Graham Drops Climate Bill

After nearly 6 months of planning, it appears that Sen. Lindsey Graham (R-SC) has quit working on the latest climate change legislation bill, in lieu of a decision by the Obama administration and senate democrats to prioritize immigration reform [1].  The draft bill, which was also supported by senators John Kerry (D-MA) and Joe Lieberman (I-CT) (hence the nickname KGL) has had some details leaked to the public over the past several months.  These included an overall cap on carbon dioxide emissions beginning in 2012, with the aim of reducing US carbon dioxide emissions 17% by 2020 and 80% by 2050. Some measures to achieve these reductions include [2]:

• Tax on transport fuels linked to the carbon content and price of carbon in other markets
• Cap-and-trade scheme for some sectors, with a portion of the revenue redistributed to consumers as rebates
• Price collar to maintain the price of carbon between $10-30/tC
• $10 billion for clean coal [3]
• Construction of 12 new nuclear power plants [3]

This latest setback comes on the heels of other recent climate change legislation, most notably the American Clean Energy and Security Act (sponsored by Rep. Henry Waxman [D-CA]).  The ACESA had proposed to reduce carbon emissions 20% by 2020 and 83% by 2050 (relative to 2005).  Although the proposed legislation passed the House 219-212 [4], the bill has since languished in senate committees and is unlikely to reemerge [5].

Garnering bi-partisan support for climate legislation is expected to be difficult (although another recent climate bill, supported by Susan Collins and Maria Cantwell is a laudable effort at bipartisanship [6]).  Disappointingly, some environmentalists groups opposed the KGL bill–most vocal was Greenpeace,  who blasted it complaining that it had been “hijacked by lobbyists” [3].  Given the concessions to industry, including a provision barring the EPA from regulating carbon dioxide, there may be some truth to this statement.  However, it is hard to imagine that a tougher bill would have any hope of passing congress–Kerry and Lieberman both scored 100% on the League of Conservation Voters environmental scorecard for 2009 [7].

Although the KGL bill does not do enough to address climate change, it is a significant step in more or less the right direction.  At a high level, the bill is not vastly different from the EU’s plan to cut carbon emissions by 20% (albeit from 1990 levels) by 2020.  The current price of carbon in the EU’s Emissions Trading Scheme (ETS) has hovered between 12-14 euro ($16-19) since the Copenhagen summit in December.  This falls at the low end of the $10-30 price range proposed by KGL.  However, there is no guarantee that this bill will be passed this year, or indeed at all, and the carbon cap proposed would not even go into affect until 2012.  While the bickering about climate legislation in congress is bound to drag for months if not years, the Europeans have been paying for their pollution since January, 2005 [8].

[1] http://www.politico.com/news/stories/0410/36301.html

[2] http://www.treehugger.com/files/2010/03/details-kerry-graham-lieberman-energy-reform-bill-leaked.php

[3] http://www.triplepundit.com/2010/04/greenpeace-attacks-kerrys-climate-bill-preview/

[4] http://www.opencongress.org/bill/111-h2454/actions_votes

[5] http://www.lexology.com/library/detail.aspx?g=453e3a8e-336b-41d0-a950-3ab25de2f473

[6] http://www.economist.com/world/united-states/displaystory.cfm?story_id=15453166

[7] http://www.lcv.org/scorecard/

[8] http://ec.europa.eu/environment/climat/emission/ets_post2012_en.htm

Corn Ethanol and Ham Sandwiches

In recent years, there has been much discussion about the energy balance of certain biofuels, particularly corn ethanol, cellulosic ethanol, and biodiesel.  Scientists have attempted to establish, using life cycle analyses (LCA), the merits of these fuels–most importantly, their “energy balance” or “energy return on investment” and lifecycle greenhouse gas emissions reduction.

The energy balance of a product is defined as the energy content of the product minus the sum of all energy inputs required to produce the product.  For example, the process to convert one bushel of corn into ethanol requires direct inputs of heat and electricity.  However, it also requires secondary inputs such as diesel fuel to drive the tractor to harvest the corn, as well as energy to build the tractor.  These analyses get very complicated, and it is not clear where the “system boundary” should lie. Does the fuel for the tractor count as an input? Most definitely.  What about the energy content in the ham sandwich the hapless farmer ate for lunch? Maybe–but he has to eat whether or not he is harvesting corn.  Should we count the energy for the tractor to harvest the wheat to make the sandwich? Should we be doing energy balances on ham sandwiches? And if the energy in a ham sandwich is less than the sum of the energy inputs, should we stop making ham sandwiches?

Obviously the answer is no.  Ham sandwiches are delicious, and I like eating them.  I also like putting mayonnaise and mustard on my sandwiches, condiments with abysmally low energy content.  And, of course, drive to the grocery store to buy these things.

The upshot of all this is that people do not use energy–they use heat, light, mobility, and consumable products (like food and toilet paper), all of which require energy inputs.  Thus the energy balance is useful for determining how some goods compare with others, just like price.  It would be useful to compare the price of two supplementary goods (such as gasoline and ethanol) in deciding which one to purchase.  But it would be strange to arbitrarily decide that if a fuel costs more than $1/mile, then it is not an efficient option.

Critics of certain biofuels will often point to the energy balance calculation as the “smoking gun” that these fuels are inefficient and a waste of energy–or indeed, an evil plot perpetrated by the farm lobby, big business, or big government.  What they instead should do is compare the energy balance of ethanol with that of gasoline, a common substitute.  These same critics might be surprised to find out that it requires 1.19MJ of fossil energy to produce 1MJ of gasoline [1], resulting in a negative energy balance.  Corn ethanol, in comparison requires only .77MJ of fossil energy for 1MJ of corn ethanol [1], an improvement of 54%.  The energy balance calculation is therefore best viewed in a relative, rather than absolute sense to avoid confusion.

[1] Farrell, A. E.; Plevin, R. J.; Turner, B. T.; Jones, A. D.; O’Hare, M.; Kammen, D. M. Ethanol can contribute to energy and environmental goals. Science. 2006, 311, 506–508.