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How not to implement a carbon tax

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Smoke

Photo credit pfala

The decision by the French government to back down on plans to enact a carbon tax is very disappointing, and not a little puzzling.

President Sarkozy initially said plans to introduce a carbon tax were

a monumental act of the French Republic ? a measure so important President Nicolas Sarkozy ranked it beside “decolonization, election of the President by universal suffrage, abolition of the death sentence and legalization of abortion” in the list of national accomplishments.

However, implementation of the tax was dropped recently after President Sarkozy’s party lost disastrously in regional elections.

According to the New York Times,

The idea of a carbon tax had been widely opposed by France?s business lobby, which argued that it would increase costs, as well as by members of the governing party, which opposed the idea of a new tax.

The French government hoped to raise $4.7 billion to $6.1 billion in new annual revenues to finance state-funded ecological investments from the proposed tax.

This is crazy.

Why did no-one propose enacting a carbon tax which was overall cost neutral?

To implement this – instead of just a carbon tax (i.e. an extra tax on top of existing costs) he could have
1. Reduced corporate tax by an amount roughly equivalent to the amount expected to be recouped by the carbon tax and then levied a carbon tax (overall take remains the same but polluters pay more) or
2. implemented it as a kind of tax break for carbon reductions (i.e. the more you pollute, the less tax break you get)

Given that the carbon tax was such a large part of President Sarkozy’s election platform it is odd that he didn’t attempt any alternative means of rolling it out. He has now effectively shelved the idea of a carbon tax for the forseeable future in France and he gives the appearance of backing down. Not something he has been keen to do up to now!

There is obviously more going on here that I am missing – anyone care to enlighten me?

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What If We Create a Better World For Nothing?

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091207usatoday global warming.91
One of my goals in 2010 is to help move the sustainability debate beyond Global Warming. Global Warming or Climate Change is still arguable – while other environmental impacts and issues are not. Its surely time for sustainability advocates to reframe our narrative – and get beyond the Global Warming debate. We might as well try and convince evangelicals of evolution… instead we need to start focusing on immediate and real issues- such as a lack of potable water in many geographies. Energy independence is perhaps the best argument for renewal energy. People are generally more worried about national security than the potentials threats of global warming.

Of course some really major climate events may change the game, but for now, we should focus on the changes we can make in terms of business, culture and politics. You can understand why I love this cartoon from USA Today, which sums my thoughts up beautifully.

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Seriously people, the correct order is planet first, then people, then profit.

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Someone I know and respect made a bit of a boo boo last week and I called him on it. In response to the announcement of BP’s “Giant oil find” in the Gulf of Mexico, he Tweeted:

Giant oil reserver [sic] in the Gulf, most rushing to drill it except the US. Wouldn’t that be ready made jobs and revenue?

To which I replied:

Wouldn’t it be ready-made pollution (CO2)? Ethics of celebrating jobs & revenue based on planetary destruction?

People seem to be all too ready to forget about the fact that climate change doesn’t stop to consider whether there is a recession. It doesn’t say, “oh, there’s a down-turn and you want to pump a few extra million tonnes of CO2 into the atmosphere? No problem, you should have said, go right ahead”

At least in the case of the BP find, according to this Wall Street Journal analysis, recovery rates may be as low as 5-15% (150-450m barrels of oil) – still a lot of CO2 but significantly less oil than the headlines were suggesting.

e.on UK, is the energy company which owns the infamous Kingsnorth power station. Kingsnorth is one of the largest coal-fired power plants in the UK and alone is responsible for roughly 7.3m tonnes of CO2 being emitted into the atmosphere per annum. e.on UK has launched Talking Energy, a channel on YouTube to foster an online dialogue about energy.

However, as you would expect, the company stresses energy sources which will benefit e.on and its shareholders in the short-term, as opposed to trying to benefit the planet (and thus the company and its shareholders) in the long term. In the video above you see Jeremy Nicholson, lobbyist and Director of the Intensive Energy Users Group – “a single-issue lobby group which campaigns for secure industrial energy supplies at internationally competitive prices”. Jeremy throws out the old lie about the need for baseload power for the electricity grid as a reason to keep investing in carbon polluting energy sources.

The baseload argument is an old one and one which was given its severest kicking recently when the Jon Wellinghof, Chairman of the US Federal Energy Regulatory Commission said back in April that:

renewables like wind, solar and biomass will provide enough energy to meet baseload capacity and future energy demands. Nuclear and coal plants are too expensive, he added.

“I think baseload capacity is going to become an anachronism,” he said. “Baseload capacity really used to only mean in an economic dispatch, which you dispatch first, what would be the cheapest thing to do. Well, ultimately wind’s going to be the cheapest thing to do, so you’ll dispatch that first.”

Now if the chairman of the US Federal Energy Regulatory Commission believes that renewables can provide enough power to meet baseload and future energy demands, I’m going to take his word over e.on’s and their lobbyist’s.

e.on, some questions for you:

  • Does CO2 cause climate change (and the consequent deaths of thousands of people annually, not to mention species extinctions, environmental destruction, etc.)?
  • Do you care that your pollution is killing people and destroying the planet?
  • When do you plan to stop killing people, destroying the environment and driving species to extinction (i.e. when do you plan to stop emitting CO2)?

Seriously people, the correct order is planet first, then people, then profit.

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What price carbon emissions?

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Excess

Photo credit Pinot & Dita

One of the reasons we are facing a climate crisis is because people have not been paying the full economic price for their carbon consumption. Had they been, we’d be living in a very different world today. A quick comparison of average car fuel efficiency in the US versus the EU (where fuel has typically been priced at 2-3x the US price) bears this out.

When people have to pay a higher price for their emissions, they are less likely to pollute (if only to save themselves money!).

This brings us onto the trickier question though of what is a realistic price for carbon. The recent price of carbon emissions in the EU Emissions Trading System (ETS) has varied from €30 to €10 while today as I write this, it has a spot settlement price of €15.31. That may be current, but is it realistic?

What is a realistic price for carbon emissions?

Well, the reason we are charging for carbon emissions in the first place is to counter the damage being done to the environment by those very emissions – the polluter pays principle. In other words, the price to emit one tonne of CO2 into the atmosphere should be equal to the price of extracting one tonne of CO2 from the upper atmosphere.

And how much is that?

I have no idea to be honest! I have asked several people in this space and no-one has been able to tell me – principally because the technologies to extract CO2 from the upper atmosphere don’t yet exist! You can be sure that it is significantly more than €30 per tonne though.

As global CO2 emissions continue to rise and the effects of climate change become even more pronounced, the price being charged for CO2 emissions globally will need to trend closer to the price of extraction and away from the current €15.

If nothing else, this will encourage us to move to a less carbon intensive lifestyle – manufacturers of carbon intensive products beware!

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UK Low Carbon Transition Plan

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Earlier this week Ed Miliband, the UK’s Secretary of State for Energy and Climate Change launched The UK Low Carbon Transition Plan.

The plan is comprehensive and lays out several targets for the year 2020:

  • * More than 1.2 million people will be in green jobs
  • * more than 1.5 million households will be supported to produce their own clean energy
  • * Around 40% of electricity will be from low carbon sources, from renewables, nuclear and coal (with CCS)
  • * We will be importing 20-30% less gas than we otherwise would
  • * The average new car will emit 40% less carbon than now.

The announcement is a world first because emissions reductions targets from each sector of the UK economy are quantified and policies to achieve them are laid out. More significantly, the budgets are legally binding making the UK the first country in the world to write its carbon targets into law.

The launch was live covered by Twitter members (esp @GuardianECO and @JamieAndrews) posting using the hashtag #UKCPaper

Highlights from the Twitter posts include:

New funding for elec cars, recharging stations in up to six cities

Why only six cities? Surely this is something which should be rolled out nationwide as a single project. With vehicle to grid technologies this would even help the UK government increase the level of renewables on the grid helping meet the 40% low carbon emissions target (with less coal!).

40% of power from low carbon energy by 2020, more in the future

As mentioned above, this target will be met by a combination of renewables, nuclear and coal (with CCS). The inclusion of both nuclear and coal in this figure is bad news. Coal is dirty for all kinds of reasons (coal fly ash slurry spill anyone? Coal ash contains arsenic, copper, barium, cadmium, chromium, lead, mercury, nickel, and thallium!) and the problems associated with storage of nuclear waste are well known.

Smart elec meters for 26 million homes by 2020. House by house, street by street transformation

Nice, but as @JamieAndrews pointed out, this just means that the timeframe has just grown longer!

It is not all negative though.

From next April, people can generate own power and feed back in to the grid for cash

£60mil for wave technology, up to £120mil for offshore wind, to support 100,000s jobs

and

Compulsory support from energy companies for vulnerable consumers

are all superb announcements and will help the government reach its targets.

The full announcement is available for download but be warned it is a 228 page pdf behemoth!

In conclusion, this is a hugely important piece of legislation setting out for the first time anywhere legally binding CO2 emissions targets for all sectors of the UK. The policies to achieve them as laid out may not all be perfect (and in the case of continuing to use coal, very far from perfect) but these are just that, policies – they will change at the whim of whoever is in power at any time. The coal and nuclear lobbies are extremely well funded and have managed to inveigle their way into this document at policy level but their days are numbered.

The legally binding CO2 emissions targets will be far harder to change.

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RealtimeCarbon.org gives realtime CO2 intensity of electricity generation in the UK

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RealtimeCarbon

If you actively select for cheaper electricity, you are de facto selecting for greener electricity because cheaper electricity has a higher % of renewable energy in the mix.

I wrote previously that it would be great if utility companies were mandated to publish realtime generation mix (% from coal, % for nuclear, % from wind, etc.).

Then if you had a truly open market for electricity, it should be possible to dynamically switch suppliers on the fly, based on the price and the realtime generation mix. If people were actively selecting for greener electricity (and given that cheaper electricity typically has a higher % of green, why wouldn’t they?), imagine the demand signal that would send to the suppliers! There would be an enormous rush to build more renewables and Kingsnorth would be shelved quicker than you can say “dirty coal”.

That idea is a step closer to reality today with the launch in the UK of RealtimeCarbon.org. This is a site which gives a realtime feed of just how “carbon intense” UK electricity is at any given moment. The data behind the real time feed comes directly from the computer systems that manage the UK’s electricity trading market. This data tells RealtimeCarbon.org how much electricity each type of power generator (e.g. coal power stations or wind farms) are currently producing during any particular 5-minute interval.

One of the beauties of this site is that they provide an xml feed of the realtime carbon intensity data (see the pdf on how to access the feed for more info). The xml feed will allow organisations to programatically monitor the CO2 emissions associated with electricity generation in the UK. Thus it will be possible to have devices programmed to automatically respond to realtime CO2 intensity signals coming from RealtimeCarbon.org i.e. shutting down when highly carbon intensive and starting up when carbon-light. This will be a big help in reducing the organisation’s carbon footprint.

RealtimeCarbon.org also has a forum where people can get involved suggesting methodology improvements, ways to improve the numbers (calculation or display) and how to use the data.

Now they just need to build this out for every other country on the planet!

[Disclosure – one of the companies involved in this project (AMEE) is a GreenMonk client]

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Rethinking B2C: Business to (Carbon) Consumer

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I was thinking about the term business to consumer (B2C) the other day. I am not a huge fan of the term “consumer” in the digital era– we’re all content creators after all. But I just realised that my notion that we are all producers is even more true in terms of carbon footprint. Whether individuals or businesses, free agents or organisations, we are all net producers of carbon dioxide.

Aha- I thought to myself, “neat insight”, and so to twitter, where I said:

“when it comes to carbon emissions none of us are consumers. we are all producers.”

Quick as a flash Digital Signals came back and said:

“The fern on our bathroom window sill would beg to differ!”

The real insight therefore is that Business To Consumer might have an entirely different meaning this century. Businesses need to create closed loops systems with plants, the only reliable carbon consumers. Of course such an idea might sound bonkers – but why shouldn’t a polluter directly pay to halt deforestation in, say, Brazil? Lets save the planet’s lungs while we still can, before the only carbon consumers we can use are ugly crop-based monocultures.

At the moment we’re trying to come up with sophisticated cap and trade schemes to work the climate change problems we face. As ever complexity rules. But if every company in the Fortune 500 rethought the notion of the consumer, and worked the problem accordingly, we could see some interesting new models emerge.

It has been said that offsetting is horse puckey, but that seems awfully shortsighted, particularly if the offsetting investment is in carbon consumers. An awful lot of research is going to be required to identify the best plant species for carbon consumption- but there has to be a successful business or five in there.

So what might your Sustainable Business To Consumer strategy be?

picture courtesy of dawnzy58 on flickr under creativecommons 2.0 attribution license.

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SAP’s Chief Sustainability Officer on Carbon Reduction

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I was in San Jose last week for for the O’Reilly ETech conference. I had an opportunity to meet SAP’s newly appointed Chief Sustainability Officer, Peter Graf and we discussed SAP’s announced aim of reducing its carbon emissions by 51% by 2020.

Some great stuff in the video – I especially loved the bit where Peter talked about the enthusiasm of SAP employees for getting on board with this program. They asked for Sustainability Champions for the company hoping to get 100 by the end of March. They had 200 by the end of the 2nd day!!! Everyone wants to be doing the right thing.

This is part II of a three-part video series I shot with Peter. I published the first part, where Peter discusses the role of Chief Sustainability Officer for SAP earlier this week and the third part will be published next week.

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Sunday Times and the Google non-story

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CO2

Photo credit \<

I was more than a little surprised to read a story printed in the UK’s Sunday Times yesterday claiming that a search on popular search engine Google:

generates about 7g of CO2 Boiling a kettle generates about 15g

Reading the article a little more revealed that the research has not been peer reviewed, so its veracity as a piece of scientific research has yet to be confirmed. However, given that the researcher in question had no access to Google’s carbon data, this has to be, at best, educated guesswork.

On top of that, the researcher responsible for the claim is CTO of Maxtility, a company whose aim is to:

solve important problems in industries ranging from education to energy

he can hardly be said to be an impartial researcher.

Google responded to the assertions this morning. In Google’s response they mention the energy-efficiency of their data centers which:

means the energy used per Google search is minimal. In fact, in the time it takes to do a Google search, your own personal computer will use more energy than Google uses to answer your query.

Google goes on to claim that

one Google search is equivalent to about 0.2 grams of CO2. The current EU standard for tailpipe emissions calls for 140 grams of CO2 per kilometer driven, but most cars don’t reach that level yet. Thus, the average car driven for one kilometer (0.6 miles for those of in the U.S.) produces as many greenhouse gases as a thousand Google searches.

Google then continues the piece by talking up its philanthropic arm Google.org (see GreenMonks’ podcast with Vint Cerf about Google.org) and the investments it has made through that vehicle in renewables, as well as its co-founding of the Climate-Saving Computers initiative.

As in most issues like this, I suspect the truth lies somewhere in the middle.

Google could do itself no end of good by having its carbon emissions third-party audited (under NDA if they are worried about competitive intelligence) while publications like the Times should know better than to run non-peer reviewed science stories from people who could be perceived to have their own agenda.

I won’t even go into on the childish Twitter bashing further down in the Times article – monumental ignorance trying to pass itself off as intelligent observation, sigh!

UPDATE – quite a bit of discussion about this happening – see Techmeme for more, also I see my old friend Jeremy Wagstaff came to a similar conclusion.

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Dirty Coal

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I came across this ad via Joseph Romm’s excellent post – as Joe said:

[the] ad violates a central rule of messaging, rhetoric, and psychology: Don’t keep repeating a strong word the other side is trying to push. That is not just a basic tenet of the 25-century old art of persuasion, but a well-demonstrated principle of modern psychology

Dirty coal is the only kind of coal there is, anything else is just unicorns.