How to crack down on carbon |

How to crack down on carbon

National carbon-reduction policy continues to be evasive.

Attempts such as the Clean Power Plan and the Waxmen-Markey bill went by the wayside. New talk of carbon taxes is being bounced around, but likely not to gain any traction. As a retired electric utility executive with 37 years of experience and supporter of carbon emission reduction, it seems to me there is a much simpler way, at least in the electric sector.

Pick the largest 200 or 300 electric utilities (as they serve the vast majority of the electric consumers in the U.S.) and apply the following rule to them — create a straight-line, declining cap for each utility starting from where they are today to where they should be by, say, 2050. For any year they exceed the cap they would pay penalty for the emissions above their cap (for example, $50 or $60 per ton of carbon emissions). They also could purchase carbon offsets from a utility that is under their cap, instead of the penalty.

It can easily be shown that this is much cheaper than a carbon tax on all carbon emissions at something around $20 per ton. Utilities would comply or pay the penalty. Each utility has some form of state and/or federal regulation in place to ensure least cost portfolios to their consumers and compliance to the rule. Utilities and their regulators are best suited to decide what resources are needed to meet the rule.

Some utilities will not like the rule but will comply. This rule would provide long-term stability to the clean-energy industry and certainty for the utilities. The reduced carbon emissions in the electric sector also would transfer to the transportations sector as the electric-vehicles market grows.

Del Worley

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