Saturday, February 21, 2015

The Carbon Price Challenge

This week, let's kick off the Carbon Price Challenge.  Together, we'll cut our emissions of CO2, save energy and money, invest in cleaner energy for our future and help end energy poverty. 

For the next month, each day I'll invite one or two people of influence and impact in climate and energy to join me in this challenge and we'll track our progress. I invite you to do the same and also welcome your nominees - the only stipulation is that one of the nominees has to be you. So, I'll  begin with me - and invite former Vice President Al Gore and Richard Branson to take the challenge.

How the Carbon Price Challenge works:
  • Decide how much you want to reduce your own CO2 emissions.
  • Tax yourself with a self-imposed price on carbon.
  • Save money through energy saving and efficiency measures to offset the tax.
  • Invest your tax and savings in clean energy solutions.
  • Contribute a portion of your tax and savings to help reduce energy poverty.
  • Challenge two colleagues, family members or friends to join you in the challenge. 

There are many practical benefits to the Carbon Price Challenge.  It's simple and we can do it now.  We choose our own personal carbon price as a strong motivator to reduce emissions of CO2. We tax ourselves using that carbon price and our carbon tax and energy cost savings are returned to us to reinvest in cleaner energy investments of our choice. And thoughtful investment of the proceeds in cleaner energy solutions will be good for people, good for the planet, good for the economy and good for our portfolios. 

Some background. The gap between what we say and what we do in climate and energy has never been greater. And while this is apparent at a global and national level, it is equally evident for many of us as individuals.  After all, even some of the staunchest climate advocates live a fairly carbon intensive life (we know who we are). We crave our energy, but look to others for the fix. 

The hard truth is that the people of the world need energy. More than 1.5 million new energy consumers are added to the world's population every week. Every week! Energy contributes to almost every aspect of our economy and quality of life and is vital to lift people from a life of poverty. Energy has been, is, and will continue to be a force for good. To argue the contrary is simply to ignore overwhelming data.

But everything has a cost - in this case, the CO2 emissions that come with much of that energy. Not so good. 

The challenge? The most reliable, affordable, scaleable and available energy sources today, oil, gas and coal, unfortunately produce CO2. But increasing levels of CO2  in the atmosphere contribute to climate change , and with that significant economic and societal costs and consequences. How can we reduce our carbon footprint while accelerating the innovation and deployment of new carbon reducing technologies for fossil fuels and the implementation of new alternative energy sources?

How you can do it: 

Step 1: Determine your current CO2 output

You can make an adequate rough estimate of your personal  CO2 footprint using any number of widely available, free online calculators. It will take you less than an hour. Much less. These calculators not only provide the numbers needed for your DIY carbon tax but equally important, will significantly increase your awareness of opportunities for reducing emissions. 

My CO2 output is presently above the US national average, which is itself well above the average for the EU and China. Not good. I suspect yours may be higher than you expect too. 

Step 2: Establish your carbon reduction target

My goal is a 10 percent reduction in my own CO2 emissions in 2015 and to cut my emissions in half over the next decade. This exceeds most government mandates. There are so many ways you can achieve a reduction in your CO2 emissions - from energy conservation to choice of vehicles and travel. Many websites offer practical advice. How you do it is up to you. 

Step 3:  Apply a price for carbon to your CO2 output and determine your annual carbon tax 

Just this past month, former U.S. Treasury Secretary Lawrence Summers called for a carbon tax and suggested a price of $25/ton.  I will take a deep breath and set my carbon price at $40/ton. Motivation. Note that this is well above the price of carbon as traded anywhere in the world or of most corporate internal carbon prices. 

In application then, I simply multiply the price of $40/ton times my calculated CO2 emissions to arrive at the annual carbon tax.  At the average per capita emissions of CO2 in the US of 17 tons per annum, the carbon tax would be $680.  With strong energy conservation and efficiency measures you can save money to offset the tax and in many cases will actually come out ahead - revenue positive at the start.   Still, if my proposed $40/ ton carbon price  is too high for your budget, for your own carbon price challenge simply consider a lower carbon price, such as Summers' $25 even Microsoft's $6-$7. Just take the challenge.

Step 4:  Save and Invest the tax proceeds 

What can I do with my tax proceeds and cost savings? Invest!  Should you decide to take the challenge and join me,  your investment choice should help to reduce CO2 output and spur development and the deployment of cleaner energy.  The investment  can help grow your personal wealth, spur economic growth and create jobs.  Invest in companies that develop, produce and deploy products and services available to reduce our carbon footprint. Invest directly in products and services that reduce your carbon footprint and can save energy costs. Contribute to institutions and organizations doing high quality basic and applied research in science and engineering directly related to energy.   

Step 5: Support Organizations Helping to End Energy Poverty:

Do something to help others less fortunate. Use a portion of your tax and savings to invest in organizations which help alleviate energy poverty around the world. The world needs energy now, esspecially in poverty, famine and disease stricken places like sub-Saharan Africa.  Every contribution helps. 

Take the Carbon Price Challenge

The basic principles of the Carbon Price Challenge may be applied beyond individuals of course. But just imagine if a thousand people concerned about energy and climate initiated their own personal carbon tax, as I have done.  Then multiply that by ten thousand. And more. Imagine if businesses and institutions did the same. Imagine the energy savings and the research investments in cleaner energy, the improved lives of people living in energy poverty, and the opportunities for creating wealth and investing in our future. 

Imagination and talk are one thing -  action another. Each of us can make a difference. How much of a difference is up to me and up to you. Collectively the impact can be massive. Challenge two people now to take the Carbon Price Challenge. Think big.
Tweet your commitment and nominees to me at lawrence_energy, #carbonpricechallenge.

So, today I challenge you and former Vice President Al Gore and Richard Branson to join me, and ask each of you to challenge two people to join you. 

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