Energy Secretary Nominee: Need Carbon Price To Double Or Triple Cost Of Dirty Energy

April 8th, 2013 by Guest Contributor

Reposted from Climate Progress:

Tuesday is the confirmation hearing date for Energy Secretary nominee Ernest Moniz. The MIT professor will face the Senate Energy and Natural Resources committee (webcast here starts at 10 am ET).

I have known Moniz for 30 years. Turns out he was my professor for advanced electromagnetism in 1982. Then I worked with him again at the Clinton Energy Department in 1997 and 1998 (his full bio is here). I think he’s a fine choice for Secretary — and considerably better than many of thealternatives.

Some have complained that Moniz, like Chu, is not an energy deployment guy. True enough, but somehow U.S. renewable electricity supply managed to double under Chu. Of course, that’s also mostly a coincidence because the energy secretary doesn’t actually have much power over energy in this country.

For those worry about fracking, for instance, the EPA administrator nominee — Gina McCarthy — will play a much more salient role. And she’s the one who will be in charge of developing carbon regulations. She gets a confirmation hearing on Thursday.

Moniz is exceedingly knowledgeable about carbon issues. Just last year told the Switch Energy Project he supports a carbon price that would substantially increase electricity costs:

“If we start really squeezing down on carbon dioxide over the next few decades, well, that could double; it could eventually triple…. I think inevitably if we squeeze down on carbon, we squeeze up on the cost, it brings along with it a push toward efficiency; it brings along with it a push towards clean technologies in a conventional pollution sense; it brings along with it a push towards security. Because after all, the security issues revolve around carbon-bearing fuels.”

Here’s the video:

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Tags: Carbon Price, DOE, Ernest Moniz, Secretary Moniz

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Otis11

See, I don’t think doubling or tripling the cost of FF energy will significantly increase the consumer’s cost of electricity… If done correctly with a phase-in period (as opposed to just starting it), it will allow us time to ramp up the transition. Consumer electricity costs will increase moderately at first, but as technology gets better and installations increase, that will drop again.
- Bob_Wallace
  
  Use the carbon revenues to offset any price rise at the retail level.
  
  —
  
  Create an “Energy Hog” label and slap it on stuff that uses significantly more power than comparable stuff.
  
  Yeah, I know. But a guy can always dream….
  - Otis11
    
    “Use the carbon revenues to offset any price rise at the retail level.”
    
    I wouldn’t mind that at all… although it would probably be better overall to use the revenue to implement energy efficiency improvements. Especially to fund efficiency improvements in public buildings and non-for-profits. They could also use a portion to give people and businesses low-interest or interest-free loans for energy efficient upgrades.
    
    Then not only do we offset the price increase (through lower consumption) but we do double duty at increasing the percentage of energy we get from renewables by reducing total demand.
    
    Thoughts?
    
    —
    
    As for the Energy hog label – we already have the Energy Star label which has low enough standards. If it doesn’t qualify for the Energy Star standards it’s by default and Energy Hog. I really think we should just implement scaled ratings. Average every product on the market together and establish that as a C rating. Then you say
    
    A+ = 70% More efficient than average
    A = 60%
    A- = 50%
    B+ = 40%
    B = 30%
    B- = 20%
    C+ = 10%
    C = 0 (average by definition)
    C- = -5%
    D+ = -10%
    D = -15%
    D- = -20%
    F = -25% Less efficient than average
    
    Then you update this every year. As products get more efficient on average, it will be harder and harder to get the highest rankings. Also, you could potentially ban anything that fails from being sold the following year, forcing the shift upward, but some might say that would be government overstepping its bounds. Comments?
    - Bob_Wallace
      
      If you plop down a big carbon tax you stand to depress economic activity (something we don’t need at the moment) and you make it harder to sell to the voting public.
      
      Pass the revenues on to end-users and the price of electricity won’t change. The economy will be fine and swarms of teabaggers won’t be waving their walkers at town halls because their power bill went up.
      
      Spending the money on efficiency, etc. would be better but it’s all about the art of finding the possible….
      - Otis11
        
        Well, first to decrease the adverse effect of the carbon tax you should phase it in exponentially over the next 7 years. Start very low, and then increase rapidly until it hits the desired price.
        
        Also, if you make 100% of the revenue go immediately into re-investment there is little economic impact to to depress any economic activity. Arguably it would have no impact as it would dramatically increase re-investment (This is not true of any other tax I am aware of, but no other tax has 100% re-investment)
        
        As for the tea-party. I believe if you said that you were using the money to make government more energy efficient (and therefore decrease cost-of-business for the government to continue running, and therefore it will require less in the future to run) and required that the money low interest/interest free loans come from private banks/institutions and the money simply pays the interest for a set number of years, they would have little room to argue as it would not increase the size of government. Also, it would arguably be (somewhat) temporary as we will most likely go carbon neutral or carbon negative by the end of my lifetime.
        
        But I agree, I would absolutely support your proposition if we could get it passed (and yes, yours would have a higher probability of getting passed). I’m just dreaming about ideal solutions…
        
        Although, if you started my proposition in California, Colorado, New York, Mass., New Jersey, etc and showed how it spurred re-investment and lowered government costs, I think it stands a fair chance. You just have to have a state willing to run it as a proof of concept.
    - http://zacharyshahan.com/ Zachary Shahan
      
      Love the idea of a grade system.
  - http://zacharyshahan.com/ Zachary Shahan
    
    Tbh, think that would work better than EnergyStar. People are very nervous about appearing ‘bad’, and while there’s a stimulas to appearing like a ‘star,’ i don’t think it’s as strong (and especially not in this market).