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Beyond carbon policy: A national feed-in tariff

I completely agree that punitive taxes has been the mantra of the green movement for decades.

My biggest problem with punitive taxes is that making fossil fuels more expensive through punitive taxes mostly punishes the average citizens who are just trying to survive. The cost of everything from heat to food goes up, driving more people into poverty.

Several years ago the New England area states established a regional tax on electricity allegedly to help provide funding to promote renewable energy. Hundreds of millions in taxes have been collected in the years since. It was just over $15 of my $48 electric bill last month. Over 30%.

After months of research it turns out not a single dime of the taxes collected has been spent directly on renewable energy as promised. Every state puts the money into their general fund. The combined renewable energy funding from all of the states general funds is far below the amount of taxes collected. So that argument fails too justify the tax. The money is being spent in ways the taxpayers never agreed to when the laws were passed with little opposition.

Your proposals make sense. Which is sadly why they will likely never happen.

A carbon tax that offsets the payroll tax increases tax on carbon while decreases tax on labor by an equal amount. This is the way to go, and increases in some prices are offset by decreases in other prices.

"In order to pay for the FiTs, an assessment would be levied on all consumers utility bills, just like the charges we currently pay for things like , and so on."

Editor - There appears to be a missing word that should appear after the word "like" and before the third comma in the above sentence. (From the 11th paragraph below the "Pitch a FiT" boldfaced subheader in the above article.)

Thanks Dov. I don't know what happened there - had some trouble with the publishing system. Fixed now.

Although my pseudonym does not show it, I am one of the green ones and I must say your article absolutely rocks! The way shown by Germany is the most sensible one, as results are proving!

Your proposal to cut around congress is brilliant and together with all your other great insights I'm obliged to shout out: "CHRIS NELDER FOR PRESIDENT 2016!!!"

Germany is lovingly supporting the American coal industry, by importing and burning our coal in larger numbers. They are building new coal plants, and increasing consumption of the ones they have.

Is this the sensible policy you refer to?

Yeah, right, James, thanks for the heads up!

I meant that the policy of Germany considering RENEWABLE energy is sensible because "Thanks to its FiT, 25 percent of Germanys electricity now comes from solar, wind and biomass."

But speaking of Germany's overall policy you are right:
It is considered that Germany will shut down it's last nuclear facility in 2021, which explains why they are switching back to coal. But what do you hate more: CO2 or radiation? I agree with you that this coal policy is not sensible at all, because coal plants pollute twice as much than gas plants. I doubt Germany will accomplish it's emmission goals (40 percent less CO2 in 2020) acting like this, Maybe there still need to be bigger carrots shown to the german investors in order not to invest in dirty coal plants and go renewable instead?

Well, I prefer neither, as demonstrated by the American, French and German nuclear power industries. They emit neither radiation nor CO2.

But in reality the US energy policy will be "drill baby drill", for shale gas. That is clearly what Obama is pursuing, with some (not a lot) of subsidies for renewables.

http://www.renewablesinternational.net/is-germany-switching-to-coal/150/537/56081/

it is coal consumption that counts, and in germany, coal consumption is going up, despite it's FiT

...as opposed to jumping blindly into the eco-abyss as they'd have us do here.

Thank you for pointing this out so succinctly. Personally, I am sick and tired of various parts of the executive and jucicial branches "cutting around Congress". It is an unconstitutional endangerment of our liberty, regardless of intent.

All of those "assessments" on our utility bills are TAXES under a pseudonym. Since they are seldom authorized by legislatures, most of them violate either the state or federal constitution. Our rights are being taken away, assessment by assessment, fine by fine, ticket by ticket, fee by fee. Those still above the poverty line are being systematically robbed, driven into dependence on the government, so they can be controlled from the top. FIGHT NOW, WHILE YOU HAVE THE CHANCE.

Mr. Nelder badly mistimed the renewable energy market, and he needs taxpayer dollars to save his investments. That is the point of this blog entry, and many others.

I agree, a carbon tax offset by payroll tax reduction is a better approach. That lets the economic system then determine winners and losers. But we need the carbon tax so polluters pay to use the atmosphere as a dumping ground.

We had a couple of elections here in the USA on November 6th. People voted. We had winners and lossers. If your canidates lost, you should work harder to get your canidates elected next time.
But don't say that you don't have representation.

It's all about electricity, and yet natural gas gets ignored.
Natural gas is our clean ~ Bridge fuel to renewable energy.
And natural gas power plants designed right can be near 100% Energy Efficient.
Cool exhaust instead of hot & greatly reduced emissions.

Coal has recently dropped from producing 50% of our electricity to 40% due to displacement by, currently cheap, natural gas.

The maximum efficiency for new natural gas plants runs about 60%.

When the author starts out with the labels which tend to demonize one side of the argument, the entire argument and the author lose credibility.

Why did the author feel the need to label the opposition as "the right wing"? Here's the sentence:

"Right-wing groups are already mustering their opposition to it."

Wouldn't it be just as "fair" to label the proponents of carbon taxes as "left wing"? How about referring to the "global warming/climate change" proponents as "environmental wackos"? Would that be fair, or are the demeaning/polarizing labels only applicable to the "right wing"?

The way I see it myself, it's the environment movement which has no real science behind it, and all they have is an agenda, which is to hand over more power to government over our daily lives. That is where the radical agenda exists.

i agree. FIT vs carbon tax is a technical issue and not right vs left. Carbon tax is a better approach, in my opinion.

Gore must have a cash flow problem, he's back at it again too...

Gore has a wide diversity of investments.

You can see that Nelder has been flogging the "renewable investment angle" for some time.

http://www.amazon.com/Investing-Renewable-Energy-Making-Stocks/dp/0470152680/ref=sr_1_1?ie=UTF8&qid=1352932680&sr=8-1&keywords=chris+nelder

You think this doesn't make his FIT idea compromised? He's advocating a massive federal tax that would benefit his investments personally. An ethical person would include a disclaimer, he does not.

...or so it seems.

Believe me, Gore has been spending a lot of his money on this, and is not making money on this is all. He has also been at it all along, but press coverage comes and goes. So you just havent been paying attention.

Chris - you are spot on. FIT is the way to go - it is the fastest way, the cheapest way and the ONLY time proven method of accelerating renewables. - it will happen - I just hope soon.
Link to a FIT White Paper for anyone to use and or pass around....

http://www.principalsolarinstitute.org/uploads/custom/3/_documents/Feed-In_Tariffs.pdf

To suggest we burn biomass is a terrible idea.

First, there is no known technology capable of filtering ultra-fine particulate matter from any source's emissions. These particles are so very tiny, a few millionths of an inch, that they penetrate deeply into our lung tissues. Ultra-fine particles are found in all emissions and consist of a myriad of toxic chemical compounds and heavy metals. Still smaller nano-scale particles (billionths of a meter in size) can pass directly through our skin and pass easily through our Brain-Blood and Placental barriers.

Investors should be made aware of a US Energy Information Administration Nov. 2010 report, that finds Biomass energy production to be the second-most expensive of all electricity generation technologies, even more expensive than a two-unit nuclear power plant.
Waste Incineration is the costliest of all.

All biomass energy production is ultimately unsustainable and investment in all thermal biomass technologies, whether they burn garbage or forests, should be most strongly discouraged.

While Natural gas is the cleanest burning fossil fuel, its extraction and transport make it dirtier than burning coal.

We need to stop subsidizing such dirty energy producing technologies and invest in truly green technologies, like Solar, Wind, Geothermal and Micro-hydro.

The commentator who wrote "The way I see it myself, it's the environment movement which has no real science behind it, and all they have is an agenda, which is to hand over more power to government over our daily lives. That is where the radical agenda exists," reveals their profound bias and ignorance. Environmentalists always use peer-reviewed science to make their case.

Every baby born today is born with their tiny body already burdened with more than 200 chemicals that did not exist 200 years ago. Every woman of child-bearing age has enough mercury in her body to cause fetal damage.

What's never figured into any energy producing technology's cost is the tremendous cost to society for caring for those made ill by industrial pollutants, whether for health care or in lost time on the job.

FIT is certainly worth entertaining.

I am that commenter that you quoted above, and, what I have to say is that...

The environmental movement is not about sound science, but about idealistic agendas, and, while there might be certain points in their "science" that are valid, it's only to try to gain a little bit of credibility so that they can then turn their argument towards selling that agenda of theirs.

Inserting certain valid points into their "science", while most of their points are very questionable and improvable and massaged, makes the entire "science" behind their arguments, "junk science".

I want a clean environment, and a healthy environment, and clean water and clean air; in that sense, I'm no different from what most people, and perhaps most "environmentalists" want. But, I'm not about to go and massacre the scientific method in order to advance any agenda which I might have. Global warming ("climate change"), is mostly about an agenda, and when you have such shysters as Gore,spearheading the effort, and who has no training whatsoever in science, then you know that it's an effort mostly based on an agenda.

The environmental movement calls for political change and individual responsibility to preserve our enviroment. The environmental movement is not science, it is in response to science. The scientists in all the major fields related to global warming agree that it is caused by man and that it will have a major effect on our climate. You are correct in saying that the strictest form of the scientific method is not applied, but that is because we have only one planet to experiment on. The modeling and testing of the models, backed up by verification and by physical properties of matter (eg we know co2 causes atmospheric greenhouse effect, we can demonstrate that) are valid scientific approaches, and they are all we have. To demand pure experimental science is to demand that we ignore anything happening to the climate and any possiblity that man might be damaging it's ability to sustain life. Some members of the environmental movement may not know their science, but that doesn't negate the fact that the vast majority of true scientists have come to the conclusion that agw is a looming disaster that can be averted or at least mitigated if we act.

"The environmental movement is not science, it is in response to science."

The environmentalists latched on to a set of "research" which they could use to advance their agenda, and it didn't matter that the "science" was very flawed, since the agenda mattered a lot more than real science.

What is happening to climate now, is the same exact changes that happened millions of times during the planet's existence, and no science is going to be exact, in one direction or the other, and no amount of human intervention is going to change the "habits" of nature with it's climate changing mechanisms.

There is no science, much less the environmental wacko's favorite "science", that can ever be conducted to make any kind of provable and sound predictions. And, it's a lot worse with climate change, since, climate change and weather, are a consequence of millions of variables, which are virtually impossible to put into any climate models or that can be accounted for adequately, in any research.

I don't deny climate change, but i will deny the junk science that has pre-defined goal of proving "man made" global warming, no matter what tactics they need to use to do so.

GIGO!

You know adornoe I'm starting to feel pity for you. You obviously have little knowledge of what science is and how it works. Because of that you will continue to be frustrated by the real information that science gives us when it doesn't fit you preconceived notions about the way things should be. I begin to wonder if your belief that climate scientists have an agenda that predefines the desired outcome and disregards science is projection because it's apparent you have an agenda that disregards science.

Regarding climate change many of the things climate scientists have said are going to happen are actually happening and in many cases faster than they said they would. There is no indication that they won't continue to happen in the future.

Any scientific model is a simplification of reality. It's impossible to include every single detail in any model that is non-trivial. However in most cases and in climate science specifically there are a few things that cause the major part of the effects and the rest of the details cause mere tweaks that have little effect on the final result. It's not necessary to include every variable or even a majority of them to capture 99% of the effects in a model.

Thank you, lamwhomiam. All so-called biomass is not appropriate for energy production. It can be more efficiently and directly purposed. Agricultural "waste" can be composted or tilled in right on the farm. Using so-called marginal land for growing switchgrass or whatever for conversion to energy can only have negative results and additional external costs. "Marginal land" is a misnomer. It's only marginal in the eye of the beholder. It has an ecological role and value that would be lost in trying to convert it to biomass crops.

Adornoe, you are so right.

Yes, everybody sane person wants a cleaner environment. No problems with that.

But the concept that a 0.4degC per CENTURY increase in mean global surface temperature ( HadCRUT3 official data, download it and plot it out for yourself) is sufficient justification for pretending that adding CO2 to the atmosphere is any kind of threat to the climate is just plain ludicrous.

The global warming bandwagon is a pseudo-scientific scam promoted by the extreme left, aided and abetted by their willing and often very gullible fellow travellers.

Fortunately governments are beginning to realise this - hence Obama's back-pedalling over his original plans to close down the American economy - and similar political changes occurring in the UK and elsewhere. We will see more of that over the years as the great political ship tacks slowly around and sails off in a more sensible direction.

But, heck, Nelder, why are you still banging on... ? The global warming scare is completely over as far as the general public is concerned. There's zero, zilch interest. So politicians, as always, will find a slow, manipulative, weasel-way out of the embarrassing mess they have largely created for themselves and others.

Meanwhile, Nelder, McKibben and all of that ilk seem determined to soldier on into the sunset...

You are so wrong in your post it is laughable if this weren't such a serious issue. When 97% of climate scientists agree with agw, how can you say it is "over". Fossil fuel is increasing atmospheric CO2 FACT. Atmospheric CO2 increases greenhouse effect FACT. Additional greenhouse effect causes heat to be retained FACT. The earth is getting warmer FACT (as you acknowledge). HADCRUT is not the only measurement and if you look at heat retained in the oceans, we are adding a tremendous amount of heat to the earth. Storms like Isaac, Irene and Sandy, droughts, sea rise, etc are all threats to our future. We can argue about how best to address the changes, but we must end carbon pollution before we remove all the carbon from under the ground.

Did you not see the figure? All this alarm for a rise in world temperature of 0.4degC per CENTURY. Not per decade. Not per year. PER CENTURY!

All the rest is hysteria and alarmism. Nothing untoward is happening to ocean temperatures. Storms in the late 20th century have been less frequent and less violent than in the last 100 years. Sea levels are not rising alarmingly.

Carbon is NOT A POLLUTANT and there is no evidence whatsoever that it is causing any measurable warming over and above natural climate variations.

Get real...

The "There's no such thing as anthropogenic climate change!" bandwagon continues to butt up against the reality that many of the things climate scientists have said will happen are happening and will continue to happen into the future. Your head's going to get mighty sore butting up against the wall of real scientific results.

Look, if Global Warming is caused by excessive amounts of CO2 in the atmosphere, the solution is simple; PLANT TREES!!! Plants inhale CO2 and exhale oxygen. The bigger the plant, the more CO2 in inhales. Why not revive the old CCC and hire all the unemployed to go out into rural land and plant trees? For that matter, planting fruit and nut trees could combat world hunger. Why not create service organizations that fund the planting of trees in Africa, Asia, and so on? According to the National Academy of Sciences, America is a CO2 sponge -- absorbing 500,000,000,000 tons of CO2 more than it produces, every year -- because of our extensive forests. Why not spread the blessing of forests around? Earth has been badly deforested anyway; if combating Global Warming spurs other countries into planting lots of trees, we could reverse that trend.

--Leslie Fish

Planting trees is a great idea, but it just isn't enough to do what is needed in terms of reducing atmospheric CO2.

Unfortunately a feed in tariff does not provide the proper economic price signals. It is essentially a subsidy and all subsidies depend on top down direction. The truly efficient economic price would be determined through a carbon tax that gradually increased over time. The market would then decide whether renewable energy, nuclear, energy efficiency(more efficient appliances), energy substitution (walking vs. driving) or energy conservation (lowering thermostats) would be the best way to go. Feed in tariffs don't properly reward nuclear, energy efficiency, substitution, or conservation. The regressivity/inflation impact of a carbon tax could be eliminated by using all revenue to offset payroll taxes. The payroll tax is currently our most regressive tax, so we could substitute one regressive tax for another and while we increased the cost of energy intensive uses we would decrease the cost of labor intensive uses.Inflation in gas for example might be offset by deflation in medical care or some other labor intensive use. However, in this regime, we would still want to ask FERC to force utilities to buy renewable power and to reduce impediments and licensing cost for the same. The utilities should be forced to buy power from rooftop solar for example at the utility rate and use net metering so that excess power was purchased at avoided cost. Feed in tariffs give the perverse result that you sell all power to the grid and then use the grid to heat water, whereas a more economic approach would be to use dc to heat water directly and not go through the grid.

You want to drive the population of the US into poverty. Nice guy. What do you give out for Christmas? Recycled cards you stole out of your neighbors mailboxes last year?

The reality is Presidents Obamas cap and trade scheme, much like you propose, was so costly to the middle class and poor in the US that even members of his own party left him hanging without support. And keep dreaming if you think any carbon tax would be offset by a decrease in the income tax as you said in your post above.

Low end CBO estimates were the Obama plan would increase the cost of living for the average American family by $1,200 per year, PER PERSON. Some CBO estimates put it as high as $1,500 per year per person.

Do the math. A $3,600 a year increase covering food, heat, and gas to get to work would have crushed the average American family of 3.

That is why democrats ran from that bill. Obama could not come close to passing it even when he had majorities in both houses and did not need 1 republican vote to get the bill passed.

Straightforward and equitable. Relatively simple to apply. Can qualify as a "virtuous cycle:" Pricing costly fossil fuels more realistically and using the proceeds to help replace fossil fuel consumption with energy conservation and renewables.

it is obvious this is a biased viewpoint because of the statement "Right-wing groups are already mustering their opposition to it."

so it's really nice to see the left haven't changed their agenda one bit... if they can't raise taxes by calling it a 'Carbon Tax', they'll try not calling it a tax and try to raise taxes anyway.

oh, and even if they can't raise taxes, they'll continue to spend us all into poverty.

by the way, while I'm on a rant, raising taxes on anything does eventually 'trickle down' to the lowest earners, who end up paying more for their goods and services. FiT is a classic example... this is from the horses mouth: 'In order to pay for the FiTs, an assessment would be levied on all consumers utility bills'.

who do you think pays a higher percentage of their yearly earning on utilities?

if a person making $12K a year pays $100/month for their utilities that's 10%. if a person making $12M a year paid 10%, they would have to spend $100K/month. poor people get hurt more than middle income and they all get hurt more than rich folk.

some of the things I'd like to see on the federal level
1. a fair tax on everything: a flat tax. Everyone from the poorest to the richest pays the same rate on all income regardless of the source
2. eliminate all the other taxes
3. government stepping back from interfering, controlling, and 'investing' in private business unless it must for the common good (regulating nuclear power and regulating airlines are good examples). most everything else should be left to the states.
4. a law that requires all congressional members up for re-election on the next election day, to retire from congress if a balanced budget is not created.

the above and more that I won't get into here will lead to meaningful downsizing of the federal government and a decrease in deficit spending.

is that, when the government spends less, the economy grows, and more people get hired, thereby decreasing the unemployment rate.

Also, a flat tax would mean that, everyone would have to pay something, even if it's just a few dollars. That would make the people creating taxing policy to be a lot more careful with their tax bills, nobody would be asking to raise taxes on anyone, which would, again, lead to less fear in the economy, and companies and individuals would be free to invest with no fear of having their investments and any resulting wealth getting confiscated "for the good of the people".

The 1973 Arab oil embargo sparked a huge roll out of nuclear power. France added 100 terawatt hours of energy/yr of nuclear electricity by 1981 with a population of just 50 million people. She added another 200 million TWh/yr in the next decade. Germany's FiT has produced 18 TWh/yr of solar in a decade in a country of 80 million and about 40 TWh/yr of wind. And the cost of that 18 TWh/yr? About 100 billion Euros due over the next 20 years in FiT. How big a failure does a policy need to be before people wake up? All a FiT is is a massive redistribution of wealth to those who least need it ... those who can afford the high up front cost of solar panels. The 70s showed exactly what is required and that it is quite doable ... a massive nuclear build.

I've just returned from the CompaMed show in Dusseldorf Germany and wanted to share a few observations.

German cars are much smaller and fuel efficient with Gas at 1.7-1.68 Euro per LITER. Do the math... 1.68 x 3.85 = $6.47 Euro per Gallon times 1.4 USD per Euro = $9.06 US per Gallon. I paid $3.12 US a gallon before I left. I did see an electric car on the street too! Why can't we get the same quality and cost vehicle in the US of A at a discount? (Ummm... think import tax and trade protectionism and taxes). Government Motors anybody?

Check out the rate of your most recent electric bill and find the stated rate in cents per kilowatt hour. If you pull out all the taxes and customer funded subsidies you'll see you can match up what's advertised by the utility with what it actually costs after all the taxes and what-nots are added in. Next, DO the math...divide the dollar amount you must pay the Utility by the KW hours you used. A wee bit higher eh!? And Germany is a failure at FIT?

The older I get the more I understand why monetary theory is so keenly avoided in the US Education system.

Rock On Chris!

you say 'think import tax and trade protectionism and taxes' actually it is the lack of this as well as our government (US, State, and local) giving incentives for foreign automakers to make cars here, the lack of unions driving up prices in the foreign car makers shops here, the US government not taxing foreign made parts, and assemblies on an equitable basis, the lack of retirees to support in the foreign auto plants that are located here, the relaxation of emissions standards for foreign cars made in the US for many years. I could go on, but I hope you get the picture.

The US auto industry could not compete on equal footing during the time this was going on (mainly the 70s and 80s) and is still at a disadvantage today. this is the reason they had to cut corners in the past and got a deserved reputation for making crap. they are doing much better today, but still have several disadvantages, the two biggest are the unions and the retirees they must support.

by the way the same basic thing happened to the US steel industry.

Is that it costs a lot more than in the US. And they burn about the same amount of coal as we do, per capita.

Sure, they drive tiny cars, and they drive less. What's that have to do with electricity? Their grid isn't very clean at all, they burn a lot of coal. They have some eleborate statistics that disguise this because they brag about how much energy they produce on a sunny day. The proof is in the pudding - they're burning that coal, come rain or come shine. All their FIT did was reward the solar panel producers. Nelder wants us to do the same here. Wonder why? Check out his book - "profit from renewables".

Why this snake oil salesman gets a soap box is beyond me. Actually it isn't - as Nelder doesn't get published much beyond this very narrow medium.

And the major cost differences are TAXES, not feedstock costs.