This document discusses mitigating environmental impacts and economic solutions to emissions from fossil fuel combustion. It describes strategies for reducing, improving efficiency, fuel switching, and capturing carbon dioxide emissions. It also compares carbon taxes and cap-and-trade programs, noting that cap-and-trade has precedent from the successful SO2 program that is projected to provide $100 billion in health benefits at a cost of $3 billion. Geoengineering approaches to altering the earth's reflectivity and emissivity are also briefly mentioned.

1. Session 9 - Fossil Fuels II
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Mitigating Environmental Impacts
Economic Solutions to Emissions
Costs of Fossil Fuel Electrical Generation
Emerging Technologies
Importance of Fossil Fuels to Achieving
Sustainability

2. Mitigating Environmental Impacts
of Fossil Fuel Combustion
• Before, during, after combustion
• During combustion, optimally manage:
– Fuel and Oxidant Properties
– Stoichiometry (proper reactant ratios)
– The Three T’s
Each has engineering
and economic limits
For CO2:
MITIGATE
Geoengineering
REMOVE
REDUCE
Improved
efficiency
•Supply
side
•Demand
side
Fuel
Switching
•Higher
H/C
•Nuclear
•Renewables
Capture
•Sequestration
•Capture
and/or use
Biological
Sequestration
Ocean
Fertilization

3. Mitigating Environmental Impacts
of Fossil Fuel Combustion
• Geoengineering is quite interesting:
– Can we controllably alter the reflectivity of the
earth to compensate for CO2-based emissivity
changes?
– A less-than-1% change in either reflectivity or
emissivity of Earth produces a 1 deg K
change in average surface temperature (in
equilibrium state) – very sensitive!

4. Economic Solutions
to Carbon Dioxide Emissions
• Carbon Tax
• Cap and Trade
• Chicago Climate Exchange
– Marketplace for trading on 6 GHGs
– Members: 15% of stationary GHG sources; 20% of
power sector
– Activity: 22.9 million MT in 2007 vs. 1 billion MT for
European Climate Exchange
Source: Chicago Climate Exchange, December 2007 News

5. Economic Solutions
to Carbon Dioxide Emissions
Comparison of Alternatives
Carbon Tax
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Cap and Trade
Favored by economists • Favored by Congress (profits
through manipulation)
Taxed at wholesale level
• Favored by IPPs, Utilities
Gives price certainty
• Favored by Environmentalists
Predictable gov’t income
(provides firm emission limits)
• Has a working precedent (i.e.,
SO2 cap/trade for electrics)
• Multi-sector

6. Economic Solutions
to Carbon Dioxide Emissions
Track Record of SO2 Cap/Trade Initiative
• When enacted in 1990:
– Goal:
By 2010, reduce to 8.98 million tons
From 1980’s level of 17.5 million tons
• Today (2007):
– Emissions at 10.5 million tons
– On track for 2010 goal
• By 2010:
– Will cost industry and customers $3 billion
– Estimated societal benefits of $100 billion
(primarily health related)

7. Economic Solutions
to Carbon Dioxide Emissions
Track Record of SO2 Cap/Trade Initiative
• When enacted in 1990:
– Goal:
By 2010, reduce to 8.98 million tons
From 1980’s level of 17.5 million tons
• Today (2007):
– Emissions at 10.5 million tons
– On track for 2010 goal
• By 2010:
– Will cost industry and customers $3 billion
– Estimated societal benefits of $100 billion
(primarily health related)