Waxman-Markey American Clean Energy and Security Act of 2009

How does one address energy issues and climate change? Last week, the Democrats unveiled a draft version of proposed legislation, called the "American Clean Energy and Security Act of 2009" (ACES), sponsored by representatives Henry Waxman (D-CA) and Ed Markey (D-MA) (download here). This legislation is praised by environmental groups, but is of major concern to conservative Republican groups.

The legislation has four titles:

Title 1: Clean Energy - Includes a Renewable Energy Standard that would require 6% of electricity come from renewable fuels by 2012, and 25% by 2025, but this obligation can be met by buying Renewable Energy Credits. Also includes Carbon Capture and Storage incentives, carbon standard on liquid fuel (encouraging cellulosic ethanol), assessments on electricity generated from fossil fuels, and requirements that utilities plan for smart grid and electrical vehicle recharging.

Title 2: Energy Efficiency - Sets higher energy efficiency standards for buildings, lighting, and appliances. Also encourages efficiency by utilities and by industry.

Title 3: Reducing Global Warming Polution - Sets goals of reducing global warming gases by 20% below 2005 in 2020; 40% below 2005 in 2030; and 83% below 2005 in 2050. Also includes Cap and Trade program, with parameters not yet specified.

Title 4: Transitioning to a Clean Energy Economy - Authorizes programs that may later be funded, including rebates to energy intensive industries (like cement and steel) which are essential but would suffer from competition under this legislation.

Below the fold I talk a bit more about what is likely ahead, and what surveys indicate of current public attitudes on related subjects.

Cap and Trade

One of the big new items in this legislation is the introduction cap and trade with respect to carbon emissions. In the draft that was introduced this past week, details were not spelled out very clearly. Regarding what little is included, the Oxdown Gazette makes the following comments:

Critically, the section on global warming, Title III, fails to address how allocations for greenhouse gas emissions allowances would be distributed. Joseph Romm, the blogger, physicist and climate expert who blogs at ClimateProgress.org, gives the bill a B+ overall, but notes that the energy provisions are significantly stronger than the climate sections. Natasha Chart seems to agree, calling it "a better job creation engine than a truly climate-friendly policy". Romm explained the significance of the draft's failure to address allowance allocation to me via email:

The danger in not specifying how allowances are allocated is that you don't have revenues to return to consumers as tax cuts. From a policy perspective, you need to auction the vast majority of the permits, and ultimately auction all of them. From a political perspective, you need to do what Obama proposes, give the vast majority of the revenues back to the public, so they are held harmless (or, in fact, do better than break even because they can adopt efficiency measures). From a messaging perspective, giving the money back to the public is the key to undermining the "biggest tax" argument.

The bill also includes a major disappointment on offsets, or as Romm calls them, rip-offsets. Jesse Jenkins, a leader of the youth climate movement who blogs at Watthead, emailed me a sharp explanation of the problem with the offset provision in Title III:

As expected, the Markey-Waxman discussion draft includes several provisions to contain the costs of compliance including a heavy reliance on up to two billion metric tons of offsets, or enough to allow almost a third of all emissions permits required under the climate regulations to be swapped for offsets.

Allowing that many offsets pokes a giant hole in the carbon cap, stuffs it with plenty of hot air, guts the carbon price signal for sectors we actually need to transform and - most importantly - robs us of billions of dollars of auction revenue that can and should be reinvested to accelerate and smooth the transition to a clean energy economy.

What is Ahead?

The release of this draft legislation is just the beginning of a long process. Hearings will be held in the House Energy and Commerce Committee starting immediately after Congress gets back from its two-week Easter break. The plan is to have a final version of the bill voted on by the committee by Memorial Day, so that it can go to the House of Representative for discussion. According to Markey, this is "the beginning of an incredibly intense period of political debate in our country."

The sponsors hope to have legislation passed and signed into law before the United Nations Climate Change Conference in Copenhagen this December. This year's meeting takes on added significance, since it is considered by many to be the last chance to reach a major international climate agreement before the 2012 expiration of the Kyoto Protocol.

Public Opinion Surveys

An organization called Public Agenda released a report on April 3rd called Americans Support Wide Array of Proposed Energy Policies, but Not Yet Ready to Make Tradeoffs. This report was based on a survey of 1,001 Americans.

The kinds of policies that American's would support, according to the survey include the following:

86 percent agree that investing in alternative energy will create many new jobs (45 percent believe this strongly)

84 percent support more investment in fuel-efficient railways (47 percent strongly)

81 percent support tax rebates to individuals who reduce energy use (,44 percent strongly)

79 percent, support tax rebates to businesses (41 percent strongly) who reduce energy use

78 percent want higher gas-mileage requirements for cars (50 percent strongly)

74 percent say developers should be required to build more energy-efficient homes (32 percent strongly)

73 percent support tax credits to purchasers of hybrid automobiles (38 percent strongly)

72 percent want to reward businesses that reduce carbon emissions and penalize those that don’t (37 percent strongly)

71 percent agree that more tax money should be spent on public transportation (33 percent strongly)

68 percent want the nation to take steps to gain energy independence even if it raises energy costs (24 percent strongly)

Americans are not willing to pay much for this, however. According to the report:

By contrast, majorities oppose measures that would force change by increasing the cost of driving, such as setting a "floor" on gasoline prices (72 percent, with 58 percent strongly opposed), congestion pricing (61 percent, 41 percent strongly) and higher gas taxes. Some 57 percent reject a gas tax even when if it would be used to achieve energy independence, with 37 percent strongly opposed.

One thing that is clear from this survey is that Americans are not very knowledgeable about the issues.

When asked to name a fossil fuel, 7% gave a wrong answer, and 32% said they did not know, making a total of 39% who did not know.

When asked to name a renewable energy source, 21% gave a wrong answer, and 30% said they did not know, making a total of 51% who did not know.

With respect to climate change, 52 percent said that reducing smog the United States has gone “a long way” in reducing global warming; another 12 percent were unsure if this was true or false. Since reducing smog has nothing to do with reducing global warming (if anything, it has the opposite effect, by removing "global dimming"), a total of 64% were incorrect on this answer.

My Views on Where the Legislation Is Headed

As I see it, there are two main groups who will support the legislation in its strongest form:

(1) Those who are very concerned about climate change

(2) Those who feel that they can make money from some aspect of the legislation (cap and trade; renewable energy, energy efficiency, carbon capture and storage, cellulosic ethanol, etc.)

In order to get support of the general population, it seems to me that costs paid by the consumer (electricity, gasoline) are going to have to be kept close to their current level. This means that if a cap and trade mandate is passed, the cost of carbon emissions in the cap and trade program will need to be kept low, perhaps with the idea of raising them in the future. This is likely to greatly reduce the effectiveness of the cap and trade program.

I think that there will also be a temptation to fill the bill to with lots of subsidies, but not much of a way to pay for them. This will ensure support from the groups who might get the benefit of the subsidies, with few concerning themselves about the ballooning deficit. (Perhaps I am too cynical.)

With respect to returning cap and trade revenues back to the public. This is based upon the theory that the consumer, when faced with a higher energy price, will cut back on his/her consumption, notwithstanding that he/she knows that part or all of this increase will be rebated back. The extent to which full reimbursement occurs depends upon how the system is structured. For example, if this is directed to lower incomes people, then the higher income groups will get little or no reimbursement.

Here is my question. If one knows that higher prices for energy will be later rebated in whole or in part, will one tend to discount those higher prices? If one knows that one gets the money back, won't the intended result of lower consumption be negated? It seems to me that I am only going to cut consumption if I know that the higher prices will not be recouped. I have to know that my discretionary income after energy costs is going to be reduced if I don't cut my consumption.

This is just a question for discussion because, frankly, I am not sure what the behavior is going to be under a cap and trade/rebate program.

Another thing. Wouldn't this program be more effective if individuals were sold or given carbon credits. The frugal/efficient could profit in two ways. They would have reduced energy costs because of their frugality combined with additional income because of their ability to sell excess carbon credits.

The problem with the tax rebate idea is that it requires a waiting period between paying the higher tax and getting the rebate via some vague benefit in the future. Then how would the tax be rebated to those like me who have such a low taxable income that I owe no federal taxes? Would the benefit come from increasing my disabled veteran's compensation or my Social Security benefit? There is bound to be opposition to the idea of paying for the tax increase in particular from small businesses since benefits would not come close to the tax increase. Giving them a higher mileage allowance still means a time gap between paying the tax and then getting the benefit. The rebate scheme is essentially a way for the feds to borrow money at a zero interest rate while the business community would need to borrow at the current interest rate in order to fill the time gap.

A general response to both questions:
The tax rebate system would likely be on a sliding scale emphasizing estimated or actual household energy use, so that extravagant energy consumers are not rebated the same amount/proportion as misers. The tax effect for many low income households would likely come in the form of a credit, like the earned income tax credit, that amounts to an annual check. For small businesses that file quarterly, the impact would likely be felt quarterly, and like households, misers would likely fare better than energy hogs (hence the special attention paid to essential but high emitting firms like concrete).

Question is, how will the "rebating authority" identify misers versus wasters? What about persons, deliberately to confuse or not, doing energy substitutions in the middle of the program? (eg. electric vs. Nat. Gas hot water, Gas furnace vs. ground-source heat pump, etc. etc.) Businesses with energy options?

Smarter to simply apply the collections to reducing national debt, a clear benefit for everyone.

People are totally down with solutions to climate change as long as the costs are unloaded on someone else. Doesn't give me a warm and fuzzy about chances for anything meaningful.

Cap and Trade is somewhat like rationing with the white market being in the auction process. The trouble with Cap and Trade is that the consumer sees only prices, not the actual effort to limit the use of the fossil fuels. For some fossil fuels, especially oil and it's products, a direct rationing system at the consumer level would be preferable in my view, since most of the emissions are at the level of the individual or small business. That's because the ration limit is directly visible to the consumer who is the one that must make the decisions on how to use the available fuel and what sorts of equipment (that means cars and housing) to purchase as time goes on.

Worse, once Peak Oil becomes blindingly obvious, it's hard to imagine a situation in which the base price for oil would not tend to increase over time, perhaps rapidly. Adding the cost of the Cap and Trade allocation on top of the cost of production of the declining oil resource would only hit the consumer that much harder.

I do think that there are situations where Cap and Trade limits would be appropriate, such as the industrial and electric generation sector, where the consumption occurs mostly in the business side of the economic activity. that's because coal is much different than oil and the major coal consumers are either used for electric generation or for steel production. The final consumption is the products of these processes, not the consumption of the actual material itself. In past years, the oil industry has consumed only a small fraction of the primary fossil energy in the initial resource compared to that which is delivered to the end consumer.

In the end, the question is whether the market system is actually going to be able to include any such limits on availability without massive distortions and disruptions. The story from the WSJ posted on the Drumbeat today linking oil shocks and recessions is just one indication of how difficult it will be for the economy to adjust, once things begin to unravel.

E. Swanson

I personally have a hard time with Cap and Trade.

I can understand a tax on items that for some reason it is desirable for us to use less of, with rebates so total income is not affected. This tax can be adjusted upward or downward as desired, and can be made to apply to specific products but not others. If desired, it can apply only in business situations. I suppose it is that flexibility and transparency that legislators don't like.

Cap and trade is more of a mystery. Clearly a lot of middle men will come out ahead.

I also really don't understand who really will be the ones who can limit carbon for relatively low cost. Are we talking about paying someone in the Amazon to plant trees in Track A, while someone else cuts down trees in Track B? Are we paying Businessman A in China to convert from using coal to using natural gas, so that there will be a better coal supply for Businessman B to expand his use of coal?

As usual, I am perhaps being too cynical. It seems like Cap and Trade needs to be limited to US projects that are pre-certified, and there needs to be someone auditing the process. This will be a big hassle--why not just use a tax and rebate the extra revenue? If most of the revenue collected from Cap and Trade goes offshore, it seems like the American consumer/taxpayer comes out behind.

It is unclear how Cap and Trade will be implemented, but early indications are that it will be the equivalent of turning over the IRS to Wall Street (which would be the next proposal the way things are proceeding). You are exactly right in that inserting extremely highly paid middlemen for no reason exerts a burden on the taxpayer.

The idea of paying less developed countries to emit less CO2 sounds ripe for massive fraud.

Say China's got an old inefficient steel plant that can't compete and will get shut down in a few years anyway. Time to ask for money to get paid to shut it down.

Your Amazon example is excellent as well. Pay to save one part of the forest and all that does is shift the logging to some unprotected part. No net reduction in CO2 is realized.

I think this is a big con game. A lot of groups are jumping on CO2 reduction as a way to game the system and pretend to cut. Look at how Russia can sell CO2 reduction credits because its economy contracted so much after the collapse of the USSR. That money paid to Russia doesn't prevent the CO2 from getting emitted. It wouldn't have been emitted anyway.

I prefer far simpler rules like:

1) No new coal burning plants. No increased kwh from existing coal plants unless they emit no more CO2 than they did at their previous peak kwh. Easy to understand this. Easy to enforce too.

2) Limits on CO2 emitted per amount of concrete produced. This is a performance rule. I like performance efficiency rules because no money changes hands.

I personally have a hard time with "Cap and Trade".

Maybe we should instead call it "Hat Tip and Kidney"?


Let me explain.

It certainly seems "fair" that every legal person should be allotted some amount of carbon footprint.

And it also seems "fair" that every biological healthy person should be allotted two kidneys.

Additionally, it seems "fair" to allow people in a free trade capitalist system to trade with each other as they see fit.

Hey you need a kidney? Guess what? I got a spare one. I'll sell it to you for $10,000. Kidneys are a limited scarce resource and economic theory says that limited scarce resources should be freely traded so as to maximize efficient uses of such resources.

Hey you need some more carbon footprint? Guess what? I got spare carbon footprint. I'll sell mine to you for $10,000. Carbon footprints are a limited scarce resource and economic theory says that limited scarce resources should be traded so as to maximize efficient uses of such limited resources.

So did you spot the place in this logic where the Three Card Monte trick got pulled on you?

It was in the words, "limited resource". When it comes to kidneys, who ever said that biological people are a limited resource? Or that each represents just one kidney for sale? When it comes to carbon footprints, who ever said that legal personages (a.k.a. corporations) are a limited resource? Heck. I can pull as many legal corporate persons out of the magician's hat as you want me to. And each one of them is entitled (fair is fair) to a carbon footprint allotment which they can then trade. So you need some more carbon footprint for yourself? No problem. I'll just create out of thin air some more legal personages and sacrifice their footprints over to you.

Cap and trade. See?
If you do, tip your hat.

Now keep your eyes on these here three cards because one of them is going to make you rich ...

Left click on bottom image to get to You Tube link

Agree with Gail, though to me Cap and Trade is no mystery at all, is't simply a scam to further enrich wealthy traders. A simple flat-rate tax on fuels at source according to their carbon content is so obviously simple, easy, fair and cheap it confounds me totally why anyone would consider some "Trading scheme". No offsetting rebate scheme needed, simply reduce government debt. Everyone benefit from that.

Peak Oil is a more immediate problem than Global Warming. An energy bill that recognizes this would focus more on reducing our dependence on oil and less on reducing our dependence on coal. Take the amount of money this bill will require to be spent. Refocus the money on pluggable hybrids and electric cars. If we did this we'd be better off in the next 15-20 years.

However, with regard coal: Why not just make a simple rule that beyond date X (say 2015) all new coal plants must capture 90+% of their CO2? This would cause a big shift toward nuclear power.

I oppose tax regimes to reduce CO2 output because I see them as more driven by the desire for tax revenue than a desire to reduce CO2 output.

At this point, we don't have a way of capturing and storing CO2. If this is possible, I expect the timeframe will be 2030 or later.

Given the lack of ability to capture and store CO2, your requirement that coal plant capture 90%+ of their CO2 would mean an end to new coal plants. I don't really see nuclear as being all that feasible either, unless we get (1) the nuclear fuel problem figured out. (Depending on Russia for recycled bomb material is not a stable long-term supply source.) and (2) figure out how to handle the nuclear waste. Putting money in bonds to fund a long term solution really doesn't work--those bonds quickly become worthless. We need to have a built-in solution that works with no cost at the end.

At this point, we don't have a way of capturing and storing CO2. If this is possible, I expect the timeframe will be 2030 or later.

Completely wrong. You have to think synergistically.

We have been capturing and storing CO2 today at Dakota Gasification/Weyburn for a DECADE.

This facility turns 6 million tons of low grade lignite per year into 54 billion cubic feet of gas and sends
about 500000 tons of CO2 per year into the Weyburn oilfield to recover about 3500000 barrels per year of oil out.

Overall we put 90 trillion BTUs of lignite in and get 74 trillion BTUs of oil and gas out plus 4.2 MtCO2 per year.

OTH,6 million tons of lignite directly burned in a conventional power plant would produce 27 trillion BTUs of electricity plus 12 MtCO2.

So the PROVEN Dakota process takes 6 million tons of lignite to make 74 trillion Btus of oil and gas plus 4.2 MtCO2 versus 27 trillion BTUs of electricity and 12 MtCO2.

The US DOE says the US has up to 90 billion barrels of CO2-EOR oil(240 Gb all EOR). EOR is profitable at $100 per barrel oil (worth $130).
With oil prices low, carbon pricing can make up the difference.


One problem is getting enough CO2 into the ground. All the
CO2 produced by all the coal fired electric plants in the US( 2GtCO2) could produce between 4-10 Gb per year. Unfortunately the local power plants are not located near the EOR oil deposits. A national grid will allow electric generation far from where it is consumed.

Two dozen big CCS EOR hybrid operations(size of the 5GW Herman Scherer plant in Georgia) in Texas could easily produce 1 mbpd.
1 mbpd--> (20)gasification plants each producing .25 Tcf of natural gas amd 50000 barrels a day while consuming 21 million tons of lignite per year.

The idea we can't backaway from the ledge we've ended up on it just silly.

BTW, it is INSANE to do Fischer Tropsch CTL with so much EOR oil around.

For example, F+T produces 2 barrels of syn fuel per ton of coal but CO2-EOR produces 4 to 8 barrels of oil(even ignoring the natural gas or electricity which could be extracted).

I doubt that the uranium supply problem is that immediate. As for waste disposal: That's more a political problem (NIMBY) than a technological one.

We ought to accelerate development of reactors that do not need U-235. U-238 and thorium are more plentiful. We could do accelerated development if we weren't in BAU mindset.

Before continuing, I need to ask how you support the following:

Peak Oil is a more immediate problem than Global Warming.


I tend to agree with that. PO, I believe, will cause food shortage and economic collapse w/in the next 5-10 years. GW is about 30-50 years away. Look like we will try to go through PO by burning coal and then collapse with GW.

Renewable will try to catch up in 15 years but won't stop the first few waves of collapse.

I do not expect a large fraction of all the people I know to lose their jobs and experience declining living standards in the next 15 years due to Global Warming. But I do expect these job losses to happen due to Peak Oil.

Also, Peak Oil is going to cut CO2 emissions.

Since the issue has been discussed here extensively and rather heatedly (ahem...), I must assume you either 1. have not paid attention to the discussions of tipping points, 2. don't think the causes of tipping points are possibly happening now or 3. think tipping points are in the future.

The problem with all three is evidence GHGs are being added to the atmosphere at a historic (meaning ALL of Earth's history) pace and that climate is changing faster now than ever before except during abrupt shifts. Additionally, the abrupt changes mentioned above are shown in the geological record to happen in periods shorter than a decade.

Given all of this, what risk assessment allows you to state that the causes of tipping points are not happening now? If they are, then the tipping points are already underway and any mitigation must happen *now*, not wait 20 - 50 years.

To state it another way, if the inputs that will cause an abrupt shift are happening now, then in essence the shift is happening now.

Finally, as I have pointed out many times:

PO might kill *you* or *me*, but it can't and won't kill all of us.

ACC just might kill all of us.

How does any risk assessment allow the statements you made in the post I originally responded to? (Your response above is irrelevant as short-term issues are not the "last straw" issues we must base our plans on as a society, though they are certainly relevant to individual actions.)

As for FF's and CO2, if you listen to Rutledge, Mearns, de Sousa and Bardi and IPCC IV (universally acknowledged to be woefully out of date the minute it was published. Note: not due to fault, but to the massive speed of ACC), well fine.

The problem is that the observed changes don't support the use of such conservative climate sensitivity. The models using climate sensitivities of 3C and lower have massively underestimated the observed physical and biological changes. This alone tells us it is impossible for their projections to be accurate. After all, we have melt in Antarctica proper already. Sea ice melt and and Antarctic melt are both at least a century ahead of projections based on 3C or lower.

**NOTE**: many people are under the mistaken impression GCM's drive climate science. James Hansen recently clarified this in the face of constant denier propaganda that climate science can't be trusted because models are imperfect. To wit:


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.

Thus, your statement that the burning of FFs will help reduce CO2 output is irrelevant. (BTW, a steady reduction of FFs that gets net additions of CO2 to 80% of present additions by 2050 gets us to 450 PPM by 2050.)

Does any of this adjust your risk assessment at all?


PS. I am not implying you are a denier of ACC, but that the risk assessment you and many (most?) others are applying to the discussion of solutions to The Perfect Storm needs tweaking.

1) I expect Peak Oil to cut CO2 emissions more drastically than any treaty. IPCC's projections for future CO2 emissions seem too high because they ignore Peak Oil.

2) I expect Peak Oil to cause lots of unemployment, lowered living standards, homelessness, financial panics, and (at least in less developed countries) considerable hunger.

3) I see the climate models not very accurate. The warming could be faster or slower. The melting could be faster or slower.

4) If we go after displacing oil rather than coal as our first priority we cut CO2 emissions just as well and at the same time we get some protection against the effects of Peak Oil.

To put it another way: If we attack Peak Oil we cut CO2 emissions. But we also protect ourselves from Peak Oil. I would rather kill two birds with one stone.

As for coal: We should just block new coal electric plant construction and build nukes instead.

Concluded some time back that the lack of imminence of the effects of AGW will doom any political solution to curb AGW pollutants, in any amount that would be meaningful in the time frame needed.

As such, I guess I agree with your statement.

"Tipping points" have been brought up already, yet even the timescale and effects of which Dr. Hansen speaks are too slow for the political process to care about.

We will watch the current administration be slowly antagonized by elements of their own party (as well as by the Republicans) to the point that any climate change legislation that eventually passes will be so watered down to be next to worthless in truly addressing the problem. And whatever valid attempts are made can be quickly undone by the next administration (which could be brought into power under the most duressing of situations.)

Title 3: Reducing Global Warming Polution - Sets goals of reducing global warming gases by 20% below 2005 in 2020; 40% below 2005 in 2030; and 83% below 2005 in 2050. Also includes Cap and Trade program, with parameters not yet specified.

I get a kick out of these blowhards coming up with figures like reducing global warming gasses by 83% by 2050! They haven't a fricken clue how or if it can be done - And they know they will be safely retired out of office and/or dead by then.
When (if ever?) they start putting specific details of how they expect to achieve their lofty goals that they put into all their legislation, then I might(?) start to pay attention.

Yeh. Sounds good as long as we worry about paying later. As the poll results show, people like these goals as long as they are not inconvenienced or have to increase their expenditures. I don't think human beings are emotionally equipped to survive in the long term.

Let's step back and look at the big picture here.

Congress will be congress so we should not expect a bill that doesn't have loopholes or tax breaks. They just can't help themselves.

The absolute key provision must be strong regulations and barriers that limit the burning of coal. I have no doubt that we're going to use every drop of oil in the ground. (Anyone disagree?)

So once we see the price spikes next year, there will be strong economic pressure (read: "panic") to turn to coal-to-liquids--either US or imported.

I can already hear the congressmen complaining about all the jobs that will be lost due to high gasoline prices and how we all know that the US has 200 years of coal available (sarcasm).

Opinion polls will almost never come out in favor of imposing current costs for fairly intangible future benefits. Citizens have to be convinced that expenditures are needed to mitigate a clearly foreseeable harm. Why else would our defense budget be a sacred cow (images of warfare and nuclear destruction are vivid) and why is social security universally supported (aging robs us of our abilities)?

The surveys indicate that a sense of urgency is creeping up on folks, but we aren't there just yet. Frankly, we've come a long way since the Clinton/Gore honeymoon when it briefly seemed possible to enact a btu tax to promote conservation. That window shut quickly when offsetting tax cuts fell off the table.

The problem with cap-and-trade for CO2 is that conservation is currently the best way to get reductions. We do not have robust competition between reduction options (i.e. technology) that will be facilitated by cap-and-trade. So the best it can hope to do is provide a price signal, i.e., the same as a carbon tax. At worst, cap-and-trade will be gamed by brokers, feeding a sense of distrust in the broader public.

I would advocate a gradual tax on GHG emissions along with proactive subsidies of clean energy and energy efficiency, to seed the marketplace with clean technology and alternative energy. It should start low (the $3/ton level observed in the Northeast U.S. market among generators might be fine) and move up a bit every few years, creating a stronger signal for clean energy/reduced energy. Once we get some technology penetration and the potential for international buy-in, tradeable permits for CO2 can make sense.

I am opposed to taxes as a way to cut CO2 emissions. Taxes just feed the leviathan. I don't want AGW becoming a way to swell the size of government. It is big enough already.

There are other ways. For example, require efficiency standards where the electric power generators must generate a minimum of x kwh per ton of CO2 emitted. Set the minimum higher on new plants.

"...Why else would our defense budget be a sacred cow..."
It's a sacred cow because so many companies depend on it and make political donations and have lobbyists and grossly inflate other countries intent and capabilities (e.g. russia/china is producing an imaginary super fighter so we need to make a better one). According to the Center for Arms Control and Non-Proliferation the US spends 48% of the world's total military expenditure. To put it another way it spends ten times as much as Russia which is normally seen as the major threat. Obama's latest budget calls for 26% more in spending on the military than Bush spent in 2006. What do you think that will be used for, imposing the US's will on other countries??

Since 1990, the US has spent $7 trillion on defence. Over this same time the US spent $360 billion on science, space & technology and $52 billion on energy, a mere 6% of the spending on weapons. Can anybody in the US not think of a better way to spend that money?

What exactly are young Americans dying for?? It's not for decent medical treatment when they leave the services is it.

Here's the EPA site on US GHG emissions.


2005 had 5925.3 MtCO2equivalent from CO2(96%), 206.5 MtCO2eq(3.3%) from methane and 51.9 MtCO2eq (.8%)from nitrous oxide.
Total GHG of 6183.7 MtCO2eq.

96% of CO2 emissions were from combustion of fossil fuels.
40% of CO2 emissions were from electricity,
32% from transport
14% from industry
6% from residential
4% from commercial

Reducing electricity generation from FFs by 30% and reducing transport emissions by 30% would reduce CO2 emissions by 20.7% or 568MtCO2
(2020 goal is 20%).

Just raising average US car fleet efficiency from ~20 mpg to 35 mpg in 2020 would reduce CO2 emissions by 390 MtCO2.
This could be expedited by the manufacturers
'recalling'inefficient cars(<35 mpg)from the road(car recycling).

Cofiring all coal plants by replacing 10% of the coal with biomass would reduce CO2 emissions by 189 MtCO2. This would take about 300 million tons of biomass per year. US timberlands can sustainably produce 370 million tons of biomass per year. Growing energy crops like poplars could take the place of mining.


390+189=569 MtCo2>568 MtCO2(20.7% reduction)
It could work.

Why isn't eating less red meat on this list? It seems like it is the least problematic way of reducing global warming gasses--unlike other approaches, has very little impact on energy availability. It is easy to do, and cheaper than continuing to raise large numbers of cattle. If people substituted vegetables for the beef they eat now, they would be healthier, as well.

I didn't see it mentioned in the legislation at all.

Also, over on Drumbeat, there is an article about painting roofs and pavement white, to offset the impact of global warming. http://www.miller-mccune.com/science_environment/is-white-the-new-green-...


"When we did the calculations, initially we couldn't believe the results," Akbari said. "So we re-checked the numbers in different ways." Again, he said, the results were unambiguous: Every 100 square feet of roof area turned from a dark color to white is equivalent to offsetting the emission of one ton of heat-trapping, atmospheric CO2.

To get an idea of what this means, consider that in a single year, the average American is responsible for about 20 tons of CO2 emissions. Per capita, Americans have the largest carbon footprint of any nationality in the world, and all of the activities that make this so — driving our cars, using our electrical appliances, buying consumer products — adds up to the equivalent, atmospherically speaking, of 2,000 square feet of white roof.

In all, Akbari, Menon and Rosenfeld estimate that permanently retrofitting roofs and pavement in tropical and temperate regions of the world would offset 44 gigatons of CO2 emissions. It takes about a year and a half for the entire world to cook up 44 gigatons of CO2.

The scale of such mitigation, in proportion to its cost, is unrivaled among technology-based climate solutions.

Regarding reduction of meat consumption, that would make enormous sense (given the very large percentage of emissions related to livestock in one way or another), but the bill actually goes out of its way to carve out virtually all the emissions from the industrial agricultural sector. See the discussion at http://www.grist.org/article/2009-04-02-cut-crap-markey-and-waxman/

From the article you link to:

Under the proposed legislation the agricultural sector is explicitly exempted under the definition of “capped sector”. Since capped sectors will be those that will be required to reduce emissions under the compliance portion of the bill, this means that the entire sector has been given a free pass from any type of emissions reductions. Unfortunately, the bill goes one step farther and makes additional exemptions under the uncapped sector section as well, where sources of emissions will be listed and then, in several years, formed into standards and promulgated into regulation. The bill specifically designates that sources of methane emissions be a separate category of this uncapped sources list, but then explicitly exempts enteric fermentation (i.e. livestock burps and farts) from being included on this list. Enteric fermentation is literally the largest source of methane emissions in the entire country. This means that not only are livestock left out of this bill, but the largest source of methane emissions would be left out of all future regulations for methane emissions in the United States from the uncapped sector. . .

Collectively, our entire food system and associated emissions may be contributing up to 1/3 of global greenhouse emissions by some scientific accounts. . .

What is so interesting about the bill is the lengths it goes to make sure that agriculture is uniquely left out of the regulations. For example, agriculture does play a prominent role in the bill as a source of potential renewable electricity credits with manure digesters and crop biofuels. But while ethanol production plants are explicitly included as an industrial sector that will be regulated under the cap, livestock and manure management are not. So, in essence, biofuels may be eligible for offset credits, but they’ll also be responsible for the emissions they may be producing as well. But, not so for livestock manure, which will be eligible for offsets, but not actually have to do anything to reduce its emissions in the first place. It should also be noted that in the forthcoming EPA’s proposed mandatory GHG reporting rule, manure management is specifically identified as a source of emissions that would be required to report their emissions. This means the problem is not that we can’t measure agriculture and livestock emissions- we obviously can if we can give potential offset credits to the sector and the EPA is going to require that they report emissions.

Eating less red meat is nice idea but it's hard to practice. Imagine a higher tax on "meat" -- I don't know if people would go for that. Even in the face of death (eating red meat shortened life, etc...), people are not paying much attention to the news.

Consumerism has become a science -- how to get people hook on things and buy them. A lot of TODers probably have enough strength to not fool by that but not so for much of the society. Kids growing up are bombarded with advertisements that they have no concept about -- but one thing for certain, they want that McBurger. Of course, a lot of us are kids inside with some sort of wants and needs.

It's a funny thing -- we want some sort of equality. Basic things have to be cheap enough that most of us can afford -- meat, car, etc... In the future with limit amount of resource, would that pretty much destroy the idea of "Democracy" in America? Some might argue we are 1/2 way there....

Why isn't eating less red meat on this list? It seems like it is the least problematic way of reducing global warming gasses--unlike other approaches, has very little impact on energy availability. It is easy to do, and cheaper than continuing to raise large numbers of cattle.

Surely you jest.

All methane emission amount to only 3.3% of US GHG emissions.

Focus, people!

Not all portions of our GHG emissions will be equally easy to manage. So, if 0.183 gigaton equivalent CO2 in agricultural methane is low hanging fruit, it could be an easy/cheap/quick place to start. Plus we would likely save water, land resources, and be healthier for it. Focus is good; let's just not focus too quickly.

Written by Gail the Actuary:
Why isn't eating less red meat on this list?

Because telling people they are not allowed to eat their choice of food is a political death sentence. I will not vote for an authoritarian. Since biosphere carbon is not the underlying cause of global warming, you are focusing on the wrong issue.

Written by Gail the Actuary:
...about painting roofs and pavement white, to offset the impact of global warming.

How much additional toxic chemicals would end up dissolved in water or in sewers as the paint wears away? White paint can not be used in the area occupied by photovoltaic panels mounted on a roof. Since the roofs of houses located in deserts are sometimes made of asphalt with embedded white rocks, this is already being done to some degree. Perhaps a better solution would be to paint wooden decks a light color rather than a dark one thereby keeping the amount of paint being used constant.

As Schneider said, "It's a clever idea that has no obvious side effects....

This approach only addresses the heating issue caused by the greenhouse effect. It does nothing to alleviate the acidification of the oceans as they absorb more CO2. I am not convinced that cooling the equator and temperate latitudes while allowing the poles to warm would be harmless to global climate.

Regarding urban albedo micro management, it seems like the problems are quite fixable.

Toxic paints needn't be used, there are many alternatives, chalk/gypsum based plasters, extremely durable paints, and for the wealthier customers, more use of white marble, or cheaper white stone alternatives, white seashells for in the garden (calcium carbonates) or on top of flat black roofs etc etc.

Solar panels won't likely cover all of the sun-facing roof; a clever design would combine white or pastel paints with solar panels to get some more diffused radiation onto the solar panels (increases kWh/year) while still reflecting large amounts of heat back into the atmosphere.

Also, it's important not just to use low latitude roofs and areas, but also apply the concept in higher lattitude areas, to mitigate global climatic change imposed by the change in albedo. Urban areas occur at every lattitude, so this seems like a manageable issue.

Reducing acidification of the oceans can be done by mining olivine, crushing it very finely, and dispersing it over the seas and oceans. Proven (it's a natural process of erosion), benign, not too expensive, and last but definately not least it also sequesters tons of CO2. Check it out:


Removing CO2 from the atmosphere would probably be better than painting or building things white. A cure is better than addressing only a symptom.

Thank-you for the link to the olivine reaction.

The transportation CO2 emissions reduction will come as a result of Peak Oil. Actually, an even bigger transport CO2 reduction will happen unless we start liquifying coal.

CO2 reduction is therefore really about electricity generation. If we just ban construction of new coal-fired electric plants and build more nukes and wind turbines we can cut CO2 emissions.

It all comes down to coal. If we replace coal with other energy sources then CO2 emissions will decline.

I think the main reasons the European cap and trade scheme has achieved little are
1) free rather than auctioned permits
2) generous use of offsets ~50%.

In Australia's proposed scheme some industries like aluminium will get free permits since they are allegedly vulnerable to say Chinese competition which has no carbon penalties. I suggest however every industry must buy permits, offsets are limited to just 10% of the cap and vulnerable industries get some other compensation like import tariffs or highly visible cash subsidies.

I agree than there should be technical standards and green energy quotas to back up the cap. The cap may have unintended consequences like a move from coal to gasfired baseload generation. On the other hand cap and trade isn't supposed to promote one technology over another.

Cap and trade may not always inflate carbon fuel prices. The CO2 spot price could actually decline in times of low demand. It is claimed that auction revenue disbursement will claw back fuel demand. Maybe but it will be hard to spend the money on more carbon as it has already been allocated; the green alternative should look more attractive.

Cap-and-trade with grandfathering rather than auctioning favours the status quo and hurts innovative new companies and products. "you've emitted GhG before, so you have a premium right in emitting GhG now" seems like a strange adage, but that's exactly what grandfathering boils down to. New innovative companies have difficulties obtaining permits, because they haven't polluted before! Obviously, grandfathering is popular because existing big enterprises have powerful lobbies, but there is no doubt that auctioning close to 100% of the permits, and including close to 100% of emitters, is the most efficient way to start up a carbon trading scheme.

The idea behind trading is that quantity of emissions level is fixed (the cap) but this requires prices to fluctuate using markets, which can definately hurt capital intensive investments. Creating a volatile carbon market on top of volatile FF markets doesn't seem all that useful to me.

The European scheme doesn't include all emissions by far, and the cap isn't that tight (scarcity of permits is required for this scheme to be effective, but the status quo is obviously in favour of as many permits as possible). The US proposed cap is tighter so should work a lot better in this respect.

I hate when politics make things less efficient and effective, so I tend to support a simple carbon tax over cap-and-trading, contractually guaranteed for the next two or three decades at least. The simplicity and transparency takes out most of the political distortion.

I have some friends at a local energy efficiency non-profit and they are hoping that the cap and trade system will create a pool of money that can be used for building retrofits and efficiency improvements.

Large whole home retrofits are effective but expensive. And the cost must be paid up front. Falling housing prices are making second mortgages difficult to get. One of our cities has talked about using property tax assessments to give low interest loans but that is dependent on bond sales and those have not gone well.

I think we need to find a way to pool up capital and put it into efficiency efforts at very low interest rates. It could be done through a tax (like the European gas taxes), or done through a cap and trade system.

I do believe climate change is man made but even if you don't, prices for fossil fuels will return to record highs. We can either capture some of that revenue stream and rout it into higher efficiency or we can do nothing and watch it turn into Dubai sky scrapers and ski runs.

We pay either way.

There is a critical flaw in the U.S. home weatherization program. The qualifying household must be low income and therefore not able to withstand significant cost, whether it be the cost of the house, energy or the retrofit. An expensive weatherization of a manufactured home could easily double the assessed value of the home causing the homeowner's property tax to double exceeding any cost savings from improved efficiency. It may even be enough to cause the family to default on their property tax and lose their home. Since the program is a great scam to increase property tax on the poor, I see no need for additional tax revenue to fund it.

You are right there will be stresses on the poor. But not becoming more efficient is going to eat them alive. Natural gas prices are going up to follow the drilling costs. Already they have increased from $2.00 per MMBtu to $8.00.

How can the poor be protected from that rise? They can't. And it will get worse. There is no choice but to increase efficiency and a way must be found to fund it.

I think it should be some kind of tax on energy because it promotes conservation. In essence the tax puts itself out of a job.

Being poor in a rural environment is very different from being urban. I'll give you an example.

I live in a rural location, a forest. My house is a poorly insulated manufactured home. In 2000 I purchased a wood stove and began using dead wood for firewood from my properties, more than 40 acres, to heat my house and do some cooking replacing about 150 gallons / year of propane. After purchasing the wood stove, my annual cost for collecting, cutting and storing firewood is about $20. My roof is insulated to about R-8 which is completely inadequate for temperatures that range from about -10 F in January to 110 F in July. It would be nice to insulate my roof to about R-20 so that the insulation better matches the R-11 of the walls and ~R-16 of the floor (possibly higher because both my floor and skirting are insulated). Insulated inserts inexpensively compensate for the singled paned windows.

Because the roof is about 8 inches think at the apex, it is impossible for me to crawl into my "attic" and lay additional fiberglass insulation. The joists and rafters are composed of 2x2's, that is lumber with actual dimensions of 1.5 inches by 1.5 inches, making a rather weak roof. As far as I can determine my options for retrofitting the insulation are:

1. remove roof, install insulation and replace roof
2. drill holes into ceiling, blow insulation into roof and patch holes (I do not have the equipment to blow the insulation)
3. remove the ceiling, install insulation and replace ceiling
4. attach rigid insulation to the ceiling

My property tax for 2008 was about $100 / year on the house. The following are the rounded-off assessed values of my house on a few acres:

2009 $24,000
2010 $18,000

I estimate that insulating my roof would reduce my expenses for firewood by $5 / year. Improving the insulation in my roof would cost thousands of dollars and if subsidized by government, probably even more with corruption (i.e. workers overcharge because government is paying for it). If I used the U.S. Home Weatherization Program to insulate my roof for "free" to improve efficiency and stimulate the economy, the subsequent increase in my property tax would dwarf a savings of $5 / year. Realize that the rural poor already use energy sources that are cheap and not necessarily destined to rise with the price of crude oil. Someone living in a trailer would have a similar problem with retrofitting and property tax. A bad plan can be more harmful than no plan, in this case by tricking the poor into increased property tax.

I doubt this is an economic solution for you unless you can get the straw bales for free and do the roof work yourself, but in terms of comfort at the hottest and coldest times of year it might be an idea to play with.



If only we all had 40 acres:-) In your case it makes little sense to retro fit.

1. Raising taxes on American working people in the midst of recession is bad economic policy.

2. Raising energy costs for American manufacturers will put them at an even greater disadvantage to manufacturers in China, Mexico, VietNam, and other countries don't imposes similar costs on their own manufacturers.

3. GCM computer models show that this program, in spite of its immense costs, will have virtually no effect on the amount of CO2 in the atmosphere in the future or on projected global warming.

Several points on CO2 emissions regulations:

1) CO2 emissions taxes are a big temptation to big government folks to grow the size of government.

2) Regulations that restrict CO2 emissions in various ways are a clearer demonstration of honest desire to restrict CO2 emissions than are carbon taxes.

3) Efforts to reduce oil usage should get priority over efforts to reduce coal burning because oil is what going to peak real soon now. I would rather kill two birds with one stone and focus on oil first.

4) If we are going to do something about coal I have two proposals:

A) Simply ban new coal electric plants. This will shift demand toward the next most expensive electric power sources which are natural gas, nukes, and wind.

B) Impose performance requirements on coal electric plants for efficiency: a minimum number of kwh generated per ton of CO2 emitted.

Banning new coal plants suggests their societal external costs must be infinite, which is an absurd notion to (environmental) economists when considering climate change mitigation. We desperately need a consistent, comprehensive and analytical approach to management of external costs.

Environmental economics 101. Simply tax the coal fuel according to marginal social cost, and make sure other (non externalities) market failures are addressed alongside. (Like, more transparency and information dissemination, putting short term energy speculation in chains since it doesn't create any wealth, and clearly defining property rights). These other market failures can be addressed through additional instruments. Tax CO2, NOx, SOx, heavy metals, particulate, etc. As more pollutants and GhG are emitted, the tax rates will increase depending on the specific marginal damage function. If coal plants use advanced abatement equipment to reduce pollution, the burden of proof rests on those companies to show the reduction in pollution and adequate disposal in order to get refunds for non-emitted pollution. Learning and innovation require further support because of other market failures (private vs social benefit).

There may be an issue with calculating the marginal external costs, though. More conservative values may have to be chosen to begin with, in order to get agreement/consensus among the scientists.

I think the external costs of coal are greater than the price difference between coal and nuclear power. So why build more coal plants.

I especially think we should block more coal plants because the coal electric industry has done such an excellent job of blocking tougher regulations on their emissions. They aren't willing to be reasonable. Fine. I'm not willing to let them build new plants.

Taxes and marginal costs: It is all too complicated and easily gamed by lobbyists and intermediaries trading emissions credits. We need simpler ways to control polluters which are less easily gamed.

I think the external costs of coal are greater than the price difference between coal and nuclear power. So why build more coal plants.

Exactly! That's the effect of internalising external costs. But it's a comprehensive, quantitative and transparent approach, while banning new coal plants directly might raise some eyebrows. Fix the externalities, then the market has the socially optimal price level.

Taxes and marginal costs: It is all too complicated and easily gamed by lobbyists and intermediaries trading emissions credits. We need simpler ways to control polluters which are less easily gamed.

Taxes are fundamentally different from trading schemes. Taxes according to marginal external costs is pretty much the most simple (and scientific) approach you can take. It does have downsides just like any other method. For example, the scientists often can't agree on marginal damage levels. There is a trade-off between choosing a low enough level to come to a broad consensus, but high enough to be effective.

The reality for controlling pollution today, is still very much "command-and-control" using direct regulatory instruments like standards and best available emissions control technologies. This is not a simple approach in practice because of the complex and different technologies available. These a highly bureaucratic processes.

Minimum standards are useful to prevent nasty things from happening, but will benefit from extra instruments that better exploit output reduction channels (ie minimum standards offer little incentive to perform better than the standards require, while doing so obviously has benefits of lower pollution/GhG). I think such a hybrid instrument policy is the way to go, but maybe I've been reading too many environmental economics books lately.

I think the American Clean Energy and Security Act of 2009 is a potentially landmark first step to usher America into a powerful clean energy economy that will create millions of jobs for American workers, save consumers and businesses hundreds of billions of dollars in energy costs, make our country energy independent, and limit global warming pollution. While very comprehensive, the bill, as presently written, still have areas that need further improvements to meet science-based goals to combat the threat of global warming in the immediate future. We must also ensure that workers in older industries that are highly reliant on carbon based energy – and the communities in which they’re concentrated – are provided with the assistance and tools necessary to make the transition to the clean energy economy. I ask Congress to continue to work to strengthen these provisions before it is voted on.