A Carbon Price for Colorado

In May of 2013 I gave a talk at Clean Energy Action’s Global Warming Solutions Speaker Series in Boulder, on how we might structure a carbon pricing scheme in Colorado.  You can also download a PDF of the slides and watch an edited version of that presentation via YouTube:

What follows is a more structured written exploration of the same ideas.

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Feds underestimate costs of carbon pollution

NRDC blogs about a new study on federal use of discount rates in calculation of carbon costs, which suggests we grossly underestimate the present value of reducing emissions.  Did you even know that the feds had put an internal price on CO2?  They behave as if it costs $21/ton to emit.  But that’s based on a discount rate of around 3%, which is the highest rate OMB suggests using for inter-generational costs.  Part II of the very detailed NRDC post is here.

2011 Wind Market Report from LBNL

Lawrence Berkeley National Labs has put out a report on the state of the wind energy industry, as of the end of 2011.  I didn’t realize that the price trend had been so uneven over the last decade.  The cost of wind power was dropping in the early 2000s, and then rebounded, peaking in 2008/2009 due to shortages in the turbine supply chain, before again dropping in the last year or two.  I started looking into these prices because I’m reading a Renewable Energy Policy by Paul Komor (2004) and the prices he quotes ($40-$50/MWh) seem low, relative to the numbers from Xcel’s ERP and the recent bids I saw in Michigan (more like $60/MWh), but the book was written right at the wind price bottom.  I’m also shocked at how wide the spread in costs is, even in just the last couple of years.  California is paying $100/MWh for huge projects, and in the wind belt some projects are coming in more like $25/MWh.  That’s got to be largely policy driven, and it indicates we’ve got a woefully inefficient market for wind.