With the U.S. and the world rapidly moving away from coal because of its harmful effects on our climate, Sen. Joe Manchin is looking at Carbon Capture Utilization and Sequestration (CCUS) to save the coal industry. CCUS technology has the potential to remove the greenhouse gases from burning coal and safely store them underground or even turn them into useful products. But the problem with CCUS is it’s expensive. Sen. Manchin summed up the reality of CCUS recently when he said: “I’d love to have carbon capture, but we don’t have the technology because we really haven’t gotten to that point.” Manchin added. “And it’s so darn expensive that it makes it almost impossible.”
CCUS is expensive and this is the problem. A recent study from LSU Energy Studies showed that the average cost to capture and store the carbon pollution from a coal-fired power plant is about $104 per ton of CO2 emissions. So, it’s not surprising to see little private investment going toward reducing emissions through CCUS when it costs carbon pollution emitters exactly $0 to dump carbon pollution into the atmosphere. If we start charging for pollution, the incentive is there to invest in the technology to reduce it.
Absent a federal plan to drastically reduce emissions (and CCUS plants capturing the greenhouse gases warming our planet), states are actively taking measures to reduce emissions in other ways. This includes regulations mandating 100 percent clean energy, campaigns to shut down coal-fired power plants, and limiting access to ports where fossil fuels are exported. I would make the argument, absent a federal plan to reduce emissions, the coal industry will rapidly decline.
There is currently a tax credit called 45Q which encourages carbon capture projects by providing financial incentives to capture pollution. Under the current law, carbon capture projects and technology can claim tax credits of up to $50 per ton of carbon captured and placed in secure geological storage. Sen. Manchin has introduced legislation that would encourage carbon capture projects by increasing tax credits to projects capturing their carbon pollution up to $120 per metric ton of CO2 captured. I should also mention that West Virginia’s Republican senator, Shelley Moore Capito, also supports this legislation. I applaud the bipartisan effort to put a price on carbon pollution; it’s a great start.
But I also share Sens. Capito and Manchin’s concern for our increasing national debt. Tax credits are one way to encourage investment, but critics say they are inefficient, unfair, and costly to taxpayers. They can also be short-lived if unpopular. With President Biden signing the infrastructure bill into law, even more taxpayer dollars are being funneled to CCUS technology including $937 million for Carbon Capture Large-Scale Pilot Projects and $2.537 billion for Carbon Capture Demonstration Projects. Thank you to Sens. Manchin and Capito and Rep. McKinley for voting to pass this important bill. All this investment is great, but it is also temporary. When the money runs out or the tax credit ends, it’s back to doing things whichever way is least costly to business and relying on Congress to throw more taxpayer dollars at the problem.
So how can we reduce emissions while at the same time reduce the burden on taxpayers and give businesses an incentive to invest in CCUS? One solution is being discussed right now among Democrats in the Senate as part of the budget reconciliation bill. The solution is placing a steadily increasing tax on carbon pollution at the source (mine, well-head, or port of entry). This ensures that the costs are paid by those who are emitting the greenhouse gases.
So how does that reduce the burden for taxpayers? The answer is to give that collected revenue back to every household to make sure any extra energy costs passed on to consumers are covered. Some of the collected revenue could also go to other sources such as helping to retrain our veteran energy workers in the fossil fuel industry, environmental justice communities or reducing our national debt. But it is imperative that at least some of that revenue goes toward protecting low- and middle-income families.
A carbon tax is fair, is efficient and is paid for by the fossil fuels industry. Just as important, it adds predictably to the cost of doing business and would send a signal to businesses to invest in technology such as CCUS. Failing to put a steady, predictable, and sufficient price on carbon pollution is driving much of the world to reduce emissions in a way that is not helpful to coal communities. Absent a price on carbon, the rest of the world is determining coal countries’ fate. Let’s put a price on carbon and put our businesses to work solving the problem.
— Jon Clark is the regional coordinator for Appalachia at Citizens’ Climate Lobby.