US taskforce deems carbon price essential

A taskforce convened by the Obama administration to investigate carbon capture and storage (CCS) has delivered its report on a technology advocated by fossil fuel industries as a way of extending the life of traditional power sources.

Run jointly by the Environmental Protection Agency (EPA) and the Department of Energy (DOE), the Interagency Task Force on Carbon Capture and Storage has delivered a series of recommendations on ways of making CCS viable over the next decade. It concludes that CCS, touted by energy industry luddites as an alternative to putting a price on carbon through taxation or cap-and-trade schemes, will remain largely dormant without the support of such incentives for behavioural change by fossil fuelled industries.

"The lack of comprehensive climate change legislation is the key barrier to CCS deployment," its final report says. "Without a carbon price and appropriate financial incentives for new technologies, there is no stable framework for investment in low-carbon technologies such as CCS."

While CCS is potentially important in reining in domestic greenhouse gas (GHG) emissions from coal and other fossil fuels, its development will remain slow while it's not driven by a price on carbon.

"Significant Federal incentives for early deployment of CCS are in place, including RD&D [research, development & demonstration] efforts to push CCS technology development, and market-pull mechanisms such as tax credits and loan guarantees," the report continues.

"However, many of these projects are being planned by the private sector in anticipation of requirements to reduce GHG emissions, and the foremost economic challenge to these projects is ongoing policy uncertainty regarding the value of GHG emissions reductions."

With plans to roll out five to 10 commercial demonstration projects over the next five years, the taskforce was convened in February to identify technological, legal, financial, fiscal, economic and institutional factors with the potential to stymie the rollout of CCS over the next decade. Its charter extended to finding ways of overcoming such issues and modelling the coordination of stakeholder input to implementation. Its report is the product of hundreds of submissions by all manner of interests and experts, including more than a dozen federal government agencies.

CCS is critical to the fossil fuel-hungry US – the DOE already has more than US$4 billion of its own and a further $7 billion in private capital tied up in demonstration projects. It's sinking plenty more into remodelling its regulatory systems to reduce uncertainty for investors. To that end, it's working on setting up a network of agencies and guiding committees to oversee the rollout of CCS schemes.

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