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Going with green energy - the Real Deal
Shinto
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So there seems to be a lot of controversy over the best green policies in terms of what is the real deal and what is not a useful investment. How can individuals and the government best maximize investment in terms of energy conservation and alternative energy production?
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A carbon tax along with a carbon credit trading system.
Yeah, carbon credit trading is great, that way businesses who don't pollute anyway can sell off their share of pollution to businesses that pollute a lot, and we're right back where we fucking started.
Where we started, except with an additional expense for businesses that pollute more and an additional incentive for businesses that pollute less?
When it's cheaper to buy credits than to actually fix the problem, the problem doesn't get fixed.
In the short-medium range, I'd like to see a much greater swing to electrical energy with the bulk of that energy created by nuclear power plants with a healthy smattering of wind, solar, and geothermal. Hydroelectric power is great for the most part (yes, everything has some downsides), but at least in North America we've pretty much tapped that as far as we could/should.
Most other forms of alternative energy don't look as if they'll be ready anytime soon. Corn isn't efficient. Hydrogen is still waiting for a technological leap to efficiently produce fuel.
If you ever need to talk to someone, feel free to message me. Yes, that includes you.
1) Allowing people to generate green energy, and plug into the electical grid to supply it, and earn money doing so. Farmers with large land and looking for more income will start putting up wind turbines and selling green energy to the system. From the government's point of view, it means more energy (a plus for Ontario, which is short on energy these days) and more green energy (always good) with no money down for new infrastructures.
2) Allowing people to check an option on their energy bill to request to get only green energy. The fact is, green energy costs more. People who check that option will basically be accepting to pay more for energy, on the condition that the extra money be used to generate green energy. The government will have to keep tabs on how many people check the option and how much energy they use, and guarantee that at least that much energy in the system comes from green sources.
When it is more profitable to sell credits than to not fix the problem, the problem does get fixed. Overall, you get the most change with the least pain.
Let's say there is a level cap for everyone. Firms that could operate below the cap have no incentive to do so. Firms that can't just go out of business. So you have a bunch of bancruptcies on the one hand and a bunch of firms that could be doing more but have no reason to try on the other.
What is so perverse about a pollution tax with no write-offs?
We have a bill moving here in NH to do that. Or rather, it provides a small subsidy to help pay for anyone who wants to invest in setting up some kind of green energy generation. The concern raised at the committee hearing was that the windmills or solar panels are whatever were not likely to be efficiently engineered and situated, so money spent on them was not well spent.
I don't have anything against pigovian taxes per se. My understanding is that our cap and trade system actually works fairly well and if we want to be more aggressive with it we just need to increase the price of the tradable permits. Do you have some information to the contrary?
I mean, what does cap and trade offer vis a vis just taxing pollution except that in the latter case the government doesn't get a revenue source to clean up pollution?
I see a possible explosion in the "consumer green energy production engineering".
Start a small engineering firm whose sole business is on designing and setting up cheap and efficient green energy generators (solar, wind, what have you) for individuals who want to make that investment.
If I could afford it I'd happily switch to something more efficient or buy carbon offsets but I really don't have that financial ability.
I think what it offers is that it allows businesses to remain open so long as the pollution level overall is still reduced by cleanliness offsetting it elsewhere. It tries to achieve the best possible balance between the economy and pollution reduction.
I don't really think that it's sustainable long-term. I mean, if passed right now, it keeps pollution levels stable. Ten years down the road, it forces new polluters to buy credits from our current polluters, and would basically work like a tax, only Dow would be seeing the revenue.
I mean I understand why the "business community" wants it, because it's basically like cutting polluters a big check on an up-and-coming commodity market. I don't understand why anyone interested in actually reducing or disincenting pollution would go for it.
Taxing pollution penalizes polluters, but doesn't reward the particularly green. The carbon trading system does both. I guess you could tax pollution and subsidize non-pollution, but then you end up with a lot of laws to deal with, each with their own loopholes, just to achieve the same result as a carbon trading regime. With the latter, you basically have two parameters: how many credits each company gets to start, and their cost. The market handles the rest.
I think the real appeal of taxing pollution is the schadenfreude associated with punishing those naughty, naughty polluters. There's an inherent resistance amongst certain folks to any policy which doesn't seem to be hammering them as much as it could be. Sort of like the trend with sex offender laws, except with less underage diddling.
So on the plus side, it creates an added cost for those who want to pollute, but on the minus side, businesses like the idea?
AK also has a "home energy loan subsidy grant" as well as an energy buyback program for putting power back into the grid. It seems to be working out reasonably well so far.
On the minus side, it gives money to traditional polluters and fails to produce a revenue stream that the government might use to mitigate the harms of pollution.
On the plus side, businesses like the idea.
I predict that some (very generous) version of it will pass congress easily.
Replacing our coal-burning base with nuclear would be an excellent move. Just stop trying to block Yucca Mountain and work on breeder reactors to cut down on long-lived waste. Solar, wind, etc can supplement if they're cost-effective.
Then for cars in the short-term, push hybrids, encourage fuel efficiency. Maybe switch over to electric at some point if we develop supercapacitor battieries.
As for energy conservation: CF bulbs, better design for standby power, good defaults for hibernating PCs, more prominent real-world savings presented on efficient appliances.
Everywhere.
Well, we instituted a cap and trade system with sulfer-dioxide as part of the 1990 clean air act. As far as I can tell, it seems like emissions have fallen by about half.
In proportion to how much they lower their pollution levels . . .
How so? Under the current system, if you pollute a lot, nothing happens to you.
Under a carbon trading system, if you pollute a lot, you have to spend money buying trading credits.
The money goes from heavy polluters to those who don't pollute as much. No, it doesn't produce a revenue stream into a single source that can be squandered by government researchers. But it creates a revenue stream towards those who can figure out how to pollute less. Under the new system, a viable business strategy would be to reduce your pollution to the point where you can sell off your credits. Would it apply towards everyone? No. But it would apply for enough people that they would begin developing cheaper, cleaner technologies. And the big polluters, down the road, would probably be more likely to purchase these ready-made technologies than they would be to dump a bunch of coin into developing them themselves.
Moreover, you can tailor the system to be just as punitive towards big polluters as any pollution tax would be. So again, we're reduced to the single con being "businesses like it".
So then it's just a question of whether tax revenue spent by the government will be more effective than a business community whose pollution behavior is coupled with incentives.
Taxing pollution does this. Taxing pollution while providing incentives to production on non-polluting energy production does this.
Grandfathering in current polluters and forcing new producers to pay old polluters for their pollution credits only creates the proper incentive/ disincentive structure at some point in the indeterminate future (i.e., when the current energy producers have gotten out of the energy production business). In the meantime, it means that oil-burning and coal-burning energy producers are competing on the same level as startups trying to invest in the significant capital required for wind or nuclear energy production.
It just fails to make sense to me. If people are concerned about a shock to energy prices, then just make the tax gradual.
Only if you're a new business. Companies that currently pollute will be given "pollution credits" that they can either sell (after reducing their pollution levels) or sit on while keeping their pollution levels constant. In either case, the pollution levels remain constant unless some third party decides to buy pollution credits and just sit on them.
A straight-up pollution tax with no trade provision would provide exactly the same incentive, only would also provide a revenue stream which could be used as incentives for non-polluting alternative energy enterprises or programs like "superfund" where the public has to clean up after irresponsible industries. It also wouldn't favor older industries.
Just make the pollution tax less linear and more exponential. Diminishing returns or whatever.
If Company A has 0 Pollution and and Company B has 100 pollution, and Company A takes up 50 Pollution for 50 dollars, reducing Company B's annual tax from 500 dollars to 300 dollars, there's wins all around.