Top climate scientist slams Copenhagen and cap/trade

http://www.guardian.co.uk/environment/2009/dec/02/copenhagen-climate-change-james-hansen
http://www.kqed.org/epArchive/R912070900
http://www.columbia.edu/~jeh1/

NASA and Columbia's Dr. James Hansen, the preeminent American global warming scientist since the 1980s (Al Gore is the figurehead but Hansen is the brains), has really come out against the Copenhagen summit (boycotting it in fact), the big nation's emissions reductions targets, and the whole concept of "cap and trade". While heads of state seek to reduce carbon emissions to 1990's levels by 2020 or so, Hansen thinks we need doubly aggressive reductions to even have a chance of averting climate disasters. Like we can live with the inevitable 1 meter sea level rise as a consequence of our past pollution and climate trends, but a 10 meter rise (if we do nothing) will be thoroughly disruptive to human kind. And despite the cheerleading and positive spin, it doesn't look like China and India will be of much help. They have agreed to reduce their "carbon intensity" by 20-40% by 2020, but not actual emissions. Intensity only refers to carbon emitted per unit of energy/commerce, so intensity goes down as GDP grows anyway (which India's and China's will obviously do). Therefore nations can reduce their intensities without ever doing anything about carbon. So while the US and China are the top carbon polluters (42% of total CO2), their carbon intensities are far below those of Congo or Kampuchea (<1% of global pollution), so obviously something is amiss.

Cap and trade (establishing total emissions limits and allowing low-polluting businesses to sell their carbon credits to high-polluting ones, or back to the government, which is in effect in Western Europe as we speak) is also inherently flawed according to him (though not for the reasons that Glen Beck believes). He even goes further to say that it is just a smoke screen to conceal, or at least prolong, business as usual (quite plausible considering the Washington-business relationship). We capitalists stubbornly believe that the "miracle of the market" will save us every time. A "carbon exchange" will incent less pollution while funding innovation. But is it the fairest and most efficient way of doing so? For a potential cap and trade industry, imagine the bureaucracy and costs associated with establishing such a complex, dynamic, lawsuit-fraught commodity exchange.

Just as investment houses nickel and dime us year after year for "managing" our 401(k) accounts, cap and trade will be run (or at least manipulated) by big Wall Street banks, who will also take their "service fee" cut of the pool. We've seen what happened with savings & loan, energy trading, telecoms, mortgage derivatives, and credit-default swaps, so can you just imagine the tricks that Goldman Sachs and others are scheming up for this nascent market that gov't is not equipped to properly regulate? The big banks have hundreds of people working on this already, and no bills have even reached the Senate floor yet (but they smell blood in the water with a carbon exchange expected to be worth a cool $1T). Already big polluters like energy companies and factories are threatening that they will have to pass costs onto the consumer due to the carbon fines from their business operations, and more than likely the banks' service fees for maintaining the carbon exchange will also get passed onto us. Yes some of the money will funnel into green research (mostly "clean coal" that will never be as clean as nuclear), but rest assured that Wall Street will extract its pound of flesh first.

In addition, "carbon offsets" will grant polluters more room to pollute, while not truly offsetting their actions, so it's really cheating the cap. Like Exxon could earn x more carbon credits for paying to protect y acres of forest from deforestation. That sounds very kind of them, but really what has it done? Since all forests are not protected, loggers and ranchers will just level another tract of land instead. And all the while Exxon gets to spew more carbon for pocket change (which will obviously benefit Exxon financially, or their bean-counters wouldn't have approved it). Another concern is "grandfathering". When sulfur limits were imposed by Congress to address acid rain pollution in the 1980s, coal power companies persuaded regulators to exempt older plants constructed before 1970. Maybe that explains why so few new power plants have been constructed, while demand has steadily grown. So despite the cap, it was business as usual, and the same might occur with carbon (you can imagine the companies whining about the huge costs of retrofitting old plants).

Hansen suggests that on the other hand, why not just impose a fee on carbon for a fixed amount, like we do for air travel and cigarettes? Like water, energy is artificially cheap in America, so that the social and environmental costs of wasting those resources are not directly felt by the waster. The reasons for this are varied, but clearly due to gov't policy. But just as the cost of used motor oil or car battery disposal is factored into the garage fees you pay, the costs of carbon pollution to the environment should be included in the carbon-emitting products we buy and the carbon-emitting business practices of most or all companies. But of course industry lobbies hate this idea because it will make their operating expenses rise while reducing revenues/productivity. A carbon fee would fund green projects and research, just as part of the cigarette tax funds gov't health programs like S-CHIP. If we were to tax $115 for every ton of carbon (or $1 for every gallon of gas, 8 cents per KWH electricity), we would net $670B each year for public use. Imagine what good that would do - we could even bail out Wall Street again during the next bust. Some of that money could even be paid back to the public to offset the higher costs of carbon-based goods or subsidize green retrofits/products (up to $250 per legal US resident per month). So instead of cap and trade (where the public gets nothing, and could even be shafted), we should implement "fee and dividend".