Saturday, December 15, 2007

Eli Rabett's Simple Plan to Save the World

The UN Framework Convention on Climate Change process requires cooperation by all parties. While the Bush administration was not able to derail the process at Bali, it was only stopped when the EU said it would not participate in next months planned Hawaii climate charade if there were no progress at Bali. The weakened worldwide position of the US, economically, politically and militarily diminishes the ability of any US government to get its way, but rapid progress may require another path.

The immediate problem is how to take global action that does not require global agreement, but only agreement among a few important and willing actors, which rewards early adapters and does not allow the unwilling to block action. The mechanism needs to be immune to off shoring, and be neutral between domestic and foreign producers. Eli believes that carbon trading proposals are aimed in the wrong direction. Rabett's Simple Plan for Saving the World has the potential of meeting these requirements. It differs from any of the other proposals that I have seen in those ways.

UPDATES: in italic Eli slept well and the good eco faries visited his dreams also Bellette (see comments)

Nations wishing to make major progress on decreasing greenhouse gas emissions should introduce emission taxes on all products. These taxes should be levied on imports as well as domestic goods at the point of sale, and should displace other taxes, such as VAT, sales taxes, and payroll (e.g. social security, health care) in such a way that tax revenues are constant, and distributed equitably.

These should be introduced as an Emissions Added Levy (avoiding the bad jokes). EAL would be imposed on sale for emissions added in the preceding step and inherent to the consumption of the product, as would be the case for heating oil and gasoline. Manufacturers would pay the EAL on electricity they bought, and incorporate this and the levy on emissions they created into the price of the product they sell.

Imports from countries that do not have an EAL would have the full EAL imposed at the time of import. The base rate would be generic EALs based on worst previous practices in the countries that do have EALs, which would be reduced on presenting proof that the actual emissions were lower.

All countries with EAL systems would reserve a portion (say 5%) for assisting developing countries with adaptations (why not use acclimations?) and mitigating programs.

By basing the levy on emissions rather than carbon all greenhouse gases stand on a common level, sequestration is strongly encouraged as well as such simple things as capturing methane from oil wells and garbage dumps (that gets built into the cost of disposal). The multipliers would come from CO2 equivalents on a 10 year basis.

The process can be effective without across the board agreement which means the ability of countries such as the US to bargain the process down is decreased. Further, early adopters will control the process and establish the base rates in concert. Imagine a world wide EAL system controlled by the early adapters market denominated in yen or euro. The effect will advantage them their currencies in the same was as the oil market being denominated in $ has benefitted the dollar.

If large enough chunks of the world economy, for example, the EU and Japan adopt this, manufacturers world wide have to follow across the board no matter where they are. There are not going to be separate lines to produce whatever for North America and Europe in China. And yes, as in all things there would be some gaming of the system. It’s the price you pay for lawyers and economists.

See, told you it was simple.

18 comments:

CapitalistImperialistPig said...

One pretty smart lagomorph, I think.

Anonymous said...

Hey Rabett, read the link, had to laugh. Al Gore says lets have the new agreement that replaces Kyoto by 2010. Now the one thing that truly stands out is how very few nations that sighed Kyoto have, or indeed will achieve greenhouse reductions below 1990 figures. The only ones who did are the eastern bloc nations that had their industries closed for them when the Iron Curtain fell. Western Europe and other nations are merrily going along and not giving a fig as to achieving goals. Now Al Gore gives them the out. New, replacement Kyoto comes in before the scheduled 2012 Kyoto end, Western Europe doesn't get embarrassed by their 2012 failure,(yes I know they were all going to make a sterling run in those last few years, and I know you so very badly want to believe that rubbish) and Al Gore scores brownie points. The Rabetts of the world get to kick their government, yet always remain strangly mute on the failure of Western Europe to get anywhere near their numbers.

But you know why I don't care, Rabett. Any Kyoto II is going to fail just as current Kyoto was going to fail. And because Kyoto II levels will not need to be meet until some long distance time( sometime after 2020- 2030 or whenever) we all go along our merry way. By 2020, China and India will well be the largest emmitters, and you, along with all the other gutless westerners will just be kissing Chinese/Indian backsides. You, Rabett, will be a pensioned off ex teacher, surviving on cheaply produced generic Chinese produced tablets, so you particularly will not say boo to the Chinese.
JohnS

Belette said...

Its not impossible. Doing it internally means shifting costs around, from labour to fuels to some extent. That could well be a good thing to do - indeed, you might well wonder why it isn't done independently of cl ch.

Doing it externally... well, how would you tax the emissions on a $10 widget from the US, if the US wouldn't tell you how much CO2 it cost? Or if the US told you, but you had no good way of verifying the number?

Details remina to be clarified... would this be a VAT-like thing, charged and rebated at each point of the chain? Sounds hideous, but thats what your point-of-sale implies. Or would it be simply charged as a duty on the fuel, which is nice and easy?

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

JohnS would no doubt be glad to know, then, that the European Environment Agency report No. 5/2007 (published 27 November 2007) has this to say:

"The latest projections from pre-2004 EU Member States (EU-15) show that the EU-15 can meet, and may even overachieve, its 2008–2012 Kyoto target to reduce greenhouse gas emissions to 8 % below 1990 levels if Member States implement now all additional policies being planned. Based on Member States projections, existing domestic policies and measures will reduce EU-15 greenhouse gas emissions by a net effect of 4.0 % below base-year levels. When additional domestic policies and measures (i.e. those planned but not yet implemented) are taken into account, the EU-15 could reduce emissions by an additional 3.9 %. The projected use of Kyoto mechanisms by ten of the EU-15 Member States will reduce emissions by a further 2.5 %. These governments have set aside EUR 2.9 billion to pay for this. The use of carbon sinks, such as planting forests to remove CO2, will reduce emissions by an additional 0.9 %. As a result, the EU-15 could achieve an 11.4 % reduction. All new Member States with a target expect to meet their target. The EU Emissions Trading Scheme will bring significant emission reductions between 2008 and 2012. It is expected to contribute a reduction of at least 3.4 %, part of which is already reflected in some Member States projections. This would represent a further reduction of at least 1.3 % to the total of 11.4 % from base-year emissions in the EU-15."

Source: Greenhouse gas emission trends and projections in Europe 2007

And from the UK report (p. 33) linked to at the above page:

"The UK’s 2007 Monitoring Mechanism submission projects total emissions of 624.9 Mt CO2–eq. in 2010, around 19.6% below the base year. In addition, ETS participants are expected to purchase 29.333 MtCO2‐eq. of European Allowance Units or carbon credits from Kyoto mechanisms. In total the UK should overachieve its Kyoto target of 678.3 Mt CO2–eq. by around 82.7 Mt. This amount of overachievement is slightly greater than reported in 2006. However it is worth noting the substantial increases in the implied Kyoto commitment between 2005 and 2007 reports due to upwards revisions of the base year emissions, and in projections of UK emissions (588.7 Mt in 2006 report; 624.9 in 2007 report). The UK has since advised that it has developed a ‘with additional measures’ projection scenario based on the Energy White Paper released in May 2007."

Source: United Kingdom - country profile 2007

Cymraeg llygoden

(2nd, slightly rewritten, attempt ... hope they don't both make it now)

Steve Bloom said...

Eli, IIRC just in the last month or two Sarkozy was rather noisily promoting something along these lines (for EU adoption).

David B. Benson said...

Alas, there will be separate factories producing for Europe and North America in China. There already are.

For toys.

Anonymous said...

Anon of above gives me some projections I provide some real facts. Go read real emission reports not some projection reports. Of course, projections are what faithwarmers do best.


"The so-called “EU-25,” which includes these eight former Communist countries, reduced greenhouse-gas emissions to 95.1 percent of 1990 levels by 2004, according to a European Environment Agency report published on February 2, 2007. That sounds like admirable progress, even if it still means the EU will likely miss its Kyoto emissions target, which the report sets as 92 percent of 1990 emissions by 2010.

But if you look at the numbers behind those reductions (see the chart on page 11 of the report), it becomes immediately obvious that any claim of emissions progress in Europe is disingenuous.

The European Environment Agency’s report tells the real story: Nearly all emissions reduction in Europe since 1990 came from the economic collapse of the former Eastern Bloc countries, whose industrial production was decimated by the fall of Communism. These eight nations account for 87 percent of Europe’s annual reduction in carbon-dioxide-equivalent emissions between the baseline year of 1990 and 2004. And even that number understates the case, because nearly all of the reduction came in the first few years.

As the Eastern Bloc’s economies disintegrated, they reduced EU-25 greenhouse emissions by 225 trillion grams per year — 87 percent of the total reduction in European greenhouse emissions between 1990 and 2004. To the degree that Europe has made any progress toward Greendom, the winning recipe has been economic ruin, not conservation or alternative energy.


In Western Europe, among the original EU-15, emissions have risen by almost 3 percent since 1993, thanks largely to growing economies in Austria, Ireland, Greece, Italy, Portugal, and Spain. These six relatively small countries have seen dramatic emissions increases, all greater than 10 percent and in some cases greater than 20 or even 40 percent. Belgium, Finland, and the Netherlands all saw emissions increase modestly, while Luxembourg, Sweden, and Denmark either flatlined on emissions or had insignificant reductions.

Germany is a special case, since a large portion of that country experienced a dramatic post-Communist industrial collapse, resulting in an 8-percent emissions reduction between 1990 and 1992. In the next 12 years, Germany reduced its emissions by another 10.2 percent. France, meanwhile, reduced emissions by 2.1 percent between 1990 and 2002, but emissions rose again for the next two years, resulting in only a modest reduction overall. The United Kingdom is the only other EU-15 country to reduce CO2-equivalent emissions significantly, cutting back by 14.3 percent between 1990 and 2004."

JohnS

vasi said...

Love the idea, Eli. I do have a couple of nits to pick with it, though:

To start with, it's not clear what we should do about emissions associated with non-tradable items. For example, if Germany's government uses public funds to plant a forest, on what products--if any--would we decrease the EAL? Or the other way around, if Australian theme parks have high emissions, how do we penalize them?

Secondly, there is the risk that this will simply segregate international trade. Suppose Canada trades with the US and the EU, and the EU starts enforcing the EAL. Now goods from Europe are more expensive to make and thus to import--while it also becomes more difficult for Canada to sell its goods in the EU. Wouldn't this make Canada's trade with the EU decrease, and their trade with the US increase? We could end up with green-but-expensive and a cheap-but-polluting blocs, where each country trades almost exclusively within its bloc.

I'm no economist, so I'm certainly missing any number of things. I look forward to being enlightened.

Walt Bennett said...

Different but the same.

Go to RealClimate, for example. Different ideas, but the same. Go to Climate Audit and they are still arguing about the reliability of the evidence.

You know who is asking the correct question? The debunkerati, aka the right wing spin machine. They, in their desperation to have a point, have stumbled upon the essential question: just how much is this artificially-inflated energy going to cost, and who is going to pay it?

In other words, how do we prevent an enormous transfer of wealth from regular folk to big business slash guvmint behind these increasing costs?

"Tax neutral" sounds so pretty, doesn't it? So basically the theory is that a poor person saves as much in other taxes as they will have to pay for artificially inflated fuel.

What fairy told you that?

John Mashey said...

Walt:

1) You may want to read the "Hirsch Report" for the US DOE, summarized plus pointer to full report in:
http://en.wikipedia.org/wiki/Hirsch_report

2) Look up "Peak Oil".

3) Some people think that PlanA is to burn oil as fast as possible. Fred Singer seems to do that, even though his reasons change often.

4) To some extent California does some of Eli's EAL, with the result that electricity costs more here.
CA is infamous for putting in place "burdensome" environmental rules and demanding numerous efficiencies [like for fridges].
Of course, this has made California *so poor*, with an economy no one else would ever want.

5) Our state planners are trying very hard to decarbonize before the economy gets smashed from the inevitable oil prices. See:
http://www.energy.ca.gov/2007_energypolicy/index.html
It won't be easy. Hirsch writes about the difference between getting onto the problem earlier versus later. I suggest that if PlanA is to burn oil like there's no tomorrow, the poor will suffer more when the prices skyrocket.

6) Has your youngest kid asked you yet: "Daddy, are you adults going to leave any oil for us?"

I have several friends who've been asked that by 12-13-year-olds, since of course, the answer was essentially "No." [Oh, those kids will still learn to drive, but cheap gas when they're 30.... I doubt it.]

-Global Cooling Expector- said...

I thought perhaps I had discovered another intelligent blog, seeing that john cross has posted here. However I now know that you ARE one of those who drunk the coolaide. Moving on.

btw, Bush was the winner at Bali. Nice spin, but totally wrong.

stevesadlov said...

You are a filthy traitor. Too bad they don't take that crime seriously any more. I mean it. You hate your country and want to overthrow it. What you propose would do that. The Pied Bunny leading all the other 1960s radicals.

EliRabett said...

You know, if Eli didn't know Steve Sadov and the deep respect he has for others, even those who hold different opinion, the Pied Bunny might think Steve wrote that.

Instead management will simply enter the comment in our Rant of the Year Contest, as archtypical of the eliminationist wing of the League of Ten Losers with Senator Inhofe in a room Climate Change Denialists.

Anonymous said...

Emissions Added Levy, rrriight. Sure you didn't pinch that from Operation Iraqi Lib^WFreedom?
:-)


D. Duck

batucuda said...

would you have the run-of-mill per-capita flat rebate checks, to protect the innocent?

EliRabett said...

Rebate checks had not occurred to me, but sure that is one way, reducing or eliminating sales tax another, retirement taxes, etc. I'm not rigid at all on how it is done as long as it is reasonably equitable.

batucuda said...

ok, i will vote for you! because i know in my heart that "reasonably equitable" means "nobody starves due to unlucky carbon accounting discrepancy and burden is on the profligate not the long-tail."