Grappling Daily with Hot-Button Environmental Issues
Economist Richard Newell is Dedicated to Examining Options for Reducing Human-Caused Greenhouse Gas Emissions p. 2
In another widely cited paper, published in the 2004 issue of the scholarly journal Annual Review of Environment and Resources, he probed the feasibility of separating carbon dioxide from waste gases and sequestering it in places like geological formations.
This so-called carbon capture and storage is feasible, his article concluded, especially from electric power plants and some other CO2 -emitting industrial sites. But the present-day costs would be about $50 to $70 per ton of carbon dioxide to remove, transport and store it, “currently a relatively expensive mitigation option,” he wrote, noting that such a strategy would become economically attractive only if climate policies were sufficiently stringent and there is sufficient cost-reducing innovation.
In dozens of peer-reviewed papers, book chapters and policy articles written over the course of his career, Newell has applied his clear-eyed analysis and straight-shooting assessments to a wide range of energy issues, from the pros and cons of reducing greenhouse gases through improved energy efficiency, to benefits and drawbacks of implementing carbon taxes or cap-and-trade systems. (In a cap-and-trade system, a ceiling is set on carbon dioxide output and companies that exceed their individual emissions cap must buy emission allowances from other companies that reduce their emissions below their cap.)
“I think what we need to do quickly is set some kind of price on greenhouse gas emissions,” he says. “That way, firms and households are faced with the social cost we’re all imposing on each other when we emit. Politically speaking, the idea of a carbon tax doesn’t have strong legs.
“Most presentday legislative proposals in the U.S. and elsewhere have instead focused on a cap-and-trade system. So I think that is the most important first step in addressing the problem,” he says. “I would supplement cap-and-trade with directed government support for research and development, which is a longer-range challenge. By supporting R&D now we can hopefully achieve results at lower costs to meet the very significant reductions we’re going to need in the future.”
In a completely different arena, Newell also has examined what he calls a cap-and-trade system for fish that New Zealand has used since the 1980s to regulate fisheries markets within 200 miles of its coastlines. The system sets a total tonnage of different fish species that can be caught within different regions, and then allocates fishermen allowances that they can trade off among themselves.
“The idea is to achieve the conservation goal of limiting the catch while still catching fish in the most profitable possible fashion,” he says. “It has been a successful program.” The program is finding increased use in the United States in places like Alaska and the Gulf of Mexico.
Paul Portney, dean of the University of Arizona’s Eller College of Management and former president of Resources for the Future, says: “Richard Newell is one of a small number of environmental and resource economists who have combined outstanding research careers with high-level experience in government. Their work attracts attention not only from other academics but also from top policymakers in Washington, D.C., and state capitals.”
Newell went on leave from Resources for the Future in 2005 to spend a year as senior economist for energy and the environment on the President’s Council of Economic Advisers. There he interacted with colleagues like future Federal Reserve chairman Ben Bernanke while offering advice to the White House on a number of policy issues.
“Shortly after I arrived the Energy Policy Act of 2005 was passed,” he recalls. “Oil prices were rising dramatically. Hurricanes Katrina and Rita hit the Gulf of Mexico, knocking out energy supplies. Also at this time there were deliberations on fuel economy regulations for light trucks and cars. And there were policy deliberations on the size of the Strategic Petroleum Reserve.”
While on leave at the Council of Economic Advisers, and “overwhelmed with work,” he was approached about a new position at the Nicholas School.