Jeff Spross — Bombshell IMF Study: United States Is World’s Number One Fossil Fuel Subsidizer

Between directly lowered prices, tax breaks, and the failure to properly price carbon, the world subsidized fossil fuel use by over $1.9 trillion in 2011 — or eight percent of global government revenues — according to a study released this week by the International Monetary Fund.

The biggest offender was by far the United States, clocking in at $502 billion. China came in second at $279 billion, and Russia was third at $116 billion. In fact, the problem is so significant in the U.S. that the IMF figures correcting it will require new fees, levies, or taxes totaling over $500 billion a year, or more than 3 percent of the economy.

Climate Progress
Bombshell IMF Study: United States Is World’s Number One Fossil Fuel Subsidizer
Jeff Spross

As Warren Mosler says, a subsidy is a negative tax. Now we learn that it is necessary not only to eliminate the subsidies but to increase taxes and regulation (which increases costs) in order to save the home planet.

But developing an inexpensive, renewable, clean source of transportable energy is of the highest priority to avoid severe culling of the species.

Jeff Spross — In Australia, Wind Power Is Already Cheaper Than Fossil Fuels, And Solar Is Right Behind

According to the latest research from Bloomberg New Energy Finance, electricity from wind power can now be supplied more cheaply in Australia than power from either coal or natural gas — and solar and other forms of renewable energy aren’t far behind.
Older coal-fired power plants from the 70s and 80s still compete at lower prices than renewables — but only because their construction costs have depreciated. For the deployment of any new power generation in Australia, renewables now appear to be the way to go.

Australia currently charges polluters $23 in Australian dollars per metric ton of carbon they emit, but the study concluded that wind power would still undercut fossil fuels even without that correction of the market’s failure to properly build in the costs of carbon pollution....

Climate Progress
In Australia, Wind Power Is Already Cheaper Than Fossil Fuels, And Solar Is Right Behind
Jeff Spross

Nordhaus — Cost of delay due to climate denial

Read it at Climate Progress
Must-Read: Economist William Nordhaus Slams Global Warming Deniers, Explains Cost of Delay is $4 Trillion

by Joe Romm

Nordhaus: Suppose we were thinking about two policies. Policy A has a small investment in abatement of CO2 emissions. It costs relatively little (say $1 billion) but has substantial benefits (say $10 billion), for a net benefit of $9 billion. Now compare this with a very effective and larger investment, Policy B. This second investment costs more (say $10 billion) but has substantial benefits (say $50 billion), for a net benefit of $40 billion. B is preferable because it has higher net benefits ($40 billion for B as compared with $9 for A), but A has a higher benefit-cost ratio (a ratio of 10 for A as compared with 5 for B). This example shows why we should, in designing the most effective policies, look at benefits minus costs, not benefits divided by costs. [emphasis added]

Romm — Natural Gas Is A Bridge To Nowhere

The President will be touting natural gas in his State of the Union address tonight,according to sources.  Nothing wrong with touting gas — if you also tout a rising carbon price, which the president once did but no longer does.

Way back in June 2009, I pointed out the value of gas in the context of a climate bill with a rising CO2 price — see “Why unconventional natural gas makes the 2020 Waxman-Markey target so damn easy and cheap to meet.”  But the key point of that post was that you could put gas in existing, underutilized plants to replace existing coal power cheaply to meet the key 2020 target Obama.

Building lots of new gas plants doesn’t make much sense since we need to sharply reduce greenhouse gas emissions in the next few decades if we’re to have any chance to avoid catastrophic global warming. We don’t want new gas plants to displace new renewables, like solar and wind,  which are going to be the  some of the biggest, sustainable job creating industries of the century.Late last year, some of the leading (center-right) economists in the country — Nicholas Z. Muller, Robert Mendelsohn, and William Nordhaus — concluded in a top economic journal that the total damages from natural gas generation exceed its value-added at a low-ball carbon price of $27 per ton! At a price of $65 a ton of carbon, the total damages from natural gas are more than double its value-added!

For the record, stabilizing at 550 ppm  atmospheric concentrations of CO2, which would likely still be catastrophic for humanity, would require a price of $330 a metric ton of carbon in 2030, the International Energy Agency (IEA) noted back in 2008.

Read it at Climate Progress

Natural Gas Is A Bridge To Nowhere — Absent a Serious Price for Global Warming Pollution

By Joe Romm