The Weekly Carboholic: study says offsets make ACES carbon cap almost meaningless

Posted on June 17, 2009

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carboholic

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Michael Shellenberger is one of environmentalism’s persona non grata de jour. He and Ted Nordhaus founded the Breakthrough Institute in order to push for technological solutions to environmental problems instead of policy solutions that both men have argued are doomed to failure from the word “Go.” This was not exactly a popular thing to say in the halls of Congress or around the water cooler at any number of large environmental organizations dedicated to creating policy solutions.

An analysis of the American Climate and Energy Security Act (ACES) by Shellenberger and Jesse Jenkins, Breakthrough’s Director of Energy and Climate Policy, found that the offset provisions of the legislation are so loose that they essentially make the carbon cap portion of the ACES-defined “cap-and-trade” system almost meaningless.

The problem, as illustrated in the image above, is that the Congressional Budget Office estimates that companies will buy more carbon offsets (such as reforestation credits) than carbon allowances under the cap-and-trade proposal. Not only will this suppress allowance prices by an estimated 70%, Breakthrough estimates that it will also result in reductions of “cumulative emissions in supposedly capped sectors of the economy by just 0.5% through 2020.” That’s 55.1 billion metric tons instead of 55.4 billion metric tons of carbon emissions. (UPDATE: A typo in the Breakthrough Institute’s analysis has been corrected and the cumulative emissions is now 2%.)

Offsets are a huge problem in general – they’re difficult to verify and thus prone to fraud and easy to game. And this analysis illustrates that the sheer number of offsets available in ACES undermines the bill’s goal of cutting carbon emissions, perhaps fatally.

I’m still personally ambivalent about ACES. But if the analysis is accurate (and not everyone agrees that the Breakthrough analysis is), it means that parts of ACES are in desperate need of repair. Unless problems like this are fixed or, at a minimum no more problems like this crop up, I could actually find myself hoping for ACES to fail. And that is just depressing.

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US China global heatingChina rejects binding GHG cuts

In yet a further indication of “the more things change, the more they stay the same,” TerraDaily reports that China will not accept binding cuts in greenhouse gas (GHG) emissions.

According to a quote from Chinese foreign ministry spokesman Qin Gang:

China is still a developing country and the present task confronting China is to develop its economy and alleviate poverty, as well as raise the living standard of its people. Given that, it is natural for China to have some increase in its emissions, so it is not possible for China in that context to accept a binding or compulsory target.

This is bad, but it’s hardly news. China has been hiding behind the “we’re a developing nation” and “the U.S. and Europe have to cut first because they’re more responsible than we are” excuses for years now. The problem is that China and the U.S. combine to total more than 50% of all GHG emissions globally, especially carbon dioxide (CO2), so no real progress can be made on cutting emissions without both nations going along. And without a binding national cap, China has essentially said that they’ll continue to emit GHGs as necessary to grow their economy.

China’s emissions will fall naturally due to the global recession just as U.S. emissions have fallen. China’s economy is overwhelming driven by exports, and other nations simply lack sufficient money to import all the Chinese goods that China can manufacture. But China’s electricity is overwhelming generated from burning coal, their coal plants aren’t particularly efficient, and they’re still building coal plants at an alarming rate. As such, smog is a serious problem throughout China. And because of government corruption and horrible living conditions, I suspect that popular pressures to reform government and clean the nation’s air and water will ultimately slow China’s economic growth and it’s related carbon emissions.

But if not, then there’s always a carbon tariff on imported Chinese goods. That would get China’s attention….

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coal-trainUSGS study suggests peak coal may be closer than previously thought

“The United States is the Saudi Arabia of coal.” “We have enough coal deposits in the U.S. for 250 years.” These kinds of claims are heard all over the place by proponents of coal power and coal-to-fuel conversion technologies. And the claims are technically correct – to a point. But what coal boosters fail to mention is that there’s “total coal,” and then there’s “coal that can be extracted economically using available technology.” And, as a Daily Green article about a United States Geological Survey (USGS) study from 2008 points out, the two are most definitely not the same.

According to the Daily Green article, the USGS studied the Powder River Basin coal deposit in Wyoming and found that the recoverable reserves were only 38% of the total demonstrated reserves of 201 billion short tons. This difference was due to rights of way, coal deposits under rivers and towns, and so on. But the USGS also estimated that the amount of coal that was economically viable to mine at 2008 prices was only 6% of the total, or just 10.1 billion short tons.

I looked up some Energy Information Administration (EIA) data on total coal reserves and consumption rate and did some quick calculations. The EIA estimates that there are 489 billion short tons of coal in demonstrated reserves nationwide. But if we cut that down to only 6% of the total using the economic arguments made in the USGS paper, that produces a total of 29.34 billion short tons of coal that can be extracted profitably. Assuming that coal consumption grows at an annual rate of only 0.86% (the average of the growth rates between 2002 and 2008), the U.S. would consume all of that available coal by 2032.

Now, there’s a lot of caveats to this quick estimate. First, as prices rise, more and more coal will become profitable to extract and better extraction technologies will be developed. Second, the USGS analysis was for one coal deposit in one region, but there are massive coal deposits in the interior of the U.S. and in Appalachia. Whether the Powder River analysis holds for those other regions is presently unknown, at least to me.

But if my quick estimate holds water over the entire country, then there’s a question I have to ask – does it make sense to spend billions of dollars developing carbon capture and sequestration (CCS) technologies that might not even be ready for deployment until after we’ve passed peak coal?

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FutureGen coal CCS pilot project revived

Late in the Bush Administration, the FutureGen coal CCS pilot project was canceled because of supposed cost overruns – or because President Bush’s home state of Texas was rejected in favor of President Obama’s home state of Illinois. It later turned out that the overruns were erroneous, but the project wasn’t reinstated. According to the NYTimes last week, the Department of Energy (DoE) revived FutureGen. The DoE will supply $1 billion while the private energy and utility companies involved in the project will pay between $400 and $600 million total over several years.

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EU needs to upgrade its electricity transmission

Electricity transmission is likely to be one of the more difficult problems facing deployment of renewable energy. Most people don’t want high voltage power lines running near their property and environmentalists don’t generally like the idea of spoiling wilderness or habitat with the same. But under one renewable paradigm, more transmission lines are necessary if electricity will be moved from where it’s generated to where it’s consumed, such as moving wind power from the Midwest to the east coast of the U.S.

But there’s another, related problem that needs to be solved with transmission of renewable electricity – old transmission lines may be unable to carry the new electricity at all. According to an article in the Guardian, this is precisely what a new study of Europe’s transmission lines has found.

According to the article, the European Academies Science Advisory Council (Easac) electricity grid working group found that the 20% renewable electricity generated by 2020 could be “wasted unless it can be distributed properly.” Furthemore, the article says that the Easac report also found “[u]pgrading the grids in individual countries should be done to common standards, and eventually the movement of electricity across Europe might even be managed centrally.”

A report last year (and reported by the Carboholic) found that all of the EU’s electricity needs could be met by large solar farms located in the Sahara that then transmitted the electricity via high voltage direct current (HVDC) transmission lines to Europe around and across the Mediterranean Sea. The Guardian article says that the Easac report found the following:

In order to do that, you need to design the transmission system so it can cope with the large power flows through existing countries’ networks [but] Italy’s transmission system is not designed for that, nor is Spain’s.

No single country’s electricity grid is designed to carry half a continent’s electricity through its borders, which is essentially what would happen with Spain and Italy.

There is another renewable energy paradigm that might help alleviate the transmission bottleneck, at least enough to give the EU time to build out a whole new set of modern transmission lines – distributed generation of electricity. The question is whether or not solar and wind power could be made cheaply enough and deployed widely enough to make centralized renewable generation (like the Sahara proposal) largely unnecessary. Time will tell.

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hywindDeep water wind turbine undergoing testing

According to an NYTimes GreenInc article last week, a deep water marine turbine is nearly ready for testing off the coast of Norway. The article and some background available on StatoilHydro’s website say that the turbine will float upon a tower that is anchored to the bottom with wires. The physics of a deep center of gravity (approximately 100 meters below the ocean’s surface) and some intelligent control systems will reduce the amount of bobbing that the floating turbine suffers as a result of wave action. The technology has been adapted from offshore oil drilling platforms, StatoilHydro’s area of expertise.

There are a number of reasons why deep water turbines are being developed. First, as the nearly eight year saga that is the Cape Wind project attests, environmentalism can run afoul of NIMBYism even in the most “liberal” of places – Nantucket Sound, Massachusetts. In this case, the wealthy homeowners along the Sound didn’t want white turbine towers spoiling their ocean view. But deep water turbines could be placed much farther out to sea, reducing the threat of NIMBY lawsuits.

Second, the American Wind Energy Association points out in their FAQ that winds tend to be stronger and blow more consistently farther offshore. This means that turbines will produce more electricity more consistently than near-shore or on-shore turbines will.

And third, according to the GreenInc article, not all regions of the world have shallow off-shore continental shelves that are suitable for shallow-water, near-shore wind turbines. In these situations, deep water turbines are the only offshore wind power option.

The turbine is slated to start generating electricity in July after the transmission line is laid from the turbine to the shore and will run for two years.

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More wind power means fewer hydroelectric dams?

Last week, the NYTimes had an article about the interaction between wind power and hydroelectric dams in the Pacific Northwest. The Bonneville Power Administration is building out large numbers of wind turbines along the Columbia and Snake rivers, but as the number of wind turbines goes up, environmentalists interested in restoring salmon habitat and spawning grounds have started to suggest that now is the time to remove the dams and return the rivers to a (more) wild state.

This provides yet another example of the tradeoffs and problems that environmentalists are going to have to face as their goals of wilderness protection, endangered species protection, renewable energy, sustainable agriculture, etc. come into conflict.

One of the problems facing this kind of a tradeoff is that the wind doesn’t blow all the time, and so standby electricity generation is necessary to fill in the gaps. In most parts of the country, that extra capacity is provide by natural gas or coal plants, but the Pacific Northwest is largely powered by hydroelectric. So removing too many dams and the electricity generation the dams provide will probably make the grid in the Northwest less stable, a point made by Bonneville in the NYTimes article.

In response, Bill Arthur, a Sierra Club representative for the Northwest, suggested in the article that Bonneville build more turbines scattered across a wider geographic area, with the idea being that the wind will probably be blowing somewhere and that the additional turbines would “smooth out” the wind power supply. And he pointed out that “dismantling [dams] could take six or more years, allowing plenty of time to plan the transition to new power sources.”

One of the problems with Arthur’s suggestion is that the list of alternative power sources that are likely to be available by the time the dams come down are the usual suspects: coal and natural gas, with possibly some solar power added into the mix. Is trading a hydroelectric dam that stresses salmon for a coal plant that poisons them or overheats their river (directly via cooling water discharges or indirectly via climate disruption) a good idea?

I don’t know. But I do know this – these tradeoffs aren’t going to go away. In fact, they’re going to get more common and become thornier different environmental projects collide head first more and more often over the coming years and decades. Ultimately, some hard decisions and difficult compromises will be necessary.

Image credits:
Breakthrough Institute
S&R
EIA
Solberg Production / StatoilHydro

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