I strongly support implementing carbon cap and trade of power plants as outlined in this draft regulation. I congratulate the DEQ on writing strong carbon cap-and-trade policy that will move Virginia forward in protecting our citizens from the worst impacts of climate change. I support linking with RGGI, which has a proven track record of success in reducing carbon emissions while keeping state economies strong.

I also urge the DEQ to make the following improvements:

1. Any power plant that makes use of biomass, either in part or in full, as its energy source should be required retire carbon allowances for 100% of the carbon emitted.
2. Any plant using municipal solid waste (“trash-to-energy”) or industrial waste as a fuel source must also be included under the cap.
3. The initial cap should be set at 30 million tons of carbon dioxide.

I would like to elaborate on the rationale for these three improvements.

ALL BIOMASS SHOULD BE INCLUDED UNDER THE CAP, NO EXEMPTIONS

The purpose of carbon cap-and-trade is to cause people to make different decisions than they otherwise would without the cap. We need a policy that is designed so that the different choices people make result in overall reductions in carbon emissions. A policy that exempts biomass will create a perverse incentive to cut down more forests.

If biomass is exempted, it will create the incentive for more biomass plants to be built, or for plants to be converted from fossil fuel to exclusively biomass. This will increase the incentive to cut down forests in Virginia and elsewhere that would otherwise remain standing. In addition to removing carbon dioxide from the atmosphere, these mature forests provide many other ecosystem services, such as cleaner drinking water, reduced erosion, oxygen production, cleaner air, and recreational opportunities. As we create carbon cap-and-trade, we must keep in mind that carbon is just one element among many in our ecosystems. Carbon policy that exempts biomass risks increasing the destruction of biodiversity in our forest ecosystems and reducing other benefits that they provide to society.

Proponents of using biomass for energy say that it is a carbon-neutral energy source. While it would be nice to think that burning biomass is carbon neutral because the energy source will absorb carbon dioxide as it grows back, a large body of scientific literature explains that the truth is not so straight-forward. One essential question is the time frame needed in order for a harvested forest to grow back enough to absorb all of the carbon released from burning. This time frame depends on many variables, including age of trees, species, amount of fossil fuels required to harvest trees, temperature, and growth rate of species.

In the 2012 issue of GCB Bioenergy, Giuliana Zanchi, Naomi Pena and Neil Bird review many scientific articles on the question of carbon neutrality of biomass and conclude,

“The assumptions and factors included differ among the studies, but the general conclusions are in agreement in stating that bioenergy is not always carbon neutral.”

In the January, 2015 issue of Journal of Forestry, Michael T. Ter-Mikaelian, Stephen J. Colombo, and Jiaxin Chen explain,

“Although the statement is generally correct in that the forest carbon deficit resulting from biomass harvest for energy might be eventually offset by carbon sequestration in regenerating forests, it is made implicitly incorrect by not acknowledging that decades to centuries are needed to erase this deficit. In the meantime, elevated levels of CO2 in the atmosphere have numerous potential direct (independent of climate change) and indirect (through changes to climate) biological consequences (Ziska 2008).”

We are on the verge of a tipping point with climate change. We need to craft a policy that reduced carbon emissions now, not decades from now. Harvesting forests for biomass fuel will increase carbon emissions in the near term. In the decades it will take for those forests to reabsorb that carbon, the added CO2 in the atmosphere will contribute to accelerated release of carbon from melting permafrost in the tundra and reduced albedo in at the poles due to melting ice cover.

A few other public comments submitted prior to this one express concern that including biomass in the carbon cap will hurt the paper industry and tree farmers. I reiterate that the point of a market-based solution is to change behavior. If the paper factory owners assess that carbon allowances no longer make it profitable to burn their residuals, they are not required to burn their wood waste. Nor are they stuck in a situation of profit loss. Paper factory owners are free to innovate to find new ways to use residual wood waste. They may discover a new application that brings in more money than burning waste wood ever did. I do not mean to make light of their difficult situation. I do want to point out that market-based solutions such as carbon cap-and-trade promote innovation. Exemptions do not. The climate crisis calls for innovation across all sectors of society, and should not exempt the paper industry or the biomass industry.

WASTE SUCH AS MUNICIPAL SOLID WASTE (MSW) AND INDUSTRY WASTE SHOULD BE INCLUDED UNDER THE CAP.

Though Virginia does not currently have large power plants that incinerate municipal or industrial waste to produce energy, a cap that does not explicitly include them will promote their development. Because MSW burned for energy is predominantly plastic that could otherwise be recycled, it is a potential source of carbon emissions and would promote the destruction of otherwise recyclable materials. Rather than wait for these plants to be built before regulating them, this draft regulation should be proactive and state that plants burning MSW and industrial waste must also retire carbon allowances to do so.

THE INITIAL CAP SHOULD BE SET AT 30 MILLION TONS OF CARBON DIOXIDE.

The level of the initial cap is of critical importance because subsequent reductions are percentages, not set amounts. The DEQ’s proposed initial cap of 33 to 34 million tons is based on the electricity utilities’ flawed projections of energy demand.

Again, the point of the cap is to reduce carbon emissions, not to give utility companies a new source of revenue through selling allowances to power plants in other RGGI states. If I were a decision maker in a current RGGI state, I would not want to link with Virginia if Virginia brings in such a high number of allowances. They will flood the market, reducing the clearing price of allowances in the RGGI market and reducing the revenue for RGGI states. Furthermore, a Virginia cap of 33 to 34 million will not cause a change in Virginia’s carbon emissions. We are not putting this regulation in place so that our utility companies can profit at the expense of RGGI states. We are putting it in place to reduce our carbon emissions to mitigate the very serious problem of climate change. We must have a cap that puts downward pressure on our carbon emissions from the first year.

Virginia’s electricity consumption is growing very slowly. Expected electricity demand growth over the next 15 years is less than 1% a year. The DEQ scenario of 33 to 34 million tons of emissions assumes a growth rate of 1.9 to 3% annual growth rate. It does not take into account the substantial amount of utility scale solar projects already in the construction pipeline, nor the increase in rooftop solar.

The anticipated energy demand depends largely on which historical data is considered. When looking at data from 2012 to 2016, one could conclude that energy demand is increasing. However, 2012 had a very mild winter and cool summer. The energy demand from 2005 to 2016 resulted in average emissions of just under 32 million tons of CO2.  Therefore, the cap should be set at lower than 32 million in 2020 to account for increased solar and natural gas, and to put downward pressure on emissions from the very first year. Even if a business-as-usual scenario predicts a decrease in carbon emissions, the purpose of a cap is to decrease carbon emissions by a greater amount than under the business as usual scenario. Therefore, I recommend a starting cap of 30 million tons of CO2 in 2020.

Thank you for considering these comments.

I am earning my Master’s Degree in Public Policy at the Frank Batten School of Leadership and Public Policy at the University of Virginia. The focus of my graduate research has been on energy and environmental policy, with an emphasis on carbon pricing design.  I hold a BA in Biology from Swarthmore College, and I taught AP Biology and AP Environmental Science for many years.

Sources:

Ter-Mikaelian, M. T., Colombo, S. J., & Chen, J. (2015). The burning question: Does forest bioenergy reduce carbon emissions? A review of common misconceptions about forest carbon accounting. Journal of Forestry, 113(1), 57-68.

Zanchi, G., Pena, N., & Bird, N. (2012). Is woody bioenergy carbon neutral? A comparative assessment of emissions from consumption of woody bioenergy and fossil fuel. Gcb Bioenergy, 4(6), 761-772.