The feeling in Washington is that the whole climate-energy debate is about to come to a climax over the decision on whether to build the Keystone Pipeline. President Obama is indeed in an almost inescapable dilemma. He can’t approve the pipeline without setting off a firestorm among his most fervent supporters (above), the college-educated, environmentally conscious youth. Yet he can’t reject the pipeline without ripping away the pretense that his administration is a firm supporter of energy. With gas prices rising every day, the conflict only grows. Is there a way out? Several commentators are suggesting a trade-off – approval of Keystone in exchange for a carbon tax.
Europe is having its problems as its vaunted carbon-trading system appears to be grinding to a halt. The difficulty? Low carbon prices. It’s strange but the system is poked with so many holes that businesses are finding it too easy to comply. Environmental groups, originally its firmest supporters, have now turned against it on the grounds that businesses are profiting by it. The businesses want to keep it, saying they don’t want separate standards in each country. The EU Parliament launched a rescue operation yesterday, voting to allow the European Commission to reduce the number of permits auctioned in the next three years. It makes sense but also reveals how arbitrary the whole system is. Would a carbon tax make more sense?
The headlines in the green press are celebrating the 147 MW of new geothermal electricity added in the United States last year. As usual, however, there is little sense of scale in these celebrations. 147 megawatts? That’s the equivalent of one industrial boiler. In fact, both geothermal and hydroelectric development have both slowed down around the world.
Finally, President Obama has set a goal of doubling the nation’s energy efficiency by 2030. Can that goal be reached? Building efficiency is improving and the market for improved efficiency in electric motors is estimated at $91 billion by 2018. Johnson Controls and the Urban Institute have introduced the PACE program to improve financing for commercial operations. The difficult is people tend to think that improvements in efficiency are the equivalent of absolute reductions in energy consumption. Often the “reductions” are from projected increases in consumption. And as Stanley Jevons showed more than 150 years ago, improvements in efficiency are often just as likely to a wider implementation of energy technologies, which means consuming more energy. It’s called “Jevon’s Paradox.”