Whatever your opinion on the health care debate, i think you’ll agree, that it’s pushed most other public policy issues off the table. The fight against global warming is no longer a top priority.  In fact any legislation bringing in a carbon cap, doesn’t charge the largest emitters for their carbon credits and it sets the levels much higher than science suggests they need to be to stop and turn back Global Warming.  I personally think that if this is the sort of “carbon cap and trade” system that comes about, it will have little or no impact on the way most Americans live.  With or without cap and trade, it’s time to put a carbon tax on gasoline and other non-renewable fuels. What is needed now is a consumer movement toward greener products and adding a tax to gasoline, to fund green energy, via tax credits.  A movement toward renewable electricity will not only help the environment, but will also create new jobs in research, development, manufacturer, installation and maintenance of these systems

Cash for clunkers is the current raging political debate in the US.  Let’s cut away all the BS and look at what is happening: the cars being bought are on average about 10 mpg better than the clunkers (heard this on CNBC yesterday).  That means for an increase of about 40% for cars and 60% for trucks.  For a vehicle driving 20,000 miles a year, at 25mpg would use 800 gallons of fuel a year, saving about 600 gallons of fuel or 6 tons of CO2. If a car is used for 10 years (much more than average) the newer car would reduce CO2 emmissions by about 60 tons.

Yesterday, US carbon credits on the CCX traded for 40 cents, yes  $ 0.40, per ton.  So the US government is giving a $4500 rebate to protect the environment from $24 worth of CO2, about 200 times more than the market price.  So, if folks want to keep the program growing for the sake of ramping up car sales, that’s great.  Just don’t think the environmental benefit is worth the cost.

One of the Obama administrations top priorities is energy.  Beyond the priority of energy is the administration’s focus on conservation and green energy.  When you are able to conserve energy in a less costly and polluting way than doing nothing, simple logic and thriftyness would cry out to do so.  Fortunately the US governement offers tax credits and as part of the recent recovery act, federal grants to retrofit schools, goverment building and homes of the poorest to do just that. 

In Allegheny county PA, home to Pittsburgh, the county expects to spend an $8.1 million federal grant on energy effienciency and getting that information out to the citizenry.  A recent project at the Allegheny county jail spent $950,000 to replace 805 lights with new LED fixtures.  LEDs, which can last over 20 years use as little as of 1/10 the power of incandescent bulbs.  The county expects to save about $180,000 on electric fees each year, paying the project back in 6 years, roughly a 12% return on investment.

How many county jails, hospitals, offices, etc. can make these switches, eventually every single one.  Until pricing comes down, by about 75%, homeowners and landlords won’t be able to afford to make the move.

If you were listening to President Obama’s speech before congress and the American people you may have missed it, but he did call for a carbon cap.

• “To truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy,” Obama told lawmakers in last night’s speech to Congress.
• “So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America.”

It’s important to note that he did not say what the cap would be, how soon it should start and who would be affected.  Rather he set the goal of answering these question in the years ahead.

My conclusion is that i don’t expect any legislation to pass before winter/spring 2010.  The markets seem to agree, the price of Offsets on the CCX rose just 2.5% today in reaction to the presidents speech.  If you want to change the world, don’t wait for washington, reduce, upgrade or offset to reduce your CO2 footprint.

As i write this article, the dispute between Russia’s Gazprom and the Ukraine Naftogaz is heading toward it’s second week and many contries, especially in central and southeastern Europe are suffering.  The suffering takes the form of economic losses due to fuel shortages and the human toll of the millions who rely on this gas to heat their homes and cook their food.  This crisis help focuses on the most important, non-environmental problem with fossil fuels: If you don’t have enough of the fuel in your country, you can fall victim to the whims of the market such as the $150 barrel of oil last summer and Gazprom/Naftogaz dispute today. 

The solution to these sorts of problems can be summerized in two words: Renewable Energy or even Green Energy if you prefer.  Yes, combining green power sources to replace dependence on fossil fuels allows local solutions to local problems.  In the current situation, it’s easy to cut off the supply of gas to Ukraine, but i doubt(i equivocate for humor’s sake)  the same can be done to stop the wind, sun and available biogas from supplying Ukraine’s needs. 

Since oil embargo of 1973, the facts have demonstrated that local sources of energy are more secure than those imported from far away lands.  Green energy might not supply the least expensive kilowatt hour of electricity, but it keeps money that is now being sent oil and gas suppliers in your own country.

Oh yeah, did I mention that replacing natural gas with green energy will reduce Greenhouse Gases (GHGs) and help fight global warming too?  Let’s hope that the opponents of fighting climate change jump on the “keep the money at home” bandwagon and help hasten the end of our dependence on hydrocarbon fuels.

Anyone who has railed against the close ties between the current administration and the fossil fuel industry has to be breathing a sigh of relief as President Elect Obama fills out his cabinet with people who believe in Global Warming and want to institute a cap on greenhouse gas (ghg) emissions.  understand that energy independence is much more likely from alternative sources than thru use of fossil fuels.

Secretary of Interior nominee, Ken Salazar, is a long time proponent of renewable energy and an opponent of developing oil shale in the western US.  The Colorado Senator told yesterday’s press conference that the country needs a technical effort equivalent to the “moon shot” to bring energy independence to the US.  He is thought to be open to the idea of business exploiting Interior Department lands, while seeking to protect wilderness and the environment.  He appears to be impressed by both the environment and the need for economic growth and the need to balance them.

The choice of Lisa Jackson for EPA administrator brings a veteran of the EPA and more recently the NJ Dept. Evironmental Protection.  She seems to be an enforcer who feels the EPA has gone easy on the US auto mileage standards, but is also criticized for “caving into business”  on enforcement issue.  Add in former Clinton admin EPA administrator Carol Browner as Presidential advisor on energy and climate change, you see a team of moderates that leans towards new environmental and regulatory changes that have been adopted by the rest of the industrial world’s countries.

If you watch television you’ve seen the ads with oilman Boone Pickens promoting switching our vehicles to run on natural gas/renewable fuels.  If not, the plan is based on 1 fundamental point: that relying on foreign oil is dangerous to the US economy and it’s position in the world.  In short, we should switch to natural guess to power vehicles instead of using oil.  The plan itself is under attack for substituting one carbon based fuel for another, when CO2 levels need to be reduced.  Further the is under attack because it’s creator/backer, 80 year old oilman T. Boone Pickens, has substantial investments in the various components of the plan.

The Good

The plan is about reducing dependence on oil and the transfer of wealth from the US to oil producing countries.  Keeping our energy spend at/near home is something that i support with my environmental, nationalist and capitalist values.  Environmentally the plan calls on substituting natural gas for gasoline that is mainly made from imported oil and substituting the electricity that is generated by natural gas, with wind power. This is a net gain for the environment. First, natural gas generates 30%+ less CO2, per mile than gasoline.  Further switching to wind from natural gas power plants eliminates the emissions from 16%+ of the power generation and about 11% of overall emissions for electrical generation (nat gas generates 33% of the CO2 of coal plants) due to it’s cleaner burn.

The Bad

The Pickens’ Plan encourage changing the entire US truck fleet to natural gas, since trucks use 25% of all gasoline.  Pickens owns Clean Energy Fuels corp. a company that runs natural gas filling stations.  Pickens’ plan calls for wind power to replace natural gas generated power, to make the fuel available for transportation.  Pickens has ordered over $2 Billion worth of wind turbines to help produce that electricity.  The plan calls for the government allow emergency use of eminent domain to create right of ways for high voltage links between wind farms and electric users; Pickens is seeking to have power lines built to his wind farm.  While the plan may help the country, it is Pickens, more than any other individual, who will benefit from his plan.

The Ugly

Boone Pickens has been around for years and has acquired a number of friends and enemies.  Many enemies in the environmental movement base their stand on the effects of his business on the environment.  We all know about the environmental issues of an oil based economy and as a the ultimate Texas wildcatter, Mr. Pickens has made his fortune(and lost it and made it back) in the Oil and Gas industry.  More recently, Mr. Pickens has acquired the majority of water rights, for his Mesa Water, in his county in texas and intends to pump ground water for sale to Dallas, which is over 200 miles away.  Not only does he intend to pump water to sell, he intends to do so at a rate which empty the aquifer in 20 to 30 years.  In June he manage to get his ranch declared a public water district which gives him considerable power in using eminent domain to take property need for his 200+ mile pipeline.  Finally is you are a democrat and/or some one angry over the Swift Boat ads directed at John Kerry in 2004, it was Boone Pickens that spent over $7 million to bankroll the activity.

The Conclusion?

I think it’s a good idea to switch transportation to natural gas, from oil, but to put a bunch of government subsidies to make this switch when we are just a few years from plug-in rechargeables with reasonable cost and range isn’t wise.  Better we should subsidize, non-carbon technology with government money or tax credits.

Anthony Rubenstein discusses the plan and California Prop 10 at his site www.AnthonyRubenstein

The Bay Area Air Quality Management District voted 15 to 1 to implement a CO2 tax of 4.4 cents per metric ton of emissions.  The tax would effect 2500 businesses ranging from refineries to grocery stores.  While this is the first Carbon Tax in the US, 4.4 cents per metric ton of CO2 represents just little more 1/2 of 1% of the actual cost of carbon offsets on the Chicago Climate Exchange where offsets closed today at $7.35 per metric ton.

For more details:  http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/21/MNDN10QD6O.DTL

Southern California Edison (SCE) announced it’s lauch of what will the the largest solar installation in the USA.  The project will install 250 Megawatts of solar panels using 65 million sq. ft. of roof space on the companies buildings.  The project should provide power to over 162,000 homes and will cost about $875 million over 5 years.  The project requires approval by the state utility regulator, which appears to be a formality. 

“The scale of this project is unprecedented,” said Mike Peevey, California Public Utilities Commission (CPUC) president. “It clearly illustrates once again Edison’s leadership position in the development of new renewable technology.”

The projects will be focused on San Bernardino and Riverside counties and will add capacity at the rate of 1 Megawatt a week.  The SCE spokesperson pointed out that this new capacity will located and connected to local power stations. Generating power nearer to the customer not only reduce losses from transmission but reduces the strain on SCE’s entire network.

I’ve been sent this link to this NY Times Article by about 5 or 6 people today and sent it myself to about the same number.  The article is about the US Federal Trade Commission (FTC) looking into the carbon offset market, since there is seemingly no standard for what an offset is.  I argue that this is not true.  There are transparent offsets avail for this newly expanding market, serving individuals and business who can’t wait for government to act against global warming.

In the name of disclosure I first need to say: I am about to launch a Carbon Offset business in the next few days, so i have a vested interest in the business.  I have spent a few months researching this business to determine the what sort of service to offer.  I started by trying to build the business by sequestering land from development, in sensitive areas of the world, but found that there was a lack of transparency in that industry and that the competition was mainly creating their own solutions.  Saving an acre of land didn’t necessarily mean the same thing with each vendor, most didn’t say if the fee was to sequester the land forever or just a year.  Even the Nature Conservancy’s “Adopt an Acre” site doesn’t say what it means to adopt an acre.  The same thing can be argued about “planting a tree”.  Sure a tree will trap tons of CO2 over 50-100 years, but only if the tree lives that long.  Is planting a sampling that won’t weigh 100 pounds 5 or 10 years out really offsetting the carbon we burn today?  And again, i want to make offsets easy for people and businesses to use to help change the world.  I’m not looking to create a solution, go plant trees and then create the studies to prove it right.  I want to help people act on their desire to do something about the greenhouse effect.

The solution that i found are exchange traded Carbon Offset commodity contracts.  These are offsets granted to various private and public organizations, via 3rd party certifiers, projects that reduce greenhouse gases.  These groups sell these offsets to other groups such as Utility Companies, looking to offset their CO₂ emissions.   These are the standard, transparent offsets that the FTC says are not available or at least are not widely use. Our business is only uses these exchange trade contract to fill our clients Carbon Offset needs.  I’ll be posting an official announcement when we launch in the next day or two.