Is there another way?

My trip to California last month raised in my mind once more the Gordian Knot of our times: how to incentivize the marketplace to respond to the climate crisis.

The European Union, Australia, and California have all implemented some version of a cap-and-trade program in an attempt to kickstart market forces in the service of carbon pollution reduction; and way back in 2009 Congress briefly considered national legislation to do the same. I’m not an expert, and I won’t go into the details, but I can say that cap-and-trade was sold to the public as a preferable alternative to what has become a modern-day bogeyman: unilateral government regulation. If the voluntary free market can’t lower greenhouse gas emissions, it’s argued, then sooner or later they’ll be reduced involuntarily. In fact, this latter approach is under consideration by the Obama administration, which was given the authority to regulate greenhouse gas emissions under the Clean Air Act by the U.S. Supreme Court. Will Obama, or won’t Obama? No one knows for sure.

Whatever the administration decides to do, I’m certain it won’t be enough, especially if the President approves the Keystone pipeline. Even with mild regulation and modest targets, American greenhouse gas emissions won’t decline meaningfully – nor are such actions likely to inspire other governments. The cap-and-trade approach, however, isn’t doing enough either. This week scientists announced that carbon dioxide levels rose by 2.67 parts per million in 2012 to just under 395 ppm – the second highest annual rise since Dr. Keeling began keeping his famous record in the late 1950s. From 2000 to 2010, the yearly rise averaged just under 2 ppm, and in the 1960s it rose by less than 1 ppm per year. In other words, the rate of rise is speeding up. Whatever we’re doing to slow climate change, it isn’t working.

Of course, this is exactly what critics said would happen, including NASA’s James Hansen, the nation’s top climatologist. Hansen thinks cap-and-trade is a shell game designed largely to enrich middlemen at the expense of ordinary citizens without the possibility of meaningful reductions in emissions. During a public appearance last December at the Commonwealth Club in California, he called the state’s program “half-assed.” While praising the state’s leaders for understanding the danger posed by the climate crisis, he admitted he was “very disappointed when they choose a half-baked system like cap-and-trade with offsets.” Offsets allow industry to meet emissions “caps” by purchasing credits on the market. “That’s been tried in Europe and it didn’t do much,” Hansen told the audience. “What you want is a system which is very simple.”

Does such a system exist? Yes, in theory. Dr. Hansen certainly thinks so. He has been pushing a third option that features (1) a direct tax on the sources of carbon pollution; (2) a slow but steady rise in this tax over time; and (3) a redistribution of the revenue raised by this tax evenly among every adult American. He argues that a rising tax would force markets to respond with innovation, and higher prices for fossil fuels, as well as the cash citizens could potentially put in their pockets from an annual dividend, would incentivize people to reduce their use of dirty energy or seek clean alternatives. It’s an intriguing idea, and Dr. Hansen has been pushing it for a while now (see his testimony to Congress in 2009: However, I always assumed it would never see the light of day in Washington despite its obvious merits (obvious to me, anyway).

Then came the news in mid-February that Vermont Senator Bernie Sanders and California Senator Barbara Boxer had introduced legislation to do something similar to what Dr. Hansen had been advocating. Called the Climate Protection Act, the bill would impose a carbon fee of $20 a ton on carbon, rising by 5% per year for ten years, and apply to thousands of oil refineries, coal mines, ports, and other sources of hydrocarbons. Meanwhile, 60% of the revenue raised by the fee would be returned to all U.S. residents ala the Alaskan model that pays a dividend to its citizens from oil royalties gathered by the government (a big part of the other 40% would disappear into the black hole of trying to “pay down the national debt,” alas). The bill has other notable goals – and some shortcomings, according to carbon tax advocates. Check it out for yourself:

The chances of this bill passing in Congress, naturally, are nil. Republicans won’t give it a second thought, but most Democrats won’t consider it either. Cap-and-trade is as far as most of them are willing to go, despite the mounting evidence it won’t get the job done. Still, at least a high-profile third choice has been proposed – and that’s a hopeful sign. There is another way.

Here are Senators Sanders and Boxer introducing their bill:


Unfortunately, the hopefulness embodied in the Sanders-Boxer bill was largely dissipated last week when the State Department issued a draft environmental impact statement that said the Keystone pipeline would have minimal impact on climate change. This isn’t what scientists have said, and it appears to contradict President Obama’s pledge in his State of the Union address to take action. “I urge this Congress to pursue a bipartisan, market-based solution to climate change,” he said. “But if Congress won’t act soon to protect future generations, I will. I will direct my cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”

Squaring these words with approval of Keystone isn’t possible, I think. But I’m no expert. Instead, I’ll turn someone who is: Dr. Hansen. Here is an op-ed that he authored last summer on the danger poised by Canada’s tar sands. It explains our predicament far better than I can. It’s worth reading again.

 Game Over / James Hansen

“Global warming isn’t a prediction. It is happening. That is why I was so troubled to read a recent interview with President Obama in Rolling Stone in which he said that Canada would exploit the oil in its vast tar sands reserves “regardless of what we do.”

If Canada proceeds, and we do nothing, it will be game over for the climate.

Canada’s tar sands, deposits of sand saturated with bitumen, contain twice the amount of carbon dioxide emitted by global oil use in our entire history. If we were to fully exploit this new oil source, and continue to burn our conventional oil, gas and coal supplies, concentrations of carbon dioxide in the atmosphere eventually would reach levels higher than in the Pliocene era, more than 2.5 million years ago, when sea level was at least 50 feet higher than it is now. That level of heat-trapping gases would assure that the disintegration of the ice sheets would accelerate out of control. Sea levels would rise and destroy coastal cities. Global temperatures would become intolerable. Twenty to 50 percent of the planet’s species would be driven to extinction. Civilization would be at risk.

That is the long-term outlook. But near-term, things will be bad enough. Over the next several decades, the Western United States and the semi-arid region from North Dakota to Texas will develop semi-permanent drought, with rain, when it does come, occurring in extreme events with heavy flooding. Economic losses would be incalculable. More and more of the Midwest would be a dust bowl. California’s Central Valley could no longer be irrigated. Food prices would rise to unprecedented levels.

If this sounds apocalyptic, it is. This is why we need to reduce emissions dramatically. President Obama has the power not only to deny tar sands oil additional access to Gulf Coast refining, which Canada desires in part for export markets, but also to encourage economic incentives to leave tar sands and other dirty fuels in the ground.

The global warming signal is now louder than the noise of random weather, as I predicted would happen by now in the journal Science in 1981. Extremely hot summers have increased noticeably. We can say with high confidence that the recent heat waves in Texas and Russia, and the one in Europe in 2003, which killed tens of thousands, were not natural events — they were caused by human-induced climate change.

We have known since the 1800s that carbon dioxide traps heat in the atmosphere. The right amount keeps the climate conducive to human life. But add too much, as we are doing now, and temperatures will inevitably rise too high. This is not the result of natural variability, as some argue. The earth is currently in the part of its long-term orbit cycle where temperatures would normally be cooling. But they are rising — and it’s because we are forcing them higher with fossil fuel emissions.

The concentration of carbon dioxide in the atmosphere has risen from 280 parts per million to 393 p.p.m. over the last 150 years. The tar sands contain enough carbon — 240 gigatons — to add 120 p.p.m. Tar shale, a close cousin of tar sands found mainly in the United States, contains at least an additional 300 gigatons of carbon. If we turn to these dirtiest of fuels, instead of finding ways to phase out our addiction to fossil fuels, there is no hope of keeping carbon concentrations below 500 p.p.m. — a level that would, as earth’s history shows, leave our children a climate system that is out of their control.

We need to start reducing emissions significantly, not create new ways to increase them. We should impose a gradually rising carbon fee, collected from fossil fuel companies, then distribute 100 percent of the collections to all Americans on a per-capita basis every month. The government would not get a penny. This market-based approach would stimulate innovation, jobs and economic growth, avoid enlarging government or having it pick winners or losers. Most Americans, except the heaviest energy users, would get more back than they paid in increased prices. Not only that, the reduction in oil use resulting from the carbon price would be nearly six times as great as the oil supply from the proposed pipeline from Canada, rendering the pipeline superfluous, according to economic models driven by a slowly rising carbon price.

But instead of placing a rising fee on carbon emissions to make fossil fuels pay their true costs, leveling the energy playing field, the world’s governments are forcing the public to subsidize fossil fuels with hundreds of billions of dollars per year. This encourages a frantic stampede to extract every fossil fuel through mountaintop removal, longwall mining, hydraulic fracturing, tar sands and tar shale extraction, and deep ocean and Arctic drilling.

President Obama speaks of a “planet in peril,” but he does not provide the leadership needed to change the world’s course. Our leaders must speak candidly to the public — which yearns for open, honest discussion — explaining that our continued technological leadership and economic well-being demand a reasoned change of our energy course. History has shown that the American public can rise to the challenge, but leadership is essential.

The science of the situation is clear — it’s time for the politics to follow. This is a plan that can unify conservatives and liberals, environmentalists and business. Every major national science academy in the world has reported that global warming is real, caused mostly by humans, and requires urgent action. The cost of acting goes far higher the longer we wait — we can’t wait any longer to avoid the worst and be judged immoral by coming generations.”

Here is a photo of tar sand:

tar sand