Climate Compass Blog

Canadian hydropower can help states achieve carbon-cutting goals

About 10 percent of Canadian electricity, much of it generated from hydropower, is exported to the United States. With Canada expected to expand its hydropower capacity in coming years, could some states take advantage of this non-emitting resource to meet Clean Power Plan goals to reduce carbon emissions?

A new C2ES report, Canadian Hydropower and the Clean Power Plan, explores this question, including how the proposed plan would need to be adjusted, and how select states could benefit.

While U.S. hydropower is not expected to significantly expand in the near future, hydropower is growing in Canada, where it already supplies 60 percent of the country’s electricity. More than 5,500 megawatts (MW), enough to power about 2.4 million homes, have been added in the last decade. An additional 11,000 MW is either under construction, nearing the construction phase, or has been announced. To put this in perspective, Canada’s entire electricity generation system is about 128,000 MW.

Hydropower is not without challenges. Damming rivers and creating reservoirs causes environmental harm to ecosystems and migratory fish and displaces communities, although project developers have been working to reduce these impacts.

In their formal comments to the Environmental Protection Agency (EPA), several state environmental agencies, including Minnesota, Wisconsin and Michigan, cited the benefits of Canadian hydropower, including its near-zero emissions. Hydropower is cost competitive and can be quickly and reliably delivered. This last quality is especially valuable because it allows hydropower to complement intermittent renewable resources like solar and wind power.

Minnesota and Manitoba already complement each other this way. Canadian hydropower electricity flows south when Minnesota’s wind turbines are dormant, and Minnesota’s wind electricity flows north when supply exceeds local demand, allowing Manitoba’s reservoirs to replenish.

More than a dozen U.S. states import a significant amount of Canadian hydropower. Importing hydropower from even a modestly sized new Canadian project (250 MW) could help a state bridge the gap between its current and proposed 2030 carbon emission rate. A hypothetical project of this size could move Minnesota about 19 percent of the way toward its proposed 2030 goal, or Massachusetts about 32 percent of the way. Due to the availability of Renewable Energy Certificate (REC) trading across the United States and many provinces, a state does not even have to be physically connected to Canada’s grid to take advantage of the zero-emission quality of its hydropower.

For states to take advantage of this resource as they implement the Clean Power Plan, EPA must clarify how imported hydropower can be factored into the calculation of state emission rates. Clarifying whether imported hydropower can be treated similarly to domestic hydropower would reduce uncertainty. EPA would also have to work with states to ensure imported hydropower is not double counted for compliance purposes and that it displaces fossil electricity to receive full credit. As discussed in our report, the existing policy and market environment can already address these concerns.

Once the Clean Power Plan is finalized this summer, states would be responsible for ensuring their own plans clearly establish how imported hydropower would be used to help achieve their goals. One policy option that would facilitate Canadian hydropower imports is to convert rate-based targets (lbs. CO2 / MWh) to mass-based targets (tons CO2 / year). Under this approach, any measure that displaces fossil generation, including hydropower from both new and existing plants, would bring a state closer to its target.

As proposed, the Clean Power Plan already offers states a wealth of policy options to achieve emission reductions. Clarifying that imported hydropower can serve as another measure in states’ policy toolbox could further add to the plan’s flexibility.

States should explore carbon pricing to encourage clean power

C2ES President Bob Perciasepe moderates a Solutions Forum panel with (l to r): Martha Rudolph, Director of Environmental Programs, Colorado Department of Public Health & Environment; David Paylor, Director, Virginia Department of Environmental Quality; and Janet Coit, Director, Rhode Island Department of Environmental Management.

States will have tremendous flexibility to choose how to reduce their carbon emissions under the Clean Power Plan, and one idea they should explore is putting a price on carbon.

The Center for Climate and Energy Solutions (C2ES) recently brought together legal and economic experts, state environmental directors, and business leaders to explore the potential to use market mechanisms to reduce these damaging emissions efficiently and cost-effectively.

Here are three key insights from this Solutions Forum:

States can learn from each other on carbon pricing

As discussed at our C2ES Solutions Forum on Carbon Pricing & Clean Power, both power companies and states see advantages to using carbon pricing, such as a cap-and-trade program, to reduce carbon emissions under the Clean Power Plan.

For companies, rather than being forced into specific measures to cut emissions, a carbon price harnesses market innovation to find the most cost-effective solutions. Meanwhile, states can draw on the experiences of existing cap-and-trade programs in California and the nine-state Regional Greenhouse Gas Initiative (RGGI).

While the advantages of market-based approaches are widely acknowledged, some stakeholders are concerned that the Environmental Protection Agency’s (EPA) timeline would make it challenging to develop a cap-and-trade program. EPA proposes giving states until summer 2016 to submit a plan. States could apply for a one-year extension or, if submitting a plan as part of a multistate collaboration, a two-year extension.

How culture shapes the climate change debate

I have an in-law who is, shall we say, rather skeptical about climate change. Any discussion on the topic usually begins with some contrarian science theory that he heard on one of his favorite talk shows (e.g. sun spots, deep ocean magma, urban heat islands), and then devolves from there.

Why do some Americans believe the antithesis of the scientific consensus on issues like climate change?

This topic is explored by Professor Andy Hoffman of the University of Michigan in his new book, How Culture Shapes the Climate Change Debate. As suggested by the title, Hoffman’s thesis – a distillation of considerable research from social scientists over the past several years – is that the public’s understanding of climate change, like other historically contentious issues such as evolution, acid rain, the ozone hole, and genetically modified food – is as much a cultural issue as a scientific one.

One of the key arguments is that a scientific consensus does not necessarily reflect a “social consensus,” the latter being something that the majority of society would consider to be true.  For instance, the scientific consensus that cigarettes harm human health emerged decades before the social consensus emerged.

World economy grew, but carbon emissions didn't

In a sign that low-carbon policies may finally be gaining traction, global carbon dioxide (CO2) emissions leveled off last year even while the world economy grew.

Preliminary data from the International Energy Agency (IEA) indicate that energy-related CO2 emissions (from burning fossil fuels for electricity, transportation, industry, space heating and so on) remained unchanged from the previous year at 32.3 billion metric tons. Meanwhile, economic growth increased 3.3 percent.

One year’s data doesn’t necessarily translate into a trend. Even with much stronger efforts, it will be some time before we can truly announce that we have turned the corner on reducing carbon dioxide emissions. But 2014 is notable in that it’s the first time since the IEA was established in the early 1970s that a levelling off or a drop in global carbon emissions didn’t accompany an economic downtown.

Historically, energy-related CO2 emissions have moved in lockstep with economic growth. They’re being decoupled due to policy changes and market forces affecting two factors – energy intensity and fuel mix – both in China and in the developed economies.