Week of 6/19/2005

Dear EarthTalk: Aside from wind power, which seems to be gaining in acceptance, what are some other promising sources of non-polluting renewable energy?

—Bianca Hoffman, Bridgeport, CT

Wind power certainly has been in the news lately, with wind farms sprouting up across America from California to the Atlantic seaboard. By the end of 2004, U.S. wind capacity neared 6,800 megawatts, enough to power 1.5 million homes every year. And new projects now in the works will add at least 3,000 megawatts of capacity over the next five years, according to the American Wind Energy Association.

But while wind may be getting most of the headlines nowadays, hydropower—energy generated from water flowing through turbines in dams—is still king of renewables. Globally, hydropower generates 20 percent of the world"s electricity. In Canada, which is the world"s largest generator of hydropower, over 60 percent of the electricity produced comes from the power of water. Norway gets almost 99 percent of its electricity from hydropower, and New Zealand is close behind at 75 percent. In the U.S. about 10 percent of all electricity—enough to power 35 million homes every year—comes from hydropower.

But although hydropower does not generate pollution, per se, it has hurt salmon populations on both U.S. coasts, and often ruins habitat for wildlife and people alike. In China and India, large controversial dam projects have flooded huge areas of land and forced the relocation of whole communities of people.

One of the world"s oldest fuel sources, biomass—the burning of plant material for energy—is enjoying a renaissance thanks to plentiful supplies of agricultural, forest and wood waste. Proponents of biomass—or "bioenergy"—say it could be harnessed as a clean alternative to coal in power plants. Currently, biomass accounts for 7,000 megawatts of U.S. energy generation, which puts it on equal footing with wind energy.

Solar powered "photovoltaic" cells, while they presently account for only about 1,500 megawatts of power annually in the U.S., promise to play a larger role in our energy future. Solar cells keep getting smaller and less costly, are highly reliable, and don’t pollute. And fuel cells, which run on hydrogen and emit water as the only by-product, hold much promise not just for powering cars (all the major carmakers are developing practical hydrogen-fueled cars) but for powering buildings and other "stationary" structures as well.

Despite the promise of renewables, though, the U.S. still generates more than 90 percent of its energy from non-renewable and polluting sources like coal and petroleum—and there is talk of a nuclear "revival" despite the potential dire consequences of a nuclear accident or terrorist act. Finding more efficient ways to harness solar energy is a top priority for many environmentalists, as the Earth receives more energy from the sun in just one hour than the world uses in a whole year.

CONTACTS: American Wind Energy Association, www.awea.org; National Hydropower Association, www.hydro.org; American Bioenergy Association, www.biomass.org; U.S. Department of Energy Renewable Fuels Program, www.eia.doe.gov/fuelrenewable.html .

Dear EarthTalk: Near tax filing day this year I heard some economists on TV discussing "green taxes" that can benefit the environment. Can you enlighten me?

—Wendy, Providence, RI

Just like taxing cigarettes helps to discourage smoking, so-called "green taxes" can work to discourage activities that damage or pollute the environment. According to Vermont Businesses for Social Responsibility, "Very simply, green taxes use the tax code to adjust the prices of products or activities. Through taxes, we can increase the cost of activities or products that damage the environment
and decrease the cost of activities or products we want to encourage for environmental reasons."

Taxes on gasoline, for example, are "green taxes" because they encourage conservation of a limited and polluting resource. Since businesses and consumers are price-conscious, adjustments to taxes force people to think about the choices they are making. Green taxation, or "tax shifting," as it is known in economic jargon, may also involve tax rebates, such as those given to consumers who purchase clean-fuel vehicles.

In the 1990s Great Britain instituted a fuel tax known as a "fuel duty escalator." It resulted in a significant drop in fuel consumption and a large increase in fuel efficiency, especially for diesel trucks. Finland, The Netherlands and Sweden have all instituted similar measures, mostly trying to curb energy consumption.

In addition to trying to influence positive behavior, green taxes also seek to make the prices of goods reflect their "true costs." We buy a lot of disposable products, for example, and quite inexpensively. But local communities then have to deal with the resultant waste, incurring costs not reflected in the retail price we pay. A tax, then, could price these items more in line with their true costs, with the revenues inuring to the municipalities that have to pay to landfill, incinerate or recycle them.

Another philosophy behind tax shifting is to move away from taxing ordinary, everyday "good" behavior (like earning an income) while taxing less desirable behavior. Germany, for example, implemented a tax reform in 1999 that lowered income taxes at the same time it raised energy taxes.

So far, the experiment has been successful, says J. Andrew Hoerner, sustainable economy program director at Redefining Progress, a non-profit organization in the U.S. that works on issues of sustainable economics. "In 44 economic studies of environmental tax reform in Europe," he says, "we basically concluded that the impact on the Gross Domestic Product is positive, the impact on employment is positive, and the effect on emissions is to reduce them."

While the scale of green tax shifting accounts for only three percent of tax revenues worldwide, the concept is gaining in popularity, especially in light of rising fuel costs the world over. In the U.S., according to Erich Pica, director of economic campaigns at Friends of the Earth, Vermont and California are exploring tax shifting, and many states offer a wide range of green tax rebates. A comprehensive listing of various state tax incentives rewarding those who buy renewable energy, drive hybrid cars and increase energy efficiency is available via the website of the Database of State Incentives for Renewable Energy.

CONTACTS: Redefining Progress, www.rprogress.org ; Friends of the Earth, www.foe.org ; Database of State Incentives for Renewable Energy, www.dsireusa.org .