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The Problem with Carbon Caps

A friend wrote to me this morning with a simple question about New Energy Economy's ongoing fight for carbon caps on electric utilities. Here is my response.

The problem with setting a cap and creating a market for carbon is that there are too many loopholes, leaving too much room for the same shenanigans we’ve always seen from utilities. Utilities are loophole specialists. They are only fighting this fight out of instinct, and because they love it when their very, very highly paid lawyers can be reimbursed by ratepayers. ;o)  A colleague of mine affectionately calls this "paying for the stick they beat us with". Nice!

Here are some of the specific problems with a law mandating that utilities reduce carbon emissions:

Electric utilities...
...want to go nuclear anyway, and everyone seems to think that nukes are carbon-free.
...pass their costs on to ratepayers on everything they do, no matter how stupid.
...are prepared to game the carbon market, just like they game every market they are given.

There are many avenues for addressing the horror that is the electric utility industry, including...

...separating genco’s from disco’s/transco’s (no company can own both wires and generators).
...granting citizens a right-of-access for uploading energy to the grid (currently we can only download).
...applying feed-in tariffs that reward strategic implementation of distributed generation.
...mandating a fuel-to-wire efficiency standard that increases over time.

The last one (the efficiency standard) is interesting to me, and I’ve never heard it proposed. It’s easy to implement and track, and it would expose the insane inefficiency of the central generation model (the main reason utilities pollute so heavily). It would also yield immediate carbon reductions, and there is precedent (automobile fuel standards).

But the real solutions are so boring...I can hear the yawns out there already.

Think I’ll head back into my stupor now!  Much love, - Mark

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Reader Comments (4)

Great post Mark, please keep developing solutions along these lines. There are markets for these solutions around the world, in fact, I just met an outfit that is doing all kinds of distribution into Europe and Asia. I should hook you up with them. Leland
August 1, 2011 | Unregistered CommenterLeland
Thanks, Leland. It has been difficult watching countries around the world implement progressive policies that spur innovation and reward strategic deployment of distributed generation, while we still argue over rate hikes so that UTILITIES (of all things) can implement PHOTOVOLTAICS (of all technologies).

So yes, working in Europe appeals at this point...thanks for the referral!
August 2, 2011 | Unregistered CommenterMark
I got this link from Helen Caldicott's website, nuclearfreeplanet.org . . .


Where I grew up we had a small local power company - now long gone and part of the corporat-ocracy. How do we go back?
August 2, 2011 | Unregistered CommenterTodd R. Doherty
The 3,000-member Jemez Pueblo is developing plans to build the first utility-scale solar power plant on tribal land. The project is to include 14,850 solar panels on 30 acres. The cost is estimated at $22 million – to be financed through government loans, grants and tax credits. It is estimated the plant could generate $25 million over the next quarter century through power purchases by outside customers. This would create sustainable revenue for the tribe’s infrastructure and community services. So far, however, an agreement from a utility to purchase the energy has not been established.

James Roger Madalena, a former tribal governor, was quoted in the Christian Science Monitor (2010): "It's very critical that we become innovative, creative, and come up with something that will last generations without having a devastating impact on the environment...The project could lead to further renewable energy projects while setting a positive example not only for Jemez students and citizens, but tribes throughout the country. The project will also benefit all living things by helping to reduce carbon dioxide emissions into the atmosphere."

Geothermal, Biomass

With nearly $5 million of assistance from the U.S. Dept. of Energy, the tribe is also exploring the development of its geothermal resources. An area near Indian Springs on the pueblo is believed to contain a geothermal resource, which could be used for commercial power generation, agricultural greenhouse operations, heating systems and/or a commercial spa. The pueblo is also designing a biomass boiler for the Walatowa Visitors’ Center, to be fueled by waste material from forest thinning.

In planning for its tribal renewable energy workforce, Jemez Pueblo is integrating renewable energy into its schools’ curriculum: Elementary students are learning about robotics and solar-powered cars through a partnership with Los Alamos National Laboratory, and are studying designs of solar-powered homes. Staff from the pueblo’s Dept. of Resource Protection teach high-school students about the geothermal, solar, wind and biomass energy potential of the region through lectures and field trips. Kevin Shendo, the pueblo’s education director, uses the tribe’s renewable energy projects to teach math, science and technology in experiential learning activities to prepare students for jobs in a local green economy. Jemez Pueblo leaders think that renewable energy will be good for generating power, income and education for the long-term.
August 2, 2011 | Unregistered CommenterLeland
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