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Cap-and-Trade – A Bureaucrats Solution to a Technological Problem

When the only tool you have is a hammer, the whole world looks like a nail. In other words, there is no problem that a bureaucrat can’t solve, if only we would let them pass another regressive tax. That may well be the sum total of the creative thinking that has gone into the Obama Cap-and-Trade plan. The Obama Administration proposes that companies buy a permit for each ton of carbon emitted, at an estimated cost, to start of $13 to $20 per ton. The permits could then be bought and sold. The theory behind this convoluted scheme is that it will somehow miraculously increase energy efficiency and renewable energy development.

Rather than focus on available technological solutions, let’s burden hard working American consumers with another ill-conceived regressive tax! Who will ultimately pay for this brilliant plan? Consumers of course. It is estimated that under the Cap-and-Trade plan,  gasoline will go up by $.12 per gallon and the average electricity bill will increase by about 7% nationally. This burden, however, will not be shared equally. The already economically hard-hit middle of the country, which is dependent on coal-fired plants for electricity, will be disproportionately taxed. The White House talks the talk when it comes to helping the economically challenged States of the “Rust-Belt,” but they sure don’t walk the walk.

We could solve this problem in any number of ways that would not unduly burden the consumer. Let me give you a few examples.  In the United States we emit over 24 metric tons of carbon dioxide per person; in France they emit a little over 6 metric tons per person. So, let’s do it the French way and cut our emissions by nearly 75%. The centerpiece of France’s green strategy is of course clean nuclear power. France generates more than 75% of its electricity from nuclear reactors. All the power you want 24/7 and no carbon dioxide. The excess energy produced in off-peak times can be used to charge electric vehicles at night or generate hydrogen from water as a means to power the future hydrogen economy.

Even the “green” Germans seem to have finally come to the conclusion that wind may be fine as a supportive source of clean energy, but it is limited by both scale and its inherent intermittent nature. This year’s German election will probably result in a reversal of its long standing anti-nuclear policy, as it has become increasingly clear that only dependable nuclear power can generate carbon dioxide free, base load electricity on a nationwide scale. In Europe, the population seems to have finally realized that for 30 years the Germans have talked green but only the French have acted green.

The technology to replace carbon dioxide-belching cars and planes with high-speed inter-city mass transportation has existed for more than three decades. Continuing on our French green theme, there is, of course, the TGV (Train a Grande Vitesse) high-speed train. Following the inaugural TGV service between Paris and Lyon, in 1981, the TGV network, centered in Paris, has expanded to connect cities across France and adjacent countries. TGVs link with Switzerland, and through the French Thalys network with Belgium, Germany and the Netherlands. The Eurostar network links France and Belgium with the United Kingdom.

Such a high-speed network would be immensely beneficial in the population-dense Northeast corridor of the United States. However, with government-run Amtrak’s usual incompetence, they managed to purchase TGV-like trains, called them ACELA, and were then forced run them at much lower speeds on existing 18th century tracks. As a French college once commented to me - when you ride the TGV you feel like your going slow, but you are really going fast, and when you ride the rattling ACELA you feel like your going fast but your really going slow.

The key to producing less carbon dioxide emissions from fossil fuels is to use the fuel with the lowest carbon to hydrogen ratio. Coal is the least desirable because there are roughly 2 carbons for each hydrogen; oil is cleaner because it has the inverse ratio of approximately one carbon for 2 hydrogen molecules; and best of all is methane (CH4), with 4 hydrogen molecules for each carbon molecule. Although natural gas is primarily methane, it does contain some longer chain hydrocarbons such as ethane, propane, butane, pentane etc. that make it slightly less desirable than pure methane. Thus, the reduction in carbon dioxide emissions when natural gas is substituted for gasoline in an automobile is about 25-30%.

Natural gas may not be the perfect solution to our need for a clean transportation fuel but it is certainly a good one and one that can be deployed in tens of millions of standard size vehicles in a relatively short period of time. The perfect solution will take at least a decade or two to be developed for standard size cars and trucks.

Voltaire had it right: Le mieux est l’ennemi du bien or “the perfect is the enemy of the good”. While there are only about 130,000 Natural Gas Vehicles (NGV) in the U.S, there are nearly 4.5 million of these alternative fuel vehicles worldwide, mainly in Argentina, Brazil, Pakistan, Italy, Germany and India. In Italy alone there are more than 400,000 NGV’s, demonstrating that this is not a pie-in-the-sky idea, but one that is easily and quickly implemented.

This essay is too short to detail all of the viable technological solutions that could be applied to reducing carbon dioxide emissions that would be far superior to an unimaginative regressive tax such as Cap-and-Trade. So let me enumerate a few additional thoughts: geothermal energy can play an expanded role, hydroelectric plants should be built not dismantled, coal gasification should be expanded, and tidal power, which unlike wind is not intermittent should be developed, as well as the creation of an energy efficient smart grid.

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4 Responses to “Cap-and-Trade – A Bureaucrats Solution to a Technological Problem”

  1. So, the President lit a candle.

    Are you cursing as darkness that Your celesital pies weren’t funded instead?

    Let’s see, that would be with our dollars also?


  2. Guys, I work for a US based company that has been engineering, procuring & constructing coal power plants for almost 125 years. Business may be effected adversely today but I assure you that the engineers who labor in this business will be able to find work in alternatives as well. I say that because it is true and also so that you will know that I have nothing to gain in promoting my own opinion. I ask everyone to do each of us a favor and please educate yourselves before you act as a hyper-partisan in favor (or against) anything. A good start is Professor David Mackays free (PDF file download) book “Without The Hot Air”. It’s available on the net at http://www.withouthotair.com. April 14th, 2009 issue of The Economist has a great book review on this book and a few others on this vital topic.
    We all have a stake in the planet’s health but lets work wisely together. This is not a simple black or white problem as we will need to transition to a new energy economy at an optimum pace. That is, this is not an Algebra problem it is more one of Calculus where the correct answer changes with the paqssage of time. Failure to do this correctly will result in energy problems or worse. Please consider reading this (and other good books) before joining the debate.
    Thx


  3. Saw your Blog bookmarked on Reddit.I love your site and marketing strategy. Check out my website if you get a chance, just click on name. (I don’t want to leave a link, it looks too spammy)

  4. @Markus I get your drift on where you were going there. I often think of my past and use it as a means to analyze where I am and where I want to get to. Where I struggel is balancing it all out. How do you guys balance things out?

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