Congressional Budget Office report Says Cap, Trade Expensive, Hurts Poor

Speaking of cap and trade flaws, the Congressional Budget Office (CBO) has released a new report on proposed CO2 cap-and-trade legislation saying it would have a negative impact on Americans, in particular, the poor.

The CBO report, titled "Trade-Offs in Allocating Allowances for CO2 Emissions," says regardless of how the allowances were distributed, most of the cost of meeting a cap on CO2 emissions would be borne by consumers, who would face persistently higher prices for products such as electricity and gasoline. It also adds that price increases would be regressive with poorer households bearing a larger burden relative to their income than wealthier households.

The CBO noted that the proposed cap-and-trade allocation method would increase producers’ profits without lessening consumers’ costs. In essence, such a strategy would transfer income from energy consumers—among whom lower income households would bear disproportionately large burdens—to shareholders of energy companies, who are disproportionately higher-income households.

CBO Researchers concluded that much or all of the allowance cost would be passed on to consumers in the form of higher prices. Those price increases would disproportionately affect people at the bottom of the income scale. For example, the Congressional Budget Office (CBO) estimated that the price rises resulting from a 15% cut in CO2 emissions would cost the average household in the lowest one-fifth (quintile) of the income distribution about 3.3 percent of its average income. By comparison, a household in the top quintile would pay about 1.7 percent of its average income.

To read the full CBO report, click here.

- David Adams (with thanks to Frank Maisano)

Carbon trading smokescreen?

The Financial Times has published a package of stories questioning whether some carbon-trading programs are really doing anything to help with global warming.

"Companies and individuals rushing to go green have been spending millions on “carbon credit” projects that yield few if any environmental benefits," the story by Fiona Harvey and Stephen Fidler reported.

Their investigation "has uncovered widespread failings in the new markets for greenhouse gases, suggesting some organisations are paying for emissions reductions that do not take place. Others are meanwhile making big profits from carbon trading for very small expenditure and in some cases for clean-ups that they would have made anyway."

Francis Sullivan, environment adviser at HSBC, the UK’s biggest bank that went carbon-neutral in 2005, said he found “serious credibility concerns” in the offsetting market after evaluating it for several months, the Financial Times reported.

“The police, the fraud squad and trading standards need to be looking into this. Otherwise people will lose faith in it,” he told the paper.

Other things the FT found include:

1.) Widespread instances of people and organizations buying worthless credits that do not yield any reductions in carbon emissions;

2.) Industrial companies profiting from doing very little – or from gaining carbon credits on the basis of efficiency gains from which they have already benefited substantially,

3.) Brokers providing services of questionable or no value;

4.) A shortage of verification, making it difficult for buyers to assess the true value of carbon credits;

5.) Companies and individuals being charged higher prices for private purchase of EU carbon permits.

To read the full report, click on:

http://www.ft.com/cms/s/48e334ce-f355-11db-9845-000b5df10621.html

Andrew Revkin of The New York Times also wrote an interesting article recently on the pitfalls of carbon trading. Click here for his article. He cites a report by Clean Air/Cool Planet called 'A Consumers’ Guide to Retail Carbon Offset Providers.'

--Craig Pittman

U.S. pushes climate change off the agenda

European Union leaders are in Washington today to talk about global warming, but White House opposition has been so staunch that they're holding their breath — for now. They may be more vocal in front of a G8 forum, Sam Eaton reports for Marketplace on American Public Media.

Listen to this story

Click here for more coverage of the meeting with EU leaders.

- David Adams

NOAA chief advocates federal climate agency.

Conrad C. Lautenbacher, the retired admiral who heads the National Oceanic and Atmospheric Administration (NOAA), says he is looking into the create a National Climate Service to go alongside the National Weather Service. Currently, there is no one federal agency dedicated to the studying climate.

Click here for an article in the St Petersburg Times.

- David Adams

Green muscle cars: the Lexus 600h L

One of my editors was intrigued by the new 'ultra-low emissions Lexus 600h L and asked me what I thought of it. Here's what I wrote about the automobile's industry's green muscle dilemma.

Click here to read 'Wonder why this wonder car exists.'

- David Adams

Florida's drought getting worse.

Lake Okeechobee is close to a record low. I'm not ready to point a finger at global warming as we've had some serious droughts in the past in Florida. But everyone should be watching this one as our water consumption keeps rising and availability is falling.

The Florida media this Sunday provided detailed coverage to the unfolding water crisis in Florida, with dramatic photos and a useful graphic.

Click here a story in the St Petersburg Times, 'Miles of Muck.'

Click here for a story in the Miami Herald, 'Why is Florida so Dry?'

- David Adams

Record weather in the UK

My mother is concerned. She's never had to water her garden in southwest England in April - traditionally one of the wettest months.

Britain is experienced the hottest April in 350 years. No-one is complaining much, as they enjoy the unseasonably balmy weather.
Average maximum temperatures at the end of April in southern England are traditionally about 13C or 14C, says The Independent newspaper. This weekend in London and the South-east, the thermometer may hit 26C or even 27C - 79F to 80F.

"The possibility is growing that Britain in 2007 may experience a summer of unheard-of high temperatures, with the thermometer even reaching 40C, or 104F,a level never recorded in history," according to The Independent.

Weather records have been tumbling in the UK in the last year.
Spring 2007 (defined as March, April and May) will probably be Britain's hottest spring. It has followed the second-warmest winter in the UK record (December, January and February) and the warmest-ever autumn (September, October and November 2006).

Before that was Britain's hottest-ever month (July last year), which included the hottest-ever July day (19 July, when the temperature at Wisley, Surrey, reached 36.5C, or 97.7F, beating a record that had lasted since 1911).

To crown it all, yesterday the Met Office announced that the past 12 months, taken together, have been the hottest 12 months ever to have occurred in Britain, with a provisional mean temperature of 10.4C. The previous record (March 1997 to April 1998) was 9.7C.

Click here to read more.

- David Adams

New global warming polls shows public support for tackling global warming

A new global warming poll by the New York Times and CBS News shows the public is more concerned and willing to take action than some might have imagined. Another poll by the Center for American Porgress shows similar results.

"Americans in large bipartisan numbers say the heating of the earth’s atmosphere is having serious effects on the environment now or will soon and think that it is necessary to take immediate steps to reduce its effects," the New York Times writes this morning.

- a surprising 92% of Americans said they were willing to pay more for electricity if it were generated by renewable sources, such as wind or solar.

- 92% also said they favored requiring car manufacturers to produce cars that are more energy efficient.

- another 64% said they would be willing to pay higher taxes on gasoline if the money were used on renewable energy research.

Click here to read more about the results of the poll.

Click here for the poll by the Center for American Progress

- David Adams

Actor James Cromwell trades (successfully) in green stock on CNBC.

At The Fueling Station we are rooting for actor James Cromwell in CNBC's Trading with the Stars, part of the network's Million Dollar Portfolio Challenge.

Cromwell, one of 12 celebs in the contest, is placing his investments with green, socially responsible stocks.

He's doing surprisingly well, currently lying in 3rd place.

Click here to listen to his views on why he likes to trade in green stocks.

- David Adams

Virgin to buy 'greener' Boeing jets.

True to his word, British airline boss, Sir Richard Branson, is eschewing European technology for what he says are greener American-made passenger jets.

Recognizing that air travel is one of the fastest growing sources of greenhouse gases, Branson's company, Virgin Atlantic, has ordered 15 of Boeing's fuel-efficient 787 Dreamliner passenger jets. Boeing says the 787-9 burns 27% less fuel per passenger that the European-made A340-300 (Airbus).

Branson's airline has taken out options on another eight 787 aircraft and purchase rights on a further 20, in a deal which could be worth $8bn.

Virgin also revealed plans to fly the first biofuel-powered commercial aircraft, a milestone in the air industry's quest to reduce emissions. Virgin has yet to make clear what kind of clean fuel technology it intends to use in its "green" maiden voyage.

The use of ethanol instead of fossil fuels is a growing trend in the car market - but ethanol is unsuitable for aircraft, as it freezes at 15,000 feet.

Click here to read more plus an interview with Branson and Boeing CEO Jim McNerney, at CNBC.

- David Adams