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Carbon-Free, Fast by Dennis Peterson

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An aggressive approach that doesn't break the bank



To rapidly decarbonize, we need early retirement of fossil plants. It's not enough to simply build clean energy when the old plants finally expire.To motivate early retirement, we need the total levelized cost of the clean energy plant to be significantly lower than the fuel cost of the fossil plant. We also need the construction time to be short, and the capital cost attainable. If we do this, then a plant owner can profit by halting fuel purchases and replacing them with loan payments on the new plant.

There are two ways to do this: invent new clean energy technology that's inherently cheap, or raise the cost of fuel with a carbon price. This proposal advocates both.

For a carbon price, we advocate fee and dividend, with a fee high enough to fund universal basic income, which many people advocate for reasons apart from climate. While a high carbon fee will raise the price of products, most Americans use less energy than average (the average being higher than the median) and will come out ahead. The very poor purchase little and will benefit the most.

Costs will increase as utilities spend money on energy replacements. Finding the cheapest alternatives possible will help. Solar and wind costs are dropping, but to run civilization on them we'd also need overproduction, storage, and long-distance transmission, all expensive. By developing the most economical designs for advanced fission and fusion, we can take it the rest of the way. Some technologies may end up being cheaper than fuel costs even apart from a carbon fee.

We also must consider transportation. For most passenger ground travel (and replacing some air), Personal Rapid Transit grids are very cheap and efficient. A shared fleet of self-driving electric cars will help remove most need for personal vehicles.

Some techniques may remove CO2 from the atmosphere more cheaply than we can decarbonize. A cryptocurrency scheme can incentivize their development until a practical method is established.

Category of the Action

Integrated action plan for the world as a whole

What actions do you propose?

For utilities to choose clean power sources for new plants, the clean sources have to be cheaper than fossil sources, either due to advancing technology or carbon prices. However, we'll still have to wait for old plants to reach end of life. For accelerated transition, we have to do better: the total levelized cost of clean power has to be cheaper than the variable cost (mainly fuel) of fossil plants.

For example, fuel cost for a coal plant is about $.03/kWh. If a breakthrough power source were available with a total levelized cost of $.02/kWh, then the plant owner could profit an extra penny per kWh by halting fuel purchases and making payments on the new technology. The same is true if a carbon price raises the fuel cost above the total cost of clean energy.

Coal emits about a kilogram CO2 per kWh. Advanced nuclear costs about $.10/kWh. To begin accelerated retirement, we would need a carbon price adding $.07/kWh to the cost of fuel, or $70/tonne CO2.

Capital and construction time are additional factors. If I have to make payments on a loan for five years before I can shut down my coal plant, I can't afford it unless I have enough excess capital and/or profits to make the payments.

Therefore, for maximum transition of the electric grid we should focus on:

  • a carbon price well over $70/tonne, the higher the better,
  • cheap, clean power sources in small increments (wind/solar and modular nuclear reactors are more helpful than large reactors and dams), and
  • potential breakthrough technologies that could result in clean energy cheaper than $.03/kWh, in case we fail to get a carbon price.


Operators of fossil plants may find it difficult to transition to wind/solar. They'd need to learn to deal with variable output, and would probably have to obtain land. On the other hand a compact, turnkey fission or fusion plant could be installed at the same location, and potentially even use the same turbines.

How to attain high carbon prices

Most discussion of carbon pricing focuses on its cost. Meanwhile, an entirely separate discussion proposes giving a fixed basic income to every citizen, without means-testing. That money has to come from somewhere. Why not carbon fees?

With a focus on cost, meaningful carbon fees seem unattainable. $10/ton carbon is considered a good start, and $100/ton fairly high. But on the other side, basic income proponents suggest we pay $10,000 per year to every citizen. With average per-capita emissions of 20 tons CO2 per person, that amounts to a fee per ton of CO2 of $500, or $1500 per ton carbon, which is higher than even the most aggressive carbon fees proposed.

And while nations balk at setting carbon fees unless all other nations do the same, nobody thinks that way about basic income. We don't need an international agreement.

Over the long term, phasing out fossil emissions means losing the revenue source for basic income. But at the same time, increased automation will be dramatically improving our productivity. As long as climate impacts aren't wrecking the economy, it should be possible to find new revenue sources. Basically, tax the robots, one way or another.


It may sometimes be cheaper to absorb CO2 from the atmosphere, using techniques like biochar, than to replace production. If a good, economical system for absorbing atmospheric carbon emerges, we could start allowing companies to submit proof of carbon absorption in lieu of fees.

To kick things off, this proposal advocates a carbon absorption incentive using cryptocurrency. Legislation would be wonderful, but unfortunately will take time to achieve. We need the politicians for carbon fees, but to reward people for absorbing carbon, we don't have to wait. 

Bitcoin and its successors have proven that if early adopters get big rewards, it's possible to bootstrap a new currency, even with nothing backing it. The currency is initially adopted by speculators, and as it gains value it is gradually used more for commerce, ultimately being "backed" by all the goods you can buy with it.

Therefore, it should be possible to motivate carbon offsets by creating a new cryptocurrency, and issuing it to people who offset carbon. Issue a total amount of currency in proportion to total carbon emissions, and divide it proportionally among people who voluntarily buy carbon offsets.


Of course, the transportation sector is another big factor. Electric cars are the popular solution, but would require a dramatic expansion of electric power supply. For extremely efficient transportation, we can use personal rapid transit. Converting cities to use PRT grids would reduce U.S. transportation CO2 output by 50%, and the grids are ten times cheaper than normal public transit. A prototype is currently being built in Israel. 

Where liquid fuels are necessary, it may be possible to generate them from CO2 in seawater or air. The U.S. Navy has made recent progress on this front. Additional possibilities are in the Cycling Carbon proposal. 

Where will these actions be taken?

Israel is building the first PRT prototype, and plans to roll it out city-wide in Tel Aviv. Once it's proven, it could be installed by any city that doesn't already have an effective subway system.

Nuclear fission research is hamstrung in the U.S. by inflexible regulation, but China and Russia are doing substantial work with advanced reactors. China has a major program developing molten salt reactors and other designs. Russia has a successful fast reactor already in production. GE is hoping to sell the PRISM, based on the U.S.-developed Integral Fast Reactor, to China, as well as to the U.K. to burn up their plutonium stockpile. There's also a startup company in Canada hoping to get a small molten salt reactor commercialized within a decade.

Private funding for alternative fusion is picking up in the U.S. For the smallest of these projects there was even a fairly successful crowdfunding. Many projects still struggle for funds, and the DOE is focused on ITER, which isn't likely to help much with climate. We can do better.

Any advanced country could implement basic income funded by carbon fees. Switzerland is probably the closest to some form of basic income. British Columbia implemented a slightly different revenue-neutral carbon fee several years ago, and it's proven effective and popular.

Technology prizes and Carboncoin are based on cryptocurrencies and would be global, like Bitcoin.

Who will take these actions?

Software developers can start, by building the cryptocurrency systems and Carbon Income site.

Activists who support basic income, climate action, and democratic reform can band together to promote Carbon Income. Maybe some politicians could join in.

Scientists and engineers can work on technologies like fusion and energy storage (perhaps assisted by technology prizes), and methods of removing CO2 from the atmosphere (which could be paid for by Climatecoin). 

Gamblers can bet against the technology prizes, collecting winnings for all those that fail. Altruists can bet in their favor.

Farmers can earn Climatecoins with biochar or no-till farming. 

City governments can install PRT grids.

What are key benefits?

Basic Income is advocated by many people on both the left and right. From the right's perspective, it would let us eliminate many inefficient welfare systems, end the "welfare trap" by which people on means-tested welfare programs can end up worse off if they get a low-paying job, and give more decision-making power to individuals instead of bureaucrats. From the left's perspective, it provides an efficient safety net for everyone, reduces wealth inequality, and prevents the radical inequality that could result from several more decades of job losses due to automation.

Personal Rapid Transit would be a fast, cheap, and convenient way to get around.

Breakthrough energy like fusion could give us cheap, highly abundant energy, which could grow the economy and allow side benefits including cheap desalination and cheap recycling of pollutants to their constituent elements.With cheap desalination, we could potentially reforest the Sahara, resulting in large reduction in ambient CO2.

What are the proposal’s costs?

This proposal uses a very high carbon fee, but all that money would be returned to the public. This carbon dividend could also replace some existing means-tested welfare programs, giving the public a net gain.

However the true picture is not that rosy, because the whole point of the fee is to motivate investments in efficiency and carbon-free energy sources. The cost of these new systems will determine the overall cost of this plan. We can't decarbonize without spending money on this, and the sooner we do it, the less financial damage we'll take from climate impacts. We can do it at lowest cost by letting the market choose what systems to install, and putting serious effort into developing new low-cost energy sources.

PRT grids are much cheaper than light rail (at $10 million per mile of track), and in combination with a fleet of shared electric cars could save the public money by reducing the need for personal vehicles.

Time line

Climatecoin, Crowdsourced Technology Prizes, and a website allowing the general public to calculate their net financial impact from Carbon Income could be built within a year.

Politics are difficult to predict, but if we can gain popular support for Carbon Income and various democratic reforms, perhaps Carbon Income could be enacted within a decade, and phased in over the next decade or two.

China is attempting to commercialize molten salt reactors within a decade. The PRISM, a small Integral Fast Reactor, is ready to be built now. Commercial fusion is difficult to predict exactly...depending on what we spend and how lucky we are, it could become available any time between 2020 and 2050.

Personal Rapid Transit is being prototyped already, and if successful could begin mass deployment within a decade.


Personal Rapid Transit grids

Argues that the U.S. could cheaply eliminate half of transportation emissions by using PRT grids. Tracks would be in a grid a mile apart, for an average walking distance of a quarter mile. We can add self-driving electric cars for rainy days, people with cargo, etc. This would be a relatively easy application of self-driving technology.

One potential major expense for PRT grids is space for parking the pods at night. This can be remedied by placing all stations on the east-west tracks, and closing down alternating tracks when ridership is low. This provides a quarter of total track space for parking, with minor impact on riding distance. If lower ridership allows higher speeds, trip time may not be affected at all.

The same technology can provide higher-speed routes between cities.

Cycling Carbon

Advocates advanced nuclear technologies, fee-and-dividend, methods of absorbing CO2 and potentially converting it to liquid fuels.

It's the 21st Century. Where's My Fusion Reactor?

Advocates fusion energy research, particularly of alternative approaches with potentially nearer-term horizons and lower cost than ITER. Fusion has progressed exponentially and performs 10,000 times better now than in 1970. 

Integral Fast Reactors Can Power The Planet

The Integral Fast Reactor would produce very little nuclear waste, which would be back to the radioactivity of the original ore in a couple centuries. It would be quite safe, require little fuel, and has the potential for low cost. GE-Hitachi has a variant ready for production.


A cryptocurrency that issues a coins for tonnes CO2 emitted, and grants them to people who pay to offset those emissions. Cryptocurrencies are able to bootstrap value if high rewards are offered to early adopters, so this may be able to motivate substantial offsets, as well as provide people with a financial interest in reducing emissions to lower inflation in the currency. It's a way to begin paying for climate action without waiting for governments.

ClimateCoin cannot solve the problem on its own. Even if it's very successful, the amount of annual sequestration it can pay for is only equal to the value of new currency it issues each year. But it's a start, while we work to get politicians on board.

See the ClimateCoin proposal for technological details. Bitcoin has proven the security of cryptocurrency and achieved modest scalability. Now next-generation currency platforms are taking it a step further, and allowing easier implementation.

Basic Carbon and Carbon Income

Since the poor emit much less CO2 than average, they would profit from a carbon dividend. Take advantage of this by setting the carbon fee high enough so the dividend serves as "basic income." Aside from just making sense, this approach could build political strength by joining forces.

The Little Engine That Could: Carbon Fee and Dividend

Thorough explanation of the fee-and-dividend idea, though with a lower fee than proposed here.

Crowdsourced Technology Prizes

Crowdsources technology prizes similar to the Ansari X-Prize. That prize multiplied its funding by a factor of ten by buying insurance against the possibility of it being paid out. This proposal advocates crowdsourcing the same economics, using a distributed cryptocurrency. The X-Prize motivated $100 million in total R&D from donations of about $1 million.

Natural Milling and Delivery of Olivine

Interesting new proposal for low-energy carbon absorption using olivine, which could be funded by ClimateCoin.

Carbon-negative biochar economies

Small-scale biochar, ideal as a carbon absorption method for Climatecoin. Also proposes the related idea of backing local currencies with biochar.

Carbon Rights

Includes a variety of other carbon-absorption methods.

How do these sub-proposals fit together?

Carbon Income provides the economic impetus for a host of changes including efficiency improvements and energy supply replacement. It's very similar to Fee-and-Dividend (but more aggressive).

Carbon Income makes both renewables and nuclear competitive enough to motivate early retirement of fossil plants. Wind/solar are available now, rapidly dropping in cost, and have plenty of room to grow. But it would be challenging to run civilization on them. Hydro is nearing geographic limits. Nuclear can take us the rest of the way. 

Personal Rapid Transit reduces the energy required for transportation by 50%. The less clean energy we have to build, the easier our task.

Alternative fusion research is very cheap compared to our overall expenditures, and has the potential to reduce clean energy costs dramatically, accelerating progress. If we don't manage to get a carbon fee, it's a last-ditch backup that could make fossil obsolete anyway...if we do the research, and we're lucky.

Crowdsourced Technology Prizes could help fund fusion and other high-risk, high-reward research.

Carboncoin gives us a quick way to start funding carbon offsets and direct carbon absorption techniques like biochar. If a cheap, reliable, auditable method emerges, we could take it further by diverting some carbon fees to fund it.

Explanation of model inputs

The model chosen for this proposal is the EMF27 450ppm plan, with increased efficiency, using all noncarbon energy sources.

450 ppm is justified mainly by the very high carbon fees advocated as part of Carbon Income. According to Nordhaus in A Question of Balance (p.91), fees lower than those, enacted over a longer period of time, would restrict CO2 to a 1.5x increase, or less than 450ppm. (However, the Nordhaus scenario assumes a global fee beginning in 2005.)

Increased efficiency is motivated by the carbon price, and is also attained in the transportation sector via personal rapid transit grids.

EnROADS could not be used primarily because it limits carbon fees to $100/ton CO2.

As a side note: while EnROADS suggests that energy breakthroughs have very limited effect, a look at the documentation (pdf, starting p. 57) shows that it doesn't account for the possibility of early replacement of fossil fuel plants by their owners, in the event of a breakthrough energy source with levelized cost cheaper than fossil fuel cost.

This proposal doesn't rely on such breakthroughs happening, but does put some effort into attempting them. High carbon fees will accelerate early retirement even without breakthroughs (and EnROADS does account for that, though limited to that $100/ton fee).


See the referenced proposals.