Climate of Fear XII.

What is the “price” of one ton of carbon-dioxide pollution emitted into the atmosphere? According to Obama administration economists, it is $37.[1] If you add that cost into the price of carbon, then market forces will nudge people to burn less carbon and will create a market for alternative energy sources. A government can either tax carbon burning directly or it can dodge around the formal tax by establish a system in which companies have to buy what amount to licenses to pollute. (These are usually labeled “cap-and-trade: solutions.)

People who depend on carbon-burning for jobs, profits, and comfort see carbon-pricing as getting their ox gored for the sake of scientific predictions in which they cannot afford to believe. Australia is a good example. It produces 5.5% of the world’s coal, most of it for export. Prime Minister Julia Gillard, a climate change believer, pushed through a carbon tax. In 2013, she lost her office. Her successor immediately got the tax repealed.

In 1990 the Country-Formerly-Known-As-East-Germany merged with West Germany.[2] East German had been an environmentalist’s nightmare, owing to its reliance on burning coal for energy. Many of the polluting electricity-generating plants were soon shut down. Nevertheless, Germany relied on coal for much of its fuel. In 1997 Germany adhered to the Kyoto Protocol. Angela Merkel was then serving as environment minister. Since then she has committed herself to cutting greenhouse gases. In 2007, as chancellor, she committed Germany to making substantial cuts in emissions. Cutting across this effort, however, was a desire to move away from nuclear energy. Germany had 17 nuclear plants, but started to shut them down as they aged, without building additional production capacity. The disaster at Fukushima in 2011 gave this slow movement a strong shove. As a result, Germany’s reliance on coal has returned to the 2007 levels. In 2013 Germany got 45 percent of its energy from burning coal and 25 percent from renewable energy. Moreover, coal miners and electrical plant workers are a big and well-connected constituency. It remains to be seen whether Merkel can push through real cuts.

The United States offers another good example. It produces 11.7% of the world’s coal.[3] In 2010, President Obama tried to get a cap-and-trade bill through the Senate, but was defeated by Republican opposition. The new Republican Congress isn’t likely to change course now.

If a carbon tax isn’t saleable in Western democracies with diverse economies, how will it fair in developing countries that rely heavily upon coal and oil to fuel their advance? India produces 7.7% of the world’s coal. China produces 46.4% of the world’s coal, all for domestic consumption. China signed a declaration sponsored by the World Bank that called for a price on carbon that reflected its real cost. China has begun cap-and-trade policies in some of its provinces. Loud snorts of derision followed the gestures: China continues to expand its burning of carbons and the declaration it signed was non-binding. Is it more than just window-dressing?

A German mining union official spoke for more than just German miners when he asked, “Is it worth it if we as a country succeed in reaching our targets in reducing carbon emissions, but sacrifice good jobs and our industrial base?”

 

[1] Coral Davenport, “President’s Drive For Carbon Pricing Fails to Win at Home,” NYT, 28 September 2014.

[2] Melissa Eddy, “Missing Its Own Goals, Germany Renews Effort to Cut Carbon Emissions,” NYT, 4 December 2014.

[3] http://en.wikipedia.org/wiki/List_of_countries_by_coal_production

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