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Costs, Benefits, and Desert Rock

By Jim Holtkamp

One of the immediate issues being discussed and litigated in the area of climate change is the imposition of CO2 controls on the Desert Rock power plant in New Mexico by way of interpretation of the Clean Air Act.  For those who may be dealing with this issue now or in the future, I suggest a few considerations. 

While increasing the cost of gasoline may be good for the development of renewable energy, roughly doubling the cost of new electricity by imposing carbon emission controls or carbon capture and sequestration may not be such a good idea right now.  In my view, there are two important considerations.  First, let's consider how much benefit CO2 controls imposed now will have in the future.  Using IPCC models (from one of the IPCC's formost modelers) and data, it is a simple matter to show that even full compliance with the Kyoto Protocol (going back to 1990 levels of CO2 worldwide) and continuing to maintain those levels over the next 100 years will only delay the global warming predicted by the models by a month or two.  In other words, such measures would only lower the temperature increase by 0.1 degree Fahrenheit ("F") by 2050, and by 0.3 degrees F by 2100, out of a total 4.7 degrees F (the IPCC's "standard" predicted increase in temperature by the year 2100).

Another measure of Kyoto's theoretical benefit (i.e. assuming that the U.S. and Australia had participated and other nations had met their obligations--neither is the case) is the delay of global warming predicted by the models, which would be approximately five years.  If the actual effect of Kyoto is calculated, it will have decreased global warming by .07 degrees F and postponed the rise of global temperatures by seven days.  Weighed against these levels of environmental benefit, there is not only a net cost of $5 trillion ($6 trillion from the U.S. alone, which experiences trivial benefits) over the 21st century, but also the following: a current lack of cost-effective technology that is ready for prime time, a need for urgent development of that technology, and a decision regarding whether it makes sense to do it on a source-by-source, discretionary, permitting basis (as opposed to a reasonable carbon tax, which is infinitiely more cost-effective and quicker than cap-and-trade). 

Issues such as these have not been included in the media discussion and debate to date.  However, I hope and expect that cost/benefit analysis of issues such as these will take place in every Enviromental Impact Statement and permit program before CO2 emission control programs are imposed by administrative fiat under the Clean Air Act.  The public and Congress also need to consider and debate these issues.  The science and the economics of the analysis recited above are essentially noncontroversial.

 (This post provided courtesy of Robert Connery, Environmental Compliance Attorney in Holland & Hart's Denver Office)

Full post as published by Climage Change Law on January 29, 2009 (boomark / email).