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Yale study finds it's renewables that are the "bridge fuel" - to a fossil-powered future

image credit: ©BigStockPhoto.com. Used by permission.

No surprises here. In Is Abundant Natural Gas a Bridge to a Low-carbon Future or a Dead-end?, Yale researchers Kenneth Gillingham and Pei Huang find "a market-driven abundant natural gas supply can provide substantial reductions in air pollution but does not considerably reduce CO2 emissions in the longer-term, especially relative to a moderate carbon price."

Researchers found renewables "eat their own lunch" - that they will eventually be overtaken by the cheap natural gas on which they depend today:

 "...although abundant natural gas supply results in welfare gains both with and without carbon pricing scenarios, it does not reduce CO2 emissions significantly over the projected period. This is because cheaper natural gas replaces not only coal but also renewables. On the other hand, natural gas is relatively effective in reducing air pollution from burning [other] fossil fuels. This implies that abundant natural gas should not be seen as a “bridge” to a low-carbon future, but rather as a source of welfare improvements."

The oil-based economies of Texas, California, Oklahoma, Arkansas, and Louisiana will benefit from a higher penetration of renewables. But in the long run, they're a waste of precious time and resources for fighting climate change - and with changes to climate predicted to last at least 100,000 years, we're in it for the long run.

Bob Meinetz's picture

Thank Bob for the Post!

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Matt Chester's picture
Matt Chester on Feb 21, 2020 10:34 pm GMT

We show that a market-driven abundant natural gas supply can provide substantial reductions in air pollution but does not considerably reduce CO2 emissions in the longer-term, especially relative to a moderate carbon price. 

Sounds like carbon pricing it is, then!

Bob Meinetz's picture
Bob Meinetz on Feb 22, 2020 3:26 pm GMT

I agree, Matt. The effectiveness of carbon pricing is controversial, however. The only form of carbon pricing which has been conclusively linked to a reduction in carbon emissions is the revenue-neutral carbon tax, aka "fee and dividend".

And there is another imperative for any carbon tax to work: affordable carbon-free alternatives. Without them, pricing carbon only imposes a burden on the public (which has been conclusively linked to a reduction in the possibility of re-election).

I came across this image online, which is worth at least a thousand words.

British Columbia has both ingredients: a revenue-neutral carbon tax and abundant hydropower. Ireland (and by connection) UK / Denmark? Abundant wind. Iceland? Abundant geothermal energy.

What about France? With few natural resources to fall back on, France relies on carbon-free nuclear energy as an alternative to oil (70% of French electricity is generated at nuclear plants).

That's deliberate. When OPEC embargoed oil in 1973, the lights went out in France: nearly all of the country's electricity had been generated by burning oil. Prime Minister Pierre Messmer, by ministerial decree, initiated the "Messmer Plan" - France would build out nuclear in a hurry and avoid ever being energy-dependent again. But more importantly  (and before its value was understood) the country was able to decarbonize its electricity faster than any country in history.

What was true in 1973 remains true today: the only realistic, clean alternative to fossil fuel, in countries not blessed with abundant natural energy resources, is nuclear.

Richard Brooks's picture
Richard Brooks on Feb 22, 2020 5:54 pm GMT

Totally agree, Bob. Carbon pricing should be used to incentivize a movement to cleaner resources which is only possible through electrification, across sectors. This is why the New York ISO carbon pricing plan is so potentially damaging; it raises the cost of electricity while exempting fossil fueled transportation and heating sectors from the carbon tax. I believe a rise in electricity prices will discourage consumers from transitioning from low cost Natural Gas and gasoline to electricity alternatives, subject to rising electricity costs for years to come.

Matt Chester's picture
Matt Chester on Feb 24, 2020 12:55 pm GMT

Thanks for sharing the graphic, Bob-- very interesting. I'd be interested to see the movement of these circles over time, particularly as differnt areas of the world adopt different levels/types of carbon pricing, since a natural reaction to some carbon pricing is to shift carbon-intensive manufacturing to where it is most affordable (a key reason that getting some sort of international agreement on the table is critical among all these national policies as well)

Bob Meinetz's picture
Bob Meinetz on Feb 24, 2020 9:08 pm GMT

You're welcome, Matt. Unfortunately the graph included no information about what it's supposed to represent ( ! ). I'm assuming colored circles are programs in effect, white circles are planned; size corresponds to energy consumption of each country, height on the chart, to total receipts.

Percentages on the x-axis - could be percent of carbon being taxed?

Matt Chester's picture
Matt Chester on Feb 24, 2020 10:32 pm GMT

Should have shared the results of my Google-Fu before. The graphic comes from this article: https://www.bloomberg.com/graphics/2018-carbon-pricing/

  • Circle size reflects government revenue raised by carbon pricing in 2018
  • Purple circles are carbon taxes, white circles are emissions trading systems
  • Y-Axis is the carbon price per metric ton of CO2
  • X-Axis is the share of emissions subject to carbon pricing
Bob Meinetz's picture
Bob Meinetz on Feb 25, 2020 4:45 pm GMT

Nice work! Would be nice if circle size represented quantifiable emissions reductions - not how much each government raked in.

One talking point of critics is that even revenue-neutral taxes are perceived as a money-grab in conservative circles.

Matt Chester's picture
Matt Chester on Feb 25, 2020 5:08 pm GMT

Has there been a serious carbon tax proposal that's gained steam without the raised funds going either to 1) dividends for citizens or 2) funding further climate-related projects? I suppose maybe 2) could be seen by some as money-grubbing, particularly in any circles that doubts the importance of making climate action a priority yesterday. 

Bob Meinetz's picture
Bob Meinetz on Feb 25, 2020 5:28 pm GMT

BC's revenue-neutral tax came under scrutiny when it was discovered some of the refunds were being structured as tax deductions, and not everyone was included equally.

I originally learned about fee-and-dividend from public advocacy of climate scientist James Hansen, the "godfather of climate change awareness". Hansen was (and is) insistent that simplicity, transparency, and an equal refund for every taxpayer would be essential for success.

In a roomful of special interests (even some which claim to be "climate-related projects"), it's amazing how quickly a pile of money can disappear.

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