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How one obscure federal agency is clearing the path for a US carbon price


Operators of the country's electric grids aren't waiting for the president or Congress....


Mark Silverstone's picture
Mark Silverstone on Oct 22, 2020

I´ll believe this when I see it.  If FERC tries this, I suspect that it will end up in court for years.   And even if it flies, a poorly thought out and patchy "mishmash" of a carbon price might end up doing more harm than good. But, good luck to FERC!

Matt Chester's picture
Matt Chester on Oct 22, 2020

This is the takeaway, IMO. There's plenty to debate on carbon pricing, both positive and negative and that's a spirited debate to have. But there's no doubt countless legal battles should we choose to go that route, not to mention the red tape, the potential missteps and adjustment, etc. And then we're 10 years down the line and no closer (in policy terms) towards the necessary amount of decarbonization. Is that the area to spend the political capital? Or are there other solutions to embrace for a quicker and more effective impact? 

Bob Meinetz's picture
Bob Meinetz on Oct 22, 2020

A "patchy mishmash"? No, a national price on carbon would be the same for all generators.

I love it when renewables advocates say they support carbon pricing, then realize solar and wind won't be remotely competitive with nuclear. Ouch!

Gary Hilberg's picture
Gary Hilberg on Oct 22, 2020

Had to read the article to see what "obscure" agency was referenced, on an energy website I would hope that FERC is not obscure!  I agree with Mark - hard to see a path to success for FERC on a Carbon Tax, although this is the only way to align all of the contributing pieces to carbon emissions.  In a free market, confusing market signals will not be helpful and will lead to poor investment decisions that do not contribute to the ultimate solution.  We see that now with the state Clean Fuel Standards - until recently almost all of the renewable diesel in California was imported from Singapore!  

Richard Brooks's picture
Richard Brooks on Oct 22, 2020

Several of the posted comments by presenters state unequivocally that the purpose of a carbon tax in wholesale electric markets is to reduce carbon emissions. FERC was emphatic in stating that they do not regulate environmental policies and indicated they are authorized to ensure effective, competitive wholesale electricity prices/markets. FERC acknowledged that State policies dictate carbon prices on the use of fossil fuels, the cost of which may be incorporated into the wholesale price of electricity in a FERC tariff filing. That's my understanding of the FERC Technical Conference outcome.  Obscure - WHAT?

Bob Meinetz's picture
Bob Meinetz on Oct 26, 2020

Richard, FERC's main function has always been to regulate interstate trade in energy. That creates several conflicts with regard to environmental policy, for example: where should the agency draw the line when state subsidies are creating an anti-competitive interstate market for wholesale electricity?

An unenviable, but predictable position to be in. Though the only effective  policy solution to climate change would be a national price on carbon, the people selling solar panels are as opposed to one as the people selling natural gas. Ironically, solar vendors are selling both the problem and the solution. Maybe, it's not so ironic after all.

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