There are various woody and other agricultural wastes which can be directly co-fired with coal. For transporting some densification is desirable, but this is probably less expensive than torrification. This is being done in the mid-west and also just starting in a west Africian country.

I conclude that the price of coal is now sufficiently high that these biomass alternatives can now begin to successfully compete.

David B. Benson,
By happy happenstance, the market is so desirous of an opportunity to purchase alternatives that it raises on its own the price of fossil.

Have you considered what happens to the money raised from a carbon tax? It enters the public sector (obviously). There is no finacial pressure on the public sector to cut carbon because the tax recycles back into the public purse.

You just have to look at our local council offices (lights and computers left on all night, snow melts instantly from roof due to no insulation…) to see how this works.

Let’s not get too hung up about how carbon gets a price. It could be cap-grandfather-trade, cap-auction-rebate, tax, etc. (Let’s retire the phrase “cap-and-trade” since it means different things to different people.) The purpose of the price is to reflect what economists call “externalities” so that the market can operate more efficiently.

Totally agree. Unfortunately the money raised is not paid back to mother earth in order to recompense her for the damage (so to speak). Instead it just recycles round getting spent, invested, lent, borrowed and so on, just like any other money. There is a big question mark over whether all this frenetic financial jiggery-pokery would actually result in less coal, oil and gas being extracted and burned.

I still think that the only way to reduce fossil fuel use is to extract less. If that means progressively reduced standards of living then tough.

The only question in my mind is whether starting today allows all this happen soon enough to prevent the worst. But nothing in this scenario seems undoable with today’s technology.

The main reaction that high fossil fuel prices are having is to focus politicians attention on domestic energy security, controlling inflation and heading off all the attendant problems of crashing house prices etc. Very little talk this week about climate change, at least in the UK. US Crude broke $113 today for the first time.

Do we really care whether we do such things
- for economic reasons, i.e., to lessen the GDP-flattening seen in Bob Ayres’ pitch, page 46:
http://www.bren.ucsb.edu/ news/ documents/ robert_ayres.PPT
or what one finds in the Hirsch Report.

I.e., to avoid driving the economy off a cliff

- or for climate reasons

To avoid driving the cliimate off a second cliff.

The real difference comes with coal, where the first one would say “burn coal” and the second one says “phase it out as fast as possible”, i.e., Earl’s scenario. But really, I’d claim that a whole lot of actions are the same.

Like any consumption tax, a price on carbon will be regressive to a certain extent, so some of the money raised should be spent on compensating people with low incomes for increased prices in electricity, fuel, and greenhouse gas intensive commodities (such as beef and aluminium). This could be done by raising the threshold above which people pay income tax, or by increasing welfare payments, or both. Of course, the amount that someone is compensated should not depend on the amount of energy or carbon that they individually use, because that would defeat the purpose of a carbon price. If people on low incomes were not compensated, then it would be very difficult politically to make the deep reductions in emissions that are necessary.

There are some areas where emissions are difficult to measure, making it difficult to incorporate these areas into an emissions trading scheme and maintain the integrity of the scheme. I’m thinking in particular of emissions in land use, land use change and forestry. This sector also has great potential for reducing emissions, and good policies that reduce emissions in this sector can have immense other environmental benefits. Therefore, some of the money raised from a carbon price should be spent on reducing emissions in this sector, through activities such as reforestation and avoided deforestation.

Finally, there is also a good case for spending some of the money raised from auctioning permits on research, development, demonstration, and possibly deployment of low emissions technologies. As well as renewables, this could include better buildings, energy efficiency, and so on. Measures such as deployment of smart meters, which would address market failures that lead to less energy efficiency could also be included.