GCC: Study finds limiting warming to 2 °C would require at least a $200/t carbon tax globally

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GRA

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https://www.greencarcongress.com/2022/05/20220506-epic.html


. . . A study by University of Chicago economist Esteban Rossi-Hansberg, the Glen A. Lloyd Distinguished Service Professor in Economics, and José-Luis Cruz of Princeton University assesses the local social cost of carbon (LSCC) and how that cost aligns with the carbon reduction pledges countries made under the Paris Agreement. They find that while the distribution of carbon reduction pledges in the Paris Agreement is roughly in line with the LSCC, the pledges have only a very small impact on reducing emissions and limiting warming.

The social cost of carbon has become the standard measure to benchmark the magnitude of the carbon taxes needed to implement optimal carbon policy. It measures the social cost in US dollars of adding a ton of CO2 to the atmosphere. If we were able to measure this social cost accurately, standard Pigouvian logic tells us that the optimal tax should be such that the price of carbon is equal to this social cost. Since carbon emissions are a global externality there is, at least in principle, a world’s social cost of carbon that takes into account all the implications of the additional ton of CO2 throughout the world and over time.

The price of carbon should then be set at this price, everywhere. Of course, this logic is correct only from a global planner’s point of view, where the planner puts equal weights across individuals. Its implementation requires transfers from the regions that are less affected, or positively affected, by CO2 emissions to the countries that are negatively affected. In practice, countries and regions tend to consider the implications of climate change for themselves, not for the whole world. Their incentives to pursue climate policy via carbon taxes, reflect their own evaluation of the social cost of carbon, not necessarily the world’s.


—Cruz & Rossi-Hansberg

Under business-as-usual, the world would reach the 2 °C limit in 2043. The Paris pledges delay crossing that threshold by only three years. . . .

To achieve the Agreement’s goal to limit warming below 2 °C over the current century would require setting at least a $200 per ton carbon tax throughout the world, according to the study. The authors consider such a policy so unrealistic that they question the feasibility of the 2 °C target itself.

… carbon taxes of the magnitude needed to achieve the Paris Agreement goals involve very large inter-temporal transfers. Something that has been recognized repeatedly in the literature. Imposing the necessary cost on current generations will be hard, even if we care deeply about future generations. The resulting welfare gains, when we value future generations almost as much as ourselves (including the effect on growth) are small, but negative for most of the developed world. They turn positive when the elasticity of substitution between energy sources is larger. Increasing this elasticity seems essential to make the required carbon policy more palatable.

—Cruz & Rossi-Hansberg. . . .
 
$200 a ton is about 20¢ a kWh

I doubt it takes anywhere near that amount of taxation to turn the tide of public policy unless countries refuse to build transmission infrastructure and rely on massive battery storage.
 
SageBrush said:
$200 a ton is about 20¢ a kWh

I doubt it takes anywhere near that amount of taxation to turn the tide of public policy unless countries refuse to build transmission infrastructure and rely on massive battery storage.

Not for my local power. Maybe yours.

Coal is 2.23 lbs per kWh. $200 per ton would be about $0.22

Natural gas is 0.91 lbs per kWh. $0.09 per kWh. More that twice as much electric power is produced from natural gas in the USA.

Wind, hydro, nuclear and solar is 0 lbs per kWh.

All of these ignore various construction costs and methane leakage from fossil fuel extraction.

Most of my local power is hydro.
 
WetEV said:
Not for my local power. Maybe yours.
Yours too, since the methane would also be taxed.
Natural gas is 0.91 lbs per kWh. $0.09 per kWh.
That is only the combustion. I realize you know this; I write it as clarification for others.
 
SageBrush said:
WetEV said:
Not for my local power. Maybe yours.
Yours too, since the methane would also be taxed.

Carbon intensity of hydro is pretty low, in most cases. The fraction of methane in local power is also low.


SageBrush said:
That is only the combustion. I realize you know this; I write it as clarification for others.

https://www.eia.gov/tools/faqs/faq.php?id=74&t=11

EIA says Lbs CO2 per kWh generated.
 
WetEV said:
EIA says Lbs CO2 per kWh generated.
Right -- the combustion of NG -> CO2 to generate heat for the turbine.

In a carbon(Eq) taxation scheme the upstream GW(e) pollution, mostly in the form of leaked methane, would also be taxed. Then you find that that the lifecycle Co2(e) pollution of electricity generated from NG is about the same as coal.
 
SageBrush said:
WetEV said:
EIA says Lbs CO2 per kWh generated.
Right -- the combustion of NG -> CO2 to generate heat for the turbine.

In a carbon(Eq) taxation scheme the upstream GW(e) pollution, mostly in the form of leaked methane, would also be taxed. Then you find that that the lifecycle Co2(e) pollution of electricity generated from NG is about the same as coal.

Sigh.

This is a very complex topic, and we are talking past each other.

Methane, if leaked, causes climate change.
Methane has a fairly powerful greenhouse effect, and an atmospheric lifetime around a decade. If you calculate over a 20 year period, methane is about 80 times more warming per molecule than CO2. With a different averaging period, you get a different result.

Both coal and natural gas extraction cause methane leakage. Some coal operations are fairly bad. Some are not. Likewise for natural gas operations. The estimated total from coal is higher now than a few years ago due to better measurements. Leakage isn't easy to put good numbers on. It's messy, hard to get accurate numbers on.

The EIA is keeping thing simple. The total release from burning coal is compared with the total electric power generated. Likewise for methane. This isn't "heat for the turbine", as combined cycle gas plants produce about twice as much electric power for the same amount of heat.

How to gracefully and accurately reduce this all to a tax befuddles me.
 
WetEV said:
This is a very complex topic, and we are talking past each other.

The EIA is keeping thing simple. The total release from burning coal is compared with the total electric power generated. Likewise for methane. This isn't "heat for the turbine", as combined cycle gas plants produce about twice as much electric power for the same amount of heat.

I am saying that the leaked methane during extraction of NG for power plants is not included in the EPA estimate of NG carbon intensity related to electricity generation.

If I am wrong, please link a reference.
 
SageBrush said:
WetEV said:
This is a very complex topic, and we are talking past each other.

The EIA is keeping thing simple. The total release from burning coal is compared with the total electric power generated. Likewise for methane. This isn't "heat for the turbine", as combined cycle gas plants produce about twice as much electric power for the same amount of heat.

I am saying that the leaked methane during extraction of NG for power plants is not included in the EPA estimate of NG carbon intensity related to electricity generation.

If I am wrong, please link a reference.

I'm adding to that point the point that the leaked methane during extraction of coal for power plants is not included in the EPA estimate of coal carbon intensity related to electricity generation.

These numbers are likely too low:

https://www.epa.gov/cmop/sources-coal-mine-methane


I'm not happy with this reference (sustainable coal mining???), but anything good seems to be behind a paywall.

https://www.sustainable-carbon.org/methane-emissions-from-coal-mines-are-higher-than-previously-thought/
 
This estimate from the IEA
https://www.iea.org/reports/methane-tracker-2020

says 342 million tonnes of methane from human sources
1 Kg of methane = 1.5 cubic meters at 15c and 1 bar

Your reference says
The team estimated that in 2010, 103 billion cubic meters of methane were released from working underground and surface mines and an additional 22 billion cubic meters from abandoned mines.

That all works out to ~ 5x more methane release from NG than Coal. I looked for worldwide production of each fossil fuel. I was able to find consumption as of year 2000. Coal was about 50% more btu than NG.

---
My statement that NG and coal have very similar CO2(e) lifecycle emissions comes from Stanford's Jacobsen. I can pull his sources if there is interest, although his most recent publication is a summary conclusion of the same, albeit made worse by the hydrogen stupidity.
 
SageBrush said:
This estimate from the IEA
https://www.iea.org/reports/methane-tracker-2020

This source gives 45 MT from NG extraction, and 39 MT from coal extraction. Put your pointer over the graph.


SageBrush said:
Coal was about 50% more btu than NG.

Ignoring that almost twice as much electric power can be generated from a BTU of NG than a BTU of coal. If the end product is electric power, the efficiency of conversion matters.


SageBrush said:
My statement that NG and coal have very similar CO2(e) lifecycle emissions comes from Stanford's Jacobsen. I can pull his sources if there is interest, although his most recent publication is a summary conclusion of the same, albeit made worse by the hydrogen stupidity.

Notice that I'm not saying NG is great. I'm saying coal is likely worse than it was thought to be a few years back. And there is a high amount of uncertainty.

iea.org said:
Estimates of methane emissions are subject to a high degree of uncertainty, but the most recent comprehensive estimate suggests that annual global methane emissions are around 570 million tonnes (Mt). This includes emissions from natural sources (around 40% of emissions), and those originating from human activity (the remaining 60% - known as anthropogenic emissions).
 
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