The Ergosphere
Thursday, January 18, 2007

The pols sit still for the message

Maybe there's hope after all.

Via Yahoo news (h/t:  The Oil Drum) comes word that Peter Barnes, founder of Working Assets Long Distance, made a presentation on greenhouse-gas abatement to the Vermont legislature.

That the legislature received the presentation is itself progress, but the specifics are noteworthy:

Regular readers will note a strong similarity to the measures I've been advocating.  The only real difference is that the permits would be sold at auction, so the economic benefit of savings fluctuates with the market.  This could lead to slumps in the efficiency industry during economic contractions, with a consequent reduction or halt in improvements.  On the flip side, the permit auction eliminates the protected status of entrenched industry and the net effect on consumers would be small and even positive for low emitters.  It amounts to a tax on "bads", not "goods"; on the whole, it's an excellent idea.

The legislators are not convinced.  State Rep. Albert J. Perry is quoted as saying "I don't see any immediate opportunity in Vermont.  I'd need to see how it's set up, get a more concrete presentation of how it would work."  This was seconded by the executive VP of the Vermont Fuel Dealers Association:  "The concept of trading carbon credits is probably something that's in our future.  The $64,000 question is `What's it going to look like?'  Some of the best ideas get lost in translation, between concept and implementation."

Two things are for certain:

  1. Such a program needs to extend beyond Vermont.  No state (or nation) can retain industry if its neighbors do not share the same expenses.
  2. The merit could easily be lost in translation.  For instance, giving free permits to existing emitters (to avoid shifting advantage to a neighboring polity) would eviscerate the incentives.  So would any system of exemptions for certain fuels, or for "the poor".

It's a proposal from a visionary, not a bill submitted by an elected statesman.  But the ideas are a long way from what seems like their natural home in California, which makes it a hopeful beginning.

Why would it not make sense to pursue this by eventually expanding RGGI? RGGI only applies to large power plant s for now, but as far as I can tell, it represents as good an approach as anything around, and if it's successful, it would make sense to move to other emissions sources. And MA just rejoined yesterday (thanks, Governor Patrick).
Maybe you should send your biomass gasification/algal CO2 recycling proposal to James Woosley (former CIA director). He seems to be a geo/securiy green who is all over the PHEV solution, and has good visibility.
It seems to me that it would be very difficult for a single state to implement an auction system that is not subject to abuse. If the auction is open only to power generators, there is potential for collusion among them. If the auction is open to all comers, there is the risk that out-of-state interests may buy up the permits and shut down NH production. Producers that operate in both NH and in neighboring states may find it more attractive to produce in a state w/o a permitting system and transport power across state lines (an activity which NH can't restrict).

If I were a legislator, my first interest would be stable and reliable electricity supplies and prices. I would put the burden of proof on those proposing such an auction to show that it is immune to manipulation.
RGGI does not appear to include emissions from fuel use; the proposal in Vermont would include motor fuel and heating oil.  The broader the effect of the program, the greater its impact will be per dollar spent.

I am told that R. James Woolsey has been sent a copy of "Sustainability", but he seldom responds.

I would argue that 'wide and shallow' (many states, power plants only: RGGI) is a more viable approach than 'narrow and deep' (1 state, all sources). 'Wide and deep' is not a tenable starting point politically. Once established and debugged (it is much, much easier to manage a trading system among tens of large players rather than thousands or millions of small ones), it's mandate could be broadened to fuels, etc.
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