For the past decade the world has been inundated with governments and private industry marketing the need to be green to avoid or reduce carbon emissions. What has not been explained to the lay person or the tax payer is the implicit carbon taxation that is levied by the switch from traditional to “green” alternates.
This article exposes the carbon emissions reduction taxation that has been levied on adopters of the so-called “green” alternatives, and shows that the level of taxation is, theoretically, many times the real market value of the carbon emissions. In one case, the level of taxation is actually infinite.
In July 2012, the Energy Information Agency at the Department of Energy (EIA) provided levelized power generation costs by various methods of power generation. The least costly method is to generate power using natural gas as the fuel in an advanced combined cycle power station. Siemens sells such stations and claims that their state-of-the-art station will emit only 730 pounds of carbon dioxide per megawatt hour of power generated. The EIA lists the levelized cost of power generation from such a power station as $63.10 per megawatt hour.
Wind energy was also analyzed by the EIA and its levelized cost was estimated at $96 per megawatt hour. This is $32.90 additional cost per megawatt hour above the advanced combined cycle station but wind energy saves the 730 pounds of CO2 emissions per megawatt hour. Dividing the added cost by the saved emissions and converting pounds to short tons we get an added cost, or an implied emissions tax, of $90.13 per short ton of avoided carbon dioxide to generate power using the wind as the source of energy.
This implied emissions reduction tax should be compared to the value of one short ton of CO2 emissions traded in the European cap-and-trade system. The value for carbon emissions on November 27, 2012 as listed by Bloomberg is only $8 per short ton (6.77 Euros per metric ton). Clearly the imputed emissions reduction tax for purchasing wind energy is more than ten times higher than the market value of the saved emissions. But wind is actually the most affordable alternate method for power generation.
The same EIA report lists the levelized cost of power generation using solar PV as $152.70 per megawatt hour or some $89.60 per megawatt hour greater than the cost from advanced combined cycle power stations. Performing the same arithmetic the imputed emissions reduction tax for PV is $245.48 per short ton of CO2 or 30.6 times the market value.
Hold onto your hats–the solar thermal project the DOE funded with $1.5 billion of your tax dollars in Ivanpah, California has a levelized cost of $242 per megawatt hour or some $178.90 per megawatt hour greater than the cost from advanced combined cycle power stations. Performing the same arithmetic, the imputed emissions reduction tax for solar thermal is $490.13 per short ton of CO2 or 61.2 times the market value.
By now you are mad that the DOE has wasted money on expensive methods to reduce carbon emissions. It gets worse! The Federal government and California state government hand out money to motorists to buy plug in cars. Greenexplored has shown that the imputed tax to society of using electric power generated from natural gas in a Volt Plug-In compared with simply using the natural gas in a CNG Honda Civic costs society $2,675 per avoided short ton of CO2 emissions. This is 334.4 times the market value.
By now you are fuming mad with our misguided energy policy! It still gets far worse. Actually, it gets infinitely worse. The Bloom Box that Al Gore and Colin Powell are involved with generates power for over $200 per megawatt hour. It, too, uses natural gas. Its stated emissions based on the permit filing in Delaware are 884 pounds of CO2 per megawatt hour. This device therefore generates more expensive power with greater carbon dioxide emissions than the advanced combined cycle power station using the very same natural gas fuel. Greater emission at higher cost means the imputed emissions reduction tax would be infinite.
The Federal government gives a 30% investment tax credit to owners of the Bloom Box and California gives away an additional 15% tax credit. Perhaps Colin Powell, who sits on the Board of Directors of Bloom Energy can explain away these weapons of mass combustion? Or perhaps Al Gore, who is a partner in Kleiner Perkins, the major investor in Bloom Energy will simply say he invented new math to show the Box is green after all.