moldybluecheesecurds 2

Thursday, June 14, 2007

Comments on CAFE standard

Thanks to the two folks who wrote in about the CAFE standards. Both had interesting perspectives I'd like to share.

E noted that carbon demand (fossil fuel use) is very inelastic (doesn't change easily despite price fluctuations) and that a carbon cap operates like a quota. In other words, it will drive prices up almost immediately.
I'm confident that my family's farming business would end very quickly, as diesel fuel is -needed- for it to function, and our profit margins are slim to begin with.
Otto also shared his perspective on CAFE, although it was more to promote his support for weaker CAFE standards than anything else. From the Auto Alliance, he supports Pryor-Bond-Levin, which would scale back the fuel economy increases in the current legislation.

To Otto: I appreciate your support for lower CAFE standards on the basis of allowing Americans to continue to indulge their desire for large SUVs and light trucks. But I'm not only disagreeing that it's environmentally feasible to cop out on CAFE, but arguing that CAFE standards fall completely short in the long run, as fuel economy increases simply reduce demand and lower prices for fossil fuels.

To E: I'm not sure exactly how to deal with the externalities of a carbon cap, and I agree they may not be desirable. The problem is that a carbon cap/tax/etc is improving the market by internalizing the cost of carbon emission. So while government might need to help level the inequity of a carbon tax (for low income, perhaps family farmers), there's no option for stopping global warming other than lowering carbon emissions and we can't do that by farming/driving/or burning diesel fuel at the rate we've been doing it.

The good news is that stabilizing climate change at 2 degrees Celsius can be done primarily with efficiency improvements, costing less than $52/ton of carbon. This poster illustrates another way to look at it: holding carbon emissions to twice pre-industrial levels (pdf). The 15 "wedges" of 1 gigaton discussed are all eminently do-able, and only 7 are needed.

No comments: