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Reducing carbon-dioxide emissions is primarily a political problem, rather than a technological one. This fact was well illustrated by the fate of the 2009 climate bill that barely passed the U.S. House of Representatives and never came up for a vote in the Senate. The House bill was already quite weak, containing many exceptions for agriculture and other industries, subsidies for nuclear power and increasingly long deadlines for action. In the Senate, both Republicans and Democrats from coal-dependent states sealed its fate. Getting past these senators is the key to achieving a major reduction in our emissions.

Technological challenges to reducing emissions exist, too. Most pressing is the need to develop the know-how to capture carbon dioxide on a large scale and store it underground. Such technology could reduce by 90 percent the emissions from coal- fired power stations. Some 500 of these facilities in the U.S. produce 36 percent of our CO2 emissions.

But these plants aren’t evenly spaced around the country. And therein may lie the key to addressing the political and technological challenges at the same time. If the federal government would invest in carbon capture and storage, it could go a long way toward persuading politicians in every state to sign on to emission reductions.

I’ll get to the specifics of the technology shortly. But first, consider how the costs of emission reduction fall hardest on certain parts of the country: A carbon tax levied on all major sources of released CO2, the approach favored by most of the environmental community, would make energy from coal-fired power plants cost more. To make a significant difference, such a tax would have to amount to $60 a ton.

Midwest Carbon Footprint

As a result, gasoline prices would rise 26 percent, and natural gas for household usage by 25 percent, nationwide. Rich and urbanized states could probably tolerate this. The West Coast, with its hydroelectric power, and the Northeast, which relies to a large extent on natural gas, could most easily absorb the associated increase in energy costs.

But the price of energy in the rural, Midwestern states would more than quadruple because of their large carbon footprint. Midwesterners get most of their electricity from coal; they drive relatively long distances to get to work, shopping and entertainment; and rural homes and buildings use more energy for heating and cooling.

One carbon-tax proposal now being considered is a “cap and dividend” plan that would send the tax revenue back to all U.S. citizens equally. But that would also favor the rich states that are less dependent on driving and coal.

It would be more helpful for the coal-dependent states if the federal government would use revenue from a carbon tax to help develop the technology for carbon capture and storage.

And that brings us to the technological challenges: No plant of any size with the capacity for CCS yet exists, but it has been demonstrated to work at small scales. Three different processes for capturing the CO2 are being tested, and scaling them up for 500-megawatt or 1,000-megawatt facilities should be possible.

For two years, the Mountaineer plant in New Haven, West Virginia, has been capturing and storing a tiny amount of its CO2 -- 2 percent of it -- but plans to build a full-scale carbon-capture plant here have been abandoned. Because Congress has dropped any idea of imposing a tax on carbon emissions, the investment doesn’t make sense.

A large plant in Edwardsport, Indiana, was being constructed with the expensive gasification process that makes it easy to add carbon-capture facilities, but it, too, has been shelved.

China may finish its large demonstration carbon-capture plant before the U.S. gets any model up to scale. Others are planned in Europe, and a small one is operating in Germany. This plant has been unable to get permission for underground storage, so it is selling some of its CO2 to soft-drink companies and venting the rest.

Subterranean Storage

Storing captured CO2 is eminently possible, too. For 15 years, the Sleipner facility in Norway has been storing 3 percent of that country’s CO2 underneath the ocean floor, with no appreciable leakage. Algeria has a similar facility, the In Salah plant, operating in the desert.

One storage strategy under consideration in the U.S. is to inject captured CO2 into huge basalt formations off both the east and west coasts. Inside the basalt, the carbon gas would gradually turn into bicarbonate of soda.

There are other ways to dispose of carbon dioxide. It has been used for enhanced oil recovery for many decades without any danger, and has been effectively stored in depleted oil reservoirs. (The gas is dangerous only in high concentration.)

It remains uncertain how much of the captured CO2 might leak during storage. Even if this were as much as 10 percent, however, it would mean that 90 percent of it would stay underground.

As CCS technology develops, it will have to be made more efficient so that it uses less energy. As it is, the capture phase is expected to require that a power plant burn 20 percent to 25 percent more coal than it otherwise would.

The technological challenges may explain why energy companies haven’t lobbied for subsidies to develop CCS. The electric-energy sector isn’t known for innovation and risk- taking. Just look at the U.S.’s outdated power grid.

But the federal government could pay for the subsidies through a tax on carbon. Such a levy would have other advantages, too: It would raise the cost of energy to reflect the damage that burning coal and oil now do to the environment, and spur the development of renewable sources.

If states with large carbon footprints can’t accept such a tax, the CCS subsidies could be paid from the general fund. The cost to build coal-fired power plants with CCS technology is estimated to be about $5 billion to $6 billion -- about the price of a single nuclear power plant. The total price for the U.S.’s 500 large plants would be $250 billion. That’s as much as the planned modernization and expansion of our missile defense system over 10 years.

But it would slash our carbon emissions by at least 20 percent. There is no other politically possible way to cut CO2 as much, and as quickly -- in a decade or two. And devastating climate change is far more likely than a missile attack.

U.S. investment in CCS technology could also induce China and Europe to follow suit. And this would allow the world time for renewable-energy technologies to mature -- to the point where we could do away with coal burning altogether.

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Assistant Professor at Carnegie Mellon University

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H. John Heinz III College
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Akshaya Jha joined PESD in the summer of 2010 and left PESD in the summer of 2015. He is currently an assistant professor of economics and public policy at Carnegie Mellon University. His current fields of interest include Energy/Environmental Economics and Industrial Organization, with Econometric theory as a secondary field.


At PESD, Akshaya performed economic analysis regarding the determinants of market interaction in bid-based electricity markets using data from a variety of settings. He is currently examining the effects of output price regulation on input fuel procurement for U.S. electricity generation. In other work with Frank Wolak, he is also quantifying the impacts of financial traders on California's wholesale electricity markets.

He received his Bachelors of Science from Carnegie Mellon University in Economics and Statistics in 2009.

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On Monday, June 13, 2011 at 4:15 p.m. in Panofsky Auditorium, Richard Morse of Stanford University will present a colloquium, "Addressing the 'Coal Renaissance' in a Post-Kyoto World."

Coal has been the world's fastest growing source of fossil fuel since 2000, contributing more to global primary energy supplies than any other source of energy.  Yet it is also the world's leading source of CO2 emissions.  As the Kyoto Protocol approaches its end in 2012 and global carbon policy is fragmented into regional efforts, efforts to mitigate global emissions will require taking a hard look at the realities of coal markets and developing pragmatic strategies that don't rely on carbon policy.

Richard Morse of Stanford's Program on Energy and Sustainable Development will discuss the outlook for global carbon policy, how international coal markets are evolving, and what strategies and technologies might realistically be used to reduce emissions from coal.   Discussion of carbon policy will include the latest developments in Europe, China, and the US, and analysis of international coal markets will highlight key issues for the future of Chinese energy consumption.  Arguing that renewable energy in its current state can only address the coal emissions problem at the margin, Morse will consider the portfolio of carbon mitigation options that can operate at scale, including carbon capture and storage (CCS).  Finally, in light of the recent nuclear tragedy in Japan, Morse will discuss with the SLAC community how to evaluate the relative risks of coal and climate change against the risk of nuclear catastrophe.

The talk is free and open to all.

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Stanford University

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On Monday, June 13, 2011, as part of SLAC National Accelerator Laboratory's colloquium series, Richard Morse from the Program on Energy on Sustainable Development led the talk on “Addressing the ‘Coal Renaissance’ in a Post-Kyoto World.” Morse discussed the outlook for global carbon policy, how international coal markets are evolving, and what strategies and technologies might realistically be used to reduce emissions from coal. This Included discussions on the latest developments in Europe, China, and the US in carbon policy, and an analysis of international coal markets highlighting key issues for the future of Chinese energy consumption.
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Gang He joins others at the Aspen Environment Forum 2011 May 30 - June 2, 2011, in Aspen, Colorado. The Aspen Environment Forum Scholars Program provides opportunities for diverse, accomplished leaders in the field to attend the Aspen Environment Forum. Scholars are selected on the basis of their experience, achievements, and interest in energy and the environment, as well as their commitment and contributions to the field. Gang He's research focus has been on China's energy and climate policy, energy economics and energy modeling, renewable energy, and cleaner utilization of coal.
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PESD researcher Richard K. Morse was invited by the International Energy Agency (IEA) to present PESD analysis of possible US west coast coal exports into the international market.  Morse argued that significant exports from the Powder River Basin area could reach international markets in the coming years, and demonstrated how that would impact the international coal trade in Asia.  Morse's insights will be used to help craft the IEA's 2011 World Energy Outlook, which will focus on coal markets.

The IEA convened a meeting of international coal experts to help guide the research for its flagship publication, the World Energy Outlook, which will focus on coal in 2011.  Morse contributed insights from PESD coal research to the global audience of energy executives, researchers, and policy makers.

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SPRIE, Stanford Graduate School of Business
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Stanford University
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Stanford, CA 94305-7298 USA

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Rohit T. "Rit" Aggarwala is an environmental policy expert, transportation planner, and historian. He currently serves as Special Advisor to Mayor Michael R. Bloomberg in his capacity as Chair-elect of the C40 Cities Climate Leadership Group. He lives in Palo Alto, California.

From 2006 to 2010, Aggarwala was the Director of Long-Term Planning and Sustainability for the City of New York. In that role, he served as the chief environmental policy advisor to Mayor Michael R. Bloomberg, and led the development and implementation of New York City's sustainability plan, PlaNYC: A Greener, Greater New York. Mayor Bloomberg called him "the brains behind PlaNYC."

Aggarwala's achievements included the passage into law of a landmark set of mandates that will make all large buildings in New York City more energy efficient, by requiring benchmarking, periodic energy audits and operations tune-ups, widespread lighting retrofits, and submetering for commercial tenants. He also led the effort to make New York City's 13,000 yellow taxis convert to hybrids, clean up the heating oil used in New York City's buildings, and develop a greener construction code for New York. He was also one of the architects of Mayor Bloomberg's effort to bring congestion pricing to Manhattan, and served as the mayor's point person on Building America's Future, a coalition the mayor created with Governor Arnold Schwarzenegger of California and Governor Ed Rendell of Pennsylvania. He has testified before the New York City Council, the New York State Assembly, and the United States Congress.

Prior to joining the Bloomberg Administration, Aggarwala was a consultant at McKinsey & Company, where he mainly served clients in the transportation and logistics industry in the United States and Europe. In addition to work at the New York State Assembly and the Virginia Railway Express, he began his career at the Federal Railroad Administration.

He is an active member of the Transportation Research Board, where he chairs Subcommittee AR010-1, Socio-Economic and Financial Aspects of Intercity Passenger Rail. He is also a trustee of St. Stephen's School in Rome, Italy.

Aggarwala holds a PhD in American History from Columbia University, where he studied under Professor Kenneth T. Jackson. His dissertation, "Seat of Empire: New York, Philadelphia, and the Emergence of an American Metropolis, 1776-1837", looked at the causes that led New York to surpass Philadelphia as the leading city in America. He also holds a BA and MBA from Columbia, and an MA in History from Queens University in Kingston, Ontario. He holds an appointment as a research scholar at the Urban Studies Program at Barnard College.

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