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MIT researchers find vehicle efficiency standards are at least six times more costly than a tax on fuel.
IN CASE YOU MISSED IT: Valerie Karplus makes her case in an op-ed in the NY Times here.
Vehicle efficiency standards have long been considered vital to cutting the United States’ oil imports. Strengthened last year with the added hope of reducing greenhouse gas emissions, the standards have been advanced as a way to cut vehicle emissions in half and save consumers more than $1.7 trillion at the pump. But researchers at MIT find that, compared to a gasoline tax, vehicle efficiency standards come with a steep price tag.
“Tighter vehicle efficiency standards through 2025 were seen as an important political victory. However, the standards are a clear example of how economic considerations are at odds with political considerations,” says Valerie Karplus, the lead author of the study and a researcher with the MIT Joint Program on the Science and Policy of Global Change. “If policymakers had made their decision based on the broader costs to the economy, they would have gone with the option that was least expensive – and that’s the gasoline tax.”
The study, published this week in the March edition of the journal Energy Economics, compares vehicle efficiency standards to a tax on fuel as a tool for reducing gasoline use in vehicles. The researchers found that regardless of how quickly vehicle efficiency standards are introduced, and whether or not biofuels are available, the efficiency standards are at least six times more expensive than a gasoline tax as a way to achieve a cumulative reduction in gasoline use of 20 percent through 2050. That’s because a gasoline tax provides immediate, direct incentives for reducing gasoline use, both by driving less and investing in more efficient vehicles. Perhaps a central reason why politics has trumped economic reasoning, Karplus says, is the visibility of the costs.
“A tax on gasoline has proven to be a nonstarter for many decades in the U.S., and I think one of the reasons is that it would be very visible to consumers every time they go to fill up their cars,” Karplus says. “With a vehicle efficiency standard, your costs won't increase unless you buy a new car, and even better than that, policymakers will tell you you’re actually saving money. As my colleague likes to say, you may see more money in your front pocket, but you’re actually financing the policy out of your back pocket through your tax dollars and at the point of your vehicle purchase.”
Along with being more costly, Karplus and her colleagues find that it takes longer to reduce emissions under the vehicle efficiency standards. That’s because, with more efficient vehicles, it costs less to drive, so Americans tend to drive more. Meanwhile, the standards have no direct impact on fuel used in the 230 million vehicles currently on the road. Karplus also points out that how quickly the standards are phased in can make a big difference. The sooner efficient vehicles are introduced into the fleet, the sooner fuel use decreases and the larger the cumulative decrease would be over the period considered, but the timing of the standards will also affect their cost.
The researchers also find that the effectiveness of the efficiency standards depends in part on the availability of other clean-energy technologies, such as biofuels, that offer an alternative to gasoline.
“We see the steepest jump in economic cost between efficiency standards and the gasoline tax if we assume low-cost biofuels are available,” Karplus says. “In this case, if biofuels are available, a lower gasoline tax is needed to displace the same level of fuel use over the 2010 to 2050 time frame, as biofuels provide a cost-effective way to displace gasoline above a certain price point. As a result, a lower gas tax is needed to achieve the 20 percent cumulative reduction.”
To project the impact of vehicle efficiency standards, Karplus and her colleagues improved the MIT Emissions Predictions and Policy Analysis Model that is used to help understand how different scenarios to constrain energy affect our environment and economy. For example, they represent in the model alternatives to the internal combustion engine based on the expected availability and cost of alternative fuels and technologies, as well as the dynamics of sales and scrappage that affect the composition of the vehicle fleet. Their improvements to the model were recently published in the January 2013 issue of the journal Economic Modelling.
Nature: Natural hazards: New York vs the sea
By: Jeff Tollefson
February 13, 2013
In the wake of Hurricane Sandy, scientists and officials are trying to protect the largest US city from future floods.
Joe Leader's heart sank as he descended into the South Ferry subway station at the southern tip of Manhattan in New York. It was 8 p.m. on 29 October, and Hurricane Sandy had just made landfall some 150 kilometres south in New Jersey. As chief maintenance officer for the New York city subway system, Leader was out on patrol. He had hoped that the South Ferry station would be a refuge from the storm. Instead, he was greeted by wailing smoke alarms and the roar of gushing water. Three-quarters of the way down the final set of stairs, he pointed his flashlight into the darkness: seawater had already submerged the train platform and was rising a step every minute or two.
“Up until that moment,” Leader recalls, standing on the very same steps, “I thought we were going to be fine.”
Opened in 2009 at a cost of US$545 million, the South Ferry station is now a mess of peeling paint, broken escalators and corroded electrical equipment. Much of Manhattan has returned to normal, but this station, just blocks from one of the world's main financial hubs, could be out of service for 2–3 years. It is just one remnant of a coastal catastrophe wrought by the largest storm in New York's recorded history.
Sandy represents the most significant test yet of the city's claim to be an international leader on the climate front. Working with scientists over the past decade, New York has sought to gird itself against extreme weather and swelling seas and to curb emissions of greenhouse gases — a long-term planning process that few other cities have attempted. But Sandy laid bare the city's vulnerabilities, killing 43 people, leaving thousands homeless, causing an estimated $19 billion in public and private losses and paralysing the financial district. The New York Stock Exchange closed for the first time since 1888, when it was shut down by a massive blizzard.
As the humbled city begins to rebuild, scientists and engineers are trying to assess what happened during Sandy and what problems New York is likely to face in a warmer future. But in a dilemma that echoes wider debates about climate change, there is no consensus about the magnitude of the potential threats — and no agreement about how much the city should spend on coastal defences to reduce them.
On 6 December, during his first major public address after the storm, New York mayor Michael Bloomberg promised to reinvest wisely and to pursue long-term sustainability. But he warned: “We have to live in the real world and make tough decisions based on the costs and benefits.” And he noted that climate change poses threats not just from flooding but also from drought and heat waves. The city must be mindful, he said, “not to fight the last war and miss the new one ahead”.
Calculated risks
In the immediate aftermath of Sandy, lower Manhattan looked like a war zone. Each night, streams of refugees wielding flashlights wandered north out of the blackout zone, where flood waters had knocked out an electrical substation.
The storm devastated several other parts of the city as well. In Staten Island, pounding waves destroyed hundreds of homes, and one neighbourhood in Queens burned to ashes after water sparked an electrical fire. Power outages lasted for more than two weeks in parts of the city. Chastened by the flooding and acutely aware that Hurricane Irene, in 2011, was a near miss, the city is now wondering what comes next.
“Is there a new normal?” asks John Gilbert, chief operating officer of Rudin Management, which manages several office buildings in downtown New York. “And if so, what is it?” Gilbert says that the company is already taking action. At one of its buildings, which took on some 19 million litres of water, the company is moving electrical systems to the second floor. “You have to think that as it has happened, it could happen again,” he says. “And it could be worse.”
At Battery Park, near the South Ferry station, the storm surge from Sandy rose 2.75 metres above the mean high-water level — the highest since gauges were installed there in 1923. In a study published last week in Risk Analysis, researchers working with data from simulated storms concluded that a surge of that magnitude would be expected to hit Battery Park about once every 500 years in the current climate (J. C. J. H. Aerts et al. Risk Anal. http://dx.doi.org/10.1111/risa.12008; 2013).
But the study authors and other scientists say that the real risks may be higher. The study used flooding at Battery Park as a measure of hurricane severity, yet it also showed that some storms could cause less damage there and still hammer the city elsewhere. Factoring in those storms could drive up the probability estimates of major hurricane damage to New York.
The 1-in-500 estimate also does not take into account the unusual nature of Sandy. Dubbed a Frankenstorm, Sandy was a marriage of a tropical cyclone and a powerful winter snowstorm, and it veered into the New Jersey coast along with the high tide of a full Moon. “It was a hybrid storm,” says Kerry Emanuel, a hurricane researcher at the Massachusetts Institute of Technology (MIT) in Cambridge and one of the study's co-authors. “We need to understand how to assess the risks from hybrid events, and I'm not convinced that we do.”
The risks will only increase as the world warms. The New York City Panel on Climate Change's 2010 assessment suggests that local sea level could rise by 0.3–1.4 metres by 2080. Last year, Emanuel and his colleagues found that floods that occur once every 100 years in the current climate could happen every 3–20 years by the end of this century if sea level rises by 1 metre. What is classified as a '500-year' event today could come every 25–240 years (N. Lin et al. Nature Clim. Change 2, 462–467; 2012).
For city planners, the challenge is to rebuild and protect the city in the face of scientific uncertainty. A few scientists have said for more than a decade that the city should armour New York's harbour with a storm-surge barrier similar to the Thames barrier in London. In Sandy's wake, that idea has gained renewed interest, and a New York state panel last month called for a formal assessment of it.
Bridges and barriers
Malcolm Bowman, who heads the storm-surge modelling laboratory at the State University of New York at Stony Brook, has spearheaded the drive for barriers. He imagines a structure roughly 8 kilometres wide and 6 metres high at the entrance to the harbour, and a second barrier where the East River drains into the Long Island Sound. The state panel's cost estimates for such a system range from $7 billion to $29 billion, depending on the design. The harbour barrier could also serve as a bridge for trains and vehicles to the city's airports, suggests Bowman. “My viewpoint is not that we should start pouring concrete next week, but I do think we need to do the studies,” he says. But whether Sandy will push the city to build major defences, Bowman says, “I don't know.”
Disasters have spurred costly action in the past. The 1888 blizzard helped to drive New York to put its elevated commuter trains underground. And in 2012, the US Army Corps of Engineers completed a $1.1-billion surge barrier in New Orleans, Louisiana, as part of a $14.6-billion effort to protect the city after it was battered by hurricanes Katrina and Rita in 2005. But the New York metropolitan area is bigger and more complex than New Orleans, and protecting it will require a multi-pronged approach. Several hundred thousand city residents live along more than 800 kilometres of coastline, and a barrier would not protect much of coastal Long Island, where Sandy wrought considerable damage. Moreover, the barrier would work only against occasional storm surges. It would not hold back the slowly rising sea or protect against flooding caused by rain.
“A storm-surge barrier may be appropriate, but it's never one thing that is going to protect you,” says Adam Freed, a programme director at the Nature Conservancy in New York, who until late last year was deputy director of the city's office of long-term planning and sustainability. “It's going to be a holistic approach, including a lot of unsexy things like elevating electrical equipment out of the basement and providing more back-up generators.”
As part of that holistic effort, officials are exploring options for expanding the remaining bits of wetlands that once surrounded the city and buffered it from storms. In his address, Bloomberg called wetlands “perhaps the best natural barriers against storms that we have”.
But most of the city's wetlands have become prime real estate in recent decades, and Sandy made clear the consequences of developing those areas, says Marit Larson, director of wetlands and riparian restoration for the New York parks department.
A few weeks after the storm, Larson parks her car near the beach on Staten Island and looks out at a field of Phragmites australis, a common marsh reed. The field is part of Staten Island's 'Bluebelt' programme, initiated in the late 1980s to promote wetlands and better manage storm-water runoff. But the patch of wetlands here is smaller than a football pitch, and Sandy's surge rolled over it, damaging the nearby row houses. “If you look at the historical maps,” says Larson, “everything that used to be a wetland got wet.”
New York is now moving to strengthen its network of existing wetlands, which cover some 2,300–4,000 hectares. The mayor's budget plan for 2013–17 includes more than $200 million to restore wetlands as part of an effort to protect and redesign coastal developments.
Sandy also showed how proper construction can help to reduce risks from future storms. In one Staten Island neighbourhood, a battered roof rests on the ground, marking the spot where an ageing bungalow once stood. Next door, a newer house still stands, with no apparent damage apart from a flooded garage — sturdy proof of the value of modern building codes. In New York, newer buildings constructed in 100-year-flood zones, which are defined by the US Federal Emergency Management Agency (FEMA), cannot have any living spaces or major equipment, such as heating units, below the projected flood level (see 'Danger zone').
The city's zoning provisions could not protect against a storm like Sandy: officials estimate that two-thirds of the homes damaged by the storm were outside the 100-year-flood area. But scientists say that the FEMA flood maps were out of date, so even century-scale storms could cause damage well beyond the designated areas. Last month, FEMA began releasing new flood maps for the New York region that substantially expand this zone.
In their latest study, Emanuel and his colleagues estimate the average annual flood risk for New York as only $59 million to $129 million in direct damages. But costs could reach $5 billion for 100-year storms and $11 billion for 500-year storms. These figures do not include lost productivity or damage to major infrastructure, such as subways.
Bowman and other researchers argue that the city should commit to protecting all areas to a 500-year-flood standard, but not all the solutions are physical. A growing chorus of academics and government officials stress that the city must also bolster its response capacity and shore up the basic social services that help people to rebuild and recover.
Most importantly, the city and surrounding region need to develop a comprehensive strategy for defending the coastline, says Jeroen Aerts, a co-author of the Risk Analysis assessment who studies coastal-risk management at VU University in Amsterdam. Aerts is working with New York officials to analyse proposals for the barrier system and a suite of changes in urban planning, zoning and insurance. “You need a master plan,” he says.
“Ultimately, we all have to move together to higher ground.”
Seth Pinsky is working towards that goal. As president of the New York City Economic Development Corporation, he was tapped by Bloomberg to develop a comprehensive recovery plan that will make neighbourhoods and infrastructure safer. He points out that some newer waterfront parks and residential developments along the coast fared well during the storm. For example, at Arverne by the Sea, a housing complex in Queens, Pinsky says that units survived because they are elevated and set back from the water, with some protection from dunes. The buildings suffered little damage compared with surrounding areas.
Intelligent design
The cost of strengthening the city will be astronomical. In January, Congress approved some $60 billion to fund Sandy recovery efforts, with around $33 billion for longer-term investments, including infrastructure repair and construction by the Army Corps of Engineers. Pinsky says that he does not yet know how much of that money will go to New York, but he is sure it will not be enough. The city will define its budget in June, after his group has made its official recommendations. The rebuilding endeavour will probably necessitate a “creative” mix of public and private financing, he says. “It will probably require calling on a combination of almost every tactic that has been tried around the world.”
Even as he calls for more intelligent development, Pinsky says that New York is unlikely to take a drastic approach to dealing with storm surge and sea-level rise. “Retreating from the coastline of New York city both will not be necessary and is not really possible,” he says.
Given the sheer scale of development along the coast, it is hard to argue with Pinsky's assessment. But many climate scientists fear that bolstering coastal developments only delays the eventual reckoning and increases the likelihood of future disasters. The oceans will rise well into the future, they say, so cities will eventually be forced to accommodate the water.
“I don't see anything yet that looks towards long-term solutions,” says Klaus Jacob, a geoscientist at Columbia University's Lamont-Doherty Earth Observatory in Palisades, New York. But Jacob admits that he is as guilty as anyone. In 2003, he and his wife bought a home in a low-lying area on the Hudson River in Piermont, New York. Although it went against his professional principles, he agreed to the purchase with the assumption that he could elevate the house. But height-restriction laws prevented him from doing so, and Sandy flooded the house. The couple are now rebuilding.
“In a way, I think I was in denial about the risk,” Jacob says. He hopes that a new application to raise the house will be approved, but he still fears that the neighbourhood will not survive sea-level rise at the end of the century. New Yorkers and coastal residents everywhere would be wise to learn that lesson. “Ultimately,” Jacob says, “we all have to move together to higher ground.”
Nature 494, 162–164 (14 February 2013) doi:10.1038/494162a
Susan Solomon has won both the Vetlesen Prize and a 2012 BBVA Foundation Frontiers of Knowledge Award.
The Vetlesen Prize is given “for scientific achievement resulting in a clearer understanding of the Earth, its history, or its relations to the universe” and is designed to recognize sweeping achievements on par with the Nobel. The Prize was established in 1959 and is given every several years by a selection committee appointed by the president of Columbia University. The most recent award was in 2008 to geologist Walter Alvarez. Previous winners include climate scientists Sir Nicholas Shackleton and Wallace Broecker, marine geologist Walter Pitman, seismologist Lynn Sykes, and founding director of Lamont Maurice “Doc” Ewing.
Soloman is being recognized for her work in identifying the cause of the Antarctic ozone hole. This research helped bring about a global ban on manmade ozone-depleting chemicals. She shares the award with French climate scientist Jean Jouzel who is being recognized for his work extracting the longest-yet climate record from polar ice cores. The pair will receive the award and accompanying medal at Columbia's Low Library on Thursday, February 21st.
The BBVA Foundation Frontiers of Knowledge Awards recognize, among other things, outstanding contributions that advance understanding or deliver material progress with regard to climate change, one of the key challenges of the global society of the 21st century.
The award citation states that Solomon "has contributed, through her research and leadership, to the safeguarding of our planet." Solomon's work over 30 years has succeeded in establishing and drawing together links between three key climate change variables: human activity, a profound and comprehensive understanding of the behavior of atmospheric gases, and the alteration of climate patterns globally.
IN THE NEWS: Changing with the climate
MIT News
January 25, 2013
MIT researchers, Massachusetts officials highlight strategies to adapt to climate change.
Just days after President Obama called for action on climate change in his second inaugural address, members of Massachusetts Governor Deval Patrick’s administration joined energy and environment researchers at MIT to discuss strategies for adapting to climate change. The panel discussion on Jan. 23 fostered a continued partnership between MIT and the Commonwealth to advance energy and environment innovation. More....
IN THE NEWS: Reporter's Notebook: An inside tour of the MassDOT
The Tech
January 30, 2013
MIT students frequently use the T and other MassDOT transit systems; since 2010, our IDs even come with a built-in Charlie Card chip. But most students are unfamiliar with the inner workings of the transit system.
Ethan Feuer, Student Activities Coordinator for the MIT Energy Initiative, organized the tour for twenty five students in order to learn more about large infrastructures and emergency preparedness in cities. More....
IN THE NEWS: Climate Research Showcase
MITEI and MIT Joint Program
February 11, 2013
MIT students, researchers help Massachusetts address a post-Sandy world.
MIT students and researchers brought their latest ideas and findings to the table at an event on January 29. The interdisciplinary group of young researchers presented to officials from the Commonwealth’s Executive Office of Energy and the Environment, in hopes that the state would be able to leverage the information for future planning and implementation. More...
Last month, the United Nations Environment Programme agreed on the first major environmental treaty in over a decade. Its focus was reducing mercury pollution. There to participate in the events were ten MIT students and their instructor Noelle Selin, a researcher with the Joint Program on the Science and Policy of Global Change and an assistant professor of atmospheric chemistry and engineering systems.
To share their experiences and lessons learned from witnessing international environmental policy-making in action, Selin and the students hosted a panel discussion on Wednesday, February 6.
Selin kicked off the event by describing the problem of mercury in our environment and why an international treaty was essential to curbing the environmental and public health effects. She explained that mercury levels in the Earth have increased greatly due to the burning of fossil fuels, cement production, and more. Mercury then rains down into oceans, where it contaminates fish as toxic methylmercury.
"The health risks to consumers of fish include neurological effects, particularly in the offspring of exposed pregnant women," Selin explained. “Over 300,000 newborns in the U.S. each year are at risk of learning disabilities due to their elevated mercury exposure."
Mercury is an element that cycles in the environment, meaning that once it’s released into the atmosphere it can take decades to centuries for mercury to make its way back to ocean sediments.
“This becomes a global issue, this becomes a long term issue, and thus an issue for international cooperation,” Selin said.
There were five student teams on the trip that covered topics including: governing institutions, products and processes, emissions, waste/trade/mining, and finance. A member from each team presented on their issue at the panel and shared their thoughts and observations on the international negotiation process.
Philip Wolfe, a PhD candidate in the Department of Aeronautics and Astronautics, discussed the institutions and policy process of the negotiations. He explained that the treaty has to work on two levels: globally and domestically.
“Individual countries engage in regional, domestic, or bilateral agreements and they’ll only really sign on to a global convention if it also meets their own domestic goals,” Wolfe said.
The treaty, if nations decide to sign it, would require tightly controlling emissions – a major area of discussion during the negotiations.
Leah Stokes, PhD candidate in Environmental Policy and Planning, discussed the challenges with regulating emissions from the burning of fossil fuels and artisanal small-scale gold mining. She explained that when individuals want to mine gold and don’t have any equipment they use mercury because it binds with gold. When burned together, the mercury burns first, leaving gold behind. This process is estimated by the United Nations to be the largest global contributor of mercury emissions.
“We also come into contact with mercury through a lot of the products we use,” explained Ellen Czaika, a PhD candidate in Engineering Systems Division.
Examples of products with mercury that will be phased out under the treaty include some types of compact fluorescent light blubs, dental fillings, pesticides, thermometers, and batteries. There were important discussions at the conference about weighing the benefits of some of these products versus their mercury risks, Czaika said.
Mercury mining is another source of concern, and a major piece of the treaty. Danya Rumore, a PhD student in Environmental Policy and Planning, explained that this was expected to be a big area of contention, but an agreement was reached that gave time for a ban to come into effect over a 15-year period.
Julie van der Hoop, a PhD student in the MIT/Woods Hole Oceanographic Joint Program, followed financial and technical assistance issues at the negotiations. She discussed how the strength and effectiveness of the treaty will be shown through the technology transfer programs, a new funding mechanism for developing nations, and implementation plans.
Ultimately, she said, “We’re looking for a treaty to be effective…If you make a treaty and it’s not effective then what’s the point?”
Many of the panelists said that the treaty has relatively weak requirements, but that this is still a historic and impactful international environmental treaty. Selin recognized that it had to be an agreement that all 140 countries would be able to sign on to and that any limits on mercury will have long-term impacts because of the nature of the mercury cycle.
“This isn’t a thing that ends today,” Stokes, of Environmental Policy and Planning, said. “This is just something that keeps going and going and going. Even though we have a treaty—really, we’re going to decide everything [about implementation] at the next meeting.”
The students attended the conference as part of a National Science Foundation grant, with the idea being to train a cohort of graduate students for science policy leadership through a semester-long course and an intensive policy engagement exercise. The group had UN observer status and was able to observe all of the negotiations, breakout sessions, and meetings. The students also presented their latest scientific information about mercury through a poster presentation, and shared their experiences and observations through a blog and twitter feed.
As Massachusetts and communities throughout the country face the realities of a world where severe weather events like Super Storm Sandy could become more common, smart adaptation strategies are needed. MIT students and researchers brought their latest ideas and findings to the table at an event on January 29. The interdisciplinary group of young researchers presented to officials from the Commonwealth’s Executive Office of Energy and the Environment, in hopes that the state would be able to leverage the information for future planning and implementation.
Going forward we will need to be thinking out-off-the-box, creatively for future planning ” Massachusetts Energy Undersecretary Barbara Kates-Garnick said at the event. “So much of what you’re doing is totally relevant to what we’re working on…I’m sure that we will be back in touch."
The student showcase was part of a series of events the MIT Energy Initiative organized during the MIT independent activities period to highlight what is being done – and what needs to be done – to face the realities of a post-Sandy world.
Included in the series of events was a panel discussion on January 23 featuring Massachusetts’ officials and MIT Professors Kerry Emanuel and Michael Greenstone. Learn more about the event, and watch the video of the panel, here.
The MIT Energy Initiative also organized a tour of the MBTA’s tunnels. Participants learned what the MBTA is doing to modernize and adapt to change. Read the MIT Tech story here.
Research aimed at predicting future climate activity has primarily focused on large and complex numerical models. While this approach has provided some quantitative estimates of climate change, those predictions can vary greatly from one model to the next and produce doubts in the projected outcome.
In this Faculty Forum Online broadcast Professor Kerry Emanuel '76, PhD '78 discussed a new approach to climate science that emphasizes basic understanding over black box simulation. On Tuesday, Feb. 5, 2013, Emanuel presented an overview of his climate research and took questions from the worldwide MIT community via video chat. Watch the video and visit the Slice of MIT blog to continue the conversation in the comments.
About Kerry Emanuel
A Cecil and Ida Green Professor in the Department of Earth, Atmospheric and Planetary Sciences, Emanuel is a cofounder of the Lorenz Center, an MIT think tank devoted to understanding climate activity. He is the author of What We Know about Climate Change, which The New York Times called "the single best thing written about climate change for a general audience."
In 2006, Emanuel was named by Time magazine as one of the 100 most influential people in the world. He received his bachelor's degree in earth, atmospheric, and planetary sciences from MIT in 1976 and his doctorate in meteorology from MIT in 1978.
By Brad Plumer
February 6, 2013
Like it or hate it, policymakers in Washington are still obsessed with the deficit. That’s why think tanks keep churning out clever plans to cut spending and raise taxes.
And here’s a new paper from the Council on Foreign Relations offering an interesting twist on the theme. Using economic modeling, Michael Levi and Citgroup’s Daniel Ahn suggest that a tax on oil consumption could be one of the least harmful ways to trim the budget deficit.
How do they figure? Levi and Ahn first assume that Congress will enact a big deficit-reduction package over the next 10 years that cuts spending by 3 percent of GDP by 2020 and raises corporate and income taxes by 1 percent of GDP by 2020. That may be unlikely in the real world, but it’s fairly similar to the much-discussed Simpson-Bowles proposal.
Next, the authors look at what would happen if Congress scrapped some of those tax hikes and spending cuts and instead replaced them with a tax on oil consumption. This would could involve simply raising existing taxes on gasoline, diesel fuel, and jet fuel. They assume the oil tax would be phased in over time and come to about $50 per barrel of crude oil in 2020, or an extra $1.20 per gallon of gasoline.
After running their economic model, Levi and Ahn found that using the oil tax to fend off some of the spending cuts and income tax hikes could be beneficial to the U.S. economy. In other words, a deficit package with an oil tax could be less harmful than a deficit package without one. Here’s the key chart:
In Variation 1, the gold line, the oil tax is used to restore part of the government spending cuts in the big deficit-reduction deal. In Variation 2, the blue line, the oil tax is used to restore part of the spending cuts and keep taxes lower. In Variation 3, the red line, the oil tax revenue is used to keep income and corporate tax rates at their current levels.
The end result: The U.S. economy performs better when there’s oil tax revenue to fend off spending cuts and tax hikes. GDP rises faster and unemployment falls further.
Why might this be? For one, Levi explained in a phone interview, a portion of the oil tax would fall on foreign countries, since the United States still imports about 40 percent of its crude. What’s more, oil in the United States is relatively lightly taxed. “Raising taxes on something that’s under-taxed, like oil, rather than something that’s already heavily taxed, like income, can yield good results,” Levi said.
Of course, this is a rather simplistic scenario, and Levi and Ahn model a few other possibilities in their full paper (pdf). For instance, it’s quite possible that an oil tax would curb U.S. fuel consumption, which might in turn lower global oil prices. (Though that’s hardly certain; a lot would depend on how OPEC responded.) In that case, the U.S. economy could see a slightly bigger boost.
Meanwhile, there are distributional consequences to consider. An oil tax is likely to be quite regressive — many poorer Americans spend a greater fraction of their income on gasoline. So Levi and Ahn looked at what would happen if half of the oil tax revenue was kicked back to consumers as lump-sum rebates, while the other half was used to reduce taxes and maintain spending levels. Even in that case, the economy performs better than it does under a standard deficit-reduction plan.
In theory, a tax on oil could have other benefits as well — if it reduces domestic fuel consumption, that would make the U.S. economy less vulnerable to large swings in global oil prices. But those benefits aren’t factored in here.
Last year, a similar study from MIT looked at the effects of using a broader carbon tax to trim the deficit. That study found that carbon taxes only offered a slight advantage over other budget-cutting measures. But there’s an important difference here — unlike the MIT study, Levi and Ahn’s paper doesn’t assume that the U.S. economy will be running at full employment anytime soon. And in that case, finding ways to blunt the impact of deficit reduction over the next 10 years could have a big effect on the course of the economy.
MIT students frequently use the T and other MassDOT transit systems; since 2010, our IDs even come with a built-in Charlie Card chip. But most students are unfamiliar with the inner workings of the transit system. I was excited to take advantage of one of the opportunities offered this IAP and take a tour of several MassDOT (Massachusetts Department of Transportation) facilities, including an underground ventilation tunnel system, bus operator training school, and the organizational headquarters for the T.
MassDOT offers variations of this tour every other week to Boston residents. The locations on the tour change based on weather. Ethan Feuer, Student Activities Coordinator for the MIT Energy Initiative, organized the tour for twenty five students in order to learn more about large infrastructures and emergency preparedness in cities.
Our tour was led by two MassDOT veterans, Adam Hurtubise, Assistant to the Highway Administrator at Massachusetts Department of Transportation, and Darrin McAuliffe, Director of Communications and Coordination.
We boarded our privately-chartered MBTA bus and departed for our first stop: bus driver training school. Driving a 40 or 60-foot bus through the crowded streets of Boston is no easy task. The rigorous training program accepts applicants with a Certified Driver’s License permit, and begins testing them only eight days later to determine if they will qualify to become a bus operator. For their final exam, students must complete a serpentine maneuver, back up in a straight line, parallel park, and drive through the streets to the satisfaction of their examiner.
As part of the training program, students are introduced to the feeling of the bus driver’s seat in a simulator. We were able to give the simulator a whirl. When I first entered the simulator cab, I was surprised by the size of the steering wheel. Making tight turns with the bus required not only excellent timing but also rapid spinning of the wheel. The size of the bus and the seemingly countless rearview mirrors were disorienting and meant I was never entirely sure where the back of my simulated bus was. I successfully right-turned and merged into traffic, only to hit a taxi seconds later as I tried to pull over to the bus stop.
The bus instructors entertained themselves by introducing obstacles, such as ambulances and elderly pedestrians, into the simulated roadway, and by turning the roads icy or making it snow in the view screen. During one particularly unfortunate drive, they caused a boulder to roll into the middle of the road. After struggling with the simulator, I am much more impressed by the MBTA drivers’ ability to maneuver these behemoths.
The next stop on our tour was Vent Building 4, one of 13 major ventilation buildings located throughout Boston. These buildings take in fresh air from above ground, pump it into roadway tunnels, and expel the exhaust-filled air from within the tunnel. This system is key to keeping the MassDOT Central Artery roadway tunnel system pleasant to drive through, and safe from smoke buildup in case of a fire.
Some buildings are built around vent cores, including the upscale Intercontinental Hotel. Vent buildings can be identified by the large vents on the side of them, but the vents are designed to be inconspicuous and the building interiors are mostly unaffected. You might never guess that the basements of such buildings house several-story-high fans, backup generators and batteries, and tunnels that connect most of the city of Boston.
We visited the Haymarket T station vent building. Before beginning this part of our tour, they outfitted us in outrageous orange hard hats and vests, because we were going to see “live traffic coming at us.”
According to Hurtubise, the Haymarket building has so much basement space that it is deeper underground than it is high. We took an elevator down into a chilly series of rooms made entirely of cement and lined with pump machinery and gauges (in case of “water infiltration,” said our guides), wandered past two large 8- and 12-cylinder diesel generators, which the city keeps in order to light the traffic tunnels in case of a power outage, through rooms containing large arrays of backup batteries in case the generators fail, until we came to a flight of stairs leading further down. The ceilings were very high, and at this point, we began to suspect the basements were even colder than the frigid 15 degree air at ground level. “
Congratulations,” said McAuliffe, as he directed us into an enormous room with fans the size of the MIT chapel lined up on one side, “you’ve found the coldest place in Boston.”
We were in the supply plenum of the vent building. Every vent building has a supply and exhaust plenum. The supply plenum is full of fans to suck fresh air into the building. In the Haymarket plenum, we could stand in the center, look directly up, and see straight out of the skylight at the top of the building. We also visited the exhaust plenum, which was much darker, creepier, and more damaging to the lungs.
Our guides assured us the levels of carbon monoxide within the car tunnels are continuously monitored to maintain a safe level. The vent system can also react to smoke from a car fire by pressurizing one part of the tunnel more than the other in order to dispel the smoke.
While in the plenum, our guides showed us a place where the room narrowed into a car-size tunnel. They explained such tunnels connect most of the vent buildings together, meaning you can travel across Boston via them, in a similar way to traveling through the MIT tunnels, although perhaps not quite as luxurious. Sometimes, said Hurtubise, the tunnels get so narrow you have to crawl. The vent building also connects directly to the car tunnel it ventilates. So, it was time for us to see some “live traffic.”
Our guides opened a door which led to a narrow concrete platform in one of Boston’s car tunnels. I had seen maintenance doors countless times in traffic tunnels, but never imagined what was on the other side. From our position, we could look down to see cars driving through the tunnels and feel the freshly ventilated air blow into our faces.
At the ventilation building, we visited one of the emergency systems MassDOT has in place in case of superstorms like Hurricane Sandy. The low-point pump room, the deepest part of the building, deals with any flooding that may occur in that section of the tunnels. We could see evidence of the most severe flood experienced in Vent Building 4: a water mark about three feet high on the walls. According to our guides, MassDOT is unsure of how its systems would be affected by a sudden rise in water level, such as Hurricane Sandy caused in New York, and is currently conducting a study on how much their infrastructure could handle.
By now, we were ready to warm up and feel our extremities again, so we proceeded to the MassDOT Highway Operations Center. This office, housed on the second story of an inconspicuous office building, resulted from the merger of Massachusetts Highway Authority and the Turnpike Authority, which occurred during the formation of MassDOT in 2009.
Most of the office was a single large room that resembled spy headquarters from an action movie. The back wall of the office displayed multiple video feeds from some of the 900 video cameras dispersed along the Massachusetts highway system.
The Highway Operations Center monitors the video feeds with help from computer algorithms to identify traffic accidents and provide emergency responders with exact location and visual information. The cameras employ an accident-finding algorithm, which triggers an alert when one camera shows non-moving tail-lights, which means the camera is viewing the back-up behind an accident, or when a camera shows no traffic at all, which means the camera is trained on the roadway in front of an accident.
The manager of the operations center, Michael Fitzpatrick, shared stories with us about incidents the office handles. The center has over-height vehicle detection systems, which alert when a truck that is too tall for a tunnel is en route to pass through it. They respond by flashing warnings on digital signs on the side of the road. Fitzpatrick said once a driver ignored the warnings and scraped a video camera off the tunnel ceiling. Police followed him in order to retrieve the camera, which was dangling from the back of his trailer.
Being MIT students, we were especially interested to learn more about their computing systems. Another unique algorithm the Highway Operations Center developed works like the Google Maps traffic feature to track the speed of traffic. Sensors identify bluetooth devices in vehicles, mainly cell-phones, and record how long it takes the devices to go from checkpoint to checkpoint. Fitzpatrick explained the color coding on the traffic map. Since it was the middle of the day, most roadways were green; amusingly some stretches were blue, indicating the average car speed was above the posted speed limit.
Although the Highway Operations Center uses some clever algorithms, several issues from the merger remain. According to Fitzpatrick, many of their monitoring and data-collection systems run on different platforms, so they do not communicate with each other.
Our final stop on the tour continued to indulge our tech-oriented sides. We parked our bus outside of a inconspicuous office building. Most passerby did not give the building a second glance, but the security guard in the foyer made us realize this building was important.
“No one really knows where this building is,” said Hurtubise. “We don’t advertise it.”
We were inside the MBTA Operations Control Center, home to the logistics departments responsible for deploying T trains and MBTA buses. The operations centers for these two transit systems were located on separate floors.
In the bus headquarters, we learned more about the role of MBTA buses. They respond to emergency situations, such as building evacuations or natural disasters, by providing buses for shelter or egress. Employees in this office were responsible for tracking the location of buses and making calls to drivers to keep them within five minutes of schedule.
The T train operations center looked like the command center from a sci-fi ship. All the walls were painted black, employees sat at computers arranged on terraced platforms facing the front wall of the room. On this wall a huge projected graphic depicted the train lines, stops, and trains currently on the track.
This tour left me amazed the with amount of detail MassDOT manages every day and great respect for its employees. Feuer called it a “wonderful” and “holistic” tour which covered many aspects of the MassDOT system.
This is the first time the MIT Energy Initiative has organized such a tour with MassDOT. The tour fit in well with this month’s theme at the Energy Initiative, “Preparing for Climate Variability.”
Due to the New York subway shut-down in the aftermath of Sandy, Feuer wanted to find out how prepared Massachusetts’ transportation systems are for such an event.
Feuer said he was pleased by the feedback he received from both students and our tour guides, and, luckily for the many students on this tour’s waitlist, he hopes to do more tours in the future.
“One student said it was a real highlight of his seven years at MIT,” said Feuer, “and Adam [Hurtubise] has told me we were the best group, that people are telling him we brought our A game.”
This tour was a unique opportunity for students. As Feuer put it, “rarely do we get to see the underpinnings of public transit” and the “engineering marvels” involved.
By Henry (Jake) Jacoby
Introduction
Mitigating climate change doesn’t sound as monumental as ending, or reversing climate change. But with global phenomenon already “contributing to the deaths of nearly 400,000 people a year and costing the world more than $1.2 trillion… annually,” according to the Climate Vulnerability Monitor, MIT professor Henry “Jake” Jacoby explains why efforts to mitigate climate change may be crucial to determining the next generation’s quality of life.
Henry (“Jake”) Jacoby is William F. Pounds professor emeritus in the MIT Sloan School of Management, and former co-director of the MIT Joint Program on the Science and Policy of Global Change.
Talking about mitigating climate change risk is a bit like the story of the man arrested for murder whose lawyer said to him, “I’ve got good news and bad news. The bad news is the blood found at the crime scene matches your DNA. The good news is your cholesterol level is down to 160.”
First, the bad news about climate change: The quantity of greenhouse gases humans have pumped into the atmosphere since the dawn of the industrial age is already changing the earth’s climate and raising global temperatures. What’s not widely recognized is that simply stabilizing global greenhouse gas emissions at today’s levels will not stabilize their atmospheric concentrations and effects on climate. Much deeper cuts will be required. Moreover, even if we succeed in reducing future emissions drastically, our children and grandchildren will have to live with the consequences of global warming –not just higher temperatures, but more severe storms, sea level rise, fire, drought and other environmental changes.
With no additional mitigation policy, we estimate there’s about a 50/50 chance that global temperatures will rise by as much as 5 degrees Celsius by the end of this century. There’s almost a one in four chance global temperatures will rise by 6 C or more.
Over the past two decades, diplomats have tried to negotiate a deal to limit atmospheric concentrations of “Kyoto gases” (carbon dioxide, methane, nitrous oxide and other industrial gases). Their ultimate goal: to curb global temperature increases to 2 C by the year 2100. However, after analyzing the data, the objective looks daunting.
Whatever we and the other nations do, climate change will adversely affect future generations. By steadily pressing ahead to create a non-carbon-based economy by whatever means available, we can limit the damage.
For example, one specific target is to limit atmospheric concentrations to about 450 parts per million (ppm). But given that the concentration of these gases has already risen from 275 ppm in the late 18th century to around 440 ppm today, and is climbing steadily, it’s doubtful we can achieve that goal.
But all is not lost. According to our calculations at MIT’s Joint Program on the Science and Policy of Global Change, even if we limit atmospheric concentrations of the Kyoto gases to a more modest 650 ppm, the high-end risks of climate change — temperature increases of 5 to 7 C — disappear. In other words, our grandchildren would still have to live with the disruptive effects of climate change, but they wouldn’t have to face the most catastrophic scenarios.
That’s the good news about climate change: almost anything we do to limit greenhouse gas emissions has its biggest effect on the worst possible outcomes. That’s why it’s worth keeping up the fight to reduce greenhouse gas emissions even though some targets will be hard to meet.
Here in the U.S., despite the national gridlock on climate change policy, energy-related carbon dioxide emissions have dropped in recent years — in part because of the recession but also due to a shift from coal to natural gas as a power source. The fact that President Obama talked about climate change in his inaugural address, plus the effect of recent storms and drought on public understanding of the risk, may help shift the debate toward a more aggressive policy response.
Right now, the U.S. has a cobbled together quilt of state, regional and national policies — automobile mileage standards, appliance efficiency ratings, renewable energy subsidies — that indirectly limit greenhouse gas emissions. From an economic perspective, the cheapest and best way to reduce emissions would be with a carbon tax, or a cap-and-trade system that places a price on carbon emissions. It’s a win/win/win solution. It would 1.) lower greenhouse gases emissions and oil imports, 2.) increase revenue which could be used to cut other taxes, and 3.) have a neutral-to-positive effect on economic growth. If a price penalty for emitting greenhouse gases is not politically feasible, then more expensive regulatory measures are going to be the way forward.
Whatever we and the other nations do, climate change will adversely affect future generations. By steadily pressing ahead to create a non-carbon-based economy by whatever means available, we can limit the damage.
In this Faculty Forum Online broadcast Professor Kerry Emanuel '76, PhD '78 discussed a new approach to climate science that emphasizes basic understanding over black box simulation. On Tuesday, Feb. 5, 2013, Emanuel presented an overview of his climate research and took questions from the worldwide MIT community via video chat.