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Congress gets ready to vote on cap and trade bill
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The vote on the cap and trade energy bill is coming up in congress. It does not look like supporters have enough votes at this time to pass the bill. It seems that some Democrats are worried about the bill putting a huge tax burden on the country that could cripple the economy. That is my concern. I don’t feel that the cap and trade bill is the best way to reduce greenhouse gas emissions.
I got some good comments on my last article: Energy Cap and Trade is bad policy! I proposed a small carbon tax that would be used to fund clean energy development. One comment from William Ernest Schenewerk, Ph.D. was critical of my small tax because it would not result in a large enough reduction in carbon dioxide emissions:
“If goal is to arrest atmospheric CO2 at 2 times pre-industrial CO2 by 2080, then carbon tax must be at least 1.0 $/kg-C ($1000/tonne-Carbon). 1.0 $/kg-C tax doubles the price of electricity generated from fossil fuel. 1.0 $/kg-C tax does not give natural gas a price advantage over coal if natural gas costs more than $5/1000 ft^3. MHD-Coal may be competitive with natural gas regardless of the carbon tax.
Atmospheric C02 will double to 560 ppmv-C if an additional 414 Tkg-C goes into the atmosphere. Applying 1.0 $/kg-C carbon tax to 414 Tkg-C, represents 414 trillion year-2000 USD. This represents 3% World GDP between 2000 and 2080. This assumes 3% annual economic growth and CO2 doubling by 2080. If CO2 doubles by 2038, the 1.0 $/kg-C represents 15% World GDP.
Arresting CO2 at twice preindustrial by 2080 requires approximately 400 TWe y (1 million giga-watt-years electric) atomic generation between 2000 and 2080. After 2080 World annual atomic power requirement is 25 TWe.”
I don’t know if his numbers are correct, but generally I agree with him. He is making the argument that my small tax would not be sufficient to reduce greenhouse gas emissions in the short run. His analysis is that we would have to double the cost of energy to achieve a reduction. The economic utility of energy means that people will pay a high price for the energy they need. The cap and trade bill would cause an auction where bidders like utility companies will have to pay whatever price for the energy they need and pass the cost on to consumers. Industrial users will most likely to be denied energy and without the energy there will be significant job losses. If energy consumption and jobs are moved overseas, it both hurts our economy and may actually increase global warming.
There are solutions to global warming that would not be devastating to our economy:
- Small carbon tax with the proceeds used to fund clean energy development through grants, tax credits, etc.
- Switch users from high carbon emission fuels like coal to lower carbon emission fuels like natural gas.
- Develop electric powered cars.
- Develop commercial vehicles like long haul trucks that run on natural gas.
- Build nuclear powered ships to haul cargo.
- Build nuclear power plants to replace coal plants.
- Set higher standards for energy efficiency in buildings, both private and commercial.
- Put a tax on incandescent light bulbs so consumers will switch to compact florescent bulbs or LED bulbs. (Tax where substitute is available)
There are a lot of things we can do without cap and trade. What we need to do is all of the other things. That is how we will reduce carbon emissions and create jobs.
