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What to do in the absence of cap-and-trade?

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Now that Lindsey Graham has effectively killed any hopes of putting a price on carbon this year, it's worth thinking about what can be done in the absence of a comprehensive climate bill. And one useful place to start is the graph above, which I got from Harvard professor Robert Stavins.

What you're seeing there is a projection for how our energy usage would change after 20 years of a Waxman-Markey-like cap-and-trade bill. As you can see, transportation -- which is probably what most Americans think would be affected -- would hardly change at all. The reason is that internal-combustion engines aren't very carbon-inefficient. We've spent so much time regulating car emissions that we've actually done a pretty good job increasing efficiency.

Rather, it's electricity generation that would take the brunt of cap-and-trade. Put simply, we get a lot of our electricity from coal, and burning coal is horridly bad for the environment. Industrial uses would also change quite a bit. So if we can't price carbon, perhaps we can implement a regulatory strategy -- maybe through the EPA, maybe through Congress -- focused on electricity generation and industrial energy that would approximate the main effects of cap-and-trade, at least for the next 20 years.

By Ezra Klein  |  June 9, 2010; 1:51 PM ET
Categories:  Climate Change , Energy  
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Comments

More about "clean coal" can be found at the website of the Podesta Group lobby firm (http://www.podesta.com/clients.htm). For clarity, the Podesta Group, long-time paid advocate of Clean Coal technology, is NOT run by John Podesta, leader of Center for American Progress Action Fund, a "donor-driven" advocate of Obama Administration policies; rather, the Podesta Group is led by another member of the Podesta family.

Convenient, though, isn't it? No matter which position one takes, the same family reaps the profit...

Posted by: rmgregory | June 9, 2010 2:16 PM | Report abuse

What to do? Pray to Helios, get a vasectomy and try not to live too long.

Posted by: tsgauh | June 9, 2010 2:16 PM | Report abuse

Why don't you just respect what the elected congressional representatives of this country decided, which is that there is no need to put a tax on carbon.

Arguing that the EPA should control energy taxes is like arguing that the Coast Guard should patrol mountain tops because that's where some ocean water comes from.

Posted by: ecocampaigner | June 9, 2010 2:17 PM | Report abuse

"perhaps we can implement a regulatory strategy -- maybe through the EPA, maybe through Congress -- focused on electricity generation and industrial energy that would approximate the main effects of cap-and-trade"

"[A] regulatory strategy"? Please elaborate.

Posted by: ostap666 | June 9, 2010 2:36 PM | Report abuse

--"Why don't you just respect what the elected congressional representatives of this country decided, which is that there is no need to put a tax on carbon."--

The heck with that. How about Klein and the congressionial nitwits respect the Constitution and stifle themselves as to the whole notion that every little problem is excuse for another government assault on individual freedom and responsibility?

But, hey, I guess the boy has decided that he's got to make his living with his nose firmly planted in as many people's undershorts as he can get around to.

Posted by: msoja | June 9, 2010 2:37 PM | Report abuse

Right, lets take issue with his opinions because the generally self-serving senators came to what he believes is the wrong conclusion.

Respecting people's freedoms isn't solving the problem.

Posted by: akusu | June 9, 2010 3:10 PM | Report abuse

I think the primary goal needs to be getting rid of and/or improving the existing coal plants in the country. Cap and Trade would have done that, but absent CO2 legislation there are plenty of public health related arguments against coal that don't involve CO2. I think the EPA is going to effectively limit any new coal plants from being built, so we have to focus on the bad old ones.

A couple ideas:
Phase out the grandfathering of older coal plants under the Clean Air Act. At the same time allow large scale modifications that improve efficiency, like adding co-gen capabilities.

Fix local regulatory hurdles so that large factories can use waste heat to produce electricity/steam that they can sell to other local businesses.

Steadily increase the pollution requirements on NOx and SOx and soot. These pollutants are unique to fossil fuels and cause public health problems. The EPA recently did this, but I'm not sure if existing plants fall under the rule.

Raise the gas tax and eliminate the biofuels loophole in CAFE. The increased CAFE standards require car companies to make more fuel efficient cars, but people aren't going to want to buy them unless gas becomes more expensive. I think that you could get some support on this issue from automakers, especially if you used the revenue from the extra tax in a creative way.

Put into law a long term plan for renewable energy subsidies, providing some certainty for investors. I think the subsidies should be phased out slowly if we get a slowly increasing effective carbon tax.

Overall, I don't think the country is going to accept anything on a large scale until renewable becomes price competitive with coal. So, I think you need to figure out a way to price the true cost of coal (public health cost, not CO2 cost).

Posted by: mschol17 | June 9, 2010 3:18 PM | Report abuse

--"Respecting people's freedoms isn't solving the problem."--

The credo of every dim despot.

Posted by: msoja | June 9, 2010 3:44 PM | Report abuse

msoja continues to want the Hobbsian dystopia that capitalism unrestrained with any meaningful regulation would bring.

"--"Respecting people's freedoms isn't solving the problem."--

The credo of every dim despot."

Deregulation solves everything

The credo of every know nothing Randian nutjob...

Posted by: srw3 | June 9, 2010 3:54 PM | Report abuse

I don't understand how deregulating the amount of pollutants, including greenhouse gases, that can be spewed into the common air makes anyone more free? Free to breathe polluted air? But how am I more free to have a healthy world in the future? All it does is make coal companies richer at the expense of everyone else.

This kind of Randian nonsense is just a childish kind of selfishness and cool-seeming contrariness for people who see themselves as separate from other people and the natural world, in other words, as little gods in their own private universe. It msut be a pretty lonely existence to be so cut off from other people, society and the environment.

Posted by: Mimikatz | June 9, 2010 4:12 PM | Report abuse

Sigh. Apologies for feeding the troll.

For clarity, I meant that in the sense that he was using it (structuring things so people can't be stupid is a sin! True story!)

For what it's worth, this year has been an epic train wreck that has been impossible to ignore. I understand that when there are alot of people involved, compromises are bound to happen, but the spirit of every effort has been successfully corrupted or derailed every step of the way. This is progress?

Posted by: akusu | June 9, 2010 4:17 PM | Report abuse

--"msoja continues to want the Hobbsian [sic] dystopia that capitalism unrestrained with any meaningful regulation would bring."--

When the summons to that fictitious beast calls the thing forth, I'll worry about that. Right now we're descending into an Orwellian nightmare, with the overseers of our failed regulatory agencies calling for more regulation. The moron Rahall, as reported in today's WaPo: "They want to see professional, highly-trained inspectors that are not just pushing paper and rubber-stamping what the industry gives them". What was it you were giving us before, Rahall? And what's the future difference going to be, other than less money in free people's pockets?

No, there is no impending doom from "climate change", but there is unrelenting misery at hand from all the tin horn despots seeking an angle for power out of the issue.

Posted by: msoja | June 9, 2010 4:44 PM | Report abuse

--"I don't understand how deregulating the amount of pollutants, including greenhouse gases, that can be spewed into the common air makes anyone more free?"--

Of course, you don't, because you likely haven't tried.

Right now, about the only recourse you have in such regards is to appeal to the glad handing morons who run for office every few years. Mostly, they'll make you some vague promises before election day, and then you have to hope and pray that they'll eventually take up "your business". Mostly, they won't, and mostly they've already made pacts with the people you're worried about, and even if you are personally harmed by one of these businesses, there's likely a law making it impossible for you to even seek recompense. See the $75 million cap on BP. (Down in my neck of the woods, a judge ruled recently that no one can sue the TVA for punitive damages related to the Emory River ash spill a year and a half ago.)

But absent all the nonsense regulation and layers of protection built with years of backscratching and back room deals, you could actually have a chance to bring action against those who cause you harm.

Of course, in the case of alleged climate change, it would amount to suing yourself, since humanity's alleged affect on the climate is nothing more than humanity's collective effort to keep body and soul together. And punishing people for wanting to stay alive and wanting to live comfortably is obviously a moronic thing to want to do.

I'm a firm believer that IF climate change is real, then the best chance of dealing with it is to have as many free people all working in their own directions on it. Having the moronic government attempt to throw darts for winners is a joke. In fact, it's suicide.

Posted by: msoja | June 9, 2010 5:03 PM | Report abuse

EK, could you provide a link to the source of the slide? I'm about to go a-looking for it at EIA, but I'm sure you already know where it came from

Posted by: gagkk | June 9, 2010 5:18 PM | Report abuse

So given this graph, could someone explain to me why an all-electric vehicle makes any sense at all (from a carbon emissions standpoint)? Just curious..

Posted by: Beagle1 | June 9, 2010 7:20 PM | Report abuse

It is long past time to put good public policy ahead of political expediency, throw away the American Power Act with all its concessions and giveaways, and heed the advice of virtually all of the world's leading climate scientists by taking a serious look at a revenue-neutral carbon tax. It's what's needed, now, more than ever.

Posted by: SallyVCrockett | June 9, 2010 8:50 PM | Report abuse

Erza you are a nincompoop. Sorry, someone needed to tell you.

Posted by: Bubbette1 | June 9, 2010 11:20 PM | Report abuse

Ezra raises a good point. However, it needs to be noted that a getting the same percentage improvement out of power producers will cost more under a regulation-only framework than under cap and trade or a carbon tax. While regulations will always be a critical part of the solution, a price on carbon will be the most efficient way to reduce greenhouse gas emissions.

Posted by: weiwentg | June 10, 2010 4:28 PM | Report abuse

Tightening up EPA regulatory authority for large emitters +

New subsidies for wind & solar (possibly including purchase mandates for govt programs) +

Govt insurance programs for nuke plants +

Deregulation of zoning laws in suburban communities to allow more density and walk/bikeability

=

Emissions reductions without the need to pass a massive new emissions trading law just waiting to be captured by the energy & financial industries.

Posted by: NS12345 | June 11, 2010 10:09 AM | Report abuse

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