The economic issues involved
The Hartland Institute quotes University of Virginia professor and noted climatologist,
Dr. Patrick Michaels as saying:
life expectancy has doubled as emissions rise
corn production per acre has increased five times
in colder areas, green growing seasons have increased by 10%
REF: Heartland Institute, The; What the Global Warming Treaty Would Do to You, Your
Job, and Your Country; Chicago, Illinois.
http://heartland.org/studies/ieguide.htm.
As CO doubles plants experience
increased growth:
wheat - 25%
soybean - 40%
REF: Houghton, J.; Global Warming; page 125.
On the surface it appears that due to increased growth, economically increasing carbon
dioxide emissions are a good thing. However, if pests increase and drought is caused,
this might negate the economic benefit from increased growth rates.
Physicist, Nigel Calder, points out that carbon dioxide makes up less than 4% of the
air and that 97% of the greenhouse gases are natural. He feels that spending great
amounts of money to discourage human activity that produces carbon dioxide emissions
would have very little effect in reducing greenhouse gas levels.
Reduced water usage in agriculture
Dr. Park S. Nobel, chair of the biology department of the University of
California, notes that with CO2
"enrichment" (increased CO2),
plant pores do not have to open as widely to take in CO2,
therefore, less water escapes from the plant in the process of photosynthesis. Thus,
the plant uses scarce water supplies more efficiently. This is an important global
economic consideration, he believes.
The implication of this is addressed by Dr. Lee Campbell, professor at NC State, who says in
the same REF (see immediately above) that with better water usage, plants can grow in
deserts, where they could not before.
The World Future Society, publishers of the Future Survey, Futures Research Quarterly,
The Future Times, and Futurist Update predicts that "by 2025 one billion people will
be threatened by water shortage."
REF: Top 10 Forecasts; Futurist Magazine; George Washington
University; World Future Society; Bethesda, Maryland, USA.
http://www.wfs.org/forecasts.htm
Increased timber production due to increased CO2
Dr. Robert Teskey, professor of forest biology at the University of Georgia mentions that
the forest industry is a $14 billion industry in the state of Georgia. He mentions
how increasing CO2) concentrations
would greatly increase wood production.
Impact on oil producing nations
Sheikh Yamani, in an interview with Gayles Brandreth this past June (2000) predicts that
by 2030 the price of oil will drop to $0, because there will be no buyers due to hydrogen
fuel cell technology.
The former oil minister of Saudi Arabia predicts that when the United States drops their
oil consumption by 50% over the next 10 years, Saudi Arabia will have major "economic
difficulties."
Economics on developing countries
Bernadette Geyer is the deputy executive director of Fuel Cells 2000 of Washington DC.
As she puts it, countries without a developed electrical infrastructure can
"do it right, the first time."
She mentions a frequent term in the fuel cell vernacular, "cogeneration." This is
the use of the heat from generating power to heat colder areas, like in Russia.
Fuel cells, unlike conventional power plants, could be more disbursed and localized.
As others have pointed out, developing countries could benefit using reforming to
capture energy from waste biomass.
Tax policy
It appears to us that a less punitive approach to the tax incentives is a better
approach. Tax credits for research and development expenses for the hydrogen
or alternative fuel would help with the tremendous entry costs, and would break
the marketing barrier.
We first point to Denmark in the development of a serious wind power program. The
governments subsidized 30% of the cost of wind power equipment for 10 years. In the
current scheme, wind power receives tax rebates while fossil fuels are taxed.
It works out to fossil fuel providers paying 85% of the wind power electricity costs.
Shell board member, Fritz Vahrenholt, would like to see eco-taxes directed to
retrofit filling stations. He says Shell will provide hydrogen at the filling
station. He projects that 2020 "50% of all new vehicles and 20% of all existing
vehicles will be hydrogen."
Germany in 1990, under the Electricity Feed Law, required fossil fuel electricity
producers to pay 90% of the costs of electricity produced by wind power, solar,
hydropower, and biomass gas capture. The resulting solar development caused prices
to drop 37%.
The Netherlands has chosen the more punitive taxing policy. They are serious about
going from 1% energy from renewables to 10% by 2010. They plan to levy energy
taxes on providers that use polluting, nonrenewable sources.
Countries in the European Union favored carbon dioxide tax and energy tax in 1992.
The reason these taxes have not been enacted is because of lack of support from
the United States and Japan.
In 1997, Japan passed the 10,000 roofs program, subsidizing installation costs of
solar installations. Japan hopes for 3.1% of energy from renewables by 2010, with a
5,000-megawatt capacity.
The United States is taking a demand side tax incentive approach. The Clinton/Gore
administration proposed legislation for tax credits for fuel cell vehicles. Current
law provides a $4,000 credit. He wants to provide tax credits for homes and
buildings using wind power and biomass methane capture systems. Currently there is
a tax credit of 1.5 cents per kilowatt for wind power. President Clinton would
like to see this credit extended to power generated from landfill methane recycled
capture.
Price control
The price of fossil fuels has been artificially held to low cost by government
legislation
so that hydrogen has to rise to a high level to break the production cost barrier.
If the American people would allow free enterprise to rule, the hydrogen technology
might take off quicker in the U.S. When prices rose in the mid-west (USA) in July,
the following interesting letters appeared to the editor of Time Magazine:
"In Europe, where gas prices are higher than in the U.S., people deal with the situation
by driving cars that are more fuel efficient. If people in America don't want to pay so
much for gas, then they should quit buying gas-guzzling sport-utility vehicles and stop
polluting the air."
Adam Levine, Los Angeles, USA
"Relatively low gasoline taxes and the resulting insatiable U.S. demand for oil have led
to environmental destruction around the world as well as to urban sprawl and
blighted city centers."
Roland James, Phoenix, Arizona, USA
REF: What's Up at the Pump?; Time; Walter Isaacson, managing editor; July 24, 2000; page 16.
"Who is responsible for the rise in gas prices? We continue to enjoy relatively low gas
prices compared with the rest of the world, we have done little to encourage conservation
and we continue to purchase ever larger, less fuel-efficient automobiles - yet in your
article, you blame everyone but us. Stand up, people. Stop complaining and accept
responsibility for your actions."
Peter R. O'Keefee, Los Angeles, USA
REF: Newsweek; Pumped-up Petrol Prices; July 24, 2000; page 16.
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