Effective climate protection means better policy and harnessing market forces

Carbon capture seems to be a win-win — curbing climate-warming emissions without stifling the lionized coal industry.

However, recent high-profile failures have raised doubts about whether technologies can affordably sequester carbon.

That’s prompted a bipartisan coalition of senators to propose subsidies to revive faltering carbon capture efforts. Unfortunately, their bill would put taxpayers on the hook for costly technologies with murky implications for the environment.

Sen. Heidi Heitkamp (D-N.D.) together with bipartisan co-sponsors including senators Tim Kaine (D-Va.); Sheldon Whitehouse (D-R.I.); John Barrasso (R-Wyo); Lindsey Graham (R-S.C.) and Shelley Moore Capito (R-W.Va.) last month introduced the Furthering Carbon Capture, Utilization, Technology, Underground Storage, and Reduced Emissions (“FUTURE”) Act.

{mosads}Their bill would raise the tax credits for carbon capture to $50 per metric ton if the carbon dioxide is stored underground, and $35 if it is used for enhanced oil recovery.

That roughly matches the $40 per ton that the conservative Climate Leadership Council has proposed as a starting level for their carbon fee and dividend plan. The American Opportunity Carbon Fee Act sponsored by Whitehouse and Brian Schatz (D-Hawaii) in the Senate (S. 1639) and representatives Earl Blumenauer (D-Ore.) and David Cicilline (D-R.I.) in the House (H.R. 3420) proposes a fee rising from $49 per ton.

However, the carbon capture-only FUTURE Act would impact taxpayers and the environment far less favorably than the more comprehensive carbon fee plans.

Comprehensive carbon fees let businesses choose from a broad menu of responses. Businesses could shift from coal to natural gas or renewables, enhance efficiency, capture their carbon emissions, or simply pay the fee if cheaper options aren’t available.

The CLC plan would return all the revenue to American households. The Carbon Fee Act would use the money to cut corporate taxes, fund worker retraining in rural and impacted communities, and provide $550 credits to workers, veterans, Social Security recipients, and disabled Americans.

By contrast, carbon capture subsidies devote taxpayer money to just one emission reducing option. That turns sensible priority setting upside down. For the sake of the environment beyond climate and for conservation of finite resources, carbon capture should be a last resort rather than the favored way to keep carbon out of the air, for reasons I explain below.

Carbon capture has struggled through a troubled history. FutureGen, proposed by President George W. Bush in 2003, was supposed to demonstrate the viability of capturing the carbon emissions from a coal-fired power plant in Illinois.

However, the project was suspended in 2015 after years of technical difficulties. This year, carbon capture efforts at Plant Kemper in Mississippi were abandoned after billions of dollars in cost overruns and years of delays.

Even carbon capture’s one major “success story” raises cautionary flags. Energy Secretary Rick Perry touted the $1 billion Petra Nova project at a coal plant here in Texas for being on time and under budget.

Petra Nova has indeed remained afloat financially, thanks in part to a $190 million grant from the Department of Energy and a favorable deal for oil extracted from a depleted South Texas oilfield using its captured carbon dioxide. The $35 per ton subsidy from the proposed FUTURE Act would have substantially improved its finances.

For the environment carbon capture is a mixed bag at best. It takes a lot of energy to separate carbon dioxide from coal exhaust. That means producing the same amount of electricity requires more coal and the mining wastes, land degradation, diesel train exhaust, and coal ash ponds that come with it.

Petra Nova avoided extra coal use by building a new natural gas unit to supply the electricity and steam needed for carbon capture from the coal unit.

But that too brought environmental impacts from building the new unit plus all the fracking fluids, methane leaks, water use, air pollution, and uncaptured carbon from the natural gas that it burns. Also, the project keeps alive a 1980-vintage coal plant that could be replaced by wind, solar, natural gas, or efficiency.

Even with carbon capture, a substantial portion of the carbon dioxide and other air pollution still enters the atmosphere, uncaptured by current technologies. Meanwhile, using more fossil fuels for electricity here leaves less to export to project so-called “energy dominance” abroad.

Furthermore, supplying carbon dioxide at the times needed for oilfield injections hinders the flexibility of coal plants to respond to fluctuating power prices.

For all of these drawbacks, why would the FUTURE Act subsidize carbon capture? Carbon capture does warrant special attention for research and development, since the technology has lagged behind rapidly maturing technologies for wind and solar.

Carbon capture will at some point be a crucial tool for controlling emissions from certain industries that lack clear alternatives. And for politicians seeking to prop up the flagging coal industry, carbon capture provides a last-ditch chance to make coal compatible with climate action.

However, the FUTURE Act illustrates a fundamental flaw in our nation’s energy policies, or, more precisely, our lack of a coherent energy policy. Without a market-based, technology-neutral system like a carbon fee or trading market, our energy policies have devolved into a jostling match of competitors seeking favors.

Solar power receives investment tax credits. Wind receives production tax credits. Old nuclear and coal plants seek bailouts to stay afloat. Oil and gas companies get favorable tax treatments. Carbon capturers would receive bigger handouts under the FUTURE Act.

All of these subsidies spend taxpayer money while making energy cheaper, thwarting incentives to conserve. And with virtually every energy producer subsidized in this convoluted system, no one can afford to shun their handouts unilaterally.

Meanwhile, the more sensible and comprehensive Carbon Fee Act lags for lack of Republican co-sponsors, despite growing support for such proposals.

A recent survey by Yale and George Mason found that 70 percent of registered voters support a revenue-neutral carbon tax. The corporate-backed Climate Leadership Council led by retired Republicans and the bipartisan Citizens Climate Lobby are extolling the virtues of this type of approach.

How long it will take for this momentum to yield technology-neutral, taxpayer-friendly, market-based solutions to climate remains to be seen.

Until then, the flawed but bipartisan FUTURE Act subsidies may have a brighter future in the current Congress.

Daniel Cohan is an associate professor in the Department of Civil and Environmental Engineering at Rice University.

The views expressed by contributors are their own and are not the views of The Hill.