Can clean energy campaigns stop climate change?

Frank Ackerman

Can we protect the earth’s climate without talking about it – by pursuing more popular policy goals such as cheap, clean energy, which also happen to reduce carbon emissions? It doesn’t make sense for the long run, and won’t carry us through the necessary decades of technological change and redirected investment. But in the current context of climate policy fatigue, it may be the least-bad short-run strategy available.

You may have lost interest in climate change, but the climate hasn’t lost interest in you. Once-extraordinary heat waves are becoming the new normal. Recent research demonstrates that by now someone “old enough to remember the climate of 1951–1980 should recognize the existence of climate change, especially in summer.”

Despite evidence of a worsening climate, the repeated failure of climate negotiations is sadly predictable. Real climate solutions require international cooperation, but inaction can be guaranteed by one country acting alone: No one else will accept significant costs for emission reduction unless the United States does. The world waited breathlessly for the first post-Bush climate meeting at Copenhagen in 2009; removing W. from the White House was necessary, but not, alas, sufficient for progress. Another breathless moment occurred as environmental advocates went all-out to pass a climate bill in Congress in 2010, accepted a series of dreadful compromises, and still failed miserably.

It’s time to exhale. Climate policy that dares to speak its name isn’t coming to the United States, and therefore the world, any time soon. American politics has drifted into a shadowy realm where people are polled on their declining level of belief in well-established, basic science. (Where will it end? “Gravity continues to enjoy high approval ratings, while swing state voters are divided on photosynthesis.”) The chance to leave a livable world to our grandchildren could slip away before sanity and science recapture the American electorate’s imagination.

In this discouraging environment, the resurgence of clean energy initiatives offers a breath of fresh air. Anti-coal activism, such as the Sierra Club’s “Beyond Coal” campaign, has the side effect of reducing carbon emissions. For example, the Big Sandy coal plant in Kentucky, a major (1078 MW) power plant, is being shut down and will likely be replaced by natural gas-fired plants, emitting about half as much carbon dioxide. American Electric Power, the owner of Big Sandy, had wanted to retrofit it to meet new pollution standards for coal plants. But the Sierra Club, supported by economic analysis from Synapse Energy Economics, showed that this would require a 30 percent increase in electricity rates. Even in a strongly pro-coal state like Kentucky, that was simply too much to pay.

Coal has become too expensive, at Big Sandy and elsewhere, because environmental regulations require costly retrofits – such as scrubbers to capture sulfur emissions. As this example shows, “cheap” energy is largely a social construct, not merely a technological fact. The least-cost source of energy depends on which costs are included. With no environmental regulations, coal would look like a bargain, because its external costs, or damages, would be excluded from the market price.

At the other extreme, what would happen if all environmental damages were included? One prominent study valued gross external damages from air pollution from coal-fired power plants in 2002 at $0.028/kwh (without a carbon price) – $0.036/kwh (with a low carbon price). The latter was 43 percent of the average residential price of electricity, or 60 percent in states relying heavily on coal.

Costs like these would indeed tip the balance against coal. But the political tradeoff for taking the easy way out on climate policy – relying on market forces to phase out coal – is the need for a very hard line on maintaining strict environmental protection. Rolling back or postponing the rules that make coal expensive would undermine the climate benefits as well.

The next battle already looms in the background. Currently coal loses in the marketplace because natural gas is so cheap. Gas is much better than coal from a climate perspective, but not good enough: to avoid dangerous climate risks, carbon emissions from electricity generation need to be far below the level of gas-fired power plants within a few decades. The current regulations that are dampening coal use won’t turn down the flame on natural gas. Air pollution from gas combustion is minimal, and including its costs would barely budge the price of gas-fired electricity.

To assess the true costs of natural gas, we’ll have to look upstream, at the source of gas. The United States suddenly has a huge supply of gas thanks to the discovery of hydraulic fracturing (“fracking”): pump enough high-pressure water into many shale formations, and the rocks will fracture and release some oil and gas. This is a disaster in the making, with potentially terrible effects on water supplies and on the overall environment of regions that have been fracked. Regulations have not yet caught up with the new technology; writing and enforcing rules that impose the full costs of fracking on gas producers will be a key challenge over the next few years. At stake is not only local environmental quality but also, indirectly, the cost of fossil fuels and the attractiveness of renewable energy.

It is almost conceivable to control greenhouse gas emissions without talking about climate change – but only by taking a consistently uncompromising position on many other environmental regulations. To fully protect and stabilize the climate, it will be necessary to move on beyond electricity, to more difficult sectors such as transportation and agriculture. In the long run, it is difficult to imagine success unless we figure out how to rehabilitate the image of science, reintroduce it to the American public, and talk without euphemisms about the challenges and the opportunities of creating a low-carbon world.

Frank Ackerman, until recently a senior economist at the Stockholm Environment Institute, will be at Synapse Energy Economics starting in September.

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