The second chapter focuses on global warming as an economic problem: Get the prices right and the technology will follow. In particular the problem of “market failure”: The benefits of using cheap fossil energy go to the user, while the costs are born by everyone; and especially the difficulty of negotiating international agreements in the presence of market failure (where prices are giving the wrong signals). The chapter also discusses the difficulty of forecasting/modeling future climate change, when this is expected to take us beyond the range of properly documented historical experience.
The third chapter deals with what Vice-President Cheney has described as the ”personal virtue” of modifying ones lifestyle so as to minimize fossil carbon emissions (or even to minimize energy use in general). These changes are important and we have to rely on some personal virtue beyond what is indicated by price signals. Illustrative life-style changes are discussed. Unfortunately personal virtue alone is unlikely to solve the problem of global warming.
The fourth chapter examines the concept of a “carbon neutral” lifestyle, where this is achieved not by modifications of personal behavior, but by buying “carbon credits” to offset actual fossil-carbon releases by the individual involved. It is shown that carbon credits have as little to do with limiting adding fossil carbon to the atmosphere (AFCO2TA), as Medieval Indulgences had to do with limiting sin.
The fifth chapter looks at the chimera of “clean coal” and the hope of finding “pollution free” technologies to allow the continued use of fossil fuels; the American idea of achieving “energy independence” by using coal to produce gasoline; and a dangerous interest in using the inexhaustible supply of methane hydrates to substitute for natural gas.
The sixth chapter addresses the currently most popular proposals for limiting AFCO2TA, namely “cap-and-trade”. The problem with cap-and-trade is that it gives established polluters a free-ride at least up to the level of their cap.
The seventh chapter provides “the answer”, namely an “energy dividend” payable to all voters, and financed by the revenues from a carbon tax. This works like cap-and-trade would with a zero cap for everyone, and the government (national, state or local) as the only vendor of carbon credits. The result is that the government (rather than established polluters) gets the revenue from carbon credits. This revenue from the fossil-carbon tax can be redistributed to the citizenry to help offset the higher cost of living resulting from the carbon tax. Consumers would pay more for fossil based power (as they would under cap-and-trade) but can be compensated with a monthly government “energy dividend”. In the U.S. a carbon tax of $250 a ton would finance a monthly energy dividend of $230 initially, dropping top $166 when all voters registered.
The eighth chapter discusses modifications to “the answer”, it shows that there is a continuum of policies from cap-and-trade to a revenue neutral fossil-carbon tax.
The ninth chapter describes some of the major investments that will be needed to replace the legacy alternating current electric grid designed to cope with varying demand for electricity, to a new direct current grid able to adjust demand to varying supplies of electricity from wind-farms and solar sources.
The tenth chapter deals briefly with the nitrogen cycle, terrestrial ozone, and industrial greenhouse gasses, particularly the man-made fluorocarbons.
The eleventh chapter explores the vexed question of how to reach international agreement on the control of ACO2 emissions.
The twelfth chapter sets out a detailed multi-pronged action program in line with “the answer”.
The thirteenth chapter discusses recent testimony by Dr. James Hansen, to the House Select Committee on the Environment and Global Warming.
Wilfred Candler, Ph. D, D. Sc, has been a Professor of Agricultural Economics at Massey University in New Zealand, and Purdue. He is now retired from the World Bank where he was Chief of the Special Topics Division of the Development Research Center, and latterly a Senior Evaluation Officer. He has written widely on agricultural policy: In Global Warming, as in Agricultural “Get the prices right, and all else will follow.”