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Category Archives: Carbon tax

Energy generation and usage is considered not only as a mark of progress of a nation but also security of a nation. That is why countries go to extraordinary distance to achieve such a security and everything else becomes secondary in the path of their goal. That is why countries with high oil and gas reserves enjoy good relationship and privileges with powerful nations of the world. Countries who do not have their own oil and gas reserves and who completely rely on import of oil and gas have no choice but maintain a good relationship with oil rich countries despite their difference in ideologies and policies. But with warming globe and changing climate the dependence on fossil fuels is fast becoming unsustainable and countries look for alternatives. It is good news for the whole world especially for nations who depend completely on import of oil and gas because they can develop their own renewable energy sources to lower their emissions. But there is one major difference. Countries who depend on import of oil and gas required to develop only an infrastructure to store and distribute oil and gas, But with renewable energy they have to develop an infrastructure to produce the hardware necessary to use alternative energy sources such as solar, wind, geothermal  but also energy storage such as batteries. The warming globe and changing climate have become a grave threat to the plant earth and a threat to lives of entire future generations. It is the greatest challenge of the industrialized world. One can view this as threat or as an opportunity. But it is time to act irrespective of our views and we must act now.

It is an opportunity for scientists and engineers to view energy sources and their applications in a new perspective. It is an opportunity to understand how human activities affect our environment and how not to damage them but preserve them for our future generations while developing new alternatives. Humanity is just a part of a larger environment and any damage to planet earth is at our own peril. It is an ancient wisdom, but we neglected them. When an aboriginal of Australia said “we belong to earth and earth does not belong to us” we failed to listen to them. We(people) became bigger than They (environment).

In pursuit of a new energy source one must be extremely careful in examining Nature and how she operates so that we do not make the same mistakes of the past. As we develop renewable energy as a potential energy source of the future, we should be aware of the life cycle of such a system and their impact on environment. Renewable energy requires hardware that uses exotic metals, catalysts, polymers, new Carbon sources and glasses. As we switch to Carbon free economy, we should make sure that there are no emissions in developing renewable energy sources and if necessary impose Carbon tax on such emissions and, to develop recycling technologies to recycle that hardware safely and environmentally friendly manner. It is critically important issue as we move forward. According to an article published in Chemical engineering News

“The potential quantities of waste are enormous. By 2025, waste batteries removed from electric vehicles will total 95 Giga watt hours, according to an estimate by Bloomberg New Energy Finance. That pile will weigh roughly 600,000 metric tons.

A similar amount of old solar panels will have accumulated by then, according to projections by the International Renewable Energy Agency. IRENA anticipates solar panel waste could reach 78 million metric tons by 2050. And Europe could see 300,000 metric tons per year of decommissioned wind turbine blades in the next two decades, says the trade association Wind Europe.

Each year, approximately 300,000 metric tons of lithium-ion battery waste is generated around the world, says Sheetanshu Upadhyay, an analyst with India’s Esticast Research & Consulting. Most of those batteries come from mobile devices, but that waste will soon be overshadowed by old electric car batteries. Sales of plug-in electric vehicles are expected to surpass 2.6 million in 2020, according to Navigation Research.”

The above data shows the amount of CO2 emission associated with implementation of renewable energy sources soon. There is a potential for large scale recycling industries on renewables, but it will come with a price and environmental issues. Right now, the main problem is the CO2 emission and the only way to tackle this problem is impose Carbon tax on emissions while encouraging industries with low emission technologies. It should be possible for UN to pass a unanimous resolution among the nations to address climate change by imposing Carbon tax uniformly across the nation. By such resolution UN can bring all those countries to the table who are currently reluctant to be a party to the Paris accord. Countries can use “Carbon rating” similar to “energy ratings” currently used for measuring energy efficiencies in appliances such as Heaters and air-conditioners. The lowest emitting technologies will get the highest Carbon rating while high emission technologies will get the lowest Carbon ratings. By using such a method country who are reluctant to act on climate change will be disadvantaged; they will not be able to compete in international market or export their goods to low emitting countries based on Carbon ratings.

 

Recycling PV solar panelsRecycling renewablesRecycling wind turbines

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“Over two-thirds of today’s proven reserves of fossil fuels need to still be in the ground in 2050 in order to prevent catastrophic levels of climate change” – a warning by scientists.

There is a great deal of debate on climate change due to man-made Carbon emissions and how to control it without any further escalation. The first obvious option will be to completely stop the usage of fossil fuel with immediate effect. But it is practically not feasible unless there is an alternative Non-Carbon fuel readily available to substitute fossil fuels. The second option will be to capture carbon emission and bury them under ground by CCS (Carbon capture and sequestration) method. But this concept is still not proven commercially and there are still many uncertainties with this technology, the cost involved and environmental implications etc.The third option will be not to use fresh fossil fuel  for combustion or capture and bury the Carbon emissions but convert the  Carbon emissions into a synthetic hydrocarbon fuel such as synthetic natural gas (SNG) and recycle them. By this way the level of existing Carbon emission can be maintained at current levels without any further escalation. At least the Carbon emission levels can be reduced substantially and maintained at lower levels to mitigate climate changes. It is technically feasible to implement the third option but it has to be implemented with great urgency.

One way of converting Carbon emission is to capture and purify them using conventional methods and then react with Hydrogen to produce synthetic natural gas (SNG)

CO2 + 4 H2 ———> CH4 + 2 H2O

The same process will be used by NASA to eliminate carbon built-up in the flights by crew members during their long voyage into the space and also to survive in places like Mars where the atmosphere is predominantly carbon dioxide. But we need Hydrogen  which is renewable so that the above process can be sustained in the future .Currently the cost of Hydrogen production using renewal energy sources are expensive due to high initial investment and the large energy consumption.

We have now developed a new process to generate syngas using simple coal, which is predominantly Hydrogen to be used as a Carbon sink to convert Carbon emissions into synthetic natural gas (SNG). The same Hydrogen rich syngas can be directly used to generate power using gas turbine in a simple or combined cycle mode. The Carbon emission from the gas turbine can be converted into SNG (synthetic natural gas) using surplus Hydrogen-rich  syngas. The SNG thus produced can be distributed for CHP (combined heat and power) applications so that the Carbon emission can be controlled or distributed. By implementing the above process one should be able to maintain Carbon at specific level in the atmosphere. Existing coal-fired power plants can retrofit this technology so that they will be able to cut their Carbon emissions substantially; they can also produce SNG as a by-product using their Carbon emissions and achieve zero Carbon emission at their site while generating revenue by sale of SNG.

Coal is the cheapest and widely used fossil fuel for power generation all over the world. Therefore it will be a win situation for everyone to use coal and also to cut Carbon emissions that can address the problems of climate change. Meanwhile research is going on to generate renewable Hydrogen cheaply directly from water using various technologies. But we believe we are still far away from achieving this goal and we require immediate solution to address our climate change problems.

Recently BASF made a press release : http://www.basf.com/group/press release/P-13-351‎ claiming a break-through technology to generate Hydrogen from natural gas without any CO2 emissions.

The climate is changing with increasing global warming caused by man-made Carbon emission. The economic impact of global warming can no longer be ignored by Governments around the world because it is impacting their budget bottom lines. Weather is becoming unpredictable. Even if Meteorological department predicts a disaster 24 hrs in advance, there is nothing Governments can do to prevent human and economic losses within a short span of time but evacuate people to safety leaving behind all their properties. Governments are forced to allocate funds for disaster management every year caused by severe draughts, unprecedented snow falls, and coastal erosion by rising sea levels, flash flooding, inundation and power black outs. We often hear people saying,” we were completely taken by surprise by this event and we have never seen anything like this in the last 50 years” after every naturals disasters explaining the nature and scale of disasters. Nature is forcing Governments to allocate more funds for disaster managements and such allocations have reached unprecedented levels. The cost of natural disasters around the world in 2011 was estimated at $ 400 billion and in 2012 it was estimated at $160 billion. The only way to fund these disasters is to tax Carbon pollution which causes global warming. Countries should take long-term decisions that will save their current and future generations to come.  They should understand how Carbon is emitted and what the best way to curb such emissions is. It is a global issue and its requires a collective solution.  There is no use of pricing Carbon when economic recession can jeopardize the pricing mechanism? Global warming is a moral and social issue and not just an economic issue.

Developed countries have emitted bulk of the Carbon since industrial revolution while developing countries such as India and China were emitting less carbon in spite of their vast population due to their lowest per capita consumption. But that trend has now changed with rapid industrialization and economic growth of India and China and other developing economies. Australia is still a leading emitter of Carbon in the world in spite of their low population because of their high energy consumption, availability of cheap and high quality Coal and increasing mining, industrial and agricultural activities. That is why Australia is one of the first few countries who introduced Carbon tax while rest of the countries is still debating about it. Now it is clear that Carbon emission is directly proportional to industrial, economic and population growth of a country and it can be easily quantified based on the growth rate of each country. It is time countries agree to cut their Carbon emissions to sustainable levels with a realistic Carbon pricing mechanism and sign a world-wide treaty through UN.

“THE EUROPEAN UNION carbon emissions trading scheme—the biggest in the world and the heart of Europe’s climate- change program—is in dire straits. The scheme’s carbon price has collapsed. The primary reason: The economic recession has suppressed manufacturing, thereby reducing emissions and creating a huge over- supply of carbon emissions allowances. Carbon trading is a market approach to reducing greenhouse gas emissions in which each facility involved is given an emissions cap for the year, and each year that cap is reduced. A firm must record and report its facilities’ emissions and must obtain allowances for its total emissions. An allowance permits a facility to emit 1 metric ton of carbon dioxide or its carbon equal; some allowances are given for free by the government, others can be bought at auction or from other firms. If a facility exceeds its cap, the company operating it has options: It can cut emissions, buy allowances from other companies, or get allowance offsets by reducing emissions at another pollution source. The cost of an allowance is referred to as the car-bon price and is driven by market conditions such as supply and demand. If the low-carbon price continues, the region’s ability to meet long-term reduction targets for greenhouse gas emissions will be severely hampered because the trading scheme will fail to provide money for clean-tech programs and incentive for manfacturers to adopt cleaner technologies. The trading scheme is a key component of the EU’s climate-change strategy because about 40% of all greenhouse gases emit-ted in the region fall under EU’s control. The mandatory scheme applies to 11,000 industrial installations, including power plants and major chemical facilities, across all 27 member states, as well as in Croatia, Iceland, Liechtenstein, and Norway. The aviation sector has been included in the scheme, but its active participation has been deferred to allow for an international agreement on aviation emissions, which is expected to be concluded in the fall. The goal of the European Commission, the EU’s administrative body and the architect of the emissions trading scheme, is to reduce all greenhouse gas emissions by 20% from 1990 levels by 2020. To contribute toward this goal, the trading scheme has targeted a 21% cut in the emissions of participating sectors by 2020 from a 2005 baseline. In recent weeks, however, the EU carbon price dropped to a new low of $5.20 for each metric ton allowance of CO2, down from a high of $23 in 2011. This is despite an annual reduction of the EU emissions cap of 1.74% through 2020 and the introduction on Jan. 1 of a new phase of the scheme requiring companies to purchase allowances. AT ITS CURRENT carbon price, the EU emission scheme’s role in encouraging chemical firms to ditch fossil fuels and adopt greener technologies “is meaningless,” says André Veneman, director of sustainability at AkzoNobel. Many of the industry’s investments in low-carbon technologies that are marginally financially viable also will likely be delayed, he says. Without a strong carbon price, the underlying push to clean-tech in the EU will come only from the price of oil, Veneman adds. Veneman and other experts say that a carbon price of between $68 and $135 is required if industry as a whole is to be forced to shift onto a new low-carbon footing. Yvo de Boer, special global adviser for climate change and sustainability for KPMG—an audit, tax, and advisory firm—and form EUROPEAN SCHEME IS IN FREE FALL Record-low CARBON PRICE threatens to derail transition away from fossil fuels and ability to meet climate-change targets.” Source: EUROPEAN SCHEME IS IN FREE FALL Record-low CARBON PRICE threatens to derail transition away from fossil fuels and ability to meet climate-change targets ALEX SCOTT, C&EN LONDO

The burden of Carbon tax should be borne by both power generators as well as consumers. Even if the Carbon tax is imposed on emitters it will eventually be passed on to consumers. Either way the cost of energy will increase steeply or there is no way to avoid such escalation if we want to keep up our power consumption levels or our current life style. In other words people will have to pay penalty for polluting the air either by generating or consuming power that causes Carbon pollution. All developed countries that have polluted the atmosphere with Carbon emission should be taxed retrospectively from the time of industrial revolution so that emerging countries need not bear the full cost of global warming. Such a fund should be used for developing renewable and clean energy technologies or to purchase Carbon allowances. Current mechanism of Carbon pricing does not penalize countries who caused the global warming in the first place for hundreds of years but penalizes only countries who now accelerate the rate of Carbon emission. Such an approach is a gross injustice on the emerging economies and not at all pragmatic. Most of the developed countries are currently facing economic recession resulting in plummeted Carbon price. This will only encourage existing Carbon emitters to emit Carbon cheaply and penalize Renewable energy and clean energy technologies with higher tariffs and drive them to extinction. In spite of Carbon level in the atmosphere exceeding 400 ppm according to the latest report, the world is helpless to cut the Carbon emission anytime sooner making our planet vulnerable to catastrophic natural disasters. Countries that are reluctant to pay Carbon tax will pay for Natural disasters which may be many times costlier than Carbon tax. Countries like US, European Union, Japan, Australia the largest power consumers and countries like Saudi Arabia, Russia, Venezuela, Iran, Iraq, Libya the largest oil producers should bear the cost of Carbon pollution that caused the globe to warm sine industrial revolution. Such a fund should be used in developing innovative Renewable energy and clean energy technologies of the future. More than anything else the rich and powerful countries should declare global warming as a moral issue of the twenty-first century and take some bold and hard economic decisions to save the planet earth..Allowance overloadCarbon pricing downward trendcost of Natural disatersEU carbon trading

 

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