1 ) Summary
After reading through the websites listed below I can see
that the US move to cut emissions at least 26% by 2025 and China’s undertaking
to level emissions in 2030 is great news. Earlier this year 27 European
countries announced that they would cut emissions by 40% in 2030. According to
the articles these commitments could lead to much better results in the
upcoming 2015 climate talks in Paris. Since the US deal uses 2005 as a baseline
and the Europeans use 1990, the two are not immediately comparable. The carbon
tax centre shows a long article by Charles Komanoff,
calculating that by bringing both to the 2012 baseline the US has to reduce its
emissions by 1% per year, while Europe has to reduce theirs by 1.9% per year.
I may be over optimistic but have seen that China wants a
carbon tax to fight air pollution but hesitates when rich countries back away
from it.( The Australian Senate voted by
39 to 32 votes to repeal their tax). They also feel that without countervailing
duties some of their industries may suffer. China cannot be expected to make a
move until the US, a major emitter, does the same. With the stringent EPA
rulings introduced in June 2014 and possible approval of the revenue neutral
carbon tax bill introduced by senators Sanders and Boxer there is a good chance
that both countries will approve a carbon tax. That would bring the carbon
pricing from 20% of the world’s greenhouse gas emission to 60%. Furthermore as
documented in post 17 a revenue neutral carbon tax with border tax adjustments
as included in the Sanders Boxer bill would in the US achieve the EPA
requirements while imposing import duties on goods from countries without
carbon tax. Early in 2013 some British climate change experts already discussed
the merits of adapting the countervailing duty recommendations on page 190 of
the newly published book “Rediscovering
Sustainability”. If no global carbon tax
can be negotiated in 2015 China could go along with the US and Europe by charging
import duties on goods from countries without carbon pricing. In that case
there is a good chance that the other 40% of emitters will see the light
and start taxing as well.
PS
In the World Bank report listed below I saw that China
has indeed started taxing carbon via an emission trading system in seven cities
and provinces. Plans are to extend it nationally by 2016 in order to meet 40-45%
reduction levels by 2020 compared to 2005 levels Mexico has a national climate change law and
a target to reduce greenhouse gas emissions 30 percent below a
business-as-usual (BAU) scenario by 2020. It started a carbon tax in 2014 and
has a voluntary carbon market.South Korea launched its ETS in January 2015, covering 525 businesses from 23 sectors that account
for about two-thirds of the country's national emissions. South Korea has a
target to reduce emissions 30 percent below business as usual by 2020.
2) Details of
the deals
On 11 November 2014 the U.S. set a new target to reduce its emissions of
heat-trapping gases by 26 percent to 28 percent by 2025, compared with 2005
levels. That's deeper than
earlier in Obama's presidency, when he pledged to cut emissions by 17 percent
by 2020, The US agreement does not require congressional approval,
although leading Republicans voiced their opposition..China, whose emissions
are still growing as it builds new coal plants, didn't commit to cuts of a
specific amount. Rather, Xi set a target for China's emission to peak by 2030,
or earlier if possible. He also pledged to increase the share of energy that
China will derive from sources other than fossil fuels.
Earlier in 2014 “The
European Union announced its intention to reduce emissions of
greenhouse gases by 40% from 1990 levels by 2030. This is the toughest
climate change target of any region in the world. Europe will produce 27% of
its energy from renewable sources by 2030. The EU is the first to set out
emissions reduction targets ahead of a crunch meeting of world governments in
Paris in 2015 that will decide a global framework for avoiding dangerous levels
of global warming. Every other major developed and developing economy is
expected to set out its own binding national emissions target within the next
year, for the United Nations talks to go ahead.
3) Comments on
the US deal
Mr McConnell
ramped up his party line, calling the US plan ‘unrealistic’ and said that it,
as part of the president’s ‘war on coal,’ it would lead to a loss of U.S.
jobs,” requiring China to do nothing at all for 16 years “ Not true, quoting
Forbes: China“already positioned itself
as a world leader in renewable energy investment, spending $56.3 billion on
renewable projects in 2013.” As detailed in post 9, China is the world leader
in Carbon Capture and storage which can reduce the Global Warming Potential
(GWP) from 4.44 to .25. China also has more installed wind turbines than any
other country and produces 23 % of the world’s solar panels . China also is a
leader in converting trucks from diesel fuel to natural gas, which emits 15-25
% less greenhouse gases. In the last five years, China has added 1,500
refueling stations for vehicles running on natural gas, with half of those
added in the last year. The United
States, by contrast, added 84 compressed natural gas stations last year.
4) Canada’s emission problems,
Canada and the US signed identical Copenhagen agreements
to reduce greenhouse gas emission by 2020 to 17 % below 2005 levels. The US can
achieve this by closing many coal fired power plants and converting others to
natural gas. Their wind power becomes more competitive and they have a flexible
net, which can absorb 20% wind power before requiring power storage. By 2018 power
generation from newly built non-subsidized facilities in cents per KWh are expected
to be as follows: Coal 10-13.6, Natural gas
6.7-13, Nuclear 10.8, Geothermal 10, Biomass 11.1, On shore wind 8.7, Off shore
wind 22.2, solar 14.4-26.2, hydro 9. It follows that when carbon is taxed, on -
shore wind will become the cheapest energy source.
Canada made progress
by closing coal fired power plants and preparing for carbon capture and storage.
Our problem is that extracting oil in Alberta takes a lot of fossil fuel energy
and without a healthy carbon tax the replacement with green energy does not
develop fast enough. As a result we will most probably only reduce our
emissions by 7% rather than the agreed 17%. That conclusion is documented in
post 19.
5) Canada’s political options
We have a
conservative government, which has been in power for many years and actually
campaigned against taxing carbon. It will be hard to convince it’s followers to
think differently following all these new developments.. Our Prime Minister Mr
Harper once again faces the predicament experience by President Truman. He has
no one handed advisers.
On the one hand he may want to continue catering to the
many conservatives who still believe that a carbon tax hurts the economy and
the poor. These people can’t be convinced that a revenue neutral carbon tax,
like we have in BC is effective, does not harm the economy and pays a lot of
money to the poor. The BC tax has reduced the consumption of petroleum products
by 17% without loss of GDP. All tax money collected is refunded fairly. The
table in http://www.fin.gov.bc.ca/tbs/tp/climate/Carbon_Tax_Report_and_Plan_Topic_Box.pdf shows that there are 17 refund categories
and that for this period, 2014/15, $ 1.2 billion will be collected. Of that
amount $ 194 million (16%) goes to the
poor and the low income people who don’t pay income tax. The two lowest
taxpayer groups receive $ 264 million (22%) of all money collected. The BC
system is used in the US and the UK as an example to show how easy it is to
implement and administer. Washington an Oregon will use the model. Those 2
states signed the Pacific Coast Collaborative, which will bring carbon pricing
to 53 million people with a GDP of $ 2.8 trillion
On the other hand Mr Harper could decide to follow the US
and introduce a revenue neutral carbon tax bill. This would encourage
discussion and catch the attention of many people who believe in climate change
but have no clue how the tax system works. He could explain that more than 1000
companies of over 60 countries demand a global carbon tax. These include the
world’s largest, third largest sixth largest and eleventh largest oil companies
as well as the world’s third largest airline. These companies know that they
can increase their profits once a global tax is in place.( See post 12). He could also explain that Preston Manning, an influential conservative has
changed his views. In 1997 as leader of the opposition he furiously criticized the
Liberal Government for signing the Kyoto agreement. Now he propagates a carbon tax
to set a “just price” for industrial emissions and thus fine tune a
woefully inadequate market(ish) economy.
Introduction of the carbon tax may also reduce the
pipeline protests. At the moment there are heated demonstrations resulting in
arrests of people trying to stop the additional Kinder Morgan pipeline. Part of the objection is based on
KM not publicizing how they will improve the pipeline following well known
problems in the industry as shown under points 12. 13 and 14 in post 1. Quite
some protesters cite the oil sands development as a reason to block pipelines.
They should realize that demand for oil will keep rising until a global carbon
tax has been established and that oil export is important to the economy. Due
to limited direct access to Asian markets Alberta has to sell its oil at low prices
which costs $ 15 billion per year. That means that until the pipelines or the
G7G railway have been completed Ottawa loses billions of tax dollars which
could have been used to help the provinces with their financial problems.
6) New References Some points in the above text are covered by
previous references on this blog.
http://fuelfix.com/blog/2014/03/04/natural-gas-vehicles-show-phenomenal-growth-in-china/
