Future of Coal in a Carbon Constrained World
By Rosanne Skirble Washington /dc 30 March 2007

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Coal-fired power plants generate 50 of the electricity produced in the United States

Coal is a cheap and abundant fuel. Yet carbon emissions from coal-fired power plants are a leading cause of climate change. A new study from the Massachusetts Institute of Technology examines how the world can continue to use coal in a way that eases rather than worsens the global warming crisis.

MIT chemistry professor John Deutch says carbon emissions can be controlled first with the adoption of a high carbon tax, to be paid by power plants that burn coal. "If such a high [carbon] tax is put into place, there would be a stabilization of [carbon] emissions by mid century."

According to Deutch, who co-chaired the academic panel that produced the report,

MIT's John Deutch says the future of carbon depends on controlling its climate changing emissions

that tax would increase urgency for new carbon control technologies. One of the most promising is carbon capture and sequestration. Deutch says CCS is designed to keep pollutants from leaving a power plant by capturing and burying them underground or under water. "The demonstration of the effective ability to capture and sequester carbon is key to use of coal going forward."

The report recommends large-scale CCS demonstration projects to build confidence in the technology and encourage its adoption. The industry, however, is skittish because CCS technology adds significantly to the cost of new power plants. But George Peridas, a climate expert with the Natural Resources Defense Council, says costs will come down as CCS is slowly phased in. "We're talking about doing it one or two plants at a time. Therefore with the right policies you could spread this cost over the entire industry and not penalize 'first-movers' and you could also spread that across the rate base for electricity with very minimal [economic] impacts."

But ensuring minimal economic impact takes planning, according to Dan Riedinger, a spokesman for the Edison Electric Institute, a trade group for the coal-fired power industry. He says the industry must plan ahead if CCS - or any other technology - is to be required in all new coal-fired plants. "We don't want to shut down a lot of coal fired generation prematurely. That's not the kind of certainty that we are looking for."

Riedinger says pressure to act too soon to meet near-term carbon reduction targets and timetables could hurt the economy and is not sustainable. "There's no silver bullet, no technology that can easily fix things," Riedinger says, adding the MIT study indicates that there shouldn't be a rush to choose a technology to address the problem right now. "Moving now won't get us where we want in emissions reductions, and it is going to drive up prices for consumers in the interim."

Historically, power companies have backed voluntary actions over federal regulations, however, Riedinger says, plant operators would support a government mandate if it includes certain industry-friendly measures. "We need to set a reasonable price on carbon. We have to look at the impact on the U.S. economy, particularly industrial customers affected by high energy costs, and we need a greenhouse gas policy that won't send U.S. jobs and U.S. emissions overseas."

The MIT report assumes that the largest emerging economies - principally India and China - will comply with the same carbon restraints as other countries. But MIT's John Deutch does not expect that to be easy. He says in a carbon-constrained world emerging economies like India and China view emissions reductions as an equity issue. "They believe that there should be a difference in future CO2 reduction mandates for developing countries and developed countries."

Deutch says China and India are unlikely to adopt carbon constraints unless the U.S. does so and leads the way in CCS technology. "I might say there is no chance of making progress on this until the United States has a carbon control policy of its own."

With the shift in power following last November's elections, Democrats on Capitol Hill have put global warming policy on the political agenda. Several climate change bills are now before Congress with the expectation that legislation to rein in carbon emissions is not far behind.

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