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Cleaning the Air While Cooling the Planet

by James Boyce • September 28, 2012 @ 11:27 am

By James Boyce and Manuel Pastor. Cross-posted on Triple Crisis.

There is good news and bad news about the clean energy transition. The good news is that half the new electric generating capacity installed worldwide in 2008-2010 was renewable. The bad news is that half wasn’t.

To avoid rapid global warming and its attendant human and economic risks, we need to accelerate the transition. We need to do more than slower growth in the use of fossil fuels: we need to cut their use substantially. This will require significantly ramped up investments worldwide in energy efficiency and clean energy.

One way to encourage this investment is to base public policies on the full range of benefits from reduced burning of fossil fuels – not only global benefits from reduced greenhouse gas emissions, but also local benefits from reduced emissions of particulates, nitrogen oxides, sulfur dioxide, carbon monoxide, mercury, benzene, and other toxic pollutants.

In the European Union, research has shown that the clean air benefits alone are sufficient to justify investments in energy efficiency and renewables. “The welfare effects of climate policy seem to be positive,” a 2006 report for the Netherlands Environmental Agency concluded, “even when the long-term benefits of avoided climate impacts are not taken into account.”

The clean air co-benefits of climate policy may be even greater elsewhere, in countries with less stringent air pollution controls than Europe. In a recent study we cite World Bank data indicating that in the United States the human health damages from particulate emissions are six times higher per ton of carbon dioxide than the average for Germany, France and the United Kingdom. In China, the ratio is more than ten times higher. (more…)

Don’t Pay Polluters

by James Boyce • September 14, 2012 @ 4:31 pm

Originally posted to Triple Crisis.

A little known greenhouse gas called HFC-23 made the news recently. Also called fluoroform, it’s a waste gas generated in the manufacture of refrigerants. Compared to carbon dioxide (CO2), HFC-23 is a minor greenhouse gas. Pound-for-pound, however, it traps more than 10,000 times as much heat.

The UN’s Clean Development Mechanism (CDM), set up under the Kyoto accord as a way for industrialized countries to “offset” their own CO2 emissions by paying for comparable actions in developing countries, counts destruction of one pound of HFC-23 as equivalent to prevention of 11,700 pounds of CO2 emissions.

The CDM pays large sums to coolant manufacturers in India, China and elsewhere to destroy the HFC-23 they produce. Indeed, these payments have become the largest single item in the CDM budget: this year, HFC-23 disposal is getting 50% more CDM money than wind power and 100 times more than solar energy.

The rub is that paying firms not to pollute gives rise to a perverse incentive. A firm that threatens to pollute more gets paid more. So manufacturers have upped their production of the refrigerants (themselves greenhouse gases, albeit less potent ones), in order to produce more HFC-23, so they can then get paid to destroy it.

It’s a great example of what economists E. K. Hunt and Ralph d’Arge once called capitalism’s “invisible foot”: when polluters are paid to clean up pollution, they create more of it, as if guided by an evil twin of Adam Smith’s invisible hand. Today some firms make half their total profits from HFC-23 disposal payments.

People living near the coolant factories don’t do as well. In the state of Gujarat in western India, residents of an adjacent village complain of skin rashes, birth defects, and damages to crops caused by a noxious fog that burns the eyes and lungs.

The European Union has halted further HFC-23 payments, prompting firms to threaten to release the gas into the atmosphere. A scientist at the Environmental Investigation Agency, which opposes the pollution subsidies, put the matter baldly: Attempting to force countries into squandering billions on fake offsets that actually increase production of greenhouse gases,” he said, “is extortion.”

The HFC-23 fiasco offers three crucial lessons for climate policy. (more…)

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The Climate Justice Imperative

by James Boyce • May 26, 2011 @ 1:17 pm

This post by James Boyce  first appeared on Triple Crisis.

It is time for a new strategy for climate policy in America – a strategy founded on climate justice.

Climate justice has four pillars:

Action: Climate change will affect us all, but its heaviest costs will fall upon low-income people who live closest to the margin of survival and are least able to afford air conditioners, sea walls, and other types of insurance. Climate inaction is climate injustice.

Adaptation for all: We cannot prevent climate change altogether. Investments in adaptation are necessary, but how should these be allocated? The conventional economists’ prescription is that investments should be guided by “willingness to pay,” which of course depends on ability to pay. The implications of this logic were spelled out two decades ago in the Summers memorandum that purported to make the case for dumping toxic waste in low-wage countries. Climate justice requires that investment in adaptation should be guided by human needs, not by the distribution of purchasing power.  

Co-benefits: Burning fossil fuel releases not only carbon dioxide but also co-pollutants that endanger human health. Co-pollutant damages per ton of CO2 vary greatly, so it makes sense to reduce emissions where the “co-benefits” of co-pollutant reductions are biggest. Because co-pollutants disproportionately impact low-income and minority communities, integrating them into climate policy is a matter of climate justice as well as efficiency.

Dividends: A cap on carbon emissions is essential, but instead of giving free permits to polluters – a central plank in “cap-and-trade” schemes – polluters should pay. Permits are valuable: their holders will receive the fossil fuel price increases triggered by the cap. They should be auctioned, not given away, eliminating any need for permit trading. The revenues should be returned to the people as the rightful owners of the atmosphere’s limited carbon-absorptive capacity (or any country’s share of it). The “cap-and-dividend” climate bill proposed by Senators Maria Cantwell (D-Wa) and Susan Collins (R-Me) in 2009 would do exactly this, returning 75% of the revenue directly to the public as individual dividends, and devoting the remainder to clean energy investments. (more…)

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