My responses below, Oliver.
-----Original Message-----
From: Discussion list for the Crisis Forum
[mailto:[log in to unmask]] On Behalf Of jo abbess
Sent: 03 July 2008 21:28
To: [log in to unmask]
Subject: Re: A Carbon Cap is not Enough
Hi CRISIS FORUM,
Oliver Tickell says : "A carbon cap is not enough, in that although it can
in principle meet the core objective of cutting emissions it will do so (if
not backed up by complementary measures) in a painful and economically
inefficient way."
I need to add to that statement the mid-term truth : if cutting emissions is
all you seek to do in the short-term, at some point this endeavour will
putter and falter : because there are certain embedded Carbon Emissions that
cannot be wiped out just by waving a magic Carbon Permit wand and saying
"Begone, Foule Emission !"
Thus, a Carbon Cap cannot, in my mind, in principle or in fact meet the core
objective of cutting emissions beyond a certain point.
The British Columbia Carbon Tax ? Probably hit 5% of emissions.
The EU Emissions Trading Scheme ? Probably hit somewhere between 10% and 15%
of emissions.
Cap-and-Hansen ? Probably somewhere around 10% of emissions ? Don't know
precisely yet. Haven't looked at the projections.
Voluntary Carbon Emissions Reductions ? 20% of people cut 15% of their
emissions in the UK. Not a large number.
Higher Oil Prices ? Cut 5% of road fuel use in North American and UK.
>>> I think we agree here
Oliver Tickell says : "There are many low and negative cost ways of cutting
emissions which are not happening as a result of market failures. Regulation
is the best way of addressing this problem, as with energy standards on
goods from cars and computers to houses and power stations."
I would like to cheer him on, but ask him why it is that these things aren't
happening already if they are truly negative or zero cost ? Is it because
nobody is being paid to do them, rather than regulations not being in place
?
>>> It is because of market failures. It may be that a house builder want to
build as cheaply as possible, and the house buyer does not know about energy
conservation and in any case has no choice to buy a better insulated house.
It may be that the IT Dept in a company has no incentive to cut electricity
bills by buying more efficient servers, as the bill is paid out of another
budget. Thousands upon thousands of examples ...
Without vision, the people are lost. Without focus, the facilities managers
in office buildings leave the lights on and the air con running 24/7.
Oliver Tickell says : "We also need to recall the success of the Montreal
Protocol which has done more to cut GHG emissions than the Kyoto Protocol,
by accident."
I say that the Kyoto Protocol didn't stand a chocolate teapot's chance of
achieving any of the things promised, because the mechanisms in the KP were
all prone to Carbon Leakage, by all the obvious compromises and blocks. Not
only that, it was never seen as a way to cover all bases.
>>> Agreed. The KP is "cap and trade" without the cap, leaving only the
trade. So lots of trade but no emissions reductions.
It is not possible to push the Cap-and-Trade model to cover Carbon
Emissions, as our economies and markets are so highly, majorly dependent on
Carbon Energy, that money is in fact a proxy for Carbon, and you can't pay
twice for it...
>>> I think it is possible. This is what the EU has done with the EU ETS,
admittedly in a very cackhanded way, but it might be quite good by 2020 or
so ... (which is of course far too late). One important thing is that people
like us should not leave it to lobbyists from the power industry to write
the rules, we should be in there making sure we get well designed markets
that deliver the environmental goods in an efficient and equitable way. It
has not happened yet but that does not mean it can't happen.
Oliver Tickell says : "The Kyoto2 approach also wants to invest a large part
of the approx $1 trillion proceeds of the Permit Auction explicitly into
decarbonising the global economy, with a huge programme of investment into
energy research, renewables, etc, including expanding access to energy in
poor countries but entirely based on low-C technologies. Also energy
conservation so as to reduce (in some countries) and limit (in others)
energy demand."
I say I think there are a couple of big problems with this :-
1. Ownership
Who will own the Green Energy plant and installations and networks after
this investment is done ? It is important to know, as this will determine
the future stability of all economies and markets and societies.
>>> This is an important question which has no single answer. In some cases
the Fund might make equity investments in power companies, in others it
might hand over infrastructure to community organisations or local
government, in others it might set up public interest companies ... what I
certainly would not want is this money to be handed over to private
corporate interests (which is of course precisely what *has* happened under
eg EUETS with the grandfathering of Allowances).
2. Scale
The Carbon Auction, by simple logic, cannot raise the kind of funds that are
required to undertake full de-Carbonisation of the four kinds that are
necessary : reducing Energy Intensity in all processes, increasing Energy
Efficiency of all systems (not necessarily the same as the first), Energy
Conservation (again, not always the same as the other two) and development
of Renewable Energy Technologies.
>>> What is your "simple logic"? My own calculations suggest the opposite,
that a combination of investment from the funds raised, and the incentive
from the carbon price acting through markets, can indeed deliver the goods,
especially when combined with complementary regulatory systems (as
discussed).
The kind of investment that is required in the development of Renewable
Energy of a sufficient scale to take up the Carbon slack is effectively the
development of an entirely new infrastructure, and will therefore be a very
large scale costing.
>>> Yes, very large. But the Auction should raise funds on a very large
scale.
You can get away with cheap costings for the other measures, at least to
start with until you hit the S-Curve of efficiency gains (as known as the
law of diminishing returns), but Renewable Energies are going to cost big
time.
>>> In some areas you will get diminishing returns, in others increasing
returns as mass production makes technology cheaper. We have already seen
this with wind power and I am sure that with large scale deployment of solar
PV and CSP these technologies will become highly competitive.
It is this initial cost hurdle that cannot be paid for by a Carbon Auction
if the price of Carbon is managed to keep the current status quo in the
economy.
Think about it for a while : do private corporations do large scale
investment unless they absolutely have to ? Of course not. It costs big
money.
>>> This is why we need the powerfully coercive approaches advocated in K2 -
carbon price, large scale spending and regulation.
Therefore, if the price of Carbon is to be kept "sane" within the current
scheme, and in the powerdown of the Cap, therefore the cost of Renewables
development will still be relatively high.
>>> We shall see (I hope) otherwise.
jo.
+44 77 17 22 13 96
http://www.changecollege.org.uk
________________________________
Date: Thu, 3 Jul 2008 15:12:12 +0100
From: [log in to unmask]
Subject: Re: A Carbon Cap is not Enough
To: [log in to unmask]
I agree that a lot of what Jo says is right. A carbon cap is not enough, in
that although it can in principle meet the core objective of cutting
emissions it will do so (if not backed up by complementary measures) in a
painful and economically inefficient way. There are many low and negative
cost ways of cutting emissions which are not happening as a result of market
failures. Regulation is the best way of addressing this problem, as with
energy standards on goods from cars and computers to houses and power
stations.
Because the result is often emission reductions at negative cost, this is
actually anti-inflationary and people are better off as a result, giving
scope to take other measures which actually do cost us, at least in the
short term.
We also need to recall the success of the Montreal Protocol which has done
more to cut GHG emissions than the Kyoto Protocol, by accident.
Again, this underscores the need for regulation at a global level, but
backed up (as in the MP) by a Multilateral Fund to finance compliance in
poor countries.
This is a very efficient way of achieving our objective, viz the F-gas
fiasco which achieved cuts of CHF3 production at a cost of $4.7 billion
under the KP, when an MP approach would have done the same for $100m. Under
Kyoto2 an MF for this purpose would be financed out of auction proceeds.
The Kyoto2 approach also wants to invest a large part of the approx $1
trillion proceeds of the Permit Auction explicitly into decarbonising the
global economy, with a huge programme of investment into energy research,
renewables, etc, including expanding access to energy in poor countries but
entirely based on low-C technologies. Also energy conservation so as to
reduce (in some countries) and limit (in others) energy demand.
I hope this helps to dispel and misconceptions about Kyoto2, Oliver.
________________________________
From: Discussion list for the Crisis Forum
[mailto:[log in to unmask]] On Behalf Of Tom Barker
Sent: 03 July 2008 12:26
To:
[log in to unmask]
Subject: Re: A Carbon Cap is not
Enough
Jo is right.
We need a renewables revolution, but we need a cap too, and it must be on
carbon emissions to the environment, not on the price of carbon. Peak Oil
will not be enough on it's own because of carbon intensive alternatives to
oil. The wherewithal to solve numerous environmental problems has been with
us for decades, but the will is lacking because of short-term economic
considerations. That is why C&C has not been adopted already. The banks
are likely to jump at 'Kyoto2' because it will give them control whereby
they will be able to do what banks do best i.e.
ensure continued profits for the industrial elite at the expense of everyone
else. Big industry and their government lackeys will always try to dupe the
people. In the 1980s, Thatcher said something like, 'Science will have
solved all global environmental problems within five years'. They must be
rubbing their hands with glee that the environmental movement is now divided
over the issue thanks to ill thought out reviews such as Monbiot's.
Tom
At 10:56 03/07/2008, jo abbess wrote:
Hi Crisis Forum,
After some
considerable thought regarding the range of Cap-and-Something overarching
policy proposals being put forward at the current time (including Hansen's,
Merkel's and Tickell's), my conclusions are that a Carbon Cap is not enough,
that money cannot be used as a proxy for Carbon Control, that a de facto
Carbon Cap is already in the arena with Peak Oil, and that all Capping
schemes have the wrong focus.
It is my assertion that any Carbon Control policy that does not deliberately
and explicitly de-Carbonise the Economies and the Energy supply is bound to
fail in its ultimate objectives, even if it has a measure of success at the
start. This is because Carbon is so deeply embedded in all developed
Economies, that it must be pulled out by the roots or it will continue to
bring both Ecology and Economy to destruction by throttling.
One of the problems with these Cap-and-Something schemes is that, although
they start out with the best intentions, the premise of capping Carbon, at
the point of designing an implementation plan, they end up proposing using a
mechanism to effect this based on money.
It then
becomes a finance-driven operation, instead of a de-Carbonisation-driven
operation.
Non-Carbon sources of Energy are by their nature less Energy intensive and
therefore we will have to accept lower Energy flow rates. This means that we
must reduce our dependence on Energy, not only reduce our dependency on
Carbon.
If we do not explicitly regulate to ramp up Renewable sources of Energy,
there will come a point where the Carbon Capping cannot be enforced, because
there is no non-Carbon Energy capacity to replace it.
It is true, that if we can somehow enforce a price on Carbon, the future
projections are that the profit to be made from Carbon Energy will be zero,
so that investment in Renewable Energy will look like a good wealth-creation
option. However, it will be argued internationally, that even though Carbon
Energy no longer has any profit-value, it is still necessary to support
Economic function, and so Carbon will continue to be used, perhaps managed
by some quangos.
We desperately need to take the Carbon out of every part of the Economy,
every part of manufacture, every part of agriculture, every part of
construction, transport, heating, lighting, power...
I think that if we rely on voluntarism to de-Carbonise, or trend-following
after setting a Carbon Price by Cap or otherwise, we will not achieve the
de-Carbonisation we need.
Also, since there is already a de
facto Carbon Cap in operation due to Peak Oil (in fact, Peak Energy), why
should the suppliers of Fossil Fuels into the Economy be compensated for
capping output ? Output is already being capped by Peak Energy...
I
know that the Energy Majors will be interested in Tickell's scheme, as a way
of having a licence to continue clinging to the crag face kicking out dirt
on the rest of us below. Tickell's proposal is a licence to continue pumping
Carbon into the Economy.
Yes, everyone has something invested in the profit-making ability of the
Energy Majors, and so everyone has an interest in them surviving. However,
the Law of Increasing Profit Margins mean that with such a licence to
continue profiting from Carbon, while ramping up non-Carbon Energy
investment, the poor will still be paying for the de-Carbonisation through
their Energy bills.
Why not just abandon such a complex scheme as Tickell's and go straight for
the jugular ? It costs hard cash to develop Renewable Energy infrastructure
and plant. The companies are unwilling to cut their profits in order to do
that (they are obliged to carry on making as high a profit as they can to
please their shareholders). The Governments will have to manage the
financing or incentivising the development of Renewables. That means one of
two options that impact Citizen Consumers : Green Energy Tax or higher
bills. Yer pays yer money and yer takes yer choice.
jo.
+44
77 17 22 13 96
http://www.changecollege.org.uk
Date: Thu, 3
Jul 2008 10:21:10 +0100
From: [log in to unmask]
Subject: Re: K2: Monbiot
in today's Guardian
To: [log in to unmask]
Aubrey, you seem
to be making some assumptions here. Central Banks are well qualified to run
the auction as they have ample experience of doing this kind of thing with
the sale of Treasury Bonds, Bills, etc. This does not mean that they will
own or control the funds, any more than if you sell an item on ebay, that
ebay owns or controls the funds you receive. The sovereign body would be the
UNFCCC. Of course it does not have to be central banks that run the auction.
Maybe ebay would do a better job? If that's what is decided, no problem as
far as I am concerned. This is a suggestion only, and if wiser heads than
mine come up with a better idea, no problem.
Oliver Tickell, K2.
From:
Discussion list for the Crisis Forum [
mailto:[log in to unmask]] On Behalf Of AUBREY MEYER
Sent: 02
July 2008 12:05
To: [log in to unmask]
Subject: Re: K2: Monbiot
in today's Guardian
So K-2's answer on future 'agency' for fossil fuel production permit-auction
is . . . . . . . "a coalition of the world's central banks" . . . . . buy
that, and the UN has clearly had its day [which may be the case].
No wonder K-2 were reluctant to answer this particular question.
Where's the constituency of support?
Are
nations and their peoples just going to say that's OK [we're not really the
affected consituency and we weren't really interested in all this climate
stuff anyway].
Are Texan, Angolan, Indian, Chinese . . . . 'a few thousand oil/coal/gas
corporations' (~) . . . . going to accept regulation in a
Government/UN-free world by a coalition of the world's central banks?/! [!!]
Are Exxon BP etc http://www.oilmajors.com/ just going to decamp from Iraq
the Gulf the Arctic [plus all the equivalent in Coal from the world's
coalfields] because they've finally succeeded in deconstructing the UNFCCC.
Is there any evidence that the banks are willing to co-operate and accept
this role?
Baron von Munchhausen fell off
his horse, when the horse was left hanging from the Kremlin Spires in
spring.
This argument for the banks to officially run the global decarbonisation
needed is like falling off my-little-pony in the middle of charge of the
light brigade.
~~~~~~~~~~~~~~~~~~~~~
"Tickell proposes
setting a global limit for carbon pollution then selling permits to pollute
to companies extracting or refining fossil fuels. This has the advantage of
regulating a few thousand corporations - running oil refineries, coal
washeries, gas pipelines and cement and fertiliser works for example -
rather than a few billion citizens. These firms would buy their permits in a
global auction, run by a coalition of the world's central banks."
etc
Oliver Tickell
wrote:
See http://www.monbiot.com/archives/2008/07/01/green-lifeline/
George Monbiot previews Kyoto2 (the book) in The Guardian and concludes that
the K2 proposals "could represent a classic Keynesian solution to
economic
crisis. The $1, $2 or
even $5 trillion the system would cost is used to
kick-start a green industrial revolution, a new New Deal not that different
from the original one (whose most successful component was Roosevelt's
Civilian Conservation Corps,
which protected forests and farmland)."
Aubrey
Meyer
GCI
37 Ravenswood Road
LONDON E17 9LY
Ph 0208 520 4742
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