TAX AND THRIVE.


 

ENERGY TAX NOW. CARBON CAP TRADING LATER.
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Abstract: The Greenhouse warming is “worse than the worst that was expected three years ago” said the IPCC scientific intermediate conference co-chair a few days ago. The USA is the number one perpetrator.

Obama has proposed green energy, without paying enough efficient attention to the fact that the market has been manipulated towards burning carbon. Instead the market should be manipulated to make burning carbon what it really is, namely expensive.

So far, oozing ever so slowly to remedy this, Obama has proposed a Carbon Cap and Trade circus, as the European Union has tried to make work, for years. But Carbon Cap and Trade should be considered only a second order measure, as it is in Europe. Carbon Cap and Trade has been attempted in Europe, decades after the instauration of continent wide huge taxes on energy.

Carbon Cap and Trade has revealed itself to be slow, difficult to implement, with extremely complicated regulations, and tricky price fixing, that have baffled even the Parisian bureaucrats. Although the French wanted to avoid this, Carbon Cap and Trade turned for years into a subsidy for polluters.

The first order measure to make the market price carbon accurately ought to be, as it is in Europe, a tax on bad energy. That could be implemented by the presidential pen tomorrow. Let Congress howl to the wind: what could it do against icy presidential logic? So here is some logic.
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WHAT GLOBAL WARMING DENIERS FAIL TO LOGICALLY PROCESS; THE CH4 ERUPTION POINT:
The USA produces more than a third of the world CO2 emissions (25% inside the USA plus a considerable amount of U.S. industrial production relocalized to China, where coal provides the energy of the beast). In the USA, more than half of electricity production comes from coal (whereas the carbon contribution in France, although still disgusting, is negligible).

What the greenhouse deniers do not understand is that warming causes THEMSELVES are non linear, and NOT CONTROLLED BY MAN, BEYOND A POINT (to be reached very soon, if not already). We basically went from 270 ppm of CO2 before the industrial (aka carbon burning) revolution, to 385 ppm now (augmenting 3 ppm per year; 19 billion tons more than the year before, .6% more).

Some will smirk and say that there is no reason to sweat, because 4,000 ppm were present during the carboniferous era, we have a long way to go before we turn carboniferous all over. True as far as the 4,000 ppm. But false as far as sweating great buckets in rising, dying, acidic seas.

Indeed the jump from 400 ppm to ten times that does not have to be linear, and, when this sort of jump happen, they certainly are not. The way it may work is this: beyond some threshold, METHANE ERUPTS.

Where does the methane come from? From frozen, hydrated deposits deep in the ocean, or in the tundra. If they get warmed up enough, those deposits evaporate, or explode, and make methane.

Methane is a Green House Gas (GHG) that is much more warming than carbon dioxide by a factor of more than twenty times over a century. It is not as stable as CO2 in the atmosphere, because, basically, it burns, or oxidizes more slowly (whereas CO2 does not). This means that its capacity to heat up the atmosphere is even higher over, say, a decade.

Thus, at some point all the methane will erupt, and put a warm blanket over the planet, all of a sudden. That, in turn, will release immense quantities of CO2 presently in the ocean (half of the humanly created CO2 has been going there, deep in the oceans, but now it is shaken out of the Antarctic ocean, due to the acceleration of wind speeds, and lowering of the main wind circulation belt, both of which were expected, and now observed, greenhouse warming effects).

This why putting a limit of 550 ppm on the CO2 would be stupid. In the official scenario, it would double the CO2 levels, and, from crude. thoughtless computations, it would only rise the planet’s biosphere by just three degrees Celsius.

But this convenient scenario inconveniently forgets that most of the three degrees warming would be in the Arctic, and would erupt the considerable methane hydrates there. Moreover, suddenly active bacteria will feast on vegetation frozen for dozens of thousands  of years, generating even more methane.

The total amounts of methane in the oceans and in the ground in the polar regions, is not known, BUT it is OF THE ORDER OF ALL THE RESERVES OF HYDROCARBONS COMBINED. It may be half of them, it may be more. Only Satan, obviously a resident of Venus, knows. In any case, the amounts of methane are gigantic, and are known to be capable of giant tsunamis and bringing the planet swiftly into its HOT MODE (because it happened 35 million years ago).

The warming of the arctic has become so catastrophic, it is self amplifying. That is a known fact. As the ice, which used to reflect the sun’s energy back to space, disappears, or get thinner, the Arctic ocean and seas absorb a huge quantity of solar energy, and store it for the next winter (the ice pack is in terrible shape in 2009 because of this storage of solar energy in 2008).

Now Arctic methane has started to contribute to the greenhouse, starting in summer 2008. It was observed visually (bubbles), it was heard, and it was felt by seismographs, off the Siberian coast.

It is to be feared that methane will keep on erupting in massive quantities. So the number to look at is not just the carbon dioxide density (around 385 parts per millions), but the density of CO2 EQUIVALENT Greenhouse Gases. At some point the effect of warming through CH4 eruption will be RUNAWAY (no human intervention would stop it, not even if one stopped the anthropogenic emissions of CO2).
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WHY ENERGY TAXES BRING JOY AND JOBS:
The three largest car companies automotive groups in the world are not American. They used to be. But no more. They are all from countries with high gasoline and road use taxes (Japan, France, Germany). There is a direct cause and effect relationship, but one needs, as usual, a threshold of mental capability and knowledge to understand this. [See addendum for details.]

The old cliche’ that rising taxes in a recession is wrong is itself wrong. What is needed now is more USEFUL economic activity, so as to get more USEFUL jobs. Taxes which decrease jobs are bad, taxes that encourage jobs are good. Energy taxes are doubly good: they give more fire power to the government spending (but enough money to the plutocrats already, please!), and they create the necessary condition for a new green energy job market.

The plans of job augmentation of the Obama administration have been, so far, laughable: the Summers-Geithner crowd is apparently spending most of its brain power on variant of the scheme of sending money to their ultra rich friends, who are past and future employers, mesmerizing mentors, their everyday obsession, and what they want to be when they grow up. They plan to “create or preserve” three million to four jobs within a year. It’s pathetic: the population augments by roughly as much, so basically their aim is to create no jobs at all, relatively speaking. Besides the economy is losing 700,000 jobs a month. That’s about nine million jobs in a year. And five millions have already been lost.

Instead Obama went to Europe, apparently trying to stimulate European laughter by suggesting that Turkey should join the European Union. That was as smart as if Sarkozy had used his recent presidential trip to Mexico to order the United States of America to make Mexico the fifty-second state of the USA (after incorporating Porto Rico, and, soon, Cuba, no doubt).

Obama also claimed that he is not fighting Islam in the Middle East, obviously another attempt to be funny (I will address this in another essay). Just fighting Al Qaeda, which is following the Qur’an verse by verse.

Obama should go back to Job One, namely stimulate the job market of the USA. For that he needs battle field courage, and use his popularity to teach America that it needs a swift reallocation of its priorities. It is better to have teachers, and schools, and health care, and welfare than trucks and potholes and waste and smog and hot, rising, acidic seas devoid of life.

Because energy prices have collapsed, due to the Great Repression out there, so did green investments, which were cut by more than half since 2008. This needs to be fixed, and it can be fixed. It has been fixed in Europe. In Europe, green energy grows by leaps and bounds because the price of energy is stable, and very high (gasoline taxes are typically of the order of five dollars, or much more, up to eight dollars per gallon!)

With high energy prices, alternative project managers and engineers and politicians can then make precise plans. A 200 meters high windmill, or a giant solar installation cannot be planned when the price of energy can be halved in 6 months. Another interest is that the price of energy, ultimately, will get enormous. To raise the price now forces anticipation while there is still time. The only available mass energy right now which is available as an alternative to coal is nuclear. But nuclear plants could not possibly be built in large numbers fast enough. Moreover, to be really as ultra safe and ultra efficient as it can be, nuclear needs generation IV and higher plants, which have not been researched yet.
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COAL IS TOXIC AND HOPELESS:
Some people crow that coal could do it all. They used to crow that the USA had 250 years of coal. China also was crowing similarly. Never mind the soot and the CO2. But then something happened, and the American and Chinese reserves were cut down enormously. It turned out that the numbers had been computed way too optimistically. In three years, the USA was cut down to 100 years of coal. Anyway, coal has to be cut down: the sea is rising too fast, faster than the worse predictions of three years ago. These days, three years is like eons.  

Retooling the entire transportation industry of the USA to make it more efficient is a good start to create new jobs. For that the government has to make more efficient industries profitable, and cut the hidden subsidies to carbon (among the later, the cost of its pollution, all the people it kills, the gigantic military deployments overseas it necessitates, and all the corruption attached to oil and gas procurements). Bringing up the price of energy is the way to do it.

That old partisan of fetching oil in Iraq, manu militari, Thomas Friedman, has turned ecological. In a pretty good editorial he cuts through the fog of the administration: “A cap-and-trade system to reduce greenhouse-gas is actually a carbon tax. So let’s stop hiding the ball and have a strategy, message and messenger that tell it like it is.” [Show Us The Ball, April 7, 2009, NYT.]
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WANT REAL CHANGE? TAX GAS, BIG TIME, AND SHUT DOWN COAL:
A gasoline tax is not subtle, and would support a rejuvenated Detroit. Indeed people would be forced, and could be further incited with cash payments to buy new cars (that could be done right away, as I advocated, and as the Obama administration has enjoined Chrysler to do with Fiat; an alliance between GM and Renault, and Ford with Peugeot and/or Volkswagen could do the same; inciting car purchases with cash payments is a French method, many times used, and that now Germany has imitated). The USA, overall, would save energy, thus money, and quickly, an effective national defense function (and that would advance the technological level of the USA and its industrial base, two other defense functions).

A national gasoline (and more generally energy) tax would also decrease the enormous deficits that are piling up as the USA tries to spend a huge amount of energy (hence money) trying to get out of its desperately erroneous trajectory. That is another national defense function.

But, unfortunately, the Bush, sorry, Obama, economic advisers are deeply entranced in Market Mystique, as Paul Krugman puts it cogently. So they are delighted to set up another market, the Carbon Cap Trade. It took years for the French and other Europeans to make it work, sort of (the carbon exchange is based in Paris). So Carbon Cap and Trade will allow to delay treatment of the national carbon disease by years. It was also highly profitable to a chemical company such as the French Rhodia, and other giant corporations.  One of the problem is that the carbon pollution prices had been mispriced (and given to companies too generously).

Of course it would be unimaginable that Carbon Cap Trade would allow some of the friends of the administration, the hedge fundists, to make more money, and it would be unimaginable that the reason that some in the administration want to set it up is that, precisely, it will take years to do so, while making it looks as if they were busy doing something.

If the executive could execute, rising energy taxes could be done by executive order. Compensatory payments could be made to the poor as in Europe.

Coal produces more than half of U.S. electricity. That has to be reduced, not forgotten. Coal should not be the object of fantasy, such as that even greater pie in the sky, “Carbon Capture”, also pushed by the administration. Capture is practiced in a few places, true. But mostly for local economic reasons (typically reinjecting CO2 to push natural gas out). Otherwise it would turn out so expensive that it would make coal too expensive. Figuring that one out with absolute certainty, would take many years, furthering implementing real change that would make a difference.
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Patrice Ayme
http://patriceayme.com/
http://tyranosopher.blogspot.com/
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Addenda: 1) HOW A TAX CAN GENERATE BUSINESS: THE CASE OF THE CAR INDUSTRY:

Demand is down or, in some cases, dying, because what people want is changing. It is not just a question of desire, but also of repulsion. Horses were pooping all around the big developed cities in 1900. The switch to the car was not just caused by the many advantages of the automobile. There was also a move away from obsolete technology out of sheer disgust. People had enough of horses as transportation.

Although this is perhaps not obvious in the USA, there is definitively this feeling in Europe about last year’s automobile’s technology. People are just waiting for the better cars around the corner. This happens in Europe because the European Union has imposed 160 grams of CO2 per kilometer in present cars (before sanctions apply). The EU is now switching to 125 grams per kilometer.

Daimler Benz, which used to produce gas guzzlers, screamed a lot, but it has improved its latest models dramatically (hey, no choice!) to catch up with Volkswagen, Fiat, Renault and Peugeot. Renault has a big electric car research project. Fiat has found a device to improve gasoline mileage. Start and stop systems are spreading. Braking energy storage by ultra high efficiency capacitors is improved. There is no doubt that European car demand will rebound as the new models come out, and European consumers feel that they are doing their moral bit of helping the environment by purchasing more advanced, greener technology.

That is why Toyota is now number one in sales, followed by Renault-Nissan (6 million), then Volkswagen (expected to produce 5.7 million cars), and then GM (expected at 5.3 million, if it is still around). so, beyond the problem of physical quality of the widgets and devices, there is the problem of their MORAL quality. People are increasingly repulsed by immoral products. This happened to nuclear energy in the past (it was not just a question of being scared).

The same happens with “organic” versus other produce. Not only are they better for health, but they are morally superior. And people like to exhibit their moral superiority: Toyota’s Prius has sold better than other hybrid cars, in part because it looks different, and owners can advertise their superiority, just as if they were birds of paradise.  And that superiority is moral.

Because the American civil industry was allowed to decay and become obsolete, hence inefficient, hence immoral in a more energy and waste conscious world, consumers are increasingly turning away from it.

Regulations are not just important to keep the financial dragon in its grotto, but in making products morally, hence economically, attractive, which consumers cannot resist.

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2) Carbon Cap and Trade has been proposed in detail in Australia. As usual, it starts by distributing free permits to pollute and a subsidy of the order of three billion dollars to the carbon polluters. Besides the government breezily announced that it may reduce CO2 pollution by as little as 5% by 2020. A joke by any other name.

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3) REAL MEN ARE NOT WEASELS: The usual counterargument from conventional left wingers is: “Big time gas taxes and shutting down coal will bring big changes, all right. The Government will change back to complete Republican control, for starters. So thanks, but no thanks. We prefer solutions that won’t actually make the problem worse in the long term.”

The answer to this defeat of the mind is that one has to do, or recommend, the right thing, sometimes. Machiavellianism does not always work.

Doing the right thing starts by making people get to know the right thoughts, and learn to reject the bad ones. The USA cannot fall of the end of the earth. Nobody worldwide care about old fashion U.S. “republicans” much more than they care about malaria carrying mosquitoes. A plague by any other name.

One could have used, and one did use, the same sort of reasoning to justify half baked ways in the Weimar republic. It was like: “let’s not irritate the Nazis too much by taking them on directly, or they will get worse”. Later, as Hannah Arendt (who herself resisted all alone, as a Jewish girl, until she was kicked out to France by the Gestapo!) pointed out, the Jewish councils cooperated with the Nazis, so as not to irritate them too much.

Instead, the way to deal with the Nazis was to take them head on, by declaring war to them, as France succeeded to persuade Great Britain to do in 1939. If nobody had taken a stance, Hitler would have ended by ruling in Washington, as he fully intended to do (he even explained his plan to his collaborators; the French frontal attack ruined it all).

So, no thanks, it is high time to tell the American people to join the rest of civilization… Time to tell them they were deluded by their plutocrats.

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4) A research article by geologists in Nature (April 2009) shows that carbon capture will, probably, not work. Reason? Injected carbon dioxide does not make carbonate, a rock (as was hoped by carbon wishful thinkers). Instead, injected CO2 makes Perrier, in the fullness of time (sparkling, extremely high pressure gas-water mix). But not to despair: it makes sense. The plutocrats want their deity, Pluto, to be served Perrier underground.

A few considerations  of the logical type then show that trying to stuff all the CO2 coming from coal beds into a few depleted natural gas fields will not work. Besides volcanoes gets a lot of energy from CO2… Carbon capture is just a way to capture the imagination of the naive into more of the same, to profit the same old crowd… Here, have some more Perrier.

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5 Responses to “TAX AND THRIVE.”

  1. Zoe99 Says:

    I agree with your proposal for a gas tax (and have encouraged the adoption of such in my country for a long time now), however, I am always stymied by one thing, which is the truth that the gas tax is one which disproportionally affects the poor. Rich people will still drive their Chevrolet Corvettes and Porsche Cayennes and Ford Expeditions and BMW 7-series sedans, without even once having noticed the price of gas, but the poor contractor who replaces roofs for a living and needs to drive a truck to carry his tools and supplies and needs to drive many miles a week will pay disproportionately relative to his income.

    So I propose a gas tax IN ADDITION TO tax credits for those below a certain income, and IN ADDITION, an “anti-green” tax on vehicles purchased which do not achieve a certain fuel economy — or, conversely, a credit to individuals who can demonstrate that their carbon footprint is small.

    But I don’t know how that would work, in practice. It seems a difficult policy to implement. You can justify it in Europe because you have extensive, affordable mass transit connecting almost all villages to larger cities, but in America we do not have this advantage — and even if we were to throw billions of dollars at the problem, we will not have this for decades to come.

    Also — I think an equitable energy policy will take into account the fact is that if I commute 100 miles to work every day, and drive a Prius, I may have a significantly larger carbon footprint than my neighbor who walks to work but drives a Chevy Suburban.

    These considerations are not taken into account by those people who so enjoy displaying their moral superiority by purchasing and driving a Toyota Prius (which also, by the way, advertises that these individuals have more income than most of their fellow citizens, as the Toyota Prius carries with it quite a penalty for its sometimes modest improvements in fuel economies over its gasoline-burning rivals).

    Like

    • Patrice Ayme Says:

      Zoe: All these very legitimate questions have been tackled in Europe already. Each rise of energy taxes is compensated by subsidies to the poor. Inefficient cars pay huge taxes, yearly, and France, and now Germany give large cash awards for switching to more efficient cars (so that most of the cost of a new car can be paid by the government for cheap, but state of the art cars). New cars mileage in the EU is now at 44 mpg overall. Mandatory is 160 grams CO2 per km on new cars (USA is at 330 grams).

      In all these matters, the USA suffers from being apparently unaware that they share the planet with other intelligent creatures. Because, for the USA, it should be as simple as cut and paste.

      PA

      Like

  2. Zoe99 Says:

    OK, now you’re just being condescending. I agree that we can learn from European regulations, but our countries really are different, and your policies will not work for us if we “cut and paste” them. (I note you did not address the point about the US not having a viable mass transit system.)

    In re-reading your column, above, by the way, I perceive more than a little Francocentric revisionist history. So France is responsible for defeating the Nazis? How, by collaborating with them? Your comments make it sound as if, but for France, we’d be speaking German in the US today.

    Really?

    Like

    • Patrice Ayme Says:

      Saying that the USA is different is an illusion. It is not so much Americanocentric as plain wrong. It’s true that American urbanism and mass transit will have to grow, but it can do so only by carbon taxes (including gasoline taxes). I am extremely familiar with the San Francisco Bay Area (population nearl 9 millions, with Sacramento). The mass transit system exists there, but is starved of funds. Higher authorities have also refused densification of the cities (which has been proposed by many local city governments). There is still a higher level plot to make the USA use as much carbon (and gasoline) as possible. BTW the world’s fourth largest oil company is French, and it searches and finds oil more than the others (so high taxes are not an anti economic incentive).

      The fact that France collaborated with the Nazis is the sort of base propaganda to smear France that has been spread by American oligarchs so as to make France not as the alternative model she is, but a grotesque Nazi like contraption. I talked with lots of this on “Tyranosopher”. It’s a huge subject; I just acquired the newly published Goebbels’ memoires 1939-42, yesterday, one more element of the giant Nazi part of my library. The Nazi plan was to engage war in 1945. After he got entrapped, by France, in a world war in 1939, Hitler was deeply shocked. After spending 10 minutes watching Berlin in terrifying silence, he barked:”Now what?”. Well, a few month later, in reprisal of bombings on French cities, French Navy bombers reached Berlin and bombed it. The Nazis condemned (at a distance) the crews, to death.

      The USA had no plans to make war in 1942. But Japan and Nazi Germany (11 December) declared war to it in December 1941. The USA did not help its fellow democracies, parents and creators, France and Britain in 1939. Instead Congress had decided they were hostile (in 1937) and had an embargo against them. Whilke the greatest American plutocrats were getting the highest Nazi rewards, for technology and investment transfer and helping crucially with the waepons’ program.

      Hitler invaded Spain in 1936 with Texas oil, and France in 1940, with Soviet oil, and a huge amount of secretly transferred American tachnology. The American intervention in the Polish campaign had been deliberately forgotten, just as some would now want to deliberately forget the torture policy of the USA government under Bush, grand son of the Bush who was the among the closest collaborator of Hitler.

      Calling France a collaborator of Hitler just because she did was she was told, while a gun was pointed at her head, is holocaust denial. why? Basically, extending the reasoning to six million of Jews killed by the Nazis, it comes down to calling of all the victims of the Shoah collaborators of Hitler, just because in their last moment they did what they were told, because they did not want to be beaten up.

      Differently from Americans, the French have the cultural knowledge of absolute war.

      PA

      Like

  3. Marcelino Sumsion Says:

    Oh my God, you mad freak! That’s a glorious post.

    Like

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