Daily Score Blog

Check out our new map!

These states and provinces shown in green are using cap and trade to put a legal limit on carbon pollution by designing market-based programs to reduce pollution economically. These places represent more than half of North America's population and economic activity.

Bigger versions for free download are available here.

This is the third in a short series of posts that explain some important but often overlooked policy issues in the Western Climate Initiative--the West's regional cap-and-trade system.

One of the core questions in cap and trade -- really, for any regulatory system -- is who, exactly, participates. Ideally, the program would include as many sources of climate pollution as possible without creating an administrative nightmare. (In fact, administrative simplicity is one of the main reasons why an "upstream" approach to regulation works best.) So we want to include refineries and coal plants, but not necessarily the neighborhood propane dealer. This is a good deal for both the regulators, who can work with a manageable system, as well as for businesses. An oil importer is sophisticated enough to account for emissions and hold tradeable carbon permits, while a smaller business can't do so as easily.

So to balance comprehensiveness with parsimony, WCI needs to establish an emissions "threshold" for regulation: facilities that generate more than the threshold participate in cap and trade, but smaller facilities don't have to. Luckily, the lion's share of emissions come from fairly large sources, so the trade-off isn't too severe in most cases. Still, there is a trade-off and it's important to get the balance right.

In it's latest draft, WCI suggested a threshold of 25,000 metric tons of carbon-dioxide-equivalent (often expressed as 25,000 metric tons CO2e or 25,000 MTCO2e). That was at the very the high end of what they had been considering. In previous drafts they had said they would set the threshold "within the range of 10,000 to 25,000 metric tons of CO2e per year per facility." The vast majority of public interest groups  -- Sightline included -- have argued that the threshold should be set no higher than 10,000 tons.

This is the second in a short series of posts that explain some important but often overlooked policy issues in the Western Climate Initiative. We've written extensively on "allocations" -- the method of distributing the carbon permits to the public through auctions or free distribution -- but there's a related issue often confused with allocations. Called "apportionment," it has important ramifications.

I know, I know, nothing gets the skin tingling like the word "apportionment." But this is a big question for the Western Climate Initiative -- the seven-state-four-province regional cap and trade system. Which states and provinces get to pass out the carbon permits? How many does each get? And who gets the revenue if the permits are auctioned? Ultimately, it's about the money.  Carbon permits have a real cash value, whether they are sold or handed out for free. And we all know that nothing sharpens a negotiation like a pile of money sitting in the middle of the table.

Maybe that's why WCI has so far produced this masterfully crafted position (pdf):

The Partners are working on an apportionment methodology based on Partner and regional emission reduction goals and requirements. The apportionment methodology will address factors such as production and consumption of electricity, projected population growth and economic activity, and other factors. The Partners intend to have a recommended apportionment methodology by Fall 2008. [Section 7]

Say what?

Before I explain what's going on here, I'll put my cards on the table: Sightline believes that state apportionment should be based on protecting consumers and working families -- in short, it should be based on climate fairness. That means figuring out where the price impacts will occur and awarding state apportionments there so that auction revenue can be used to assist families. One way to do that might be to apportion permits among states and provinces in proportion to their spending on carbon-energy. I'll come back to this in a monent, but first I should explain that some of the intuitive answers to apportionment are unfair.

At first blush, it might seem pretty straightforward to figure out the apportionment (sometimes called an "allowance budget").

Last week when the Western Climate Initiative's latest draft appeared it mystified most folks who aren't insiders to the process. That's a shame because WCI is hugely important. So over the next few days I'm going to embark on a series of posts that I hope will clear up some of the misunderstandings. Along the way, I'm also going to explain what Sightline wants to see improved.

Maybe the single most important question in cap and trade is the question of "scope," the question of what we should include under the cap. How do we decide which carbon pollution counted? And who must obtain the tradeable carbon permits that are equal to the cap?

WCI gets a couple of things right. First, they will regulate all six of the major greenhouse gases. And they've opted for an "upstream" approach: regulating carbon at the handful of points where it enters the economy (pipelines, refineries and so on) rather than further downstream where hundreds or thousands of fuel users would be implicated. It's the coal plant, not the residential electricity meter, that gets treated.

But other questions have been stickier. Some sectors are getting a pass, at least for now, because they are technically infeasible to cover. For example, emissions from agriculture and forestry are difficult to count and there are multitudes of small-scale emitters who have little capacity to participate in a cap and trade program. Fortunately, however, the vast majority of the West's carbon pollution is relatively easy to count, and the polluters are large and sophisticated companies that are accustomed to regulatory requirements. (Think utilities, oil refiners, and smelter operators.) The right thing -- for the climate, for the program's cost-effectiveness, and for equity among businesses -- would be to include as many sources of carbon pollution as is technically feasible.

But that hasn't happened.

The single biggest problem with scope is that WCI is excluding oil companies -- even though transportation fuels are the single largest source of emissions -- until the second "compliance period," which doesn’t start until 2015. (A "compliance period" is a unit of time over which the regulated firms must match their climate emissions to the number of carbon permits that they have obtained.) Seven years is a long time to wait to address the central climate threat of the West. And it gets worse: because each compliance period is three years long -- meaning that polluters have three years to match their emissions to their carbon permits --we might not see meaningful reductions until eight or nine years from now.

That's hardly the only problem.

Here's the word from the US Department of Transportation:

[Vehicle travel] on all public roads for May 2008 fell 3.7 percent as compared with May 2007 travel...marking a decline of 29.8 billion miles traveled in the first five months of 2008 than the same period a year earlier. This continues a seven-month trend that amounts to 40.5 billion fewer miles traveled between November 2007 and May 2008 than the same period a year before, she said.

So it's official:  high gas prices (coupled with a slack economy) are encouraging us to drive less. And if you look at the chart to the right, the recent downturn comes after a fairly long period of slow growth in vehicle travel.  It looks like the gradual rise in gas prices has been tempering the growth of driving since at least 2005.

I wouldn't be surprised to find that total gas consumption has fallen even more steeply than the number of miles driven.  After all, SUV sales are down; sales of efficient cars are up; highway speeds are slowing slightly; congestion is down (because fewer cars are on the road); and there's anecdotal evidence that people are choosing the more efficient car when they have more than one vehicle in the driveway.  All of these factors tend to decrease gasoline consumption, above and beyond the decline in vehicle miles traveled.

Of course, the DOT responds to the news by...calling for more money for roads!

"Less driving means less money for the Highway Trust Fund," said Acting Federal Highway Administrator Jim Ray. "The status quo cannot and will not work in the 21st century."

That's right: we're driving less, gas costs are through the roof, and people are turning to transit in record numbers.  But according to the DOT, the real problem is that the Highway Trust Fund is running out of cash.  (How on earth are we going to pay for all those new roads that people can't afford to drive on?)

George Erb of the Puget Sound Business Journal recently shot some ink at Washington Governor Chris Gregoire. He wrote:

Earlier this year Washington was competing with four other states for a $2 billion uranium enrichment plant that could be located on the Hanford Nuclear Reservation. The facility would employ about 400.

But Areva, the French company that proposed the plant, announced in May that it would build the facility at Idaho Falls, Idaho. The Tri-Cities were stunned.

The Tri-City Herald later learned, through a public records request for correspondence, that the governor’s office was aware of Areva’s offer as long ago as the summer of 2007.

Civic leaders had urged the governor’s office to help close the deal for the state. But the Tri-City Herald discovered that Gregoire instead canceled a telephone call with Areva’s chief executive in September 2007. Then she didn’t contact the company for another six months.

Um. I don’t know terribly much about this, but it smells a little off.

I'm going to geek out for a second. But first, check out this graph:

I suppose there are two lessons:

1. Price and consumption are not perfectly correlated. Clearly there are many non-price factors affecting electricity consumption. (These include, at least, the local climate, building size and type, and local energy efficiency policies.) But still...

2. Price definitely affects use, and the fit gets better as you move up the price axis. The more expensive electricity is, the less likely consumers are to be profligate.

In energy circles it's sometimes alleged that consumers are price insensitive or economically irrational about consumption. There's some truth to that, but it's only a partial truth.

These charts help demonstrate why carbon pricing can be effective. Putting a price on carbon -- or a price on energy -- acts to reduce consumption. Price is not the only factor and it may not even be the biggest factor, but it does appear to matter. And it appears to matter more above about 10 or 12 cents per kilowatt hour.

This hooks into a larger debate in the Western Climate Initiative.

I'm not going to pull punches:  The Oregonian ran an opinion piece on climate science, penned by columnist David Reinhard, that simply isn't up to the standards of responsible journalism.  Not only does it get basic facts wrong, it displays a disturbing arrogance, coming from someone who's arguing that others should display a little humility.

The Oregonian's readers deserve better. 

Just wanted to let folks know that we have an updated and corrected version of our grizzly bear range-map. The former version of the map incorrectly showed that grizzly bears no longer live on the southeast Alaskan Islands of Chichagof, Baranof, or Admiralty. In fact, grizzlies are still present -- and in extremely high numbers. Still, the major lesson of the map -- that grizzly range is drastically reduced -- is probably the more important point that the map makes.

An animated version can be downloaded here; static versions in several sizes can be found here.

A big hat tip is in order to sharp-eyed reader Bill Walker of Billings, Montana who caught the mistake.

The new draft proposal is here.

Just the major points. First off, the proposal is basically pretty good. We should keep in mind that what the Western Climate Initiative (WCI) is doing represents a big -- gigantic -- step in the right direction for the climate. So I'll raise a glass to everyone who's worked so hard on the WCI proposal so far.

But there's room for improvement. Below, I highlight the core areas of the proposal. These are bedrock issues that make me concerned.

Transportation is in. Sort of.
It appears that transportation fuels – the region’s largest source of carbon pollution – will be delayed until 2015, the second “compliance period.” The document is not crystal clear, but in Section 6, “Setting the Regional Cap,” it says that the regional cap will be adjusted in 2015 to add both transportation and the natural gas that is used in homes and businesses. (See 6.3). It's critical that we included transportation fuels ASAP.

Auctioning is in limbo.
WCI appears to be punting on this hugely important question. In past communications they’ve said that states and provinces will be required to auction a minimum percentage of between 25 and 75 percent of their allowances. In today’s draft (see 8.7) they say this:

The issue of establishing a minimum percentage of allowances subject to auction by each Partner is still under discussion by the Partners. The Partners expect to make a recommendation on this issue by Fall, 2008.

That's not wildly helpful. But in defense of WCI, they do include quite a bit of language about how the value of allowances are to be used (Sections 8.2 and 8.3) most of which are clearly good public interest goals.

Offsets are on the table.
WCI is apparently considering allowing offsets in the amount of 10 percent of any regulated firm’s allowances. They say, “not greater than 10 percent of an individual entity’s or facility’s compliance obligation” (section 9.2). (A firm's compliance obligation is its total amount of carbon emissions.) Since WCI is shooting for a 15 percent reduction, allowing a firm to submit offsets to cover 10 percent of its total emissions is tantamount to allowing offsets to cover more than half of all the WCI reductions. In my judgment, 10 percent is probably much too high a figure. We shouldn’t have so much confidence in offsets. (For more on the trouble with offsets, see this excellent 2-page summary from economist Chris Busch with the Union of Concerned Scientists. It's California-centric, but completely relevant to WCI.)

A strange loophole, maybe.
Finally, there’s some odd language sprinkled throughout the document that appears to nudge open the door for some states or provinces to avoid capping transportation fuels. In Section 1.4, for example, the document says:

WCI Partners acknowledge that individual jurisdictions may instead utilize comparable fiscal measures, such as British Columbia’s carbon tax, to address transportation fuels and fuel use by residential and commercial sources.

That would be a mistake. Consistency and comprehensiveness are key to the program's success. To use this particular example, BC's carbon tax can easily integrate with a cap and trade program (the taxes would basically become a "reserve price" in the auction system). But a legal cap on carbon is important because it makes certain we meet our climate targets.

I thought this was interesting.  The Texas highway department – Texas, no less! -- says that roads simply don’t pay for themselves.

… no road pays for itself in gas taxes and fees. For example, in Houston, the 15 miles of SH 99 from I-10 to US 290 will cost $1 billion to build and maintain over its lifetime, while only generating $162 million in gas taxes. That gives a tax gap ratio of .16, which means that the real gas tax rate people would need to pay on this segment of road to completely pay for it would be $2.22 per gallon. This is just one example, but there is not one road in Texas that pays for itself based on the tax system of today. Some roads pay for about half their true cost, but most roads we have analyzed pay for considerably less. To conclude, in the SH 99 example, since the traffic volume for that road doesn't generate enough fuel tax revenue to pay for it, revenues from other parts of the state must be used to build and maintain this corridor segment. The same is true across the state, meaning that, as revealed by the tax gap analysis, overall revenues are not sufficient to meet the state’s transportation needs.

There may be some political shenanigans at play here that, not being a Texan, I know nothing about. (Haven't I heard that Texas is trying to build a massive toll-road corridor?) Still, the idea that roads don't pay for themselves -- and instead, must sap money from other funding sources -- seems like quite an admission from a highway department. Perhaps there are lessons here for road construction projects all across North America, not just in Texas.

Hot on the heels of the news that Washington is once again home to wolves, the Oregonian today reports that biologists have confirmed wolf packs in Oregon.

...Oregon's first reproducing pack of wild wolves since the predators were exterminated from the state decades ago.

State biologist Russ Morgan and another biologist heard the howls of at least two adult wolves and two pups in the predawn hours Friday in northern Union County, north of La Grande, Morgan said Monday. The biologists themselves were howling under a bright moon, trying to produce an audible response from wolves. That's a common method of surveying for the animals.

For a while we've known that individual wolves have made their way back into Oregon, but now this is sign of an actual resident population. There's every reason to believe that wolves will flourish here:

The biologists heard the Oregon wolf pack on the edge of the 177,000-acre Wenaha-Tucannon Wilderness, part of the Umatilla National Forest. It is rugged, remote and thickly forested, with plenty of potential prey for the wolves, Morgan said.

This is great news for Washington too because the Wenaha-Tucannon Wilderness overlaps state boundaries in the sparsely populated corners of southeast Washington and northeast Oregon (in fact, about two-thirds of that protected wilderness is in Washington). If you haven't spent any time in northeast Oregon, it's difficult to convey how rugged and wild it is. There's the Wallowa-Whitman National Forest (with its Eagle Cap Wilderness), the Hell's Canyon National Recreation Area (with its Hell's Canyon Wilderness), and many, many miles of scrub and rangeland.

Time to head back into my pillow fort:

Nitrogen trifluoride (NF₃) can be called the missing greenhouse gas: It is a synthetic chemical produced in industrial quantities; it is not included in the Kyoto basket of greenhouse gases or in national reporting under the United Nations Framework Convention on Climate Change (UNFCCC); and there are no observations documenting its atmospheric abundance...With 2008 production equivalent to 67 million metric tons of CO₂, NF₃ has a potential greenhouse impact larger than that of the industrialized nations' emissions of PFCs or SF₆, or even that of the world's largest coal-fired power plants.

Yoiks.  So there's at least one greenhouse gas that's NOT recognized by international global warming protocols, but IS a significant climate concern.  Great.  Just great.  Of course, the gas is used in tiny quantities -- but molecule-for-molecule, NF₃ is about 17,000 times as potent as CO2 in warming up the atmosphere.

Still, there's a pretty straightforward solution here: just add nitrogen trifluoride to the list of climate-warming pollutants that are covered under any global warming regulatory system or GHG tax.  (Are you listening, WCI? How 'bout you, British Columbia?)

[Hat tip to Brandon.]

The great thing about  this Swiss study on tap water vs. bottled water is that it takes a boring, commonsense intuition, and makes it interesting -- just by providing a few numbers.

In this case, the intuition is that bottled water uses more energy—and thus releases more greenhouse gases—than plain old tap water.  The point is really obvious:  just think about the energy that’s required to manufacture bottles, and you can pretty easily guess that bottled water will be more energy-intensive than water from the tap. In fact, it’s so obvious, it almost seems pointless to do a study

But it turns out that there’s a very interesting point to be made:  the gap between bottled water and tap water is simply enormous.  Based on European data used in the Swiss study, water straight from the tap has about one half of one percent of the climate-warming impact of the most benign bottled water -- and less than a thousandth of the overall environmental impact of the most energy-intensive bottled water.

In the chart to the left, I’m deliberately leaving the numbers vague.  The two bars actually average of a number of different figures – different drinking water systems, bottling options, and water temperatures.  So the numbers are a bit meaningless.  Still, they give a sense of the magnitude of the difference between bottled water and tap water.

In this case, the most important message isn't simply that tap water is better -- it's the raw scale of the gap between tap water and bottled water.  Of course, bottled water doesn't rank particularly high on the list of climate offenders, compared to cars and trucks, coal fired power plants, and the like. Still, if you’re a bottled-water drinker, and you're looking for a quick and easy way to reduce your carbon footprint – and you’re lucky enough to live in a place with clean, tasty tap water – playing taps (ha!) for your bottled water is a pretty good place to start.

Last week, we got proof-positive that wild wolves are back in Washington. An animal that was struck and killed on a road in northeast Washington was genetically confirmed to be a wolf, not a wolf-dog hybrid. A good article in the Spokane Spokesman-Review provides some context:

Numerous reports of wolves seen or photographed in remote parts of northeast Washington in recent years suggest the animals are dispersing from Idaho, Montana and Canada. But those unconfirmed sightings, primarily in Pend Oreille and Stevens counties, might have been of wolf-hybrids, which Luers said appear nearly identical to gray wolves.

And:

Last year a rancher near Laurier, Wash., found a calf that had been partially eaten by a predator with large canine tracks. Some officials were convinced that a wolf – not a hybrid – killed the calf. But Luers noted wolf-hybrids have been known to kill livestock as well.

And:

While no physical proof has been found, state wildlife officials believe wolf packs have moved into Okanogan County. In response to reports of sightings, biologists surveyed the west half of the county and heard vocalizations indicating adult and juvenile wolves were in the area. The biologists visited several locations and made wolf-like howls, and they heard multiple adult and juvenile howls in response.

If you're not familiar with Washington's geography, the significance is that these are pretty different areas. Northeast Washington (Pend Oreille and Stevens County) is a fair distance from the places in western Okanogan County where wolves are alleged to be in residence.