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On 07 Apr 26 an Oil Drum blogger named Squalish (http://www.theoildrum.com/node/2499) wrote a response to a debate about government's role in climate change policy. In that piece Squalish described an idea whereby all CO2 taxes would be pooled into a separate fund and "rebated annually in an equal amount to every US taxpayer".

This got me thinking. What a clever idea but why not bypass the government coffers entirely?

Here is how a simple scheme might work as illustrated by the story of Joe Average and Jane Median.

Joe and Jane live in different jurisdictions. Both use 1000 liters (250 US gal) of gasoline per year, which coincidentally happens to be the average for all drivers in their areas. Both Joe and Jane pay $1 per liter ($4 US gal) for gasoline at the pump which amounts to $1000 per year each for fuel.

Joe and Jane's governments see a need to reduce fossil fuel consumption to help combat climate change. As such, each government will enact legislation to put a price on carbon.

Joe Average lives in a jurisdiction where the government introduces a revenue neutral carbon tax of $1 per liter, with vague promises to offset his pain at the pump with equivalent income tax reductions.

Jane Median lives in a jurisdiction where the government has also introduced a carbon levy of $1 litre. However, Jane's government has appointed an arm's-length non profit agency to collect all this levy. This agency's sole mandate is divide and refund the total amount evenly amongst all registered drivers of which Jane is one.

Once the legislation is enacted both Joe and Jane are now paying $2000 per year for their motor fuel. Neither is happy about it. Nonetheless, unhappiness is a powerful (albeit negative) motivator to make the desired changes: to use less fossil fuel.

Meanwhile Joe is still waiting for his government to enact legislation to lower his income tax by $1000 per year. He is in a higher income tax bracket, so he doesn't hold out much hope that he'll see that deep a cut. Jane, on the other hand, is already receiving her refund check for $83 each month, which almost totally offsets her carbon levy ($83x12=$996). Jane's cash reward is a powerful positive motivator. Jane is certainly in the better frame of mind than Joe.

Now both Joe and Jane are environmentally savy consumers and they embark on a conservation campaign which saves them 10% on their annual fuel usage, ie. each drops to 900 litres (225 US gal) per year. Let us suppose that Joe and Jane are ahead of the curve and the average driver in their respective jurisdictions is content for the time being to continue consuming 1000 litres (250 US gal) per year.

As a result of their conservation efforts both Joe and Jane are rewarded by an annual savings of $200 each at the pump. However, each is still paying $1800 per year at the pump, substantially more than before the carbon tax. Joe is the least happy. He is still spending $800 MORE for fuel than before his enlightened government introduced the carbon tax. Jane meanwhile still experiences the pain when she fills up at the pump. However, she is still receiving her $83 refund check each month. So her net outlay is now $800 per year or $200 LESS than she was spending before her enlightened government introduced the carbon levy. Jane feels like the program is paying her to conserve.

Both governments are of the view that to be effective, the price of carbon needs to be escalated in a predictable and scheduled manner going forward. In both cases the next scheduled increase brings the carbon tax/levy to $2 per litre. Both Joe and Jane are now going to be paying $2700 per year for fuel. They are good conservers but they are finding it difficult to conserve more than the original 10%. Fortunately, now that fuel is $3 per litre ($12 per US gal) lots of non fossil alternative fuels are price competitive. Joe and Jane switch vehicles to take advantage of an alternate fuel which is priced at $2.50 per liter ($10 per US gal).

Joe saves $450 per year by switching to an alternative fuel. However, he is still paying $1250 more per year than before the carbon tax as introduced. He is still waiting for his income tax offset to kick in.

Jane, on the other hand, is still ahead of the curve amongst her fellow drivers. She also saves the same $450 per year at the pump by switching to a cheaper alternative fuel. However she now receives $166 per month in refund cheques from the carbon levy fund. Her net outlay has dropped to an amazing $250 per year or $750 less than before the carbon levy was introduced! What is even more amazing is that Jane's alternative fuel producer is receiving the full $2.50 outlay at the pump. In fact Jane's government is able to collect a fair tax on that $2.50 alternate fuel as well. No need for profit or tax holidays to stimulate the acceptance of the alternative fuel.

The question is which of Joe or Jane would be more likely:

1. to tell a friend about their fuel conservation/alternative fuel strategy
2. to live in a jurisdiction which sees total fossil fuel usage drop
3. to vote for their government next time round.

At the end of the day the purpose of any carbon pricing scheme is to reduce fossil fuel consumption. The success of any program hinges on a buy in from the consumer. The consumer has to do the conserving or switching. There are a number of reasons why this simple scheme would have a better buy in than alternatives.

• There is a widespread mistrust of governments and government programs. Jane's government is acting as the enabler and not the doer. The fact that this scheme is administered at arms length should lead to better public acceptance. Better public acceptance should translate into better results.
• The collect, average and refund math naturally rewards consumers who position themselves below the average and penalizes those which are above the average. Those consumers at the average are revenue neutral. This scheme will be perceived as fair. Schemes which are perceived to be fair have a better acceptance.
• The only way to game the system is for the consumer to reduce their fossil fuel consumption below the average. That way they'll get a bigger refund check than they spent in the carbon levy. This motivates the consumer to do exactly what the program set out to accomplish: to reduce fossil fuel consumption or encourage a switch to non carbon fuel sources.
• Furthermore as more consumers try to conserve their way to below the average that average itself will drop. This naturally nudges the consumer to redouble efforts to continue fossil fuel conservation or replacement. This can be further amplified if the carbon levy is itself escalating in time.
• The monthly refund check will be viewed in a positive light. When a taxpayer overpays income tax and receives a refund check upon filing, they don't typically think of it as the government giving them back their money but simply as the government giving them money. This extra positive reinforcement should amplify the effectiveness of the program.
• Alternate non fossil fuels are naturally rewarded in the scheme. First of all the price of fossil fuel is raised to help new competitors enter the picture. If the consumer were to switch to biofuel, electric or hydrogen vehicles they would still receive the rebate check to offset that higher alternate fuel cost. The fossil users subsidize the non fossil users. This should accelerate the uptake of alternative fuel sources. This should help naturally sort out the alternative fuel sources which scale well from those which don't.
• This scheme has a natural end point. Once all the consumers have conserved to zero or converted to non fossil fuel sources there would be no carbon levy collected and no refund administered. The program will have achieved its objectives and could be disbanded without any impact on government revenues. There is no incentive to run this program beyond its natural end point.

Left on its own, price induced rationing can be very unfair. Unfairness on this global scale can lead to many undesirable consequences which are worth avoiding. The pricing scheme that Jane's government adopted attempts to address this fairness issue by naturally rewarding those who do the right thing while at the same time penalizing those who choose not to. The beauty of this scheme is that this reward and penalty occurs regardless of your ability to pay. This is not to say that Jane's government would find it easy to implement such a scheme. Jane's government would have to address two vulnerable areas:

• registry fraud
• cross jurisdiction shopping

There are technical solutions to registry fraud (eg. biometric smart card, encription) but the political will and cost to implement them may be a problem. The cross jurisdiction shopping is a problem common to any carbon pricing scheme. Unless neighboring jurisdictions implement similar programs, consumers will purchase fuel in the lower cost jurisdiction if possible.

Some jurisdictions have examples of a government enabled arms length organizations created for the purpose of collecting and redistributing funds: eg. the state run lotteries. However, the US currently consumes 1.55 billion liters of gasoline per day (388 million US gal). At a $1 per litre levy Jane's non profit would be handling close to $1.6 billion/day. This flow of money is orders of magnitude larger than lottery proceeds. This is a non trivial float of money and by definition will difficult to administer cleanly.

The world is facing two fossil fuel challenges going forward: carbon dioxide induced climate change and Peak Oil. Fortunately, the solution to both is the same: consume less fossil fuel. The two crisis are different, however. In the climate case, if we fail to act fossil fuel rationing will not be a natural consequence. In the Peak Oil case, if we fail to act we'll get fossil fuel rationing regardless. The way to mitigate the climate crisis dictates that we collectively organize to artificially ration fossil fuel. Peak Oil on the other hand dictates that we collectively organize to smoothly ration a geologically declining supply of a fossil fuel (oil).

The price we pay for fossil fuel is a powerful lever in determining how much we consume. It follows that intervening in the market to put an artificial price on the carbon in a fossil fuel will induce us to consume less. This is at the heart of most climate proposals (including that employed by Jane's government). In theory putting a price on carbon would ration fossil fuels and we'd simultaneously address the needs of climate change and Peak Oil. However, as with all artificial market interventions the devil is in the details.

There are no perfect solutions here. As Ginsburg's Theorem dictates: you can't win, you can't break even, and you can't even quit the game.

Doing nothing about these challenges is a choice. I believe that Jane's government offers us a better choice.

As the semiconductor industry prepares to post a rare drop in revenues, with another decline expected next year, it's no wonder that many chip companies are shifting their hopes to solar power.

Last month, Hemlock Semiconductor announced plans for a $3 billion expansion of its polysilicon production, mainly for solar cells, which some industry watchers said could signal a solar boom ahead. While chips are a matured industry, solar is just getting started — in June, research firm iSuppli predicted that investment in solar-cell production would match investment in semiconductor manufacturing by 2010.

Over the last year, semiconductor companies have seen the opportunity and rushed into the brighter industry. The overlap between the two industries is clear: chip companies have long histories of building low-cost manufacturing processes to shape and slice silicon, the key ingredient in traditional solar modules.

And the trend is global. Intel spun out a solar-cell startup called SpectraWatt and invested $37.5 million in German thin-film solar company Sulfurcell. IBM partnered with Tokyo Ohka Kogyo to develop thin-film solar panels. National Semiconductor launched a solar-inverter technology called SolarMagic. Semiconductor Manufacturing International announced plans to make polysilicon for solar cells, and Tokyo Electron and Sharp also announced a joint venture to develop new solar-manufacturing equipment.

But it's unclear whether the solar industry really makes sense as a semiconductor savior. After all, a number of analysts have predicted that the solar market could be darker over the next few years, with a solar-panel oversupply, and a drop in module prices likely coming. The slowing of global economies also means more businesses and home owners — and even government agencies — could delay or reject spending the upfront costs needed to install a solar-power system.

Subsidies in the hottest solar markets, like Spain, could also shrink as those markets mature more. Spain’s new solar program, approved in September, set a 500-megawatt limit for solar incentives next year and a 460-megawatt cap for 2010, which could significantly slow installations in the country. And while programs in the United States, Italy, France, Portugal and Greece will take up some of the slack, they probably won't be able to pick up all of it, according to Jenny Chase, senior analyst with New Energy Finance.

Not all semiconductor insiders believe that solar is the way to go. Novellus Systems CEO Rick Hill in September said he doesn't believe that solar makes the most sense for chip companies. Mark LaPedus at the chip industry publication EE Times wrote this week that he's “a little disappointed” with the adoption rates in solar and thinks that green for the chip industry is “somewhat overrated.” And Cypress Semiconductor bucked the trend in September when it gave away its remaining shares of solar-manufacturer SunPower.

But with all the activity, it's clear that many semiconductor companies believe they have something to offer. And in a soft semiconductor market, where layoffs are the order of the day, it wouldn't be surprising if even more companies turned to solar to hedge their bets. Aaron Thurlow, global sales channel manager for National Semi's renewable-energy segment, said he expects that will happen. “It's probably still early [in the shift] for some of the large companies, but it’s starting now and it's very exciting,” he said.

The trend has long been met by both welcome and trepidation from companies already in the semiconductor and solar markets. At least since Applied Materials bought Applied Films in 2006, solar companies have been wondering if chip companies will bring in more competition and higher volumes of modules into the market.

It’s unclear how much of a leg up the silicon manufacturing background gives chip companies when they enter the solar market. Some analysts, such as Ron Pernick, a principal with Clean Edge, think that the natural advantage of chip companies in solar is significant. Others, such as Michael Rogol, managing director of Photon Consulting, say it depends on the size of the company, and that big companies may lose out to smaller ones on cost and flexibility.

Either way, Julia Hamm, executive director of the Solar Electric Power Association, said semiconductor companies' involvement is important for helping solar companies deliver solar power at the holy-grail cost of grid parity. Companies that have reached high volumes in other industries can help speed solar toward larger scale and drive costs down, she said.

In addition, household names could help make consumers more comfortable with solar, she said. “There is value in name-brand recognition, to be able to go into a room of people who previously know nothing about the solar industry, and say ‘Intel, BP, Applied Materials, GE.' People say ‘What, those people are in the solar industry?' And suddenly people listen.”

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A unified bathroom theory combining hygiene theory, universal theory, green theory, vatsu theory.

A bathroom with a meta-efficient shower, bath, sink. Warmed by radiant heat through the floor. Heat from direct, renewable source (for example wood or sun). Align energy.

(more…)

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A Unified Meta-Theory Of Design combining optimization theory, green design theory, universal theory, timeless theory, and zen theory.

Meta-efficient in 2009.

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Like many other chip companies, consumer electronics makers and investors, Japanese manufacturer Toshiba is wading into the bright but unfamiliar waters of the growing solar market. Today, Toshiba said it has officially jumped into the solar photovoltaic business by launching a “Photovoltaic Systems Division” that will do business largely as a solar power plant integrator and components supplier.

It's a little unclear how Toshiba's new solar division will split up and focus its efforts. But on the components side, the company, which is mostly known for making laptops and gadgets, says it will offer up its Super Charge ion Battery (SCiB) for the solar market. Recently Toshiba also stepped up its game in the race to supply rechargeable batteries to automakers with news that it plans to build a second factory to build its batteries.

On the systems integration side, Toshiba says it will work with already established partners — Toshiba bought nuclear power project developer Westinghouse back in 2006 to concentrate on the U.S. nuclear power plant market. While Toshiba will likely be working out the kinks of its solar division this year, the company is already bullish enough on solar to predict that its PV unit will deliver annual business of about 200 billion yen ($2.2 billion) by fiscal year 2015. That's confidence.

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Growing support for nuclear energy in the U.S. has hinged on three key arguments in recent years: It offers a carbon-free alternative to coal; a domestic alternative to petroleum; and a supposedly cheaper, more reliable alternative to renewable sources like wind and solar. But according to a new analysis from Climate Progress, existing nuclear power plant technology can generate electricity at no less than $0.25 to $0.30 per kilowatt-hour (including fuel and O&M, excluding distribution) for the first year of operation.

Costs would drop slightly in following years, but that's triple today's average utility rate, about 10 times the estimated per-kilowatt-hour cost of efficiency-boosting measures, and more than some generation costs for existing renewable energy technologies.

As a result of the research, Climate Progress, which is published by the Center for American Progress Action Fund, said it may nix nuclear energy from the 14 “stabilization wedges” included in its proposed climate change response. The current list suggests 700 gigawatts of nuclear energy plus radioactive waste storage capacity equivalent to 10 Yucca mountains.

In addition to assessing business risks for new nuclear power facilities, study author Craig Severance set out to clarify the notion that short-sighted, anti-nuclear environmentalists halted carbon-free energy development. High costs, he writes, have thwarted nuclear all along:

Climate Progress challenged nuclear energy advocates today to go beyond touting relatively low operating costs for paid-off nuclear plants, and provide detailed documentation of cost estimates for energy from new facilities. As for next-generation nuclear technology (like Hyperion's nuclear-in-a-hot-tub-sized-box device), Climate Progress considers it a fine idea — and worth pursuing — but not likely to help us meet 2020 or even 2030 greenhouse-gas emission reduction targets.

As Time's Michael Grunwald noted last week, “It turns out that new plants would be not just extremely expensive but spectacularly expensive.” The fallout from overly optimistic early estimates can now be felt around the world, from Finland, where costs have ballooned and progress slowed at a nuclear plant, to Florida, where a plant planned for just off the Keys could cost up to $18 billion.

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Hydrogen fuel cells have long been hailed as the next big thing to replace petroleum in cars, but there is one major problem: hydrogen is usually produced from fossil fuels. Fortunately, a multitude of companies are looking at alternative hydrogen sources— including sewage and dough.

Read more of this story »

CleanTechies is nominated as “Best Business Blog” by The Weblog Awards, the world’s largest blog competition. The CleanTechies Blog was selected from over 5,000 open and public nominations in 48 categories and is one of 10 nominees – and the only green blog – in the category “Best Business Blog”. We need your help: Please help us win this award by voting for CleanTechies before the polls close on January 13 at 2pm PST.

Click here to vote now! Thank you very much for your support!

Founded in 2008, the CleanTechies Blog has quickly gained traction in the CleanTech community, reaching thousands of professionals, career changers, students and other environmentally concerned citizens worldwide. The blog covers issues affecting renewable energy, resource efficiency, green building and sustainable transportation. Industry experts write about current trends, discuss clean technologies and policies and provide career advice. 

“We are thrilled that the CleanTechies Blog has been nominated for this reputable award,” said Ian Thomson, CEO and co-founder of CleanTechies. “This affirms our goal to provide a platform on which our online community can stay up-to-date on global trends, technologies and current events, share ideas and insights and interact with like-minded professionals not only on a local level but also worldwide.” He further added: “We aim to be the largest and most powerful CleanTech community in the world. Our nomination demonstrates that we already have a relevant impact on our audience.” 

The Weblog Awards are the world’s largest blog competition with over 545,000 votes cast in 2007 and nearly two million since 2003. One of the major goals of The Weblog Awards is to expose the world to a wide variety of blogs and to increase readership of all finalist blogs. 

The Conservative Party in the UK is ringing in the new year with a call to boost funding for clean technology startups, create cleantech incubators across the country and establish a Low Carbon Index for publicly-traded companies on the London Stock Exchange and the LSE's Alternative Investment Market (AIM). Conservative Party leader David Cameron says his party is aiming at “creating a new generation of world-beating startups to rival anything going on right now in Silicon Valley.”

The recommendations were outlined in two reports that the conservatives said were put together by independent working groups. The incubators are planned to help startups get off the ground, and the Low Carbon Index aims to provide cleantech companies with access to cash at the next stage of their development.

Cameron said in a speech that UK firms currently have a less than 5-percent share of the global market for cleantech goods and services. “This market is expected to be worth trillions of pounds, and produce millions of new jobs, in the years to come, so we've got to do better — a lot better,” he said.

One of the reports pushed for £600,000 ($883,025) of public sector funding to be invested in cleantech incubators for every £150,000 of private investment — a four-to-one ratio —  with a yet-to-be-determined cap on the government spending. Companies could also get access to free or heavily subsidized facilities to test their products under the plan.

For the stock index, the plan is to include companies from a wide range of sectors, including renewable energy, waste reduction and fuel cell technologies, with companies from anywhere in the world eligible to join, as long as they're already listed on the LSE or the AIM. About 100 companies would already qualify for listing in the proposed index, according to the report on the plan.

Prime Minister Gordon Brown of the Labour Party has made his own announcements for a green future in the UK, and said this weekend that cleantech could be a help in the current credit crisis. “Rather than [the recession] pushing the environment into a lower order of priority, the environment is part of the solution,” he told the Guardian.

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Two companies in China have announced that they intend to build a 1 GW solar power plant in the northwest region. Initially the solar farm will be built as a 30 megawatt station with an initial investment of $150 million.

The Chinese solar panels will combine crystalline silicon-based and thin film technology. This will rival another 1 GW solar installation that was announced about a month ago. Amelio Solar stated this they will be building a 1 GW solar farm in Jordan using thin-film photovoltaic technology.

In China, the Qinghai New Energy Group and China Technology Development Group Corporation will start building the giga-scale solar farm in the Qaidam Basin later this year. The basin was established as an Economic Experimental Zone for renewable energy by the Chinese government in 2005.

Currently, every 7 to 10 days another coal-fired power plant goes up in China. Over the past two years, coal consumption has jumped 14-percent per year. Quick and decisive action needs to be taken in China to reduce coal dependence and switch to renewables and the 1 GW solar power plant will be a jumpstart in the right direction.

Home on the Carbon-Offsetting Range: Rangeland sequestration projects, which involve paying landowners to trap carbon dioxide underground by keeping grass unmowed, are on the cusp of a major boom. — Scientific American

DOE Unveils Marine Energy Database: The U.S. Department of Energy released a new searchable database today that includes information about the technology stage and permitting of wave, current, and ocean thermal energy conversion projects. — DOE's Energy Efficiency and Renewable Energy

Word Watchdog: Be Gone, Green: “Going green” and “green” in environmental contexts received the most nominations in Lake Superior State University's 34th annual survey of words that should be banished “from the Queen's English” for misuse, overuse, and general uselessness. — NYT's Green Inc.

Elizabeth Kolbert on a Green Collar Economy: Van Jones argues that the best way to fight both global warming and urban poverty is by creating millions of “green jobs.” But could an environmentally oriented public-works program be just a giant green boondoggle? — The New Yorker

M2E Power Gets a New CEO: Eric Apfelbach, former president and CEO of biofuel company Virent Energy Systems has joined Boise-based kinetic energy startup M2E as president and chief executive. — Press Release

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If you're dead and worried about the carbon emissions created from your cremation, relax. The Swedish town of Halmstad has a solution. After an environmental review showed that Halmstad's crematorium was pumping too much smoke into the air, the facility's director decided to re-use heat from the cremations to warm up the crematorium's buildings.

Read more of this story »

Sports car maker Lotus plans to enter the electric vehicle race, CEO Michael Kimberley told the Financial Times last week. “Don't be surprised to see an electric Lotus shortly,” he said, adding that a concept version could debut as early as March, at Geneva's International Motor Show. For now, Kimberley said, “We are working on the technologies that will go behind it.”

Of course, the technologies behind an extended-range electric vehicle — Lotus's chosen route to a battery-powered model — represent no small amount of work and potential for delays. The company, which builds bodies for the Tesla Roadster, plans to turn to a “major automotive manufacturer” for many of the model's key components, including a fuel-based range extender. Tesla Motors, a likely rival for Lotus if its plans go through, has also turned to contractors for parts of the all-electric Roadster.

Lotus has some serious catching up to do — Fisker Automotive, GM and Tesla revved their engines for an EV race years ago, and Tesla is rumored to have a deal with a large automaker (likely Daimler) for its third-generation vehicle. But Lotus also has an opportunity to avoid some of the pitfalls that hampered early movers. As the first luxury electric sports car startup to enter production, Tesla has learned a series of lessons the hard way. For example, after being sued by Magna Powertrain, the company hired to design and build transmissions for the Roadster and an as-yet unseen sedan, Tesla's then-VP of sales, marketing and service, Darryl Siry, told us, “One of our lessons is that we need to have more control over our fate and manage the process in house.” Another lesson? Watch out for suppliers and contractors launching out on their own.

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