Carbon Taxes on the Move: A U.S. Step Back and Canadian Leaps Forward

Up this morning atop MIT Technology Review:

The victory of climate change-denying Republican candidate Donald Trump was one of two big setbacks for U.S. climate policy earlier this month. The other was the resounding defeat of Washington State’s Initiative 732, which sought to prove that using fees on carbon emissions to cut existing taxes could provide bipartisan appeal for what economists consider to be the most efficient mechanism to cut greenhouse gas emissions: carbon taxes.

Washington State rejected the idea of a carbon tax by 59 percent to 41. In sharp contrast, just across the world’s longest border, carbon taxes are attracting politically diverse support. Four-fifths of Canadians will live in provinces with such taxes in 2017, and in 2018 all Canadians could be paying a carbon tax…

For the story see “Canada Moves Ahead on Carbon Taxes, Leaving the U.S. Behind

A few caveats and details left on the cutting room floor:

  • The carbon trading scheme operated by California, Quebec and Ontario has a rising floor price for credits, currently set at roughly C$15, that makes it act like a carbon tax at times (like now) of soft demand for tradable credits.
  • These states and provinces are — like carbon tax innovator British Columbia — coupling their carbon pricing schemes with regulations such as restrictions on coal-fired power that drive more reductions and do so at lower political risk. For more on this (and more) see my carbon pricing explainer in Ensia from this summer.
  • Canada’s promised emissions reduction for 2030 fails, like most national commitments made at last year’s Paris climate talks, to put global emissions on a trajectory to meet the Paris Agreement’s fundamental goal: holding global warming to well below 2 degrees C.
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Carbon Polluters Fund XPrize to Repurpose Their Emissions

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Unique plant in San Antonio converts CO2 to minerals and chemicals. Photo: Skyonic

XPRIZE—the organization behind grand technology challenges such as the race to space won in 2004 by SpaceShipOne and current contests to land a Lunar rover and a Star Trek-style medical tricorder—unveiled a competition today that tackles a more mundane yet critical challenge: transforming carbon dioxide emissions from power plants into saleable products to help slow or reverse climate change. The competition’s $20 million kitty has been raised from major carbon emitters: a coalition of oil and gas producers producing high-carbon oil from Alberta’s oilsands, and New Jersey-based electric utility NRG Energy. Continue reading

How Canada Should Return Obama’s Oil Pipeline Punt

Late last week President Barack Obama deferred consideration of the Keystone XL oil pipeline, designed to ship Alberta petroleum to the Gulf Coast, until after next year’s U.S. elections. Obama’s move immediately sparked vows in Canada to redirect crude exports to Asian markets less angst-ridden by the environmental impacts associated with tapping Alberta’s tough, tarry petroleum. A smarter strategy would be to reduce those impacts, starting with the black mark that brought Keystone XL to national attention: oil sands crude’s bloated carbon footprint. Continue reading

Low-Carbon Fuel Rules

California is about to add to its record of leadership on clean energy policy with its innovative Low-Carbon Fuel Standard that goes into effect January 1. We highlight the program and its likely impact on alternative energy sources for transportation today at MIT TechReview.com in “Low-Carbon Fuel Rules”. As the tagline states, “California is about to implement a standard to boost cleaner fuels and punish the rest.”

One point is that California’s LCFS may not deliver the knock-out blow to Canada’s carbon-intensive tarsands that many climate change activists continue to hope for. Gasoline and diesel fuel refined from the tarsands’ asphaltine bitumen may escape being banned if its producers emphasize energy efficiency according to UC Davis’ Daniel Sperling.

Another observation I’ll be following up is the cohesiveness of the biotech industry. In the face of regulatory innovations such as the LCFS that would disadvantage corn ethanol production and advantage cash-hungry innovators developing more carbon-smart advanced biofuels, the latter seem to be quietly defending the status quo.

Then there’s the California standard’s nuanced approach to diesel, which is not addressed in the TechReview piece but which Carbon-Nation spotlighted last summer. The short take is that the LCFS mandates separate and equal reductions in the carbon footprint of the gasoline and diesel fuels sold in California. That approach eliminates the possibility that diesel use will be incentivized as an alternative to gasoline. The reason? California regulators believe that even today’s ‘clean diesels’ release more than their share of soot, which is a major cause of premature mortality and also a potential contributor to climate change in its own right.

We explore the climate challenge and opportunity posed by soot in the September issue of Discover magazine. See “The Easiest Way to Fight Global Warming?”

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Canadian ‘Stimulus’ Targets Carbon Capture & Nuclear

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Canada’s Conservative government unveiled a budget yesterday with an energy balance distinctly different from that contemplated by President Obama in his economic stimulus package. “Green Causes Left Out of Budget” is how the Toronto-based National Post headlined its coverage of the Canadian budget proposed yesterday. Toronto Star columnist Chantal Hebert writes that environmentalists may be the only “constituency, friendly or hostile to the Conservatives, that will not get a piece of the multibillion-dollar stimulus package.”

Whereas Obama’s $819-billion stimulus package proposes to give renewables a big boost, Prime Minister Stephen Harper’s C$33-billion (US$27-billion) ‘Economic Action Plan’ would leave unchanged Canada’s EcoEnergy support program for renewable energy. Canadian Wind Energy Association president Robert Hornung predicts the program may run out of cash before the end of the coming fiscal year, blunting the industry’s ability to draw investment amidst a superhot U.S. market:

“Our ability to compete with the United States for investment in wind energy projects and manufacturing opportunities will decline as a result of this budget. At a time when the United States has made measures to support renewable energy deployment a key component of its plans to stimulate the US economy, Canada is moving in the opposite direction.”

Continue reading