Renewable Energy: Why Emissions and the Economy Don’t Tell the Whole Story

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Renewable Energy: Why Emissions and the Economy Don’t Tell the Whole Story

Solar panels on a dairy farm in Minnesota.  (Photo: Clean Energy Resource Team/flickr/cc)

Last week, President Obama announced the Clean Power Plan, the United States’ strongest climate policy to date. The plan aims to reduce coal-fired power plant emissions by allowing states to devise their own plans to reach federally-mandated emissions reduction targets. This choose-your-own-adventure policy could send states down very different paths, some worse for the environment and community resilience than others.

A bragging point for the Clean Power Plan is its flexibility; all currently identified low-carbon energy sources can play a role in state plans, including natural gas, nuclear, hydropower and other renewables. But despite the low-carbon nature these energy technologies share, they differ greatly in overall community and environmental benefit. Natural gas is abundantly available today due to controversial fracking technology (most of which occurs near rural communities); hydropower requires dam construction (sometimes on massive scales); and nuclear power comes with the risk of disastrous accidents, issues around extraction and long-term storage problems.

The final Clean Power Plan rule does emphasize renewable energy and energy efficiency over natural gas; a “Clean Energy Incentive Program” provides credits that can be traded later as part of emissions trading systems to states that expand wind, solar and energy efficiency efforts in the two years before state implementation plans take effect. However, shifting from coal to natural gas is one of the three building blocks EPA used in calculating state goals, so states are still permitted to emphasize natural gas in their implementation plans, even if it’s not incentivized. Shifting from one fossil fuel to another is not a sustainable energy future for any state, even if it slightly reduces greenhouse gas emissions.

The autonomy that the Clean Power Plan gives to the states can and will be used in different ways. While some states may choose to make up for coal reductions by shifting to natural gas, others may embrace the opportunity to develop and grow localized renewable energy policies based on wind and solar. The benefits of such localized policies are numerous: in addition to being carbon-free, renewables such as wind and solar have fewer negative environmental impacts, create jobs and boost local economies.

The Made in Minnesota Solar Incentive Program is a success story of one such localized renewable energy policy. The program started in 2013 to incentivize customers to install photovoltaic and solar thermal systems using products certified as manufactured in Minnesota. Customers are paid based on the production of their renewable energy system. Each year, customers receive a check based on the amount of kilowatt hours of energy their system produced. This year, over 500 businesses, homeowners and nonprofits entered a lottery for Made in Minnesota funding, far exceeding the program’s resources. If the program had the capacity to fund all the applications, Minnesota would have doubled its solar capacity in one year.

The program’s budget is $15 million over 10 years, and is funded in large part by public electric utilities’ Conservation Improvement Program (CIP) budgets. CIP budgets, mandated by the state of Minnesota, require public electric utilities to invest 1.5% of their state revenues in energy efficiency or renewable energy projects. Made in Minnesota customers are hooked up to the grid, so the incentive program helps the public electric utilities reach their current state-mandated goal of producing 1.5% of their electricity using solar by 2020. This percentage may increase once Minnesota crafts its implementation plan for the Clean Power Plan.

“I guarantee that most clients would never have installed a solar system without a little help from the government,” said John Kramer, CEO of Sundial Solar, a Minnesota-based company that consults on and performs solar panel installations. “The purpose of these programs is to demonstrate that solar is worth it. This is a technology that can be beneficial for everybody.”

So what’s stopping states from doubling down on localized renewable energy programs in their Clean Power Plan state implementation plans? Kramer thinks it’s partially ideological. “Some people think [solar incentives] milk taxpayers,” he said, “but they don’t realize all the subsidies that big gas and oil get.”

This is a valid point - a 2015 International Monetary Fund analysis estimated that oil and gas subsidies will amount to $5.3 trillion worldwide in 2015. That’s greater than the total health spending of all the world’s governments. And some critics think that figure is underestimated because it doesn’t account for the costs that climate change will incur as a direct result of burning fossil fuel. On the other hand, subsidies for renewable energy are estimated at $120 billion for 2015. That means that renewable energy subsidies will amount to just over 2% of the money spent on fossil fuel subsidies this year.

It’s not only fossil fuel subsidies that cause other energy technologies to win out over renewables such as solar. Fracking has led to an abundance of natural gas and the technology has gotten cheaper in recent years. But even though natural gas is cheap and burns cleaner than coal, fracking has a long list of negative impacts. Rural communities are disproportionately hit by these negative impacts, which include water contamination, earthquakes, land grabbing and methane pollution.

Even certain renewables pose large risks to the environment, human health and community well-being, despite clean energy generation and cost effectiveness. Hydropower is widely used, cost effective and will play a large part in many state implementation plans. Hydropower accounted for 68.75% of Washington’s total electricity generation in 2013, and many northern states, including Minnesota, have the opportunity to import large amounts of hydropower from Canada. However, dam construction can pose considerable threats to biodiversity and habitat, and can increase some vector-borne diseases that threaten human health. Perhaps more importantly, the dams that fuel hydropower imports from Canada are already displacing tribes and altering their native lands, and will continue to do so if renewable energy standards in the United States permit for more imported hydropower.

Nuclear power is another contender for inclusion in state implementation plans. The United States generates over 30% of the world’s nuclear generation of electricity and new reactors are still being built. Nuclear plants have a comparatively long life (60 years versus the 30 years for a natural gas plant) and they do not emit carbon dioxide. But nuclear power’s problems start at the source and continue throughout the energy production process. Uranium mining, most of which has occurred on tribal lands in the southwestern United States, produces toxic mining waste that contaminates water and increases radiation levels. To make things worse, mining often occurs without the tribes’ consent. In addition, nuclear plants are not immune to human error and natural disasters, and a nuclear accident can release radiation that lingers in the environment for years. It’s clear that states must consider more than cost and emissions reductions when designing their implementation plans over the next one to three years.

Successful localized renewable energy programs, like Made in Minnesota, demonstrate the feasibility of expanding technologies like wind and solar that do more than lower greenhouse gas emissions. Now is the time for states to look at the whole picture and move down a path of sustainability that includes economics and carbon accounting, but values environmental quality, human health and community resilience as well.

Tara Ritter

Tara Ritter is Program Associate for Climate and Rural Communities with the Institute for Agriculture and Trade Policy.

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