It is past time that the United States develop an efficient plan to deal with carbon dioxide, former Deputy Secretary of Energy Clay Sell said Thursday during the United States Energy Association’s Annual Energy Supply Forum. To that end, the next secretary of energy, regardless of which party is in the White House, must “design a carbon pricing regime that will provide the certainty and efficiency energy investors desire,” Sell said.
While the energy secretary has little regulatory pull in is such matters, he or she will have the power of the “bully pulpit” that comes along with the job, according to Sell, who served in the Energy Department during the George W. Bush administration.
The current administration has taken steps to address carbon pollution through subsidies on renewable energy and regulations including the controversial Clean Power Plan, which imposes on coal-fired power plants the first-ever limits on carbon pollutions.
Under the Clean Power Plan, states are required to develop action plans to meet federally set emissions reductions goals. This patchwork of requirements, layered on top of complex subsidies for different energy technologies, has produced an inefficient policy regime, according to Sell. “We know we’ve got to do it, and we know we need to replace this mess of subsidies, mandates, regulations, etc., etc., etc., that produced distorted effects and come up with a way to price the value of carbon-free technologies so that they can be properly rewarded in the marketplace and that can be done,” he said.
Implementing a carbon price in the United States will not be easy politically, but should be pursued regardless. “Let me be clear, since I rolled in last night and I’ll roll out tomorrow, I can tell you from kind of an idealistic view, but it is my view that you need to design a new program that would effectively replace the various other efforts to control carbon, including the Clean Power Plan,” he said, noting that he is no longer involved in national energy policy.
A second former deputy secretary of energy, Daniel Poneman, concurred that a carbon price would be the most efficient way to decrease emissions.
Poneman also stressed the need for the Department of Energy to assist in the commercialization of innovative low-carbon technologies. “Inventing technologies is a laboratory is not enough,” he said. “We need to find ways to accelerate commercialization, particularly with first-of-a-kind technologies that may have high upfront capital costs.”
A carbon price should not be seen as a single point solution for decarbonization but as a means for tackling the issue “in a rational way that drives private investment to do things that can only successfully take place at the scale that private sector can support in terms of investment,” said Poneman, now CEO of Centrus Energy.