Hitting Waxman-Markey Targets? No Problem

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Properly utilising natural gas – combined with the fact that the Waxman-Markey CO2 target of a 17% emissions cut by 2020 – could mean that hitting the W-M targets will be fairly easy.

Joe Romm at Climate Progress provides an analysis for how to reach the 17 per cent:

  • Two per cent will come from the recent EIA forecast that clean energy deployment from the stimulus, with a little help from the recession, will result in U.S. energy-related carbon dioxide emissions being two per cent lower in 2020 than they were in 2005.
  • Two per cent could come from Obama’s plan to raise fuel efficiency standards to 39 mpg by 2016.
  • Five per cent stems from the projected 293 million metric tons of carbon dioxide emissions that will be achieved by enforcing W-M.
  • One per cent, Climate Progress thinks, might come from the EPA’s projected 100 million in domestic offsets.
  • One per cent, similarly, may come from international offsets, which will cost more in 2020 as compared to low-cost renewables and natural gas.
  • The remaining six per cent – which Climate Progress estimates at a 360 million metric ton in reductions – could come from one, reducing carbon emissions by 60 million tons by 2010 with another 180 million tons by 2010 and two, switching from use of dirty coal to high-efficiency gas. 

The only question in Romm’s opinion: “Are the gas plants there and will the natural gas be available at a reasonable price?” He thinks yes to the first question. For the second question, he thinks pricing carbon will do the trick:

Again, note how flat the line is.  Most of the capacity being used below about $20/MWh ($0.02 kWh) is coal.  But there looks to be more than 15GW of natural gas for just $5 MWh more.

Now $14 a ton of CO2 adds $15/MWh to coal and $5 to combined cycle gas. So somewhere between, say $7 a ton of CO2 and $14 a ton you bring in a huge amount of gas in those two regions — assuming the gas is available at a reasonable price in 2020 (compared to coal).

 

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