Common Tragedies

Thoughts on Environmental Economics


Posted by Evan Herrnstadt on August 5, 2008

From the Austin American-Statesman:

But in May, Greenpeace issued a report titled False Hope: Why Carbon Capture and Storage Won’t Save the Climate, which said carbon capture has not been commercially tested, distracts from efficiency measures in power plants and will cause power prices to rise. The report accused coal companies of trying to sell carbon capture as a way of staying in business, since carbon caps could crack down on their emissions (emphasis added).

The group said the government should invest in efficiency measures and alternative power technologies, like wind and solar, instead.

I’m not sure how Greenpeace thinks we are going to abate our carbon emissions without experiencing some sort of electricity price increase.  (Please excuse the following caricature of electricity markets.)  CCS will indeed make coal-fired power more expensive.  And it will become competitive as the price of traditional coal power plus carbon costs surpass those costs.  Under a cap-and-trade system, it’s conventional wisdom that a carbon price will get passed through by electric utilities to the consumer.  So we should turn entirely to wind and solar?  As we know, there are problems of physical capital availability, transmission infrastructure, and of course higher costs.

As for the comment about coal companies selling CCS as a way to stay in business, well, no kidding.  They are a firm with profit incentives, and they are trying to find technologies that allow their product to stay competitive under carbon regulations.  I’m not saying that I’m 100% behind CCS, but just because a firm is supporting something for profitability’s sake doesn’t mean that it’s automatically an evil idea.  I’d be interested to see how much switching entirely to efficiency, wind, and solar by 2020 would “cause power prices to rise.”  I imagine some blackouts might be involved as well.  Just saying.

On a related note, I’ve started sending text message warnings to my friends when I see Greenpeace fundraisers outside Whole Foods.

Q: Do you care about the environment?

A: No.  In fact, I’m off to burn some tires.  Bye.

One Response to “Arrrrrggg…reenpeace”

  1. No achievement without sacrifice. It astounds me how many so called “environmentalists” think that we can turn things round without pain. The pain of not acting is of course significantly greater, but life isn’t all roses and cupcakes.

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