To summarize, carbon pricing will always be a regressive tax. I also think that there are a number of practical reasons that carbon pricing will not work as theorized. Because a global program is impractical, leakage is always going to be a problem. All carbon pricing proposals need to address the problem that as carbon emissions go down revenues go down relative to the fact that reductions get more difficult and expensive as control efficiency increases. The academics who support carbon pricing seem to be blissfully unaware of the realities of the energy market that are at odds to their theories. Based on observed results I think that indirect market signals are going to lead to less cost-effective reductions in the time frame necessary for the aggressive reduction rules. To date, carbon pricing for the electric sector only considers generation costs which leads to cost shifting the additional costs to supply electricity when and where it is needed to be covered outside the carbon pricing framework. Finally, supporters under-estimate the very real problems of implementation logistics. My concerns about carbon pricing are supported by the RAP study.
Their success is indicated by the fact that ethanol received a 51-cent per gallon subsidy through 2008 and 45 cents a gallon ever since. In addition, cheaper EtOH made in Brazil from sugar cane suffers a 54-cent tariff. But wait! There is more! An escalating government mandate that runs through 2022 requires the production of 37 billion gallons of biofuel (primarily ethanol) in the United States.
All of this support for an unnecessary fuel even before the U.S. became the energy capital of the world, was exposed in 1998 by the late Dr. David Pimentel of Cornell University. While chairing the U.S. Department of Energy Panel to investigate the economics of ethanol production, the panel found that 131,000 British Thermal Units (BTUs) were required to produce a single gallon of ethanol, which only produced 77,000 BTUs when burned. That is a net energy loss of 54,000 BTUs per gallon. But it gets worse.
While some cost is captured by selling the residual dry distillers grain for animal feed, the panel determined that water use and soil erosion required by growing corn had their costs as well.
On one planet, all
species, countries, and geopolitical issues are ultimately interconnected. We are witnessing how the outbreak of a novel
coronavirus in China can wreak havoc on the entire world. Like COVID-19,
climate change, biodiversity loss, and financial collapses do not observe national or even physical borders. These problems can be managed
only through collective action that starts long before they become full-blown crises.
The coronavirus pandemic is a wake-up call to stop exceeding the planet’s limits. After all, deforestation, biodiversity loss, and climate change all make pandemics more likely. Deforestation drives wild animals closer to human populations, increasing the likelihood that zoonotic viruses like SARS-CoV-2 will make the cross-species leap. Likewise, the Intergovernmental Panel on Climate Change warns that global warming will likely accelerate the emergence of new viruses.
The AEMC has released an issues paper which outlined some ideas of how electric cars might contribute to lower energy costs, rather than increasing them.
… It suggested with the right systems in place, households could use their electric car batteries to “soak up” excess rooftop solar generation
when energy was cheap and have the option to sell power back into the grid when it was more expensive.
Adding batteries to a home photovoltaic system reduces the energy payback of the entire system by 21 percent on average due to two factors.
… in states that allow solar owners to sell back to the grid at the same price the utilities charge consumers, utilities complain consumers are using them as a free battery.
While that policy may achieve environmental goals by encouraging home solar panels, it could become financially unsustainable for the utilities. Nevada in particular has tangled with this issue. The state
sharply reduced the rate utilities paid PV supply sellers in 2016, which caused a backlash. Two years later the state raised the rates to 95 percent of the retail rate consumers pay.
But where the situation becomes problematic is when there is a sharp change in generation, like when clouds blot out a mass of solar panels in Perth at once, or demand changes rapidly — an industrial customer going offline suddenly, for example.
In these circumstances, the
so-called firming services provided by conventional power plants, and which keep the system on an even keel, can be stretched thin.
That’s when the Australian Energy Market Operator (AEMO), which runs the wholesale market in WA and is responsible for keeping the lights on, begins to worry…
… But, of course, households with solar often use much less power from the grid.
They still cost just as much to service, but they’re paying a fraction compared with households that don’t or can’t have solar on their roofs.
… Under the scheme, households are paid a flat rate of 7.1 cents for every unit of electricity they pump back into the grid.
This excess energy is worth very little in the middle of the day — some in the energy industry would say nothing — and arguably a small fortune later in the day when it is actually needed.
And it does all this at a cost of $200 per megawatt hour — nearly six
times the cost of electricity from natural gas-fired power plants.