For the people who aren't convinced that global warming is a man-created problem, they rightly worry that global warming legislation (taxing carbon emissions) will adversely effect the economy. What few realize is that even the threat of global warming is already hurting the wallets of Americans and the economy in general in two places, the future industry and the electric industry.
Business leaders who develop plans for the future of their companies evaluates the benefits and costs of many issues. On top of all the issues, one now must add the threat of global warming taxes. If I decide to invest money to build a factory which emits CO2, I now have to consider the fact that there could be a heavy global warming tax in the United States. So with that stark possibility, do I build my factory in the US, or do I go elsewhere?
The other hit to your wallet will be in your electric bill. Like oil, the price of natural gas has risen dramatically over the last 8 years. (Today's price is about $9.80/mmBTU). Many existing power plants use natural gas and a technology that costs about $0.10-0.12 for the fuel alone to generate one kilowatt-hr of electricity. The newer technology, will cost about $0.07-8 per KW-hr for fuel alone for a natural gas plant (based on today's price of gas $9.80/mmBTU). A coal fired power plant will cost about $0.02-$0.03 for the fuel to generate 1 KW-hr.
If you were to build a new power plant, with the stark price difference, the obvious choice is to use coal. Wrong, the fears that surround global warming taxation is so strong, that despite the obvious price spread, companies will still choose natural gas plant. This will only further increase the demand for natural gas, while the supply remains relatively constant.
Why natural gas over coal? Natural gas has a better
heat rate, meaning that to generate the same amount of electricity, natural gas will emit about 40% less CO2 than natural gas. That spread has caused electricity providers to chose natural gas despite the cost difference. There are some additional capital costs required with a coal plant, but it is minor considering the $0.05-0.08 spread between coal and natural gas. The real deciding factor is the carbon tax.
If you believe that global wamring is man-caused, choosing natural gas as fuel sourced is only an incremental reduction in CO2. The only way to get rid of CO2 is to stop combustion. Combustion in its simplest, complete form is CH4 + 2O2 = heat + 2H20 + CO2. So the only way to remove CO2 is to remove the combustion itself.