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Breakthrough Institute

Breakthrough Institute

The Breakthrough Institute is a paradigm-shifting think tank committed to modernizing liberal thought for the 21st Century. Our core values are integrity, imagination and audacity.…

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Why Raising the Price of Fossil Fuels Is A “Waste of Effort”

It has taken 15 years for American public policy to move toward the long-term goal of mitigating climate change. Although many believe that the new climate policy will allow the United States to take a leadership role in international negotiations, Steven Cohen of Columbia University’s Earth Institute continues to believe that the overall approach of encouraging renewables by raising the price of fossil fuels will not succeed. Without substitutes, their use will grow regardless of price says Cohen. They are simply too important to regulate; they must be replaced. The goal should be to make fossil fuels irrelevant.

On Monday, under section 111(d) of the Clean Air Act, President Obama proposed regulations requiring significant reductions in greenhouse gases produced by each American state. Using 2005 as a baseline, states, on average, will be required to achieve a 30 percent reduction in greenhouse gases by 2030. If the courts allow it, a year from now, those regulations would go into effect and about two years from today, on June 1, 2016, the states would be required to tell EPA how they will achieve those reductions. The president's move is long overdue, but remains a significant step. It says that global warming is an established scientific fact and American public policy and law will now turn to the long-term goal of mitigating climate change.

It has already taken 15 years to get to this point. In 1999, a number of states and cities petitioned EPA to reduce greenhouse gases from motor vehicles. In 2003, under then-president George W. Bush, EPA asserted that it did not have the authority to regulate greenhouse gases and, even if it had the power, it wouldn't exercise it. Eventually, Massachusetts sued, and in 2007 the Supreme Court decided that EPA had the authority to regulate greenhouse gases and that unless the agency could provide scientific evidence that these gases did not cause harm, it also had the obligation to regulate them. In January 2014, EPA issued greenhouse gas regulations for new power plants. Today's announcement will regulate and require reductions from many existing sources of greenhouse gas emissions, including existing power plants. States are required to submit plans to EPA telling the agency how they will achieve these reductions.

As important as the federal moves are, many states, such as California and a number of those in the Northeast, may have already met the targets being proposed. The northeastern "Regional Greenhouse Gas Initiative" (RGGI) has been a notable success. According to the New York State Department of Environmental Conservation:

Related Article: Obama’s Climate Plan Is Leaking Methane

Together the nine RGGI states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont) set a cap for total emissions of CO2 from electric generation facilities in the region. By agreement, the RGGI cap declines over time, gradually tightening emission limits: initiated at 165 million tons per year in 2005, the regional cap in 2014 is 91 million tons. Emissions caps (or CO2 Budgets) in individual RGGI participating states are equal to agreed-upon shares of the region-wide cap...Today in the RGGI region, power sector GHG emissions are more than 40 percent lower than they were when RGGI was initiated in 2005.

One key issue addressed by President Obama's new federal regulation is the proposed baseline year from which reductions must be achieved. States like New York will be pleased that 2005 has been set as the baseline, since at least their power generators have already achieved the national reduction goals. States will have over a decade to achieve these new targets, and the northeastern states have already demonstrated that these reductions are feasible. While the new greenhouse gas rule is a significant first step, it has taken years to accomplish and, in a global sense, represents a small step in a long journey. Although many believe that the new climate policy will allow the United States to take a leadership role in international negotiations, I continue to believe that the overall approach of encouraging renewables by raising the price of fossil fuels will not succeed. I also think that nations who claim they will not reduce emissions until the United States does are simply rationalizing their inability to act. Without a replacement for fossil fuels, emerging economies will continue to increase their use of these fuels.

I have become convinced that regulating energy is not like regulating anything else. Energy is central to modern economic life. Only food and water are more important, and there is no massive drive to raise the costs of those necessities. I have long been influenced by Howard Odum's concept of net energy and his view of the interconnection of energy, ecological, and economic systems. The first comprehensive treatment of these concepts can be found in his and Elizabeth Odum's 1976 classic,The Energy Basis for Man and Nature. Odum distinguishes net energy from gross energy. He believes that the actual amount of fossil fuel reserves remaining must account for the amount of energy it takes to extract and transport energy for use. He and Elizabeth Odum also discussed the ecological damage caused by fossil fuel extraction and use, and the economic cost of that damage. Building on their analysis, I believe that our rapidly growing use of fossil fuels virtually ensures that the energy supply will require more and more energy to extract and that the price of fossil fuel energy will rise faster than projected.

Devoting scarce political capital to the goal of raising the price of fossil fuels is a waste of effort. Without substitutes, their use will grow regardless of price. They are simply too important to regulate; they must be replaced. Energy is deeply connected and imbedded in every aspect of modern life. Fossil fuel energy prices will rise and the growing proportion of GDP devoted to energy could very well dampen economic growth and threaten political stability. Post-industrial nations like ours will reduce greenhouse gas emissions over the next decade and indeed those reductions have already begun. Nevertheless, the vast increases in fossil fuel based energy use in China and India alone virtually guarantee continued global warming. No treaty or policy will reduce the hunger for fossil fuels in those places. Only a lower-priced, reliable, and convenient replacement for fossil fuels will make a difference. The argument is that a global climate policy will speed the development of renewables. I see no evidence of that. It could just as easily be ignored, undermining the legitimacy of international law.

A replacement for fossil fuels is essential for ecological, economic, and political sustainability and stability. Governments should focus as much human brainpower as we can find to develop and implement renewable energy technology. The goal should be to make fossil fuels irrelevant. Fossil fuels need to become the energy equivalent of the eight-track tape. They need to be driven from the marketplace by a better source of energy. By "better" I mean lower-priced, reliable, and less of a threat to our ecosphere.

Related Article: Peak Pollution: China to Lead the Clean Energy Revolution

Given my view of the big picture, why do I favor the command and control regulation of greenhouse gases that the Obama administration is employing? First, because it places climate change more firmly on this country's institutional, political, and policy agenda. A clear signal is being provided to private corporations, governments, nonprofits and everyone else that climate change is a real threat and the US federal government is at long last ready to respond. The second reason that I am heartened by the administration's move is that it is the only policy option available under current political conditions. While it will be a decade before it is meaningful and operational, and other policies might be speedier and more effective, it beats the current US national policy: doing almost nothing.

The new greenhouse gas regulation is no profile in political courage, but I gave up "hope" long ago that President Obama would respond aggressively to the climate crisis. Given the political potency of the hard right, he was not going to risk reelection over climate policy. The president had the authority to propose today's rule since he came to office in 2009. When the Waxman and Markey cap-and-trade policy was killed in the spring of 2010, he could have responded with the same policy he will announce today. He could have reminded the business community that the alternative to the more efficient cap-and-trade policy was the available blunt weapon of command and control regulation. It took an extra four years to get to that point -- four years of anti-science propaganda and denial of the reality of climate science.

Fortunately, state and local governments have taken the lead on this issue and America has begun to reduce its carbon footprint. But as we harvest this low-hanging fruit, I think it's time to start focusing on the basics. Only a partnership between the government, America's still-great research universities and the private sector can develop and implement the technological fix to the climate crisis. The research, development and deployment of renewable energy technology should be our highest national priority.

By Steven Cohen of the Breakthrough

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