Alliance For Clean Energy New York Pushes For Carbon Fee On Thermal Generating Stations

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The state of New York has one of the more aggressive renewable energy standards in America. It calls for the state to obtain 70% of its electricity from wind, solar and other renewable sources by 2030. But the Alliance for Clean Energy New York says in a new report the state is unlikely to meet that goal without imposing a fee on carbon emissions created by thermal generating stations.

carbon fee to support renewable energy
Image credit: Alliance for Clean Energy

On its website, the group says its mission is “to promote the use of clean, renewable electricity technologies and energy efficiency in New York State, in order to increase energy diversity and security, boost economic development, improve public health, and reduce air pollution.”

Its latest report begins with this preamble:

New York State should support and pursue an initiative to account for carbon emissions in the State’s wholesale electricity markets. For two years…..the New York Independent System Operator has been studying and discussing this initiative with all stakeholders…..The results of this work set the foundation for an innovative, first-in-the-nation policy to embed price signals that account for carbon emissions within New York’s wholesale electricity markets. This will support New York’s pursuit of aggressive and ambitious goals to reduce this pollution and transition New York to a 100% clean energy economy.

The group is absolutely correct. It is just plain nuts to allow industry to pollute the environment and pay nothing to clean up their mess. It’s like having the local septic pumping system back its trucks up and empty them in the town square. We have been following this distorted model for so long, it seems normal to most people but it is far from normal. It is hazardous to human health and destructive of the Earth’s ability to support life. How could such a dangerously flawed system be allowed to continue?

Carbon pricing is a program that would allow the NYISO to charge a fee to electric generators that emit carbon dioxide, with the fee set at the estimated cost to society of the damages caused by their carbon dioxide emissions. Economic experts in pollution control have long advocated charging emitters for the pollution they emit as the most effective way to reduce emissions by sending a clear price signal. The approach has been tried and shown to be highly successful, most notably for emissions of the sulfur dioxide that causes acid rain.

For New York, because there are legal mandates in place to achieve renewable energy and climate goals, carbon pricing would not be the only instrument — or even the principal instrument — for achieving these goals but would be an essential complement to the law. It will support and assist in the achievement of New York’s carbon reduction mandates by aligning market forces with policy goals.

The New York Independent System Operator estimates the state could implement a carbon price in 18 months once the governor gives his blessing. But Governor Andrew Cuomo, despite his public support for renewable energy, has been missing in action when it comes to supporting carbon fees. His office failed to respond to request for comment by the press.

The pricing signals resulting from a carbon fee would make thermal generation more expensive, giving an economic boost to renewables. That, ACE NY argues, would benefit New York’s energy storage goals by attracting more investors to that technology. Energy storage will become more valuable for its ability to capture renewable energy during times when it is abundant and inexpensive and provide it back to the grid when demand — and therefore prices — are higher. Energy storage means high cost thermal plants will be powered up less frequently, which also means less carbon pollution overall from the electricity generating sector.

carbon fee impact Brattle Group
Image credit: The Brattle Group

An analysis by the Brattle Group in November, 2018 found that factoring in a carbon fee would raise utility rates slightly during the first 3 years but then result in lower rates in the following 10 years. Note that these calculations do not include any economic benefits that accrue from lowering the amount of carbon pollution in the atmosphere.

The Alliance for Clean Energy New York is urging the state to consider a carbon fee to employ market price signals that reflect the full social cost of carbon.

“This innovative approach would set an example for the nation and the world. It would also complement the Climate Leadership and Community Protection Act and increase the chances that NY’s ambitious goals will be met by harnessing market forces. Taking this approach is more efficient than relying solely on State programs to counteract the flawed price signals of a wholesale market that fails to reflect the cost to society of carbon pollution and it will significantly lower the costs otherwise paid by state agencies to achieve these goals.”

In a rational world, all interested parties would line up to support the carbon fee idea. It is precisely the kind of “free market” plan that conservatives suckled for decades by Charles and David Koch say they want. But the ultimate effect of the plan is burning less fossil fuels, the one thing the Kochtocracy hates more than anything else in the universe. Will conservatives support the carbon fee proposal? “We’ll see,” said the Zen master.

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Steve Hanley

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new."

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