Green taxing and spending, 2013-2015.

Carbon capture in Norway, September 2013.
Nuclear power in the UK, October 2013.
Energy price reform, November 2013.
Carbon tax in Canada, 2014.
Carbon price floor, UK, March 2014.
IMF fuel tax toolkit, July 2014.
International energy investment, September 2014.
Carbon emissions in the UK, March 2015.
Fuel duty in the UK, March 2015.
Fuel subsidies, May 2015.
Global carbon pricing, July 2015.
Cheap oil, December 2015.
Weather-dependent renewables, 2015-6.

Carbon capture in Norway.
Davide Castelvecchi, 23 September 2013

Norway’s government is cutting off support for a facility that by 2020 was to capture and store carbon dioxide emissions at a commercial scale. . .The failure at Mongstad follows . . . a series of disasters for European efforts to launch large carbon capture and storage projects. While North American projects look set to switch on next year, Europe has failed to finance projects that were conceived at similar times in the early and mid-2000s – thanks to a mixture of political reluctance, the economic recession and its effect on carbon prices, and government bureaucracy . . . a lot of the learning that Statoil put in to study the geology for carbon burial . . . may now be lost.

. . . Statoil has been burying millions of tonnes of CO2 at . . . gas fields in the North Sea for many years, but that is because Norway puts a tax of €50 per tonne on offshore CO2 emissions . . . There’s no similar incentive to trap CO2 emitted from onshore power plants . . . The separate $1 billion technology centre at Mongstad, which supports research into how best to capture emissions, will continue, and the government will invest an extra 400 million kroner ($68 million) into the work. That is a joint venture between the Norwegian state, Statoil, and oil giants Shell and Sasol.

Nuclear power in the UK.

Fiscal Meltdown

. . . the biggest onshore wind schemes could supply only a fraction of the low carbon power a nuclear plant can produce. . . . If every square metre of roof and suitable wall in the UK were covered with solar panels, they would produce 9% of the energy currently provided by fossil fuels.

The harsh reality is that less nuclear means more gas and coal. Coal burning produces, among other toxic emissions, heavy metals, acid sulphates and particulates, which cause a wide range of heart and lung diseases. . . . But none of this means that we should accept nuclear power at any cost.

. . . at Hinkley Point the cost is too high. . . Payment to the operators, the government now tells us, will be “fully indexed to the Consumer Price Index.” . . . Guaranteed income for corporations, risk assumed by the taxpayer . . . Cumbria – the only local authority which seemed prepared to accept a dump for the nuclear waste from past and future schemes – rejected the proposal in January. No one should commission a mess without a plan for clearing it up.

But this above all is a wasted opportunity. . . The . . . third-generation power station chosen for Hinkley C already looks outdated, beside the promise of integral fast reactors and liquid fluoride thorium reactors. While other power stations are consuming nuclear waste, Hinkley will be producing it.

An estimate endorsed by the chief scientific adviser at the government’s energy department suggests that, if integral fast reactors were deployed, the UK’s stockpile of nuclear waste could be used to generate enough low-carbon energy to meet all UK demand for 500 years. These reactors would keep recycling the waste until hardly any remained: solving three huge problems – energy supply, nuclear waste and climate change – at once.

. . . To build a plant at Hinkley Point which will still require uranium mining and still produce nuclear waste in 2063 is to commit to 20th-Century technologies through most of the 21st. In 2011 GE Hitachi offered to build a fast reactor to start generating electricity from waste plutonium and (unlike the Hinkley developers) to carry the cost if the project failed. I phoned the government . . . to ask what happened to this proposal. I’m still waiting for an answer.

Energy price reform.
Alison Marshall, November 2013.

Renewable energy may be cheaper and safer than nuclear or carbon fuels but there probably isn’t enough of it. Environmentalists disagree about what combination of renewable energy, energy efficiency, fourth generation nuclear power, and carbon capture and storage should be used.

Funding problems are delaying the expansion of all these technologies. Green taxes on resources and pollution would put prices in the right perspective. They would discourage third generation nuclear energy including Hinkley C, and gas, coal and oil without carbon capture.

So environmentalists should unite in a campaign for a green tax switch from income taxes to green taxes, with universal citizens incomes to make the green taxes progressive.

Carbon tax in Canada.

Canada has among the highest per capita greenhouse gas emissions in the industrialized world. . . Confronted by inattentive voters, opposition from greenhouse gas intensive industries, and provincial governments defending local industries, Canadian governments have relied almost exclusively on politically appealing but ineffectual voluntary programs and subsidies. . . By the time the Kyoto Protocol took effect in 2005, it was clear that Canada would need more aggressive measures to meet its target. . . After decades of ignoring the advice of academic economists, policy makers have begun to embrace market-based approaches to environmental regulation. . . In February 2008, British Columbia (BC) became the first jurisdiction in North America to adopt a revenue-neutral carbon tax.

. . . The tension between academic ideas and politics yielded many ironies . . . a Prime Minister with a graduate degree in economics rejecting a carbon tax; an economist who had long advocated carbon taxes advising against a federal tax proposal on political grounds; and a former political science professor pursuing normative goals with apparent disregard to positive theories of politics.

(Kathryn Harrison. )

. . .BC’s tax . . . started out low . . . then rose gradually to the current $30 per tonne, which works out to about 7 cents per litre of gas. “Revenue-neutral” by law, the policy requires equivalent cuts to other taxes. . . BC now has the lowest personal income tax rate in Canada . . . and one of the lowest corporate rates in North America.

. . . Since the tax came in, fuel use in BC has dropped by 16 per cent; in the rest of Canada, it’s risen by 3 per cent (counting all fuels covered by the tax). To put that accomplishment in perspective, Canada’s Kyoto target was a 6-per-cent reduction in 20 years.

. . . Further, while some had predicted that the tax shift would hurt the province’s economy, in fact, BC’s GDP has slightly outperformed the rest of Canada’s since 2008.

With these impressive results, BC’s carbon tax has gained widespread global praise as a model for the world – from organizations such as the OECD, the World Bank and The Economist.

( Ross Beaty, Richard Lipsey and Stewart Elgie, 9 July 2014. )

The tax has actually become quite popular. “Polls have shown anywhere from 55 to 65 percent support for the tax. . . ”

( Chris Mooney, 26 March 2014. ).

. . . carbon tax shifting encourages employment and investment (by cutting income taxes) and discourages pollution (by taxing emissions). It also promotes energy efficiency and clean innovation.

( Stewart Elgie, 9/ 10/ 2014. )

Carbon price floor, UK.
18 March 2014 .

Energy companies already pay to pollute under the EU emissions trading scheme (ETS), buying permits to emit greenhouse gases when they generate electricity. But the price of the permits crashed to a record low last year, meaning there’s much less of a financial incentive for companies to cut their emissions.

The carbon price floor is meant to solve this by putting a minimum price on how much power generators in the UK pay to pollute. If the ETS price drops below this level, companies pay the difference to the UK Treasury. The carbon price floor was set to increase each year, from around £16 per tonne of carbon dioxide in 2013, to around £70 by 2030.

. . . the policy was generally derided when it was introduced. . . Now that it looks as though the carbon price floor will be frozen at 2014 levels – a bit under £20 per tonne – many are calling on Osborne to reconsider.

. . . Many economists maintain the most effective way to make companies cut emissions is by putting a price on carbon . . . Campaigners and chief executives alike say freezing one of the UK’s landmark climate policies just two years after it was introduced could make it hard to trust the government’s climate change promises again. Even if they weren’t all that keen on it to begin with.

. . . Coal’s cheapness has been more economically significant than the cost of emitting carbon dioxide in recent years, and it’s unclear whether keeping the carbon price floor would change that.

. . . The government had a chance to end the reign of old coal last year . . . As the energy bill entered its final legislative stages, an amendment was added which would have extended the emissions performance standard – which sets a strict limit on emissions from new power plants – to old coal plants. The amendment was voted down by coalition government MPs.

IMF fuel tax toolkit.
31 July 2014.

A new book, Getting Energy Prices Right: From Principle to Practice, is in effect the toolkit that the International Monetary Fund promised two years ago to help their members price energy responsibly.

It provides estimates of appropriate taxes on coal, natural gas, gasoline and diesel in 156 countries, to include environmental costs in the fuels’ overall prices. For example, meaningful taxes on coal, to reflect carbon damages alone, would amount on average to around two-thirds of the current world price.

At the book’s launch in Washington, Christine Lagarde, the IMF Managing Director, said that global cooperation is needed to overcome global challenges like climate change. But countries should not wait for global agreement on climate policies. Acting in their own national interests, they should make their energy tax systems properly reflect environmental side effects.

Higher energy prices would prompt people to shift to cleaner fuels or more fuel-efficient vehicles. They would be an efficient and simple way of dealing with environmental harm, better than relying on a patchwork of direct cash subsidies and other uncoordinated policies.

The revenue from energy taxes could be used to lower other taxes or to pay down public debt, so it is expected that these tax shifts would have limited adverse economic effects.

The IMF estimates that these policies would reduce deaths from fossil fuels by 63 percent, cut carbon emissions by 23 percent, and raise revenues by 2.6 percent of GDP, for the world as a whole.


International energy investment.
Investors seek price on carbon in climate deal.
The Guardian, 19 September 2014.

Institutional investors managing £15 trillion of assets have called for . . . governments to set “a stable, reliable and economically meaningful” price that polluters would have to pay for their carbon emissions, which would help increase investment in clean power and energy.

Before the UN climate summit in New York next week, the investors also called on governments to phase out fossil fuel subsidies, worth an estimated £370bn worldwide a year, five times the £60 bn paid in subsidies for renewable energy.

Carbon emissions in the UK.
Simon Evans, 4 March 2015.

UK carbon dioxide emissions fell by more than nine per cent in 2014 year-on-year, according to Carbon Brief analysis of newly released government energy data. . . record warm temperatures . . . contributed to the decline in emissions.

. . . A 9.2 per cent reduction would leave UK emissions 28 per cent below 1990 levels . . . The UK is aiming to halve its greenhouse gas emissions by 2025 and cut them by 80 per cent by 2050, both against 1990 levels.

. . . total UK coal use in 2014 was the lowest seen since the 1850s, when the UK was in the midst of the industrial revolution. The reduction was caused by several factors. . . the . . . most decisive factor is changes in the relative price of coal- versus gas-fired electricity.

. . . The top six years for annual UK carbon emissions reductions, in records going back to 1880:

. . . 1893 . . . Long depression.
. . . 1921 . . . Miners’ strike.
. . . 1926 . . . General strike.
. . . 1980 . . . Mass unemployment.
. . . 2009 . . . Global financial crisis.
. . . 2014

. . . Comments:

. . . If biofuels in the above article means the forests which the EU is chopping down in the U.S. for wood chips to burn in EU power plants, then the UK should be ashamed of itself. Instead of reducing world emissions, they are massively increasing them. . . Many . . . effects are not fully included in science models . . . melting permafrost and methane clathrate emissions . . . decreasing albedo . . . While I applaud Europe for doing more than the rest of the world, what it is doing and planning to do is grossly insufficient. We need to be net-zero in all global warming emissions as soon as humanly possible and definitely within 10 years.

. . . When the world can achieve a 10% reduction per year, each year, then there may be some chance at mitigation.

Fuel duty in the UK, 2015.
Christopher Hope, The Daily Telegraph, 19 March 2015.

The fuel duty escalator – which pushes up the price of a litre of fuel by RPI inflation plus one pence – was introduced by the previous government and planned for 2011-2014.

. . . the Coalition abolished the escalator in . . . 2011 . . . and all scheduled increases since then have been RPI inflation only. . . if the escalator had stayed in place the duty on a litre of petrol would have gone up from 57.1p to 72.29p between May 2010 and May 2016. . . under the Coalition the duty has only increased . . . to 57.95p over the same period.

The Chancellor also announced . . . a cut in the supplementary charge on oil industry companies’ profits . . . he would also cut petroleum revenue tax . . . next year.

Fuel subsidies, 2015.

Fossil fuel companies are benefitting from global subsidies of $5.3tn (£3.4tn) a year . . . greater than the total health spending of all the world’s governments . . . according to a startling new estimate by the International Monetary Fund.

. . . The vast sum is largely due to polluters not paying the costs imposed on governments by the burning of coal, oil and gas. These include . . . the money governments are forced to spend treating the victims of air pollution and the income lost because of ill health and premature deaths . . . as well as . . . the harm caused . . . by the floods, droughts and storms . . driven by climate change.

Nicholas Stern, . . . economist at the London School of Economics, said . . . “A more complete estimate of the costs due to climate change would show the implicit subsidies for fossil fuels are much bigger even than this report suggests.”

. . . Coal is the dirtiest fuel in terms of both local air pollution and climate-warming carbon emissions and is therefore the greatest beneficiary of the subsidies, with just over half the total. Oil, heavily used in transport, gets about a third of the subsidy and gas the rest.

. . . China, with its large population and heavy reliance on coal power, provides $2.3tn of the annual subsidies. The next biggest fossil fuel subsidies are in the US ($700bn), Russia ($335bn), India ($277bn) and Japan ($157bn), with the European Union collectively allowing $330bn in subsidies to fossil fuels.

. . . existing fossil fuel subsidies overwhelmingly go to the rich, with the wealthiest 20% of people getting six times as much as the poorest 20% in low and middle-income countries. . . Vitor Gaspar, the IMF’s head of fiscal affairs . . . said that with oil and coal prices currently low, there was a “golden opportunity” to phase out subsidies and use the increased tax revenues to reduce poverty through investment and to provide better targeted support.

. . . IMF official David Coady . . . said: “If we get the pricing of fossil fuels right, the argument for subsidies for renewable energy will disappear. Renewable energy would . . . become a much more attractive option.”

Shelagh Whitley, a subsidies expert at the Overseas Development Institute, said: “. . . our research shows that many of the energy subsidies highlighted by the IMF go toward finding new reserves of oil, gas and coal, which we know must be left in the ground if we are to avoid catastrophic, irreversible climate change.”

Global carbon pricing, 2015.
Michael Le Page, New Scientist, 18 July 2015.

. . . poor, fast-growing economies in Asia and Africa have been investing heavily in coal power as prices fall.

. . . Trying to get an effective global agreement on cutting emissions is not possible . . . “Game theory tells you this will fail,” Gjalt Huppes of Leiden University . . . told New Scientist.

. . . “Most economists agree a carbon price is the best way to curb carbon emissions,” said Joseph Stiglitz, . . . the World Bank’s former chief economist . . . Each country could implement its own pricing system, by taxes or carbon markets, he said. What matters is that the price starts high and rises steadily, to give businesses confidence to invest in alternatives.

. . . a relatively small “coalition of the willing” could force . . . a global carbon pricing scheme . . . on the world. Just two or three of the US, the European Union, China and Japan could do it, Huppes argues. It needn’t even be the whole US . . . California would be enough.

The point is that a carbon-pricing bloc could impose punitive taxes on goods imported from non-carbon-pricing nations. That would create a powerful incentive for countries to implement their own systems and thus be allowed to join the trade bloc. This won’t fall foul of trade laws: the World Trade Organization will specifically allow such taxes.

. . . Some politicians are still talking about limiting warming to 1.5°C, but scientists now regard this as fantasy. . . Kevin Anderson of the University of Manchester . . . argues . . . it will take decades to transform our energy supply to a zero-carbon one . . . our only hope of sticking to 2°C is . . . radical reductions in energy demand . . . and a Marshall plan to build a zero-carbon energy supply.

Cheap oil.
Martin Wolf, Financial Times, 2 December 2015.

The problem is not that the world is running out of oil. It is that it has far more than it can burn while having any hope of limiting the increase in global mean temperatures over the pre-industrial levels to 2 degrees C.

. . . low oil prices now justify elimination of subsidies. In rich countries the opportunity of low prices could – and should – have been used to impose offsetting taxes on consumption, thereby maintaining the incentive to economise on use of fossil fuels, increasing fiscal revenue and allowing a reduction in other taxes, notably on employment. But this important opportunity has been almost entirely missed.

Weather-dependent renewables.

. . . Germany is the world leader in the installation of weather dependent renewables . . . it is . . . part of a strongly interconnected European system . . . the peaks in wind and solar output tend to be smoothed by the larger geographic coverage. . . although renewables output in Germany is less than half of demand for nearly all of the time, much of the renewables production (typically half) is exported to its neighbours . . . It is unlikely that this could continue if Germany’s neighbours were to adopt a similar renewables strategy and also sought to export surplus production.

. . . the electricity system of Ireland and Northern Ireland is a small synchronous system with modest DC links to the GB system . . . the system operators ensure that total generation from non-synchronous generation (which is mostly wind) never exceeds 50% of demand. This is achieved by curtailing wind output if this limit is about to be breached. There are plans to increase this to 75% as experience of managing the system grows.

(Energy Research Partnership, August 2015. ).

Any electrical power grid must adapt energy production to energy consumption, both of which vary drastically over time. . . beyond about 20-40% of total generation, grid-connected intermittent energy sources such as photovoltaics and wind turbines tend to require investment in either grid energy storage or demand side management or both. . . As of March 2012, pumped-storage hydroelectricity (PSH) was the largest-capacity form of grid energy storage available.

( , accessed 20 june 2016.)

Further reading.

Green taxing and spending, 2006-2012.