Counting Carbon: Forward-Looking Analysis of Decarbonization

Abstract

Policy analysis primarily looks backward to solve problems of individual
and public choice. Analysts often seek to derive and draw marginal curves
from existing data to extrapolate observed relationships into the future.
Indeed, the White House Council on Environmental Quality recently issued
a proposed rule that would, among other things, codify the concepts
underlying these tools for environmental matters, i.e., requiring the
considered effects of a proposed action to be “reasonably foreseeable” and
meet a “reasonably close causal relationship.” That proposal expresses a
perspective with a long tradition, yet it presents a curious circumstance.
Although marginal and statistical regression tools are among the most
powerful methods for understanding past continuous change, their power
and efficacy diminish when applied to discontinuous change, meaning
disjointed or abrupt.

This article discusses the discontinuity problem that is inherent in reducing
atmospheric greenhouse gas emissions (decarbonization). It suggests that
combinatorics (i.e., mathematical analysis by counting and ordering) offers
a useful methodology for evaluating that discontinuous change. Here, a
simple counting approach (viz. Equivalent Substitution Analysis)
considers, as two corresponding sets, the discrete number and combination
of technological substitutions that are required for decarbonization. One
implication of the analysis is that decarbonization need not be analyzed
solely as a collective action problem. The article proceeds by exploring
decarbonization conceptually and against archetypal modern analysis. The
article concludes with a detailed case study of an electric utility, the nexus
of decarbonization in the United States (“U.S.”).