Solar Tax Credits

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My colleague Michael Coleman had an excellent piece in this morning’s paper laying out the stakes and contending factions in the fight over solar tax credits:

Senate Republicans and Democrats, almost all of whom say they support extending the solar tax credit, haven’t been able to agree on how to pay for it.


Most Democrats, including Bingaman, contend that Congress should rescind $18 billion in annual federal subsidies given to the biggest oil and gas companies since 2006 and redirect them to the solar industry.


“This is not a tax benefit they had before— they were doing fine before and they are doing fine now,” Bingaman said, referring to record profit margins that oil and gas companies have posted in recent years. “I don’t think this is a major setback for oil and gas companies given the profits they have had.”


The U.S. House approved the tax shift in February.


But Sen. Pete Domenici of New Mexico, the top Republican on the Senate energy committee, said he won’t support it.


Domenici, who is retiring from Congress after his term ends in January, said the solar tax credit extension doesn’t need to be paid for.


“We know it will work and will yield benefits to the American economy, so I would vote for it without the offsets,” Domenici said, referring to proposals to “offset” the breaks given to solar companies by eliminating some tax breaks for oil companies.


“I think they’re so important they should be adopted without offsets,” Domenici said.

(image courtesy National Solar Observatory)

Weitzman pt. II

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That’s all well and good, Marty, but stop squirming and tell us how much you’d price carbon at? That’s all we really care about:

Weitzman hemmed and hawed and noted that the whole point of his paper was that there are these big uncertainties, and that previous attempts to calculate the socially optimal price on carbon haven’t accounted for these and thus are wrong, and that you couldn’t even really do the calculation with the current tools we have. But he finally acknowledged that if you made him philosopher-king and demanded an answer he would say that the price on emissions (i.e. a carbon tax or the price of a cap-and-trade permit) should be $50 per ton of CO2, rising at rate of a few percent over inflation.

How Stuff Works

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I’m a big fan of what I call “how stuff works” journalism: take a topic of the day and step back and explain how the darn thing works. Too often, we write either incrementally, or for insiders who already know the underlying structure of what we’re talking about. (This explains, for example, my ultimately fruitless search, recently for a story explaining what Bear Stearns did for a living.)

My colleague Andrew Webb turned a nice piece this morning about how our gasoline gets here. The news peg was a mixup that put diesel in people’s regular gasoline tanks. But you don’t even need that for this to be a fun and useful story of pigs and water and society’s plumbing.

Weitzman and Ahab

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Martin Weitzman’s paper on the economics of catastrophic climate change is rather like Moby Dick – something we all nod to knowing references while we’re secretly saying to ourselves, “WTF? Did you actually understand this?” I actually went so far as to enlist an environmental economist of my acquaintence (being a journalist has its advantages). He used a white board. It was fun.

The nut of the argument is that climate change involves uncertainty about low probability but potentially very high consequence events, making ordinary cost-benefit analysis difficult.

So I was happy to see in Daniel Hall’s post today on the subject that I am not alone:

Nobel prize winner Tom Schelling, one of the discussants at the event, noted that he read the paper 5 or 6 times without ever feeling that he was sure what it was saying.

The problem is that Weitzman doesn’t really tell us what we ought to do. But it nevertheless is a very significant framework for thinking about the issue.

Biofuel Scam

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As if the built in systemic problems associated with the current biofuel push were not enough, here’s a remarkable story from the Guardian in which biodiesel is shipped from Europe to the United States, then back, to qualify for the US biodiesel export subsidy:

The “splash and dash” scam involves shipping biodiesel from Europe to the US where a dash of fuel is added, allowing traders to claim 11p a litre of US subsidy for the entire cargo. It is then shipped back and sold below domestic prices, undercutting Europe’s biofuel industry.

(h/t WSJ)

Fish

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Lissa counted 10 fish this morning in the pond, alongside the first lily pads of the spring. Me? (Sneeze) All I could see was the scum of pollen floating on top.

update: I was out adding water this evening and noticed the first thin cattail leaves coming up.