New York Times columnist Thomas Friedman is nothing but consistent: he wants a carbon tax and he wants it bad. Since 2005, he’s mentioned “carbon tax” 41 times in his column. Yet, while his support for a carbon tax hasn’t waned, the characteristics of his preferred carbon tax policy have.
As ITIF argues in Inducing Innovation: What a Carbon Price Can and Can’t Do, pricing carbon by itself does little to support clean energy and carbon reductions. It can be a useful tool for nudging near-competitive low-carbon technologies into the market and spurring modest carbon cuts, but it’s at best a complementary climate policy. That changes if we use a carbon tax as a revenue-raiser to support additional policies aimed at making clean energy cost and performance competitive with fossil fuels. In other words, tying a carbon tax to aggressive energy innovation policy can get us better climate mitigation “bang” for our climate policy “buck.” It’s why I proposed an “Innovation Carbon Price” that ties 20 percent of carbon tax revenue to public energy innovation investments and 80 percent to strengthening corporate tax incentives for training, research, … Read the rest
President Obama aggressively called for addressing climate change in his fifth State of the Union address, but ultimately came up short of outlining a clear and compelling vision with the necessary policy scope to address the significant technological challenges impacting clean energy.
Here are my five top take-aways:
1) Demanded Action to Address Climate Change
It is indicative of the sad state of the U.S. climate debate when a mere mention of support for addressing climate change elicits celebration. Nonetheless, the President deserves credit for calling on Congress to take action against climate change and using about 10 percent of his speech to discuss what he would like to see.
“But for the sake of our children and our future, we must do more to combat climate change. Yes, it’s true that no single event makes a trend. But the fact is, the 12 hottest years on record have all come in the last 15. Heat waves, droughts, wildfires, floods – all are now more frequent and more intense. We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states
A new study by top climate scientist Ken Caldeira and tech industry leader Nathan Myhrvold provides good qualitative analysis of the character and aggressiveness of the change needed in the U.S. electricity sector to significantly cut carbon emissions. The analysis paints a black-eye on those that believe natural gas is a climate relevant “bridge-fuel” to a clean energy future. It may have been a bridge-fuel option forty years ago as part of a cohesive national energy strategy, but given our climate realities, replacing coal plants with ‘cleaner’ natural gas is a climate and energy policy non-starter in addition to it being limited in addressing our other energy challenges. Its technological development history, however, does provide a government-industry roadmap on how to drive clean energy innovation.
Historically low natural gas prices and newly discovered (and large) domestic shale gas supplies (see image)have thrown a wrench in the climate and energy policy debate. It’s no longer as simple as making clean energy cheaper than coal and oil – the burning of which is the main culprit behind climate change. Instead, natural gas offers power producers a cheap and – on paper … Read the rest