RSS Feed Menu“To address Russia’s out of control addiction to vodka, Premier Putin launched a massive program today to increase the production of whisky, rum and other alcohols. Whisky will receive a 53 cents per gallon subsidy and will be required to be blended with all vodka.”
Absurd as this made-up headline may sound, it is a good description of the American energy policy. We consume and waste too much energy. Europeans and Japanese consume half as much energy as we do and have shown convincingly that we could cut energy use by at least half without hurting our living standards. It is puzzling that instead of focusing on cutting our energy waste, the most talked about energy “solutions” are invariably about increasing the energy supply.
We have one of the most energy guzzling transportation systems. Here are three examples with a supply-side theme that aim to bring even more fuel supply to transportation:
- Corn ethanol and other biofollies: Even as the global population heads for a staggering nine billion, we not only mandate conversion of food into auto fuel, but we also subsidize it! As a result, food has become too expensive. Other victims besides the poor range from birds and wildlife in the American Midwest — whose Conservation Reserve Program land has fallen to corn ethanol production — to endangered orangutans in Southeast Asia.
- Plug-in cars use electricity as auto fuel: More than 80% of pollution in electricity production comes from coal. Coal is twice as dirty as gasoline. Getting rid of coal is one of the highest global warming priorities. But it ain’t happening for decades to come and we have not even started down that path. With this backdrop, vehicles that effectively burn coal under the hood have no place on the road.
- The Pickens Plan: T. Boone Pickens wants you to use natural gas (supplied by his company) in your car. He was willing to throw in a few windmills in the package to get environmental support, but they seem to have fallen victim to the ongoing credit crunch.
As if we don’t burn enough gasoline in our cars, we also want to throw in food, coal and natural gas in our SUV tanks. Our energy policy is to basically increase the supply because that is what consumers want.
When supply increases, consumption finds a way to increase. Consider the auto efficiency (CAFE) standards meant for reducing our gasoline use. History shows that when fuel supply is abundant, so are the CAFE loopholes. For example, electric cars are expected to get a 100 miles-per-gallon superefficient designation. Under the CAFE rules, when a car company sells an electric car, it can also sell a few SUV’s because the standards are met on an average. Talk about a loophole! (An electric car itself pollutes like a 20mpg SUV. Its high mileage rating comes about by ignoring the pollution from electricity.)
Increasing the supply of even clean energy like wind or solar can end up having no environmental benefit if it just aids more consumption. Rutgers University has a very efficient cogeneration (combined heat and power) plant that saves large amounts of greenhouse emissions by using waste heat for heating and air conditioning. There is no money to increase the cogeneration capacity, but the university is spending money on a highly subsidized, sexy but dinky solar array that is not as good as cogeneration in terms of emissions saved per dollar invested. Cogeneration efficiency can not compete with the PR power of a solar array because cogeneration is about reducing waste but solar energy is backed by the supply-side logic. In the meanwhile, New Jersey keeps importing dirty coal electricity from other states that the cogeneration plant could have replaced with high efficiency clean electricity and heat.
Our conservation hopes are tied to cap-and-trade, which will be difficult to get and will be riddled with escape hatches and giveaways for coal and ethanol. Cap-and-trade revenues will likely be frittered on these giveaways and feel-good subsidies for ineffective boutique renewables. Giveaways will come early in the game and escape hatches will come later when the rubber hits the road in the form of a looming emission cap.
The right solution is to tie the cap-and-trade with auctions (or almost equivalently, a carbon tax) to sending every collected penny from it back to the people in the form of direct refund (or income tax reduction). The refund will cancel the regressive element of the auction/tax. We should forget all our favorite subsidies in order to avoid giving away revenues from a regressive tax to rich operators who game the system. We are no good at the subsidy game.
Large price hikes are needed to reduce emissions, but people will balk at them unless the money goes back into their pockets. If the cap-and-trade revenues are diverted for other purposes including our pet energy “solutions”, it will be that much more difficult to lower the cap. Using cap-and-trade revenues to reduce the budget deficit may sound noble, but it is not in the environmental interest.
Adapted from a piece published in the July-September issue of the Jersey Sierran.
joemarier // Jul 20, 2009 at 12:12 pm
I’m thinking that if the money is returned via tax cuts, it will just go right back into energy consumption.
barker13 // Jul 20, 2009 at 12:46 pm
“It is puzzling that instead of focusing on cutting our energy waste, the most talked about energy “solutions” are invariably about increasing the energy supply.”
So… (*SCRATCHING MY HEAD*)… let me get this straight:
Common sense puzzles you?
(*HEADACHE*)
Folks… I do believe Sunil has just “jumped the shark” as far as the credibility of NewMajority is concerned.
RIP July 20, 2009
BILL
balconesfault // Jul 20, 2009 at 2:24 pm
joe has it right. People consume energy because it improves their chosen lifestyles. If you consume more energy, you can keep your home warmer in the winter. Or colder in the summer. Or you can drive around with a bigger box around you. And you can drive to the convenience store 1/4 mile away, instead of walking.
Charging more money for energy (as will happen with any energy tax scheme) will dampen consumption … thermostats will be adjusted a couple degrees in either direction. Drivers will move to more fuel efficient vehicles. They may even walk, ride a bike, or opt for public transportation for some trips.
The problem in a tax refund “to cancel the regressive element of the auction/tax” is that as Joe pointed out, some portion of that refund will most certainly pay for additional energy consumption.
Which is the way the free market works. But you have to note that we’re running huge financial deficits as a nation, so the tax refund will be essentially borrowing money as a nation in order to encourage the current generation to use up as much fossil fuels as possible. In other words – your policy would be screwing our future generations twice over.
sinz54 // Jul 20, 2009 at 6:06 pm
Sunil Somalwar writes: “It is puzzling that instead of focusing on cutting our energy waste, the most talked about energy ’solutions’ are invariably about increasing the energy supply.”
It’s only “puzzling” to those who are too young to remember the 1970s.
President Carter’s austerity program–wear a cardigan sweater, turn down your lights and thermostat, and shiver in the dark–turned off Americans to conservation. Indeed, the days of Reagan and exuberance–buy big houses, buy big cars–were largely a reaction of relief to the realization that the days of Carter were over.
The onus is on today’s advocates of conservation to show how we can use energy more efficiently without shivering, sweltering, or ruining our eyes trying to read by dim light.
balconesfault // Jul 20, 2009 at 7:18 pm
“Indeed, the days of Reagan and exuberance–buy big houses, buy big cars–were largely a reaction of relief to the realization that the days of Carter were over.”
Yep. Like going on an orgy of self-indulgence, mostly on plastic, after hearing that your company is going to tightening its belt in the future and may start laying people off or at least suspending raises.
One major fault that Republican’s two two-term Presidents had was a steadfast refusal to call for collective sacrifice among Americans in any way, shape or form. Personally, I don’t think a President can be considered “great” unless he does motivate Americans to sacrifice somehow for our long-term prosperity and strength.
CTF // Jul 21, 2009 at 6:46 am
The best way to stem the tide of global climate change is with a transparent and straightforward carbon tax. Not only does a carbon tax avoid the evasion and market manipulation inherent to cap and trade, it incentivizes green R&D and returns the revenue to the people. It’s the only solution that makes good sense.
barker13 // Jul 21, 2009 at 8:50 am
Re: CTF // Jul 21, 2009 at 6:46 am –
CTF – there’s going to be no human “stemming” of climate change because such is not in our capacity.
You want to know what “makes sense?” I’ll tell you. Relax. Chill out. We’ll deal with the perceived negatives of “global warming” as we have to and as we can.
In the meantime… I’m turning up the heater for the pool because here in New York… it’s been a cold summer.
BILL
sinz54 // Jul 21, 2009 at 9:10 am
balconesfault sez: ‘One major fault that Republican’s two two-term Presidents had was a steadfast refusal to call for collective sacrifice”
The ONLY legitimate reason to sacrifice, is to achieve a good end result for YOURSELF at some point in the future. That is, deferred gratification works. During World War II, Americans put up with lots of rationing and wage and price controls–because it was toward the goal of winning the war. After which, those sacrifices came to an end.
But a PERMANENT sacrifice in one’s standard of living is absurd. Toward what end? Whom or what am I supposed to be sacrificing for? And when does the sacrificing end, if ever?
What liberals seem to want is a kind of PERMANENT self-flagellation. That’s what Carter demanded. He couldn’t ever promise Americans that the sacrificing would ever end–and so they said forget it.
sinz54 // Jul 21, 2009 at 9:19 am
balconesfault sez: “I don’t think a President can be considered “great” unless he does motivate Americans to sacrifice somehow for our long-term prosperity and strength.”
What evidence is there that Americans need to “sacrifice” their standard of living, in order to achieve long-term prosperity and strength?
CTF // Jul 22, 2009 at 5:49 am
Barker–Thanks for the reply. I’m going stick with virtually ALL the leading scientists who say this is a problem that needs to be addressed though. The question for me is how to address it. And for my money, a revenue-neutral carbon tax is superior to the cap and trade program outlined in Waxman-Markey.
barker13 // Jul 22, 2009 at 10:24 am
Re: CTF // Jul 22, 2009 at 5:49 am –
“I’m going stick with virtually ALL the leading scientists who say this is a problem that needs to be addressed though.”
Are you old enough to remember when vertually ALL the leading scientists were warning of the coming Ice Age?
Remember when “Soylent Green” wasn’t just a movie but a prediction of sorts…? (*GRIN*) (Of course I’m overstating the case but you get my drift – we were destroying the environment… we were overpopulating the planet… yadda, yadda, yadda… doomsday was right around the corner…)
CTF. Have you ever seriously considered/researched “the other side?”
I mean obviously I can’t help but be exposed to “your side,” the Al Gore side, the (former) “global warming” side that’s now simply the “climate change” side. I’m getting BOTH sides of the debate. How’bout you…???
May I respectfully suggest that you head on over to http://www.globalwarming.org and sign up for Cooler Heads Digest weekly emails. Just give ‘em a few months… I’m talking 15-20 minutes a week max to read over the articles/reports/op-eds which they’ll email you links to on a weekly basis.
Oh… and another thing that might help…
OPEN THE WINDOW! (*GRIN*)
http://www.whnt.com/news/sns-ap-tn–recordcool,0,4032125.story
(*GRIN*) No. Obviously I “get” that you’re talking “trends,” not specifics. Still… don’t know where you live, but here on the northeast coast of the US… it’s been a pretty cold summer. And it’s my understanding that GLOBAL temperatures have been either “stable” or perhaps even on a slight downward slope over the past decade or so. (*SHRUG*)
“The question for me is how to address it.”
True! (But address what… cooling or warming…???) (Nevermind!) (*GRIN*)
No… seriously… I “get” where you’re coming from. The thing is, if you were King of the World, unquestioned “God on Earth” as far as earthly power was concerned, the question of “what to do” would still exist – but at least under such a scenario once you made your decision (your Majesty) your will would be done.
We live in a world where China’s gonna do what China’s gonna do… India’s gonna do what India’s gonna do… Europe is going to announce “agreements, policies, and goals” that they’re simply NOT going to abide by.. (*SHRUG*)
Maybe it’s just me… but I just don’t see national economic suicide via unilateral “disarmament” as the way to go. (Call me a reactionary!) (*CHUCKLE*)
“And for my money, a revenue-neutral carbon tax is superior to the cap and trade program outlined in Waxman-Markey.”
OK. If those are my only choices I’m with you. But how’s this…
For *MY* money, NO carbon tax is the way to go. (*SHRUG*)
Nice chatting with you! And seriously… give “Cooler Heads” a try. Hell… if this topic is truly important to you and you consider yourself open-minded, why not stimulate the economy and order up http://www.amazon.com/s/ref=nb_ss_gw_2_16?url=search-alias%3Dstripbooks&field-keywords=global+warming+skeptic&sprefix=global+warming+s something from the list I’ve provided the link to. (Or… save your money – head on over to your local library.)
Remember MBTE, CTF? It wasn’t that long ago… right? (*RUEFUL GRIN*) Remember how “the science” told us it was the way to go… until that is “the science” was proven to be disastrously wrong?
Oh, well… everyone makes “mistakes,” right…??? A little polluted ground water never hurt anyone… right? (*SIGH*)
BILL
BILL
miggsathon // Jul 23, 2009 at 1:52 pm
Excellent post, and very accurate. Cogeneration (along with its sister technology, waste energy recovery) could do an awful lot to reduce waste in the system. Indeed, EPA and DOE estimates suggest we could slash U.S. greenhouse gas emissions by 20% just though cogen and WER. That’s as much as if we took every passenger vehicle off the road. Meanwhile, costs would fall due to increased efficiency. We should do much more of this.
Now maybe I’m biased, because I’m associated with Recycled Energy Development, a company that does this work. But the reason I’m involved in the first place is the staggering potential.
In the comments you mentioned a carbon tax. We’re iffy on that because it gives the revenue to the government to play with, and the government can then use it to do exactly what you’re talking about: promoting its favored technologies. Instead, we should have a market-based cap-and-trade system in which no one is given allowances for free and companies can trade on the private market. All the govt has to do is set the standard and police it.