This has been a rough week in DC, but maybe we need some #energytwitter nerd threads to distract us. Today: why economy-wide GHG pricing doesn't work for the transportation sector, absent complementary policies.
1/ First, stipulate that "economy wide GHG pricing" is a supply/demand-set price per ton (or any other mechanism that treats all tons of GHG pollution as economically equivalent.)
2/ Suppose you buy a reciprocating engine to generate electricity. You run it 5 days/week, all year long, or 5x24x52 = 6,240 hours per year. When you make that investment, you plan on keeping it for 15 years before you have to replace it.
3/ Now suppose you also buy a reciprocating engine that in the form of your commuter vehicle (e.g., an IC engine). You have a 45 minute (each way) commute. You keep it for 15 years. That engine runs 45 minutes x 5 x 52 x 15 = 5,850 hours over the course of it's entire life.
4/ In other words, the same technology, but in one case used for power generation and in the other for transportation. In one mode you operate 6000 hours/yr, and in the other you operate it 6000 hours over 15 years.
5/ Since your fuel use is a function of operating hours (e.g., you don't burn gasoline while your car is in the garage), that means that fuel cost is ~15x as important to the investment thesis in a power plant as it is in a vehicle, all else equal.
6/ To put this in more personal terms: in the example above, if you average 35 mpg on your commute and get 27 mpg, you're spending $155/month on $4/gallon gas.
7/ I'll bet that's less than your monthly car + insurance payment. And note that if the price of gasoline moves by $1 / gallon, your differential cost is just $40/month.
8/ Which, by the way, is the same impact as a 25% change in fuel economy. The obvious implication being that in the (passenger) transpo sector, the economics of vehicle ownership are dominate by vehicle cost. In the heat & power sectors, the economics are dominated by fuel cost.
9/ Now let's bring that back to GHG pricing. GHG pricing, by definition is applied to the thing that emits greenhouse gases when burned - the fuel.
10/ Any price that is set at a high enough level to change the economics of the heat & power sectors & decarbonize will be too low to decarbonize transpo. And any price high enough for transpo will be way too high for H&P.
11/ Or, in economics parlance, the GHG price set in a supply/demand balanced paradigm will never clear at a high enough price to affect transportation economics.
12/ To be clear, we should - nay, MUST - put a price on GHG emissions. The point is just that decarbonizing the transportation sector will also require complementary policies that affect the price of the vehicle. I'm a big fan of feebates, personally: casten.house.gov/media/press-re…
13/ Another way to think of this for the financially inclined. How much more would you pay for a car that had zero fuel cost? e.g., in the example above, how much would you pay to save $150/month?
14/ If you are Homo Economicus rational and you are financing your car with a 7 year, 5% loan, you'd be willing to pay about $10,000 more for that car (since at anything above that level, your car payment increase > your fuel savings)
15/ Such a vehicle of course doesn't exist (Damn you thermodynamics!) but I think we can stipulate it would cost more than $10,000 more than Beck's current Hyundai.
16/ (Sorry for the obscure song reference - couldn't resist.) Point is, decarbonizing transportation requires policies to lower vehicle cost. Decarbonizing power and industrial sectors requires policies that price GHG emissions. /fin
Because there seems to be some confusion on this point. A $150/month car payment at 7 years would amortize a 5% loan. This is basic financial math, not a political statement on how much people should pay for fuel economy.
(Shorter version for those without any finance training: open Microsoft Excel on your computer. Click "help" and read up on the PMT function.)
• • •
Missing some Tweet in this thread? You can try to
force a refresh
I’m not wild about the cynicism here, partly because it blames all of Congress for things the Republican majority is jamming through, but more because it assumes that our founders actually created a Representative democracy. Some morning musings: washingtonpost.com/opinions/2025/…
1. To the first point, there are a host of issues that are squarely in the Democratic platform that regularly pass the House when Dems are in power but are blocked by Rs. Women’s rights, sensible gun control, campaign finance reform. All are supported by strong majorities.
2. There is no equivalent in today’s Republican platform but - and humor me on this before you blow up the mentions - that’s not entirely the Republican’s fault.
If you've tuned into CSPAN anytime in the last 2 hours and found yourself slapping the side of the TV, wondering why the screen isn't changing, here's what's happening...
1. Lots of us including yours truly got in really late last night to vote on a bill that would slash taxes for billionaires, kick 17 million people off their health insurance, force lots of kids, seniors and veterans to go hungry AND is really unpopular. It's an easy "no" vote.
2. BUT, Trump wants it. And he wants it before July 4th so that he can go out and tell the American people how much he hates veterans, seniors, children and other Americans who are not billionaires. And if Daddy wants something, Republicans will do it.
Because a number of folks keep asking, let’s talk about why the Democrats overwhelmingly voted to table Al Green’s motion to impeach Donald Trump. TL;DR: if you want Trump to be out of office ASAP, this was the right call, right now. Read on for the explanation…
1. Shortly after my wife and I got engaged we took a vacation to Wyoming. In the course of a horseback trip, our guide, upon learning of our upcoming nuptials, prior to offering me some advice said “I’ve been married 5 times, so I think I know a little something about women”.
2. In that vein, in my 6 years in Congress, I’ve seen 3 house impeachments (Trump 2x where I voted yes, Mayorkas 1x where I opposed). None were removed. So I think I know a little something about removing people from office…
This is not about the merits of Iran’s nuclear program. No president has the authority to bomb another country that does not pose an imminent threat to the US without the approval of Congress. This is an unambiguous impeachable offense.
I’m not saying we have the votes to impeach. I’m saying that you DO NOT do this without Congressional approval and if Johnson doesn’t grow a spine and learn to be a real boy tomorrow we have a BFing problem that puts our very Republic at risk.
To be clear, I do not dispute that Iran is a nuclear threat. That’s why Obama negotiated the JCPOA. But whether that is better resolved through diplomatic or military measures is not a decision that the executive branch has unilaterally.
This is the reason why our Constitution has an emoluments clause. And every day that the House GOP refuses to do any oversight of the Trump family's grift is another day that our Republic gets a little more fragile. Thread: ft.com/content/13a6ce…
1. I've been raising a stink about Sun and Trump ever since he fronted $30M to World Liberty Financial, Trump's shady AF defi platform. thedefiant.io/news/tokens/ju…
2. That "investment" triggered provisions in the initial World Liberty financing documents that allowed the Trump family to take cash out of the business. In exchange, Sun got a stake in tokens that cannot be sold and are controlled by the Trump family. Literally nothing.
Liz Truss lasted 49 days as Prime Minister. For context, that's less than 20% of the time that Kevin McCarthy lasted as speaker. And yet she - like him - thinks she has some wisdom to offer from that experience. (TL;DR: she's learned nothing.) washingtonpost.com/opinions/2025/…
As I said on the floor earlier this week, mediocre businesses hate competition for the same reason mediocre politicians hate DEI. Because they can't win in a meritocracy. But economic growth depends on competition - in labor and energy markets.
Under Bessent's watch, investors have fled US equities and treasuries for other countries. Saying that he should pro-growth is fine. But you should praise him (or Brexit supporters) for it in the same way you praise me for my ability to win the NBA slam dunk contest.