Temperature Reduction from Oregon's Clean Fuels Bill

Oregon's legislature recently passed the "Clean Fuels Bill," SB 324, which aims to reduce CO2 emissions from the transportation sector by 10% of 2010's emissions in 10 years. It awaits the governor's signature.

Naturally, nearly everyone is against it -- and it doesn't help that it was a favorite of environmental "consultant" Cylvia Hayes, the fiance of Governor Kitzhaber, who were both just run out of town for seriously blurring the lines of Hayes' participation in Kitzhaber's office.

The Oregonian's editorial board is, calling for the governor to veto this bill:

But leaving aside the program's complexity (not to mention the state's track record of mismanaging complex initiatives), its benefits simply aren't worth the costs. Slashing the carbon footprint of Oregon's road fuels by 10 percent would have no effect on global warming. Meanwhile, carbon dioxide emissions attributed to the state's transportation sector are relatively stable. In 2012, the latest year for which the federal government has data, state emissions from transportation were lower than at any time since 1990. Emissions in 2012, in fact, were 13 percent lower than in 1999. These numbers hardly point to a crisis requiring an expensive response. Yet implementing SB324 would boost fuel costs by up to 19 cents per gallon. That's the equivalent of a 63 percent hike in the state's gas tax, and not one cent would be used to improve roads or bridges.

So what will this mean for global warming? How much warming will be prevented? 

As with all such questions, it isn't a fair one. Yes, we all emit only a very tiny fraction of the world's CO2. We all contribute only a very tiny fraction to the resulting warming. Granted.

By the same token, the amount of food you will eat tomorrow is only a tiny fraction of the world's agricultural output. If you do not eat tomorrow -- or for the rest of your (very shortened) life, the world's agricultural system wouldn't notice. Not one farm would stop farming if you stopped eating.

But I bet you, like me, will eat tomorrow, and for all of our natural days afterward. So a more fair question is, how much would global warming be reduced if everyone in the world cut emissions by what the Oregon clean fuels bill will?

OK, here some numbers I worked up: 

Oregon's transportation sector emitted 22.3 megatonnes of CO2 (Mt CO2) in 2010.

So the reduction is, the state says, a total of 7.3 Mt CO2 (by a calculation I don't really understand, like whether they're considering each year to see the same reduction, or the same percentage reductions, or what they're assuming for the emissions trend over the next 10 years, or that it's compared to 1990 by 2020, but I'll use it).

The climate response function -- the ultimate amount of warming over total emissions -- is fairly linear, with a proportionality constant of 1.5 deg Celsius per trillion tonnes of carbon emitted (95% confidence limits 1.0 - 2.1°C/TtC).

That comes to 0.41°C/Tt CO2, or 0.41 millionths of a degree Celsuis per Mt CO2.

So Oregon's Clean Fuels Bill will prevent 3 millionths of a degree Celsius of warming, or 0.8 trillionths of a degree Celsius per state resident.

No, that's not much. Which is really a demonstration of the scale of the problem, and the inadequacy of our meager attempts to address it.

If everyone in the world did the same, emissions would be reduced by 1.4 Gt CO2/yr, preventing only 0.006°C of warming. 

This Bill only cuts Oregonian per capita emissions by about 190 kg CO2 per person per year, or a 1.2% of Oregon's per capita emissions. At 19 cents/gallon, I calculate the cost statewide to be $450 million, or 0.26% of GDP (in 2010) or $120 per person per year (that's per state resident, not per driver). 

So almost $500/yr for the average Oregon family of four per year. That's not trivial. 

At 19 cents/gallon, this works out to a carbon tax of $21 per tonne of CO2.

That's not an especially high carbon tax. British Columbia's carbon tax is now C$30/t CO2, or at the moment about US$24/t CO2. 

BC's carbon tax is working. But it's revenue neutral. Oregon's is not -- it's just another tax, which will pay for more government, in a state whose gas prices are already among the highest in the nation. 

I think that's a big mistake. Revenue neutral is much easier to support. A reduction in income taxes for the implementation of a carbon tax. Even a Wall Street Journal op-ed supported a revenue neutral carbon tax.

A carbon fee-and-dividend program would be even better.

The Clean Fuels program will also be regulation heavy:

The program would require the Oregon Department of Environmental Quality to manage a market of so-called “clean fuel” credits — to be bought and sold among public and private entities, with gasoline consumers ultimately bearing the cost — but with few regulatory powers.

and it expects specific things from fuel suppliers:

Require importers of transportation fuels – owners of the fuel when it crosses into Oregon –
to reduce the average carbon intensity of fuels they provide in Oregon to meet the annual
clean fuel standards. To meet the standards, regulated parties can choose a variety of
strategies, including incorporating more lower-carbon biofuels, natural gas, biogas, propane
or electricity into their fuel mix, or purchase clean fuel credits from providers of clean fuels.

A carbon tax is much simplier -- there are no government run markets, no fuel credits, etc. The carbon tax is paid at the wellhead or port of entry. It naturally carries that cost along with the transfer of the oil or gas to the end user, with little additional regulation needed.

It's depressing that Oregon politicians made a hash of this bill, making it far more complicated than it needed to be. That drastically curtails support for it. Why not do what BC is doing? Dumb.

I'm not typically cynical about government -- or, at least, as cynical as it seems the average American is. But this definitely ups my cynical value a couple of notches, and I'm a supporter of reducing carbon emissions.