A mini-Kyoto Accord in New England gets agreed to.
At the heart of the Regional Greenhouse Gas Initiative (RGGI) is a "cap and trade" program that sets a fixed limit on CO2 emissions. The right to emit the gas then becomes a tradable commodity on Jan 1, 2009. Companies that produce less carbon dioxide can sell their credits to others, giving an economic incentive to cut emissions and sell, rather than buy, credits.
The RGGI caps regional CO2 emissions at 121.3 million short tons through 2014, then cuts them to 10 percent below that level by 2018. Some say the pact will cost households an additional $3 to $24 per year on their electric bills, although the RGGI governors expect new technology and energy efficiency to reduce rates.
As I've previously argued, for electric power our three choices are coal at its current level of dirtiness, nuclear, or higher prices. The New England states (which already have higher prices) have opted for still higher prices. Keep in mind that New England is more densely populated than most of the US. So in order to achieve the same level of air quality as the plains or Rockies states New England has to impose tougher and more expensive emissions regulations.
Though in this case the New England states are pursuing emissions reduction for a gas that mainly affects temperature (and in a way that would make winters less severe). The New Englanders would benefit more by incurring the same level of additional costs to cut particulate, mercury, and other pollutants that have more direct health impacts. While a CO2 reduction will reduce some other pollutants as well the same amount of money could reduce those other pollutants much more if CO2 reduction is not part of the equation.
As for increased energy efficiency: The New England governors would need to increase electric bill costs by much more than $24 per year to get people to install a lot of more energy efficient devices. But the best way for New England to reduce energy usage would be to spend on reducing the use of fossil fuels for heating. Better insulation and solar heating would provide the best bang for the buck.
We ought to solve the potential CO2 emissions problem in the longer term by obsolescing fossil fuels. If one is to believe Ray Kurzweil (see The Singularity Is Near: When Humans Transcend Biology) then by the 2020s artificial intelligence will solve the nanotech problems and solar power will provide us with all the power we need. If Ray is right (and he might well be) then we ought to focus environmental efforts on improving the air quality for breathability so we can avoid illness in the shorter run. Then let rapidly advancing technology obsolesce oil long before the temperates rise by much.
If Ray is right then the New Englanders have their environmental priorities wrong.
By Randall Parker at 2005 December 26 11:03 PM Policy Energy | TrackBackRP says: "But the best way for New England to reduce energy usage would be to spend on reducing the use of fossil fuels for heating. Better insulation and solar heating would provide the best bang for the buck.
We ought to solve the potential CO2 emissions problem in the longer term by obsolescing fossil fuels."
i think that's what the plan does... by setting up a market to assign a cost to pollution (that is currently shared by society) it makes it easier for alternative technologies to compete. from the local power companies (who have changed their tune over the last several years about decommisioning connecticut's nuke plants) to individual entrepreneurs to homeowners, people will each find their own solutions on both the demand and supply side.
something with global impacts (i.e. co2) should be handled globally.
of course new england benefits quite a bit from the plentiful warm waters currents that global warming could screw-up.
I'm curious as to why more people don't take home heating insulation more seriously in New England. I live in Boston, and you can just feel money flowing from your wallet if there is a source of cold air, like an open door.
I know of a company here that does some good work with IR cameras to automatically detect the biggest source of inefficiency.
Perhaps a better initiative would be a tax break for investing in greater efficiency where the need is greatest. For instance, if a third party determines that I can save X% or Y units of gas, a break would kick-in if the steps were taken to increase insulation.
Building codes have required highly insulated, very tight homes since 1975. Plus there has been a program in place to pay for insulating poor people's homes for 25 years.
Governments and industry have conducted many advertising programs in the last 30 years calling on people to insulate their homes. It is ingrained in the psyche of every American.
So the eco-industry is engaging in wishful thinking if they believe that insulating homes will solve the energy shortage they caused. Only a very small percentage of our housing stock could still be uninsulated.
One additional method that the New England states can use to reduce their CO2 emissions would be to outsource all their manufacturing industry to other states that are not part of the CO2 reduction scheme or to China. They can then go with being an entirely service-based economy.
I used to be a global greenhouse skeptic. Recently, however, I have been changing my mind. You see, I make my money in international business with East Asia. I work to outsource manufacturing from the U.S. to places like China and Malaysia. I also do import/export as well. Since I have lived and worked in Asia for 10 years, I have many Asian contacts and most other Americans do not.
If these kinds of CO2 emission limitation schemes become popular through out the U.S., it will drive up the cost of energy and, thus, make outsourcing of manufacturing economically more attractive. This, in turn, is good business opportunity for Moi. So, I have decided to let the greenhouse people do their thing and I, in turn, can derive benefit from thier work to help increase my business and, in turn, put more money in my pocket. This can only be good for me and I will definitely make the most of it.
Besides, why do we need energy-intensive industry in the U.S. anyways? We are mostly a service-oriented economy as it is. Greenhouse regulation aggreements will help complete the transformation of the U.S. economy to a service-oriented one, which is perfectly fine with me. I make most of my money off of the Asian business, not the U.S. business. Hence, I have less and less vested interest in the U.S. economy. I am currently working a job that is likely to have me living and working somewhere in Asia before the end of 2007.
Car manufacturing will become an Asian business once Ford and GM are gone. 70-80% of the parts and subassmeblies for Boeing's 777 and the soon to be released 787 are made in Japan. The next step would be to outsource the assembly of the airliners themselves to China or other Asian country. This will probably occur in the next 10 years. Steel is largely a Chinese industry, although Korea and Japan still make lots of it. Ditto for Aluminum and semiconductors. Need I tell you that FPD (flat panel displays) is an exclusively Asian industry (fabs, OEMs, all of it)?
Despite the recent fraud in stem cell research in korea, stem-cell based regenerative medicine and, in deed, biotechnology in general is moving fast forward through out Asia. You see, they do not have the sentimental BS (both left and right wing) that holds up research in this country. They do not have the tree-huggers to anti-abortion people like we do here. One Asian person told me that he thinks that Western people are emotional "immature". I concur.
The reason our energy use is growing is not that we are inefficient users of energy. Our increasing energy use is due to the US being a fast growing nation that has reached a population of 300 million. If New England has any success with their CO2 program, it will be due to the continuous move of their people and companies to the south.
We have two choices. Stop all immigration or increase the energy supply.
"Besides, why do we need energy-intensive industry in the U.S. anyways?"
Have you ever heard of a computer server?
I'm told Google's data centers use the same amount of electricity as a city (100MW).
Were the senators from the northeast to shut their ever-open, global-warming mouths, CO2 emissions would drop at least 10%.
Jake,
Stop immigration AND reduce the indigenous birth rate. We could even adopt China's one-child policy.
Ivan,
I forgot about data centers. Yes, they do consume lots of electricity. In any case, Google, Yahoo, and the others could certainly relocate their data centers to any convenient East Asian country. Since India is exempt from emission controls under Kyoto and other treaties and they have lots of English-speaking computer IT graduates, India would be the logical choice.
Any industry or process that consumes significant energy can be outsourced to Asia.
PacRim Jim,
Yes, I am nasty and full of invective when it comes to the greenhouse thing. I think it is all a crock of BS. Its one of the few issues that I see eye to eye with the Baby Bush on. However, if Americans insist on believing in this scam and choose to sacrifice their economic prosperity on this scam, who am I to argue with them? I can just go back to Asia (I used to live there before) and, better yet, help them eviscerate the U.S. economy by helping to outsource everything in sight. In any case, there is NO WAY that I am sacrificing MY economic prosperity to this effing scam. I'll find a way to profit from it, even if it involves the sacrefice of everything else here.
This ought to be funny ( if you don't live there) to watch. The New England ISO ( they
operate the electric grid) has been telling New Englanders they don't have enough local
power to meet their needs. While econuts in MA. have been trying to shut down a very old
and dirty coal fired plant the ISO says impossible. The power is needed to keep your lights
and furnaces running. New England has been getting by on the generosity of other regions
with surplus power, Canada in particular, but for how much longer?
It maybe that Canadian imports will become a thing of the past as Ontario has decided to go
for a coal free future starting immediately. Toss in the fact that the econuts have even
tried to block the building of undersea power line from NY to Conn. to augment delivery
options, that the swells at Martha's Vineyard don't want offshore windmills and building a
new nuclear power plant in New England is about as likely as Ted Kennedy telling the truth
about what happened at Chappaquiddick and one can imagine Third World conditions in New
England if there is a prolonged cold snap in the coming winters.
As someone has mentioned maybe the solution is the deindustrialize the region. Boston was a
patriotic little town back in the 18th and 19th century. Maybe it will be again as the
men of that town set sail ( literally) in their wooden ships to hunt whales once more for
oil to light their lanterns.
Hugh,
As a proud Baystater, I think this is cheap invective. After I rub the sticks together to start a fire and light the candles, I shall post a better rejoinder.
New England's intitiave shows how well educated individuals can formulate policies that do not address the desired end and raise the cost of living. I am confused why these policy makers fail to appreciate the simple notion of opportunity costs. How can these people not understand the larger issue confronting them. That is, the are charged with a finite set of resources and a range of issues to address.
Governor Mitt Romney backed away from the NE CO2 compact at the last minute. Massachusetts, which all good Repubs love to hate, has no skin in that particular game so for all of you who want to bash the Commonwealth please get a clue.
"So the eco-industry is engaging in wishful thinking if they believe that insulating homes will solve the energy shortage they caused. Only a very small percentage of our housing stock could still be uninsulated."
Yo, Jake, got any numbers on that or are you just making sh*t up? I'd guess the latter unless you can provide some numbers.
Let me give you a real world example of recent energy conservation practice. My apartment was rebuilt over a decade ago. This 1920s era double triple decker in Cambridge, MA was insulated and new windows were installed. The problem is that the wall cavity is about half of what current code requires in new construction, the window installers screwed up the basically new storm windows when they put in the new windows so the insulative value of the storms is virtually nil, and the landlord decided to install windows with about a 1.5 R value in our apartments where the tenants pay they own heat rather than the 2.4 R windows they installed in the apartments a few blocks away where the landlord pays for heat. Lotsa room for improvement. One of the things they did in my apartment was remove the demand hot water heater I had installed and replaced it with a hot water heater in the furnace downstairs in the locked basement to which no tenant has access. That's a loss of fuel efficiency on my hot water of about 30% or so.
BTW, I took my bedroom off-grid for less than $160 with a couple of solar/LED lights and a solar/dynamo radio that is modified to charge AA batteries as well. I don't use space heating in that room and my alarm clock is an electronic pocketwatch whose battery I can probably recharge in yet another little solar device that I have. The day I installed my system, the electricity went out for three to five hours. How many black outs will it take before I reach payback? What's the marginal advantage of having light and a radio while your neighborhood is still dark?
gmoke is correct about the lack of incentive for many rental unit operators to properly insulate dwellings.
Also, I'm skeptical about the strictness of modern building codes.
Here's what I propose for new construction: Have building codes with ratings levels for owner-occupied dwellings. Make those ratings levels part of the report on each house to be disclosed when the house is sold. People with high efficiency rated houses could include the rating in advertisements when the houses are sold. Insurance companies evaluating mortgage applications could use the ratings when calculating total cost of ownership and whether buyers can afford monthly mortgage payments.
Also, for rental units require much higher energy efficiency.
As for economic impacts and migration of industries and peoples: Yes, any attempts to raise energy prices locally will move industries to places with less restrictive regulations on energy usage. Hence European and British industry lobby against Kyoto enforcement. Also, restrictions on Liquified Natural Gas terminal construction in the US push chemical, fertilizer, and other industries abroad. The market compensates.
If Ray is right then the New Englanders have their environmental priorities wrong.
Right... They should be funding the C-Prize.
http://www.geocities.com/jim_bowery/cprize.html
In other words, I think Kurzweil's estimate of 20 years may be too conservative if the C-Prize is funded. It could be shortened to 10.
PS: I don't know how the AI/human hybrid intelligences solve the clean energy problem -- maybe they will "solve the nanotech problems" whatever they are. Maybe they will create cheap solar energy collection technology. What seems obvious is that advancing super-human intellectual ability to cover a more comprehensive range should be the top priority.
Err James. You really ought to know that developing real AI without working out the logic of AI safety is species suicide. Read what you need to here www.singinst.org
With all due respect to the nanotech/singularity folks -- it seems rather silly to worry about what some form of artificial life is going to do to us when there are billions of real live human beings already self-replicating -- exponentiating -- and doing stuff to us right now.
The rental problem gmoke describes is a real one. Either the tenant pays for utilities, in which case the landlord puts in whatever is the cheapest capital investment, or the landlord pays for utilities, in which case the tenant feels no need to conserve. In neither case do we get the proper feedback (though my guess is that the former comes closer).
It might make for an interesting study to see what would happen if each payed half - the landlord would have some encouragement to keep the apartment somewhat efficient, and the renter would have some encouragement to conserve. Neither would see the complete benefit, so some cost benefit calculations might turn out less than optimal, but it would prevent the gross ones.
To the point of trading, I never quite got the logic behind giving credits to polluters, and letting them trade for money. It always made more sense to me that the state should auction the credits off, perhaps crediting the resulting cash to people's electric bills. Why should we give polluters credits worth real money, just because they pollute? No matter which of these strategies is taken, Kurt and Hugh's point holds - this kind of thing does encourage industry to pull up stake, and encourages energy import, both of which result in loss of efficiency (and thus more pollution). Whether they prevent pollution universally is anyone's guess.
Excellent post Kurt, I couldn't agree with you more. Limiting energy production and manufacturing is weakness, and the western world in general is trying to show it as strength. Both right and left politicians.
My family is originally from Scotland and Scotland in 1950 used to produce 15% of the world's ships. Now they dont' make ships in Scotland, but Japan makes 35% of the world's ships, Korea 33%, and China at 15-18% and rising very rapidly.
Few people know how much of the boeing is made in Japan, and we can't even use the tired excuse of low third world labor costs.
Kurt just think America can follow the path the ceo's want.. no product design, no manufacturing, just marketting and accounting tricks to make money.
Maggie good point.. new englanders like Europeans and very well educated and still making elementary mistakes. I believe most of them are well intentioned, and honestly want to help save the environment and husband resources.
Basically this is the Club of Rome 'limits to growth' ideology playing out. The one the baby boomers grew up learning.
Yep, yep, yep! Club of Rome: Grade 9 History
Mr. Stewart's class. I remember that one! Population growth, mass starvation, murder for a bowl of rice and the whole bit. All that stuff is going to happen by about a half decade ago.