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Dagobert Brito, the George A. Peterkin Professor of Political Economy, and Robert Curl, the Kenneth S. Pitzer-Schlumberger Professor Emeritus of Natural Sciences and winner of the 1996 Nobel Prize in chemistry, made this recommendation in a paper published by Rice University’s Baker Institute for Public Policy. A PDF of the paper can be viewed at www.bakerinstitute.org/publications/BI-pub-BritoCurlCO2ElecEcon-070210.p....
Brito and Curl argue that there are three important unresolved questions in the current debate on the reduction of carbon dioxide emissions: "First, what is the range of prices on carbon dioxide emissions that will be necessary to achieve the desired reductions? Second, should electrical generators and transport fuels be regulated jointly or separately? Third, should the restrictions be in the form of a quantity limit such as cap and trade or in the form of a carbon tax?"
The authors calculated the cost of CO2 emissions by modeling the transition from coal-based electricity generation to a system based on natural gas. Because coal-based electricity generation accounts for about a third of U.S. CO2 emissions (some 2 billion metric tons), Brito and Curl describe it as "the 900-pound gorilla in the room." Replacing coal generators with natural gas, they believe, "is the most economical way to achieve a target of reducing carbon dioxide emissions by 20 percent."
The United States is already moving from coal-based electricity production to a system based on natural gas. The authors said policymakers should encourage this transition, but they doubt whether natural gas supplies will be adequate to maintain this shift in the end. Development of nuclear and renewable electricity generation will need to continue at a rapid pace. Natural gas, however, can be the transition technology to carbon-neutral electrical generation. "Unless or until there is a technological breakthrough in carbon sequestration," Brito and Curl wrote, "the carbon intensity of coal means that 'clean coal' cannot be an important factor in reducing carbon dioxide. Replacing existing coal generation capacity with modern coal generation plants can only reduce total carbon dioxide by 5 percent."