Let's talk about Carbon Credits.... They've been around for about 25 years but we don't hear much about them. If a company emits too much pollution ( steel , coal consuming energy company) they buy credits from a company that produces less than a specific amount to offset the excess that they are creating. It sounds like a progressive way of reducing pollution. But if you look at it objectively, it looks like extortion. The company that uses coal to produce energy has been doing it that way for 40 or 50 years. A new company is designed using modern technology and solar panels on the roof that can sell their credits. The company that sells them was going to design their site that way anyhow because it is the most efficient way of doing it. It's not like they specifically designed the company to get the credits. A trading industry had to be established to trade the credits. I wonder if the idea behind carbon credits was a tool to create a new financial instrument with the false impression that something was being done for the environment. The air is not cleaner as a result of carbon credits. I think that it might even delay the investment in new technology from old industries because buying the credits is cheaper than investing in new technology. I wonder what the motivation was behind them when they were created? I don't think cleaner air was the objective. I want to say that GS created them. That should throw up a red flag. VP Gore wanted to create an independent exchange just to trade them but it didn't happen. Another red flag. Am I too far off base .....?
Too far off base? Yes. Pollution laws were first based on amount: STOP. Then the Command&Control regime pushed a given technology: DO THIS. Multiple top-flight economists designed policies and wrote papers to argue and demonstrate that putting a price on pollution -- *internalizing* an external effect of some activity (i.e., electricity generation) would cause [a] market mechanism to be triggered, bringing the full, AND UNFETTERED, technological weight of science and industry to bear, and find the cheapest way of reducing *biosphere-wide* pollution, as long as participants were allowed to trade in the reduction technology and in the *monetized* results. Cap&Trade, which (since about 2000) is wrongly claimed by both sides to be a "liberal" idea, is in fact the creation of free-market wonks seeking to free industry from (the very onerous) Command&Control. Technologically, the reduction methods almost all entail a ferocious use of electricity -- but they are *all* expensive, and they *all* benefit from economies of scale. They are NOT "efficient" compared to the prior, externality-imposing activities. Whoa no. And because of that expense in building AND expense in operation, the market mechanism drives each company to reduce/OR PURCHASE right up to its own, LEAST COST, marginal cost of emission, OR BE PAID for the extra, by a company who's own cost of reduction would be higher. The reducing company benefits; the paying company benefits; the economy benefits; our air supply benefits. And it worked wonders. 30-40 years ago, graduate degrees based on research in "Acid Deposition" (what was popularly -- if erroneously called, "Acid Rain") were a dime-a-dozen, whether in forestry, fisheries, hydrology, recreation, entomology, whatever. Now? "Less so."
I didn't go back and look....but wasn't Tesla's last ER....the one where they actually showed a profit... because they sold a bunch of these things?
Similar....I wasn't completely Alzheimer'd. "Tesla's results were lifted by $139 million in sales of California zero emission vehicle credits. Rival automakers can buy the credits rather than sell electric cars of their own. That was comparable to what the company booked from sales of so-called ZEV credits for all of 2014, said Cowen analyst Jeffrey Osborne." http://www.reuters.com/article/us-tesla-results-idUSKCN12Q2QW
That's not a carbon credit. It's a fleet credit, each manufacturer has to have a certain percentage of their fleet be zero emissions and they can use credits from another manufacturer to achieve that. This makes perfect sense, if you want X% of new cars to be zero emissions you don't really care how you get there as long as you get there, so it can be that Ford sells none and Tesla sells them all or Ford sells half and Tesla sells half, or any other permutation. If Tesla's in a position to make them much cheaper than Ford it makes sense to set up an incentive structure that would allow that to happen, you achieve the goal at the lowest possible price to the consumer.
Every time you plug in your electric car to charge, the car is giving off emissions. So in the weirdest twist of reality, here's how it works. We all complain about how our gas-guzzlers give off emissions when they are running, but give off no emissions when they are not running. With electric cars, they give off no emissions when they are running, but give off emissions when they are not running and charging. How is that for a mind-bender? We have come full circle and have not solved anything.
Not quite. *Humorous*, but not quite. In the big, bad, world of air pollution, the Big 3 baddies are particulates, sulfur oxides, and nitrogen oxides. (Yes, we just discounted C and Hg. Bare with me.) In assessing the costs of controlling these things on the general public, the question goes to whether the source is dispersed (as per individual motor vehicles) or point-source (a gushing pipe or smokestack). Clean Air Act. Particulates for cars were largely taken care of when we outlawed the wonderful (if toxic) inclusion of Pb into our gasoline formulas. That, and fuel injection. ("Woot!") For powerplants, they received electrostatic precipitaters back in the 50s-70s -- glorified bug-zapper screens that would attract the big bunches of particles, have it stick on a screen, and then occasionally get clapped like a dusty rug, with (these days) the particulate cake going into wallboard. Clean Air Act Amendments of 1977. But that particulate matter also absorbed other by-products of coal emissions, such as the sulfur content. Freed from the weight of the particulate, the sulfur emissions went not 5-50 miles from the plant to settle, but 500-5000 miles -- even circling the globe. "Egads, now we've got Acid Deposition." (Any place with thin soil saw their ecosystem attacked in a vicious, yet insidious, manner.) Heralding, Clean Air Act Amendments of 1990. With the battle plan on sulfur emissions now in place (and working pretty well), the next ingredient was nitrogen -- there was a race this whole time, as more and more internal combustion engines appeared, but as those same engines used less and less gasoline and burned it more and more completely and efficiently. Phew! BUT!!! The imposition of catalytic converters really honked people off. And what of NOx?? ("What of Hg and C?!?!?") For *societal* economic efficiency, it was easy to shift the focus away from the 100,000,000 automobiles, and onto the 1,000 largest coal plants. Fix them, and fix a big chunk of the issue for a lot less $$$ on society. (People still pay! But in their electric bill, not in their auto's running cost or reduced life.) Which gets back to your point. As you note, we DO pay for pollution reduction, and so-called "Zero-emitting Vehicles" whose charge came from the general electric system, carry *precisely* the emissions of the gross kwh generated. BUT, (and the big butt), it remains *much* more efficient to reduce point-source pollution ("in bulk", if you will) than to impose 100,000,000 (or, now, 200,000,000) pollution-reduction steps on dispersed users.
"Now, if we could onnnnnn-lyy figure out how to combine pollution-free energy capture with an automobile...... That would be somet'in', wouldn't it???"
Emissions are always going to be produced because something has to occur at the source, whether it is more coal being fed into a boiler or more uranium being being produced at a nuclear power plant. Nothing is free. Electricity doesn't happen by itself. But when the cars are moving in urban areas and along interstates, they aren't polluting the local air we breathe. The electricity we use recharging our cars at night would be unused anyhow. The power companies have to produce electricity whether it is sold to me and you or if it goes unsold. The major benefit of electric vehicles is that they do not consume petroleum, of which 50 percent of everything we use is imported. If we use coal, natural gas or hydro to power our local electrical plants we consume local resources. If we consume oil, it comes from unstable regions like the Middle East and Venezuela. The less oil we import, the less likely we will have soldiers returning home in body bags and Middle Eastern influence on domestic policy is diminished. It's not just saving the environment, it's good foreign policy. And you don't have to worry about oil changes, coolant changes, water pumps etc....