Articles by Sean Casten

CO2 and the Clean Air Act

We are rapidly approaching national greenhouse gas legislation, either through a congressionally-led cap-and-trade bill or an EPA-led amendment to the Clean Air Act. However passed, these regulations will then immediately face a practical problem: how do you enforce a law that is in conflict with itself?

This problem arises because of the Clean Air Act's core failing: It compels businesses to increase their CO2 emissions. The moment we compel businesses to reduce those same emissions is the moment we expose this flaw and invite waves of litigation that will not only delay the implementation of CO2 policy, but also invite compromise and negotiation that will likely be forced to sacrifice some of the Act's environmental intent. How on earth did we get here? And what are we to do about it?

The clean air act mandates greenhouse gas pollution

Broadly characterized, the Clean Air Act does three things:

1. It sets limits on the concentration of regulated pollutants at regulated point sources;
2. It steadily tightens those limits over time, and;
3. It requires any new pollution sources to meet the most current (stringent) pollution standards.

By any measure, the act has done a commendable job of reducing non-CO2 air pollution. But it has unwittingly increased CO2 pollution as well.

Can Congress be trusted to get necessary GHG legislation right?

We need an economy-wide greenhouse gas bill that puts a price on GHG emissions and allows reallocation of capital in response. Congress increasingly appears unable to produce such a bill.

First came the fiasco of Lieberman-Warner, wherein it became quite apparent that the route to Congressional approval was paved with district-directed pork, stealing money out of CO2-reduction efforts and distributing it to any number of pet projects. Thankfully, that failed.

Then last week, Speaker Pelosi suggested that the great thing about cap-and-trade is that it gives Congress money to dole out to favored interests:

I believe we have to [implement cap and trade] because we see that as a source of revenue ...

Again, the idea that the purpose of a GHG bill is to reduce CO2 emissions is completely subsumed by salivation over the potential grab bag.

Now comes this, from E&E Daily ($ub. req'd), noting that given the choice between a California waiver and cap-and-trade, legislators from the rust belt prefer cap-and-trade. Why? Because it might give them a chance to throw some money back at their districts:

Sen. Debbie Stabenow (D-Mich.), for example, pointed to the large new revenue stream often linked to a cap-and-trade system, saying that the money would help domestic automakers retool their plants to meet a tighter suite of emission standards.

"I think that ultimately this gets addressed in the energy bill to slash cap and trade," Stabenow said. "It's not enough just to talk about the regulations. If we want to have a domestic auto industry, we have to be provided support, particularly in the middle of this global credit crisis where we have to invest massive amounts of money and aren't able to get credit."

Is the purpose of a cap-and-trade bill really to provide bailout dollars to the auto industry?

More on Illinois' Clean Coal Portfolio Standard

Now that I've had time to review the legislation [PDF] that begat Illinois' Clean Coal Portfolio Standard, I offer a few tidbits.

Short version: We're not even going to pretend that coal is clean or cheap anymore. The bill actually defines "clean coal" as high-sulfur coal, and defines "cheap" as being that which doesn't raise electricity rates too fast.

Specifics:

A closer look at current U.S. CO2 pricing

Kevin Drum over at Mother Jones blogged on my recent Grist post, joining my mom in the list of people who publicly praise my math skills. Thanks!

Much more interestingly, he raises this question:

Are we wiling to charge [a price for CO2 emissions] openly, with the carbon charges going to the public, [or] inside a complex giveaway to a favored corporation?

(The question is in response to my estimate here that the recently passed Illinois Clean Coal Portfolio Standards Act represents an implicit $300-$500-per-ton payment in the name of CO2 reduction.)

It's a great question because the truth is that under current federal and state policy, we do pay people for their actions to reduce CO2. But we do so in a horribly inconsistent way, providing not only inconsistency between technologies and "favored corporations," but also wild disparities in price.

For instance, suppose you're getting $0.03 per kWh from your state renewable portfolio standard. Those kWh displace -- on average -- 1,300 lb per MWh of U.S. power, and you are therefore being paid $46 per ton of CO2 you reduce. CO2 reduction is not the only justification for RPS policies, but would we ever have an RPS if we didn't care about CO2? I doubt it.

The good news there is that people are, today, being paid in the U.S. for reducing CO2. But is there any rhyme or reason to their price? And is it at all consistent with what others are getting for the same environmental service?

More math below the fold.