Science Sunday: Climate Change Part 2: Politics and Policy

A couple weeks ago, I outlined the problems associated with carbon dioxide, methane, and other greenhouse gas emissions, and the global warming associated with them. In Part 2 of this series, I will discuss how politicians are approaching this issue, and likely policy solutions.

Scientists (and a few politicians) have recognized this as a problem for decades (it was first observed in 1824 but not widely accepted until the late 20th century.) International discussion on how to reduce greenhouse gas pollution began in 1992 and led to the Kyoto protocol. The US Senate failed to ratify the treaty; many claimed it placed too much burden on developed countries like the US and not enough on developing countries like China. Americans generally did not begin to take global warming seriously until the Hurricane Katrina disaster and the release of Al Gore's An Inconvenient Truth.

Leaders from all over the world will soon meet in Copenhagen to formulate a global plan to reduce emissions. Europe and much of the developing world are ready to respond aggressively to this impending crisis. The world's two biggest polluters, China and the US, are the main obstacles: China is unwilling to commit before the US, and the US Senate, which needs to ratify any resulting treaty, is still controlled by deniers and industry shills.

The solution settled on at Copenhagen will most likely revolve around a cap and trade system. Cap and trade has proven very successful at reducing pollution for other pollutants, including sulfur dioxide, nitrogen oxides, and volatile organic compounds. The beauty of a cap and trade system is its simplicity: it defines an acceptable amount of pollution (which decreases every year) and auctions off the rights to pollute that amount. In this way, polluters feel financial pressure to reduce their emissions: reducing the number of pollution credits they buy reduces their expenses. Rational businesses that are able to reduce their emissions will do so faster than businesses that need more time to adjust. In this way, emissions are reduced by the specified amount each year, and use of the market in allocating the reductions minimizes the resulting economic pain.

Other approaches have also been considered. The most popular of these has been the carbon tax. Its theoretical effect is the same as cap and trade: by making it more expensive to pollute, businesses and consumers are pressured to reduce their emissions. The problem with this is that it's very complicated: unlike a cap and trade system, where the cap is determined by policy, tax experts would have to predict how high tax rates need to be set to cause the desired reductions—not nearly as easy. Further, taxes are really vulnerable to political meddling—if we ever have a budget surplus again, the Bush of the future might see fit to blow it all in a giant carbon tax cut; further, who can imagine how many special carbon tax breaks would be awarded to well-connected industries. Cap and trade is not so vulnerable to tax-cutting politics.

Another approach which, due to its gross inappropriateness to this particular problem, has received little attention, is to require use of pollution-reducing technology. For example, cars are required to have catalytic converters to reduce tailpipe pollution. This will not be implemented for greenhouse gases because practically every machine in existence is responsible for carbon emissions. It would not be possible to devise a set of standards for them, let alone enforce them. It's much better to set a cap and let the market decide where the reductions will occur.

So, how would a cap and trade system actually work? Globally, it would probably consist of several markets—the EU could run one, China could have their own, the US could have their own, and groups of developing countries might establish joint markets of their own. Ideally, a central global market would distribute them, but I doubt the UN-phobic elements in the US would go for that. The US would have determined a schedule of economy-wide emissions reductions in advance, and each year, would auction off permits to emit CO2, such that the sum of all the permits would equal the amount of pollution allowed by the schedule for that year.

If companies adjust quickly and switch to efficient and clean technologies, demand for permits will be low, and so will the price. If they don't, the price will be higher, and they'll have to cough up a lot of money for it.

Who would actually buy the permits though? After all, anybody that uses energy or drives a car is responsible for emissions. Needless to say, a system where every single consumer and business would have to buy permits over a national market would rank somewhere between shitstorm and clusterfuck. Again, the system would keep things simple: only “upstream” polluters—the people who burn the coal or sell the gas—would buy emission permits. Their operating costs would increase as a result, and they'd consequently pass some of the cost on to “downstream” consumers. In this way, costs of reducing emissions are fairly distributed among consumers and businesses. You'll indirectly help pay for the carbon emissions associated with turning on your lights or driving your car.

So, Duke Energy buys a certain number of permits to run its coal-fired plants, and passes on some of the cost to consumers. Each consumer sees the higher cost of using electricity and uses less. However, Duke sees that its profit will keep taking a greater hit each year (since the cap is lowered each year) and decides to save money by building solar, wind, and wave energy plants. Since utilities are now willing to pay more to make clean energy (which they don't have to buy permits to produce), the amount of energy generated by those means skyrockets.

Imagine two factories under this system. Factory A sees that the times are changing and installs more efficient machines and puts solar panels on its roof. Factory B stubbornly continues business as usual. As a result, factory A will have lower operating costs and will be able to profitably sell its product for less than factory B. Consumers will subsequently buy more of factory A's products because they're cheaper. This provides yet another mechanism to encourage people to reduce emissions.

(Krugman has a nice Econ 101-style graph for those interested. Note the emphasis on "private benefit", as polluters externalize much of their costs.)

One part of this remains to be discussed, which I saved for last because of its dubiousness as a technology. If one could buy a permit to put carbon into the atmosphere, why could one not sell a permit, and thereby profit, from removing carbon from the atmosphere? How? Many people, mostly in the coal industry, think that CO2 can be injected into underground reservoirs, where it would be harmless. This is already done by oil companies, who inject CO2 into oil-bearing formations to push the oil out. However, little work has been done to see if the CO2 stays there afterward, or leaks to the surface.

Technology of this nature is referred to as Carbon Capture and Sequestration (CCS). CCS is mainly being considered for coal-fired power plants, where CO2 is emitted in high concentrations and therefore would be easy to capture and sequester. A coal plant that sequestered all of its emissions would essentially be carbon-free, though there are plenty of reasons to stop using coal anyway. If technology is developed that could remove CO2 from the atmosphere itself, which is difficult because of the low concentration of atmospheric CO2, that could be injected underground. Someone that did that would generate negative emissions, and could sell emission credits back to the market for profit.

Of course, the whole CCS idea depends on CO2 actually staying underground once injected. There are a few approaches being considered for this. One is to inject it into a porous sedimentary rock formation with an impermeable cap rock overlying it, trapping it underground. Another is to inject it into a formation of basalt or a coal seam that could chemically absorb the CO2. So far, no CCS technique has been demonstrated to work.

So, the politics of establishing a cap and trade system? Clean energy companies love it. Environmentalists love it. Fossil fuel companies and agribusinesses (which emit huge, and unnecessary, amounts of methane) hate it. Utilities are split between those that accept the need for change (like, to their credit, Duke Energy) and those that don't. US Chamber of Commerce hates it, but they're losing members left and right for their position on it.

In the US Congress, it's a complicated issue. Some otherwise liberal congresscritters from industrial, coal, and oil states fear the impact on their state's economy (and on their campaign contributions from polluting companies.) Conservatives generally hate it, regardless of where they're from. Progressives from non-energy-intensive areas generally support it.

Of the North Carolina delegation: Hagan, Butterfield, Etheridge, Price, Shuler (guess he's good for something), Watt, and Miller supported the House bill or support similar action in the Senate; Burr, Jones, Foxx, Coble, McIntyre, Kissell (wtf, Larry?), Myrick, and McHenry opposed/oppose it.

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News for the week:
Volvo will begin making fuel-efficient hybrid trucks (video only, sorry.) This is significant because trucks account for about 6% of US CO2 emissions. Truckers are very sensitive to fuel costs and adjust their practices to lower costs, so these hybrids should hopefully catch on and reduce emissions.

Laws dealing with beachfront property are a complicated mess. In Florida, the state added sand to a beach, extending land beyond existing property lines, and claimed the resulting beach for the public. All the private landowners are pissed off because they no longer have exclusive rights to the beach. An interesting legal dilemma. At least they aren't building groin and sandbag structures there.

Introduced Asian Carp may be moving toward Lake Michigan from the Mississippi River basin. This would probably cause an ecological catastrophe and cause native fish populations to crash. Government decisionmakers are considering closing a couple canals that could provide a path for the carp.

The Indonesian volcano Toba exploded 73,000 years ago in the biggest known eruption since our species has existed. A recent study has found strong evidence of a global environmental catastrophe associated with it that nearly snuffed out humanity.