“Fee and Dividend”: the Best Way to Address Climate Change

December 23, 2009 · Filed Under Uncategorized · Comment 

James Hansen champions an alternative solution to address climate change called “fee and dividend” which would impose a fee on any pollution source (mines, wells, ports of entry) and distribute the revenue back to the public. Both “fee and dividend” and “cap and trade” attempt to reduce carbon emissions by raising the price of fossil fuels, but Hansen insists that the former is simpler, more effective, and less vulnerable to speculation and gaming. I agree with him.

A pollution tax is the easiest way to incentivize alternative technology and energy efficiency. Give the dividends back to legal citizens, just like Governor Palin did in Alaska.

Cap and trade would create bloated bureaucracies, gaming and corruption. Fee and dividend would promote clean energy without the bureaucracy. Right now America seems to lag behind many other industrialized countries in developing clean technology. We are addicted to cheap coal and oil. Those countries that lead the way to clean energy will benefit economically because they will develop clean technologies and services that they can eventually export to the rest of the world as the demand for clean energy grows.

Interview with Climate Scientist James Hansen on Why He’s Pleased the Copenhagen Summit Failed, “Cap and Fade,” Climategate

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European Commission urges US to cooperate in CO2 cap-and-trade market

January 28, 2009 · Filed Under Environment · Comment 

The European Commission today presented its proposals for a comprehensive new global agreement to tackle climate change to be concluded at the Copenhagen UN climate conference in December 2009. The proposal Towards a comprehensive climate change agreement in Copenhagen urges the U.S. to join the international community in a renewed cap-and-trade market linking members of the Organization for Economic Cooperation and Development, a group of 30 industrialized nations, by 2015.

Related Links

EU Business: EC Communication: Towards a comprehensive climate change agreement in Copenhagen – briefing

Bloomberg: EU Seeks CO2 Market With U.S., Climate Aid for Poor

NY Times: E.U. Appeals to U.S. to Join Common Carbon Trading Market

C-SPAN Energy: Al Gore testified before the Senate Foreign Relations Cmte. on 1/28

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Lieberman-Warner’s “America’s Climate Security Act” re-introduced in 2008

June 9, 2008 · Filed Under Environment · Comment 

Eventually the U.S. will join the majority of industrialized nations in addressing climate change and pass some kind of legislation (probably by 2011 I would imagine with either McCain or Obama in the White House) to start regulating greenhouse gas (GHG) emissions in the U.S. I would prefer an adjustable fuel tax or pollutant-component tax on the front-end of supply (e.g. 2% or 3% tax in 2010) to simplify the regulation. But even with a complicated cap-and-trade system, we should begin to see some reflection of the true cost of fossil fuels (i.e. including the perceived environmental costs) in the prices we pay for petroleum fuels, electricity and natural gas.

Here is an NWF overview of the Lieberman-Warner bill.

Starting within five years, the bill would reduce global warming pollution from major emitters such as power plants and oil refineries by about two percent each year from current levels. Emissions from these sources will be reduced by 15% below current levels between 2012 and 2020. Over the longer term, the bill will reduce global warming pollution from major emitters by one-third (33%) below current levels between 2012 and 2030, and by 70% below current levels between 2012 and 2050. The bill regulates power plants, oil companies and big industrial emitters, accounting for about three-quarters of total U.S. greenhouse gas emissions. According to analysis by the Natural Resources Defense Council, due to additional measures in the legislation to strengthen building codes and appliance standards, the bill could reduce overall U.S. greenhouse gas emissions between 16-22% below current levels by the year 2020.

Prices that depend on energy will probably go up slightly as a consequence of any GHG regulation, but the Lieberman-Warner bill, also known as “America’s Climate Security Act”, would only require a gradual 1% to 2% annual reduction in GHG emissions. Plus the bill should accelerate demand for energy efficiency and stimulate other sectors of the economy, so who knows what the net effect will be on the overall economy.

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