Highlights
1 Abundant natural gas alone does not have a significant impact on CO$_2$ emissions.
2 About $10 bn/yr in natural gas investment disappears near a $40/ton carbon tax.
3 Existing gas assets face significant impairment risk under stringent climate policy.
4 Abundant gas lowers marginal welfare cost of abating small amounts of CO2.
5 Abundant gas raises the marginal cost of abatement levels relevant for climate policy.
Natural gas has been promoted as a ‘‘bridge’’ fuel toward a low-carbon future by offering near-term emissions reductions at lower cost. Existing literature is inconclusive on the short-term emissions benefits of more abundant natural gas. The long-lived nature of natural gas infrastructure also threatens to lock in emissions levels well above longer-term targets. If natural gas can offer short-to-medium term benefits, how much of a bridge should we build? Using ARTIMAS, a foresighted computable general equilibrium model of the US economy, we interact scenarios developed by the EMF-34 study group related to abundant natural gas, low-cost renewables, and a carbon tax to examine the role of natural gas in a carbon-constrained future. We find that abundant natural gas alone does not have a significant impact on CO2 emissions. We also find that, under a higher carbon tax, natural gas investment of approximately $10 billion per year declines to zero at a tax of about $40/ton and existing natural gas assets face significant risk of impairment. Last, the presence of abundant natural gas lowers the marginal welfare cost of abating small amounts of CO2 but is likely to raise the cost of abatement levels consistent with common climate objectives. The integrated welfare costs of climate policy depend on how much abatement we must undertake.
A bridge too far? The role of natural gas electricity generation in US climate policy
Woollacott, J. (2020). A bridge too far? The role of natural gas electricity generation in US climate policy. Energy Policy, 147, [111867]. https://doi.org/10.1016/j.enpol.2020.111867
Abstract
Publications Info
To contact an RTI author, request a report, or for additional information about publications by our experts, send us your request.
Meet the Experts
View All ExpertsRecent Publications
Article
What's in a name? A data-driven method to identify optimal psychotherapy classifications to advance treatment research on co-occurring PTSD and substance use disorders
Article
Grandi Byen-supporting child growth and development through integrated, responsive parenting, nutrition and hygiene
Article
Effects of additional context information in prescription drug information sheets on comprehension and risk and efficacy perceptions
Article