A new study [PDF, via WSJ] from the Congressional Budget Office "discovers" something I guess I kind of thought was common knowledge: realistically, no price on carbon will ever be high enough to substantially curtail driving in the U.S. Even $200/ton carbon -- wildly outside the range of anything Americans will accept -- would only add $2 to a gallon of gas. That's not nothing, but gas has added $2 in just the last couple years, to no huge effect. The CBO reports says the fuel economy standards passed by Congress this year will have far more effect than any cap-and-trade program.
Again: no cap-and-trade system or carbon tax will solve the problem of transportation emissions in the U.S.
Given that transportation is the one of the largest sources of emissions in the U.S., it's clear that a price on carbon -- which has for years been enviros' raison d'etre -- is the beginning, not the end, of climate policy.
What would make a dent on transportation emissions? Here are a few of my favorites:
- public transit investment
- transit-oriented development
- feebates
- a junker credit
- a low-carbon fuel standard
- congestion pricing
- boost plug-in hybrid market via gov't procurement
What are yours?
UPDATE: Hm, I just noticed Ezra's follow-up, in which a commenter of his says this:
Of course the implication of your point, then, is that including transport fuels in a carbon-tax/cap-and-trade scheme may do less substantive good than the political harm which comes from oil lobbyists and the GOP screaming about higher gas prices (we may not like them, but we ignore them at our political peril). A lower cap, as a % of emissions, focused on industrial and electricity generation, coupled with aggressive measures to increase the efficiency of the US vehicle fleet and eventually transition to electric vehicles may be a political winner without a marked substantive impact. But good luck convincing the environmental community of that.
Dunno that I'm part of the "environmental community," but I for one would be happy to accept that.
Do we need nuclear and coal plants for baseload power?
N.Y. Sen. Kirsten Gillibrand answers Grist’s questions on the Kerry-Boxer bill
Comments
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Sean Casten Posted 8:00 am
09 Oct 2008
The issue is that the primary cost of owning a car is the price of the car. The primary cost of owning most other CO2 sources (power plants, boilers, etc.) is the fuel. The difference between the two is simply one of capacity factor, since a car spends most of it's lifetime not running (and thus not buying fuel) while a power plant/steam boiler/etc. spends most of it's lifetime burning fuel. Ergo, a price tied to carbon emissions - and hence fuel use - will have a much greater impact on the capital allocation in the heat & power sectors than it will in transportation.
The solution, it seems to me, is to regulate transportation at the vehicle, and regulate other sources at the fuel. How you standardize that to make sure that the implied price per ton is damned complicated. But if you look at those times when we have been successful at shifting vehicle use (a la CAFE), they have primarily been through vehicle rather than fuel-based regulation.
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Earl Killian Posted 8:53 am
09 Oct 2008
However, California's AB1493 would make a difference. CARB's rulemaking under AB1493 for passenger cars and light duty trucks under 3751 pounds was for 205 g CO2e/mi in 2016, and 175 g CO2e/mi in 2020. That's the equivalent of 42.1 MPG in 2016, and 49.1 MPG in 2020.
Trying to use gasoline price to raise MPG is like pushing on a rope. The US has the worst vehicle efficiency standards in the developed world (including China). We could fix this with strokes of a pen.
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GreenEngineer Posted 10:20 am
09 Oct 2008
In addition, another may be that there are technologies available, right now, that are carbon-free and near price parity with grid power. If you have a technology that is slightly more expensive (over time), but eliminates carbon emissions, then even a small price on carbon can put you over the line economically. Whereas I can't think of anything analogous that's available in the transportation arena. And, no, the Tesla doesn't count -- it's not slightly more expensive.
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Ken Johnson Posted 11:04 am
09 Oct 2008
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Tasermons Partner Posted 11:07 am
09 Oct 2008
Hopefully, high gas prices will do a number on it's own.
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Colin Wright Posted 1:15 pm
09 Oct 2008
Let's look at electricity. Let's say a carbon price adds 50% to retail power (from, say, 10 cents/kwhr to 15 cents kwhr or $100 to $150/mo)). States with good access to wind and power will be able to switch over to renewables (California, say). But take say a state with little access to wind or solar, say Michigan. They will continue to burn coal because they have no alternatives (like the ICE situation). Worse. As the price of carbon goes up, they will shoulder a much larger proportion of the burden. (So why would their politicians sign on to a carbon tax/trading system?)
In other words, a market-based system will produce winners/losers (eg. California/Michigan). But the only way to get a law enacted is to share the burden so that electricity prices reach a rough parity across the country.
So what we need, in my view, is a national grid paid for by tax-payers (that pipes in renewables to the states that lack resources). We share the costs to bring everyone on board. Equity arguments outweigh those of economic efficiency.
And as Joe Romm likes to say, we have all the technology we need. There is no need for arguments that the market will bring innovation. (Of course, any innovation and price reductions we gain through mass production/adoption will be a bonus.)
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racc Posted 4:17 pm
09 Oct 2008
Nearly 10 Billion Fewer Miles Driven in May 2008 than May 2007 Seven-Month Decline in Travel Reflected in Highway Trust Fund
http://www.dot.gov/affairs/dot10208.htm
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danlewer Posted 8:28 pm
09 Oct 2008
So, as you say, using a tax might just lead to additional government revenue and no environmental benefit.
But cap and trade works differently. Even if a C&T scheme that includes transport emissions only adds the same amount to the price of fuel as a tax, the emissions across the scheme are capped. This means that if transport emissions don't reduce, emissions somewhere else must.
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Ken Johnson Posted 2:33 am
10 Oct 2008
Another point: Taxes need not increase government revenue. You can allocate tax revenue in the same way that allowances or auction revenue would otherwise be allocated. For example, use tax revenue from high-GHG fuels to subsidize low-GHG fuels (including renewable electricity for PHEV's).
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Jon Rynn Posted 2:41 am
10 Oct 2008
In other words, what if the only transportation alternative that will really work will be transit plus dense communities? How would pricing carbon do anything if this is the case? It might provide the political will to do what would need to be done: in other words, pour trillions into a new transportation/housing infrastructure. But pricing carbon, as far as transportation is concerned, might be more like putting more and more leaches on someone, as they used to do in the 18th century, on the theory that the patient isn't getting better because we aren't doing what we're doing enough. In other words, it will just kill everybody who needs to transport via the automobile without attending to the real solution, rail and dense communities.
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