Provocation 230. Why do institutions deal with marker costs of energy but not of end costs of its use?
I keep being perplexed. So many institutions treat the energy problem driving climate heating as solved if alternative non carbon costs match or fall below fossil fuel costs. This is especially important for the costs and impact of heating buildings. My view, as I have written, is that the discussion looks at the cost per kw and hoping solar and wind can deliver kw below the cost of coal and gas. this is pure market theory.
But these discussions do not include the cost of conversion of gas furnaces to electric, which are significant. Even if such costs are made part of the discussion, the capacity of manufacturing to deliver so many units seems not to be recognized.
a new report by the IMF , attached, is typical I think of institutional perspectives.
It starts with a strong view of the dire problems of co2. Followed by
A better future is possible. The technological andpolicy means are available to switch from coal and otherpolluting fossil fuels to cleaner energy while maintainingrobust economic growth and creating jobs. For theneeded transformation to take place, a key challenge isto distribute its costs and benefits in a manner that canmuster enough political support—both domestically andinternationally.
This Fiscal Monitor argues that, of the various mitigationstrategies to reduce fossil fuel CO2 emissions,carbon taxes—levied on the supply of fossil fuels (forexample, from oil refineries, coal mines, processingplants) in proportion to their carbon content—are themost powerful and efficient, because they allow firmsand households to find the lowest-cost ways of reducingenergy use and shifting toward cleaner alternatives.
burden of the tax in proportion to household consumptionis moderately larger for lower-income households
This chapter analyzes the carbon prices countriesmust impose to implement their mitigation strategiesand the tradeoffs with other mitigation instruments.Limiting global warming to 2°C or less requires policymeasures on an ambitious scale, such as an immediateglobal carbon tax that will rise rapidly to $75 a ton ofCO2 in 2030. Under such a scenario, over 10 yearselectricity prices would rise, on average, by 45 percentcumulatively and gasoline prices by 15 percent, forhouseholds, compared with the baseline (no policyaction). The revenue from such a tax (1.5 percent ofGDP in 2030, on average, for the Group of Twenty[G20] countries) could be redistributed, for example,to assist low-income households, support disproportionatelyaffected workers or communities
So cash goes to lower income people who have ti pay a higher price. Won’t they just use the supplement to pay the increased cost while maintaining, or only slightly lower, current costs? Remember for the gas heated home, the cost of shifting to electric is much more in the cost of replacing equipment to use the electricity than it is in the cost of the electricity itself.
The kind of seductive language , sort of implying we are conscious, is
This Fiscal Monitor compares such usesof the revenues in terms of economic efficiency andimpact on income distribution.
A question would be, what is the going on in th mind of the writer? Lying, at one extreme, and, at the other extreme of motive, comfortable using grad school logic because never taught what might be wrong with this market model applied to the market model to appliance conversion. Those conversion costs by the way, are proportionally higher for large buildings. There is also the problem of time to manufacture all the new electricity based heating units.
Meeting temperature stabilization goals does not
mean that overall global energy investment must
increase much further, but it does imply an urgent need
to shift energy supply investment toward low-carbon
This perspective seems aimed at maintaining supply in some form without consdiering its use at the and. Why?
Yes. Why are we stuck in this logic applied to only half the problem?
Here is a more detailed part of the report
These opportunities includereducing the emission intensity of power generation(for example, switching from high-carbon-intensivecoal to intermediate-carbon-intensive natural gas orcoal with carbon capture and storage, and from thesefuels to carbon-free renewables or, with appropriatesafeguards, nuclear); curbing electricity demand (forexample, through adoption of energy-efficient appliances,air conditioners, and machinery and less useof products using electricity);
Energy efficient.. but no cost analysis
One source of the problem seems to be a failure of those with an economic perspective to recognize the realities of the texture or real lives . What is it like to live in a home that we want to keep heated? We will do all we can to keep using energy and to avoid the cost of conversion – actually most homes cannot afford this conversion.