How the Cap and Trade Works in Practice

[FinanceDude]

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Originally Posted by REWahoo NOTICE: We have removed a number of posts on this thread discussing the politics of cap and trade. If you want this thread to remain open for discussion, please be sure your comments are related only to the economic, investment or other non-political aspects of this subject.

That's easy: Cap and trade is a terrible idea, will bankrupt the American economy, and unfairly punish the folks that are unfortunate to live in states with coal-fired plants........now I feel better.......

[jessy]

Wasn’t there some kind of law/rule that was going to require all first home buyer loans to meat a new set of requirements? I think it was all 4 and 5 start appliances, something with the insulation, and there were some other things on the list. I can’t find that information.

Kroeran
What percentage of oil that the US uses comes form over seas? I have been told that it was a low percentage but the media makes us think it’s more so they can fluctuate gas prices.

[Gone4Good]

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Originally Posted by samclem Subject to the caveats ERD50 gave (i.e. if CO2 limitation is really an issue worthy of expenditure of scarce resources, and if there's an international consensus on this), then a tax on the sources of carbon pollution (e.g. fossil fuels) is probably the least damaging means to achieve reductions.

I think you get to the same place with either a tax or with cap and trade. The virtue of C&T is that you target a quantity (amount of allowed C02) and the market sets the price that accomplishes that target. With a tax you set a price (the amount of the tax) and the market determines how much carbon is emitted at that price. If what you really care about is targeting a quantity, than cap & trade is the better approach. Having said that, the administrative complexity, and the opportunities for unintended consequences, seems much higher with cap & trade. I don't know if those drawbacks are significant enough to tip the balance in favor of a simple tax, but they might be.

[samclem]

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Originally Posted by . . . Yrs to Go Having said that, the administrative complexity, and the opportunities for unintended consequences, seems much higher with cap & trade. I don't know if those drawbacks are significant enough to tip the balance in favor of a simple tax, but they might be.

These are the factors that make a tax preferable, IMO. The complexity of the C&T market will be astounding, and the opportunities to cheat or even to abide by the rules and yet produce no reduction in C are huge.

One "advantage" of C&T to some proponents is the ability to expand the model beyond carbon. After all, methane is a much more potent greenhouse gas than is CO2. Methane, in large part produced by livestock, can't be reduced with a tax on fuel (unless we tax hay). But, once we have C&T for carbon, it's less of a problem to set up a similar scheme for methane. And so the complexity would multiply. And then there would be other things needing to be limited.

So, no make-believe C&T "market", please. I'd rather not give the state another tool by which to control behaviors--let them muddle through with the hammer and tongs of regulations and taxation. They are doing enough damage with those implements already.

[Gone4Good]

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Originally Posted by samclem One "advantage" of C&T to some proponents is the ability to expand the model beyond carbon. After all, methane is a much more potent greenhouse gas than is CO2. Methane, in large part produced by livestock, can't be reduced with a tax on fuel (unless we tax hay). But, once we have C&T for carbon, it's less of a problem to set up a similar scheme for methane. And so the complexity would multiply. And then there would be other things needing to be limited.

I think "carbon" is just shorthand for greenhouse gases. If I'm not mistaken, methane and other greenhouse gases are part of the C&T legislation.

[samclem]

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Originally Posted by . . . Yrs to Go I think "carbon" is just shorthand for greenhouse gases. If I'm not mistaken, methane and other greenhouse gases are part of the C&T legislation.

Yep, you are right. Now I like C&T even less.

[FinanceDude]

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Originally Posted by samclem Yep, you are right. Now I like C&T even less.

Great, now we can look forward to a "flatulence tax"..........

[HFWR]

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Originally Posted by FinanceDude Great, now we can look forward to a "flatulence tax"..........

D.C. would go broke (broker?) in a hurry!

However, flatuence is not the issue; cows "burp" methane...

[Kroeran]

very cool!

then there are creative approaches to capturing bovine methane...

[Kroeran]

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Originally Posted by jessy Kroeran What percentage of oil that the US uses comes form over seas? I have been told that it was a low percentage but the media makes us think it’s more so they can fluctuate gas prices.

http://wiki.answers.com/Q/What_perce..._the_US_import

imported vs overseas is also another angle - we will let you have all the oil you want as long as you don't block the border to traffic to Florida

[jessy]

Thank you for the link Kroeran; I never know the number was that high. I thought it was a lot lower.

More methane comes out of a cows mouth then the cows other end. But I do like that pic.

[Texas Proud]

OK... I am a gassy sort of guy.... so can I reduce my output of greenhouse gasses and sell them on the market? If so, then I need to eat a LOT of beans before the CAP is put in place... don't want to lose some money by not getting my max cap....


My boss planted about 1,000 or more trees on his place a few years ago... seems like a bad idea if they do the cap and trade... should have waited and created and offset for someone and make money doing it...

Like others... I would think a tax is a better option... less games... but we need to get all forms, including the cows etc... a tax on each head of cattle... (what about pigs they have a lot of pig waste that creates problems)...

[Kroeran]

I could use some global warming

[HFWR]

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Originally Posted by Texas Proud Like others... I would think a tax is a better option... less games... but we need to get all forms, including the cows etc... a tax on each head of cattle... (what about pigs they have a lot of pig waste that creates problems)...

Some farms, and landfills, are capturing methane for use...

Methane digester converts dairy manure to electricity

Title: Hydrogen and Electricity Generation from Anaerobic Wastewater Treatment

Northern Ontario’s first methane powered electricity plant

BMW expands landfill-methane electrical generation at Spartanburg plant — Autoblog Green

http://www.uwex.edu/uwmril/pdf/Rural...mics_Mehta.pdf

[kumquat]

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Originally Posted by Kroeran I could use some global warming

I bet I need it more. I'm somewhere near these:
Weather Forecast: Regina, Saskatchewan - The Weather Network
Weather Forecast: La Ronge, Saskatchewan - The Weather Network
Weather Forecast: Edmonton, Alberta - The Weather Network

An it's much closer to the coldest mentioned

[samclem]

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Originally Posted by HFWR Some farms, and landfills, are capturing methane for use...

Of course, when they burn the methane the carbon ends up in the atmosphere, but as CO2. These methane digesters don't directly prevent a single ounce of carbon from getting into the atmosphere. Still, I guess if it reduces the need ot burn propane or something else, it does indirectly reduce the carbon in the atmosphere. And saves the propane for use later. By the Chinese.

[hguyw]

Since 40 - 50% of the stuff that ends up in landfills is compostable, landfills are a major source of methane. The compostable matter ends up buried, resulting in anaerobic (without oxygen) decomposition that produces methane, a major greenhouse gas. Home and municipal composting operations are growing in popularity because of this - composting by definition requires oxygen (aerobic decomposition) and therefore produces much less methane (or maybe none, I'm not a chemist). The result is free organic matter for gardens. The city of Ottawa seems to have the right idea.

I think the whole cow flatulence thing is a bit of a red herring. Before humans took over the planet, there were literally millions and millions of grass-eating, burping, four legged creatures wandering the earth. That said, I think we do need to take a long, hard look at CAFOs, both from an enivronmental and humane standpoint. I've switched to as much locally grown foods as I can, including local, grass-fed meats and eggs. I offset the added cost by growing my own vegetables and buying and freezing fruits in season. As my garden grows, my food costs should continue to decrease. (Right now, it's 25 degrees with snow on the ground, and I have fresh salad greens growing in my cold frame.) Since the rule of thumb is that it takes 10 calories of oil to grow 1 calorie of food (or put another way, the average meal travels 1500 miles from field to fork), eating local will become a necessity as fossil fuel (and the fertilizers made from them) prices continue to rise in the future. The increased prices of factory food is a lot scarier to me than cap and trade.

[ERD50]

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Originally Posted by hguyw ... eating local will become a necessity as fossil fuel (and the fertilizers made from them) prices continue to rise in the future.

I don't have a link handy, but I recall reading a study that indicated that much of the non-local food growing/shipping is actually a good thing environmentally. Better to grow the food where it grows best and ship it than to invest the resources to try to grow the food locally. There are exceptions of course, and we ought to do whatever makes sense.

While your cold frame is working well for you, that is a tough thing to do on a commercial scale for salad priced items. Acres and acres of cold frame would be big undertaking and require a lot of materials. And they would need to be set up for heating for cold snaps (or risk losing a crop), for letting air out on hot days, and provide access for harvest and tending. How does losing a crop once in a while compare to the fuel used to transport those crops?

ahhh, here's a link:

http://www.leopold.iastate.edu/pubs/...p/food_mil.pdf

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Carbon dioxide equivalents per kilogram of tomato were compared over a 20-year period for tomatoes grown in Denmark, the Netherlands, Sweden (with Sweden being the end consumption point), and other countries.86 Spanish tomatoes were shown to have lower CO equivalents than those produced in Denmark, the Netherlands, and Sweden, even though the transportation distances to Sweden were shorter than for the Spanish tomatoes. The reason is that the Spanish tomatoes were raised in open ground while the Swedish, Dutch, and Danish tomatoes were raised in heated greenhouses, which required more fossil fuel energy in crop production. Transportation energy savings for the systems with shorter transport distances were overshadowed by higher energy needs in crop production. The results of this Swedish study underscore the importance of examining fuel use and CO emissions across all sectors of the food system.

I think that if you look at the fuel used per ton of food, per mile transported, it won't add up to much. And growing locally probably means a lot of small trucks making rounds (often running empty on the return from the market?), which is going to be less efficient than rail, ship and big rigs.

-ERD50

[hguyw]

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Originally Posted by ERD50 I don't have a link handy, but I recall reading a study that indicated that much of the non-local food growing/shipping is actually a good thing environmentally. Better to grow the food where it grows best and ship it than to invest the resources to try to grow the food locally. There are exceptions of course, and we ought to do whatever makes sense.

This makes perfect sense of course, but it's based on the assumption that people are going to want - or will be able to afford - out of season fruits and vegetables no matter how expensive they get. Everything's relative; even if diesel fuel went to, say, $15 per gallon (extreme from our view now, but not impossible in the future I think), the field-grown-shipped tomatoes would probably still be cheaper than the hot house-local tomatoes.

But will either tomato be affordable to someone who makes an average wage, if diesel and fertilizer costs jump the way some say they will in the coming decades?

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While your cold frame is working well for you, that is a tough thing to do on a commercial scale for salad priced items. Acres and acres of cold frame would be big undertaking and require a lot of materials. And they would need to be set up for heating for cold snaps (or risk losing a crop), for letting air out on hot days, and provide access for harvest and tending. How does losing a crop once in a while compare to the fuel used to transport those crops?

Actually, it's not so far fetched. While I'd love to say I "invented" winter gardening all by myself, the reality is there's a great book out there called The Four-Season Harvest by Eliot Coleman. A good portion of the book covers the author's travels in southern France in January to study winter gardening techniques in order to try and transplant them to his small market farm on the Maine coast. While the two climates are different, the day length is the same and that's the critical factor. Rather than try to grow summer crops in the winter, his focus is on what crops can grow under unheated protection through the Maine winter on the 44th parallel? Turns out there's about 30 of them. He also discusses the fact that in decades past, it was quite common to see market gardens on the outskirts of French (and other European) cities that consisted of acres and acres of cold frames. Now the technologies have changes and row covers are more common - he saw acres and acres of "chenilles" instead.

My feeling is that in the future we will see a relocalization of food production with local transport, out of necessity. As you said, it would require small delivery trucks running around, but if we can transition to cleaner electric production those local trucks may not need to burn any oil or gas at all.

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I think that if you look at the fuel used per ton of food, per mile transported, it won't add up to much. And growing locally probably means a lot of small trucks making rounds (often running empty on the return from the market?), which is going to be less efficient than rail, ship and big rigs. -ERD50

Actually, Coleman looks at this in depth in the book. He did a little study to compare the embodied energy in a plastic greenhouse with the energy involved in trucking produce from California. All his figures and calculations are laid out in the book in detail, and he concludes,

"...the energy consumption per 12-ounce head of lettuce to transport a semi-tractor-trailer load 3,200 miles from California to the East Coast is 3,034 BTU. According to those calculations, a head of lettuce grown in a Maine greenhouse requires only 40 percent as much energy as delivering that lettuce from California. However, it is actually a lot better than that. Since the greenhouse polyethylene lasts three years and since the grower could get both a spring and a fall crop each year with no other energy input, six lettuces can be produced over the lifespan of that...polyethylene. Each Maine greenhouse-grown lettuce thus consumes only 6 percent of the energy required by each trucked-in lettuce."

The secret is, as you stated, to grow things where they grow best. Cool and cold weather greens do just fine in unheated green houses.

[samclem]

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Originally Posted by hguyw All his figures and calculations are laid out in the book in detail, and he concludes, "...the energy consumption per 12-ounce head of lettuce to transport a semi-tractor-trailer load 3,200 miles from California to the East Coast is 3,034 BTU.

Wow--that's an interesting figure. A gallon of diesel fuel contains 139,000 BTU, so moving that head of lettuce by truck used .022 gallons, or about 6 tablespoons of fuel. At today's fuel price, that's about 6 cents. Even if diesel did go to $15/gallon, that would cost about 30 cents/head for the fuel to move it across the country.

Now, if you put it on a train instead for the majority of the trip, you'd burn less than 1/2 of the fuel.

Or, viewed another way: If a person owns a car that gets 30 MPG and makes one trip "out to the country" 15 miles to get some locally-grown lettuce at the farmers' market, he'll have burned more fuel than it took to bring 45 heads of lettuce from across the continent by truck to his supermarket.

No wonder it makes sense to grow things where they grow best.