Build on EPA Rules with Revenue-neutral Carbon Price

The Environmental Protection Agency has announced new rules to curb carbon emissions, under the Clean Air Act. The program is called the Clean Power Program and aims to reduce emissions from coal-fired power plants by more than 30% within 20 years. It is the single most significant step toward reducing power plant greenhouse gas emissions ever taken by the US government.

Many environmental activists are celebrating; predictably, opponents of climate action are warning of grave economic costs. The real impact is less, and less immediate, than many suspect. If the targeted emissions are reduced by the target percentage, then overall US greenhouse gas emissions from industrial, household and transportation sources, will decline by roughly 10% over 20 years.

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Why the Carbon Budget Matters

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The Intergovernmental Panel on Climate Change (IPCC) found, in its 5th Assessment Report (AR5), which was released in September, that the worldwide human community has a global lifetime budget of “burnable” carbon-based fuels. Beyond that, any further burning of carbon-emitting fuels would push global average temperatures more than 2°C higher than the historic norm, unleashing unmanageable climate destabilization. So, though existing reserves might allow us to use far more than the scientifically measured carbon fuel budget, those resources are in effect “unburnable”.

This is not a matter for ideologically driven debate. This is a question of hard numbers. A 2°C rise is the tipping point, beyond which it is projected climate destabilization will be irreversible, with complex feedback loops exacerbating the situation more and more. Beyond a certain point, probably well before we reach the full 2°C rise, the actual cost of adapting to significant destabilization of historically consistent climate patterns will exceed our ability to spend to respond.

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