Economics, not politics, must drive climate solutions

By Monica Martinez

Michigan businesses and families are constantly faced with budget choices and investment decisions.   At the same time our nation, indeed the world, has a desire to recycle, be efficient, and practice “green” efforts.  But the reality is we have been and will always be motivated by another “green” – the almighty dollar.  And, frankly that’s the way it should be as we make decisions on how best to reduce greenhouse gas (GHG) emissions.

In 2008, then Gov. Jennifer Granholm convened a Climate Action Council (CAC) under the direction of the Michigan’s Department of Environmental Quality.  I had the privilege of serving on the CAC and was tasked with focusing on energy related GHG emissions.   As a result of the CAC report, a Gubernatorial Executive Directive adopted a goal of reducing Michigan’s 2005 GHG emissions 20 percent by 2020.  Fast forward to 2013, and we are still grappling with uncertainty as to how exactly the federal government is going to implement carbon dioxide emissions policy – we know rules on existing power plants are coming, but no one knows for certain what they will look like or when they will actually be implemented following anticipated legal challenges.

The CAC’s recommendations were two-fold: pursue engagement on a national climate strategy and the creation of a comprehensive list of policy recommendations to reduce GHG emissions in Michigan.  As the CAC report was being prepared, the Michigan Legislature acted on two recommendations – a Renewable Portfolio Standard (RPS) and an Energy Efficiency/Optimization (EO) requirement.  I’d note, however, that the two policies were on opposite extremes of the cost effectiveness of reducing emissions. The renewable portfolio standard was the second most costly option. Efficiency/optimization was the most cost effective.

In Michigan we have had success with implementing the state’s RPS, and anticipate meeting the state’s “10 percent by 2015” requirement.  Additionally, each year our utilities are either meeting or exceeding state energy efficiency requirements. In fact, Michigan is ranked as one of the most improved states for efficiency and has been ranked 12th by the American Council for an Energy Efficient Economy in its’ 2012 state survey.  But the reality is that both of these state mandates are only a small part of the reason why our state’s energy related carbon dioxide emissions have lessened.   Our economic downturn and lower natural gas prices (thanks to the shale opportunity and innovation) have vastly contributed far more to the reductions than anything else.

If we are going to be realistic about reducing emissions, we need to focus on cost effectiveness.  This means we should be targeting our efforts on power plant replacement and repowering with a more carbon emission friendly fuel such as natural gas, and removing barriers and increasing incentives for combined heat and power (CHP) applications.  Both recommendations rank solidly in the top three for cost effectiveness.  Given our nation and state’s economic opportunity with today’s abundance of natural gas it seems like a no brainer.  New natural gas power plants and CHP applications minimize waste, enhance the grid’s reliability, and maximize efficiency –all economically – before we even consider that these choices reduce GHG emissions more cheaply than other technologies.

So let’s be smart – and dollar wise with our energy policies and greenhouse gas reduction strategies.  We need to move away from the notion that we have to choose costly policies to get the job done – let’s be thoughtful and all encompassing.  The good news is, we can choose solutions that are American made and American produced to help us get there.

Ms. Martinez is a former member of the Michigan Public Service Commission and president of Ruben Strategy Group, LLC.

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Comments

Tiffany Hartung
Wed, 07/31/2013 - 10:42am
It should also be noted in Ms. Martinez's bio that she is a consultant for the natural gas industry.
Marissa
Thu, 08/01/2013 - 9:44am
Natural gas fracking drills deeper vertically and farther horizontally than traditional drilling methods, uses at least 100 times more fresh water, injects toxic chemicals into the ground, and leaves a huge waste disposal problem in its wake. Not surprisingly, states that have used fracking extensively have paid for it in the form of all manner of public and environmental health problems -- unsafe (sometimes flammable) drinking water, higher toxic air pollution levels, and soil and water contamination.
Charles Richards
Sun, 08/04/2013 - 2:23pm
Marissa is mistaken on several counts. She is conflating pollution from standard gas well drilling and that from fracking. There are hazards from all natural gas drilling, but fracking doesn't have any more than regular gas wells. As for flammable drinking water she is taking Gasland more seriously than it deserves. The EPA has investigated such claims and found them baseless. It is true that fracking uses a lot of water and some chemicals in its operations, but those costs are far outweighed by the enormous benefits of natural gas. Natural gas will displace some coal burning power plants, which will result in substantially reduced carbon dioxide emissions. Natural gas will also displace gasoline and diesel in transportation.
John Q.
Thu, 08/01/2013 - 10:02am
What are the "costly policies" that we should be avoiding?
Thu, 08/01/2013 - 12:06pm
Natural gas may seem like a "no brainer" in the short term, but long-term the cheapest solution isn't always the best. Ignoring Ms. Martinez's connection with the natural gas industry, and even ignoring the dangers of fracking, the true economic impact of climate change will not be felt until most of our generation has passed on. This means that the market economy will not necessarily be enough to get essential changes to happen. We may need to spend a little more money now to avoid spending a lot more money later. And we may need to enact government policies that take the power away from "the almighty dollar" for the sake of coming generations.
Lisa Knowles
Sat, 08/03/2013 - 5:43pm
Agreed....gas seems cleaner and better versus the dirty coal option. But, the water usage involved in fracking is surely going to make natural gas another dirty issue soon enough--well, actually it is already--just many people don't realize it's cost and problems. With foresight, we need to do the best long-term solution...likely renewable energy options. We can have both--energy usage and environmental success. Somehow fossil fuel industries try and make us feel like we cannot have both. It's either coal or gas/oil to make energy or we will be without power and unable to drive cars. Falsehood. Anything is possible if we put our resources together--not just our fossil fuel company resources together--all of our resources. Using a small amount of gas, water, solar, bio, etc. and we can find solutions. The problem: money. Where there are resources, there is greed and a desire to make lots of money based on the resource owned. Monica, I do not envy your job in consulting these businesses. I hope you can find a way to help us work together and conceive long term solutions for the environment's sake--a shared interest, not just the natural resource owners' interests. I think it's going to take a lot of minds at the table.
Charles Richards
Sun, 08/04/2013 - 2:32pm
Ms. Martinez is that rare individual: one who possesses common sense and good judgement. Some of the commenters seem to think we can, by putting our heads together and brainstorming, we can escape the constraint of limited money. They object to using the most cost effective methods of dealing with climate change, failing to realize that if we deal with climate change in the most efficient manner we will have more money to deal with other important goals.