The Center for Climate and Energy Solutions seeks to inform the design and implementation of federal policies that will significantly reduce greenhouse gas emissions. Drawing from its extensive peer-reviewed published works, in-house policy analyses, and tracking of current legislative proposals, the Center provides research, analysis, and recommendations to policymakers in Congress and the Executive Branch. Read More
U.S. Capitol Visitor Center
Room SVC 202-203
First St SE
Washington, DC 20515
Thursday, May 22, 2014
9:30 AM to 11:30 AM
Carbon pricing is widely viewed as a cost-effective way to reduce greenhouse gas emissions and encourage energy innovation. Different forms of carbon pricing are employed in a growing number of jurisdictions around the world. Experts join C2ES to explore options for expanding the use of carbon pricing in the United States -- in particular, as a way for states to implement upcoming federal standards to reduce carbon emissions from power plants.
Session I: Carbon Pricing - What are the Options?
ADELE MORRIS (presentation)
Policy Director, Climate and Energy Economics Project, Brookings Institution
APARNA MATHUR (presentation)
Resident Scholar, American Enterprise Institute
Vice President, Markets and Business Strategy, Center for Climate and Energy Solutions
Session II: Carbon Pricing Under the Clean Air Act
DALLAS BURTRAW (presentation)
Senior Fellow, Resources for the Future
DAVID BOOKBINDER (presentation)
Co-Founder, Element VI Consulting
BRIAN TURNER (presentation)
Deputy Executive Director for Policy and External Relations, California Public Utilities Commission
JON BREKKE (presentation)
Vice President, Membership and Energy Markets, Great River Energy
Senior Fellow, Center for Climate and Energy Solutions
Judging from the climate policy debate in Washington, one might conclude that carbon pricing is only a concept, or something being tried in Europe.
But in fact, 10 U.S. states (California and the Northeast states in the Regional Greenhouse Gas Initiative) have carbon trading programs. That means more than a quarter of the U.S. population lives in a state with a price on carbon. And a growing number of nations and provinces around the globe are turning to carbon pricing to cost-effectively reduce greenhouse gas emissions and encourage energy innovation.
On June 2, the Environmental Protection Agency (EPA) is expected to release its proposal to cut carbon dioxide (CO2) emissions from existing power plants. This proposal is a key element of President Obama’s Climate Action Plan, and will be critical to reducing U.S emissions of CO2, the most common greenhouse gas contributing to climate change.
The proposed rule, being developed under EPA’s authority under Section 111(d) of the Clean Air Act, could be groundbreaking for at least two reasons. First, it has the potential to drive major reductions in the highest emitting sector in the United States – the power sector – which is responsible for nearly 40 percent of U.S. carbon emissions. Second, EPA has indicated that the proposal will include a number of novel policy provisions to advance low-emitting generation and energy efficiency.
At C2ES, we’ll be looking for answers to four key questions as we read through EPA’s proposal. These questions are expanded upon in our new brief, Carbon Pollution Standards for Existing Power Plants: Key Challenges.
Summary of C2ES May 2014 comments on EPA’s proposed “Standards of Performance for Greenhouse Gas Emissions from New Stationary Sources: Electric Generating Units.”
On September 20, 2013, EPA proposed carbon dioxide emission standards for new power plants in implementing its authority under section of 111(b) of the Clean Air Act. More information on the proposed rule can be found here. On May 7, 2014 C2ES submitted formal comments to EPA in response to the proposed rule. You can read those comments here, which are summarized below.
Market-based measures preferred: A comprehensive market-based approach would be a more efficient and effective way of reducing greenhouse gas emissions. This would require congressional action, which is unlikely in the near term. In the absence of legislation, C2ES believes EPA must proceed using its existing authorities under the Clean Air Act.
Comprehensive energy strategy needed: The United States needs a comprehensive energy strategy that advances low-emitting uses of coal and natural gas, nuclear power, renewable energy, and efficiency. Carbon capture and storage (CCS) must be an element in this strategy.
Importance of a CCS requirement: EPA’s proposed rule would essentially require any new coal plant to employ CCS technology to capture approximately 40 percent (at minimum) of its carbon dioxide (CO2) emissions and store this captured CO2 underground. Due to the availability of inexpensive natural gas and other market factors, no new coal plants are projected in the near term. However, significant increases in natural gas prices may renew interest in new coal plants. If this occurs, a CCS requirement as proposed by EPA will ensure that these new coal plants do not exacerbate the challenge of reducing greenhouse gas emissions.
CCS experience: There are about 50 commercial-scale CCS projects in the power and industrial sectors in various stages of development across the globe, including 12 already in operation in a variety of industrial plants in the United States. All of these plants transfer the captured CO2 to enhanced oil recovery projects (CO2-EOR). CO2-EOR has been used in the United States for 40 years to coax additional production from existing oil wells while reliably storing CO2. Since this process attaches a value to captured CO2, it has been and will continue to be critical in the deployment of CCS in the power sector.
A CCS requirement is only part of the solution: There are several barriers to the deployment of CCS on new coal plants. For one, even if there were an economic reason for a power company to build a new coal plant, there would be no economic or regulatory reason to include CCS. Additionally, CCS technology is currently very expensive, especially compared to a new natural gas power plant. The proposed rule addresses the former problem, but not the latter. Federal financial support through tax credits, such as the Expanding Carbon Capture through Enhanced Oil Recovery Act of 2014, and/or grants is also critical to help technology companies and power providers gain experience and reduce the costs of CCS.
Flexibility mechanisms: In addition to a regulatory requirement and financial support, power companies need time to bring CCS to the point of being cost competitive with other low- and no-carbon power generating technologies. We therefore encourage EPA to consider provisions to allow for flexibility in compliance with the CCS requirement, such as a 20-year emissions averaging period or a few years of lead time before capture is required on plants built after the rule goes in place.
Natural gas standard: Since there are circumstances whereby it is necessary to run gas plants at less than peak efficiency to minimize the systematic emissions of the power system – for example, to back up intermittent renewable sources of electricity – we encourage EPA to ensure that the proposed standards for natural gas plants are achievable for new combined cycle plants under all likely operating conditions.
Relationship with standard for existing plants: The relationship between EPA’s greenhouse gas standard for new power plants and the standard for existing plants is currently unclear. We request that EPA provide guidance on this point to reduce uncertainty for power companies and state regulators.
Statement of Eileen Claussen
President, Center for Climate and Energy Solutions
May 6, 2014
The Third National Climate Assessment makes clearer than ever that climate change is taking a toll here and now, and that it poses growing risks to communities across the country.
Based on an exhaustive review of the latest scientific evidence, the report brings it home to Americans that we are not immune to threats posed by climate change to our infrastructure, water supplies, agriculture, ecosystems, and health.
The impacts vary from region to region – more competition for water in the arid West, more heavy downpours in the Northeast and Midwest, and rising sea levels fueling powerful storm surges along the Gulf Coast. What is clear is that every region faces impacts that could be costly and severe.
Motivated in part by the billions in damages caused by recent extreme weather events, many companies are starting to take action to build their climate resilience, as documented in our “Weathering the Storm” report.
Companies, communities, and individuals all need to better manage climate risks, both by reducing carbon emissions and by becoming more climate-resilient. Investments in mitigation will give our adaptation efforts a greater chance of success.
We agree with the NCA: More must be done across the public and private sectors to reduce -- and to safeguard ourselves against -- the rising risks of a warming planet.
Contact Laura Rehrmann, firstname.lastname@example.org or 703-516-0621
If carbon dioxide were a valuable commodity instead of a waste product, there would be a lot more incentive to capture it.
It turns out some oil producers already find carbon dioxide so useful, they’re willing to pay for it. In fact, they pay upwards of $30 per ton of CO2, which they then inject underground to coax oil from declining wells.
U.S. oil producers have been practicing carbon dioxide enhanced oil recovery (CO2-EOR) for four decades. Historically, they’ve relied mostly on CO2 from naturally occurring underground reservoirs. A better idea is to use man-made carbon emissions that would otherwise go into the atmosphere and contribute to climate change.