Arguments
Barack Obama speaks as he unveils his plan on climate change at Georgetown University in Washington DC. Photograph: Alex Wong/Getty Images
President Obama acts on climate change by enforcing the law
Posted on 25 June 2013 by dana1981
This is a re-post from The Guardian's Climate Consensus – the 97%.
In his state of the union speech this February, President Obama vowed,
If Congress won't act soon to protect future generations, I will. I will direct my cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.
President Obama followed through on that promise today, unveiling a climate action plan that includes measures to reduce greenhouse gas emissions, accelerate renewable energy permitting on public lands, and prepare American infrastructure for the impacts of climate change.
The centerpiece of the plan is the announcement that the US Environmental Protection Agency (EPA) will regulate greenhouse gas emissions from existing power plants, in addition to the rules already in draft form that are set to regulate emissions from new power plants. The White House released a video to explain the importance of these steps in addressing climate change by decarbonizing the economy.
Republican House speaker John Boehner reacted to this news by calling the EPA regulations "absolutely crazy." However, in reality they're required by law.
Under the Bush Administration, the EPA refused to regulate greenhouse gas emissions. The state of Massachusetts sued the EPA, and the case went all the way up to the US supreme court. In 2007, in a 5-4 decision with Justice Anthony Kennedy casting the deciding vote along with the four more liberal justices, the court ruled that if greenhouse gases were determined to endanger public health or welfare, the EPA would be required to regulate their emissions in accordance with the Clean Air Act.
The Bush EPA delayed the decision about the threat of greenhouse gas emissions until after he left office. After President Obama took office, the EPA issued its endangerment finding in 2009. Based on an evaluation of the best available scientific evidence like the Intergovernmental Panel on Climate Change (IPCC) report and US national climate assessments, the EPA determined that greenhouse gas emissions clearly endanger public health and welfare via their impacts on climate change.
This finding meant that under the Clean Air Act, greenhouse gases meet the definition of "air pollutants," and the EPA would have to regulate their emissions from mobile and stationary sources (vehicles and power plants). Vehicle emissions were regulated via new fuel efficiency standards requiring cars and light trucks to average 54.5 miles per gallon by 2025. The newly announced power plant emissions are the EPA's enforcement of the Clean Air Act requirements for stationary sources.
On the one hand, with Congress refusing to implement any sort of climate legislation, regulating emissions from vehicles and power plants is the biggest single step President Obama can take to reduce American greenhouse gas emissions. He could have followed the Bush administration's strategy and tried to delay these regulations, forcing environmental groups to sue to make the courts require that the EPA enforce the law.
On the other hand, that is really all the Obama administration is doing – enforcing the law. Any opposition complaints that this decision is "crazy" or bypassing Congress are factually and legally wrong.
In fact, if Republicans want to eliminate these regulations, all they need to do is pass climate legislation to supersede them. A growing number of conservatives support implementation of a carbon fee and dividend system, for example. At the moment the majority of Republicans in Congress seem to deny that climate change is human-caused and/or a problem, and oppose taking any steps to reduce greenhouse gas emissions.
CO2 is now 400 parts per million. Lets put that in a new perspective. Lets use "feet per million". Therefore air is 78% nitrogen or about 780,000 feet per million or about 140 miles. Oxygen is about 21% or about 40 miles and that leaves 1% of other gases, mostly Argon, or not quite 2 miles. Then CO2 is 400 parts per million or 400 feet. So all the gases except CO2 will reach 999,600 feet or just about the distance across Minnesota's midsection from SD to Wisc. and the CO2 will reach from home plate to the fence at Target Field. So What the hell"s the big deal?
voneschen:
Assuming for the sake of argument that your comment survives moderation, given it is (a) off-topic for this thread and (b) practically constitutes sloganeering, your simplistic analogy, put bluntly, has no basis in the reality of what is going on.
There are many resources, online and in textbooks that are presumably available at public libraries in your general area, which explain the radiative physics of atmospheric gases, and precisely why only the gases identified as greenhouse gases (namely CO2, H2O, and a few others) are important for modulating the outgoing flux of infrared from the Earth's surface, resulting in the atmospheric greenhouse effect.
Please avail yourself of, say, David Archer's online materials at the University of Chicago before continuing with further, similar analogies which have no bearing on the applicable physics. Certainly you will be in a far better position to ask more interesting and perhaps even incisive questions.
@1
Your myth is covered in this Skeptical Science write-up:
http://www.skepticalscience.com/CO2-trace-gas.htm
Ah, the feeling that if something is tiny it would surely have a tiny effect — what Peter Hadfield calls the "Feelie Method of Scientific Enquiry".
Yes, let's put that into perspective:
He wasn't driving drunk, he just had a trace of blood alcohol; 800 ppm (0.08%) is the limit in all 50 US states, and limits are lower in most other countries).
Don't worry about your iron deficiency, iron is only 4.4 ppm of your body's atoms (Sterner and Eiser, 2002).
Ireland isn't important; it's only 660 ppm (0.066%) of the world population.
That ibuprofen pill can't do you any good; it's only 3 ppm of your body weight (200 mg in 60 kg person).
The Earth is insignificant, it's only 3 ppm of the mass of the solar system.
Your children can drink that water, it only contains a trace of arsenic (0.01 ppm is the WHO and US EPA limit).
Ozone is only a trace gas: 0.1 ppm is the exposure limit established by the US National Institute for Occupational Safety and Health. The World Health Organization (WHO) recommends an ozone limit of 0.051 ppm.
A few parts per million of ink can turn a bucket of water blue. The color is caused by the absorption of the yellow/red colors from sunlight, leaving the blue. Twice as much ink causes a much stronger color, even though the total amount is still only a trace relative to water.
All from the appropriately-named "CO2 is just a trace gas" page right here at SkS.
No idea why you thought converting it into feet would help. How big do you think an influenza virus is compared to a person? Ebola? I guess "Feelies" aren't the best method of scientific enquiry after all.
(On topic:)
While I am hardly either anti-government nor an unqualified booster of markets, I certainly feel that fee-and-dividend, by sending clear price signals and relying on decentralised decision-making, is more likely to gain traction with political conservatives, and takes advantage of, instead of trying to fight, human nature. (And, for those who don't like government, it also means money goes straight into people's pockets.)
So I certainly hope that Congress can get its act together and get on with passing some fee-and-dividend legislation.
However, I suspect that will (a) have to wait for Congressional midterms in 2014, and (b) the Democratic Party will either have to do much better or moderate Republicans will have to win primaries against the Tea Party caucus.
Composer99 @ 5
This is an issue worthy of more discussion, i should say i am not from the US so am not sure where the EPA sits in all this regarding energy policy etc so i cannot comment on political issues one comment by Obama has spiked my interest.
This statement
Agency (EPA) will regulate greenhouse gas emissions from existing power plants, in addition to the rules already in draft form that are set to regulate emissions from new power plants.
Is the intention to apply a tax to the CO2 emissions or to actually reduce the said emissions?
Cheers
I thought it was very apropos that President Obama kept wiping the sweat off his brow throughout the speach.
Voneschen, the big deal is the first 999,600 feet has nothing to do with the greenhouse effect, other than to act as a passive heat reservoir. It's the last 400 feet that absorbs enough energy to keep earth from being a frozen slush ball all the way to the equator.
Your argument is that of a child innocent of the knowledge of reality.
Now you know one of the reasons we re-elected this President!
Donthaveone @ 6
I'm not from the US either but from my understanding Obama made no mention at all about a carbon tax and his administration has flatly denied that one will be introduced as a result of this speech. I don't know how the regulation will be enforsed. What I do know is that many are saying that Mr Obama is doing too little too late.
This link is to an opinion piece. Obama's Fracked-up Climate Change Speech.
voneschen@1
Given that you quoted quite complex figures (for many people) and estimates regarding the amount of different gases in the atmosphere. It suggests you know what the 'big deal' is.
eg. you know infra-red radiation doesn't 'see' Nitrogen and many other gases, so the fact that the gas is a large proportion of the atmosphere is irrelevant. At the simplistic level that you present your theory, Nitrogen may as well not be there as far as trapping/delaying IR goes.
Donthaveone:
Obama and the EPA are notallowed to impose a carbon tax or equivalent price, whether as a straight-up tax (e.g. as British Columbia has done), a fee-and-dividend system, or a cap-and-trade system (as the European Union has done): only Congress has that ability.
The advantages of a carbon pricing system are that it (a) internalises the externalities imposed by burning fossil fuels (that is, global warming, ocean acidification and their respective consequences), and (b) sends a clear price signal to markets.
Donthaveone asked, "Is the intention to apply a tax to the CO2 emissions or to actually reduce the said emissions?"
Probably fines for emissions in excess of amounts allowed. The EPA backed off issuing regulations on how much CO2 just new power plants could emit a few months ago... apparently because they were facing lawsuits holding that if these emission levels were harmful from new power plants then surely they must also be harmful from existing plants. Which, of course, is simple logic and thus likely to prevail at trial.
Thus, based on Obama's speech, they are now planning to set a limit for both new and existing plants. If it is the same limit that they were considering previously then it would basically outlaw all coal power in the US. Technically, power companies could continue operating coal plants and pay fines for violating the clean air act, but they would lose money doing so... and that kind of defeats the whole purpose.
It is also possible that they will set a higher 'allowed CO2 emissions level' or a transition plan where the allowed CO2 emissions decrease over time. Obama didn't give details so it is impossible to tell, but the phased approach seems most likely to me. That will allow existing coal plants to shut down at natural end of life, as they have been doing anyway since natural gas became cheaper in the US (and now solar and wind are doing so in some areas). Meanwhile it would also prevent new coal power plants from being built because they'd just have to shut down or start paying fines right around the time they'd be paying back the initial investment. Thus, end result is the same as the previous EPA regulations... no more new coal power plants but existing ones get to wind down to avoid a sudden drop in available power... but because of the way it is structured it would now be more resistant to legal challenges.
All speculative, but that's my guess.
One wonders where that 54.5 miles per gallon figure came from. Wouldn't 50 have been more realistic, and what assumptions about the weight of the passengers?!
The president can't impose taxes or pass laws - he's very limited in what he can do to address climate change. He was able to implement these regulations because Congress passed the Clean Air Act in 1970, followed by the Supreme Court and EPA decisions in 2007 and 2009 that GHGs qualify as air pollutants under the Clean Air Act. Thus he didn't need any new laws to implement these regulations, only to enforce existing law.
Only Congress can put a price on carbon emissions. That's really their only alternative to these government regulations, so at least President Obama has put pressure on them to do so.
voneschen @ 1, tiny isn't insignificant. The example of ozone shows that, in spades.
Present in the stratosphere, it saves life on Earth from being destroyed by the Sun’s harmful ultraviolet radiation.
G. M. B. Dobson described how in “40 years’ research on atmospheric ozone at Oxford: a history” (see: http://www.esrl.noaa.gov/gmd/ozwv/dobson/papers/Applied_Opt ics_v7_1968.PDF), first by telling reader's how Fabry and Buisson, after making careful measurements of the absorption coefficients of ozone in 1912 and comparing their results with the absorption of sunlight by the atmosphere, concluded that about 0.5 centimeters worth of ozone was present in one vertical thickness of the atmosphere or, in other words, that the amount, when condensed into a liquid and spread uniformly over the Earth’s surface would cover it with a layer 0.5 centimeters thick!
To make the point even more clear, Ozone in concentrations as small as a few parts per million in the air that we breathe, is enough to destroy our lungs.
Small amounts of Ozone at the Earth’s surface kills life; small amounts of it in the stratosphere stops solar ultra violet radiation from destroying life completely.
Donthavone @6, and others not from the US: The US Department of Energy makes US energy policy. The EPA does what its name says: protect the environment. The EPA does its job through regulation and by direct involvement in major cleanup activities, for example through its Superfund program.
As Dana points out, President Obama is limited by the US Constitution from imposing new laws unilaterally. All US regulations have to have implementing legislation behind them. The Clear Air Act allowed the EPA to regulate CO2 emissions, and President Obama is working that angle.
Jay Dee Are @17... It's interesting that they had the presence of mind to make sure CO2 was included in the Clean Air Act.
Kinda hard to blame that one on Al Gore. ;-)
"voneschen" has not responded, nor will he.
The troll, feed it not.
voneschen has not been seen here before but managed to get a first post on a new article, that was off-topic. surely a troll.
Rob @18: Actually, the original act didn't list CO2 specifically. The provision of the clean air act in question was very general - stating that the EPA should regulate any materials emitted into the atmosphere which are found to be harmful. The findings Dana referred to were an EPA analysis finding that CO2 was harmful and a Supreme Court decision that they were required to act on it (that was in 2007 with the EPA under George W. Bush resisting doing anything about AGW).
So yes, the original Clean Air Act was designed with the 'presence of mind' to make it flexible and allow the EPA to decide on the details... rather than needing to pass a new law for each pollutant and specifying the allowed emissions levels and so forth. Instead just a nice simple, 'the EPA is in charge of identifying and regulating air pollution'.
Of course, whatever they eventually do will be challenged by conservatives. Indeed, there have already been a host of challenges to the EPA finding that CO2 is harmful (and it has been fun watching those wither and die as standards on allowed scientific evidence bar virtually all denialist nonsense from the courtrooms). That may prevent implementation for years... with their hope being that the next president if then a Republican and can toss the new standards before they ever go into effect.
Thanks to all those who replied i must say your politics is a lot different than mine where i live (how many times can you sack a prime minister in their first term of office LOL).
We have a carbon tax which actually does nothing in regards to reducing emissions it just makes our manfacturing un competitive so i hope O Bama does not go down this path for your sake.
To actually reduce emissions via something like carbon capture and storage (CCS) is nothing more than a pipe dream, our old PM who was elected, then sacked and is now our PM again likes this dream so wish us luck.
So i suspect O Bama is talking about a tax and some type of credit system, each your the coal company gets less credits and is fined if they exceed this limit which is great for them because they just jack up the cost of your power.
By the way if the EPA deem GHG's as a pollutant then do they have the power to regulate H2O as well as CO2 and i assume methane?
[RH] Our president's name is Obama. Please show some repect toward the office by correctly spelling his name.
Donthaveone,
We have a carbon tax which actually does nothing in regards to reducing emissions it just makes our manfacturing un competitive so i hope O Bama does not go down this path for your sake.
Strictly speaking, we have an emissions trading scheme with a fixed permit price for the first few years, but the effect is similar, which is this: it makes carbon-intensive technologies less competitive than the alternatives, and because it's an ETS, it also puts a cap on the total emissions.
And, in fact, emissions have been reduced in the 11 months since it was introduced. Not only that, but since the whole point of an ETS is that emissions are capped, over time the emissions are reduced simply by virtue of lowering the number of permits on offer. It's not a difficult concept and it has been used widely in the past for other pollutants.
Funnily enough, it's the kind of approach normally favoured by free-market types because rather than the government picking winners and deciding what technologies to support through subsidies (i.e. Tony Abbot's scheme), the government simply tells the market what their emissions quota is and the market decides how that is to be met, with the various competing technologies duking it out.
Regarding manufacturing, as an exporter I can tell you that putting a price on carbon has had a negligible effect compared to the strong A$. It's lost in the noise. And those that are more carbon-intensive actually get free permits.
By the way if the EPA deem GHG's as a pollutant then do they have the power to regulate H2O as well as CO2 and i assume methane?
Methane, yes — if you look carefully they're talking about "CO2e", where "e" stands for "equivalent". H2O no, for the obvious reason that H2O is a condensing greenhouse gas — it goes up and down automatically with temperature. If you tried to emit a large quantity of water vapour into the atmosphere, it would quickly precipitate out again before it had a chance to have a long-term effect. It is one of the most important positive feedbacks, because as CO2 warms the earth, the atmosphere can hold more H2O, amplifying the effect of the CO2, but the H2O itself is not directly controllable. Think of it like a turbocharger in a high-powered car — the accelerator pedal is the CO2, and the turbocharger is the H2O. You can't control the speed (and therefore boost) of the turbo directly, it responds automatically to changes in the accelerator, multiplying its effect.
@22 -Donthaveone
To add to JasonB's explanation, the following article addresses why it isn't accurate to think of water vapor in the same way we think about CO2 and other GHGs.
http://skepticalscience.com/water-vapor-greenhouse-gas.htm
Found a bit more info on what exactly they are doing. By September the EPA is supposed to put into effect regulations which require all new power plants to produce less than 1000 pounds of CO2 per megawatt hour of electricity produced. This is the same standard the EPA delayed releasing a few months ago. Given that the average coal plant produces ~2250 pounds of CO2 per megawatt hour, that basically outlaws them or would require vast improvements in 'carbon capture' technology... not to mention huge decreases in its cost. It would also stop many natural gas plants as they currently average ~1135 lbs/MWh. However, there are natural gas plant designs which can meet the new standard while remaining profitable. Petroleum based power plants (very common in Hawaii) are also pretty much impossible under the new regulation.
They aren't doing anything with existing power plants right away. Instead, Obama has directed the EPA to come up with regulations for those within a year. That would likely be before any litigation on allowing existing power plants to emit above the new EPA designated harmful level could work through the courts. Again, this seems designed to let them phase out and avoid a disruption in the power supply.
The ironic thing is that this really doesn't amount to much at all. It will prevent a few coal power plants from being built, hopefully shut down some of the existing ones a little earlier, and force natural gas plants to be a little less polluting. The reason it isn't a big deal is that most of that was already happening. Coal power has gone from 53% of all US electricity in 1997, to 44% in 2011, to just 36% in 2012. Basically, it was already falling off a cliff. There were very few new coal power plants in the works, just a handful in heavy coal mining states, and most of the existing coal plants are old and likely to shut down within a decade anyway.
Meanwhile, in the US, natural gas is booming and wind and solar are taking off in some areas where they are now cheaper than coal. Half of the new US power installed so far in 2013 has been solar. Probably the biggest impact this regulation is going to have is by slightly reducing the emissions from each natural gas plant. Obama will probably get credit for 'ending coal', but really it was already inevitable without this new regulation.
CBD@21... Doh! I actually knew that about the EPA endangerment finding. I've argued it many times in various comments sections.
"...it just makes our manfacturing un competitive..."
My background is in manufacturing, and I can tell you without a doubt that a carbon tax is not an impediment to domestic manufacturing. And even if it was, China is advancing carbon pricing much more rapidly than we are, so any potential (minimal) effect is actually reversed.
Firstly to RH, yes i spelt his name wrong by adding a space and a capital B however i think your claim of showing disrespect to the office of the president of the united states is drawing a very long bow. I will endeavour to get his name right in the future.
@23 and 24, my question was do they have the power to regulate H2O as a pollutant the reason being is that if you raise the cost of coal fired electricity via a CO2 tax ofr the purpose of encouraging an alternative then surely nuclear would be the best option. The green movement in Australia discourage nuclear (actually it is more than just them) so i would assume it would be similar in the US therefore a way to raise the cost of nuclear would be to claim H2O in its gaseous state is a pollutant as well thusly driving the electricity sector towards an alternative of their liking.
I wish people would not try and read things that are not there.
@25
Thanks for the info CBDunkerson, if you limit the amount of CO2 produced as you say then yes no new coal plants will be built and a phasing out of the old could happen. However how could you reduce the gas plants? CCS is not feasible both in cost and technology so i suggest you will lose them aswell (at least new plants same as coal). You did not mention nuclear, is nuclear still a viable alternative in the US or is there major hurdles put in place for this sector as well?
To JasonB @23 and Rob Honeycutt @27 regarding CO2 tax has no effect on manufacture sorry but i must disagree. The tax adds to the cost of manufacture so if you are competing with an overseas manufacturer then you become less competitive and in the current environment this is the last thing you need obviously.
The tax that is applied to the coal miners/electricty produces from coal or gas adds to their costs of manufacture this cost is passed onto the users and for the most part this cost is passed onto the consumer. In the cases where the cost cannot be passed on then this is now an additional financial cost born by the company.
As the amount of permits allowed to the top 500 (or was it 300?) companies that produce CO2 is reduced the costs that flow down to the consumer will increase the amount of co2 produced will remain the same as there is no viable alternative.
If you think the co2 emissions have reduced since the tax has been introduced then please by all means produce that information and show that it is a direct result from the CO2 tax. From my understanding all the major coal fired power stations are still running flat chat, still producing the same amount of electricity ergo CO2.
Cheers
Donthaveone... You can disagree if you like, but I work in manufacturing and I can tell you that carbon taxes are unlikely to affect the competitiveness of US manufacturing. If carbon taxes were immediately extremely high and other major manufacturing bases had no carbon taxes, then you might have a position.
As I stated before, China, currently the world's largest manufacturing region, is actively putting in carbon pricing faster than we are in the US. Any disadvantage on the level you're suggesting is actually reversed.
You also ignore the fact that carbon pricing is likely to come with broad cost benefits for nations who implement it. Where you lose economic benefits in some areas (carbon intensive production) you gain back in other areas where you have less carbon intesive production. And the really carbon intestive manufacturing isn't mobile enough to send off shore. Concrete production is never going to China.
Consider also, carbon pricing would tend to drive more domestic manufacturing of low carbon and carbon-free solutions. More wind energy, more PV production and installation. What happens with such installed costs is, you force companies to innovate. The companies that innovate their way toward lower carbon solutions are going to be the market winners. Those that can't innovate will die.
Over the longer term, I very much hope that much larger carbon pricing goes into effect. This is because, putting some real bite behind carbon pricing will force manufacturers to implement systems that avoid production of carbon.
Donthaveone: if you can wait a day or two, I have a post in the pipeline here that will present hard data that demonstrates that a carbon tax can be structured to minimize any effect on business competitiveness and, at the same time, reduce emissions substantially.
Rob @ 30
It is not a matter of disagreeing we are just debating an issue and we have differing opinions.
Here is a link that will help you understand Australias carbon tax plus it gives you a list of what other countries have done, mind you China is on the brink of financial collapse so i have doubts about them implementing a scheme any time soon
http://www.sbs.com.au/news/article/1492651/Factbox-Carbon-taxes-around-the-world
Now this is a tax it is no different to any other tax so my question is how can applying a tax create a better environment for manufacturers?
At the moment we here in Oz are paying the largest co2 tax in the world and our major trading partners do not so we meet your conditions outlined above that would mean "i have a position".
In fact one of the reasons why Labor have a gaping hole in their forward estimates is because the expected revenue raised from the tax is not going to materialise as the EU market which ours will be link to is verging on collapse.
Even if the world does act as one at some point in time how is raising the cost of cheap reliable electricity going to have any affect apart from raising the cost of that cheap reliable electricity. This is just another tax applied by governments to increase revenue nothing more nothing less.
Andy Skuce @ 31,
Thanks for the heads up Andy i look forward to reading your post, i am sure that what you say can be done.
Cheers
Donthaveone,
@23 and 24, my question was do they have the power to regulate H2O as a pollutant
No, because it doesn't meet the legal definition of pollutant that CO2 does because of the explanation already given above.
if you raise the cost of coal fired electricity via a CO2 tax ofr the purpose of encouraging an alternative then surely nuclear would be the best option.
Nuclear gets to compete in the market place just like all the alternatives. A carbon tax neither favours renewables relative to nuclear nor hurts them relative to nuclear because nuclear is also low-carbon — raising the cost of carbon helps nuclear exactly as much as it helps the renewables, and if you like nuclear then this is a good example of the benefits of using a market-based scheme (like a carbon tax or ETS) rather than a "direct action" scheme like Tony Abbott wants.
a way to raise the cost of nuclear would be to claim H2O in its gaseous state is a pollutant as well thusly driving the electricity sector towards an alternative of their liking.
CO2 is being claimed to be a pollutant because of the impact it is having on the environment. The 2007 Supreme Court case linked to in the main article showed that CO2 legally met the definition of pollutant given in the Clean Air Act and therefore the EPA were required by law to regulate CO2 emissions. Remember, at the time, the Bush administration was in charge and the EPA had to be dragged kicking and screaming to get it to do its job.
The only way for the EPA not to regulate CO2 emissions now would be for Congress to pass a special law claiming that CO2 was not a pollutant despite legally meeting the criteria or by removing the need for the EPA to act by imposing their own regulations (like an ETS or carbon tax).
Your suggestion doesn't make any sense anyway — even if H2O was classified as a pollutant, why would that hurt nuclear relative to e.g. solar thermal? Both can be made low water users at additional cost.
However how could you reduce the gas plants? CCS is not feasible both in cost and technology so i suggest you will lose them aswell
A combined-cycle gas plant has an emissions intensity of 800 lbs CO2/MWh so it would have no problem meeting the standard.
To JasonB @23 and Rob Honeycutt @27 regarding CO2 tax has no effect on manufacture sorry but i must disagree. The tax adds to the cost of manufacture so if you are competing with an overseas manufacturer then you become less competitive and in the current environment this is the last thing you need obviously.
I didn't say "no effect", I said "negligible effect" compared to the massive effect that the exchange rate has had on profitability. Something can indeed be non-zero but still be lost in the noise and make no difference to the outcome. If you think the carbon tax has had a material effect on competitiveness since it was introduced then please by all means produce that information and show that it is a direct result from the carbon tax.
The tax that is applied to the coal miners
Note that coal miners don't have to pay tax on the coal that they mine — the consumers of that coal, the ones that actually burn it, have to pay the tax. The coal miners only have to pay tax for fugitive emissions that they release during the mining process, which gives coal mines with less emissions a competitive advantage, as it should.
for the most part this cost is passed onto the consumer
Exactly. That's what the bonus payments and tax cuts were to compensate consumers for, and now that the figures are in it's clear that most consumers have been over compensated, which is why it's put a hole in the budget!
the amount of co2 produced will remain the same as there is no viable alternative
That's clearly false, as evidenced by the reduction in Australia's CO2 emissions and the increase in renewables.
You may be surprised to find that studies have shown (both here and in Germany) that the increase in renewables has actually led to cost reductions because the renewables have zero production cost, and so they're dumped onto the grid at whatever price is going, undercutting the peaking power generators that have the highest production costs (which is why they're only used for peaking power) leading to lower wholesale prices on average.
If you think the co2 emissions have reduced since the tax has been introduced then please by all means produce that information and show that it is a direct result from the CO2 tax. From my understanding all the major coal fired power stations are still running flat chat, still producing the same amount of electricity ergo CO2.
How was that understanding informed?
April: Emissions from power sector drop to a 10-year low while the share of renewable energy in the National Electricity Market (NEM) has soared beyond 12 per cent and looks set to continue rising (SMH)
June: In the eleven months since Australia's carbon price began, emissions from Australia's National Electricity Market were down 7.4%, emmissions intensity was down 5.1%, brown coal electricity was down 13.3%, and black coal electricity was down 4.2%. The 11 TWh reduction in coal-fired electricity generation was made up for by a 5 TWh increase in renewables, a 1 TWh increase in gas and liquids, and a 5 TWh reduction in consumption. (Link)
Now this is a tax it is no different to any other tax so my question is how can applying a tax create a better environment for manufacturers?
It is actually different because it is an ETS that just happens to have a preset price on carbon permits at introduction to allow businesses to plan better.
But its purpose is not to "create a better environment for manufacturers", it's to "create a better environment", fullstop. To the extent that benefits manufacturers, then they benefit. You know, because the economic impacts of the climate effects of BAU have been avoided, for example. Manufacturers who rely on externalising the true costs of their manufacturing will obviously suffer when those costs are internalised if they do not react accordingly.
At the moment we here in Oz are paying the largest co2 tax in the world and our major trading partners do not
And yet you haven't produced any evidence that it's having a meaningful impact on the bottom line, and in a few years the point will be moot as we'll be in the largest ETS market in the world, paying the same price.
Even if the world does act as one at some point in time how is raising the cost of cheap reliable electricity going to have any affect apart from raising the cost of that cheap reliable electricity.
Basic economics. If you make something bad more expensive relative to alternatives, less of the bad thing will be consumed.
I think you also need to recognise that not incorporating the true cost of emitting carbon into the price of fossil fuels is actually distorting the free market and preventing it from allocating resources efficiently. If the consumers of coal, for example, are not required to pay the true cost of burning that coal, and instead that cost is bourne by everybody and not just those consumers, then they are going to consume a lot more than they otherwise would have, and other technologies that do not have those costs aren't able to compete fairly in the market.
As for the world acting "at some point", the EU was way ahead of us, and by the end of this year a billion people will be living with some kind of carbon pricing mechanism. We're not exactly trailblazers.
This is just another tax applied by governments to increase revenue nothing more nothing less.
And yet it is revenue negative thus far, and you yourself claim that it's going to blow a gaping hole in the forward estimates!
Maybe, just maybe, the purpose is to actually reduce carbon emissions instead?
Donthaveone, as others have noted (several times now), regulating H2O emissions would not make any sense because H2O emissions have nothing to do with atmospheric levels. Humans could increase our H2O emissions one hundred fold and the total atmospheric H2O level would not change. There are these things called 'rain' and 'dew' which prevent the atmosphere from retaining more water than it can hold for a given temperature.
On natural gas, as I said in my original post (and JasonB subsequently reiterated) not all natural gas plant designs exceed the regulated CO2 emissions limit. Thus, natural gas plants can continue being built, they just have to be cleaner than the current average plant in the US. This is where I think the new regulation will actually have the most impact. Unless there are major government investments in renewable power, natural gas is going to be the largest power source in the US for the next fifteen years or so. If these regulations are applied to existing plants within a few years and then maintained through the period where natural gas is a major power source they will reduce total CO2 emissions from natural gas by about one third.
Finally, on nuclear plants... they are well below the CO2 emissions limits and there are no other regulations in place which significantly impact them. That said, there is no chance of major nuclear power development going forward. Nuclear has always been more expensive than coal and has only become more so. Thus, the only reason to go nuclear has been to decrease pollution (or rather, replace carbon and other fossil fuel pollution with radioactive waste and potential nuclear disasters), and that no longer makes any sense as wind and solar both produce even less pollution and are now cheaper than nuclear for most of the planet. Nuclear had a window where it could have become a significant power source, but that time has now clearly passed. Existing nuclear plants will continue operating until they reach end of life and a few new ones may be built to play a niche role in providing 'baseload' power in some areas, but that's about it. There is no logical reason to pay more for a higher polluting technology... which also has a limited fuel supply. Future technological developments might give nuclear another shot in the form of thorium reactors, fusion, or some other development, but those are currently theoretical or even more expensive than 'standard' nuclear.
"By the way if the EPA deem GHG's as a pollutant then do they have the power to regulate H2O as well as CO2 and i assume methane?"
There would be no point in regulating H2O on the grounds that it is a GHG, because while it is a GHG it is not a long-lived greenhouse gas. The residence time of water vapour is of the order of a week, so if we pump H20 into the atmosphere, it will just precipitate out again quite rapidly. CO2 on the other had is only removed permanently from the atmosphere ver slowly, which means that unlike H20, our CO2 emissions accumulate.
The main reason that water vapour as a GHG is increasing is because the atmosphere is warming (largely due to CO2) and a warmer atmosphere supports more moisture, which adds a positive feedback. However, even if fossil fuel emissions didn't include H20, the additional mositure supported by a warmer atmosphere would come from evaporation or transpiration instead, so it would happen anyway.
Donthavene,
You have assumed in your posts that coal generated electricity is the cheapest electricity. This is only true at present because coal is allowed to transfer much of their costs onto taxpayers for free! In the USA, thousands of people die every year from coal pollution. In Florida, where I live, I can only eat fish from lakes twice a month because of coal pollution. When less coal is burned these taxes will be decreased and all other manufactures will have lower costs since they will no longer subsidize coal.
In any case, even without a carbon tax wind is the cheapest method of generating new electricity in the USA today. Solar will soon be the second cheapest. You need to catch up on your facts. If costs of carbon go up it will spead up the change to wind and solar. That will lower electricity costs and make the USA more competitive! Please provide a peer reviewed study for your outrageous claim that a carbon tax will increase electricity costs, you have the facts backwards.
Other posters should not let deniers claim that a carbon tax will increase electircity costs. Wind is currently the cheapest source of electricity in the USA, even without counting the cost of the pollution coal releases. Decreasing carbon emmisions will lower electricity costs.
See this New York Times article that describes problems utilities are having in Europe. Apparently, cheap renewable electricity is undercutting gas generators so the gas generators are being shut down. CO2 costs are low so coal is cheaper than gas. Not many coal plants have been shut down yet. Utilities do not want to develop new fossil fuel plants because of competition from renewables. This Daily Kos article describes some retailers like IKEA and Walmart setting up electricity generation. Presumably it is cheaper to set up solar on their unused rooftops than to buy electricity at retail prices. (hat tip fxible at realclimate)
There will be major changes in electricity generation in the next decade now that wind and solar are cost competitive with fossil fuels. The question is how will these resources get developed. This peer reviewed article shows renewables (primarily wind) are cheaper than fossil fuels now to generate 30% of power (in the US Northeast) and will soon be cheaper for 100% of power generation. In their model they do not use any hydropower because "Hydropower makes the problem of high penetration renewables too easily solved, and little is available in many regions, including PJM". Long range transmission lines (not used in their model) make backup more widely available.
michael sweet, actually right now natural gas is the cheapest source of electricity for the US as a whole. However, this is a recent development from the fracking boom and a major reason for the decline in coal power in the US. There isn't much fracking in the rest of the world yet, and natural gas is more expensive to transport than coal, so this is solely a US phenomenon at this point.
That being said, the basic formula of renewables undercutting fossil fuel prices remains the same. Wind and solar are now cheaper than coal in some parts of the US and that is quickly becoming the case nationwide. Thus, we will likely see the US switching to natural gas, wind, and solar as its major power sources over the course of the next decade or two. Then, as large enough smart grids and/or energy storage infrastructure are developed natural gas will phase out and leave just renewables. All assuming disruptive new technology comes along.
Donthavene... "Now this is a tax it is no different to any other tax so my question is how can applying a tax create a better environment for manufacturers?"
The fallacy you're presenting here is that you are arguing the tax is isolation of every other economic aspect. That is not how markets work. A tax does not make money just disappear. Tax revenues remain in the economy and create other benefits for a nation and its people, and the companies doing business within its borders.
What I'm saying, as JasonB echoes, is the effect for manufacturing is minimal at best compared to a wide range of other economic influences on the manufacturing sector.
Add to this the fact that the taxes being proposed are returned to taxpayers, the net effect for consumers is nearly zero (and potentially positive).
All this does is places a cost on activities that produce carbon. That will act to drive innovation to create solutions that produce less carbon. Those innovation, over time, are more likely to reduce costs for consumers, and become a net positive economic benefit.
If you are a manufacturer who can not, or will not, innovate then this spells trouble for you. If you are a manufacturer who wants to innovate, then you will view these kind of taxes as a golden opportunity.
CBDunkerson,
You are correct that in the US gas is cheapest. The article describes generators in Europe where gas is much more expensive than in the US. Apparently imported coal (probably imported from the US) is cheaper there.
The international power market is complex. It is no surprise that what happens in one country is not exactly the same as what happens in another country. But if they are not building fossil fueled power plants in Europe due to competition from renewables the handwriting is on the wall. Renewables will take over when they are the cheapest form of energy. Wind is already there in many locations, including much of the USA. Once renewables are built they are very cheap to run-- no fuel costs. If fossil fuels did not receive such high subsidies renewables would already be cheaper.
Carbon taxes (if they are to be effective) ARE different from other taxes in that they are avoidable. If nobody minded paying them, then they would have no effect. However, the expected behaviour is that people will choose to avoid them by moving to non-carbon generation. You create a market opportunity- "I can provide you with cheaper electricity because I use renewable/nuclear to create it". What you are really saying is that you dont want to pay more your energy - fair enough - but you energy costs are heavily subsidized. Sometimes by direct subsidies on coal in some countries and always because coal producers avoid paying the environmental cost. How do you feel about other people (eg delta dwellers in poorer countries; future generations) paying for your cheap energy?
Michael sweet @35,
You call me a denier, what in fact am i denying? [-snip-]
So many responses to my questions, thanks to all but i cannot respond to all individually of course.
For the purpose of clarity (once again) the reason for the question re H2O was simply to find out if there was a legal way to stop nuclear production, maybe a better question would have been is it a popular option in the US? CBDunkerson has answered that question for me so thanks to you CB.
Jason @33,
Thanks for the link to the gov PDF it shows gas has risen by 5.6% and renewables by 28.5%, unfortunately it fails to give two details.
1, What is the makeup of renewables, for example how much of this increase is from existing Hydro etc
2, They are talking about name plate capacity and not how much energy was produced. Do you know what the actual production figures are?
[RH] Moderation complaints (even sarcastic ones) are also against the rules.
Donthaveone,
I cited a peer reviewed study modeling the cost of using renewable energy for 1/5 of the US grid, approximately 72 GW of power. It showed that renewables cost less than fossil fuels to produce at least 95% of overall power generation. They did not include hydropower because it makes it too easy to use renewables. You respond with rough approximations unsupported by calculations about a single power plant, concluding with a handwave that it will never work. Produce a peer reviewed study, or at least a coherent complete argument, to support your wild claim that renewables cannot produce power as cheaply as fossil fuels. I have supported my position, you have waved your hands and said you do not believe peer reviewed work. That is denial. Did you even read the article I cited?
This article from Clean Technica describes three German counties who generate 250% of their electricity using renewables. The list of counties who generate over 100% is long. They are working toward producing 100% of all energy used. The author states "solar and wind are now cheaper than the electricity rate for households, commercial customers, and in many cases even industrial customers – causing 30% of all German businesses to plan investments in renewable capacities." The primary barriors are political, not technical. As people see the benefits of renewables they are giving up fossil fuels.
Provide an argument to counter my real world example. No more hand waving because you have no data to support your position.
Donthaveone @ 42,
1, What is the makeup of renewables, for example how much of this increase is from existing Hydro etc
I don't have time to look this up for you right now, but from memory the majority of the recent increase is from wind and solar. Perhaps you could try searching yourself? It didn't take me long to find that report.
It might be educational to see if you can find the reports I mentioned above, showing that wholesale electricity prices actually dropped due to wind and solar penetration. In fact, wholesale prices have actually gone negative multiple times now, because they would rather pay you to take their power than have to shut down the wind turbines when they're producing too much.
2, They are talking about name plate capacity and not how much energy was produced. Do you know what the actual production figures are?
The figures I quoted were energy production figures, not nameplate capacity. It clearly says "Electricity generation by fuel type Terawatt-hours". TWh is a unit of energy, not of power (which nameplate capacity is). Renewables were responsible for more energy generation than gas and liquids, and over half as much as the total for brown coal.
BTW, everyone familiar with the topic already knows the difference between nameplate capacity and actual production. What actually matters is the levellised cost of production, not how "efficient" it is. (For example, a cheap solar PV that only achieves 12% efficiency but costs half as much per peak Watt as a high-end system that achieves 18.5% efficiency is a better deal provided you have enough roof space to meet your generation requirements, which shouldn't be a problem with the cheaper system if you're living in a house, for example.) Wind is already cheaper than new coal power plants even at an average efficiency of 30%.