Cabinet Memo
(Cabinet Memo’s are key to operation of the British-style civil service. A Cabinet Memo should be no longer than four pages, and cover:
Background,
The Problem,
Alternatives, (with advantages and disadvantages) and
Recommendation.
It being the considered opinion of the civil service that if a problem cannot be described and solved within four pages, it is not properly understood.
In real life, a Cabinet Memo is drafted by one department, ideally by Environment but in practice by Treasury as ”Senior Department”. It is then critiqued and reworded by all other interested departments, until a unified document is agreed upon. Here is Global Warming in four pages.)
Arresting Global Warming
Background: There is now a well established scientific consensus that human use of fossil fuels (coal, oil, natural gas, limestone, tar sands and potentially methane clathrates) is leading to increased concentrations of atmospheric carbon dioxide (ACO2), which in turn is leading to “global warming”, loss of sea-ice, melting glaciers, melting permafrost, rising sea levels, extreme and damaging weather, forest fires, floods and droughts. ACO2 levels are already above anything experienced in the last 450,000 years.
A number of computer “climate models” have been shown to track well against historic data. How well they will predict the future is unknown, since there are no records to test them against for the levels of ACO2 being induced. Melting of sea ice and glaciers provides one “positive feedback” that has been tested; reduced ice-cover results in increased energy absorption and temperature rise, leading to more melting. Other potential feed-back mechanisms that could lead to sudden increases in ACO2, and rapid and unpredictable temperature and sea level rise, exist such as burning of tropical and northern forests, melting of the permafrost, loss of the Greenland or Antarctic glaciers, or the release of methane stored as clathrate on the polar sea floor. The tundra alone contains enough carbon to double ACO2. Thus there is a danger of unpredictable and irreversible increases in ACO2, possibly leading to an unstoppable sea-level rise of 20 to 80 feet.
Developed countries (especially the U.S.) have contributed most to the inventory of ACO2, however developing country emissions are rising rapidly, China surpassed the U.S. as the economy with highest annual ACO2 releases in 2006.
Recent research has shown that it is technically feasible to collect CO2 from the atmosphere and concentrate it suitable for sequestration in exhausted oil fields, other suitable geological structures, or to be converted to magnesium or calcium carbonate. Unfortunately some technical and cost problems remain to be solved before it can be used in a major CO2 sequestration program.
There is very little recognition amongst the general public, industry leaders (or indeed the political leadership) of the urgent need to dispense with fossil energy.
The Problem: The problem is three fold:
i) How to reduce (and eventually eliminate) our fossil CO2 emissions at least cost,
ii) How to induce other countries to join with us in eliminating fossil CO2 emissions, and
iii) A widespread belief that “business as usual” is a viable option.
Alternatives:
i) Do Nothing. This is always an alternative, but in this case is almost certainly a non-starter, since it implies an 80 foot sea level rise (drowning all major coastal cities) in from 90 to 270 years.
ii) Technology Development and Energy Efficiency.
Advantages: California has had substantial success in encouraging utilities to show consumers how to save electricity (per household usage is only 7,000 kWh, versus 13,000 for the U.S. as a whole). Relatively modest increases in efficiency in wind farms, solar thermal and plug-in hybrids would likely make them cost competitive with fossil energy. If collecting CO2 from the atmosphere becomes economic, this would lay the foundation for actually reducing the level of ACO2.
Disadvantage: Fails to mobilize market forces to reinforce a switch to renewable energy.
iii) Cap and Trade.
Advantages: Sets definite upper limit on fossil fuel use, and “puts a price on pollution”, thus mobilizing market forces to help switch to fossil free energy sources.
Would be popular with polluters who would get windfall profits. Major source of political contributions from polluters wishing to preserve their caps.
Disadvantages: As generally proposed caps would be allocated to industries on the basis of historic levels of CO2 emissions. This “rewards established polluters” and gives them a free-ride up to the level of their cap. Monitoring of a large number of decentralized sites is likely to be difficult. As carbon credits are traded, purchasers are likely to pass the cost onto consumers, with a dead-weight loss for consumers and windfall profits for polluters. If caps are set too low, they might lead to power cuts. Major source of political corruption, see “Advantages” above.
iv) Revenue Neutral, Carbon Tax. (A tax of $250 ton of carbon would allow payroll taxes to be cut by a third)
Advantages: Could be collected at the mine, well-head or when imported, thus simplifying monitoring. Tax revenue would come to the government, to be used to lower or eliminate other taxes (that is the revenue neutral provision). Mobilizes market forces to help switch to fossil free energy. Should be no government induced black-outs. Could explain to consumers that higher energy costs were being balanced by removal of other taxes, such as payroll tax. Tax rate could be adjusted in the light of experience.
Disadvantages: Would be unpopular with polluters, since they would not get windfall profit. Hard to hit a quantitative target for fossil fuel use, since the policy would set the tax rate, not the quantity of fossil fuel to be used. Voters allergic to any tax increase. Offsetting reduction in payroll taxes would provide no offsetting benefits to (retirees, unemployed, etc.) who do not pay the tax.
v) Carbon Tax with Energy Dividend. (A tax of $250 per ton of carbon would provide a dividend of about $166 per month, per registered voter.)
Advantages: As for (iv) above, plus would be benefit all eligible citizens/voters, thus excluding green-card holders and illegal immigrants. Would mobilize voter as well as market forces for the switch to fossil-free energy, and immunize the majority of voters against usual opposition to tax increases, would encourage voter registration: The key to participatory democracy. Would provide votes to counter the likely large financial contributions from polluters designed to protect themselves.
Disadvantages: Industry opposition, as above.
vi) Ban on New Fossil Fuelled Power Plants.
Advantages: Would signal how very seriously the Government takes the problem of global warming, and its political commitment to strong and effective action, would finally force industry and consumers to face the need for new answers and life styles, would be politically popular as showing the Government “is finally doing something”.
Disadvantages: Would be highly politically unpopular as consumers lost access to cheap energy, and would generate strong opposition from the fossil fuel interests.
vii) Host an Annual International Consultation.
Advantages: This would bring together the leading three or four people most responsible for reducing ACO2 emissions in each country, for a week of reports and presentations on what is working, what progress has been made, and mutual reinforcement. This would be a technical, informal international consultation amongst the technicians most directly involved. It would avoid the political maneuvering characteristic of formal international agreements.
Disadvantages: Cost, perhaps $10 million a year.
Recommendation:
It is recommended that the government adopt alternatives (ii), (v), (vi) and (vii): Technology Development and Energy Efficiency, Carbon Tax with Energy Dividend ($250 ton of carbon, and dividend of $166 per voter per month), Ban on New Fossil Power Plants and Host an Annual International Consultation. These four policies should be pursued simultaneously. |