EPC Forum – The Social Cost of Carbon, presentation by Laurie T. Johnson
Presentation by Laurie T. Johnson, Ph.D.
Laurie T. Johnson is Chief Economist, Climate and Clean Air Program Natural Resources Defense Council
About the Presentation
Using the “social cost of carbon” (SCC) (i.e. the monetized value of the marginal benefit of reducing one metric ton of CO2), we estimate on a cents-per-kilowatt-hour basis the environmental cost of CO2 emissions from fossil fuel generation. Adding this to production costs, we then compare the total social cost (generation plus environmental costs) of building new generation from traditional fossil fuels versus cleaner technologies, as well as of continuing to operate existing coal plants versus replacing them with new cleaner generation. We find that for most SCC values it is more economically efficient (from a social cost benefit perspective) for new generation to come from any of the cleaner sources than conventional coal, and in several instances the cleanest sources are preferable to conventional natural gas. For existing generation, most SCC estimates justify replacing the average existing coal plant with conventional natural gas, natural gas with carbon capture and storage, or wind. Several also justify solar photovoltaic and coal with carbon capture and storage over maintaining a typical coal plant.
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