How Many Billions Unknown in Carbon Cost

Estimating the cost of cutting carbon emissions to reach the 25 percent reduction target of the state’s global warming law, AB 32, is fraught with uncertainties but must be pursued when formulating regulations, noted speakers at the fourth annual California Climate Change Conference held September 10-13. The development of AB 32 rules, as well as global warming energy policies, must include analyses of various foreseeable economic uncertainties, including the future cost of oil and other fuels, and the market price of a ton of carbon. Which sector of the economy will bear the brunt of the financial burden of curbing greenhouse gas emissions also must also be weighed. “We can’t afford not to deal with uncertainties,” said John Weyant, Stanford University professor of management science and engineering. For example, if the level of mandated renewables in utility portfolios rises from 20 percent to 33 percent to help curb global warming gases, ratepayers’ utility bills could become unacceptably high, pointed out Weyant, who also is a member of the AB 32 Economic and Technology Advancement Advisory Committee. State legislation would increase the renewable portfolio standard to 33 percent by 2020. An increase in energy rates could lead to a political backlash that could undermine AB 32’s climate change goals, he said. “Medium-income California residents are an important measure of the political palatability of regulations,” added Charles Kolstad, University of California, Santa Barbara, professor of environmental economics. He recommended giving subsidies to those that take actions to reduce emissions before AB 32 rule deadlines go into effect, known as “early adopters.” To help account for future uncertainties, Weyant and others urged AB 32 regulations be flexible enough to allow adjustments for resulting economic disparities. This week’s four-day conference held in Sacramento was sponsored by the California Energy Commission, Environmental Protection Agency, Department of Water Resources, Pacific Gas & Electric, and the Sacramento Municipal Utilities District. Conference speakers, which included scientists, economists and bureaucrats, agreed that the least-costly strategy for cutting carbon emissions is energy efficiency. However, there was no agreement on the cost effectiveness and speed at which to implement efficiency strategies because of future variables. The costs will hinge largely on the price of carbon. Another area lacking consensus was whether higher prices spur behavioral changes and result in the consumer using less energy. According to CEC commissioner Art Rosenfeld, savings generated from efficiency gains would cover the costs of supply side reductions, such as building renewable projects to meet growing energy demand. In addition to economic uncertainties associated with reducing greenhouse gas emissions in regions expecting higher temperatures, there are other unknowns. That includes how to meet rising peak demand driven up by hotter summer days, weather variability that affects hydropower output, and the role of nuclear energy. “The biggest effect of climate change is in peak power,” said Maximillion Auffhammer, University of California, Berkeley, Department of Agriculture and Resources associate professor. According to Energy Commission data, commercial and residential air conditioning was responsible for 35 percent of peak demand in 2005, and that key load is expected to rise with the temperature. Another driver of rising electricity use are data centers. The centers, which are often hidden from the public but essential to the modern Internet economy, use between 1 MW and 20 MW, and consume $4.5 billion of energy a year in the U.S., according to Eric Manaset, Lawrence Berkeley National Laboratory scientific engineering associate. “Data centers are an important area for energy efficiency improvement in the U.S. and California,” he said. Manaset estimated that data centers in California consume roughly 5-6 percent of the state’s energy. The data centers’ energy use doubled over the last two years and is expected to eventually represent $7.4 billion in electricity costs in the U.S. Reducing that demand requires improved operations, more efficient equipment, and better management of the equipment to optimize air flow to reduce cooling costs, which are a large driver of energy use. Also discussed was the role of nuclear energy in a carbon-constrained world. “California is doing a good job fighting climate change without new nukes,” Rosenfeld said. The state prohibits the building of new nukes while a long-term radioactive disposal site remains unsolved. Rosenfeld added that the number of new nuclear plants world-wide will likely soar, partly in response to climate change concerns.

Over 11K Stories!

| Independently Powered Energy News

How Many Billions Unknown in Carbon Cost

vdharadmin

Related Posts

State Carbon Emissions Reduction Plan Update Faces Big Pushback

Bills Pass that Move the Needle on Non Fossil Energy Pass

California Falls Behind on Climate Protection

Carbon Tax No Longer Hushed