Monday, December 5, 2011

Zeitgeist: 2/3 Support Revenue Neutral Carbon Tax As Pew Trusts Pull Funding for Pew Climate Center

The Pew Center on Global Climate Change has been my nemesis since we started this blog.
They were a backer of cap-and-trade, with all the scams, games and fraud that are part and parcel of such a monstrosity.

The Center's Eileen Claussen has been a relentless proponent of cap-and-trade for going on two decades, dismissing any other approach and has personally profited to the tune of at least $6 million ($10?) for her advocacy.

Back in 2009 I tried to explain the recipe, leavened with just a pinch of snark:
Collateralized carbon obligations i.e. tranches of income streams from projects claiming the absence of an invisible gas to satisfy policy goals informed by computer models of the most chaotic system on the planet have got to be the coolest financial development of the young century. Let's go!
(and gearing. we need lot's of gearing.)
Another poke at the bear, from 2007:
"When Britain decided to end slavery,
Wilberforce didn't set up a cap-and-trade system"
That's me, misquoting myself.

Sometimes I find my fellow capitalists repulsive. When they lobby for political favors, then turn around and blandly refer to the result as an example of free markets I don't know whether to laugh, cry or attempt to destroy them. Laughing is probably the healthiest response, world domination the most challenging.

I've been looking for examples to skewer CO2 cap-and-trade.
One thought problem was how to end slavery.
Another was Nuclear weapons proliferation. Think about it.
Mr. Consultant comes up to you and says "The market based system of capping production and handing out allowances to produce nukes, which can then be traded, is the only rational approach".
Don't think too long though, lest you enter "Le Théâtre de l'Absurde". Trust me, the world of Jean Genet and Sam Beckett gets old fast, Pinter and Albee's, faster....
The Pew Center was a founding member of USCAP which was as fine a collection of rentseekers and crony capitalists as you'll find anywhere, starting with Lehman Bros. and General Electric.. Pew itself counted among its Business Executive Leadership Council members Enron's Ken Lay.
Anyway, here's the Pew news from BusinessWeek (Nov. 10, 2011):
Pew Center Turns to Industry Funding for Climate Change Research
The Pew Center on Global Climate Change, which seeks market-based solutions to global warming, is turning to corporate sponsors after losing $3.5 million a year in support from a charitable trust.
The center will announce the change and its new name, the Center for Climate and Energy Solutions, at a press briefing today, said Eileen Claussen, founder and president of the group. Royal Dutch Shell Plc, Hewlett-Packard Co. and Entergy Corp. are stepping in with long-term funding for the group, Claussen said...MORE
...The Pew Charitable Trusts is winding down its $3.5-million annual support for the Pew Center on Global Climate Change, which will change its name to the Center for Climate and Energy Solutions. Shell, Duke Energy, Hewlett-Packard, and General Electric are among the firms that will now cover most of the center’s budget.

The Arlington, Va.-based group researches market-based solutions to global warming. Its founder, Eileen Claussen, said the industry sponsors have committed to maintaining the center’s independence....
At almost the same time, the Yale Project on Climate Communication was publishing "Public Support for Climate & Energy Policies in November 2011"  (25 page PDF)
The press release announcing the release said, in part:

Revenue Neutral Carbon Taxes
  • 65 percent of Americans support a revenue neutral carbon tax that would “help create jobs and decrease pollution,” including majorities of registered Republicans (51%), Independents (69%), and Democrats (77%).
  • Likewise, 60 percent of Americans support a $10 per ton carbon tax if the revenue were used to reduce federal income taxes, even when told this would “slightly increase the cost of many things you buy, including food, clothing, and electricity.” This policy is supported by 48 percent of registered Republicans, 50 percent of Independents, and 74 percent of Democrats.
  • 49 percent of Americans support a revenue neutral carbon tax if the revenue was instead returned to each American family equally as an annual check. Only 44 percent support this policy if the revenues were instead used to pay down the national debt.
Do note the tricky wording of the questions. At least the revenue neutral carbon tax idea has outlived the Pew and USCAP groups. In fact, as the Energy Collective notes:
It's Carbon Tax Time!
“I was a huge supporter of cap and trade,” said Wayne Leonard, the CEO of Entergy, a $11 billion utility company.

“We developed enormously elegant solutions, but they couldn’t get done.”
Taxing carbon emissions is the next best way to deal with the threat of global climate disruptions, he said, in part because it would give the energy industry a degree of certainty about how to deploy its capital.
“A simple tax on every one is a starting point,” Leonard said. Proceeds could be used to reduce the federal deficit or rebated to consumers....

...The arrival of yet another Washington group to deal with climate and energy issue doesn’t mean much, especially when it’s a makeover of an existing group. C2ES says: “We believe that ensuring safe, reliable, affordable energy for all – while protecting the global climate – is a paramount challenge of the 21st century.” Well, sure, but that’s what Washington environmental groups have said for years, with few signs of political progress to show for it. Global GHG emissions, meanwhile, reached record levels in 2010.
So what’s to be done? If a new idea was voiced at C2ES’s launch event, I missed it. Most interesting, to me at least, was the conversation about an old idea–a carbon tax or fee–which was set off by Leonard’s comments....MORE
For the record Entergy was not a member of USCAP but operates 12 nuclear reactors at 10 power plants.

USCAP member Exelon has 17 reactors and bragged that being grandfathered in to a cap-and trade plan such as Waxman-Markey would result in windfall profits.* One can only assume that Entergy's windfall would have been be on the order of $800 million per year.

I don't trust any of these guys.

*From Exelon's 2nd quarter slide-show (p.3):

Lowest carbon intensity in the sector - $1.1 billion(2) and growing annual upside to Exelon revenues from implementation of Waxman-Markey legislation

(2) Assumes $15/tonne carbon pricing.
From a letter to NRG shareholders during the takeover attempt:

We are offering you securities in a company… whose value rises rather than declines as carbon is priced into the marketplace…
Talk about having a vested interest in the legislation!