In February, RFF hosted a presentation by Kathleen A. McGinty, Secretary of the Pennsylvania Department of Environmental Protection, at the Fifth Annual Hans Landsberg Memorial Lecture. The series honors the memory of Landsberg, a pioneer in energy and mineral economics who was a devoted member of the RFF staff for nearly 40 years.
With the reality of mandatory climate policies being crafted at both the state and federal levels, Kathleen McGinty encouraged the audience to keep in mind the old saying of "all things in moderation" when considering three options that could be counted as part of a comprehensive strategy to reduce greenhouse gas emissions: corn-based ethanol, carbon taxes, and cap-and-trade systems.
McGinty acknowledged that while carbon taxes and cap-and-trade systems to control emissions are both enjoying considerable "enthusiasm and exuberance" for their potential, "everyone now seems to love to hate corn-based ethanol." She nudged listeners that "maybe, at least for a time, we could dial up our enthusiasm" for the gasoline alternative that she considers to be an "okay start from an environment point of view," especially when considered along with the need to increase national energy security.
One concern people have about corn-based ethanol is that while it is net-energy positive, it's not dramatically so, especially as compared to cellulosic ethanol, said McGinty. She noted that many feel that "we can't afford the 'whoops' in terms of ethanol in building all that technology and infrastructure—let's wait for cellulosic." But, according to McGinty, "about 78 percent of the capital plant equipment for a corn-based ethanol plant is exactly what you would use for a cellulosic ethanol plant. So to me, it's not a dead end."
Nor is a carbon tax a dead end or the sole answer for McGinty, which she believes to be an elegant solution to the "perfect storm of the Katrinas, the Iraqs, and the $3 per gallon gasoline. To me, there is an essential role for a carbon tax to send a price signal." She also discussed the inherent difficulty in overcoming the fact that a carbon tax alone, in order to make significant reductions in carbon emissions, would have to be set at what she considers to be an unsustainably high level.
The third part of the equation for McGinty is a cap-and-trade system, again emphasizing its role as an "absolutely essential, fundamental building block of an overall climate policy," but acknowledging that it cannot bear the heavy weight of reducing overall emissions alone. "The job is bigger when we see what is unfolding around the world. We might not have the 2°C head room we thought we had. We might not have the 450 ppm head room we thought we had, and we might not have the 2050 head room we thought we had."
There is no panacea or quick answer to the complex issues surrounding climate change, McGinty said. Policymakers will need to carefully craft a blend of policies in order to address the global changes that will be the result of a warming planet.
A version of this article appeared in print in the Spring 2008 issue of Resources magazine.
