Moniz summarized the conclusions of a report on the future of coal that was recently conducted by a group at the Massachusetts Institute of Technology (Deutch and Moniz, 2007). According to that report, coal is today a cheaper source of energy than oil, natural gas, nuclear power, or renewable sources of energy. But the use of CCS technology to reduce future climate change will substantially increase the cost of coal as an energy supply. The MIT study set out to find a path that mitigates carbon dioxide emissions yet continues to use coal to meet urgent energy needs, especially in developing countries.
Maintaining and increasing the use of coal as a major energy source without harming the environment will require that tremendous amounts of carbon dioxide be sequestered, Moniz observed. A single coal-fired plant produces millions of metric tons of carbon dioxide per year, which translates into more than a billion barrels of carbon dioxide over the course of its lifetime. Mitigating climate risks will require that billions of tons of carbon dioxide be sequestered globally each year. No laws of physics rule out such an accomplishment, but achieving it will require, as Moniz put it, “exquisite reservoir management.”
Carbon dioxide capture has been done before in refineries and other industrial settings. But those technologies have been extremely expensive. “We really need some new technology to improve cost and performance,” Moniz said. Developing these technologies will require that many scientific and technological questions be addressed, including questions about the physics and management of underground reservoirs. Large investments in infrastructure also will be needed, and a broad range of regulations will need to be put in place dealing with such issues as permitting, liability, siting, and monitoring.
Once CCS technology is developed, economic incentives will be needed to spur its commercial application. The MIT study examined the effects of imposing a tax on the use of fossil fuels designed to encourage CCS and the development and use of other energy sources (Deutch and Moniz, 2007). The high-tax trajectory starts at $25 per metric ton of carbon dioxide in 2015 and increases at a real rate of 4 percent per year. The low-tax trajectory begins with a carbon dioxide emission price of $7 per metric ton in 2015 and increases at a rate of 5 percent thereafter.
Both taxes have a substantial effect on the amount of carbon dioxide released into the atmosphere (Figure 5.1). However, the high-tax scenario makes sequestration an economically attractive technology well in advance of the low-tax scenario (Figure 5.2). “If you start delaying projects for 10 years and then add 20 years for deployment, … the conclusion is [that we need] to begin the process now.”