 Good morning, Howard Wigg, Old Green, staying back away, December 6th, 2021. And today we will talk about carbon. Carbon is not the stuff that's at the edge of the pencil that you used to write on with. Yes, it is, but carbon is a little more ubiquitous than that as in carbon dioxide. Those three atoms swinging together and we're fine with the oxygen part, but it turns out the carbon part is causing just a wee bit of problems like the extraordinary weather we're having right now and the fires in the West, floods in the East and so forth, so forth. So what do we do about carbon? Scott Glenn, our manager for the Hawaii State Energy Office my employer was at the COP conference in Scotland and on the way back he stopped in Iceland where they have a device that extract carbon from the air makes it into a solid rock and then deposits it. Now that sounds like a good way of getting rid of carbon but they said for all the success that they are realizing who really effectively stabilize and even lower the Earth's temperature, we'd have to have about a million of these devices all over the world and they are great consumers of energy. The reason Iceland can do it is they have virtually unlimited geothermal heat sources that use this. So maybe that's not the most practical application in the world, what if instead we changed human behavior is a point where humans always follow the money that is going to be the topic today, carbon pricing. And I'm very pleased to bring to the stage Mr. Noel Marin, he is the community resilience specialist and Dr. Paul Bernstein, who's a part-time economist at University of Hawaii, welcome gentlemen and the subject today is carbon pricing, please Noel, take it away. Thank you, Howard, it's great to be here. I appreciate your program and how you're shining a bright light on the many actions that are required for us to be able to address our climate crisis. My colleague and I Paul will be tag-taming today and we'll share our insights on carbon pricing. I'd like to first say that I'm not a scientist nor an economist. My background is in enterprise technology. However, I am, we all are fortunate to be in the midst of thousands of scientists, economists, environmental advocates and many more working to solve this climate crisis. We've long understood the causes for climate change and we really know what must be done. We need to aggressively implement many of the solutions to reduce global warming emissions. We need to draw down legacy emissions, Howard, as you just described and we also need to prepare our communities for the inevitable consequences of climate change. And all this must be done in a way that is equitable, inclusive and just. What's important is that we understand and just, what's important is that we prioritize the solutions that can have the most immediate impact. If we turn to slide one, please, I just wanna share a little information about our organization. We are both state coordinators along with another individual, Molly Whiteley, or this organization called Citizens Climate Lobby we're a nonprofit, non-partisan grassroots group. We have over 200,000 members nationally. Here in Hawaii, we have over 900 members. And what we do is we create political will for durable and effective climate legislation, both here as well as at the national level. Durable means that the policies that are implemented are not subject to the whims of who's in power. And effective means that we can affect rapid reduction in emissions and do it in a manner that also cares for our people and our economy. But before we go into carbon pricing, I'd like to share some contact. Some of this may be a review for some, but I think it's really important to take a look at this as it lays the foundation for what we talk about later. If we go to slide two, what you see here is essentially where the emissions are coming from, right? As you can see the energy sector, transportation, electricity production, and industrial processes contribute to the lion's share of emissions. Slide three, if you go there, you can take a look at the fact that while we are putting an emphasis on CO2, it contributes to 75% of the emissions. There are other gases that we shouldn't be concerned about, methane, nitrous oxide, fluorinated gases. They may be smaller in proportion to the emissions, whether and shorter live, but they also have a very powerful heat trapping quality compared to CO2. So we also must focus on reducing their emissions. By the way, there's this very promising development with the advent of satellite monitoring and detection for methane. And this allows us to better understand where these emissions are coming from and be able to, with that attribution, be able to manage the issue. Let's go. Well, I just attended a webinar on methane containment and they cited this exact fact and they said basically, once you have pinpointed the source of the methane emissions is generally connected to petroleum production, that it's a matter of essentially closing the leaks, getting down there and just tightening things up. It shouldn't be emitting and you just tighten it up. Relatively simple, hopefully, hopefully, this is more technological progress coming to assist us. It's incredible with satellite imagery, with all the detection capabilities that are out there, their GIS tracking geolocation. We're able to start to pinpoint where these issues are. And as they say, you really can't control what you can't measure, but with this pinpoint, laser pointed detection, we're now able to do exactly what you just described. And fortunately, some of the solutions are really simple, right? Making sure the leak goes away as an example, like you just described. Let's turn to slide four and take a look at emissions globally. This gives us an idea of the top emitters across the world. And I should say that there is more than this that meets the eye. If you take, eventually, you take a look at, and we'll look at this shortly, that it's not just the net emissions per country that is important, we also should take a look at emissions per capita. But if you look at the slide here, you see that the lion's share is China with the 12 gigatons emitted, right? The US comes second, India, Russia, and Japan. Now, if you go to the next slide, you'll see that this is the emissions per capita, so this is the emissions per person. You'll notice that the US and Australia are there within the top emitters. And you see a lot of smaller countries, island nations that are actually top emitters. And so the importance of this is that we need to take a look at it, not only from a net emissions perspective but also per capita. There are many different things that we can do, for example, in the US to reduce our carbon footprint and that could translate into not just our emissions going down, but also influencing others around the globe. Now, well, question, what in the world is Trinidad-Obego doing in there? I don't think of them as a major oil producer or anything. Yeah, I think that when I looked into this, I believe, and Paul, feel free to chime in as well. I believe this is because they are an island nation if I'm not mistaken. So these island nations, and think of Hawaii as well, right? We import a lot of our energy. So these are nations, smaller nations that are heavily dependent on fossil fuels and are therefore contributing quite a bit per capita. Paul, anything that you'd like to add to that? Yeah, I believe Trinidad-Obego, I thought they used to or maybe still have a refinery. So they are somewhat energy producers. That's well. Yeah, I think that contributes to it as well. That would probably explain it. Yes, thank you. Okay. So if we turn to slide six, you know, this, I raise a question, what does this all mean? Collectively, we dump over 150 million tons of emissions into our atmosphere and we do this every day. And we treat our atmosphere as this open sewer as Al Gore would say. And this is mainly from the burning of fossil fuel. The key cause for global warming is the burning of fossil fuels. We've known this for decades. We know what needs to be done. And to address this problem, we must cut emissions aggressively. Now, just as you would first turn off the spigot, you know, when your tub is overflowing, we need to stop burning fossil fuels to control warming. So what do we do? We put a price on carbon. Just as we, when we put a tax on cigarettes, for example, we dramatically reduce smoking rates. A price on carbon will have the impact of reducing the use of high carbon products. And there have been several modeling studies that have demonstrated the effectiveness of pricing on changing difficult macro behavioral patterns. If we go to slide seven, and this is in response partly, Howard, to one of your questions that you've posed offline. It is, you know, what are the various strategies that are out there and how do they compare in terms of efficacy? And if you look at this, the top most would suggest the least effective in terms of addressing global emissions. And these are generally localized. You know, they could be a state, they could be a sub-entity within a nation covering one sector. And a good example here is the regional greenhouse gas initiative. And this is implemented in the Northeast. There are about 11 states and it addresses the power sector. The majority of the carbon pricing schemes that we have globally cover a variety of different sectors and also greenhouse gas coverage. And you'll see here that there are around 45 countries or so with pricing in some form or another. And there are many others that are in the process of introducing pricing or some type of emission trading scheme. Now, I should note that the United States and Australia are the only countries with developed economies that currently don't have a national carbon price. This is something that our organization and many are trying to change. Now, at the very bottom, you have the potentially most effective but it's also the most challenging because it does demand that there's collaboration and cooperation at the global level. And these are not necessarily pricing strategies that we have here, but I wanted to just call out with Kyoto and also with Montreal protocol. We had essentially a situation where multiple nations across the globe agreed to with Kyoto to reduce greenhouse gas emissions. And then for Montreal to reduce the utilization of CFCs which were destroying the ozone layer. And one very notable thing about that is it worked. We were able to cut down the use of CFCs and the ozone started to heal itself. The consequence of course is that HFCs were a different type of gas that were used to replace those refrigerants and they unfortunately have this very powerful greenhouse greenhouse effect. So hence we have this Kigali amendment which hopefully the US will be able to sign as well. So the point of raising these global arrangements is that they offered the opportunity for rapid action on global issues. Of course, they're quite a bit more challenging to implement and therefore action at all the other levels that we have, including at the national and local level are important because they all add up at some point. So with this, I'd like to now have Paul share with us information about carbon pricing here in the US as well as locally. But Howard, wondering if you had any questions for us? Yeah, well, no, I'll do a question later as we get into the details here. Thank you. So Noel, I wanted to pick up on what you were saying that really key to fact, as you said that Montreal Protocol is working still regarding the CFCs and I think an important element tying in with what you've been saying about carbon pricing is that I think most people believe the Montreal Protocol was so effective because there were readily available substitutes that were cost competitive with the CFCs. And I think that that's a lot of what we're trying to get to with having a carbon price that make the cost of these alternatives to fossil fuels more competitive. And then we'll see that the market and other countries, et cetera, will undertake the behaviors, namely reducing the use of fossil fuels that we need to happen to address climate change. So that, and you can put up slide eight. So speaking of carbon pricing, so in the US over the last few years, there've been a number of national policies proposed to essentially put a price on carbon. They've differed, let's say primarily, both in the stringency of the carbon, the price on carbon, and therefore sort of the emission reductions they were meant to achieve, as well as the dividend. And one thing that the distance climate lobby actively pushes is a return of the dividend or return of all the carbon revenues back to individuals. Some of the, so that's essentially the bill that distance climate lobby is supporting is the Energy Innovation and Carbon Dividend Act. The other bills give a certain portion of the money back to individuals and then reserve some of the funds for infrastructure, helping economies that rely on the fossil fuel industry providing them some money for transition, some monies and some of the policies are allocated towards research and development, which is certainly critical if we're going to address some of the certain sectors in this economy. Next slide, please. So Energy Innovation Carbon Dividend Act or shorthand carbon fee and dividend, in terms of how it works, it places a increasing fee on the carbon emissions that result from the burning of fossil fuels. To make the policy the lowest administrative burden the carbon fee is placed upstream as far as possible. So at the, actually the point of extracting coal or natural gas and at the refinery. So based on the carbon content of these fuels the carbon fee is placed and carbon revenues are collected by the government. Then the government goes out and returns all this money back to individuals in equal shares. So it means everybody on this, the three of us would get the same amount back regardless of how much money essentially we put into the kitty or into the pool. So if I'm driving a Hummer and I leave my lights on all the time and have lots of air conditioning and you Howard and Noel are driving a Prius and very good about turning off the lights and what have you, I'll be putting a lot more money into the pot than you folks, but we all get the same amount back. So therefore you're basically rewarded for the behavior that will lead to lower greenhouse gas emissions. In addition, by doing it this way the policy becomes quite progressive and I'll get into that a little bit later. The other element or kind of the third leg of the stool if you will with the carbon fee and dividend is what's called the border carbon adjustment which essentially is aimed at protecting domestic industries. So if the US employs carbon pricing and trades with another country that doesn't have carbon pricing then the government will credit US exports to that country based on the carbon fees that US company had to pay and put a tariff or a tax on imports from this other country that doesn't have a carbon fee. Next slide. Okay, so essentially I'd say why does ECL like this bill, the carbon fee and dividend bill and may I add that there are 3,500 plus economists who find an open letter supporting carbon fee and dividend and I believe there's something like 28 Nobel laureates and four former chairs of the Federal Reserve. So it's not as if it's just a policy that Noelle and I like is broadly supported. And I would say going back to something Noelle said that I guess I kind of think of it as a free ease if you will, why it has appeal to economists. It's effective, it brings down emissions very effectively. It addresses all emissions, actually all emissions from carbon dioxide that occur in the economy. It's not like an efficiency standard that only addresses new technology. Placing a price on carbon would affect people's current operating behavior. It's efficient. So there's low overhead costs, low administrative overhead costs is just economically efficient. There's not a lot of waste with the policy. And possibly most important is it's equitable which goes back to what I was saying about it being progressive because in general higher income folks will be paying much more in carbon tax or carbon fee either directly or indirectly than lower income households. But again, every household or every individual, I should say receives the same amount of revenue from this policy. And therefore since lower income folks are putting less money into the kitty but receiving the same amount back, they in general on average studies show that lower income households or lower income individuals will actually receive more money than they put in. The opposite is true for the higher income but they're much more able to deal with the increase in prices or what have you. So carbon fee and dividend does a beautiful job at protecting low income household and protecting them from the price increase and helping them make this transition. I'll let me be the devil's advocate here. We have a fellow living on the Waianae Coast who was a dishwasher in Waikiki and he drives a 1996 Oldsmobile, not so well tuned that gets maybe 13 miles to the gallon. It goes all the way from Waianae to Waikiki and then back again fighting rush hour traffic both ways. And he's earning a dishwasher's, oh wait, what do we do about this poor fellow? I agree with you that this is one, probably as this individual that you're describing may not actually take in more money than he pays out. A couple of things though, one is any policy that we want to enact that is going to seriously address our greenhouse gas emissions is going to cost money. And so people talk about a renewable portfolio standard in the electric sector, talk about efficiency standards, what have you. All of these have costs and none of these raise any revenue. So that same dishwasher is going to have to pay more for his electricity, may have to pay more if you had cafe standards, so vehicle efficiency standards clearly would not affect the dishwasher immediately but when going to buy the next car, it would make the car more expensive. So, but as I said in these policies, there's no money to give back to the dishwasher. Whereas with the carbon fee and dividend, at least the low income person, this dishwasher in have some of his costs covered. Okay, I would, I were in charge, I would say that there'd be waivers for low income people and in this case, he might apply, be able to apply for a loan to get a much more fuel efficient car. Right, you could do that. You could also structure it so that you decided to have an income threshold, let's say and so high income folks don't get any of the dividends and you actually give more low income folks, right? Maybe low income folks get one and a half shares and then somewhere in the, you know, keep going up somewhere in the middle, they just get one share and okay, if you want, you give the high income folks a quarter share or something like that, right? You could certainly make it much more progressive to, as you said, protect folks like this and folks in rural areas in general, right? Who have to drive long distances for their job? I'd like to add to that in this particular use case, there's a situation, the situation is one where someone is not financially able to afford, let's say an electric car, something more efficient. One of the things that, you know, as we look at this particular policy or this particular solution is that it should not exist in a silo, right? There will be other interventions that will be needed to be able to help move everyone forward, including the situation. And what I'm referring to is, for example, if we were able to introduce, you know, there are the tax credits that are also rebates for EV purchases that may come out, come about, that could be configured in a way that would allow for lower income individuals to benefit more and that will help offset the cost of acquiring clean transportation. Because the fact that he's using, you know, a really old vehicle, very inefficient, it's also emitting, you know, that's still an issue, right? That ultimately will need to address. Hey, thank you. We've got two minutes to wrap up. Time passes faster around here. Wow. Do you want to take it? Noel, do you want to wrap up and we'll skip? Yeah. Why don't we go to slide, well, slide 11. I think we should just make a quick mention of this. So there are attempts here locally to establish a carbon price. There was an attempt, a couple, for the past three years now, including carbon cashback in the last session, and there will be additional attempts, I predict, moving forward. Additionally, there was a study that was conducted by Yojiro, which is very localized, and it has demonstrated that there will be, you know, great benefit to our community to establish a local carbon price. And then the last slide here, I just wanted to just call attention again to the fact that we're in Code Red. I know this is a Code Green show, but we're in Code Red, and we need local and global action, and we need a lot of it right away. We need to aggressively cut emissions. This is one way to do that, not the only way, but one of the many ways, a very effective way to do it. We also need to draw down emissions. There are mechanical ways to do this. There are nature-based solutions. There are forestation solutions, and we also need to adapt. There are all these adaptation strategies. The point I'm trying to make is that they all have to coexist, and we all have to be very aggressive about them. Importantly, we need to focus on those which are most important first, or most effective first, as a way to make the most progress in the relatively short period of time. Thank you. I'm in the energy efficiency field, specifically building energy efficiency, and the technology exists where we could cut the energy use in homes and buildings by half, very cost-effectively. The technology is there. It's just the will and the pricing structure that's not there. I'm so supportive of that, Howard. I think efficiency across the board, buildings, even transportation, that's one of the reasons why we're pushing really hard with electric vehicles because they're super efficient compared to fossil fuel vehicles. So no emissions, more efficient. So if we can reduce our energy need, then that just means less renewable energy solutions that we need to build. Totally agree. Okay, and needing to wrap up, is there a way of Googling either one of you who are interested, people could Google something and then your contact information with the pop-up. Your website, or the cclhawai.org is certainly one place to go. Well, can you spell out that acronym, please? Yeah, cclhawai.org. That's real easy. And you can also search for Paul Bernstein and Noel Moran Hawaii on Google, and I'm sure you'll find us. I'm more likely you. Hey, it comes time to bid fond adieu, Paul Bernstein, Noel Moran, thank you very, very much and look forward to your fighting the good fight in the upcoming legislature. And this being duplicated, I'm assuming nationwide by many, many, many jurisdictions. I wish you all the best in this noble effort of yours. And with that, I say, hold green farewell from Howard Wigg, December 6th, 2021, thank you very much.