The Providence Journal just published an op-ed I wrote regarding how long term contracts for clean energy can help reduce costs and risks for electric utility ratepayers.
Tag Archives: renewable energy
Recently, I testified at the Rhode Island Statehouse regarding the impact of the state’s Distributed Generation Contracts law on ratepayers. In preparing the testimony, I realized it is important for legislators to have a tool to estimate those impacts under a variety of scenarios. I decided to create that tool for them, which is attached here:
This isn’t intended to replace a full economic impact study, and actually significantly underestimates the positive benefit of solar for ratepayers. But it gives a general sense that cab hopefully help better inform policy related to renewable energy and utility regulation. Try it out.
In “Get The Energy Sector Off The Dole“, clean energy investor Jeffrey Leonard offers a great way to make renewable energy more competitive, reduce pollution and greenhouse gas emissions, and help restore our economy to some rationality and health with competitive markets.
The title says it all. Leonard suggests ending all direct subsidies, tax advantages, hidden subsidies in special regulatory treatments and other “externalized” subsidies for all energy industries. Its great stuff.
Some choice quotes:
Government statistics show that about 70 percent of all federal energy subsidies goes toward oil, natural gas, and coal. Fifteen percent goes to ethanol, the only renewable source of energy that consistently gets bipartisan support in Congress (think farm lobby and Iowa). Large hydro-power companies—TVA, Bonneville Power, and others—soak up another 10 percent. That leaves the greenest renewables—wind, solar, and geothermal—to subsist on the crumbs that are left.
None of these estimates account for continuing support to the nuclear industry, estimated to be about $1 to $2 billion, much of it to promote research and development efforts on new nuclear technologies and waste disposal methods. There are plenty of hidden subsidies, too. We place a cap on liability for accidents (like the BP oil spill). We offer the nuclear industry large loan guarantees. And, of course, we maintain an immense military embroiled in the Middle East and elsewhere as it tries to secure access to energy resources around the globe………..
We can waste money and distort the market by subsidizing all of these forms of energy. Or we can just call it quits on the waste. Disarm completely. Kill all the subsidies—yours and mine,,,,,,,,,,,.
So we find ourselves in a new political moment when for the first time it is possible to imagine an alliance of GOP libertarians, disaffected environmentalists, and budget hawks coming together for a grand deal that would sweep away sixty years of bad energy policy. Obama should seize the moment to bring this coalition together in support of a single objective: to eliminate all government subsidies and tax credits on production of all primary sources of energy.
This story is a perfect example of enlightened government officials picking winners and losers and parceling out borrowed money while sticking our kids with the multi-trillion dollar tab for their reckless and wasteful spending. The half billion dollar loan guarantee from the federal ARRA “stimulus program” for a start-up with at best questionable technology and prospects, is a glamorous version of the complete waste the vast majority of the stimulus spending represents. It’s perfect example of the fundamentally flawed policy framework that parcels out public money for private ventures based on the subjective and often arbitrary criteria of government officials.
What’s the best explanation the article offers for a start up with unproven technology getting a half billion dollar loan guarantee?. “Solyndra actually applied for DOE loans back in 2006, when Bush was still President. When Obama announced that he wanted to rev the energy economy, Solyndra happened to be first in line.” Likely it also involved something like the way government corruption works here in Rhode Island and one of their VC’s suggested “I know this guy, who knows a guy…..”
Hopefully the recent election represents a political wake up call that will put an end to this kind of senseless waste. The new congress should clarify the fundamental principal that the proper role of government is to set and enforce fair, sensible and stable rules for the economic game rather than unfairly and arbitrarily inserting itself in the game as a competitor. The sooner we get government completely out of the roles of business, the more likely we will be to recover some semblance of a sustainable economy.
Expect Solyndra to become a political poster child for those opposing clean energy policy generally, not just wasteful government policies like the stimulus program. The kind of arbitrary political favoritism the stimulus program and most government economic policy represents today is a deep fundamental challenge to a healthy economy and to sensible sustainable public policy.
Secretary of the Interior Ken Salazar has announced that he will make a permitting decision regarding Cape Wind by April. He has requested public comment on the project before February 12. Comments can be sent here and here.
The long saga of Cape Wind’s permitting efforts has proven to be a classic example of how well intended environmental regulations can be abused and hypocritically turned against very environmentally responsible projects.
The story of Cape Wind should be taught in Law Schools as an example of how the rule of law guaranteed by our constitution and precedent in law at least back to the Magna Carta can been manipulated and abused by politically connected cynics.
Starting in 2001, Cape Wind was subject to an exhaustive four year permitting process coordinated by the US Army Core of Engineers under the National Environmental Policy Act (NEPA) and involving seventeen state and federal permitting agencies. When the results proved conclusively that the project would have no significant negative impacts of any kind, powerful politicians from both parties got the regulations changed so that the water views from their friend’s mansions on the Cape Cod would not be impacted.
A new regulatory process required the NEPA process to start completely over under the purview of the US Department of Interior’s Minerals Management Service. After another four or five years of intense study by multiple agencies, again the project was proven conclusively to have only positive impacts on the environment, on the economy and on our future. The MMS staff and all the reviewing agencies recommended the project be approved.
Recently, project opponents working with members of local Native American tribes have tried to derail the project again claiming that the waters in which the Cape Wind is to be built were once dry land which may contain ancient burial sites and that their religion requires unobstructed views of these sacred waters. It is perhaps telling that these objections were never raised to block marinas, pleasure boats and all sorts of other modern offenses that might blight these sacred views. And one might also wonder about the religious impact when oil spills have polluted those waters making fuel deliveries to the Cape’s only power plant.
Of course cultural and historic heritage issues are considered fully and very carefully as part of the NEPA review process and should have been raised much earlier. It’s not as if those making these claims were unaware of the permitting process which has now been done twice and which provided them every possible opportunity to intervene in a timely and appropriate manner. What new information is now being brought to bear and why wasn’t it provided earlier? If there is nothing new being presented, then why should the Department of Interior effectively reopen the permitting process to review these matters?
The delay that has already been granted in issuing the permits to build Cape Wind in order to consider these late concerns is the most flagrant kind of abuse of the rule of law that is fundamental to the preservation of our civilized society. If such claims are allowed to derail Cape Wind at this late date, then what is to stop any opponent of any project ever proposed anywhere from hiring a couple of Native Americans after the permitting process is completed to claim the project is on their sacred grounds or blocks their sacred views? What is to prevent anyone alleging any other religious beliefs to assert that anything that they don’t happen to personally like should be stopped in its tracks and claim government protection against whatever may happen to offend their purported religious heritage?
The Constitution grants us all freedom to practice religion as we wish, but not at the expense of the Constitutional rights of others, nor at the expense of the fundamental rule of law in our land.
If we allow the regulatory goal posts to continually shift after a project is proposed, based on arbitrary environmental, religious or any other kind of claims, then we will have all lost the protection of the rule of law that our nation and our prosperity is based on. The corruption inherent in abuses such as that now underway in this obstruction and that which Cape Wind has earlier been subjected to, undermine our freedom and every constitutional protection we are granted as Americans.
Regulators from all the state and federal agencies overseeing this project have done their job very well – twice. From their comprehensive reviews, it is very apparent that the only real issue ever seriously in question is the subjective aesthetic impact of the project.
But the aesthetic question is not a question of Cape Wind vs. a pristine world. The question is far larger than the aesthetic impact of a few wind towers barely visible over the horizon. Like the rest of America, the Cape and Islands need energy. Aesthetic blights from mining, refining, delivery and disposal of fuels for oil, gas, coal and nuclear power plants, and the larger impacts of those technologies on our society, should be given serious consideration in evaluating Cape Wind. The rights, aesthetic concerns and religious sensibilities of those impacted by the entire systems delivering energy to Cape Cod and the Islands must be give equal weight to the concerns of the Cape Wind opponents.
The craziest part of all this is that from the closest shores, Cape Wind will be barely visible just a couple degrees above the horizon, and only on a clear day.
As I have testified on behalf of the Northeast Sustainable Energy Association in Army Corp of Engineer’s hearings on Cape Wind:
“The choice we face goes far beyond local aesthetics. Will we choose to continue our dependence on polluting fossil fuels from the Middle East? Will we choose a future plagued by international conflict, terrorism and climate change implicit in fossil fuel dependence? Will we choose to forgo a golden opportunity to provide clean energy and good jobs for the region? The real question is whether we will choose a compromised future or the tremendous potential of sustainable prosperity.”
Perhaps those opposing Cape Wind are not willing to make the choices necessary for our nation to remain a free and prosperous. But as a nation, we have real choices to make.
We can choose to get serious about creating clean renewable energy solutions at home and exporting those solutions of peace, hope, and prosperity abroad, or we can continue to waste our treasure and send our troops off to die fighting for oil in places like Iraq. Many Cape Wind opponents say they support renewable energy. But empty words do not solve the problems our addiction to oil has caused. Words alone do not help the families of the brave Americans sent to make the ultimate sacrifice in the Persian Gulf.
Today, wind power is cost competitive with conventional power plants. The wind industry has grown about forty percent each year for over a decade. Wind projects do not cause air pollution or oil spills, and they do not depend on an everlasting stream of imported oil and gas. Cape Wind is as good as any significant solution to our energy needs can possibly be.
A lack of seriousness about developing real solutions like Cape Wind will doom our children to a future enormously complicated by international conflict, climate change, terrorism, diminishing economic prospects and compromised freedom. Our lack of wisdom and vision will cause more brave Americans to die in future wars that could be prevented.
For too long, we have compromised our proud heritage with bad decisions. Our leaders need to face realities that ordinary people see clearly. We cannot allow our regulatory process to be hijacked and violate the rule of law at the arbitrary whim of a few.
The NEPA process has been followed fully for Cape Wind – twice. The conclusions are absolutely clear. It is long past time for public officials to act responsibly, put a stop to the cynical games and allow the project to get built.
Building Cape Wind will be a symbol of our commitment to the rule of law and our commitment to a peaceful and prosperous future.
Please make sure Secretary Salazar hears from you.
Newsweek is out with a good interview of world famous NASA Climate Scientist James Hanson regarding Copenhagen and the recent release of controversial e-mails from the Climate Research Unit at the University of East Anglia.
Hanson brushes off the significance of the dust-up over the e-mail release:
Do the e-mails indicate any unethical efforts to hide data that do not support the idea of anthropogenic global warming or to keep contrary ideas out of the scientific literature and IPCC reports?
They indicate poor judgment in specific cases. First, the data behind any analysis should be made publicly available. Second, rather than trying so hard to prohibit publication of shoddy science, which is impossible, it is better that reviews, such as by IPCC and the National Academy of Sciences, summarize the full range of opinions and explain clearly the basis of the scientific assessment.
On the question of Copenhagen and current US policy , Hanson is even more clear:
How serious a setback would it be if no agreement on a climate treaty is reached in Copenhagen, where 192 countries are meeting starting Dec. 7?
It’s not a setback at all if it allows a careful reassessment of what is needed. The cap-and-trade scheme [that the Copenhagen negotiations were working toward] is just not going to be effective at controlling greenhouse emissions. Political leaders have to realize that the fundamental problem is that fossil fuels are the cheapest form of energy, so they will continue to be burned unless we put a gradually increasing price on carbon emissions [through a carbon tax]. That’s a much better approach than national goals for emissions reductions, which will probably not be met.
What do you think of the climate bills now before Congress?
They’re disasters. We can’t allow the polluters to write the bill, but that’s what happened. What’s needed is putting a price on carbon, not cap-and-trade.
Hanson is even more clear in his editorial about Copenhagen in The Guardian “Is There Any Real Chance of Averting A Climate Crisis?” in which he suggests:
Absolutely. It is possible – if we give politicians a cold, hard slap in the face. The fraudulence of the Copenhagen approach – “goals” for emission reductions, “offsets” that render ironclad goals almost meaningless, the ineffectual “cap-and-trade” mechanism – must be exposed.
He goes on to argue for a simple carbon tax offset by a total return of the tax to the public either through reductions in payroll taxes or “dividends” payed directly to citizens, an approach that has been favored by economists of all political persuasions.
I can’t agree with Hanson when he calls for increased use of nuclear energy, for all the reasons cited here.
But in general, Hanson has it exactly right on how to address climate and energy issues through public policy – put a real price on fossil fuels through the tax system and offset that tax with reductions in regressive taxes like the payroll tax which stifle our economy and discourage jobs creation.
Hanson is absolutely right in his assessment of on our current policy efforts in Congress and on his hopes for Copenhagen.
Below is an article I recently published in the current issue of the Northeast Sun, the journal of the Northeast Sustainable Energy Association. The article analyzes the Waxman-Markey bill in the House. The same core flaws are also in the recently proposed Kerry-Boxer Senate bill. The article also describes the Inglis, Flake and Lipinski legislation – a real solution to our energy challenges:
A Serious Solution For Energy Policy
Every president since Richard Nixon has proclaimed energy policy a national priority. They have all failed to provide any lasting solutions.
We are headed toward failure again. The Waxman Markey American Clean Energy and Security Act (ACESA) passed by the House of Representatives could set back real solutions to our energy problems by decades, while exacerbating economic problems facing our country.
What matters is not intentions but results. Despite the rhetoric, ACESA won’t reduce carbon emission in a meaningful way or create what clean energy solutions need to be successful – a real price on the “economic externalities” of our fossil fuel addiction.
The American Clean Energy and Security Act Has Major Problems:
1) The Carbon Cap Is Ineffective
The core of the ACESA is a new derivatives market for government permits to emit greenhouse gasses, along with offsets, which provide credit for activities such as planting trees or protecting forests, which mitigate impacts of emissions.
Scientists argue the carbon caps in ACESA are too low to impact climate change, while economists and practical observers suggest they are so subject to manipulation they are unenforceable. By allowing billions of tons of unverifiable offsets, many from international sources, no carbon emission reduction would even begin in the United States for at least a decade if all the offsets provided in the congressional bill were utilized.
2) New Derivatives Market Threatens The Economy
The Financial Times quotes US Commodities Future Trading Commissioner Bart Chilton predicting carbon markets would become “the biggest of any derivatives product in the next four to five years.”
ACESA credits and offsets create a volatile multi-trillion dollar carbon derivatives market that could impact financial markets much like the recent crash in mortgage-backed derivatives. The inclusion of unverifiable international offsets makes markets harder to understand or regulate, inviting market manipulation and fraud.
In the Friends of the Earth report “Subprime Carbon”, Michelle Chan cautions: “today speculators do the majority of carbon trading, and they will continue to dominate as carbon-trading markets grow.”
Unlike existing SOx and NOx emission trading markets, with limited sets of players and clear rules, the proposed carbon markets promise pay for impossible to verify assets to unlimited numbers of players.
In a CNBC video, “The Carbon Challenge”, former Vermont Governor Howard Dean declares, “I am terrified of a Bernie Madoff in the cap and trade business who is selling stuff that doesn’t exist.”
3) ACESA Is The Largest Corporate Welfare Program In History
Their campaign position paper declares: “Barack Obama and Joe Biden’s cap and trade system will require all pollution credits to be auctioned. A 100% auction ensures that all large corporate polluters pay for every ton of emissions they release, rather than giving these emission rights away for free to coal and oil companies.”
Waxman Markey gives away 85% of the permits for free
In his March Congressional testimony White House Budget Director Peter Orszag said: “If you didn’t auction the permit, it would represent the largest corporate welfare program that has ever been enacted in the history of the United States.”
While creating a huge derivatives market for Wall Street, ACESA gives billions in free carbon credits and offsets to coal companies, oil refiners and the utility industry. In “The Cap-and-Trade Giveaway”, Alan Viard suggests: “under a system of free permit allocation, the stockholders of companies that receive free permits would receive windfall gains. A cap and trade system with freely allocated permits is equivalent to a carbon tax in which the tax revenue is given to stockholders.”
In a report on cap and trade, the Congressional Budget Office estimated that some recipients of free credits could see their market capitalization double or triple instantly.
Harvard economist Greg Mankiw succinctly blogged: “Cap and trade = Carbon tax + Corporate welfare.”
4) ACESA Undermines EPA Authority And Successful Policy At The Regional, State And Local Level
ACESA eliminates EPA’s existing authorization to regulate greenhouse gas emissions under the Clean Air Act and prohibits successful state and regional programs like the Regional Greenhouse Gas Initiative. It imposes federal control over matters like building codes, traditionally the constitutional purview of the states.
Successful state Renewable Energy Portfolio Standards (RPS) are complicated by ACESA. The minimum compliance payments in the proposed Federal RPS are too low to spur markets for renewables. And ACESA allows technologies like waste incineration to compete in renewable energy credit markets with real renewables
5) Massive ACESA Financial And Regulatory Interventions Delay Real Solutions
Along with cap and trade, ACESA involves hundreds of new regulatory and economic prescriptions, distorting markets based on political calculus and favoring entrenched interests. In a guise of offsetting higher consumer prices, billions of dollars of carbon credits are free to utility companies, undermining competitive energy markets. ACESA further encourages failures like corn-based ethanol, disrupting agricultural markets while providing no net energy or environmental benefit. Regulatory provisions micromanage virtually every sector of the economy, stifling innovation.
6) ACESA Fails In Pricing “Economic Externalities” Of Our Fossil Fuel Dependence
The Wall Street Journal quotes President Obama saying in March: “If you’re giving away carbon permits for free, then basically you’re not really pricing the thing and it doesn’t work — or people can game the system in so many ways that it’s not creating the incentive structures that we’re looking for.”
By giving away 85% of carbon credits, establishing ineffective carbon caps and allowing offsets, ACESA doesn’t provide price feedback in energy markets and in the economy generally that are essential for making clean energy cost-competitive.
Volatile price swings undermine investor ability to put a predictable value on alternatives to incumbent energy systems. The speculative derivatives markets inherent in ACESA encourage volatility. The Wall Street Journal reported that in Europe, “prices for carbon permits have whipsawed from a high of 30 euros a ton to a low of 2 euros a ton.”
7) ACESA Undermines Political Viability Of Real Solutions
In a presentation at Dartmouth College, NASA climate scientist James Hansen declared: “Cap and trade is not going to work……in Europe it has been completely ineffective.” His conclusion is confirmed by Euractiv.com reports of European governments proposing new carbon taxes, effectively acknowledging the failure of their cap and trade program.
In their Philadelphia Enquirer editorial “Cap-and-Trade Does More Harm Than Good”, environmental attorneys Laurie Williams and Allan Zabel state: “The Waxman-Markey approach would not only guarantee a decades-long failure in the United States; it would also undermine U.S. credibility in international negotiations on climate change.”
Ex-Secretary of State George Shultz, speaking to the International Association for Energy Economics suggested of Waxman Markey: “it is going to be so obviously corrupt it is going to discredit the whole idea.” Having negotiated the Montreal Protocol, the most successful international environmental treaty in history, Shultz suggests a straight carbon tax would give the US far more credibility in negotiating climate treaties.
Greenpeace summarizes: “the Waxman-Markey bill sets emission reduction targets far lower than science demands, then undermines even those targets with massive offsets. The giveaways and preferences in the bill will actually spur a new generation of nuclear and coal-fired power plants to the detriment of real energy solutions. To support such a bill is to abandon the real leadership that is called for at this pivotal moment in history.”
ACESA will inevitably increase costs throughout our economy, but does not provide effective mechanisms for average people to cover those costs. With all of these problems and no credible prospect of meeting its stated goals, if we allow ACESA to pass, it could be decades before voters trust Congress to attempt any meaningful solution to our fossil fuel addiction.
What An Effective Solution Would Look Like – Revenue Neutral Carbon Tax
On January 26, President Obama made his first major policy address on energy. He described our energy challenge clearly: “At a time of such great challenge for America, no single issue is as fundamental to our future as energy. America’s dependence on oil is one of the most serious threats that our nation has faced. It bankrolls dictators, pays for nuclear proliferation and funds both sides of our struggle against terrorism. It puts the American people at the mercy of shifting gas prices, stifles innovation, and sets back our ability to compete.”
A simple carbon tax addresses all the challenges President Obama cites. And if implemented in a revenue neutral manner by replacing payroll taxes or providing direct rebates to all citizens, a carbon tax also addresses the serious economic problems we are facing.
Strong price signals from a carbon tax would shift markets and do not require the risks and inefficiencies of excessive regulation or huge speculative derivatives markets Today we tax work and productive investment while encouraging waste and pollution with subsidies and tax breaks for oil, coal and other entrenched industries. It’s time to think rationally about using this powerful lever of government to discourage what we don’t want, like wasting energy, while encouraging work, job creation and sensible investment.
Williams and Zabel suggest: “While cap-and-trade-and-offsets will enrich special interests and delay the transition away from fossil fuels, carbon fees with monthly rebates could be the centerpiece of an affordable, equitable, rapid transition to a clean-energy future.”
Waxman Markey is not the only energy bill in Congress.
Representatives Inglis (R-SC), Flake (R- AZ) and Lipinski (D-IL) worked across party lines proposing H.R. 2380, The Raise Wages, Cut Carbon Act of 2009. Their bill puts inescapable prices on carbon emission immediately that are far greater then the EPA and Congressional Budget Office estimate Waxman-Markey will provide ten years from now. Instead of Waxman Markey’s hundreds of billions of dollars in corporate welfare, H.R. 2380 would reduce regressive payroll taxes while providing increases to people receiving social security to directly offset the economic impacts of the tax. Congressman Inglis’ suggests website “By reducing payroll taxes and taxing carbon dioxide, we can turn an environmental fix into a decisive, economy-expanding national security fix.”
The Miami Herald reports that that H.R. 2380, “would initially impose a tax of $15 a ton of carbon dioxide on the producers and distributors of gasoline, natural gas and coal, with the tax rising to $100 a ton over three decades.” Such clear policy signals allow businesses throughout the economy to plan effectively and make long-term investments.
Inglis, Flake and Lipinski propose that, “the tax applies to fossil fuels as they enter the economy: at the mine mouth, the oil refinery and the natural gas pipeline. This upstream application of the tax will make it easy to implement and reduce administrative costs.” They suggest, “consistently applying the same tax to all domestic and imported products will keep this border adjustment in compliance with existing WTO agreements.” And they are willing to take political risk and treat voters honestly, publicly predicting that customers of coal-fired utilities would see cost increases of 83.5% in the first year.
In “Show Us The Ball”, Thomas Freidman reports that: “Representative John B. Larson, chairman of the House Democratic Caucus, circulated a draft of a similar bill that would impose a per-unit tax on the carbon-dioxide content of fossil fuels, beginning at a rate of $15 per metric ton of CO2 and increasing by $10 each year. The bill sets a goal, rather than a cap, on emissions at 80 % below 2005 levels by 2050, and if the goal for the first five years is not met, the tax automatically increases by an additional $5 per metric ton. The bill implements a fee on carbon-intensive imports, as well, to press China to follow suit. Larson would use most of the income to reduce people’s payroll taxes.”
Revenue neutral carbon tax solutions offer a rational market oriented solution by putting a real price on carbon emission. They are favored by the vast majority of economists on all sides of the political spectrum. By effectively discouraging petroleum use, such taxes address our trade imbalances and enhance our national security interests while stimulating markets for clean energy, energy efficiency and fuel-efficient vehicles. Plus, these taxes are good economic policy, reducing the penalties on work and job creation in regressive payroll taxes.
We need to dependably get the “economic externalities” of fossil fuels accounted for directly in the real economy. A simple carbon tax is the most effective way to do that.
Make Sure The Senate Hears Us
Willem Buiter, former chief economist of the European Bank for Reconstruction and Development, summarizes the political challenges in “Carbon Offsets: Open House for Waste, Fraud and Corruption”. He notes that politicians “prefer cap and trade because it hides/obscures the fact that for it to work, it must be equivalent to a tax; however, it does not look like a tax and will not show up in conventional tax burden calculations. Also… you can hand out the credits free of charge to your friends (including the heavy historical polluters).…The amounts of money involved are vast and the opportunities for graft, bribery and corruption limitless.
Before suggesting Waxman Markey is about the best we can expect from Congress, in “Just Do It”, Thomas Friedman summarizes the bill well: “It is too weak in key areas and way too complicated in others. A simple, straightforward carbon tax would have made much more sense than this Rube Goldberg contraption. It is pathetic that we couldn’t do better. It is appalling that so much had to be given away to polluters. It stinks. It’s a mess.”
NESEA members are practical idealists. We cannot settle for ACESA as the best Congress can do. We cannot accept politically expedient “solutions” that we know are bound to fail. If we support legislation that does far more harm than good, then we become part of the problem, rather than part of the solution.
Political challenges facing a carbon tax are certainly no more formidable than the practical problems with ACESA. It is time to move beyond political horse-trading to a serious solution. Willams and Zabel argue: “Those who favor Waxman-Markey as a political best-case scenario lack faith in the American people.”
We need government policy that makes environmental and economic sense. Lets call on our Senators to reject Waxman-Markey and implement a simple carbon tax that puts a significant and inescapable price on carbon emissions – right now.