Last month at the European Parliament, the WWF held an event that was titled: “Fighting Coal CO2 Pollution: Is the EU Falling behind the US?” The event was held to discuss the United States’ use of an Emission Performance Standard (EPS) as a part of the climate change regulations that it will be effecting under the Clean Air Act. The event raised the question of whether such a policy could be a helpful compliment to Europe’s climate change policies, particularly its troubled Emissions Trading System (ETS) whose excess permit supply has allowed Europe to return to burning cheap coal.
Where ETS had failed to keep coal from the market, the event’s conveners hoped that an EPS might succeed. After all, in the United States there is no carbon price, but coal-burning fell off a cliff after 2008 in the face of stricter carbon dioxide standards for power plants under the Clean Air Act. Europe, meanwhile, remains irrevocably addicted to coal. Is the United States is doing something right while Europe’s policy has run amok?
Not really. Carbon intensity in the United States currently stands at just above 0.5 tons of carbon dioxide per MWh. Europe’s carbon intensity—in the midst of its coal bacchanalia—is 0.31 tons of carbon dioxide per MWh. That number has actually declined in the past few years even as coal use in Europe has increased, and done so despite the fact that Germany has taken on the order of fifty terawatt hours per year of zero emissions nuclear offline. If Europe instituted an EPS just like the United States has, it would have to increase its carbon intensity by 45% by 2030 in order to meet the target that the United States has set for itself for that year of 0.45 tons of carbon dioxide per MWh.
To which one might say, but of course that’s not what anyone is talking about. Even in the United States, 0.45 tons per MWh is the country average; some states have stronger targets, others weaker. Europe’s EPS could be selectively applied to coal-offending countries in order to drive down coal consumption. Perhaps. But this is not the way that the EPS has been applied in the United States, where coal burning states, due to the pragmatic realities, have been given the highest per-megawatt hour emissions quotas, whereas states with a cleaner emissions profile have the tightest targets. This speaks to a reality of climate change policy—that countries and governments do what they can, given the barriers that are created by powerful incumbent industries and their influence in governments. But put that aside for a moment and consider that in Europe some of the countries with the highest renewable energy generation percentages also are major coal offenders—namely, Germany.
Would an EPS really fix the problem? In Germany, coal is being burned as a bridge fuel to the fill the power demand while it continues to bring more renewable energy online, and retire its nuclear power plants. That the United States is using gas, not coal, as a bridge fuel is an indication of the comparatively low gas price in the United States, not its comparative virtue with respect to Europe, or the comparative success of its carbon dioxide regulations. Indeed, despite impending regulations on coal in the United States, coal emissions continue to fluctuate with gas prices; in 2013, coal generation increased by 71.6 TWh, an amount greater than the 50 TWh per year increase that European environmental organizations are trying to prevent with the introduction of an EPS.
Rules for the US EPS under the Clean Air Act are not yet finalized. But one of the many options being discussed for their implementation is trading of carbon efficiency between over-performing and underperforming regions. Such a measure would mean that when gas prices increase in the United States, American generators will have plenty of room to continue using coal as a bridge fuel in the same way that Germany is using it now. Indeed, even without trading, with the target as high as 0.45 tons per MWh, There will be room in United States for using coal as a bridge as in the same manner that Europe is now as gas prices increase.
More dangerous still for the United States, while coal is clearly a bridge in Europe, it may be a long-term strategy for the United States, which, in the absence of the renewable targets that exist in Europe, is already starting to replace its retiring coal-fired power plants with gas plants, rather than building renewable energy. This will lock the United States into a long-term relationship with natural gas that will prevent it from meeting the emission reductions targets required to mitigate climate change. It is true that Europe has a number of new coal-fired power plants coming online, but these are the result of legacy policies, and—with the possible exception of Poland—new plants are very unlikely to be permitted in EU countries in the future. The average age of a coal fired power plant in the United States is 40 years old, in Europe it is 34 years. In both regions, much of the coal fleet will be retired in the next 20-30 years. For both regions, the critical question is what will replace coal. Europe’s use of coal in the mid-term, unlike the United States use of gas, does not hold the danger of massive new investments in long-lived energy technology that is incompatible with a stable climate.
Of course Europe could design an EPS with a target that was so tight, say 0.2 or 0.1 tons of carbon dioxide per MWh, with tight geographical boundaries, no concessions for coal regions, and no trading that would make it harder to burn coal, and drive an accelerated retirement of coal-fired power plants. But if Brussels could pass this without giving concessions to the member states and industrial interests that will lobby against it, one might ask why it couldn’t simply tighten the ETS, or increase its renewable energy targets and get the same effect?
In some ways the focus on the EPS is strange preoccupation with form over function. The political economy and civil society of a region, more than the particular policy levers it chooses, shape the substance of climate policy and the ultimate strength of its outcomes. That there is such debate over coal burning in Europe despite the comparative strength of its climate policies is already an indication that it is a leader in emissions cutting. Coal burning or no, there is no other region of the world where there is such concern both within environmental organizations and the government not just with cutting emissions, but cutting them enough to matter.
This post was also published on The Energy Collective.