Bruce Murphy
Murphy’s Law

Four Ways to Slash Carbon Emissions

The EPA requirement that Wisconsin cut carbon emissions could be easily met, through these four approaches.

By - Jun 17th, 2014 11:46 am
Menomonee Valley Plant

Menomonee Valley Plant

Wisconsin has long been heavily reliant on coal. It ranks ahead of all but 13 states in the amount of power generated from coal, which fueled 51 percent of electricity in Wisconsin. That has major health consequences for its citizens, because no power source is more harmful. Pollution from Wisconsin coal plants is estimated to contribute to 268 deaths, 201 hospital admissions and 456 heart attacks each year, not to mention significantly increasing the state’s health care costs.

But that situation could soon improve, due to new rules by the federal Environmental Protection Agency, which will require states to reduce carbon emissions. Critics, however, charge it could have a “devastating” impact on Wisconsin’s economy, as Scott Manley, vice president of government relations for Wisconsin Manufacturers & Commerce (WMC), has declared.  In short, according to these critics, we must choose between our health and our jobs.

But using the U.S. Chamber of Commerce’s own figures on the impact of the EPA rules, their cost is equal to just one-fifth of one-percent of the total American economy, as Nobel Prize winning economist Paul Krugman has noted.  Writing for Urban Milwaukee, Bruce Thompson has looked at the impact claimed by the WMC and finds it is equal to two months of job growth for the five state, Midwest region.  And these are the worst-case scenarios. 

But even that small impact on jobs could probably be avoided, if Wisconsin simply took some proactive policies to reduce its reliance on coal and promote in-state solutions. There are four ways to do this:

Encourage Energy Conservation: it’s the low-hanging fruit that can easily reduce carbon emissions by reducing energy use. There are millions of homeowners, businesses and non-profits in the state that could save energy by installing insulation, fluorescent of LED lights, more efficient heating systems and  appliances. And the entire cost of this is recouped through future energy savings. The state’s Focus on Energy program, created in 2001, pushes public utilities to provide incentives and assistance to homeowners and businesses to adopt conservation measures, but the companies like We Energies have always been less than bullish about the program and the new Public Service Commission (PSC) appointed by Gov. Scott Walker hasn’t been excited about conservation.

But the benefits for the state are obvious: An independent analysis in 2012 found that that for every $1 invested in the program (for both conservation and alternative energy installations), homeowners and businesses save $2.89 in energy costs, up from $2.46 in savings that a 2011 audit by nonpartisan Legislative Audit Bureau reported.

Embrace Alternative Energy: Wisconsin’s heavy reliance on coal is a drag on the state’s economy. It makes us an importer of power that each year sends $12.5 billion out of state to meet our energy needs. Why not invest some of the state’s money to invest in alternative energy — wind, solar, geothermal and the like.

Wisconsin has already made some progress on this front: in 2013, the PSC recently announced, utilities generated more than 10 percent of the state’s power from renewable sources in 2013, hitting the level proscribed earlier by the Democratic-controlled legislature some two years before the 2015 deadline it set. The PSC report shows renewables provided 10.17 percent of power generated last year, up from 3.8 percent in 2006.

But most of the increase came before Walker and the Republicans came to power and progress has slowed down considerably. The Focus on Energy program also provides cash incentives to businesses and homeowners to adopt alternative energies like solar and wind technology. Democrats had passed legislation setting the annual funding for this at $160 million, with a steady increase to $256 million by 2014, but Walker and the Republicans slashed the annual funding to $100 million.

Given how quickly Wisconsin met the 10 percent challenge, you’d think state leaders would want to increase the goal. Neighboring states like Minnesota and Illinois have increased their targeted goal to 25 percent, but here again Walker and the Republicans have dragged their feet.

As I’ve previously written, Walker’s policies have sent a message that Wisconsin is not “open for business” when it comes to wind power. As a result, the state’s progress in installing wind power came to a screeching halt in 2012. Data from Wind on the Wires shows that in 2012, Illinois added 823 megawatts of wind power, Iowa added 814, Michigan 611, Minnesota 267 and Indiana 203. Wisconsin’s total? Zero.

As for solar power, Rex Gillespie, a former president of the Wisconsin Solar Energy Industries Association, told Milwaukee Magazine in February 2012 that work for solar contractors began to decline after the PSC slashed funding for solar power.

Yes, alternative energy depends on subsidies. But so does the fossil fuel industry. Meanwhile, the subsidies for alternative energy encourage the creation and expansion of in-state industries, while buying subsidized fossil fuel helps states like Wyoming and Texas.

Create a Cap and Trade Program: Though it’s now vilified by many conservatives, cap and trade is a free market oriented solution that was once championed by Republicans. Under this approach, government imposes a cap on emissions, and each company starts the year with a certain number of tons allowed—a so-called right to pollute. The company decides how to use its allowance; it might restrict output, or switch to a cleaner fuel, etc.. If it doesn’t use up its allowance, it might then sell what it no longer needs.

A cap and trade plan was endorsed by President George H.W. Bush and approved in 1990 as an amendment to the Clean Air Act. The program actually began in 1995. Since then, the American industrial sector has slashed sulfur dioxide pollution 64 percent. The EPA estimates the program has saved $120 billion in public health costs, which is about 40 times what it cost to implement the program, while saving 20,000 to 50,000 lives per year.

Smithsonian Magazine called the program “one of the most spectacular success stories in the history of the green movement.”

Could such a plan work for carbon emissions? It already does, In 2009, nine states in the Northeast — Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont — created a regional plan to reduce carbon emissions through a cap and trade plan. The result: these states reduced emissions by 18 percent, 4.5 times more than the other 41 states in this period of time. But did it hurt economic growth? Nope. During this same period, economic growth in the nine states rose by 9.2 percent, compared to 8.8 percent in the other 41 states.

These nine states now emit 91 million tons of carbon emissions annually. Wisconsin by itself emits 96 million tons.

To maximize the impact of cap and trade in Wisconsin, it might be better to adopt a similar, regional plan that included a state like Iowa, which is one of the national leaders in creating wind power.

Switch to Natural Gas: This is the only solution that seems acceptable to the state’s Republican leaders, but given how much companies like We Energies have invested in coal-fired plans, they are not excited about the high costs involved in convert to natural gas plants. But that would not be an impediment to solutions like conservation or cap and trade, and even alternative energies, because they are smaller-scaled, lower cost projects, could have appeal for utilities — not to mention businesses and homeowners across the state.

Of course, it takes leadership to make this happen, and Walker seems more concerned about protecting fossil fuel companies located outside this state. He signed the “No Climate Tax Pledge” promising to  “oppose any legislation relating to climate change that includes a net increase in government revenue.” The pledge was devised by a group co-founded and backed by the billionaire Koch brothers whose companies, according to the EPA, emit over 24 million tons of carbon dioxide annually.

As for Milwaukee-based company We Energies, the state’s largest utility, it remains a sluggard in embracing alternative energy: it generated a ways more than 7 percent of its electricity from renewable power last year, while other Wisconsin utilities generated much more: Northern States Power, for example, gets 18 percent of its electricity from renewables, WPPI Energy gets 16 percent and and Dairyland Power 14 percent.

Categories: Murphy's Law, Politics

24 thoughts on “Murphy’s Law: Four Ways to Slash Carbon Emissions”

  1. Who cares about the much higher prices for Energy, that Wind Farms can only exist with Tax Money and Big Goverment only gets bigger.
    Why care about the loss of jobs? Not the elite who love to tell others how to live as like ticks suck us dry.
    May you live to see what you wish come to pass and live in the Hell you create

  2. Dave Reid says:

    @Wayne As the story points out traditional energy sources are subsidized as well.

  3. Tom D says:

    One set of numbers in this story astounded me. The 9 northeastern states mentioned (with a total population of 40.5 million) produce less CO2 than Wisconsin (population 5.7 million).

    Each Wisconsinite produces 7.5x as much CO2 as somebody from the Northeast!

  4. Eric says:

    Carbon emissions are down 10% from 2005 levels due to higher use of natural gas and lower prices.

    @Dave Reid-Renewable energy sources would go bust without government subsidies. It is true that fossil fuels also receive government subsidies, but they are self sustaining businesses. They do not need government subsidies to survive. Renewables would not survive without taxpayer funding.

    @Bruce Murply-I would investigate the European experiment on alternative energy, specifically England with wind farms and Germany with solar. Also, carbon emissions have been coming down due to higher natural gas production and thus lower natural prices, leading to increased use of natural gas versus coal fired plants.

  5. Dave Reid says:

    @Eric “It is true that fossil fuels also receive government subsidies, but they are self sustaining businesses. ” Actually, by definition they are not (note the subsidy).

  6. Eric says:

    @Dave Reid-I think you are confused by the word subsidy. There are different types of subsidies. We’re not wandering around throwing money at Exxon but we are very much doing so for their counterparts in the renewables industry. The fossil fuel subsidies, they’re not subsidies to the producers of fossil fuels, they’re subsidies to the consumers of them (Think lower income folks who need help). Yes, certainly, there’s some leakage as the higher demand for fuels stimulated by the subsidies leads to higher prices for producers. But this is still conceptually different from the renewables subsidies which are expressly designed to go to the producers. The renewable programs are taxpayer funded enterprises. Without taxpayer funding, they go away. Indeed, given the way that most of the green energy subsidies are constructed the producers are subsidised by directly over-charging the consumers. We all pay higher heating bills to subsidize the renewable energy piece of the energy pie.

  7. Andy says:

    Cap and trade is such hooey. It always was… even if republicans supported it once. It only shifts polluting around… it doesn’t actually cut anything. Citing the RGGI in new england is pointless because the recession and low price of natural gas had them way below their capped level before the program even began. Luckily this also meant there was negligible affect on power rates and the economy as a whole.

    Cap and trade is just a tax… It does nothing else.

    Further, can I point out that utility rates in New England is about 30% higher then the East North Central region?

    Unlike staunch republicans I am ok with implementing renewable resources in a measured fashion, even though they need to be subsidized. I can see the benefit in it. But too much too quick will have too many negative consequences with very small return.

  8. Carl says:

    All energy sources are subsidized in the U.S. and elsewhere. By most metrics, renewable energy sources have received far less in subsidies in their early years — and overall — than any of the other energy sources. These findings come from a report by Nancy Pfund, Managing Partner, DBL Investors, and Ben Healey, a graduate student at Yale University School of Management. Here’s a link to their report:

  9. Observer says:

    When SC Johnson was alive he fought the building of the Oak Creek coal fired power plant claiming it wasn’t good for our environment. The old curmudgeon was right. How Gene Klappa keeps his job is beyond me. Coal is dirty, the plant was built and now we need to correct this at the expense of our electric bills. Grrr.

  10. Bruce Thompson says:

    Andy, There is no question that a cap and trade mechanism, if properly implemented, would reduce total emissions. As a hypothetical, suppose the goal for Wisconsin is to lower emission from 96 million tons to 50 million. Wisconsin would then issue permits to allow a total of 50 million tons (presumably this would be phased in over time). A market would be opened to allow trading leading to a market clearing price. Firms that could reduce emissions for less than the market clearing price would sell their permits to firms facing higher costs. Essentially this creates a market economy for carbon emissions.

    Your comment seems to assume the cap would be set at 96 million tons, in which case, what’s the point?

  11. Tyrell Track Master says:

    Good article. WI is going to have to bite the bullet and get clean sooner or later. The sooner the better or costs will only get worse.

  12. Andy says:

    Yes Bruce Thompson you are correct. At least correct if this was a completely isolated system or at least one that accounts for the CO2 of imported electricity from outside the system. However the RGGI does not, thus you’re opening the door to just shifting the CO2 emissions elsewhere. Even if we expand the system across the country you’re still going to see an export of the cheap coal laying around everywhere, or even if we don’t export the coal we are already seeing our coal companies themselves expanding overseas… which leaves the CO2 now being emitted overseas.

    Coal is cheap enough where you’d be hard pressed to see any real reduction of it’s use unless you get pretty drastic in your manipulation of the market price for it. Cap and trade can do that… but again, whether it’s just the RGGI in it’s current state or you tax the hell out of the system, the ultimate short term affect is just to create cost increases on energy.

  13. Andy says:

    Sorry, to explain my second paragraph, I’m talking about global demand for Coal.

  14. Tom D says:

    Andy (post 12), CO2 from imported electricity isn’t an issue for the RGGI since most electricity imported into the region is Canadian hydro-electric power.

  15. Todd Spangler says:

    While I acknowledge the legitimate concerns regarding CO2 emissions and their effect on the environment, and I don’t have a huge problem with the new EPA directives targeting coal plants in the US and their CO2 emissions, I think it’s worth keeping in mind that US CO2 emissions will play a proportionally smaller role in this issue with each succeeding year. Annual Chinese CO2 emissions already exceed those of the US by more than 50% according to the data in my most recent World Almanac, and the charts on this report from Yale last year show that the US portion of world CO2 emissions is down to only about 15%, with that share rapidly dropping:

    Climate change and ocean acidification are real problems that our civilization needs to address IMO, but the overwhelming majority of the evergrowing, massive amounts of CO2 that appear almost certain to be released in the coming years and decades will not be coming from the US, in any event, but from elsewhere in the world.

  16. Andy says:

    Tom, it’s true that about half of their imported electricity is Hydro… but even at that, we can’t all be so lucky. So it is an issue for the RGGI, and it’d be an even larger issue for other regions who would look at cap and trade.

  17. David says:

    The USA is 5% of the world’s population, and consumes 40% of the available energy on the planet. We are the energy hogs of the world. We use twice the amount of energy as average European residents. All the easy coal, oil, and nuclear energy has been mined and much more difficult to extract today. The majority of western oil field access is under water and more expensive. During the early days of the 19th Century, oil extraction took one unit of energy to obtain thirty-eight back. In come cases it is one unit to extract sixteen. It takes one unit of natural gas energy to extract two of tar sand oil. The law of diminishing returns and increasing needs of larger middle classes in India and China dictate world energy prices that are all intertwined and linked. Oil is the key link and densest energy product on the planet that is needed to extract all other forms including manufacture of wind turbines and solar panels.

    Maybe energy is still too cheap in Wisconsin compared to other areas of consumption? Some residents will pay more for cable and Ipad monthly bills than electric and natural gas and do not blink an eye over it.

    Other adjoining states have already made the commitment to 25% levels of renewable production mostly from large wind. As our state sits idly by on renewable energy, we will become a net importer instead of reliance on domestic production. That has always been a weakness in Wisconsin and exporting $12.5 Billion annually for energy.

    Cutting into that $12.5 Billion export of dollars could be a key factor for job expansion in many construction and remodeling businesses that could be providing services and materials for consumer owned energy efficiency upgrades, renewable features like solar panels, and comprehensive re-design of homes and businesses that includes time of use rate choices, energy storage devices like thermal mass storage furnaces, heat pump water heaters, ice making air conditioning, and eventually plug-in cars, and load management controls that would maximize on peak and off peak production of electricity. This could have the effect of flattening the load production curve, fill the off peak valley, a maximize use of renewable production.

    We have the technological know how right now to reduce our energy consumption of fossil fuels by 50%, obtaining the same level of work, and cut drastically into that $12.5 Billion annual export. It takes educated leadership and consumers to reach this type of goal. In 2010, Wisconsin was rated as a top ten state in its current path for energy efficiency and renewable energy. We have dropped below twenty ranking with our willfully ignorant legislature, Governor, and WPSC Commissioners leading us on the down-slope in many economic categories. All we have to do is compare Minnesota to Wisconsin and the positive results they are achieving within the same time period with different policies and leadership.

  18. wisconsin Conservative Digest says:

    Bruce, silliest stuff you have ever written. Would not make on iota of difference of carbon in air till the rest of the world aligns. There is not any proof anywhere that this is harming anyone, just lots of computer models put together by the left.
    This would bankrupt Wisconsin, look at the problems Germany is having with trying to coordinate their solar, wind and regular power. Doesn’t work.
    This will be in court long after we are dead, so why bother?

  19. Andy says:

    David, just to clarify… what is this 12.5 billion number you’re throwing out there? Is that all fossil fuels including vehicle fuel, home heating LP and natural gas, and things of that natural as well? IE, all energy and not just electricity? I just want to clarify because you keep bringing it up when general conversations are revolving around electricity.

    But I still think you fail to realize that it’s not the people with huge cable and cell bills that we are most concerned about… it’s the people who struggle to pay their bills and leave paycheck to paycheck that we’re worried about. Although even in the cases of people who pay those cable bills and cell bills it can have big impacts. We saw how the price of gas triggered the inevitable housing bubble burst. Energy is usually the second largest portion of family disposal expenditures and tends to have large negative consequences when it suddenly shoots up in cost.

  20. Observer says:

    The longest journey starts with that first small step. China is well aware of the dangers of pollution and is working to rectify it. I worry more about India. That said, we can’t worry about what other nations do, we must do what we can. WCD, if all your neighbors jumped off the cliff, would you follow? I try to be fair and look at things from all sides. I appreciate this comments here save yours. Writing “There is not any proof anywhere that this is harming anyone” will not win any converts to your way of thinking.

  21. David says:

    The $12.5 Billion has been quoted in a number of news articles regarding imported fuels. The last report I can find with Wisconsin statistics breakdown is a report on 2010 for 2009, a down year overall for energy consumption due to the economic bust cycle.

    Later report versions may be on another site that I would have to search for, possibly on the Energy Center of Wisconsin instead of a the state site. It may be that the current administration does not consider the report of value and stopped the purchase and publication.

    The majority of residents in Wisconsin are linked to electric and natural gas for power and heating needs. More rural areas are dependent on propane and electric for heating and cooking. Propane is derived from oil and tracks that world wide price.

    You are correct that high energy prices aide as a trigger to economic upheaval. This happened in the 70s, 80s, 2004-06, and again in 2007. Natural gas prices were high in the 70s, and energy efficiency programs gained traction along with access to more fields. Prices stabilized in the latter 80s.

  22. re-thinking China says:

    Yes, what China does may overwhelm what the US does.
    But — China has spent decades doing their best to copycat the US.
    So if we want China to stop polluting, the surest way is to lead the way.

  23. David says:

    China helps set the world wide market price of oil and other energy stocks. Oil is the most important. China, as the largest middle class on the planet, bought more GM cars in 2013 than purchased in the USA. By about 2050, and at current rates of consumption world-wide, fossil supplies will not be able to sustain the world appetite, and may actually happen much sooner without massive changes. Wisconsin is a small blip on the map compared to the planet.

    China and other countries purchase coal from Corporations stripping entire mountain tops in West Virginia. All the frack gas being exploited for its current low cost, causing regional earth quakes from lubricating earth crust, have energy corporations seeking LNG export options. At one time, the USA was considered to have coal reserves of 250 years, and has now been placed at 100 years. The same will happen with natural gas and any tar sand removal. Seller will seek the high bids on the planet and it may be in the USA. We lack an energy policy that keeps dwindling supplies for use here.

    Whether a person believes in climate change and pollution causes or not, energy supplies will dwindle over time, become more costly to extract, and go to the willing highest bidder on the planet. Alternative sources like wind and solar, combined with a comprehensive reconstruction effort and education with maximizing energy efficiency, conservation, load management controls and storage, provide a hedge and diversified portfolio of options to aide in managing the bets as advised by almost all credible economists. A byproduct of this pathway is a reduction in polluting emissions and greenhouse creating gases. On a state level, saving consumers billions of dollars annually, and on a national level, trillions.

    We have not even gotten into a discussion of how the transportation industry is responsible for 1/2 of emissions and the need for efficient mass transit. We have not gotten into discussion of how the agriculture system is also responsible for consumption of natural gas and oil in fertilizer and herbicides to substitute for the loss of carbon (as CO2) in soil over the last 100 years. Current agriculture is not on a sustainable path since it on a drug addition to fossil products that will become more expensive and scarce over time.

    Humans have likely already flipped the climate switch that is set in motion for centuries. We need to come to grips with how we will soon deal with these changes of rising sea levels, extended regional droughts, and extreme storms in all seasons.

    Corporations do not care about these human problems since their main goal is a selfish greedy short term profit. As humans, when do we stop serving the needs of the corporations, and serve our human and life quality needs? When do our politicians answer to humans instead of corporations?

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