Above – Michael Liebrich of Bloomberg New Energy Finance discusses how energy efficiency & distributed renewable energy will kill energy suppliers.
Two Appalachian mining companies filed for bankruptcy earlier this year, while Murray Energy Corporation, the largest underground coal miner in the country, said on Friday it is set to lay off around 1,800 workers, more than a fifth of its workforce. Another 439 miners from Alpha Natural Resources are also facing layoffs, the Associated Press reported.
Murray Energy founder and CEO Robert Murray warned of the layoffs and other industry shake-ups last week during a coal conference in Pittsburgh, Pennsylvania.
“Every major coal company in this country is either going to be broken up or sold or in bankruptcy except two,” he said. “And I hope I am one of them.”
US coal production is expected to fall 7 percent in 2015, according to the US Energy Information Administration.
The political noose is tightening on the global fossil fuel industry. It is a fair bet that world leaders will agree this year to impose a draconian “tax” on carbon emissions that entirely changes the financial calculus for coal, oil, and gas, and may ultimately devalue much of their asset base to zero.
The International Monetary Fund has let off the first thunder-clap. An astonishing report – blandly titled “How Large Are Global Energy Subsidies” – alleges that the fossil nexus enjoys hidden support worth 6.5pc of world GDP.
This will amount to $5.7 trillion in 2015, mostly due to environmental costs and damage to health, and mostly stemming from coal. The World Health Organisation – also on cue – has sharply revised up its estimates of early deaths from fine particulates and sulphur dioxide from coal plants.
The killer point is that this architecture of subsidy is a “drag on economic growth” as well as being a transfer from poor to rich. It pushes up tax rates and crowds out more productive investment. The world would be richer – and more dynamic – if the burning of fossils was priced properly.
It is becoming clearer that last year’s sweeping deal on climate change between the US and China was an historical inflexion point, the beginning of the end for a century of fossil dominance. At a single stroke it defused the ‘North-South’ conflict that has bedevilled climate policy and that caused the collapse of the Copenhagen talks in 2009.
Todd Stern, the chief US climate negotiator, said the chemistry is radically different today as sherpas prepare for the COPS 21 summit in Paris this December. “The two 800-pound gorillas are working together,” he said.
“It is becoming clearer that last year’s sweeping deal on climate change between the US and China was an historical inflexion point, the beginning of the end”
Omg, the rightwingnuts were right, that Obama is the antiChrist and will bring about the End of Days!
Oh goody. More talk of a carbon “tax”.
Here we are, living in a time with the most disparity between the rich and the poor as there has ever been in our history, a time with a huge unemployment rate, a time with more elderly poor than ever before, and here is more talk about a carbon tax as if a carbon tax is a progressive instrument crafted with loving beauty and cunning intent.
In reality, a carbon tax is a truly dreadful idea, a love child born from the loins of the frustration and the lack of imagination of well-meaning but fuzzy-thinking environmentalists. Somehow, they assure us, a carbon tax will magically fertilize the economic garden and new renewable energy farms will be popping up like technicolor mushrooms across the land.
What will actually happen is this:
Electricity and fossil fuels would become more expensive. Thousands more poor elderly folks will either freeze to death in winter, or die of heat stroke in summer. Millions of people will live with more physical discomfort than before (which will make a certain subset of environmentalists very happy indeed, as they correlate environmental success with human suffering). More people will lose their jobs and homes. Meanwhile, the rich, of course, will not be affected and could care less.
And then comes the rub – exactly how is that carbon tax money, or that higher fossil fuel cost, supposed to translate into building and deploying new renewable energy infrastructure? Through more laissez-faire economics? Through more financially-strapped homeowners deciding to risk their own money to generate their own power? Through more homeowners leasing away their solar profit to Elon Musk and not even getting to use a single watt of their own rooftop-generated power?
Is our government supposed to be involved in our energy future or not?? Are they going to take that carbon-tax money and subsidize new energy start-ups with it? Why not simply just subsidize new start-ups without imposing a carbon tax in the first place?
Or is the government supposed to pay for setting up a carbon tax, collecting it, investing it, keeping track of it, maybe even returning it back to lower income people (after they have dies of heatstroke, I guess) and then NOT using to finance start-ups, but to just hope that start-ups will magically start-up on their own?
This is complete madness, cruel and pointless. So pointless, in fact, that we are now seeing fossil fuel mavens encourage talk of carbon taxes – because they know they won’t actually accomplish anything with out government mandating that something actually be built and deployed.
If we want to encourage the growth of new renewable energy, why not simply subsidize it directly? Or do you really insist that more elderly people should die instead?
Or better yet, why doesn’t the Federal government do its f*****g job and mandate the construction of new energy farms? You know – like China is doing? You’ve heard of China? It’s this large country which is not owned lock, stock, and barrel by its corporations. And it is about to kick our ass so hard on renewable energy that out forefathers are going to feel it.
It never ceases to amaze how some people seem to think that when money is taxed, it vanishes from the economy. How did that myth get started? And why should anyone believe it?
Every serious carbon tax proposal that I’ve seen is a revenue-neutral carbon tax, like the one in British Columbia, where the local economy is growing faster than Canada’s as a whole.
Revenue neutral means that the revenue from the carbon tax is returned to the taxpayers on a per-capita basis. Which means that everyone gets a check from the government — and that check is the same size regardless of your income. Which means that YES, a carbon tax can be very nicely progressive, thank you very much. It all depends on how it’s structured.
Indeed, a carbon tax is not a tax on the people, it is a tax *for* the people.
And government monies are spent on its administration, which vanish from any pot which might possibly accomplish the building and deploying of new energy infrastructure. Which, of course, no pot actually does, because there is nothing – absolutely nothing – about a carbon tax which has anything to do with actually planning, building and deploying renewable energy.
Also, sorry, but taxing the crap out of fuels, which for those on a fixed budget means a choice between either freezing, broiling, or not having enough to eat is just plain brutally cruel. That is, in the real world, where regressive taxation is regressive, and is NOT easily confused as “progressive”.
And, finally, please tell me how such a tax is actually going to mean a better way toward more renewable energy infrastructure than direct subsidies would provide, or – God forbid – an actual Executive Directive to charge the Department of Energy to start planning, building, and deploying the energy system we all agree we need?
A new report issued by the international relief charity Oxfam “Let Them Eat Coal” urging the G7 leaders to ditch coal-fired power plants
“Each coal power station can be seen as a weapon of climate destruction – fuelling ruinous weather patterns, devastating harvests, driving food price rises and ultimately leaving more people facing hunger. With these climate impacts falling disproportionately on the most vulnerable and least food-secure people, the burning of coal is further exacerbating inequality.”
http://www.climatenewsnetwork.net/world-leaders-urged-to-kick-killer-coal-habit/
“According to the report, coal-fired power plants in the G7 countries are responsible for more than twice the total emissions of the 54 countries of Africa, and ten times more than the 48 least developed countries of the world.”
http://www.carbonbrief.org/blog/2015/06/coal-in-the-g7-who-is-burning-what/
The owner of one of the failed coal mining companies blamed his failure on the EPA but in reality he was put out of business by his fellow fossil fuel companies fracking for gas and selling it cheaply.
ALL U.S. fossil fuel companies of any stripe naturally “blame their failures on the EPA” and the dictator in the white house. It’s called deflection, “spin”, propaganda, or lying plutocratic bullshit (just the greedy rich trying to preserve and increase their wealth at the expense of everyone else and the biosphere at large).
Coal has been in trouble in the developed world for quite a while because it’s the dirtiest fossil fuel, and the oil and gas companies are all too willing to throw coal under the bus so that they can take coal’s markets and prosper—-because their products are marginally “cleaner” and “cheaper” (if one doesn’t look at them too closely and ignores hidden costs).
I will not bore everyone with my chant of “INDIA-CHINA-COAL”, but we need to see significant and rapid movement away from coal in the developing world if we want to have any hope of hitting the 2 degree C target. If the Paris talks, the Pope’s Encyclical, the divestiture movement, and the improving economics of renewables all come together in 2015, we may see the beginnings of a real breakthrough in 2016.
China has begun and I think we’ll see meaningful reductions in their usage ahead of schedule.
India is making meaningful noises but I don’t have any confidence as to what they’ll do.
But it may be too little, too late.
I should have said sizable instead of meaningful wrt China’s reduction in coal usage.