There are few people left, at least in my orbit, who don’t share the goal of prompt decarbonization of the economy. The quaintly named $64,000 question ($64 trillion question?) is how we get from here to there.
Today, the New England Power Generators Association released a report prepared by Analysis Group that explains how an economy-wide price on carbon can help New England do just that. (Full disclosure: Foley Hoag has done work for NEPGA and my wife works at Analysis Group, though not on this project.)
As a long-time carbon tax supporter, I did not need to be sold, but the report still has some important conclusions.
- A carbon price of $25-35/ton in 2025 and $55-70/ton in 2030-35 would be sufficient to put us on a path to meet our GHG reduction targets.
- Electrification will reduce household energy costs such that, even including the price on carbon, such costs will be lower in 2035 than without electrification.
- The only means to get on a pathway towards attaining region-wide carbon reduction goals is to combine “high electrification” with carbon pricing.
- Existing fossil fuel generators will still be necessary for “at least the next one to two decades” for load management.
So, the way to get to a decarbonized economy in New England is to price carbon. We still have to answer one more question: how do we build sufficient support for pricing carbon that it becomes a political reality?