Comment Log Display

February 26, 2017
 
California Air Resources Board
1001 I Street
Sacramento, CA 95814

RE: 2030 Target Draft Scoping Plan

Dear CARB and stakeholders,
 
We appreciate your work to reduce GHG emissions and are thank you
for the opportunity to comment on the CARB 2030 Target Scoping
Plan.
 
For context, the Unitarian Universalist Fellowship of San Dieguito
is a non-profit religious organization that seeks to affirm seven
principles of faith: 1) The inherent worth and dignity of every
person; 2) Justice, equity and compassion in human relations;
3) Acceptance of one another and encouragement to spiritual growth
in our congregations; 4) A free and responsible search for truth
and meaning; 5) The right of conscience and the use of the
democratic process within our congregations and in society at
large; 6) The goal of world community with peace, liberty, and
justice for all; 7) Respect for the interdependent web of all
existence of which we are a part. Based on these collective values,
our vision for our fellowship and world includes sustainable
living. It is with these principles and vision foremost in our
minds that we write to express our comments regarding the CARB 2030
Target Scoping Plan. 
 
We are concerned about climate change and the economic drain on our
local economy from importing fossil fuels into our state. We have
analyzed the economic effects of importing over $100 billion in
fossil fuels from outside California, and we believe that replacing
imported fossil fuels with locally produced renewable energy will
stimulate our local economy. Our research regarding Cap and Trade
(C&T), which has been tried since 2012, shows it to be ineffective
in reducing GHGs. Our analysis of the British Columbia carbon tax
and of the relevant articles cited in your Scoping Plan, led us to
conclude that the tax, while too low, has had moderate success.  We
believe that California can reduce GHG emissions while stimulating
the local renewable energy sector of our state economy in an
efficient and equitable manner through a carbon fee/tax and
dividend. In this letter, we present government data supporting our
findings.

As mentioned, we advocate a carbon tax and dividend.  If the tax is
downstream near the consumer, an additional tax on leaks,
particularly wellhead leaks such as Aliso Canyon, would be an
important component.  If the tax is upstream, it must be structured
to include all GHG emissions from fossil fuels, including those
that escape through leakage. In order to avoid hardship and further
efficiency and equity, it would be necessary to return most of the
revenue to California residents in the form of a dividend, divided
equally among all residents, with half shares for children.  A
portion of the revenue could be used to fund other state-sponsored
programs.

We understand your concern “If we set the price too high, we have
made the program unnecessarily expensive, and if we set the price
too low, we will not achieve enough GHG reductions.”  We believe
that there is little risk to setting the carbon tax too high, as
this will only serve to decrease fossil fuel consumption and
stimulate the economy, provided that the tax is accompanied by a
corresponding tax credit (dividend) paid to each resident.  We also
believe that it is possible to ascertain the correct level of the
tax by an examination of our own state’s history with fluctuating
gas prices.  

California’s history with high gas prices evinces the effects of
$4.00/gallon pricing on consumption and on the renewable energy
sector of our state’s economy. Your own 2014 report, “Impacts of
Gas Price on Passenger Vehicle Use and Greenhouse Gas Emissions”
states:  

Overall, changes in gas price can lead to significant effects on
travel behavior, with some (usually limited) effects visible in the
short run and (most) others measurable only after several years
(long-run effects). 

In 2014, when gas prices exceeded $4.00/gallon, purchases of hybrid
vehicles increased and carpools became more common. (See charts
below.) Now that gas prices have been under $3.00 for nearly a
year, light trucks sales have begun to increase, while car sales
have decreased.
The consumer response to price fluctuation supports a carbon tax in
the range of $100-150/metric ton ($0.88 - $1.32/gallon) as an ideal
first step, phased in slowly and possibly followed by additional
increases, to motivate Californians to reduce their consumption of
gasoline.  

Although there is little recent data regarding the price elasticity
of demand for fossil fuels other than gasoline, the increased
production of renewable energy in California over the last couple
of years indicates that Californians are ready and eager to
substitute local renewable energy for imported fossil fuels. 
According to the EIA, from December 2015 to December 2016, the net
generation of electricity from small-scale solar generation
increased 28%. During the same period, utilities increased electric
generation from 786,000MW to 988,000MW. Our state is now producing
over 5% of our electricity from solar energy, and nearly half from
renewable sources. (See California Net Electricity Generation by
Source chart below.)  This recent surge indicates that we are at a
tipping point where a tax on carbon would lead to a significant
increase in investment of renewable energy.  Yet Sempra and other
electric providers are still advocating for constructing additional
gas-fired power plants.  A carbon tax would provide strong
motivation to abandon such plans and construct additional solar
farms, wind farms, and hydroelectric plants. A carbon tax would
speed the shift, which has already begun, but is happening too
slowly, from fossil fuels to renewable sources such as solar, wind,
and hydroelectric. 

We believe that some of the assessments in the Scoping Plan were
based on a misunderstanding of the BC report “Trends in Greenhouse
Gas Emissions in B.C. (1990-2014)”.  The Scoping Plan states “BC’s
emissions have increased by 2.7 percent from 2011 through 2014,”
citing this report. This is a misrepresentation in various ways.
The BC tax was implemented in 2008, and amended in 2010 to phase
out the exclusion of forestry related emissions for biofuels such
as biodiesel, ethanol, and hydrogenated vegetable oil (HVO).  
Emissions from 2011 to 2014 are more closely related to the 2010
amendment than to the 2008 implementation of the tax itself. 
Furthermore, the same report states that emissions dropped from
66.3 Mt CO2e in 2007 to 62.7 Mt CO2e in 2014, a decrease of 5.5%.
To fully understand the effect on the tax, it is important to look
at additional data, such as GHG data from 2007, GDP data, and
population data. 

As you can see from the Greenhouse Gas Emissions charts below, GHG
emissions seem to have decreased after the tax, but not
substantially.  In relation to population and GDP, GHG emissions
seem to have decreased substantially.  This trend began just before
the tax was implemented, which could indicate a weak correlation
between the tax and emissions.  However, that could be due to
fossil fuel price variations. Fossil fuel prices spiked in 2008,
thenBC Greenhouse Gas Emissions
BC Greenhouse Gas Emissions

CARB, in the Scoping Plan, expresses a concern regarding an
“unnecessarily expensive” carbon tax, but does not specify exactly
what that concern is. Based on our assumption that your concern is
economic, we will address the effects on the economy here.  We do
ask, however, that you specify your concern if it is not an
economic one.  

If revenues from the carbon tax are used primarily to pay a
dividend to residents, there is no concern that the economy will be
stifled.  Rather, it will be stimulated by the shift from fossil
fuels imported from outside the state to local renewable energy.  

The costs to California of these imported fuels is substantial. 
According to the EIA, California spent a total of $137,720 million
on energy in 2014, including $102,265 million for fossil fuels
(oil, gas and coal), and $35,455 million for “other” forms of
energy.  Of the $102,265 million spent on fossil fuels, $86,002
million was for 629.5 million barrels of oil, $16,128 million was
for 2,351 billion cubic feet of natural gas, and $135 million was
for 1.7 million short tons of coal.  From a fiscal perspective,
this would be fine if that money stayed in our state.  But it
doesn’t. In contrast with renewable energy which is produced
locally, very little of the fossil fuels we consume are produced
within our state.  California only produced 204,699 barrels of oil,
218,590 million cubic feet of gas, and no coal.  Thus, California
imports 68% of its oil at a cost of approx. $58,481 million; 91% of
its natural gas at a cost of $14,676 million and 100% of its coal
at a cost of $135 million, equating to a total cost of $73,292
million for imported fossil fuel.  

And this is not all. A significant portion of the $35,455 million
for “other” was spent to import electricity.  $562 million was paid
to Canada and Mexico to import 12,369,304 million MW of electricity
from Canada and Mexico.  An additional 79,719,494 million MW of
electricity was also imported from other states, at varying prices,
which likely cost over $30,000 million. When this is added to the
$73,292 million paid for imported fossil fuels, we find that over
$100 billion is being sent from California to outside our state for
fossil fuels.  An aggressive carbon tax will incentivize us to buy
local renewable energy, thus enabling us to keep much of that $100+
billion in our state.  This would be a tremendous boon to our
economy.  

Another important effect of a carbon tax is psychological.  Our
state could make a tremendous statement regarding the environmental
cost of GHGs by being the first to implement a carbon tax.  Even if
the tax is too small to have a measurable impact on emissions and
needs to be accompanied by a cap and trade system, a tax on carbon
would make a statement about our state and about our understanding
of the impact of fossil fuels.  This, in and of itself, is
important.

With regard to Cap and Trade (C&T), there are a number of issues
that were not addressed by your Scoping Plan. First, the major
beneficiaries of C&T are the Wall Street firms, such as Goldman
Sachs and J.P. Morgan, which create the market for carbon offset. 
Other beneficiaries include developers of renewable energy projects
outside California.  This is a cost to our state and a drain on our
economy.  

Second, the economists, Chichilniski, Heal and Starett, who
developed the concept of C&T back in the 1990’s and pushed it
through Kyoto, have basically abandoned it as unworkable. 

Finally, the assertion that C&T provides emissions certainty is
unfounded.  Emissions have increased since the implementation of
C&T in 2012. The downward emissions trend that began in 2007, ended
in 2011, at 352.4 mill metric tons CO2, and then went up.  In 2014
it was 358.0 mill metric tons (See California Carbon Dioxide
Emissions, below).
    

In conclusion, we believe that a carbon tax/fee and dividend can
provide an effective, efficient and equitable means of enabling our
state to meet or exceed our emissions reductions targets while also
stimulating our state’s economy.  

We appreciate your work to promote the health and well-being of our
state and the planet, and we are thankful for the opportunity to
comment on your Scoping Plan.  Please do not hesitate to contact
Laura Colban (858-692-2528 lauracolban@gmail.com)  if you have any
questions. 

Sincerely,

By unanimous vote of the Board of Directors of the Unitarian
Universalist Fellowship of San Dieguito:
Alisa Guralnick, President
Mark Tuller, Vice President
Heather Stroud, Secretary
Rich Franzwa
Bob Quick
Clint Stoddard
Alison Schlick
Rev. Meghan Cefalu