What the new carbon tax credit does for electricity
One of the biggest concerns about the use of technology to capture carbon dioxide emissions is that it would displace renewable energy and deepen dependence on fossil fuels, but a new report out today suggests that’s largely unlikely to happen.
Driving the news: The report by environmental group Clean Air Task Force finds that a federal tax credit that Congress expanded last year for carbon-capture technologies doesn’t displace any electricity from renewable energy while maintaining an impactful reduction of emissions.
The big picture: The technology that captures CO2 from power plant smokestacks and industrial facilities is prohibitively expensive in most cases but considered essential to reducing heat-trapping emissions to the level scientists say is necessary. The Trump administration and Congress have supported its development, despite Washington’s deep divisions over larger climate-change policies.
By the numbers:
- Nearly 50 million metric tons of carbon dioxide emissions could be captured and stored underground annually by 2030 on U.S. power plants fueled by coal and natural gas, the report found.
- That’s equivalent to taking 7 million cars off the road.
- The tax credit encourages 3% of America’s fossil-fuel electricity to use carbon-capture technology — most of that on existing coal plants.
- It has virtually zero impact on developing electricity from renewable energy.
What’s next: Deepika Nagabhushan, an expert at the group and lead author of the report, says the tax could help the U.S. get more than two-thirds of the way toward achieving goals by the International Energy Agency, but guidance is needed from the IRS to really encourage more investment.