SPECIAL REPORT-The California Carbon Rush (Hold the Eureka!)
It could be worse than sticky, argues Gary Stern, a power utility executive. Stern lived through the disastrous deregulation of the California power market a decade ago and fears the carbon market will be small and open to manipulation. The state refuses to set a limit for prices. Traders could learn how to corner the market (think Enron) and then hold hostage utilities and factories with no option but to buy sky-high permits on the open market.
State officials say they are working on new safeguards to stop just such efforts and will unveil them in July. California also plans to hire an external monitor to watch the markets — a key recommendation of Stern. “I’m not saying we would expect the same thing to occur in the emissions markets,” he said. “However, we didn’t expect that to occur in the electricity markets.”
Even if all goes well, nine years of carbon trade won’t be enough to end worries about climate change, especially if other states and nations don’t pitch in.
“The ambition doesn’t add up in terms of what the science is calling for. In fact it doesn’t get close,” said Greenpeace forest campaigner Rolf Skar, who derides the decision to give away any pollution permits at all. He also turns up his nose at California’s plans to let industry pay for “offsets” — projects to soak up carbon, such as forest management.
Offsets are seen as an important price safety valve — letting a redwood grow bigger to capture carbon in its wood is cheaper than building a carbon-free power plant, and a substantial portion of California’s emissions reductions could come from such schemes.
Owners typically pay contractors to verify such projects — which is not dissimilar to a bond issuer paying a credit agency to rate it — but designers say the offset program avoids conflicts of interest and project standards are extremely strict.
To make a serious dent in emissions, regulators will target transportation. Cars, trucks and planes spew out 40 percent of the state’s carbon, more than utilities or industry.
The state’s climate change law could have been called the “California Petroleum Use Reduction Act,” Mary Nichols, California’s top climate change regulator, joked last year.
The state is the third biggest user of gasoline in the world, after the U.S. as a whole and China, but drivers can change emissions very quickly — by leaving the car in the garage or buying a new, more efficient, car.
“You are just trying to get people to drive less, effectively, which is probably going to be quite expensive,” said Sikorski of Barclays.
Auto fuels are pulled into the cap-and-trade system in 2015. Gasoline prices are sure to rise as distributors are forced to buy carbon permits.
full story here
This reminds me of the “war” against smoking. The stated goal is to eliminate the smoking of tobacco, along with other uses of it. Fine then, just do it. Ban tobacco use outright. If that can’t be done (there goes all those fancy cigars), tax it into virtual non-existence, $40 a pack of cigarettes would do it.
But they don’t. Tobacco is an “undeclared” addiction. Many TV shows and movies promote tolerance and understanding of addictions to harder drugs, urge sympathy and support. But smokers are dirty thoughtless morons who pollute the air with their filthy habits, they can quit if they want to.
Thus the politicians have a captive source of revenue, and have carefully taxed tobacco to where they can claim reductions of use, and there has been a reduction in casual use, but the net result is maximizing the revenue stream. The different smoking cessation programs, from drugs to other nicotine sources like gum and patches, tend to be pricier than smoking and generally considered not affordable without someone else (like government) helping to pay the bill.
Note the matches to the anti-fossil fuel (anti-CO2 emissions) schemes. Tax to maximize revenue stream, lose some non-essential usage (turn off unneeded lights, etc) but generally maintain the captive base of those who need the energy they use. Demonize the dirty thoughtless moronic fossil-fuel users who pollute the air with their emissions and can quit emitting if they want to. Provide Other People’s Money for the up-front costs of ceasing to use fossil fuels (wind, solar), support the “substitution deception” (you’re still getting the energy you need for your car, but now it’s electricity from the wall socket instead of burning liquid fossil fuels therefore it’s much better, even if it costs more), etc.
This ain’t about saving anything, except perhaps the jobs of unelected bureaucrats. And like with the Tobacco Settlement monies (which were diverted from the stated uses of cessation and education programs and to fund health care, into general funding and pet projects of politicians), don’t expect the monies generated from “carbon restrictions” to be actually used for reducing CO2 emissions in meaningful ways.
This is what Government does. It forces you to give up money you can hardly afford to lose, while trying to make you feel ashamed that the government has to take away your money at all. The good news, those carbon taxes are never going to be so high that people can’t find a way to pay them, don’t expect lots of “food or gasoline” decisions among the general voting populace. Government has proven adept at maximizing what funds they can get from a population of addicts, be they hooked on tobacco or energy.
I believe increasing unemployment will make people drive less …oh wait….
I think skeptics in California should go out and support the extreme green policies, such as not giving any credits or offsets. A quick obvious crash of green policies and then recovery is better than a decade protracted slow strangulation of the state.
You know there’s a real kicker to that wise old adage that socialism is a great system til you run out of other people’s money. Now they just print more.
I’ve never considered living in California before, but it may be a good idea in a few years after the house of cards has fallen.
“Is it even legal in the US for a State to impose the purchase of a Derivative Contract as a mandate?”
States have a lot more leeway (potentially) than the federal government. It depends on how the State Constitution is crafted. If it’s crafted well, then it keeps the government from running roughshod over its citizens. I suspect that California’s isn’t set up that way.
Now that I think about it, if they can drive more people out of california they’ll have less federal representation, which can only be good for the rest of the country. 😉
California is what it is. The rest of us, especially residents of the neighboring states, need to build a wall/fence/barrier ASAP. It’s not fair or just to excuse the behavior of Californians by allowing them to desert their state when the chaos ensues. The people who made the mess should be required to live in it and/or clean it up themselves.
“…and when well us trades people be able to load our tools and materials onto a bus that will take us at least within a block of our clients’ homes?”
Or pedal down to Home Depot to pick up some concrete blocks and 2×4’s.
When I lived in Calif. and Jerry was running, I remember a bumper sticker that said:
“If it’s Brown, flush it”.
Here is a comment I posted yesterday on Joe “Rantin’ Joe” Romm’s blog which he wacked.
RE: BC Climate Action Plan, a New Communist Manifesto.
Hello Joe!
Go to the following link:
http://www.env.gov.bc.ca/cas/cap.html#cap
On this page download the Climate Action Plan pdf file where you will learn that since the BC gov has the legislative authority to control GHG emissions and levy carbon taxes, the gov can:
1. Sieze control of all means of production
2. Regulate the production of all goods and services
3. Control and regulate every aspect of the personal activities and lives of the people of BC.
4. Redistribute wealth to the low income wage earners via a carbon tax rebate.
Presently, the carbon tax is claimed to be revenue neutral. Not quite true. Overall, the tax is revenue neutral. However, the gov can change the taxation rules anytime in the future. Or when Prof. Mark Jaccard at SFU tells them to.
The carbon tax is presently $20 per ton of CO2 equivalent. I now pay a carbon tax of $1 per gigajoule of nat gas which costs $5 per gigajoule. This tax will go to $1.60 per gigajoule on July 1 2012. That is a tax rate of 32%
The weather forecast is for temps to drop well below freezing next week. And there is no relief on the carbon tax for unusual cold snaps. I’m sending my carbon tax bill to Mother Nature and she can send the extra money to Gordon “Clueless” Campbell.
Do you really want that Lisa lady and her crowd running you life?
Can we erect a border wall with California, so the pathologically suicidal greenies don’t infect our states?
If California wants to commit economic suicide, who are we to stop them. It might be humorous to watch all the liberals in Hollywood moving out of the state to avoid the increase in taxes and fees.
The only thing that worries me is that some in Washington will insist CA is “too big to fail” and force the rest of the nation to bail them out. Perhaps some worthy Tea Party member in Congress will start the mechanisms now to deny ANY state a federal bailout. Might be good verbage to add to the budget bills.
Why turn out the lights if there’s no one left to worry about the bill? Might as well get the benefit of the upstream CO2 emissions.
Harold Pierce Jr says:
February 18, 2011 at 7:37 pm……….
I live in Powell River – and I cringe every time the furnace comes on.
This, as they say, will be interesting…
I can see a thriving black market developing in Nevada Gasoline…
I can get a 250 gallon “plastic jug” to fit in the back of my wagon. With a set of extra heavy tires on it (it will take truck tires…) it can carry that load. Now I use Diesel, so it’s not a fire issue to haul it. That much fuel will get me about 1 year of driving (and my spouse would need one per 1/2 year). So if I visit my family in Nevada 2 or 3 times a year…
BTW, we also have a “e-waste” fee. This is to make up for the “pollution” of electronic equipment. So to buy a TV or laptop it adds $8 to $16 (or maybe more? it goes up with screen size). Add in our 9+% sales tax, and buying that new flat screen TV is “not pretty”. But… Buy it in Nevada or Oregon while tanking up? Hmmmm…..
Then again, I’ve always wanted a bit of land out of state… Maybe I’ll finally be able to convince the spouse to move…
Communism is that long hard road from capitalism to capitalism.
Lance says:
February 18, 2011 at 6:33 am
Last one to leave California, please turn off the lights….
________________________________________
When the last party supply store has closed……time to book(old expression).
Regarding people leaving California, check this out:
http://www.forbes.com/2010/06/04/migration-moving-wealthy-interactive-counties-map.html
Click on Los Angeles County and see the red lines indicating people leaving and the black lines (much fewer) of people moving in. Mouse over the endpoints to see how many people move in or out from each endpoint county.
In the case of LA County, the only significant black lines (people coming in ) seem to be from New York and my area, southeast Michigan.
George V.
I listened to a lecture last week by a San Francisco lawyer touting the great economic opportunities in California’s green initiative. I sat shaking my head, then I decided maybe she was talking about economic opportunities for lawyers. Good luck, y’all. You are going to need it.
It would be cheaper and more humane for California to meet their emission goals just by
picking 40% of their population at random and shooting them.
California is making sure no one frauds the fraud. And California also claims their efforts won’t be enough to end worries about climate change, especially if other states and nations don’t pitch in.
The answer to that is the famous quote from Alfred E. Neuman in Mad Magazine “What, me worry”. Of all that people are worried about climate change is not one of them. And seeing their state follow California down the drain is not something most would want.
You know it is the squirrels fault for not gathering all the nuts.
RE: BC Carbon Taxes On Fossil Fuels
Here are current tax rates on fossil fuels:
Liquid fuels, cents per liter
Gasoline: 4.45
Diesel: 5.11
Jet: 5.22
Propane: 3.o8
Solid fuels, dollars per tonne:
Coal, high heat value: 41.45
Coal, low heat value: 35.54
Gas, cents per cubic meter:
BC Nat Gas: 3.08
BTW reg gasoline costs ca $1.22 per liter or $4.61 per US gal. And nobody gripes about the high cost of gasoline (or diesel) like the folks with big honking SUV and pick-up trucks.
The tax on nat gas is presently $0.9932 CDN per gigajoule which cost $4.568 CDN per gigajoule. On my last gas bill I paid a carbon tax of $13.31. When they are on sale at the Safeway, I can buy ca 2-3 large pizzas (ca 900 g) or 26 donuts for that amount of tax.
These carbon taxes are based on a tax of $20 CDN per tonne of CO2 equivalent. On July 1 2012, the carbon tax increases to $30 per tonne of CO2 equivalent, an increase of 50%.
For the transportation sector there are complex regulations for the assessment and payment of carbon taxes and are costly for companies to administer. Some independent truckers (i.e., owner-operators) are fearful these carbon taxes will really squeeze the botttom line and might put them out of business.
If a Boeing 747 filled up in Vancouver intl airport with 346,000 US gal of jet fuel, the carbon tax would be $68,270.
The carbon taxes will greatly increase the costs of basic construction materials such as cement, bricks, roofing tiles, etc as well as pottery, glass containers, etc.
The BC gov will soon release laws regulating the emission of GHG’s from the so-called “big polluters”.
Fortunately for us in BC, we pay only 6.27 cents per kwh for the first 1354 kwh and 8.78 cent per kwh for any additional electricity.
From E.M.Smith on February 19, 2011 at 1:45 am:
According to this liquid weight calculator, 250 gallons of diesel is 1825 lbs (828 kg) alone, then comes tank weight. Can you haul a ton in the wagon?
It’s likely moot anyway. After extensive searching for how much can be transported before the authorities get irritated, and finding about the same amount of gallons usually mentioned, I found 49 CFR cited with the relevant section:
http://www.fmcsa.dot.gov/rules-regulations/administration/fmcsr/fmcsrruletext.aspx?reg=392.51
Yes it says “commercial” but you know how these things go. How much explaining do you want to do and how often do you want the cops to pull you over? The 119 gallon spec is repeated in other states. Minnesota example:
http://www.dot.state.mn.us/cvo/factsheets/FuelTanks.pdf
No, I do not know how they reconcile 119 gal of diesel, 869 lbs, with the 440 lbs limit of (a). Tank can only be half full?
This seems to be why the largest transfer tanks for diesel are normally 90 gallons. They’re also normally metal, aluminum specifically. I suspect a regulation somewhere against plastic for transferring large quantities of diesel, linked to lack of fire resistance (plastic melts).
Google Search
I’ve read the translation is container size, thus you could have multiple containers of 119 gal max size, just like how you can carry multiple gasoline cans that are each 8 gal or less. More explaining. Also, diesel is a Class 3 hazardous material (reference), you might need the appropriate diamond warning signs. The metal transfer tanks are to be bolted to a truck bed, I’ve also seen mention of maybe needing a grounding strap as well. And if you’re referring to a “station wagon” then you should know the tanks are to have an emergency vent to release overpressure, which is incompatible with being confined in the cabin space.
Best option is a tank trailer:
http://www.refuelingtanktrailer.com/
Made in America, 390 gallons.
On the non-commercial versions that shouldn’t be yelled at by the authorities (see Photos), they are labeled “Not For Hire” and “Private Use” which indicates they are DOT/FMCHSA exempt, legal on all public roads. Also these tank trailers are “equipment” not “trailers” thus might avoid needing registration and a license plate.
The absolute base unit is only $2999.99 with flat rate $299.99 shipping to your door in the contiguous 48 states, thus it should pay for itself in… How high are you expecting those Kalifornia fuel taxes to go?
Harold Pierce: While your dollar calculations may be correct regarding the 747 fueling in Vancouver, the aircraft itself only holds 64,225 US Gals., not the 346,000 gals. you cite. A small point, perhaps, but worth mentioning anyway.
Someone pointed it out earlier that what happened during the Great Power Crunch was *not* “deregulation,” unless the definition of the word suddenly changed to “strict regulatory control contrary to obvious and inevitable market forces.” It’s just another “persistent media-carried lie.”
Also, please remember that these things don’t pass 100% even in CA – but between the flight of the reasonable, gerrymandering and regional discrepancies, reasonable Californians are outnumbered. These crazy things don’t always pass but they’re usually 60/40. So 40% of us are reasonable but stuck here for one reason or another.
Until it becomes literally unbearable, a day which appears to be approaching rapidly.
Merovign says: February 19, 2011 at 12:26 pm
Someone pointed it out earlier that what happened during the Great Power Crunch was *not* “deregulation,” unless the definition of the word suddenly changed to “strict regulatory control contrary to obvious and inevitable market forces.” It’s just another “persistent media-carried lie.”
———————————————————
Here’s a good summary of what caused the great California electricity problem that got the Governor removed from office:
http://www.world-nuclear.org/info/inf65.html
California imports about 1/2 its electricity, and the new policy deregulated the wholesale market but maintained regulation over the retail market. Then, the legislators prohibited long term power purchase agreements (that’s collusion and therefore bad). This forced the utilities onto the spot market where the wholesale price was higher than the retail price.
Then, of course it went to hell, and the regulators claimed that “deregulation doesn’t work” If I read this in a fiction novel, I wouldn’t believe it because nobody can be that stupid.