Category Archives: Storage

Grid Storage R&D Center planned for Pacific Northwest National Lab by 2025

The first phase of planning work is underway on a $75 million research and development center focused on accelerating development and deployment of long-duration, low-cost energy storage.

The U.S. Department of Energy announced the beginning of design and construction of the Grid Storage Launchpad located at the Pacific Northwest National Laboratory in Richland, Washington.

The facility will include 30 research laboratories, some of which will be testing chambers capable of assessing prototypes and new grid energy storage technologies under real world grid operating conditions.

“The Grid Storage Launchpad facility will bring together researchers and industry from around the country to modernize and add flexibility to the power grid, advance storage technologies, and boost use of clean energy,” said Secretary of Energy Jennifer M. Granholm. “Deploying new grid technologies means we can get more renewable power on the system, support a growing fleet of electric vehicles, make our grid more reliable and resilient, and secure our clean energy future.”

The GSL will focus on three outcomes to advance grid energy storage development:

  • Collaboration: Bringing DOE, multidisciplinary researchers, and industry together at the facility will lower the barriers to innovation and deployment of grid-scale energy storage.
  • Validation: The facility will enable independent testing of next generation grid energy storage materials and systems under realistic grid operating conditions.
  • Acceleration: From benchtop to systems, the facility will de-risk and speed the development of new technologies by propagating rigorous performance requirements.

During this new phase of development, PNNL will select a design and construction contractor and begin working toward the start of construction, which could begin late this year. The building is expected to be operational and ready for occupancy by 2025.

“It took 40 years to get to the current state of today’s lithium-ion battery technology, but we need to move much faster to develop the long-duration, low-cost batteries needed to meet the significant challenges of decarbonizing the energy system,” said PNNL Director Steven Ashby. “The GSL will speed up the process considerably by doing the work needed to develop and deploy new grid storage technologies.”

The Grid Storage Launchpad will support the DOE’s Energy Storage Grand Challenge announced in January 2020 by then Energy Secretary Dan Brouillette. The Challenge was initiated to help researchers and industry develop domestically manufactured energy storage technologies which can meet U.S. market demands by 2030.

— — — — —

Energy Storage Breakthroughs will be a session track in POWERGEN International happening Jan. 26-28 in Dallas. The POWERGEN Call for Speakers is now open and click here to submit a session idea.

The post Grid Storage R&D Center planned for Pacific Northwest National Lab by 2025 appeared first on Renewable Energy World.

Grid Storage R&D Center planned for Pacific Northwest National Lab by 2025

The first phase of planning work is underway on a $75 million research and development center focused on accelerating development and deployment of long-duration, low-cost energy storage.

The U.S. Department of Energy announced the beginning of design and construction of the Grid Storage Launchpad located at the Pacific Northwest National Laboratory in Richland, Washington.

The facility will include 30 research laboratories, some of which will be testing chambers capable of assessing prototypes and new grid energy storage technologies under real world grid operating conditions.

“The Grid Storage Launchpad facility will bring together researchers and industry from around the country to modernize and add flexibility to the power grid, advance storage technologies, and boost use of clean energy,” said Secretary of Energy Jennifer M. Granholm. “Deploying new grid technologies means we can get more renewable power on the system, support a growing fleet of electric vehicles, make our grid more reliable and resilient, and secure our clean energy future.”

The GSL will focus on three outcomes to advance grid energy storage development:

  • Collaboration: Bringing DOE, multidisciplinary researchers, and industry together at the facility will lower the barriers to innovation and deployment of grid-scale energy storage.
  • Validation: The facility will enable independent testing of next generation grid energy storage materials and systems under realistic grid operating conditions.
  • Acceleration: From benchtop to systems, the facility will de-risk and speed the development of new technologies by propagating rigorous performance requirements.

During this new phase of development, PNNL will select a design and construction contractor and begin working toward the start of construction, which could begin late this year. The building is expected to be operational and ready for occupancy by 2025.

“It took 40 years to get to the current state of today’s lithium-ion battery technology, but we need to move much faster to develop the long-duration, low-cost batteries needed to meet the significant challenges of decarbonizing the energy system,” said PNNL Director Steven Ashby. “The GSL will speed up the process considerably by doing the work needed to develop and deploy new grid storage technologies.”

The Grid Storage Launchpad will support the DOE’s Energy Storage Grand Challenge announced in January 2020 by then Energy Secretary Dan Brouillette. The Challenge was initiated to help researchers and industry develop domestically manufactured energy storage technologies which can meet U.S. market demands by 2030.

— — — — —

Energy Storage Breakthroughs will be a session track in POWERGEN International happening Jan. 26-28 in Dallas. The POWERGEN Call for Speakers is now open and click here to submit a session idea.

The post Grid Storage R&D Center planned for Pacific Northwest National Lab by 2025 appeared first on Renewable Energy World.

3 cost-effective steps President Biden can take to accelerate a clean energy revolution

By Whit Fulton, ConnectDER

With the new administration inaugurated in January, and with Secretary Jennifer Granholm confirmed last week, those of us working to help solve the climate crisis can’t help but feel hopeful with what should be a new, aggressive approach to energy policy. As the world is facing a daunting climate crisis, and with a nearly 4-year delay in taking action to solve it in Washington, I was pleased to see that President Biden selected Governor Granholm as Energy Secretary. While so many have spoken volumes about her work resurrecting the auto industry after the 2008 financial crisis, it was her efforts on the state level shepherding aggressive renewable energy policies which helped create 125,000 green jobs in Michigan. 

I was equally thrilled to see the new President appoint former EPA administrator Gina McCarthy and Ali Zaidi to the top two climate advisory positions in his administration. All three have an impressive track record of moving the country towards a sustainable future for generations to come.

Now that all three are officially in place, it’s time to get to work.

In Mr. Biden’s own words, climate change will have the urgency of a “day one” issue. Beyond re-joining the Paris Agreement in his first 100 days, Biden and Granholm will need to begin rolling out practical policy plans to make significant investments in clean energy, technology, and infrastructure to create hundreds of thousands of American jobs. 

More than anything else however, and as with any industry, the renewable energy industry needs policy certainty. Wind, solar, and distributed energy resources (DERs) have all faced major policy uncertainty through shifting dynamics in Washington over the past six years. While it’s clear now that renewables are making unprecedented progress, the new administration must work to solidify policy so we can help simplify and accelerate the creation of jobs and our energy transition. Here are my thoughts.

Set Reliable Standards that Drive Interoperability

One unfortunate quirk of the US’s historic balancing act between Federalism and Republicanism is the patchwork of city, state, and regional standards that govern how clean energy can be installed and attached to the grid.  Simplifying, streamlining, and normalizing on key standards would reduce transaction costs and promote safety, unlocking massive acceleration in new deployments and jobs, and all at a fraction of the cost of straight subsidy to industry (don’t get me wrong, subsidies are great too, but let’s focus on the best returns on investment out there).  For example: there should be a standard one-page application for interconnection that can be filled out and filed electronically that is universal for utilities and local inspectors across the country.

So how do we do it?  First, Biden’s team should empower a single national certification organization that would examine, regulate and certify compliance for stakeholders with all relevant standards for electrical systems, processes and interconnections in the new energy economy.  Second, take a carrot approach: organizations that meet the standards should be rewarded with modest but meaningful tax or other incentives.  Forget sticks, since many organizations may have unique circumstances that justify taking a slower approach.  Best of all, there are excellent organizations working on this problem already like SEPA, NABCEP, SEIA, and EPRI, to name a few.  Empowering them with the needed funding and mandate to execute their mission at a larger scale would generate outsize returns for the industry and the planet.  

Promote Certified U.S.-made and Manufactured Products

Clean energy technology is only as clean as the components it’s made from.  While we do depend heavily on imports, and will continue to do so, we can’t really call our infrastructure clean if it’s built using abusive labor practices and carbon-intensive energy.  In this moment, there is an unprecedented opportunity to promote onshoring of renewable energy technologies to aid meaningful domestic job creation. This is where Granholm’s experience in the rust belt and with the auto industry will be vital; these areas of the country are and will continue to feel the strain of decarbonization. They need new opportunities and areas for advancement. Certified U.S. made and manufactured products earn a home field advantage not only through these job creation benefits, but because they also support the greater human rights and environmental justice mission of the U.S., and don’t offshore our carbon footprint. 

The Biden Administration should realign its trade policy with China and others to quantify any tariffs not in terms of arbitrary tit-for-tat retaliation but in terms of entrained carbon and other related CO2e measures.  The funds collected from the tariffs should then be allocated directly to a dedicated fund for carbon negative investments at home, thereby helping offset the cost of the tariffs, stimulating onshore cleantech industry activity, and creating a virtuous cycle to incentivize lower carbon everywhere.

Establish A Transparent Carbon Market

Markets work. At least, they work more cost-effectively than overbearing regulatory edicts.  Establishing a national carbon market, a simple process that charges electric generators and other major carbon emitting industries a cost per ton of carbon, can act as a disincentive to produce power from highly-polluting means and spur clean energy deployment (read: jobs). This is a powerful motivator for the energy transition, creates new funds for beneficial uses, and is already being done regionally.

Our working model: The Regional Greenhouse Gas Initiative, RGGI (pronounced “Reggie”), is a cooperative effort among Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. RGGI works by capping and reducing CO2 emissions from the power sector. Each RGGI state’s Budget Trading Program limits emissions of carbon dioxide from electric power plants, issues CO2 allowances, and even offers a secondary market for tradable certificates, allowing generators that more effectively reduce emissions to benefit financially.  Long-established U.S. emissions markets for nitrogen oxides and sulphur, bi-partisan creations, have shown enormous cost savings relative to imposed technology controls. This model should be applied to carbon and expanded nationwide.

Our Last Chance & Greatest Opportunity

The way the new administration perceives and reacts to climate change will set it apart from international peers (not to mention the outgoing administration). Avoiding a two degrees Celsius global temperature increase will require not only infrastructure investments but also a completely different way of looking at our need for and use of energy as individuals and homeowners. 

At this exact moment in time, we Americans have an unprecedented opportunity to improve our energy system, one that, done right, leads to a stronger economy and a cleaner, safer planet. With resolve and clear policy, America can assume the mantle of leadership needed to carry us into the next century and beyond.


About the Author

Whit Fulton is the founder and CEO of ConnectDER. ConnectDER devices enable easy, safe, low-cost, and rapid connection of distributed energy resources (DERs) to the power grid, via a connection to a collar that installs between the electric meter and meter socket. Whit founded ConnectDER to give inventors a place to solve meaningful problems and to ensure they have an ownership stake in the solutions they create.  His personal mission is to create technologies and business approaches that unlock profitable models for renewable energy.  Whit honed his analysis, negotiation, and product development skills through a series of senior managerial positions in energy analytics consultancies and cleantech startups.

The post 3 cost-effective steps President Biden can take to accelerate a clean energy revolution appeared first on Renewable Energy World.

3 cost-effective steps President Biden can take to accelerate a clean energy revolution

By Whit Fulton, ConnectDER

With the new administration inaugurated in January, and with Secretary Jennifer Granholm confirmed last week, those of us working to help solve the climate crisis can’t help but feel hopeful with what should be a new, aggressive approach to energy policy. As the world is facing a daunting climate crisis, and with a nearly 4-year delay in taking action to solve it in Washington, I was pleased to see that President Biden selected Governor Granholm as Energy Secretary. While so many have spoken volumes about her work resurrecting the auto industry after the 2008 financial crisis, it was her efforts on the state level shepherding aggressive renewable energy policies which helped create 125,000 green jobs in Michigan. 

I was equally thrilled to see the new President appoint former EPA administrator Gina McCarthy and Ali Zaidi to the top two climate advisory positions in his administration. All three have an impressive track record of moving the country towards a sustainable future for generations to come.

Now that all three are officially in place, it’s time to get to work.

In Mr. Biden’s own words, climate change will have the urgency of a “day one” issue. Beyond re-joining the Paris Agreement in his first 100 days, Biden and Granholm will need to begin rolling out practical policy plans to make significant investments in clean energy, technology, and infrastructure to create hundreds of thousands of American jobs. 

More than anything else however, and as with any industry, the renewable energy industry needs policy certainty. Wind, solar, and distributed energy resources (DERs) have all faced major policy uncertainty through shifting dynamics in Washington over the past six years. While it’s clear now that renewables are making unprecedented progress, the new administration must work to solidify policy so we can help simplify and accelerate the creation of jobs and our energy transition. Here are my thoughts.

Set Reliable Standards that Drive Interoperability

One unfortunate quirk of the US’s historic balancing act between Federalism and Republicanism is the patchwork of city, state, and regional standards that govern how clean energy can be installed and attached to the grid.  Simplifying, streamlining, and normalizing on key standards would reduce transaction costs and promote safety, unlocking massive acceleration in new deployments and jobs, and all at a fraction of the cost of straight subsidy to industry (don’t get me wrong, subsidies are great too, but let’s focus on the best returns on investment out there).  For example: there should be a standard one-page application for interconnection that can be filled out and filed electronically that is universal for utilities and local inspectors across the country.

So how do we do it?  First, Biden’s team should empower a single national certification organization that would examine, regulate and certify compliance for stakeholders with all relevant standards for electrical systems, processes and interconnections in the new energy economy.  Second, take a carrot approach: organizations that meet the standards should be rewarded with modest but meaningful tax or other incentives.  Forget sticks, since many organizations may have unique circumstances that justify taking a slower approach.  Best of all, there are excellent organizations working on this problem already like SEPA, NABCEP, SEIA, and EPRI, to name a few.  Empowering them with the needed funding and mandate to execute their mission at a larger scale would generate outsize returns for the industry and the planet.  

Promote Certified U.S.-made and Manufactured Products

Clean energy technology is only as clean as the components it’s made from.  While we do depend heavily on imports, and will continue to do so, we can’t really call our infrastructure clean if it’s built using abusive labor practices and carbon-intensive energy.  In this moment, there is an unprecedented opportunity to promote onshoring of renewable energy technologies to aid meaningful domestic job creation. This is where Granholm’s experience in the rust belt and with the auto industry will be vital; these areas of the country are and will continue to feel the strain of decarbonization. They need new opportunities and areas for advancement. Certified U.S. made and manufactured products earn a home field advantage not only through these job creation benefits, but because they also support the greater human rights and environmental justice mission of the U.S., and don’t offshore our carbon footprint. 

The Biden Administration should realign its trade policy with China and others to quantify any tariffs not in terms of arbitrary tit-for-tat retaliation but in terms of entrained carbon and other related CO2e measures.  The funds collected from the tariffs should then be allocated directly to a dedicated fund for carbon negative investments at home, thereby helping offset the cost of the tariffs, stimulating onshore cleantech industry activity, and creating a virtuous cycle to incentivize lower carbon everywhere.

Establish A Transparent Carbon Market

Markets work. At least, they work more cost-effectively than overbearing regulatory edicts.  Establishing a national carbon market, a simple process that charges electric generators and other major carbon emitting industries a cost per ton of carbon, can act as a disincentive to produce power from highly-polluting means and spur clean energy deployment (read: jobs). This is a powerful motivator for the energy transition, creates new funds for beneficial uses, and is already being done regionally.

Our working model: The Regional Greenhouse Gas Initiative, RGGI (pronounced “Reggie”), is a cooperative effort among Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. RGGI works by capping and reducing CO2 emissions from the power sector. Each RGGI state’s Budget Trading Program limits emissions of carbon dioxide from electric power plants, issues CO2 allowances, and even offers a secondary market for tradable certificates, allowing generators that more effectively reduce emissions to benefit financially.  Long-established U.S. emissions markets for nitrogen oxides and sulphur, bi-partisan creations, have shown enormous cost savings relative to imposed technology controls. This model should be applied to carbon and expanded nationwide.

Our Last Chance & Greatest Opportunity

The way the new administration perceives and reacts to climate change will set it apart from international peers (not to mention the outgoing administration). Avoiding a two degrees Celsius global temperature increase will require not only infrastructure investments but also a completely different way of looking at our need for and use of energy as individuals and homeowners. 

At this exact moment in time, we Americans have an unprecedented opportunity to improve our energy system, one that, done right, leads to a stronger economy and a cleaner, safer planet. With resolve and clear policy, America can assume the mantle of leadership needed to carry us into the next century and beyond.


About the Author

Whit Fulton is the founder and CEO of ConnectDER. ConnectDER devices enable easy, safe, low-cost, and rapid connection of distributed energy resources (DERs) to the power grid, via a connection to a collar that installs between the electric meter and meter socket. Whit founded ConnectDER to give inventors a place to solve meaningful problems and to ensure they have an ownership stake in the solutions they create.  His personal mission is to create technologies and business approaches that unlock profitable models for renewable energy.  Whit honed his analysis, negotiation, and product development skills through a series of senior managerial positions in energy analytics consultancies and cleantech startups.

The post 3 cost-effective steps President Biden can take to accelerate a clean energy revolution appeared first on Renewable Energy World.

New energy storage deployment topped record 3,500 MWh in 2020, ESA report shows

Energy storage installation grew nearly 200 percent and totaled an all-time operational record in fourth quarter 2020, according to a new report.

The report released by analytics and research firm Wood MacKenzie and the U.S. Energy Storage Association’s latest U.S. Monitor report indicated that about 2,156 MWh of new energy storage was brought online in the last three months of the year. This breaks the previous quarterly record and is 182 percent higher than 2020’s third quarter, according to the report.

Falling prices and fewer barriers to energy storage deployment are credited with helping the quarterly revival. Front-of-meter storage accounted for four of every five MW deployed in the fourth quarter, according to report.

Residential storage totaled about 90 MW and represented 14 percent of the MW total during the period. Much of that growth was driven by homeowner interest in California, the ESA release says.

Overall for the year, nearly 1,500 MW of capacity and 3,500 MWh in new storage was brought online. The capacity total was 179 percent higher than the previous year’s installations.

“2020 is the first year that advanced energy storage deployments surpassed gigawatt scale—a tremendous milestone on the path to our aspiration of 100 GW by 2030,” said Jason Burwen, U.S. Energy Storage Association Interim CEO. “With continuing storage cost declines and growing policy support and regulatory reform in states and the federal government, energy storage is on an accelerating trajectory to enable a resilient, decarbonized, and affordable electric grid for all.”

The U.S. energy storage market is forecast to add five times more storage—or close to 7,000 MW­—in 2025, according to the ESA.

Front-of-meter installation could account for up to 85 percent of new MW annually, as utilities deploy large-scale projects to help balance out intermittent renewable energy growth. The U.S. installed 3,115 MWh of storage from 2013-2019, a total which was exceeded in 2020 alone, Wood Mackenzie Head of Energy storage Dan Finn-Foley noted in a statement.

“The data truly speaks for itself,” Finn-Foley said. “This is the hallmark of a market beginning to accelerate exponentially, and momentum will only increase over the coming years.”

The world’s largest utility-scale battery storage system, Moss Landing, was brought online earlier this year in Monterey County, California. The 400 MW/1,600 MWh Moss Landing was developed by Texas-based utility owner Vistra Energy and is backed by long-term contracts with Pacific Gas & Electric.

— — — — —

Decarbonization and Energy Storage Breakthroughs are two of the content tracks when POWERGEN International happens live Jan. 26-28, 2022, in Dallas. The POWERGEN Call for Speakers is open for submissions through May 17. Click here to see the tracks and submit a speaking session idea. Presentations which include utility speakers will be given added weight.

The post New energy storage deployment topped record 3,500 MWh in 2020, ESA report shows appeared first on Renewable Energy World.

New energy storage deployment topped record 3,500 MWh in 2020, ESA report shows

Energy storage installation grew nearly 200 percent and totaled an all-time operational record in fourth quarter 2020, according to a new report.

The report released by analytics and research firm Wood MacKenzie and the U.S. Energy Storage Association’s latest U.S. Monitor report indicated that about 2,156 MWh of new energy storage was brought online in the last three months of the year. This breaks the previous quarterly record and is 182 percent higher than 2020’s third quarter, according to the report.

Falling prices and fewer barriers to energy storage deployment are credited with helping the quarterly revival. Front-of-meter storage accounted for four of every five MW deployed in the fourth quarter, according to report.

Residential storage totaled about 90 MW and represented 14 percent of the MW total during the period. Much of that growth was driven by homeowner interest in California, the ESA release says.

Overall for the year, nearly 1,500 MW of capacity and 3,500 MWh in new storage was brought online. The capacity total was 179 percent higher than the previous year’s installations.

“2020 is the first year that advanced energy storage deployments surpassed gigawatt scale—a tremendous milestone on the path to our aspiration of 100 GW by 2030,” said Jason Burwen, U.S. Energy Storage Association Interim CEO. “With continuing storage cost declines and growing policy support and regulatory reform in states and the federal government, energy storage is on an accelerating trajectory to enable a resilient, decarbonized, and affordable electric grid for all.”

The U.S. energy storage market is forecast to add five times more storage—or close to 7,000 MW­—in 2025, according to the ESA.

Front-of-meter installation could account for up to 85 percent of new MW annually, as utilities deploy large-scale projects to help balance out intermittent renewable energy growth. The U.S. installed 3,115 MWh of storage from 2013-2019, a total which was exceeded in 2020 alone, Wood Mackenzie Head of Energy storage Dan Finn-Foley noted in a statement.

“The data truly speaks for itself,” Finn-Foley said. “This is the hallmark of a market beginning to accelerate exponentially, and momentum will only increase over the coming years.”

The world’s largest utility-scale battery storage system, Moss Landing, was brought online earlier this year in Monterey County, California. The 400 MW/1,600 MWh Moss Landing was developed by Texas-based utility owner Vistra Energy and is backed by long-term contracts with Pacific Gas & Electric.

— — — — —

Decarbonization and Energy Storage Breakthroughs are two of the content tracks when POWERGEN International happens live Jan. 26-28, 2022, in Dallas. The POWERGEN Call for Speakers is open for submissions through May 17. Click here to see the tracks and submit a speaking session idea. Presentations which include utility speakers will be given added weight.

The post New energy storage deployment topped record 3,500 MWh in 2020, ESA report shows appeared first on Renewable Energy World.

The oil industry says it might support a carbon tax – here’s why that could be good for producers and the public alike

by Richard Schmalensee, Professor, MIT Sloan School of Management and Davide Schoenbrod, Professor, New York Law School

The oil industry’s lobbying arm, the American Petroleum Institute, suggested in a new draft statement that it might support Congress putting a price on carbon emissions to combat climate change, even though oil and gas are major sources of those greenhouse gas emissions.

An industry calling for a tax on the use of its products sounds as bizarre as “man bites dog.” Yet, there’s a reason for the oil industry to consider that shift.

With the election of President Joe Biden and rising public concern about climate change, Washington seems increasingly likely to act to reduce greenhouse gas emissions. The industry and many economists and regulatory experts, ourselves included, believe it would be better for the oil industry – and for consumers – if that action were taxation rather than regulation.

The American Petroleum Institute emphasized that trade-off in its draft statement, first reported in the Wall Street Journal on March 1. The statement says “API supports economy-wide carbon pricing as the primary government climate policy instrument to reduce CO2 emissions while helping keep energy affordable, instead of mandates or prescriptive regulatory action.”

Regulations versus taxation

There are a few ways to set a price on carbon. The most straightforward is a carbon tax. The price is designed to reflect all the harm done by greenhouse gas emissions, such as the impact of heat waves on public health.

A tax on carbon emissions would likely be imposed on firms that produce oil, gas, coal and anything else whose use results in carbon emissions. While companies would be taxed, they would pass those costs on to consumers.

The tax gives everyone incentives to reduce their contributions to carbon emissions by, for instance, fixing leaky windows, buying an electric vehicle or making a factory more efficient. In addition, the revenue from the carbon tax could be rebated to consumers in a variety of ways. Thus, if the tax is high enough, everyone from the biggest corporation to the most modest homeowner would have a strong incentive to search out the most cost-effective ways to cut carbon emissions.

In contrast, regulations put federal agencies in charge of deciding how best to reduce emissions. Regulators in Washington often know far less than individual factory owners, homeowners and others how to cut those factories’ and homes’ emissions most cost-effectively and thus reduce the cost of the tax for those people. Regulation comes with procedural requirements that impose paperwork expenses and delays on businesses, too.

Regulators can also be subject to pressure from members of Congress and lobbyists to do favors for campaign contributors such as, for example, not regulating emissions of favored industries stringently or regulating in ways that protect favored industries from competition. In the 1970s, one of us, David Schoenbrod, was a Natural Resources Defense Council attorney who sued under the Clean Air Act to get the EPA to stop the oil industry from adding lead to gasoline. That experience laid bare the accountability problem: The statute allowed Congress to take credit for protecting health, but lawmakers from both parties lobbied the agency to leave the lead in, and then Congress blamed the agency for failing to protect health.

The upshot, in our view, is that regulation could produce less environmental protection bang for the buck than a carbon tax.

As then-presidential candidate Barack Obama stated in 2008, with regulation, agencies dictate “every single rule that a company has to abide by, which creates a lot of bureaucracy and red tape and oftentimes is less efficient.”

What will Congress do?

On March 2, a new major climate bill was introduced in Congress. It reflects many of Biden’s climate strategies, but it sticks to regulation rather than considering a carbon price.

The CLEAN Future Act, introduced by the ranking Democrats on the House Energy and Commerce Committee, directs regulators to reduce greenhouse gas emissions to zero by 2050. The centerpiece of the bill is a national clean electricity standard, which focuses narrowly on electricity generation and, we believe, misdefines the climate problem as too little clean electricity rather than too much carbon being emitted from all sources.

The bill’s 981 pages are jam-packed with regulatory mandates and leave plenty of opportunity for legislators to blame regulators for both the failure to achieve the act’s goal and the burdens of trying to do so. Besides, most of the legislators who would vote for such a bill will be out of office long before 2050.

A carbon tax could be passed decades before 2050. Whether it will be set high enough to do the job remains to be seen, but we will know exactly which elected officials to blame or applaud for their attempt to tackle climate change. Government will be transparent, as it and a clean atmosphere should be.

What’s at stake in the choice between taxing carbon and regulating it is not how much we will cut emissions – Congress can set the tax, and thus the reduction in emissions, as high as it wishes. What is at stake is whether the choice of how to cut carbon will be made by the businesses and people who emit it or by regulators, legislators, and lawyers and lobbyists working for business and advocacy organizations.


Disclosure Statement

David Schoenbrod is a senior fellow of the Niskanen Center and has written extensively about the regulatory process. Richard Schmalensee does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.


About the Authors:

Richard Schmalensee served as the John C Head III Dean of the MIT Sloan School of Management from 1998 through 2007. He was a member of the President’s Council of Economic Advisers from 1989 through 1991 and served for 12 years as Director of the MIT Center for Energy and Environmental Policy Research. Professor Schmalensee is the author or coauthor of 11 books and more than 120 published articles, and he is co-editor of volumes 1 and 2 of the Handbook of Industrial Organization. His research has centered on industrial organization economics and its application to managerial and public policy issues, with particular emphasis on antitrust, regulatory, energy, and environmental policies. He has served as a consultant to the U.S. Federal Trade Commission, the U.S. Department of Justice, and numerous private corporations. (Read his full bio at this link)

David Schoenbrod was at the forefront of environmental justice, taking on big business. Now, his concern has turned to Congress evading accountability to voters. Professor Schoenbrod’s most recent book, DC Confidential: Inside the Five Tricks of Washington, shows how politicians from both parties take credit for popular promises, but avoid blame for unpopular consequences and points the way to stopping the trickery. He also frequently contributes to the editorial pages of The Wall Street Journal, The New York Times, and other newspapers and periodicals. (Read his full bio at this link)


This article was first published by The Conversation and was reprinted with permission.

The post The oil industry says it might support a carbon tax – here’s why that could be good for producers and the public alike appeared first on Renewable Energy World.

The oil industry says it might support a carbon tax – here’s why that could be good for producers and the public alike

by Richard Schmalensee, Professor, MIT Sloan School of Management and Davide Schoenbrod, Professor, New York Law School

The oil industry’s lobbying arm, the American Petroleum Institute, suggested in a new draft statement that it might support Congress putting a price on carbon emissions to combat climate change, even though oil and gas are major sources of those greenhouse gas emissions.

An industry calling for a tax on the use of its products sounds as bizarre as “man bites dog.” Yet, there’s a reason for the oil industry to consider that shift.

With the election of President Joe Biden and rising public concern about climate change, Washington seems increasingly likely to act to reduce greenhouse gas emissions. The industry and many economists and regulatory experts, ourselves included, believe it would be better for the oil industry – and for consumers – if that action were taxation rather than regulation.

The American Petroleum Institute emphasized that trade-off in its draft statement, first reported in the Wall Street Journal on March 1. The statement says “API supports economy-wide carbon pricing as the primary government climate policy instrument to reduce CO2 emissions while helping keep energy affordable, instead of mandates or prescriptive regulatory action.”

Regulations versus taxation

There are a few ways to set a price on carbon. The most straightforward is a carbon tax. The price is designed to reflect all the harm done by greenhouse gas emissions, such as the impact of heat waves on public health.

A tax on carbon emissions would likely be imposed on firms that produce oil, gas, coal and anything else whose use results in carbon emissions. While companies would be taxed, they would pass those costs on to consumers.

The tax gives everyone incentives to reduce their contributions to carbon emissions by, for instance, fixing leaky windows, buying an electric vehicle or making a factory more efficient. In addition, the revenue from the carbon tax could be rebated to consumers in a variety of ways. Thus, if the tax is high enough, everyone from the biggest corporation to the most modest homeowner would have a strong incentive to search out the most cost-effective ways to cut carbon emissions.

In contrast, regulations put federal agencies in charge of deciding how best to reduce emissions. Regulators in Washington often know far less than individual factory owners, homeowners and others how to cut those factories’ and homes’ emissions most cost-effectively and thus reduce the cost of the tax for those people. Regulation comes with procedural requirements that impose paperwork expenses and delays on businesses, too.

Regulators can also be subject to pressure from members of Congress and lobbyists to do favors for campaign contributors such as, for example, not regulating emissions of favored industries stringently or regulating in ways that protect favored industries from competition. In the 1970s, one of us, David Schoenbrod, was a Natural Resources Defense Council attorney who sued under the Clean Air Act to get the EPA to stop the oil industry from adding lead to gasoline. That experience laid bare the accountability problem: The statute allowed Congress to take credit for protecting health, but lawmakers from both parties lobbied the agency to leave the lead in, and then Congress blamed the agency for failing to protect health.

The upshot, in our view, is that regulation could produce less environmental protection bang for the buck than a carbon tax.

As then-presidential candidate Barack Obama stated in 2008, with regulation, agencies dictate “every single rule that a company has to abide by, which creates a lot of bureaucracy and red tape and oftentimes is less efficient.”

What will Congress do?

On March 2, a new major climate bill was introduced in Congress. It reflects many of Biden’s climate strategies, but it sticks to regulation rather than considering a carbon price.

The CLEAN Future Act, introduced by the ranking Democrats on the House Energy and Commerce Committee, directs regulators to reduce greenhouse gas emissions to zero by 2050. The centerpiece of the bill is a national clean electricity standard, which focuses narrowly on electricity generation and, we believe, misdefines the climate problem as too little clean electricity rather than too much carbon being emitted from all sources.

The bill’s 981 pages are jam-packed with regulatory mandates and leave plenty of opportunity for legislators to blame regulators for both the failure to achieve the act’s goal and the burdens of trying to do so. Besides, most of the legislators who would vote for such a bill will be out of office long before 2050.

A carbon tax could be passed decades before 2050. Whether it will be set high enough to do the job remains to be seen, but we will know exactly which elected officials to blame or applaud for their attempt to tackle climate change. Government will be transparent, as it and a clean atmosphere should be.

What’s at stake in the choice between taxing carbon and regulating it is not how much we will cut emissions – Congress can set the tax, and thus the reduction in emissions, as high as it wishes. What is at stake is whether the choice of how to cut carbon will be made by the businesses and people who emit it or by regulators, legislators, and lawyers and lobbyists working for business and advocacy organizations.


Disclosure Statement

David Schoenbrod is a senior fellow of the Niskanen Center and has written extensively about the regulatory process. Richard Schmalensee does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.


About the Authors:

Richard Schmalensee served as the John C Head III Dean of the MIT Sloan School of Management from 1998 through 2007. He was a member of the President’s Council of Economic Advisers from 1989 through 1991 and served for 12 years as Director of the MIT Center for Energy and Environmental Policy Research. Professor Schmalensee is the author or coauthor of 11 books and more than 120 published articles, and he is co-editor of volumes 1 and 2 of the Handbook of Industrial Organization. His research has centered on industrial organization economics and its application to managerial and public policy issues, with particular emphasis on antitrust, regulatory, energy, and environmental policies. He has served as a consultant to the U.S. Federal Trade Commission, the U.S. Department of Justice, and numerous private corporations. (Read his full bio at this link)

David Schoenbrod was at the forefront of environmental justice, taking on big business. Now, his concern has turned to Congress evading accountability to voters. Professor Schoenbrod’s most recent book, DC Confidential: Inside the Five Tricks of Washington, shows how politicians from both parties take credit for popular promises, but avoid blame for unpopular consequences and points the way to stopping the trickery. He also frequently contributes to the editorial pages of The Wall Street Journal, The New York Times, and other newspapers and periodicals. (Read his full bio at this link)


This article was first published by The Conversation and was reprinted with permission.

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