Senator Sheldon Whitehouse, Democrat – Rhode Island, said Nov. 13 that "good guy" corporations with climate change reduction strategies need to be more active in pressing federal lawmakers to enact carbon pricing, specifically calling out technology companies to do more, while industry experts addressed other carbon pricing challenges.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
"As we try to solve this [climate change] problem politically in Congress with a bill of some kind, people need to recognize that even the 'good guy' corporations are not showing up in Congress to ask for climate legislation," Whitehouse said during virtual New England Energy Summit. The summit was organized by trade group New England Power Generators Association and public affairs consulting firm The Dupont Group.
A prime example is that the lobbying and trade organization TECHNET, whose membership includes Silicon Valley companies such as Google, Apple and Microsoft, brought a 13-page priority list earlier this year to Congress that had no mention of climate change or renewable energy, Whitehouse said.
TECHNET is comprised of some "really strong" renewable energy companies, and such an omission from their priority list is a "really strong example" of companies with strong public-facing statements and "terrific" internal climate policies coming to Congress and "throwing in the towel even before the fight has begun," he said.
There has to be a general awareness that American companies "are AWOL in Congress" and they should be there so the mechanics of politics has some degree of balance against the "continued mischief of the fossil fuel industry," Whitehouse said.
The senator also said that fossil fuel industry subsidies effectively amount to $600 billion per year, which gives such companies a "competitive advantage that bakes big distortions into the marketplace."
Additionally, the idea of carbon pricing is not dead in Congress and Republicans have done lots of thinking on it, he said. There are also four separate Democrat-led carbon pricing bills, with the most recent filed by deputy leader of Democrats in the senate, Dick Durban, Illinois.
"So this is not some fringe idea," Whitehouse said.
Momentum to address climate
Melissa Hoffer, chief of the Energy & Environment Bureau at the Massachusetts Attorney General's Office, listed multiple recent signs of movement on climate change concerns from the private and public sectors.
Hoffer cited "massive migration" of capital from fossil fuels to renewable energy resources that Goldman Sachs called a "seismic shift" and Black Rock CEO Larry Fink advised investors in an annual letter that climate risk is investment risk.
Goldman also predicted in a report that renewable energy will be the largest area of energy industry spending in 2021, surpassing upstream oil and gas investment for the first time in history, Hoffer said.
The Commodity Futures Trading Commission and the Federal Reserve each issued "strongly-worded reports" that highlighted energy transition momentum and climate change risk for financial markets, she said.
Nailing down climate change mitigation costs is also challenging because all the technologies needed to decarbonize are changing fast, making it hard to see how those costs will change over time, said Paul Hibbard, principal at consultant Analysis Group.
This includes things such as hydrogen infrastructure, renewable natural gas, long-term energy storage, etc., he said.
The cost to decarbonize today with current technologies and operational capabilities would be over $100/ton of carbon dioxide emissions, but we have to imagine these various technological cost trajectories changing over time in order to forecast decarbonization costs in twenty or thirty years, Hibbard said.
Additionally, decarbonization is currently very focused on the power sector, but over time reducing emissions from transportation and buildings will become the bigger focus, and that could increase power demand by 10 GW over the next 10 years, he said.
Matthew Nelson, chair of the Massachusetts Department of Public Utilities, was slightly more skeptical about carbon pricing, calling it an "elegant economic solution," that the state has embraced, but questioning the ideal carbon pricing approach.
For example, an electric-only carbon price could hurt electrification efforts if power prices were to increase compared to fossil fuels, Nelson suggested.
"It's hard to have faith in markets at this point and that you are going to get a sufficient carbon price needed to walk away from long-term [renewable energy] contracts, net metering and renewable portfolio standards," he said, adding that if "you set the right price for carbon you can walk away from those things."