This is the fourth discussion post for my Energy Science and Technology course. The question I was responding to was “What should the U.S. do about global coal consumption?” I included my professor’s feedback at the end so you can see some of the counterarguments.
For the sake of our planet, we need to introduce coal to the dodo bird. The U.S. should implement a carbon tax and use money from it to fund the development of cleaner energy generation technologies in partnership with developing countries. The President could mix a carbon tax with other measures appealing to Republicans.
There are currently fourteen national or regional carbon tax programs, including much of Europe, Japan, and British Columbia, so this can be done. A $16/ton of CO2 equivalent tax with annual increases could raise $1.1 trillion over 10 years and $2.7 trillion over 20 years. Even just some of that money could go far to help other countries, and our own, move away from coal.
Our main partner should be India. According to the World Bank, it already has the third highest level of carbon emissions while its per capita rate is less than 1/10th of the U.S. Their population is three times ours, so things get scary if they want to live like us. Their power minister promised to double the use of domestic coal to more than a billion tons by 2019. India’s high ash content coal and strip mining extraction are a bad combination. Possible programs include developing viable carbon capture and storage technologies, subsidized “cleaner” coal, conversion to natural gas plants, or expansion of their renewable energy production. Focusing on India provides two benefits: a growing market for our exports and a significant opportunity to avoid future greenhouse gas emissions.
Outside India, we can help others find cleaner ways to meet their energy needs. Developing countries can progress smartly and in a cleaner way than we did. The National Renewable Energy Lab’s current funding is $380 million (NREL.gov). We can expand their work while using very little of the carbon tax revenue. As a wise man (and handsome too!) recently told me, the most economical energy sources, if starting new, are onshore wind, natural gas, and photovoltaics. We can help countries implement those production methods while developing the industries in our country.
Pairing a carbon tax with other measures will make it more palatable. Republicans get the reductions in capital taxes or renewable energy tax incentives they want. Offset taxes for lower income earners to avoid the carbon tax being regressive. This wouldn’t be a unilateral action either. Former Treasury Secretary Lawrence Summers suggests “a well-designed tax would be levied on the carbon content of all imports coming from countries that did not impose their own carbon levies.” This generates more revenue, keeps our manufactured goods price competitive, and encourages other countries to reduce their carbon emissions.
The U.S. has the influence as the greatest economic power and responsibility as one of the highest emitters to set the pace for the world in reducing emissions. If used properly, a carbon tax can send coal the way of the dodo bird.
Feedback from my professor:
The $16/ton carbon tax you suggest will raise the price of coal-fired generation by less than $0.02/kWh. Is that enough to change behavior? Is that enough to shut down coal plants across the globe and replace them with cleaner generation (gas, nuke, wind, solar)? My hunch is no.
Is your carbon tax global? What would the WTO think of the U.S. imposing carbon taxes on imports? What would the Chinese government do, retaliate by banning imports of Boeing planes and Caterpillar tractors?
How do we know that our politicians in Washington will spend the carbon tax revenue on renewables? They might just decide to buy more votes by spending that revenue on more free crap. Free college tuition for everyone! Yippee!