Does additionality matter?

The first follow-up to my recent post on carbon policy details.

First, a note to non-carbon-wonks: "Additionality" is a term of art in the world of carbon policy. It describes the degree to which a given activity causes additional carbon reductions -- the idea being that we shouldn't pay for carbon reductions that were going to occur anyway. As a fantastic oversimplification, suppose your car broke down and you had to ride your bike to work. The principle of additionality says you shouldn't be paid for the carbon you didn't emit. (You would have ridden anyway -- what choice did you have?) But if there's an increment of money that would tip you over into getting rid of your car and always riding your bike, that's additional.

Theoretically, great idea. Practically? Stupid.

To understand why, go back to the test I posited in my earlier post: Does the metric increase or decrease the rate at which we invest capital to lower GHG emissions?

The answer for additionality is not what you'd expect, for rather subtle reasons.

First off, let's note a couple truths:

Can words describe how bad corn ethanol is?

Well, maybe my words can't describe how bad corn ethanol is, or Mayor Bloomberg's, or those of top scientists, but I think I have found someone's words that do: Opus's from Bloom Country.

First, however, the lastest grim news from Fortune: "The ethanol boom is running out of gas as corn prices spike." Yes, "plans for as many as 50 new ethanol plants have been shelved in recent months." Why?

Spurred by an ethanol plant construction binge, corn prices have gone stratospheric, soaring from below $2 a bushel in 2006 to over $5.25 a bushel today. As a result, it's become difficult for ethanol plants to make a healthy profit, even with oil at $100 a barrel.

If you can't make money with oil at $100 a barrel, you are not much of an alternative fuel.

But I know what you're thinking -- if corn ethanol is so bad, what's wrong with plants being scrapped? Well, the corn ethanol business is here to stay. The corn ethanol mandate from the most recent energy bill requires doubling supply from current levels. Fortune explains what that means:

With amusing results

Responses to Bush’s climate speech

Here's a roundup of responses to Bush's climate speech. We'll add to it as more come in.

Rep. Edward J. Markey (D-Mass.), chair of the Select Committee on Energy Independence and Global Warming:
"By the time President Bush's plan finally starts to cut global warming emissions, the planet will already be cooked. The President's short-term goal is to do nothing, his medium-term goal is to do nothing much, and his long-term goal is to do nothing close to what's needed to save the planet from global warming."

Sen. Joseph Lieberman (ID-Conn.):
"I share the President's preference of a market-based approach over carbon taxes. I remain encouraged by EPA's finding last month that the Lieberman-Warner Climate Security Act will achieve strong results in curbing global warming without imposing economic hardship on Americans. I don't think that the President's statement will have any negative impact on our efforts to attract votes to the Climate Security Act on the Senate floor this June. I remain confident about the prospects of this critical legislation."

Sen. John Warner (R-Va.):
"The President's announcement today that he supports measures to reduce greenhouse gas emissions in the U.S. is welcome news as the Senate prepares to consider climate change legislation this summer. This personally delivered message is recognition that a growing problem faces America -- and the world -- caused by erratic fluctuations in climate, particularly temperature variations and rainfall patterns. I am pleased the President is prepared to engage on this vital issue, both on Capitol Hill and on the international stage."

National Association of Manufacturers President John Engler:
"President Bush has laid out a constructive and balanced set of principles to curb greenhouse gas emissions by 2025 ... We agree with President Bush that Americans deserve an honest and open discussion of climate change solutions by their elected representatives rather than decisions imposed by unelected regulators and judges. However, the primary federal legislation (S. 2191) sponsored by U.S. Senators Joseph Lieberman (I-Conn.) and John Warner (R-Va.) set for debate in Congress would do more economic harm than environmental good. We look forward to working with Congress and the administration on legislation that reduces greenhouse gas emissions without damaging the economy."

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A notorious illegal fishing ship meets its end

Here's one for the dustbin of history: This week, Australian authorities confirmed that one of the world's most infamous pirate fishing vessels was scrapped in a shipyard in India in December.

The Viarsa 1 was first spied illegally catching Patagonian toothfish (better known in restaurants as Chilean sea bass) in Australian waters in 2003. The resulting pursuit (scroll down for daily updates) by patrol vessels lasted 21 days and crossed 3900 nautical miles, inspiring Wall Street Journal reporter G. Bruce Knecht's acclaimed book, "Hooked: Pirates, Poaching and the Perfect Fish."

Many ships that participate in illegal, unreported and unregulated (IUU) fishing in the Southern Ocean are owned by Spanish companies, including Viarsa 1, and fly under flags of convenience. The owner of Viarsa 1, Vidal Armadores S.A., still owns several pirate ships. Just last summer, a ship associated with the company, Magnus, was apprehended while using illegal fishing gear in South Africa. The ship was sailing under the name Ina Maka with a North Korean flag.

It may go without saying that Vidal Armadores S.A. has received support in the form of subsidies from the Spanish government.

There is at least one way to clamp down on IUU fishing: stop allowing ships to fly flags of convenience. In addition, ships that have been caught pirating should not be allowed to obtain special fishing permits. Currently, the European Union is considering such a measure.