifications cannot withstand paper, pencil and a four function calculator.” However, Mr. Petersen bases his economic analysis on his $38,800 cost and a list of subsidies from what he calls an “extraordinary article”, The Real Costs of Alternative Energy by Alex Planes . Fortunately for the future of electric cars, Mr. Planes’ real costs are extraordinarily misleading.

Subsidies: Mr. Planes says, “a clear-headed look at the true costs of energy is something many — including our political leaders — sorely need.” He goes on,“Subsidies are just one of the costs of supporting alternative energy, but are they worth it?” Using U.S. Energy Information Administration data, Mr. Planes calculates the subsidies to energy sources in terms of the dollars per barrel of oil equivalencies. The subsidies he comes up with are coal: $0.39, oil and gas: $0.28, solar: $63, and wind $32.59. Based on his values, he says renewable energy’s costs to the government are “in some cases so high, and the actual energy returns so low, that it hardly seems worth the investment. Solar’s pitiful slice of American power use — less than a single day’s worth of oil consumption — is underwritten by enough taxpayer money to simply buy most of the power outright and provide it to taxpayers for free.” Subsidies are a poor way to estimate “true costs” as they are more indicative of the perceived future value of the resource to society.

True Cost? The reason Mr. Planes article is extraordinarily wrong is that he does not really give you the “true cost” of the use of fossil fuels. The true cost  of a resource includes not only the price but also the cost of cleaning up the environment and disposing of the waste. Fossil fuels dispose of their waste by releasing it into the air which causes damage to the environment and health problems for many Americans. We are in effect subsidizing the fossil fuel industry by the cost of allowing them to freely discharge their wastes into the environment. Any effort to determine the “real cost” of subsidies should include health and environmental costs. Mr. Planes says in the comments section of his article that he perhaps should rewrite his article to include what he calls the external costs. In the meantime, many people are using his incomplete analysis to disparage sustainable energy sources.

A Truer Cost: It is difficult to come up with an exact value for the “real subsidies” to the fossil fuel industry, but it is possible to estimate their magnitude. Top economists such as Britain’s Nicholas Stern, using the results from formal economic models, estimates that if we don’t limit our carbon emissions, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more in the future, and we would run the additional risk of an environmental catastrophe.

Using 5% of the US GDP for 2010 would give an environmental cost of $727 billion. The American Lung Association estimates that the EPA’s proposed guidelines for particulates could prevent 38,000 heart attacks and premature deaths, 1.5 million cases of acute bronchitis and aggravated asthma, and 2.7 million days of missed work or school. They estimate the economic benefits associated with reduced exposure to soot to reach as much as $281 billion annually. Those two add up to about $1.01 trillion, and when divided by the 13541 million barrels of oil equivalent given in Mr. Planes article for coal, gas and oil together amounts to an additional subsidy of $73.9 per barrel of oil equivalent. The subsidies to wind and solar electric energy do not look so bad if you actually use fossil fuels: $74, solar: $63, and wind: $32.59. The calculations do not include all the environmental and health costs, but they do give an idea of how much we are subsidizing the fossil fuel industries by ignoring the damage to people’s health and the environment. Then there is the added risk of an environmental catastrophe.

 Disclosures: In an apparent effort to be evenhanded, as required by Motley Fool, Mr. Planes then concludes, “Wind and solar power have their drawbacks, but continue to make notable improvements year after year. However, neither option can yet provide the clean, constant, and convenient power the world demands. Natural gas offers the best opportunity for the near term. It’s plentiful, well-developed, and efficient, and will take on greater importance as dirtier hydrocarbons lose market share. ” Mr. Planes then offers you a free analysis of an “exciting opportunity to play the natural gas boom, by investing in a small company turning our oil-guzzling vehicle fleet into clean-burning natural gas machines.” He disclosed that he holds no stock in natural gas vehicles, but he may not be disclosing a bias against renewable energy. He refers to one of Robert Bryce’s books in his paper and his analysis sounds much like those in Mr. Bryce’s “Power Hungry: The Myths of ‘Green Energy’ and the Real Fuels of the Future”. In Mr. Bryce’s  5 Myths about Green Energy, he attacks green energy using false comparisons, misquotes, scientific inaccuracies, and the omission of pertinent facts. It is not surprising that  Mr. Bryce is not a fan of green energy as he is a senior fellow at the Manhattan Institute, which receives large donations from the Koch Foundation and Exxon/Mobile.

 Mr. Petersen, using Mr. Plane’s analysis, finds, “The law of economic gravity cannot be ignored and will not be mocked. Shiny new electric vehicles from General Motors, Ford Nissan, Toyota, Tesla Motors and a host of privately held wannabe’s like Fisker Motors and Koda are doomed to catastrophic failure. Their component suppliers will fare no better. There is no amount of political or wishful thinking that can change the inevitable outcome.” When Mr. Petersen was asked about the omission of health and environmental costs in a comment on his article, he replied he was only interested in “hard authoritative numbers.”

 Obscenity? Mr. Petersen goes on, “The ultimate obscenity is that a conversion from gasoline drive to electric drive will not reduce the total amount of energy used in transportation. It merely shifts the energy burden from lightly subsidized oil and gas to more heavily subsidized energy from coal, nuclear and renewables.”  Not really. The amount of energy used would be reduced even if using electricity from traditional coal fired power plants to charge the electric vehicle. Coal-fired power plants have a thermodynamic efficiency of about 30%. Electric motors are now about 90% efficient in converting electric energy to work and when considering friction, power line transmission losses, energy lost when the batteries are charged, and the energy gained by regenerative braking, the overall efficiency of using coal to run electric cars comes out around 20%. Internal combustion engines have a thermodynamic efficiency of about 15% but drive train losses reduce that to an overall efficiency around 10%. These efficiencies are reasonable as a  paper by Stanford University  comparing “source to wheel efficiencies” rated the electric Tesla at 1.145 km/MJ of and the gasoline powered Honda Civic at 0.515 km/MJ. At current prices, that figures out to about 5 cents/mile for the Tesla and about 12 cents/mile for the Honda.

  Using sustainable energy sources to charge the batteries would be the ideal case as the “energy source to wheel” efficiency would be 60 to 80% and the carbon emissions would be greatly reduced.  There would be a substantial savings in energy and carbon emissions even if using electric cars charged using coal-fired power plants. Electric vehicles have the added advantage that the infrastructure to charge the batteries is already in place. The electric car does not seem to be built on such a house of cards as Mr. Petersen’s article suggests.

An article titled Investors See Climate Opportunity to Make Money, Create Jobs, reports 450 large institutional investors who control more than $20 trillion worldwide, agree “climate change is a risk to avoid and also an opportunity to make a good return on investments.” It reports “Global clean-energy investments reached $260 billion in 2011, some five times more than the $50 billion in 2005.” Our energy needs will best be served by a mixture of traditional and alternate energy sources and we should not let pessimistic analyses keep us from investing in and developing the alternate sources.

* Revised to include a more recent Stern Report on 01/22/2012.

 (c) 2012 J.C. Moore

 

Dr. Heidi Cullen: The Weather of the Future

Sun ,13/11/2011

What will the weather be like in the future? Dr. Heidi Cullen, noted climatologists and author of the book, The Weather of the Future , gave a public talk in Tulsa explaining how global warming is causing the weather to be more extreme. She explained that our future holds an increasing number of extreme weather events unless we act to reduce our carbon emissions.  There was an article in the local Tulsa World newspaper announcing the talk; however,  there was no follow-up article describing the talk or her research on climate change. Tulsa Oklahoma was once considered the oil capital of the world and many of the local politicians and oil company executives that live there do not have a favorable opinion of climate change, so her message was one many Oklahomans needed to hear. To correct the newspaper’s oversight, the author sent the following letter to the editor, which outlined the main points of her talk. The letter generated some controvery and there were a number of comments on the letter.

In her talk, Dr. Cullen explained how global warming is changing our climate. Climate describes the average weather, and research shows the Earth’s average weather has been changing. It is difficult to recognize the pattern of change and only by analyzing millions of weather and temperature records is it possible to see the pattern. Over the last century, NASA’s temperature records show that the Earth’s temperature has increased by about 1°F. That has increased the energy in the atmosphere and the moisture in the air over the oceans. That combination is causing our weather to become more extreme, as you have probably noticed from the events that have happened lately.

Dr.Cullen explained that climate is complex, made up of both natural and man-made factors, and the scientific research has been directed toward identifying the contributions of each. Carbon dioxide was identified in the 19th century as one component of the atmosphere that helps warm the Earth. Our activities have increased the CO2 concentration in the air by 37% since then, and undoubtedly much of the recent warming has been caused by man. Detailed studies of extreme weather events have shown that global warming contributed to their severity. Although that may seem bad news, the upside of that is that if we are responsible for it, we can change it.

The first step in that process is to immediately begin to reduce our carbon dioxide emissions from fossil fuel energy sources. Dr. Cullen outlined what our energy needs will be by 2050 and showed how we can reduce our carbon emissions and meet our energy needs by then with mostly renewable sources. She explained that building the infrastructure for renewable energy will create jobs and contribute to our economy. Rather than considering the cost of doing so a mortgage on future generations, we should consider reducing pollution and developing sustainable energy sources as an investment in our future.

(c) 2011 J.C. Moore

Have Republicans Abandoned Conservative Values?

Wed ,01/09/2010

The truth is that conservation and environmental stewardship are core conservative values.

It is hard to imagine how someone can be considered a Conservative if they don’t want to conserve the most important thing we have, the environment. They claim that they actually do, but not just now, not in that way, or not if it might cost a little. They also try to perpetuate the myth that conservation and environmental protection are liberal causes to justify their opposition. The truth is that conservation and environmental stewardship are core conservative values. (1)

It is even harder to imagine why the Republican Party would embrace the ideals and arguments of those non-conservationists. Our past Republican leaders have been strong advocates for environmental stewardship and they were responsible for enacting some of our most significant environmental legislation. (2)

Theodore Roosevelt believed that conservation was essential for keeping America strong and he was responsible for the permanent preservation of many of the unique natural resources of the United States. As he said,

“To waste, to destroy, our natural resources … will result in undermining in the days of our children the very prosperity

Dwight Eisenhower was the first President to be so taken by the beauty of the arctic wilderness that he set aside 9 million acres as the Arctic National Wildlife Refuge to be protected  for future generations. The Refuge remains as one of the most pristine wilderness areas in the United States.
Richard Nixon enacted many of the nation’s landmark environmental laws, which he saw as a means of unifying the nation. The EPA was created under Nixon’s leadership. According to Nixon:

“Clean air, clean water, open spaces — these should once again be the birthright of every American.” “…we must strike a balance so that the protection of our irreplaceable heritage becomes as important as its use. The price of economic growth need not and will not be deterioration in the quality of our lives and our surroundings.”

Barry Goldwater, dubbed “Mr. Conservative”, was a gifted photographer who produced beautiful pictures illustrating his beloved Arizona landscape. He put his finger on it when he said :

“While I am a great believer in the free enterprise system and all that it entails, I am an even stronger believer in the right of our people to live in a clean and pollution-free environment.”

Ronald Reagan signed 43 bills preserving a total of 10.6 million acres of wilderness. He was instrumental in U.S. ratification of the Montreal Protocol — which dramatically reduced depletion of the upper atmosphere’s protective ozone layer. He developed a cap-and–trade system that prevented our acid rain form blowing into Canada that cost much less than even the government estimated. As he communicated:

“If we’ve learned any lessons during the past few decades, perhaps the most important is that preservation of our environment is not a partisan challenge; it’s common sense. Our physical health, our social happiness, and our economic well-being will be sustained only by all of us working in partnership as thoughtful, effective stewards of our natural resources.” “I’m proud of having been one of the first to recognize that states and the federal government have a duty to protect our natural resources from the damaging effects of pollution that can accompany industrial development.”

John McCain during his 2008 presidential campaign, proposed a pragmatic national energy policy based upon good stewardship, good science, and reasonableness. He cosponsored cap-and-trade bills in the Senate in 2003, 2005, and 2007 and, as he said then,

“A cap-and-trade policy will send a signal that will be heard and welcomed all across the American economy. And the highest rewards will go to those who make the smartest, safest, most responsible choices.” And he was right. Having to pay the true cost of fossil fuel use is fair and would create incentives for renewable energy and energy efficiency.

Cap-and-trade was once considered to be the market solution to reducing carbon emissions. When popular, a number of key Republicans, such as Sen. Lisa Murkowski (R-AK), Sen. Richard Lugar (R-IN), Sen. Lindsey Graham (R-SC) went on record as endorsing the policy. Even Sen. Scott Brown (R-MA), only two years ago, while supporting a version of a cap-and-trade bill in the Massachusetts legislature said:

“Reducing carbon dioxide emission in Massachusetts has long been a priority of mine. Passing this legislation is an important step … towards improving our environment.” (3)

Costs: But somewhere amid lobbying, big donations from power companies, and criticisms from so called conservatives who don’t really want to conserve much, the Republicans have backed off the cap-and-trade concept. They are now claiming it would cost each U.S. household $3,100 a year, a cost that has great sticker shock but is totally inaccurate. Dr. John Reilly, the MIT economist whose work was used to get that number, has criticized Republicans for distorting his work. (4) The Congressional Budget Office estimates that the cost of the cap-and-trade program in 2020 would average about $175 per household (5) and estimates are that associated savings would reduce the federal deficit by about $19 billion over the next decade. (6). A recent report by the National Academy of Sciences details the high economic costs of inadequate environmental legislation, such as reduced streamflow, rainfall, and crop yields (7). Estimates by the World’s top economists such as Britain’s Nicholas Stern (8) are that right now it would cost about 2% of the worlds GDP to mitigate environmental damage – but if delayed, that amount could rise to 20% or more of the world’s GDP by 2050 and put us at risk of an environmental catastrophe.

The misinformation, the damage to the environment, and waste that would be caused by not acting should alarm traditional Republicans. However, according to the Republicans for Environmental Protection, the GOP establishment has lost sight of its

“core conservative values, largely due to the influence of corporate lobbies and political leaders beholden to them for campaign support, and in opposition of the willingness of populist Democrats to embrace environmental protection. The result has been a polarizing battle that is not at all about the advance of conservative principles, but rather the advance of special interest political agendas.” (1)

(1) http://www.rep.org/index.html Republicans concerned about the environment may wish to check out this Republicans for Environmental Protection website.
(2) The quotes below came from http://www.conservamerica.org/quotes.html
(3) http://www.grist.org/article/2010-06-29-remember-when-republicans-liked-cap-and-trade/
(4) http://flavcountry.blogspot.com/2009/05/mit-economist-john-reilly-calls.html
(5) http://cboblog.cbo.gov/?p=300
(6) http://www.msnbc.msn.com/id/38130006/ns/politics-capitol_hill/
(7) http://www.denverpost.com/headlines/ci_15536630
(8) http://siteresources.worldbank.org/INTINDONESIA/Resources/226271-1170911056314/3428109-1174614780539/SternReviewEng.pdf

The Republican Flip/Flop on Cap-and-Trade

Thu ,22/07/2010

A Winning Flip: I can remember when Republicans liked Cap-and-trade. (1) For instance, John McCain cosponsored cap-and-trade bills in the Senate in 2003, 2005, and 2007 and, during his 2008 presidential campaign, proposed a pragmatic national energy policy based upon good stewardship, good science, and reasonableness. As he said then,

“A cap-and-trade policy will send a signal that will be heard and welcomed all across the American economy. And the highest rewards will go to those who make the smartest, safest, most responsible choices.”

And he was right. Having to pay the true cost of fossil fuel use is fair and would create incentives for renewable energy and energy efficiency.

Cap-and-trade was once considered to be the market solution to reducing carbon emissions. While popular, a number of key Republicans, such as Sen. Lisa Murkowski (R-Alaska), Sen. Richard Lugar (R-Ind.), Sen. Lindsey Graham (R-S.C.) went on record as endorsing the policy. Even Sen. Scott Brown (R-Mass.), only two years ago, while supporting a version of a cap-and-trade bill in the Massachusetts legislature said:

”Reducing carbon dioxide emission in Massachusetts has long been a priority of mine. Passing this legislation is an important step … towards improving our environment.”

But somewhere amid lobbying, big donations from power companies, and criticisms from so called conservatives who don’t really want to conserve much, the Republicans are now calling it cap-and-tax, essentially making fun of what was once their own idea.

The Sticker Shock Distortion Flop: In an effort to kill the bill, Republicans such as Senator Tom Coburn (R-OK) are now claiming cap-and-trade would cost each U.S. households about $3,100 a year, a cost that has considerable sticker shock. However, that number was fabricated by doing some misleading  additional math on a MIT study. Dr. John Reilly, the economist who authored the study, has criticized Republicans for distorting his work. In his words,

“It’s just wrong, It’s wrong in so many ways it’s hard to begin.” Not only is it wrong, but he said he told the House Republicans it was wrong when they asked him. “That’s just not how economists calculate the cost of a tax proposal”, Reilly said. “The tax might push the price of carbon-based fuels up a bit, but other results of a cap-and-trade program, such as increased conservation and more competition from other fuel sources, would put downward pressure on prices.” Moreover, he said, consumers would get some of the tax back from the government in some form. (2)

What Is the Uninflated Cost? The report by the nonpartisan Congressional Budget Office (CBO), the entity responsible for providing Congress with nonpartisan analyses of economic and budget issues, estimates that the net annual economywide cost of the cap-and-trade program in 2020 would be $22 billion—or an average of about $175 per household. That figure includes the cost of restructuring the production and use of energy but it does not include the economic benefits and other benefits of the reduction in greenhouse gas emissions and the associated slowing of climate change. Households in the lowest income bracket would see an average net benefit of about $40 in 2020 while those in the highest bracket would see a net cost of $245. Overall, net costs would average 0.2 percent of households’ after-tax income. (3) That doesn’t seem so bad, particularly as the CBO experts also estimate the climate and energy bill now stalled in the Senate would reduce the federal deficit by about $19 billion over the next decade. (4)

The High Cost of Doing Nothing: The cost of doing nothing may be unacceptably high in the long run because of resource scarcity, environmental damage, and the risk of reachng catastrophic tipping points. A recent report by the National Academy of Sciences details the high economic costs of reduced streamflow, rainfall, and crop yields (5). Estimates by the World’s top economists such as Britain’s Nicholas Stern (6) or the US’s Paul Krugman (7) are that right now it would cost about 2% of the worlds GDP to mitigate environmental damage – but if delayed, that amount could rise to 20% or more of the world’s GDP and put us at risk of an environmental catastrophe.

A Flip is Needed: What is it worth to have clean air, clean water, a more sustainable economy, and a less risky future? Can we risk doing nothing? We need a flip by our Republican leaders.

(1) http://www.grist.org/article/2010-06-29-remember-when-republicans-liked-cap-and-trade/

(2) http://flavcountry.blogspot.com/2009/05/mit-economist-john-reilly-calls.html

(3) http://cboblog.cbo.gov/?p=300

(4) http://www.msnbc.msn.com/id/38130006/ns/politics-capitol_hill/

(5) http://www.denverpost.com/headlines/ci_15536630

(6)   http://siteresources.worldbank.org/INTINDONESIA/Resources/226271-1170911056314/3428109-1174614780539/SternReviewEng.pdf

(7)  http://www.nytimes.com/2010/04/11/magazine/11Economy-t.html