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It's time for a carbon tax
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mac



Joined: 07 Mar 1999
Posts: 4673

PostPosted: Sat Nov 27, 2010 12:50 pm    Post subject: Reply with quote

coboardhead--ignoring Iso's nonsense, and appreciating your post:
Quote:
did also not adequately promote nuclear energy. We are three decades behind in nuclear facility construction and waste disposal. We should really get plants on line or at least permitted before penalizing utility customers.

Using cap and trade as a deficit reduction tool is bad policy. Reinvest in alternative energy instead with this lease revenue.

A carbon tax may make sense to promote alternative energy and reduce dependence on foreign energy. But, we have to be careful how it is applied and what the revenue is used for. Any new taxes should be gradually introduced to avoid shock on any parts of the fragile economy. Taxes that reflect true costs of a product are good policy.


I agree with almost everything you say, but have some caution on nuclear energy. Not on the environmental side, but on the institutional and cost side. Poking around I found these two sites: http://alternativeenergy.procon.org/view.answers.php?questionID=001269, which seems reasonably balanced, and : http://www.phyast.pitt.edu/~blc/book/chapter9.html

which confirms my cost-effectiveness concerns. Well designed and built nuclear power facilities are pretty cheap, below 2 cents/KW hour--excluding capital costs. But that is a big but...Black eyes for engineering, government regulation, and construction. The failure of WOOPS casts a long shadow. Here's what the CBO said about it:
Quote:
“[T]he longer-term competitiveness of nuclear technology as a source of electricity is likely to depend on policymakers’ decisions regarding carbon dioxide constraints. If such constraints are implemented, nuclear power will probably enjoy a cost advantage over conventional fossil-fuel alternatives as a source of electricity-generating capacity. Today, even the anticipation that carbon dioxide emissions will be priced is a factor being weighed in investors’ decisions about new base-load capacity. Those conclusions are tentative, though, because the electricity industry faces numerous uncertainties. If expectations related to future market conditions—especially those pertaining to construction costs or fuel prices—shift before investors commit to the construction of new base-load capacity, the prospects for new nuclear capacity could change dramatically…


So I think the objective of any carbon fees/taxes is to start the transition away from fossil fuels. In the short term, conservation is the best investment, and efficiency will be a hallmark of ongoing efforts. But we have plenty of coal and natural gas, and oil will be with us for a long time. What is needed is a price signal and efforts to smooth a transition and begin mitigating the impacts.
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mac



Joined: 07 Mar 1999
Posts: 4673

PostPosted: Sat Nov 27, 2010 2:21 pm    Post subject: Reply with quote

Part 2 on nuclear energy and price signals. One of the advantages of a more complicated tax or fee system is that it can get you a better result. While a simple carbon tax would be effective and efficient, it is nearly toxic politically--both parties have been telling voters that they can have it all without paying for it until they sell their house. The Republicans have simply chanted no new taxes, and have cut taxes while refusing to actually cut spending. A carbon tax could do a number of things that would make it more palatable. First, recognizing that it is regressive, it could replace other regressive taxes like sales taces. Second, it could be used to fund research into technology, actual mitigation of existing emissions, retrofitting inefficient systems, or paying down the debt. There's a lot of money at stake--total taxes on gasoline are presently about 40 cents per gallon, about 18 cents of that is Federal. Raising the Federal tax rate by 15 cents/gallon would generate $126 million a day, $46 billion a year. I doubt it would have much effect on either consumption or the profitability of the oil business--it would add 5% to the average cost of a gallon of gasoline, and Exxon alone has reported profits of $10 billion in a quarter. Remember, a fee of 15 cents per gallon would only capture 1/3 of the security cost associated with importing oil. The objective is remove the competitive disadvantage to domestic energy sources by subsidizing the importation of oil (and exportation of jobs) so heavily.

Here is where I would move away from assumptions about a fair or simple tax. The objective is not to punish consumers, or oil companies, but to begin a transition towards a more sustainable energy policy in the long term, and to reduce our foreign entanglements--the cost of which threaten our economic viability. As such, I would want to invest in alternatives and mitigation measures. Cap and trade has the potential to encourage new coal-fired electic generation--as long as CO2 emissions are scrubbed or offset. Getting CO2 out of electric generation will be easier than getting it out of transportation. For the forseeable future we have a low density urban and rural pattern that doesn't work well with transit, walking, or bicycling. So trying to get some retrofit of existing power generation without disrupting the economy would be a major goal. California is likely to continue to pioneer work on cap and trade, albeit at a slower rate without the other Western states.

Nuclear, in particular cooling, poses particular difficulties in California where water supply is limited and the coastline is precious. The San Onofre plant in Southern California has had substantial impacts on the marine environment, and mitigating those impacts has been a continuing struggle. Diablo Canyon is pretty cheap, but was a long time getting on line and takes up a hefty chunk of the shoreline. The Humboldt plant was pretty much a disaster, and the Rancho Seco power plant near Sacramento is now decommissioned. The economic issues here are pretty profound.

Ironically, increasing nuclear generation will require more government, not less government. Long term storage of low-level waste is neither too expensive nor too risky to threaten the viability of nuclear power. But it does take a long-term, competent institutional capacity. Having cleaned up after power companies who left the public holding the bag for non-nuclear waste, and reminding us all of the radioactive rabbit (not an Energizer bunny) recently found near Richland, I know industry (General Electric at Hanford) will do everything they can to avoid liability. Long term management of waste requires creating institutions and funding for long term storage. Having done present worth analysis, I don't think the cost issues are insurmountable, but the institutional issues are profound.

It also requires reform of the regulatory arena without losing public confidence. I've been a regulator and I've been regulated, and I know that regulatory agencies will do unreasonable things, both on their own and in response to public pressure. Here is an appropriate quote from the source I previously cited:
Clearly, the regulatory ratcheting was driven not by new scientific or
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technological information, but by public concern and the political pressure it generated. Changing regulations as new information becomes available is a normal process, but it would normally work both ways. The ratcheting effect, only making changes in one direction, was an abnormal aspect of regulatory practice unjustified from a scientific point of view. It was a strictly political phenomenon that quadrupled the cost of nuclear power plants, and thereby caused no new plants to be ordered and dozens of partially constructed plants to be abandoned.


Getting to a better result will require excellent science, engineering and communication. Not all are highly esteemed in todays polarized environment.
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coboardhead



Joined: 26 Oct 2009
Posts: 1849

PostPosted: Sat Nov 27, 2010 8:53 pm    Post subject: Reply with quote

Provocative post.

I worked my way through grad school doing analysis of the yucca mountain nuclear waste isolation project. This was nearly 30 years ago.

About this time, the nuclear energy business went bust. No new nukes. I know much of the reason was because of the regulatory environment. I also know that it was easy to blame cost overruns on the regulators.

Now, bringing nuclear on line is not economically feasible without carbon capping, as you say. Reducing costs of nuclear plants can be accomplished if we start building plants and streamlining costs and permittingp but probably not enough.

So, we will sit at the sidelines and wait until we have a crisis. This is our political climate.

Protecting and subsidizing the petroleum industry is so ingrained in our economy that it will be very difficult to change. The deficit reduction task force folks proposal to tax fuel to reduce debt may, however, start a dialogue in that direction.
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mrgybe



Joined: 01 Jul 2008
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PostPosted: Sat Nov 27, 2010 11:36 pm    Post subject: Reply with quote

coboardhead wrote:
Protecting and subsidizing the petroleum industry is so ingrained in our economy that it will be very difficult to change.


How does the protection/ subsidy provided to the petroleum industry compare to that provided to other industries?
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mac



Joined: 07 Mar 1999
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PostPosted: Sun Nov 28, 2010 1:27 am    Post subject: Reply with quote

Quote:
How does the protection/ subsidy provided to the petroleum industry compare to that provided to other industries?


Says the man observed screwing a sheep, "I don't think it's so baaaad."

Do oilies only believe in a market when it applies to someone else?
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feuser



Joined: 29 Oct 2002
Posts: 1387

PostPosted: Sun Nov 28, 2010 2:27 pm    Post subject: Reply with quote

mrgybe wrote:
coboardhead wrote:
Protecting and subsidizing the petroleum industry is so ingrained in our economy that it will be very difficult to change.


How does the protection/ subsidy provided to the petroleum industry compare to that provided to other industries?


It's kind a like bottle-feeding the 800# Gorilla in the room. I think that's a valid comparison.

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mrgybe



Joined: 01 Jul 2008
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PostPosted: Sun Nov 28, 2010 3:16 pm    Post subject: Reply with quote

It's clear from the last two posts, and the absence of a response from Coboardhead, that no-one here can answer the question.........but still they believe that sweeping assertions based upon wafer thin knowledge is a satisfactory substitute for informed debate.
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mac



Joined: 07 Mar 1999
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PostPosted: Sun Nov 28, 2010 3:23 pm    Post subject: Reply with quote

I think mrgybe has found a way to plonk me. Easier than actually responding, isn't it!
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mrgybe



Joined: 01 Jul 2008
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PostPosted: Sun Nov 28, 2010 4:28 pm    Post subject: Reply with quote

"There is no response to ignorance like keeping silence"

Spanish proverb
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isobars



Joined: 12 Dec 1999
Posts: 13315

PostPosted: Sun Nov 28, 2010 4:42 pm    Post subject: Reply with quote

mrgybe wrote:
they believe that sweeping assertions based upon wafer thin knowledge is a satisfactory substitute for informed debate.


What did you expect after they elected a President based on "Hope and Change" ... read from a teleprompter?
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