Comment Log Display
Below is the comment you selected to display.
Comment 53 for Design Comments for the GHG Scoping Plan (sp-design-ws) - 1st Workshop.
First Name: Morgan
Last Name: Putnam
Email Address: putnam@caltech.edu
Affiliation:
Subject: Reducing Financial Risk: The Advantage of a Carbon Tax
Comment:
To whom it may concern, I understand that there are both pros and cons to carbon tax and carbon cap and trade plans. However, based upon my undergraduate education in chemical engineering and my graduate education in photovoltaics (solar cells), I strongly suspect that a carbon tax would provide a much more stable pathway to AB 32's goal of a 20% reduction in carbon dioxide emissions from 1990 levels by 2020. One of the largest challenges that I see facing the renewable energy industries is the size and time scale of the financial investments needed. To clarify this point, I would like to briefly discuss the Ôsilicon shortageÕ that has been present in the solar industry since 2004. The Ôsilicon shortageÕ is not a result of a shortage of cheap silicon in the earthÕs crust, but rather the shortage exists because plants that purify silicon are not being built fast enough to meet the increased demand for purified silicon. While it might seem odd that companies would be hesitant to provide raw materials for an industry that has grown over 40 % each of the past five years, one must keep in mind that a plant to purify silicon is an investment on the order of $100 million dollars. Additionally, it takes three years to build a plant. This is a typical cost and time-scale for a large-scale chemical purification plant; confer plant costs and time scales in the oil and gas industry. Consequently, for companies to risk $100 million in a silicon purification plant, they need to know that they will be able to sell their purified silicon, not this year or next year, but three years from now and every year thereafter for ten to fifteen years. Undoubtedly then, there is a substantial amount of risk in such an investment. I believe this is the reason why a Ôsilicon shortageÕ continues to exist in the solar industry. Thus a key challenge for a carbon mitigation system is the reduction of financial risk for large capital investments. Reducing this risk requires creating a system where the cost of emitting carbon dioxide five, ten and fifteen years from now is predictable with some level of accuracy. Intuitively, it seems to me that a carbon tax will be able to meet this challenge with greater success than a carbon cap and trade system, and it is for this reason that I urge you to consider how well the system that you choose will be able to meet this important challenge. Lastly, I would like thank you for your time and for granting the public the opportunity to offer input, Sincerely, Morgan Putnam Morgan Putnam Ph.D. Candidate Chemical Engineering California Institute of Technology B.S. Chemical Engineering, Cornell University 2005
Attachment: www.arb.ca.gov/lists/sp-design-ws/56-carb.doc
Original File Name: CARB.doc
Date and Time Comment Was Submitted: 2008-08-01 00:15:11
If you have any questions or comments please contact Office of the Ombudsman at (916) 327-1266.