A GOOD IDEA Path to Economic Transformation

June 18, 2020

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by Russ Freeman (Modern Rotating Impact Mill Production Company, llc./Biofuels Digest) So how do we choose a GOOD PATH from many alternatives carbon sources?

Repurposing carbon in Municipal Solid Wastes could be exceptionally attractive to local government facing a pandemic-driven loss of both income and property tax revenue while also facing a dramatic rise in the need for social services. There are business clusters that offer cost savings and proven and fully funded mix waste carbon sourced energy, fuel, food, and housing materials as well as jobs, and tax revenues!
Agriculture as a replacement for fossil sourced carbon is attractive to rural communities dependent on agriculture!
Other initiatives could be envisioned and supported as “most viable” under certain conditions!

Such interests need a common rallying point to confront those advocating for the status quo.

Then, there is a governments role. Should government?

Throw money at it? May be an essential stopgap, but if continued it is a path to a potential inflation-led economic disaster = as a sustainable solution, it is A BAD IDEA.
Penalize undesired behavior like a carbon tax. Could help level the carbon-source playing field, but taxing discourages economic growth, biases the market, and biases innovation – which needs to be driven by the market = as a sustainable solution, it is A BAD IDEA.
Incentivize desired behavior as by providing carbon credits for either recycling or sequestering carbon. This has worked well to encourage natural carbon deployment. Relatively free access to public resources, depletion allowances, freight subsidies and eminent domain for transportation assets all support the fossil carbon industry. These have helped to create a powerful, well-established, well-financial industry with strong political, financial, and institutional foundations. A century ago, all that seemed good, but we are now seeing that = it has become A BAD IDEA.

So, are there any GOOD IDEAS??

One I am suggesting arose because federal and state governments working together had generally shown that provisions of the Clean Air Act – as initially passed by Congress – were unenforceable. Even though they used the best expertise available at the time, strategies the government had come up with for achieving compliance were continually challenged in and then overturned by the courts. However, since compliance was mandatory and since Congress had granted them standing, environmental groups were threatening to sue EPA to require stopping all new construction.

The agency had experienced one incident that temporarily froze construction, and the response led me to believe that such a move would surely result in Congress overturning the Clean Air Act. Thus, our offset policy was conceived and then sold as a stopgap pending Congressional review.

What both States and EPA officially wanted was a Congressional delay in the legally mandated date for getting everyone into compliance with requirements of the Act. What they got, after due Congressional consideration, was incorporation of the offset policy into the act. While bitterly opposed by environmentalists at the outset (Termed by them: “selling pollution rights”), offsets have become what is now known as “cap and trade” – (C&T) a key tool in the environmental toolbox.

Fortunately, in anticipation of the possibility that it might survive, we worked a strong foundation into the proposed stop gap program by including provisions necessary to ensure that the “offsets” would be saleable into the market we expected they would create.

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The capacity of the air to accept carbon is an analogy. Issuing offsets incrementally transforms the assimilative capacity of the atmosphere into an asset – having-value-in-its-own-right. This will automatically happen once an upper limit is being enforced and offsets are available and are required to support issuance of any new permits. That value will accrue to any then-existing air-emissions permit and offset owners, with some portion also available to the public. The public share is captured via a fee for service realized through the “ownership-of-record” update process, government set-asides (e.g. the 20% set aside in emissions banking) or a form of property tax.

So, what are the key reasons that a C&T model is a GOOD IDEA as a vehicle for carbon sourcing:

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The Clean Air Act presents a good C&T model for State total carbon management areas. This approach does not say where carbon should come from, or what it should be used for. It only says: “whatever the source or what ever the use and ultimate disposition, results must fall within a targeted “carbon in use inventory” and that cap on carbon must be met by a date certain.

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Congress would need to allocate a carbon inventory among States and State Legislatures would allocate that cap to designated areas within the State.

With this model:

Federally mandated national standards are to be attained and maintained, but those are set based on scientific input with only a finding of fact by the bureaucrat in charge.
The mandate – a fixed amount of carbon in play with a date certain for results.
Implementation by federally approved state implementation plans which are not really plans but rather a compendium of enforceable rules.
A State plan approval process that must require:
- Tradable carbon certificates that meet real property standards,
- An effective State framework for enforcement of rules in the state plan
- A State “in the economy carbon entitlements” record of ownership. READ MORE