A New Climate Tipping Point

Last week, a long-awaited report from the United Nations’ scientific panel on climate change showed that the worst consequences of global warming would occur even sooner than previously thought. Here’s the story behind the findings.

On today’s episode:

  • Coral Davenport, who covers energy and the environment for The New York Times.

  • William D. Nordhaus, who was awarded a Nobel this year for his work on the economics of climate change.

Background reading:

Exxon Puts Up $1 Million to Campaign for a Carbon Tax

Rare donation to fight climate change represents a break with fellow oil giants—and with the Trump administration

Exxon Mobil Corp. is committing $1 million over two years to promote a tax on carbon emissions by corporations, one of the few times an oil company has given money to make fighting climate change a political priority in Washington.

Exxon sees a carbon tax as an alternative to patchwork regulations, putting one cost on all carbon emitters nationwide, eliminating regulatory uncertainty hovering over Exxon’s business in states that might seek to target oil companies, the person said.

.. Exxon’s contribution will go to Americans for Carbon Dividends, a new group co-chaired by former Senate Majority Leader Trent Lott. It is promoting a carbon tax-plus-dividend policy first proposed by two former secretaries of state, James Baker III and George Shultz, last year. All three figures are Republicans.

The idea is to discourage companies from emitting carbon through the tax, but to avoid burdening consumers by returning the money to Americans through what the group calls a “carbon dividend” that it estimates could be as much as $2,000 annually per family.

On climate change issues, Exxon finds itself in unlikely opposition to many in the Republican Party, at a time the GOP holds the White House and majorities in Congress. Republican leaders there have often derided the idea of global warming and shown contempt for taxes as a solution.

While the Baker-Shultz plan is designed to be revenue-neutral by sending all of the money directly back to Americans, critics say it is too nuanced and complicated to be palatable.

.. “I don’t think the base would believe that, even if it were true,” said George David Banks, a former adviser to Mr. Trump on climate issues. “Not only are you asking the base to support climate policy, but you’re asking them to support a tax. You’re asking them to support a double whammy.”

General Motors Co. , Johnson & Johnson , and other oil companies, including BP PLC, are founding members of the Climate Leadership Council, the organization fine-tuning the details of the Baker-Shultz plan.

.. It pledged this year to cut its methane emissions 15% by 2020, it has touted its research to make fuels from algae and its chief executive

.. If big companies—especially fossil-fuel companies—make climate policy a lobbying priority, it could open the door to an eventual solution or compromise, though it may be years away and not include this plan or any carbon tax.

.. “This is an interesting and important signal shift. For years, Exxon’s political effort was all on the side of climate denial and obstruction,” said Sen. Sheldon Whitehouse (D., R.I.). “At least Exxon money is now on both sides of the fight.”

Canada Backtracks on a Carbon Tax

Justin Trudeau’s Liberals try to stop a stampede of capital out of the country.

The new carbon tax is only one of the green policies hurting Canada’s competitiveness. Ontario has long been the nation’s manufacturing hub. But in 2005 the province began phasing out the use of coal for electricity generation, and in 2009 it passed the Green Energy Act, designed to force industry and consumers into renewable energy. The net effect has been skyrocketing electricity prices in the province and declining manufacturing output.

.. Ontario, under new political management since June, and Saskatchewan have gone to court to challenge the federal government’s authority to impose the tax. Prince Edward Island, New Brunswick and Manitoba have their own proposals to price carbon and are all on record against a federal take.

In Alberta, where the economy depends heavily on pumping oil, the United Conservative Party’s Jason Kenney is the favorite to win next year’s election for provincial premier. He has promised to oppose the Trudeau tax. He says he will keep a provincial carbon tax but limit it to “major emitters.”

Canadian Environment Minister Catherine McKenna said last week that the Trudeau government wants “to have the most energy efficient, smart industries here that create good jobs, at the same time do what we need to do to tackle emissions.” But Liberals may soon find out that as one of the world’s foremost energy producers, Canada can’t have it both ways.

 

Electric Cars Are the Future? Not So Fast

Though they’re no longer ugly, impossibly expensive and impractical, electric vehicles need to out-innovate fossil fuels if they are ever to displace the internal combustion engine

at the current battery cost of $270 per kwh, oil would have to cost more than $300 a barrel​ (in 2020 dollars) to make electric and gasoline equally attractive. If battery costs fall to $100, as Tesla Founder Elon Musk has targeted, oil would have to average $90.

..  an optimistic scenario, where battery costs fall 10% a year starting now and gasoline begins at $5 a gallon, electric vehicles will be competitive in five years. If battery costs fall just 5% a year and gasoline starts at $2.25, it will take more than 20.
.. Electric vehicles are meant to be recharged at night. Economists Joshua Graff  Zivin, Matthew Kotchen  and Erin Mansur note in a 2014 article in the Journal of Economic Behavior and Organization that night is when electricity is most likely to come from burning coal. They estimate electric vehicles account for more carbon dioxide per mile than existing cars in the upper Midwest, where coal-fired plants are more prevalent, and more than comparable hybrids in most of the country.
.. Yet they may not be the most efficient way to combat carbon emissions. A carbon tax, for example, would incentivize conservation and alternative fuels regardless of oil prices.