Carbon tax protects coal communities | Opinion
As the United States and the world rapidly move away from coal due to its adverse effects on our climate, Senator Joe Manchin examines Carbon Utilization and Sequestration (CCUS) to save the coal industry. CCUS technology has the potential to remove greenhouse gases from burning coal and store them safely underground or even turn them into useful products. But the problem with CCUS is that it is expensive. Senator Manchin summed up the reality of CCUS recently when he said, “I would love to have carbon capture, but we don’t have the technology because we haven’t really gotten to that point. Manchin added. “And it’s so expensive that it makes it almost impossible.”
CCUS is expensive and that’s the problem. A recent study by LSU Energy Studies showed that the average cost to capture and store carbon pollution from a coal-fired power plant is around $ 104 per tonne of CO.2 emissions. So, it is not surprising that little private investment goes into reducing emissions through CCUS when it costs exactly $ 0 to emitters of carbon pollution to dump carbon pollution into the world. atmosphere. If we start charging for pollution, the incentive is there to invest in technology to reduce it.
Lack of federal plan to drastically reduce emissions (and CCUS factories capturing the greenhouse gases that warm our planet), states are actively taking measures to reduce emissions by other means. This includes regulations imposing 100% clean energy, campaigns to shut down coal-fired power plants and limiting access to ports where fossil fuels are exported. I would say that in the absence of a federal plan to reduce emissions, the coal industry will decline rapidly.
There is currently a tax credit called 45Q which encourages carbon capture projects by offering financial incentives to capture pollution. Under current law, carbon capture projects and technologies are eligible for tax credits of up to $ 50 per tonne of carbon captured and placed in secure geological storage. Senator Manchin introduced legislation that would encourage carbon capture projects by increasing tax credits for projects capturing their carbon pollution up to $ 120 per metric tonne of CO2 capture. I should also mention that West Virginia Republican Senator Shelley Moore Capito also supports this bill. I applaud the bipartisan effort to put a price on carbon pollution; it’s a good start.
But I also share Sens. Capito and Manchin’s concern for our growing national debt. Tax credits are one way to encourage investment, but critics say they are ineffective, unfair and costly to taxpayers. They can also be short lived if they are unpopular. With the enactment of the Infrastructure Bill by President Biden, even more taxpayer money is funneled into CCUS technology, including $ 937 million for large-scale carbon capture pilot projects and $ 2.537 billion. for carbon capture demonstration projects. Thanks to Sens. Manchin and Capito and Rep. McKinley for voting to pass this important bill. This whole investment is great, but it’s also temporary. When the money runs out or the tax credit ends, it comes down to doing things the cheapest way for business and relying on Congress to spend more taxpayer dollars on the problem.
So how do you reduce emissions while easing the burden on taxpayers and encouraging businesses to invest in CCUS? A solution is currently being discussed among Democrats in the Senate as part of the budget reconciliation bill. The solution is to increasingly tax carbon pollution at the source (mine, wellhead or port of entry). This ensures that the costs are paid for by those who emit the greenhouse gases.
So how does this reduce the burden on taxpayers? The answer is to return these collected revenues to each household to ensure that all additional energy costs passed on to consumers are covered. A portion of the revenue collected could also go to other sources, such as helping to retrain our energy veterans in the fossil fuel industry, environmental justice communities, or reducing our national debt. But it is imperative that at least some of that income goes to protect low- and middle-income families.
A carbon tax is fair, efficient and paid by the fossil fuel industry. Equally important, it predictably increases the cost of doing business and would send a signal to companies to invest in technology like CCUS. Failure to put a stable, predictable, and sufficient price on carbon pollution is pushing much of the world to cut emissions in ways that are not helping coal communities. In the absence of a price on carbon, the rest of the world determines the fate of coal mining countries. Let’s put a price on carbon and put our businesses to work to solve the problem.
– Jon Clark is the regional coordinator for Appalachians at the Citizens’ Climate Lobby.