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Climate Vets, Agribusiness Offsets and Profoundly Non-feasible CCS

A poll of veterans from Iraq and Afganistan shows that 73% support climate change legislation.

Jeremy van Loon reports that wind energy often can overwhelm the power grid, resulting in too much energy and even customer refunds:

Texas had so-called negative power prices in the first half of 2008 because wind turbines in the western part of the state weren’t adequately linked with more populated regions in the east, according to the Electricity Reliability Council of Texas.

Until there’s more integration and better transmission grids, prices probably will fluctuate, leading to negative prices, in which payment to consumers is reflected as a discount on their monthly bills.

Jeremy Hance writes that although the total land lost to deforestation is still higher in Brazil, between 2000 and 2005, the percent loss of forest in Canada and US is greater than that in Brazil.

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New study by engineers at UH and Texas A&M cast doubt on the feasibility of carbon sequestration (aka clean coal technology).

Published reports on the potential for sequestration fail to address the necessity of storing CO2 in a closed system. Our calculations suggest that the volume of liquid or supercritical CO2 to be disposed cannot exceed more than about 1% of pore space. This will require from 5 to 20 times more underground reservoir volume than has been envisioned by many, and it renders geologic sequestration of CO2 a profoundly non-feasible option for the management of CO2 emissions.

In applying this to a commercial power plant the findings suggest that for a small number of wells the areal extent of the reservoir would be enormous, the size of a small US state.  Conversely, for more moderate size reservoirs, still the size of Alaska’s Prudhoe Bay reservoir, and with moderate permeability there would be a need for hundreds of wells. Neither of these bodes well for geological CO2 sequestration and the findings of this work clearly suggest that it is not a practical means to provide any substantive reduction in CO2 emissions, although it has been repeatedly presented as such by others.

Here’s analysis by Joe Romm about how agriculture will be affected by climate change. Note that according to Mother Jones, the upcoming climate change bill will specifically exclude agriculture from its regulations. That seems strange although as Romm points out, this will give farmers an opportunity to convert their growing/fertilizing process to excrete lower amounts of CO2.  He writes:

 A University of Tennessee and 25×25 study predicts that a well-designed carbon offsets trading system that pays farmers to conserve carbon through good soil and forest management practices will grow farm revenue by $13 billion a year.

Tom Philpott expresses (justifiable) skepticism about how agricultural offsets will be implemented:

Before the bill had even made it out of committee, agriculture — a massive emitter of greenhouse gases — had been exempted from any carbon cap. By the time Peterson got done with it, it was full of goodies for agribusiness. His biggest coup was probably engineering things such that the USDA, not the EPA, runs the ag-offsets program. The EPA’s role in life — true, often honored in the breach — is to protect the environment. The USDA’s is to promote U.S. agriculture — and most of U.S. agriculture is environmentally devastating.

And Waxman-Markey enshrined an expansive definition of offsets for agricultural practices. The practice of "chemical no-till" — essentially, replacing tillage with heavy applications of broad-spectrum herbicides and herbicide-tolerant GMO seeds — is already widely practiced in the Corn Belt, to the delight GMO seed/agrichemical giant Monsanto.

As I wrote last summer, there’s no evidence that chemical no-till increases soil carbon content — indeed, there’s evidence that it does the opposite. Yet under Waxman-Markey, farmers stand to reap extra rewards from this dubious practice — without having to change a thing about how they farm.

Wow, that piece he wrote last summer  points out that agribusiness stands to make a lot of money off carbon offsets. Some changes to farming are of dubious effectiveness (be very afraid when you hear “no-till farming” mentioned as a carbon sequestration solution). Organic farming seems to be a very good alternative to the other methods to capture carbon.

Also from Climate Progress, a quote from Trenberth about how unregulated CO2 emissions have increased the amount of precipitation available for extreme weather:

NCAR researchers have correlated the rise from human influences to a 3.5 percent increase in the amount of water vapor in the Earth’s atmosphere. That vapor and the heat it transports is sucked up by a storm as it intensifies.

By Trenberth’s calculation, global warming has raised the heat available to a major storm by about 7 percent.

“So, when a storm is over land, you are probably getting, on the relative order to the same storm in the 1970s, about 7 percent more water,” Trenberth said. “Maybe that is the straw that breaks the camel’s back. Maybe that is the extra water that causes the levee to break.”

Hmm, just keeping up with Joe Romm has turned out to a full time job….

From one of the climate desk reports, Rachel Morris has a great piece about how transnational carbon lawsuits might pan out:

Environmental lawyers point to several possibilities for international claims. Countries affected by oceanic changes could seek redress via the Convention on the Law of the Sea, although it can’t be used against the US—which hasn’t ratified the treaty. A nation could go after a polluter in the International Court of Justice on the grounds that its citizens’ human rights would be violated if their country were wiped off the map—but, again, the US is not a signatory, and the ICJ is somewhat toothless. A number of lawyers told me that the most promising avenue might be the common- law doctrine used in the Kivalina case. Any nation could sue a US company in US court for a "nuisance" caused by climate change—Tuvalu v. ExxonMobil, if you will. And a couple of island nations that were once American protectorates, like Micronesia and Palau, have legal compacts with the US that give them more powerful tools: They could potentially sue a company or even a government agency, using domestic statutes such as the Clean Air Act.

Which is not to say that winning will be easy. While the scientific evidence of climate change has hardened to the point of irrefutability, blaming someone for it in a court of law is a knottier business. US judges have swatted down most climate lawsuits either by ruling that global warming is for Congress to address, or by finding that it would be unfair to hold a handful of companies responsible for damage caused by centuries of pollution across the world.

Nevertheless, industries are bracing for a tide of climate lawsuits. The major insurer Swiss Re has warned that "climate change-related litigation could become a significant issue within the next couple of years." Pawa compares this nascent field to the epic court battles over tobacco and asbestos. "It’s a process of learning by doing," said Pawa. "Just by bringing these cases over and over again, the judiciary [and] the public get used to the idea of liability." According to a forthcoming United Nations study, the world’s 3,000 biggest public companies could be on the hook for $2.2 trillion—more than 30 percent of their profits—if they were made to pay for the fallout of their carbon emissions.

In case you didn’t see it several weeks ago, Paul Krugman had a great piece about building a green economy.  About carbon tariffs:

But what if the Chinese (or the Indians or the Brazilians, etc.) do not want to participate in such a system? Then you need sticks as well as carrots. In particular, you need carbon tariffs.

A carbon tariff would be a tax levied on imported goods proportional to the carbon emitted in the manufacture of those goods. Suppose that China refuses to reduce emissions, while the United States adopts policies that set a price of $100 per ton of carbon emissions. If the United States were to impose such a carbon tariff, any shipment to America of Chinese goods whose production involved emitting a ton of carbon would result in a $100 tax over and above any other duties. Such tariffs, if levied by major players — probably the United States and the European Union — would give noncooperating countries a strong incentive to reconsider their positions.

To the objection that such a policy would be protectionist, a violation of the principles of free trade, one reply is, So? Keeping world markets open is important, but avoiding planetary catastrophe is a lot more important. In any case, however, you can argue that carbon tariffs are well within the rules of normal trade relations. As long as the tariff imposed on the carbon content of imports is comparable to the cost of domestic carbon licenses, the effect is to charge your own consumers a price that reflects the carbon emitted in what they buy, no matter where it is produced. That should be legal under international-trading rules. In fact, even the World Trade Organization, which is charged with policing trade policies, has published a study suggesting that carbon tariffs would pass muster.

Here’s a good response from David Roberts:

Perhaps inadvertently, Krugman reveals how environmental economists seem to think of their work. Assume a free market filled with exchanges among "consenting adults." Then introduce a negative externality — say, CO2 emissions. What’s the proper response? Viewed in that light, obviously the right response is to put a price on the externality. Done! That’s why the environmental economist’s approach to climate policy always seems to be: price carbon and get out of the way.

But … and this is a gargantuan but (quit snickering) … why would you assume a free market? Are there free markets in energy anywhere in the world? If so I’m not familiar with them. Everyone involved in energy markets is always and already operating within a skein of existing market distortions. We live in a fallen world.

More mechanics, less theory

Start with the fact that U.S. electrical utilities are a nightmare of overlapping regulations and jurisdictions, some deregulated, some semi-regulated, some regulated monopolies. Or start with the fact that the global oil market is dominated by state-owned enterprises. Or start with the fact that governments, particularly militaries, are among the largest purchasers of energy. Right on down the line, you find "free" markets distorted by overlapping local, state, and federal regulations, tax breaks, political favoritism, and public infrastructure choices. Very often existing distortions serve the interests of incumbents. (See, e.g., Matt Yglesias on "Mandatory Sprawl.")

However people in energy markets may behave inside this web of constraints, distortions, and politicizations, it’s not going to be well-captured by models based on rational choices within perfect markets. Yes, economists can tell us how a free market will react to a cap-and-trade system. But can they tell us how the network of regulated monopoly utilities in the South will respond to it? That’s what I want to know!

What we need from economics is fewer theorists and more mechanics, people who understand how energy markets actually work and can offer informed counsel about how to make them work better. I want economically credible strategies that can help us get from here, our fallen, compromised, dirty world, to there, a freer, more sustainable world.

Dave Roberts later made a very important point  that CBO estimates of cost rarely factor in  the potential benefits to consumers:

Using the CBO’s standard modeling, the agency determined that ACES (the climate change bill)  will cost the average household $90 worth of purchasing power in 2012. By 2030, that figure rises to $550 a year, and by 2050, $930.

Now, relative to the enormous growth in GDP and average household incomes these models assume, that amount of money is peanuts. (The program would shave 0.8 percent off GDP growth by 2050 — by contrast, the recent financial crisis knocked off something like 5 percent in one fell swoop.) But still, Smith and the Republicans have gotten their ammo. "During the recession, with Americans hurting, the Democrats want to pass a bill that will hit every family squarely in the pocketbook, starting with $90 and rising every year!"

Dems’ only response will be, "Hey, $90 isn’t that much!" That’s not exactly a political winner.

But here’s the thing: the CBO is only modeling the cap-and-trade program in ACES — i.e., the carbon pricing system. What about the other two-thirds of the bill? There’s a whole efficiency title, which is quite strong (much stronger than the craptastic provisions in the Senate bill). There are electric car provisions, grid provisions, renewable energy provisions. These complementary policies serve to reduce per-capita energy use and stimulate innovation in clean industries; that is to say, they serve to drive down the cost of compliance with the cap.

What would happen if these policies were integrated into the economic modeling used by the CBO? I suspect that the outcome would be much more favorable.

Now, of course there’s a reason CBO doesn’t model the portfolio approach. It’s difficult to model how multiple policies interact. Economists are uncomfortable with that kind of uncertainty; they like statistical precision; they don’t like putting their professional credibility behind what amounts to a series of educated guesses. If you asked, Elmendorf would probably say that he is being up-front about what the CBO is doing and it’s up to policy makers what use they make of it.

But I don’t buy that. The CBO is perpetuating the myth that climate policy is all cost — a myth that makes decent climate policy less likely. It’s contributing to the surreal atmosphere in which the entire media and political elite act like nothing but carbon pricing exists. Somebody’s got to take responsibility for that sorry state of affairs. Somebody’s got to change it. It’s not going to help to have climate campaigners (and DFH bloggers) protesting it. Nobody in the Village takes them seriously. Economists need to step up.

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