Bill WolfePSEG Duck Island (Hamilton, NJ) coal plantA study by Tepper School of Business at Carnegie Mellon University found that establishing a price for carbon emissions would reduce energy demand (full disclosure – my kids attend Tepper and CMU).
The study explores a “price as low as $35 per metric ton of CO2“. By way of comparison, NJ’s global warming policies are based on a $2 per ton cost (under the NJ “Regional Green House Gas Initiative (RGGI) law signed by Governor Corzine). See: http://www.njleg.state.nj.us/2006/Bills/PL07/340_.PDF
If $35 per ton would yield a 10% reduction in emissions, it’s pretty clear that NJ’s RGGI $2 per ton won’t do very much.
Yet compliance with NJ’s legislatively mandated greenhouse gas emissions reduction goals will require dramatic reductions – 20% by 2020 and 80% by the year 2050. See “Global Warming Response Act” P.L. 2007, c.112 http://www.njleg.state.nj.us/2006/Bills/PL07/112_.PDF
Here is press release on the study:
CO2 PRICING STUDY REVEALS CONSUMPTION EFFICIENCIES
ESTABLISHING A PRICE FOR CARBON EMISSIONS IN THE U.S. WOULD SPUR IMMEDIATE REDUCTIONS IN ENERGY CONSUMPTION AND MORE EFFICIENT USE OF POWER GENERATORS, STUDY BY CARNEGIE MELLON RESEARCHERS SHOWS
Simulation of Short-Term Effects of $35 Cost Per Metric Ton of CO2 Indicates Up To Ten Percent Cut in Emissions Possible
http://www.tepper.cmu.edu/news-multimedia/tepper-multimedia/tepper-stories/co2-pricing-study-reveals-consumption-efficiencies/index.aspx
As recent judicial, political and industry developments appear to continue to move the United States toward a mandatory price for carbon dioxide (CO2) emissions, new analysis by Carnegie Mellon University researchers provides the clearest picture yet of the possible short-term effects of establishing such a cost. The research, published recently by Environmental Science & Technology, suggests that even a modest price would, almost immediately, result in up to 10 percent reductions in emission levels by prompting changes in both power company investments and consumer behavior.
Simulating the impact of a price on CO2 emissions from the existing fleet of U.S. power plants in three regions using marginal costs for generators and hourly electricity load data from 2006, the researchers considered the short-term effects on electricity price and demand even before any new, more efficient generation facilities could be built. They identified that a price as low as $35 per metric ton of CO2 would likely cause a reduction of consumer electricity use, as well as a change by grid operators in the order in which generators are economically dispatched, depending on their emissions levels and marginal fuel prices.
In fact, the researchers predict that as much as ten percent reduction in emissions would be the result, although the level of reduction is heavily dependent upon the availability of alternative and less carbon-intensive power generation technologies in a particular region. For example, facilities in the Northeast and Midwest would see a higher drop in emissions resulting from the price, while emissions in Texas – with relatively larger numbers of natural gas facilities – would be affected significantly less.
While this study predicts the impact and demand elasticity for an instantaneous price increase, the researchers believe that any price imposed will likely phased in gradually or done via a cap-and-trade system. “Any price structure for emissions would hopefully have a clear timetable that would allow utilities and consumers to make informed investment decisions,” said M. Granger Morgan, Lord Chair Professor in Engineering in the Department of Engineering and Public Policy at Carnegie Mellon. “In addition to the changes in resource allocation by utilities, consumers would pay more attention to their energy consumption or switch to more energy efficient appliances.”
In addition, the study supports and expands on prior research about how a CO2 emissions price would spur greater investment by power generators in new, more efficient technologies. “Our findings indicate that significant reductions in CO2 can and would be observed in the near-term, even before more efficient power generation technologies are deployed on a wide scale,” said Jay Apt, associate research professor at the Tepper School of Business at Carnegie Mellon and co-author of the study.
The study, titled “Short Run Effects of a Price on Carbon Dioxide Emissions from U.S. Electric Generators,” appeared in the May 1st issue of Environmental Science & Technology. The research was by Adam Newcomer, a PhD candidate in the department of Engineering and Public Policy; along with Professors Apt and Morgan, Professor Lester B. Lave of the Tepper School of Business at Carnegie Mellon; and Professor Seth Blumsack of Penn State University. The research was supported by the Carnegie Mellon Electricity Industry Center, established in August 2001 to work with industry, government and other stakeholders to address the strategic problems of the electricity industry, making it more competitive and its systems more reliable.
Bill WolfeI am posting this in response to Steve Adubato’s suggestion that the debate on off shore drilling should begin now!
The best way to avoid the politicization and manipulation of the debate that Steve rightly criticizes is with science based information, so I was suprised that Steve’s post failed to guide readers to good information.See: http://blog.nj.com/steveadubato/2008/08/let_offshore_drilling_debate_b.html
In the 2005 Energy Policy Act, Congress directed the federal Minerals Management Service (MMS) to conduct an inventory of off shore oil and gas resources.
For readers interested in cutting through the politics, here is a link to that Report:
http://www.mms.gov/PDFs/2005EPAct/InventoryRTC.pdf
I don’t have time today to lay out an analysis, but would suggest the following in approaching this Report:
1) go to page 65 and read the caveats before reading the Report – note that inventory is based on “undiscovered” oil and gas deposits – that’s right, totally imaginary resources.
2) Note how little oil and gas are allegedly located off the Atlantic coast. Be sure to note ZERO “known” oil and gas reserves found on page vii of the Executive Summary, and compare this with the “undiscovered” imaginary numbers.
3) compare the amount of energy allegedly located off shore with current consumption rates (this will take some work);
4) Consider economic reality – some energy will be just too costly to recover, even with oil at $200 per barrel. The Report explicitly rejects any economic, access, or environmental considerations.
5) Then after you do all this, ask: what is the off shore wind energy potential? Why aren’t the capacity of wind, wave and solar alternative energy sources “inventoried”.
Bottom line: The Republicans are demagoguing an issue that – at best – could meet maybe 1-2% of total US annual oil/gas demand, but not until over 10 years from now. Drilling – under best case scenarios – would have virtually no measurable impact on FUTURE gasoline prices at the pump, and NO IMPACT on current prices. This is the only “issue” the Republicans have. Pathetic.
(btw, any reduction in the price of a barrel of oil alleged to have resulted from Bush’s announcement of lifting the off shore drilling moratorium BY DEFINITION would be a result of market speculation).
WHERE the HELL ARE THE DEMOCRATS?
All for now.
(ps – I tried to post this information as a comment on Steve’s post but was blocked. Nice, especially for someone seeking “debate”.)
[8/23/08 Update: Menendez: Drilling off Jersey “doesn’t make sense
http://www.app.com/apps/pbcs.dll/article?AID=200880823010
Bill Wolfe
Corzine signs modest legislation that shows Trenton not serious about global warming
“… In recent years, our politics has tended toward incremental proposals made up of small policies designed to avoid offending special interests, alternating with occasional baby steps in the right direction. Our democracy has become sclerotic at a time when these crises require boldness.”
Al Gore
http://comment-blog.advance.net/cgi-bin/mte/mt-search.cgi?tag=Al%20Gore&blog_id=2882
President Bush has been criticized for the practice of issuing “signing statements” that are appended to bills passed by Congress. These statements basically say he reserves the right to violate laws passed by Congress. Bush takes the extreme position that he has “inherent powers” as “Commander in Chief” that can not be limited by Congress.
Former Boston Globe reporter Charlie Savage won the 2007 Pulitzer Prize for reporting on how Bush had gutted hundreds of laws by issuing signing statements, most recently to allow Bush to bypass laws banning torture and imposing conditions on appropriations of Iraq war funding. See: http://www.boston.com/news/specials/savage_signing_statements/
Because Congress speaks for the people, the Bush view of Presidential power is a fatal blow to democratic principles and the constitutional scheme of separation of powers.
Here in progressive NJ, we respect the Constitution – if not democratic principle – so we reject the radical Bush doctrine.
But we gut law and over-ride democratic principle in more subtle ways – the old fashioned way, so to speak.
In contrast to Presidential “signing statements”, Legislative intent statements are perfectly valid. In fact, a legislative Committee that releases a bill often will issue a Statement regarding the intent of the bill. At times, clever technical legislative drafting, backed by a Statement, can essentially gut a law before it even becomes law.
This rather cynical practice allows the bill’s sponsors to claim political credit for championing a popular cause, but without really doing much of anything (precisely the “baby steps” to avoid offending special interests that Al Gore righteously rails against).
Follow along for a recent case in point.
Polls of NJ voters show that solutions to global warming are an incredibly popular issue. Current NJ law – the 2007 Global Warming Response Act – calls for deep reductions in green house gas emissions. Accordingly, Governor Corzine and an overwhelming majority of Trenton legislators support taking steps to reduce emissions (or at least creating the appearance of doing so!).
Last week, Govenror Corzine quietly (i.e. no individual bill press release or public event was held) signed new legislation (A1559/S1788) related to global warming. For Corzine’s press release (certainly no signing statement) See: http://www.nj.gov/governor/news/news/2008/approved/20080805.html
Killing two environmental holy grails with one stone, the new law would allow towns to consider “green buildings” and “environmental sustainability” in the municipal Master Plan.
Sounds HUGE and GREAT right? Global warming AND sustainable development addressed in the same bill?
Ahh, but when one actually reads the bill and the Legislative statement, one finds extremely small potatoes.
First, the bill merely enables enlightened towns to act (avoiding the now taboo practice of a “State mandate”, or what we used to call leadership).
Second, the municipal Master Plan authority is limited in terms of actually requiring the necessary set of changes in land use, zoning, site planning, architecture, engineering, building codes, environmental controls, and mitigation that are required to truly address the global warming and sustainability issues and achieve legislated emissions reduction goals (for example, those goals would require retrofits of existing buildings to install energy efficiency and/or renewable energy, such as solar rooftops. New development will be required to offset carbon emissions.)
And third – and here’s where the cynicism comes in – the Legislative statement basically says the intent of the Master Plan can not be implemented or enforced via changes in building codes (as the highlighted text below indicates):
SENATE ECONOMIC GROWTH COMMITTEE
STATEMENT TO
[First Reprint]
ASSEMBLY, No. 1559
STATE OF NEW JERSEY
DATED: MAY 8, 2008
The Senate Economic Growth Committee reports favorably
Assembly Bill, No. 1559 (1R).
This bill amends the “Municipal Land Use Law” (C.40:55D-1 et
seq.) to allow a municipal planning board to include in a
municipality’s master plan a green buildings and environmental
sustainability plan element providing for, encouraging, and promoting
the efficient use of natural resources and the installation and usage of
renewable energy systems, considering the impact of buildings on the
local, regional and global environment, allowing ecosystems to
function naturally, conserving and reusing water resources, treating
storm water on-site and optimizing climatic conditions through site
orientation and design. This bill is not intended to modify or
supersede the State Uniform Construction Code.
http://www.njleg.state.nj.us/2008/Bills/A2000/1559_S3.PDF
So, next time the Governor or your local legislator exclaims his/her strong commitment to tackling global warming, ask to see it in the fine print.
