A Win-Win Solution

March 8, 2008
A Win-Win Solution

By David Keith and Thomas-Homer Dixon

What should we do with the carbon we produce when we burn fossil fuels? Some experts say we should fight climate change by putting the carbon back underground, whence it came.

In late January, a blue-ribbon panel recommended that Canadian governments spend $2-billion to begin deploying carbon capture and storage technology (CCS). This technology injects the carbon dioxide produced by burning fossil fuels into exhausted oil and gas fields or salty aquifers deep underground.

As is true of any large-scale energy technology, CCS carries costs and risks. The Intergovernmental Panel on Climate Change, the world's leading expert body on these topics, has estimated that CCS's costs are competitive with other leading ways to cut emissions and that its risks are small compared to those of related industries, such as underground storage of natural gas. CCS is not a magic bullet. But many climate and energy experts think that it's among humanity's best tools to control carbon emissions.

Yet almost all Canada's environmental groups panned the panel's recommendation. And these groups' opposition is clearly slowing CCS's development. Governments spend money to win the support of various interest groups, so they're reluctant to commit major funding to CCS — an environmental initiative — as long as environmental groups don't like it. In last week's budget, the federal government announced just $240-million in CCS funding, far less than previous support for biofuels and wind power.

By opposing CCS, environmental groups are gambling that we can make the huge cuts in CO2 emissions we need simply by improving our energy efficiency and using renewables like solar and wind power. They may be right. But if they're wrong, they could cripple action against climate change — the greatest environmental threat of our age. It's a dangerous, and seriously imprudent, gamble.

In criticizing the panel's proposal, environmental groups focused their ire on the use of government money to jump-start CCS technology. As John Bennett, of ClimateforChange.ca, put it, "The cost of cleaning up an industry should come out of the profits of the industry, not the taxpayers' pockets."

In many respects, these criticisms are fair. Ideally, polluters should pay to clean up their pollution. Governments should use taxes and technology-neutral regulations to put a price on carbon emissions, which would push industries to make deep reductions. Solutions would then come from the bottom up, and government would stay out of the business of choosing the best ways to cut emissions. Industries such as coal-fired electrical utilities and Alberta tar-sands processors that can generate relatively pure streams of CO2 might decide to go the CCS route and pay the cost of putting their emissions underground.

Yet the sad reality is that it will take years and maybe decades to untangle Canada's baroque energy and climate policies and to replace them with transparent and simple regulations based on the "polluter pays" principle. Environmental groups are wrong to argue that we shouldn't use government funds to support promising technologies before the mess is straightened out. We don't have the time to wait, because Earth's climate is changing fast, now. 

Without carbon prices or regulation, public funding is the only way to ensure that CCS technology gets going quickly. Such an investment today would bring a double return: near-term emissions reductions and, more important, the option to use CCS at a much larger scale later. By 2015, we would have "kicked the tires," by trying out CCS at full industrial scale. Then we would be able to count on the technology if we need it on a vastly larger, economy-wide scale in the following decades.

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See also: David Keith