The collision of capitalism, global warming and peak oil

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The collision of capitalism, global warming and
peak oil Why we need a federal tax shift Paul
Riehemann Blog host, Solve4Biggies.com April
30, 2008
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Global warming

• Professor Jonathan Foley, Director, UW-Madison
  Center for
• Sustainability and the Global Environment
  (SAGE)
• Global warming - debate is over earth is
  warming and we're causing it.
• extremely conservative estimate (actual number
  could be 10X this)
• 150,000 PEOPLE PER YEAR ARE DYING PREMATURELY
  AS
• A RESULT OF GLOBAL WARMING.
• gtgt increased disease, drought and
  floods
• Intergovernmental Panel on Climate Change
  (IPCC)
• there is sufficient international agreement
• other countries are investing heavily in
  reducing greenhouse gas
• emissions

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Peak oil
Oil production follows a bell curve Plenty
going up..then scarce and expensive going
down U.S. peak occurred in 1970
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? projected
Source lifeaftertheoilcrash.net
2004
But, world oil production is still increasing
right??
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? projected
Source lifeaftertheoilcrash.net
2004
But, world oil production is still increasing
right?
No.
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? projected
Source lifeaftertheoilcrash.net
2004
But, world oil production is still increasing
right?
No.
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120
Actual
2008
Source U.S. Dept. of Energy/EIA-0383 February
2007
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The history of oil
Source lifeaftertheoilcrash.net
How are we using this finite resource NOW to
ensure a sustainable energy future?
Were not.
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What to do? -- Definitions

• External costs
• Result when part of the cost of producing a good
  or service is born by a firm or household other
  than the producer or purchaser.
• Paul M. Johnson, Auburn University
• Tragedy of the Commons, Garrett Hardin (1968)
• Grazing horses
• Kyoto treaty

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What to do? -- options

• Nuclear power No
• - What to do with the nuclear waste? How much
  will it cost?
• Cap trade No
• - Complex. What price CO2? Risky for markets.
  Cars trucks?
• Conservation Yes
• - But, people organizations need a financial
  incentive.
• Renewable energy Yes
• - But, a poor payback now so its a
  drop in the bucket.
• Local and individual actions Yes
• - But, wont be THE answer. (Tragedy of the
  Commons)
• A federal tax shift Yes
• - 2,502 economists agree.

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A phased-in, federal tax shift

• At the federal level, shift taxes from income to
  non-renewable
• energy revenue neutral for government,
  individuals and families
• A BTU tax is best adds to energy costs for
  fossil fuels and nuclear
• How much? equivalent of 10 to 40
  cents/gallon/year of gasoline
• for 10 years
• Could cause inflationary pressure
• (as does
• - cap trade
• - a complete economic crash from
• skyrocketing fossil fuel costs
• - global warming costs.)

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A phased-in federal tax shift Benefits (1 of 2)

• REAL incentive for conservation
• REAL stimulus for renewable energy
• more renewable energy projects economically
  viable
• creates a mighty GREEN JOBS engine domestic
  products
• and export
• U.S. becomes a LEADER in reducing greenhouse gas
  emissions
• Reduced foreign energy dependence regain
  economic control

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A tax shift?...  raise non-renewable energy
prices now?!

• Paul, have you been living under a Popsicle
  stick?
• - Credit and housing crisis - Inflationary
  pressure
• - Number of jobs has decreased - Likely
  recession
• - Oil is over 110 a barrel
• --------------------------------------------------
  ---------------------------------------------
• No. We can pay now or pay a lot more later
• Oil shortages and skyrocketing prices
• Higher food prices from drought, flood and
  ethanol production
• Higher ocean levels wreaking havoc on coastal
  areas
• Increased world hunger
• More wars?
• Higher insurance rates
• Water shortages reducing output from
  thermo-electric power plants
• Costs of increased air pollution
• U.S. and worldwide flooding, drought, increased
  wildfires, and natural disasters
• Costs and risks of increased trade deficits
• Increased health costs if we increase coal use
  (air pollution)

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A phased-in federal tax shift Benefits (2 of 2)

• Reduced foreign trade deficit
• Reduced air pollution and costs
• No ridiculous CAFE standards
• Less road traffic
• OIL companies become ENERGY companies
• The federal govt doesnt spend tens of billions
• on renewable energy projects. Instead
• the MARKET decides.

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In conclusion

• The key you and your federal representatives
• Presidential contest
• John McCain suggested gasoline tax holiday
  April 15
• Hillary Clinton backed gas tax holiday April
  28
• Barack Obama against gas tax holiday April 28
• Two questions to ask Senators McCain and Clinton
• - Right now, do we need to use more oil or
  less?
• - How best to use less oil?
• If one of your federal reps walked in the door
  now and said they
• support a federal tax shift.... what would you
  say?

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Questions? Brett Hulsey Paul Riehemann
CP
Copy please