Last week, AEP announced that it was putting on hold its plans to develop commercial scale carbon capture and storage technology at its Mountaineer plant in New Haven, West Virginia. As explanation, AEP cited the uncertain status of U.S. climate policy. More specifically, AEP CEO Michael Morris noted that it is difficult to get regulatory approval to recover CCS capital costs until GHG reductions are required.
It’s understandable that, in a world where putting a price on carbon emissions has become The Policy Which Shall Not Be Named, those who are trying to move technology forward look to other policy instruments, such as federal grants or subsidies, or tax provisions. A robust clean energy standard would provide increased incentives for technologies covered by the standard, but it is hardly the most efficient approach economically.
To this simple country lawyer’s mind, it’s not really that complicated. I can’t expect those who doubt the reality of climate change to support climate policy. For those who do, at some point we’ve got to recognize that there is no way to reduce carbon emissions, protect industry, and hold consumers harmless. The whole point is that carbon emissions are a negative externality – a cost that no one has been paying. Until we make someone pay those costs, its unrealistic to think that we can really encourage the technologies we need to develop to reduce carbon emissions.