Putting a price on carbon will help New York state achieve a clean energy future

new york_

(Robert Bye, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Richard Dewey, President and CEO, NYISO


New York State, the 11th-largest economy in the world, recently enacted the US’ most aggressive climate change legislation. By 2040, according to the new law, the state must get all of its electricity from zero-emission sources.

How does a state of 19.8 million citizens, which in 2018 generated more than 40% of its energy from fossil fuels, reach zero emissions in only two decades? A carbon-pricing proposal from the New York Independent System Operator (NYISO) can play a significant role – as new research by the Analysis Group has concluded.

We at the NYISO have independently managed New York’s electric grid and its competitive wholesale electric marketplace for 20 years. In the past two decades, price signals in the NYISO’s competitive markets have helped to drive down power sector emissions dramatically, according to the US Environmental Protection Agency’s Air Markets Programme data and US Energy Information Administration data on power generation. Specifically, we have reduced the emissions rates of carbon dioxide by 52%, nitrogen oxide by 88% and sulfur dioxide by 99%. Today, we seek to bring those numbers down even further, and have been working with our stakeholders since 2017 on a carbon-pricing initiative.

 

What is carbon pricing?

Carbon pricing would embed a cost-per-ton of CO2 emissions in the sale of wholesale electricity, creating a price signal for investment in new clean-energy resources, as well as for existing generators to minimize their CO2 emissions through upgrades and efficiency improvements. It would also better align NYISO’s wholesale energy markets with New York State’s environmental objectives.

Simply stated, pricing CO2 emissions makes cleaner energy more profitable and carbon-emitting energy less economic. It also appropriately places the financial risk for developing cleaner, greener technology on investors rather than consumers. Carbon pricing would make use of the power of New York’s competitive electricity markets to promote more clean energy on the grid.

Why markets?

Competitive markets reward the most responsible and efficient ideas, and have provided incentives for generators to replace older, more polluting generators with more efficient generation, reducing greenhouse gas emissions.

Our markets provide the price signals to attract innovation and investment to the grid, where and when needed, and have already made it easier to attract, for instance, wind and solar resources.

How it works

Here’s how carbon pricing encourages investment in clean energy and further reduces emissions:

1. New York State sets a social cost of carbon as a price-per-ton of emitted CO2 based on the environmental impact

2. Power plants pay for the CO2 they release into the atmosphere

3. Generation owners receive an economic incentive to invest in low-carbon or carbon-free resources like wind, solar and hydro

4. Consumers benefit from payments made by polluting power producers.

Price signals create a strong economic incentive that values cleaner energy production and drives investment in new technologies like carbon capture and fuel cells. Carbon pricing promotes innovation, helping to grow clean energy businesses in New York State. And it encourages existing fossil-fuel plants to invest in repowering or in emission-reducing technologies.

Recognized by economists

The World Bank believes that carbon pricing is an essential tool to keep global warming to below 2°C and get to zero net emissions before the end of this century. In addition, a carbon price would “encourage technological innovation and large-scale infrastructure development” while accelerating the diffusion of carbon-efficient goods and services, according to a “Statement on Carbon Dividends” by the Climate Leadership Council, 3,554 U.S. economists, 27 Nobel Laureate recipients and other experts .

The report by the Analysis Group, commissioned by NYISO and co-authored by energy policy and economics expert Susan Tierney, concluded that our carbon-pricing proposal can help New York State meet its clean energy goals faster and more cost-effectively while reducing emissions and maintaining grid reliability.

The report also found that carbon pricing can:

· Reduce the consumer cost of reaching 100% carbon-free emissions

· Help grow investment and innovation in clean energy generation

· Promote innovation and energy efficiency in fossil fuel-burning technology

· Improve public health by encouraging the retirement of the highest-emitting generators

· Affirm New York’s position as a national leader on climate change

What’s next?

We are currently working with our stakeholders and with the state to finalize our carbon-pricing proposal. If the state and NYISO stakeholders support moving forward with carbon pricing, stakeholders vote whether to approve carbon-pricing wholesale market rules; the NYISO board of directors will then vote on whether to integrate carbon pricing into New York’s wholesale energy markets. The proposal would eventually need to be reviewed and accepted by the Federal Energy Regulatory Commission.

In the meantime, we have a huge opportunity to make a difference, and we see carbon pricing as one of the best solutions to help New York State reach its clean-energy goals while reducing the cost to consumers, driving innovation on the grid and improving public health by encouraging the retirement of the highest-emitting generators.

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

EU makes key TTIP document public as protests get louder

Driving structural change through global value chains integration

Pay packet inequality growing worldwide, says new UN report

Parliament and Council agree drastic cuts to plastic pollution of environment

The countries most ready for the global energy transition

More than one million sexually transmitted infections occur every day: WHO

Antibiotic resistance: challenges and solutions

A Sting Exclusive: “Doing ourselves a favour”, Vice President Dombrovskis underscores that this time growth has to come from within the EU

From Prince to Picasso, the arts can be just the tonic, new UN health agency study shows

Europe’s far-right launches attacks on neighboring nations

‘Deteriorating’ human rights in Belarus amounts to ‘wholescale oppression’: UN expert

Kellen Europe Hosts EuroConference 2016

World Pride underscores that all people are born ‘free and equal’ in dignity and human rights

‘Free state aid’ for imprudent banks

Venezuela: ‘Shocked’ by alleged torture, death of navy captain, UN human rights chief urges ‘in-depth’ investigation

Negotiations on Investment Facilitation at the WTO gain support at Davos

Oxford Dictionaries’ word of the year for 2019 is ‘climate emergency’

‘Chance for peace’ in South Sudan finally within reach, declares UN Peacekeeping chief

IMF launches a new offensive against Germany

The unique role of business in building social good

We have solutions to crime. We just need to scale them

EU on track to end use of chemicals harming the ozone layer

How tech can help businesses balance profit and purpose

Coronavirus update: Countries urged to fight ‘controllable’ pandemic

Britain in and out of the EU

‘Never give up’: UN chief urges all who serve, marking UN Day

Globalization 4.0 will help us tackle climate change. Here’s how

France asks help from Germany but it will not be for free

An economist explains the pros and cons of globalization

OECD warns global economy remains weak as subdued trade drags down growth

UN rights experts call on Russia to release Ukrainian film-maker whose life is in ‘imminent danger’

Russia and the West use the same tactics to dismember Ukraine

Ebola: EU provides an additional €30 million to tackle the outbreak in the Democratic Republic of Congo

Youth Parliament to finalise millennials´ priorities for future of the EU

Haitian President at General Assembly calls for essential development aid as UN mission shifts away from peacekeeping

Malaria could be gone by the middle of the century. Here’s how

The future of sustainability: recycling carbon through the power of the sun

Pharmaceuticals: Commission refines intellectual property rules

European creativity and digital economy are drowning in a copyright swamp

Eurozone: The cycle of deficits, debts and austerity revisited

The 100-year climate catastrophe of Mont Blanc

What will Germany look like after the next election?

EU Justice Scoreboard 2019: results show the continuing need to protect judicial independence

India’s economy is an ‘elephant that is starting to run’, according to the IMF

WEF Davos 2016 LIVE: Cameron corroborates that Britain should remain in the EU

How trade wars pose a threat to the global economy

Thursday’s Daily Brief: Poverty report reveals ‘vast inequalities’, measles compounds DRC Ebola woes, Guterres visits Mozambique, Bangladesh update, freedom of expression online

The Brexit factor in the US-China trade war and other conflicts

European Parliament strengthens EU consumer protection rules

Why the world needs systems leadership, not selfish leadership

This project in India helps people and tigers co-exist peacefully

Do electronic cigarettes produce adverse health effects?

Around 260,000 children in DR Congo’s Kasai region suffering severe acute malnutrition

From low-earth orbit, ‘envoys’ of humanity join UN space forum

Here are 3 alternative visions for the future of work

Villages ‘reduced to ash’ amid ‘barbaric violence’ in DR Congo, reports UN refugee agency

Coronavirus: How worried should we be?

How to build deforestation-free supply chains: lessons from Indonesia

Low quality healthcare is increasing the burden of illness and health costs globally

Somalia: UN urges steps to ensure future elections not ‘marred’ by rights abuses seen in recent polls

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s