Book Review: Cracking the Carbon Code


In Cracking the Carbon Code, Terry Tamminen lays out his strategy for managing and reducing carbon emissions. He describes what California has done. He describes great strides that China has made. He describes his strategic meetings on the subject with President Obama prior to his election. He makes estimates on what the costs would be to regulate carbon dioxide (0.7 cents per kWH of electricity; 35 cents per gallon of transportation fuel). He talks about carbon markets that have sprung up around the world, and makes recommendations for how businesses can inventory and manage their emissions (e.g., he recommends that all businesses have a carbon manager to deal with each company’s carbon emissions).

Cracking the Carbon Code: The Key to Sustainable Profits in the New EconomyA Fundamental Disagreement

But I read this book against the background of a fundamental nagging problem as I see it: I don’t believe there is a viable global solution to carbon emissions in any case – and so far the data back me up on this. Further, the author is fairly confident that we will get some meaningful regulations in the U.S. that will put a price on carbon dioxide emissions. In that case, a lot of what Tamminen describes in the book may be realistic. But I don’t think we will actually see any sort of stringent regulations being passed into law. There is too much opposition on the Republican side, so what I expect to see is a continuation of the voluntary carbon markets like the Chicago Climate Exchange. But those are so minor in the context of overall carbon emissions that I see them having little impact.

While the book lays out strategic plans, the fact is that carbon emissions continue to rise. The reason is understandable; developing countries want to develop and they are using cheap energy to do so. That’s why in 2010 – despite all of the efforts to rein in carbon emissions – coal usage was at an all-time record high. And that’s why according to National Oceanic and Atmospheric Administration (NOAA) carbon emissions in the past decade were at their highest growth rate since NOAA started measuring them.

CO2 Emissions Are Rising Unabated

I have long believed that we are likely to consume most of our available fossil fuels. There will be some that are simply too expensive to extract, but even countries like Canada — where environmental awareness runs high — continue to develop their oil sands. Why? It is a boon to their economy, and if the U.S. doesn’t buy from them, China will. For the same reason, China, India, the U.S, and everyone else will continue to burn coal. Even if we could pass regulations with real teeth in the U.S. that could stop coal-fired power plants from being built — fulfilling a campaign promise of President Obama — it won’t make any difference. The developing world will continue to develop.

China and their consumption of 2 barrels of oil per person sits in stark contrast to the U.S. and our 23 barrels of consumption per year. While we won’t produce enough oil to allow them to consume what the U.S. consumes, China is busy securing fossil fuel resources around the world. They will continue to increase their fossil fuel consumption — and thus their carbon emissions. That is a very big part of the reason that the data show that this is a losing battle:

Greenhouse gas emissions hit record highs

Despite 20 years of effort, greenhouse gas emissions are going up instead of down, hitting record highs as climate negotiators gather to debate a new global warming accord.

The new report by the International Energy Agency showing high emissions from fossil fuels is one of several pieces of bad news facing delegates from about 180 countries heading to Bonn, Germany, for two weeks of talks beginning Monday.

And then there’s of course this:

Despite Various Attempts at Regulating CO2 Emissions, the Climb has been Unabated

Can you find the spot on the graph where the Kyoto Protocol was enacted? Neither can I.

There may be some local action that slows down the rate at which fossil resources are used, but as energy becomes more expensive pressure will mount to use those resources. This is why President Obama has waffled over offshore drilling. It is why the world will eventually start building more nuclear plants. If the choice is coal, oil, and nuclear power – or much higher energy prices – people are going to vote for candidates who promise to keep their energy bills in check.

One example of legislation that I expect to see watered down is Section 526 of the Energy Independence and Security Act of 2007 (EISA). This provision prohibits federal agencies from entering into contracts for transportation fuels with greater life-cycle greenhouse gas emissions than conventional fuel (such as synthetic fuels from coal). I have often said that it is simply a matter of oil prices before Section 526 is repealed. I am not saying that this is right or wrong, I just believe it is what will happen. Even today Section 526 is under attack, and I believe it will be repealed before 2020.

Specific Criticisms

Beyond the general disagreement with where CO2 regulations and emissions are headed, there were some nitpicks I had with the book.

In the forward by Arnold Schwarzenegger, he states that there is enough hydrogen in the water discharged by sewage treatment plants to power our cars, trucks, trains, and airplanes. I have no idea what that is supposed to mean.

The author spent a lot of time covering the great strides that China is making in cutting their carbon emissions. But that sort of glosses over the fact that China’s carbon emissions are growing rapidly. I had the impression here of the old saying “In theory, there is no difference between theory and reality. In reality, there is.” In theory China is doing a lot to cut carbon emissions. Meanwhile, they continue to build coal-fired power plants as quickly as they can, and so their carbon emissions were at an all-time record high in 2010.

In discussing the economics of some of the options for reducing one’s carbon footprint, Tamminen often treated state and federal tax money as simply a free pot money for everyone. Economic considerations were not really important in many cases because of the “free money.”

At one point I felt like he was playing games with the carbon measurement. It was essentially “If your carbon emissions are increasing, find a different metric for measuring them: Use per capita emissions if that works for you.” Thus, for a country with a high population growth rate, per capita emissions might be decreasing, while overall carbon emissions are in actually increasing rapidly.

In the book Tamminen incorrectly attributes Verasun’s bankruptcy to their high carbon footprint. In fact, that had nothing to do with what caused Verasun’s bankruptcy, and those plants continue to operate today under different management.

The book compares the trading scheme for sulfur that dramatically cut sulfur emissions in coal-fired power plants to a possible carbon trading scheme that could do the same. I don’t think these things are comparable for two reasons. One is that sulfur is washed out of the air by rain (and forms acid rain). That means that sulfur emissions in China aren’t going to result in a global increase in atmospheric sulfur. That is not the case with carbon dioxide. Second is that the point sources for sulfur were predominantly coal-fired power plants, and therefore pollution-control equipment could be concentrated there. There are far more point sources for carbon dioxide emissions.


If someone were to ask for a recommendation of a book that outlines steps for managing and lowering carbon emissions, I could recommend this book. The book does deliver on that account. There is a great deal of focus on measuring the carbon intensity of your business. The book covered that topic in enough detail that it could have been subtitled “How to do a Life Cycle Assessment.” But my overall assessment of the book is that it is idealistic relative to what can be achieved, and basically ignores the real-world data that shows that the situation is not improving.

However — and I do want to stress this point — I don’t mean to suggest that Tamminen is wasting his time. If the metric for success is global carbon emissions, then I do think efforts aimed at this will fail. On the other hand, many steps like improving energy efficiency are worthwhile for other reasons; for instance improving efficiency reduces susceptibility to energy price shocks. And that is the case with many steps that one would take to reduce their carbon footprint; there are other benefits that I think will end up being primary benefits.