Madmallard
.223 Rem
The cost of living in New Yorkistan is about to go higher.
The state's top energy policy makers moved closer to creating a price for carbon in New York in a much-anticipated report released Friday.
Carbon pricing is seen by many in industry and environmental advocacy as a crucial step in cutting carbon emissions from all sectors and the country's best hope to mitigate some of the worst effects of climate change. While action on the federal level is virtually non-existent, states like New York and California are increasingly stepping in to design carbon pricing schemes they hope can serve as models for the rest of the U.S.
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The report, issued by the state's grid operator, finds that including the social cost of carbon emissions in New York's electricity prices could support the state's clean energy goals with a minimal impact on costs to consumers and may actually reduce electricity prices.
The New York Independent System Operator and state policymakers have been working together to fine-tune the study. The report, prepared by the Brattle Group is the first step in a collaborative process to further consider what a carbon price would look like and how it could be implemented, according to a letter by NYISO CEO Brad Jones and Public Service Commission Chairman John Rhodes that accompanied the report.
"Any carbon pricing proposal must contribute to achieving New York State’s public policies, while providing the greatest benefit at the least cost to consumers while also providing appropriate price signals to incentivize investment and maintain grid reliability," they wrote.
NYISO's study — initiated in fall 2016 — drew national attention during a federal conference on the risks posed to competitive wholesale electricity markets by state policies that subsidize some resources over others — what critics typically call "picking winners and losers."
Subsidies for nuclear and renewable energy, along with record-low natural gas prices, have raised alarms about the future of merchant power plants across the country. Imposing a price on carbon would help level the playing field, supporters of the notion argue.
The report foresees a future where New York's goal to reduce overall emissions from all sectors, including transportation and industry, will require even greater reliance on renewable sources than Gov. Andrew Cuomo's 50 percent by 2030 goal. Electrifying sectors like transportation and building development could significantly cut emissions, provided the electricity is derived from low carbon sources.
Putting a price on carbon would help incentivize greater investments in renewable energy and more efficient combined-cycle fossil fuel-powered generators that would displace less efficient resources, according to the report.
Imposing a $40 per ton price on carbon in 2025 would decrease carbon dioxide emissions from the power sector by 2.6 million tons per year, or 8 percent of today's emissions, according to Brattle's analysis.
The carbon charge imposed on generators would then be redistributed to utilities and their customers. The report finds though that a carbon price could result in a one percent decrease in electricity prices, or as much as a two percent increase.
The estimated cost to consumers is offset by the revenue return and lower costs for the state's subsidies for nuclear and renewable resources due to higher wholesale electricity prices, according to the report.
New York's energy leaders lay out an early blueprint for carbon pricing
The state's top energy policy makers moved closer to creating a price for carbon in New York in a much-anticipated report released Friday.
Carbon pricing is seen by many in industry and environmental advocacy as a crucial step in cutting carbon emissions from all sectors and the country's best hope to mitigate some of the worst effects of climate change. While action on the federal level is virtually non-existent, states like New York and California are increasingly stepping in to design carbon pricing schemes they hope can serve as models for the rest of the U.S.
Story Continued Below
The report, issued by the state's grid operator, finds that including the social cost of carbon emissions in New York's electricity prices could support the state's clean energy goals with a minimal impact on costs to consumers and may actually reduce electricity prices.
The New York Independent System Operator and state policymakers have been working together to fine-tune the study. The report, prepared by the Brattle Group is the first step in a collaborative process to further consider what a carbon price would look like and how it could be implemented, according to a letter by NYISO CEO Brad Jones and Public Service Commission Chairman John Rhodes that accompanied the report.
"Any carbon pricing proposal must contribute to achieving New York State’s public policies, while providing the greatest benefit at the least cost to consumers while also providing appropriate price signals to incentivize investment and maintain grid reliability," they wrote.
NYISO's study — initiated in fall 2016 — drew national attention during a federal conference on the risks posed to competitive wholesale electricity markets by state policies that subsidize some resources over others — what critics typically call "picking winners and losers."
Subsidies for nuclear and renewable energy, along with record-low natural gas prices, have raised alarms about the future of merchant power plants across the country. Imposing a price on carbon would help level the playing field, supporters of the notion argue.
The report foresees a future where New York's goal to reduce overall emissions from all sectors, including transportation and industry, will require even greater reliance on renewable sources than Gov. Andrew Cuomo's 50 percent by 2030 goal. Electrifying sectors like transportation and building development could significantly cut emissions, provided the electricity is derived from low carbon sources.
Putting a price on carbon would help incentivize greater investments in renewable energy and more efficient combined-cycle fossil fuel-powered generators that would displace less efficient resources, according to the report.
Imposing a $40 per ton price on carbon in 2025 would decrease carbon dioxide emissions from the power sector by 2.6 million tons per year, or 8 percent of today's emissions, according to Brattle's analysis.
The carbon charge imposed on generators would then be redistributed to utilities and their customers. The report finds though that a carbon price could result in a one percent decrease in electricity prices, or as much as a two percent increase.
The estimated cost to consumers is offset by the revenue return and lower costs for the state's subsidies for nuclear and renewable resources due to higher wholesale electricity prices, according to the report.
New York's energy leaders lay out an early blueprint for carbon pricing
