The advisers note that broad policies to impose a cost on carbon emissions, such as a carbon tax or cap-and-trade, don’t have political traction. But other options to address emissions are available.
The endorsement arrives as environmentalists are pressing the administration to begin setting standards for the current fleet of coal-fired power plants.
Obama has vowed to use executive powers to address climate change if Congress remains gridlocked on global warming policy.
On natural gas, which has lower carbon emissions than coal and oil, the letter backs continued production increases while “ensuring that environmental impacts of production and transport do not curtail the potential of this approach.”
It notes, for instance, the need to curtail leakage of the potent greenhouse gas methane from gas production sites and transport.
The letter to Obama includes a host of suggestions for “decarbonizing” the economy. Among them are curbing regulatory barriers to deployment of carbon capture and storage technology and steps to “level the playing field” for renewable power and efficiency technologies through the tax code.
They include longer-term renewable energy tax credits, replacing the frequent Capitol Hill battles over short-term renewables and other tax code changes that would help finance green power projects.
“Conventional energy projects have better access to low-cost capital than renewable energy projects,” the letter states, and suggests ways to fix that. From the letter:
Preferred tax status through investment vehicles such as Master Limited Partnerships (MLPs) and Real Estate Investment Trusts (REITs) have benefitted conventional energy projects but are not currently available to renewable projects. Rulings by the Department of the Treasury may suffice to confer such status in some cases, but Congressional action will be required in others. We suggest that the Administration reexamine the options to make it easier to finance renewable energy projects.
The report notes these steps would build on emissions reductions already under way and likely to continue from existing policies and trends, notably the switch from coal to gas and renewables in the power sector and declining oil consumption that will be spurred on further by auto mileage rules.
Elsewhere, the report has recommendations on R&D policy; exploring the possibility of a new North American climate agreement; and continuation and expansion of existing collaboration with China, the world’s largest greenhouse gas emitter (the U.S. is No.2).
Obama asked for PCAST’s input in late November.