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Tag: carbon tax
Don’t Ban Fracking — Pass A Carbon Tax Instead

Don’t Ban Fracking — Pass A Carbon Tax Instead

The Trump administration’s formal notification that it will abandon the Paris climate agreement should be treated as a huge in-kind contribution to the Democratic Party. It’s an emphatic message to anyone who cares about the planet: Do not, under any circumstance, vote Republican in 2020.

The Democrats running for president could not be more starkly opposed to Donald Trump. He mocks climate change as a hoax, wants to dig coal until West Virginia is just a vast cavity in the ground, and thinks the Arctic National Wildlife Refuge should be a safe space for oil rigs. The Democrats recognize scientific reality, favor the Paris climate accord and are committed to curbing greenhouse gas emissions.

Some of the candidates, unfortunately, are enamored of the old command-and-control approach to environmental protection: forbidding this and requiring that. Elizabeth Warren, Bernie Sanders and Kamala Harris support a ban on fracking, a method that has greatly increased U.S. oil and gas production. Almost all the candidates would end new oil and gas leases on federal lands. Raising vehicle fuel economy standards and setting a deadline for all vehicles to achieve zero emissions are common ideas.

These proposals all suffer from the same flaw: dictating purported solutions from on high, with little regard for side effects, instead of devising incentives for creative, inexpensive remedies. This approach guarantees that the cost will be higher than necessary and results worse.

It appeals to politicians, though, because it allows the illusion that major progress can be made without any sacrifice by voters, except maybe those who frack for a living. The assumption is that if people realize environmental improvement is not cost-free, they will run screaming from the room.

That theory has prevailed for decades. So I am startled but pleased to discover that this year, many Democratic candidates have decided to treat voters as intelligent people who can be persuaded to embrace optimal remedies.

The best of all is a carbon tax, which would raise the price of different fossil fuels to reflect the harm they do. Among the candidates who favor it are Sanders, Warren and Harris, as well as Joe Biden, Pete Buttigieg, Amy Klobuchar and Julian Castro.

It would advance these purposes without draconian regulations, inflexible bans or cumbersome bureaucracy. The money collected could be rebated to every American — yielding a net tax increase of zero.

This represents a major shift. Even Barack Obama saw no way to sell it. His first energy secretary, Steven Chu, told Obama in 2012 that a carbon tax would be the ideal way to attack the problem. “It’s not gonna happen,” the president replied.

In 2015, Obama conceded publicly that it would be “the most elegant way to drive innovation and to reduce carbon emissions.” But he was not so masochistic as to try to get it through a Congress controlled by Republicans who wouldn’t admit the ocean was rising if it were lapping at their chins.

A carbon tax would stimulate good choices rather than force them, giving an advantage to those that are most cost-effective. It would discourage coal use, aid electric vehicles, foster conservation and boost renewable sources of energy. It would end fracking eventually rather than immediately, easing the journey to a low-emission future.

Asking economists if they favor the idea is akin to asking loggers if they like chainsaws. In January, an ad published in The Wall Street Journal endorsing a carbon tax boasted the signatures of 3,554 U.S. economists (“the largest public statement of economists in history”). Among them were 27 Nobel Laureates and 15 former heads of the White House Council of Economic Advisers, from Republican and Democratic administrations.

Contrast that with, say, a prompt ban on fracking, which would minimize flexibility and maximize pain. It would devastate an industry, sharply increase the price of oil, provide a windfall to Saudi Arabia and Russia and disrupt the transition away from coal-fired electricity.

“It would be a humongous shock to the global market and affect economies around the world,” Sam Ori, executive director of the Energy Policy Institute at the University of Chicago, told me. “But you wouldn’t do much to reduce emissions.”

Reducing emissions is the highest priority, to be achieved in the most efficient and least painful way. Democrats may be coming around to the realization that for most voters, a carbon tax is not nearly as scary as climate change.

Happy Earth Day — But Don’t Forget Arbor Day (And Trees!)

Happy Earth Day — But Don’t Forget Arbor Day (And Trees!)

The last Friday in April is National Arbor Day. You knew that, didn’t you? Born in the Victorian era, Arbor Day began mainly as a gentle reminder to admire trees as things of beauty. As an environmental observance, it has been upstaged by the more comprehensive Earth Day (itself now almost 50 years old). But Arbor Day has been very much updated.

The status of trees as uniquely important environmental players has risen in recent years. Trees are now on the front lines in the battle against climate change. That’s because forests absorb nearly 40 percent of human-made fossil fuel emissions every year. Burning wood and rotting trees release carbon dioxide into the air.

This makes massive deforestation a harbinger of doom for the environment as we know it. Fortunately, there are ways to head this off. Proposals to create a carbon-offset market for trees, if put in motion, could reverse the destruction. Right now, these cap-and-trade setups are open only to utilities and industrial companies. Adding trees to a cap-and-trade system would let owners of forested acres make real money by not cutting down trees.

The fate of tropical forests, particularly in Southeast Asia, is of greatest concern. The ranching, mining and timber industries have played a major role in leveling more than a billion acres of tropical forest over the last 40 years. The loss of these trees contributes an estimated 12 to 15 percent of the world’s carbon dioxide emissions a year.

Here’s a simplified version of how a market for trading carbon offsets now works: Company A reduces its emissions below a government-set cap. Company B’s emissions, by contrast, exceed the limit. To avoid paying a penalty, Company B buys offset credits from Company A.

The price of credits is set by supply and demand. That these systems are market-oriented pleases conservatives committed to fighting climate change. Trade in these markets already totals billions of dollars a year.

Some 40 countries now put a price on carbon. Some do it via cap-and-trade. Others, such as Canada, place a tax on fossil fuels, with most of the proceeds going back to Canadians through reductions in their tax bills. The United States does none of the above, but California and nine Northeast states have established their own cap-and-trade systems.

Where do trees come in? Removing trees increases emissions. Letting them grow reduces them. Putting a price on leaving them alone would act as a powerful incentive to not cut them down.

There remains the dilemma that many locals in and around tropical forests currently make a living in ways that require their destruction. Under a proposal known as the Rainforest Standard, however, mechanisms would be set up to spend some of the money building new livelihoods not dependent on axing trees. Examples include ecotourism, fishing and harvesting tree products, such as nuts and palm fruit.

Ordinary homeowners don’t have big forests to preserve but can nonetheless use trees to reduce their carbon footprint. Trees shading the house have a cooling effect in hot weather, reducing the need for air conditioning. And there is some money in this, of course, in the form of lower electricity bills.

So National Arbor Day is coming. Bear in mind that your state’s Arbor Day may fall on a different date than the national one. Many states move their observance to coincide with the best times in their area to plant trees. The big news this year is that in addition to providing beauty and serenity, trees can play a major role in saving our world from catastrophe. Is there a poem for that?

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators Web page at www.creators.com.

IMAGE: A fire burns near trees in a peatland area on the outskirts of Palembang on Indonesia’s Sumatra island, September 9, 2015. REUTERS/Beawiharta

Why A Carbon Tax Is A Truly Good Idea

Why A Carbon Tax Is A Truly Good Idea

Address climate change and send Americans a check at the same time. That’s the nut of an intriguing idea put together by a group of Republican elders. The plan would curb emission of greenhouse gases by taxing them at the refinery, at the mine, or wherever they enter the economy. The proceeds would be sent to Americans in the form of dividends. A family of four could expect to receive about $2,000 in the first year.

Those leaning left also see beauty in a carbon tax, though some environmentalists want the revenues to go toward developing renewable energy sources. I’d prefer that, too, but the prospect of dividends makes for a much easier sales pitch. And frankly, the private sector is doing a very good job of clean-energy innovation.

The plan would tax carbon dioxide emissions at $40 a ton, with the rate rising over time. There would be “border adjustments” to punish imports from countries lacking a comparable carbon pricing system. And former President Obama’s Clean Power Plan would be repealed. (Hold on; we’ll get back to that.)

The authors include former Secretaries of State James Baker and George P. Shultz, former Treasury head Henry Paulson, and leading conservative economists. Their group is called the Climate Leadership Council.

Whether this would fly in today’s Washington remains to be seen. A different kind of Republican currently occupies the White House and much of Congress. These politicians hold that a) the planet isn’t warming, b) if it is warming, humans play little part in it and/or c) we’ll be gone by the time catastrophe hits.

President Trump has called climate change a Chinese hoax. He’s also claimed an “open mind” on the matter. You figure it out.

President Obama pushed for a cap-and-trade system — not the same as a carbon tax but another market-based means for reducing emissions. Environmentally minded conservatives have endorsed cap and trade also, but the Republican House voted no. Whether it objected to cap and trade on policy grounds or because Obama wanted it, we cannot be sure. And let the record show that Trump’s crowd doesn’t hold much love for establishment Republicans, either.

The Clean Power Plan called for reducing power plant carbon emissions by 32 percent within 25 years (to 2005 levels). Setting such limits would have its virtues, especially at a time when congressional leadership is limp. But it would also be a magnet for legal challenges.

A carbon tax would elegantly put strong financial incentives in place to discourage use of fuels that emit greenhouse gases. It also would provide a measure of predictability that companies need for making long-term capital investments — something government-set renewable energy targets don’t do well. Simply put, the targets are not bankable commitments against which green energy companies can get financing.

When companies have to pay for pollution, there’s less need for micromanaging laws requiring such items as smokestack scrubbers. In sum, until you get to zero emissions, you are paying.

Less government involvement also means less politics. Recall how Republicans flogged the Obama administration over losses at Solyndra, a solar energy company that stimulus money helped finance.

Private capital knows that often only 1 in 10 investments pay off. Political demagogues don’t know or don’t care to know. The program used by Solyndra happened to have many successes, but who can name a single one?

Expectations that the current administration will take up even a conservative approach to global warming are dismally low. The single candle lighting the darkness is the new secretary of state, Rex Tillerson, who supported a carbon tax as CEO of Exxon Mobil.

Trump has been king of surprises. Isn’t it time for a good one?

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com.

IMAGE: United Nations Photo / Flickr

How Tillerson Created The (False) Impression He Supports Climate Action

How Tillerson Created The (False) Impression He Supports Climate Action

Donald Trump’s unorthodox selection of ExxonMobil CEO Rex Tillerson for secretary of state touched off a flurry of stories about how an engineer from humble beginnings rose through company ranks to become one of the world’s most powerful corporate titans, negotiating with potentates and presidents in dozens of countries spanning the globe.

Much of the coverage has focused on Tillerson’s chummy relationship with Russian President Vladimir Putin, which has raised eyebrows among Democrats and Republicans alike, including Sens. Lindsey Graham, John McCain and Marco Rubio. Tillerson’s bromance with the Russian strongman, however, has largely overshadowed another major area of concern: ExxonMobil’s leading role in promoting climate science denial and blocking government efforts to address global warming.

Instead of exploring those issues, many news organizations have accepted at face value statements Tillerson and his lieutenants have made about company climate policy. A closer look, however, shows that while Tillerson may talk the talk, when it comes to walking, he’s heading in the wrong direction.

As a number of reporters have noted, Tillerson — unlike his crusty predecessor Lee Raymond — acknowledges that climate change is a problem. “At ExxonMobil,” Tillerson said in May at a conference in Washington, D.C., “we share the view that the risks of climate change are serious and warrant thoughtful action.”

That sounds promising, right? But Tillerson followed that statement by noting that more than a billion people around the world lack access to electricity, living in what he called a state of “energy poverty.” Cutting back on fossil fuels, Tillerson said, would condemn them to a life of deprivation. His solution: more fossil fuels, especially natural gas. As he has said on other occasions when addressing the same topic: “What good is it to save the planet if humanity suffers?”

Tillerson also routinely disparages well-established climate models, insisting they are inaccurate, and recommends societies learn how to adapt to sea level rise and other consequences of global warming instead of trying to reduce carbon emissions.

“Changes to weather patterns that move crop production areas around — we’ll adapt to that,” he said during a talk at the Council of Foreign Relations in June 2012. “It’s an engineering problem and it has engineering solutions. …The fear factor that people want to throw out there to say we just have to stop this [carbon emissions from burning fossil fuels], I do not accept.”

Tillerson reiterated his disdain for climate science before a much larger audience the following March. During an hour-long interview on PBS’ Charlie Rose, he emphasized uncertainty — exactly what ExxonMobil did after its own scientists warned upper management in the late 1970s about the potential for climate catastrophe. “We have continued to study this issue for decades,” he told Rose. “… With all of that [new data, better models, and more competent analysis], though, the facts remain there are uncertainties around the climate, climate change, why it’s changing, what the principal drivers of climate change are.”

Social scientists call that “manufacturing doubt.” That’s just what the tobacco industry did to stave off tighter government controls on its product despite the fact the science linking smoking to cancer and other diseases was conclusive — just as climate science is today.

Stories about Tillerson’s nomination in The Wall Street Journal, The New York Times and other publications have uncritically repeated ExxonMobil’s hollow assertion that it endorses a carbon tax. As I have previously pointed out, Tillerson first claimed to back a revenue-neutral carbon tax in 2009 in a cynical attempt to derail congressional approval of a rival approach — a market-based, cap-and-trade system — that was gaining ground at the time. In fact, a cap-and-trade bill did pass narrowly in the House, only to die later in the Senate.

Not only was Tillerson undoubtedly aware back then that a carbon tax had virtually no political support, since 2009 ExxonMobil’s friends on Capitol Hill have made sure that no carbon tax bill will ever see the light of day. There have been a handful of nonbinding carbon tax resolutions in recent years, however, and the overwhelming majority of ExxonMobil-funded senators and representatives consistently voteagainst it. Meanwhile, the company has ignored members of Congress who have actually sponsored carbon tax legislation. Earlier this year, for instance, Sens. Sheldon Whitehouse and Brian Schatz — who get no financial support from ExxonMobil — introduced a revenue-neutral carbon tax bill. Did they hear from the company? No.

“Regarding ExxonMobil’s alleged seven years of support for a carbon fee, we’ve seen no meaningful evidence of that,” the senators said in a letter they sent to the company in August. “None of the top executives that make up ExxonMobil’s management team has expressed interest in meeting with any of us to discuss the Whitehouse-Schatz proposal or any carbon fee legislation.”

In an otherwise critical editorial on Trump’s pick for secretary of state, The New York Times applauded Tillerson for pulling the plug on climate science denier groups. “On a positive note,” the paper of record opined, “Mr. Tillerson has reversed Exxon Mobil’s long history of funding right-wing groups that denied the threat of global warming, and he could perhaps persuade Mr. Trump not to pull out of the landmark Paris agreement to reduce greenhouse gas emissions.”

In fact, Tillerson did not completely pull that plug. Despite company denials, ExxonMobil has continued to spend millions of dollars on denier groups since Tillerson took over the tiller in 2006. Outed by a 2007 report by the Union of Concerned Scientists, the company spent more than $18.6 million from 1998 — a year before it merged with Mobil — through 2005 on more than 40 think tanks and advocacy organizations. The company did drop some deniers from its roster in response to negative publicity, but from 2006 through 2015, it spent another $14.3 million on its climate disinformation network. Sixteen groups received ExxonMobil funding last year, and 10 of them — including the American Enterprise Institute, American Legislative Exchange Council, Federalist Society and Hoover Institution — were listed in the 2007 UCS report.

As for the Times‘ hope that Tillerson, as secretary of state, could persuade Trump to uphold the Paris climate accord, it’s not clear he would try. After all, his company stands to profit handsomely if it fails.

It is true that ExxonMobil endorsed the agreement, at least on paper. A close reading of the company’s statement of support, however, suggests that it hinges on whether its own agenda is satisfied.

After calling the accord “an important step forward by world governments” and insisting that ExxonMobil “has a constructive role to play in developing solutions,” the statement urges policymakers to reduce carbon emissions “at the lowest cost to society, keeping in mind that access to affordable and reliable energy is critical to economic growth and improved standards of living worldwide.”

Ensuring worldwide access to energy is a not-so-veiled reference to Tillerson’s pet energy poverty argument, and as we know, his solution for the developing world is to buy more of what his company sells.

The statement’s conclusion, meanwhile, is especially ironic. It declares the best policy option to meet the challenges of curbing carbon and providing energy to all is — you guessed it — a carbon tax, which the company has been working overtime to make sure never happens.

When senators begin to weigh the pros and cons of Tillerson as the nation’s top diplomat a few weeks from now, they need to take into account the fact that he has spent his entire professional career at a corporation whose foreign policy is not only often at odds with U.S. interests, but one that has done more than any other oil company over the last two decades to spread climate science disinformation and prevent urgently needed government action. If they take the confirmation process seriously — and consider the harm Tillerson has inflicted on the planet to protect ExxonMobil’s bottom line — they will reject him. Let him retire next year with his $69.5 million pension and $218 million in company stock. He’ll be fine — and hopefully won’t be able to do any more damage.

Elliott Negin is a senior writer at the Union of Concerned Scientists. His articles have appeared in The Atlantic Monthly, Columbia Journalism Review, The Hill and many other publications.

IMAGE: ExxonMobil Chairman and CEO Rex Tillerson speaks at  an energy conference in Houston, Texas April 21, 2015.  REUTERS/Daniel Kramer/File Photo