RFF ON THE ISSUES: Employment effects of regulation; Energy efficiency bill passed; Conservation act renewal hearing
In this edition:
- RFF First Wednesday Seminar on the employment impacts of environmental regulation
- A study on the early effects of energy benchmarking and disclosure laws
- Commentary on the reauthorization of the Land and Water Conservation Fund Act
Employment Effects of Regulation
New research by Industrial Economics, Inc. suggests that EPA’s Clean Power Plan “would create more than a quarter of a million jobs” by 2040. The report notes that coal industry jobs lost due to the stringency of the regulations would be “offset not only by investments in cleaner sources of power, but also by productivity gains across the whole economy.” Read More
Typical Earth Day stories focus on the achievements of our country’s two signature environmental laws, the Clean Air Act and the Clean Water Act. But today, I’d like to give some love to the 50-year-old Land and Water Conservation Fund Act, which expires at the end of September unless Congress reauthorizes it. A real opportunity to improve the fund could be realized through the reauthorization process (more on this below).
First, a little background: in 1964, Public Law 88-578 created the Land and Water Conservation Fund (LWCF), the principal funding source for federal land acquisitions for conservation and recreation. The Bureau of Land Management, Fish and Wildlife Service, National Park Service, and Forest Service all receive funds from the LWCF. Since its creation, the LWCF program has permanently protected nearly five million acres of federal lands. The LWCF also served for many years as a major source of state and local funding for parks and recreation. According to the National Recreation and Park Association, 98 percent of counties in the United States have a park or recreation site that was created with LWCF grants.
Offshore oil and gas lease revenues bankroll the LWCF; since 1977, by law, $900 million of these revenues have gone into the fund each year. This doesn’t mean, however, that $900 million are actually spent. The fact that LWCF spending is subject to the annual appropriations process remains a sore point for conservation and recreation advocates. Because of this feature of the law, spending has fluctuated over time and has not come close to the $900 million mark since the late 1970s. Read More
In this edition:
- An analysis of the funding methods used to support public parks
- Expert commentary on the effects of EPA’s emissions regulations on coal plants
State Park Funding Options
Connecticut Governor Dannel Malloy unveiled his state budget last month, which includes a “$2 million cut in the annual state parks budget.” The Department of Energy and Environmental Protection, which is responsible for overseeing 255,000 acres of state land, would need to “cobbl[e] together state park funding from an array of sources” rather than rely exclusively on the state’s general fund. Read More
Each week, I review the papers, studies, reports, and briefings posted over at the RFF Library Blog.
Draft House Legislation Allowing States to Opt-out of the Clean Power Plan
[AIMO.com] On Tuesday, Senate Majority Leader Mitch McConnell (R-KY) put forward a budgetary amendment to allow states to opt out of the Environmental Protection Agency’s Clean Power Plan, which seeks to reduce greenhouse-gas emissions from the nation’s power plants by 30% by 2030. The Senate could vote on the budget this week… – via US House, Energy and Commerce Committee, Energy and Power Subcommittee
Yale Climate Opinion Maps
[Slate] On Monday, researchers from Yale and Utah State University unveiled a new statistical technique that allows an in-depth accounting of Americans’ attitudes toward global warming. The resulting maps—down to the county level—reveal some interesting takeaways. – Yale University | Utah State University
DC Microgrids Scoping Study–Estimate of Technical and Economic Benefits
Microgrid demonstrations and deployments have show the ability of microgrids to provide higher reliability and higher power quality than utility power systems and improved energy utilization. Los Alamos National Laboratory has released a report titled DC Microgrids Scoping Study: Estimate of Technical and Economic Benefits, which presents the results of a study by several national labs and funded by the Office of Electricity Delivery & Energy Reliability. The study provides a preliminary examination of the benefits and drawbacks of potential DC microgrid applications relative to their AC counterparts, using several metrics for comparison, and offers recommendations for potential future research and deployment activities. – Los Alamos National Laboratory for US DOE Office of Energy Efficiency & Renewable Energy
Methods of Measuring Radioactivity in Fracking Wastewater May Be Inaccurate: Iowa Study
Background: The economic value of unconventional natural gas resources has stimulated rapid globalization of horizontal drilling and hydraulic fracturing. However, natural radioactivity found in the large volumes of “produced fluids” generated by these technologies is emerging as an international environmental health concern. Current assessments of the radioactivity concentration in liquid wastes focus on a single element – radium. However, the use of radium alone to predict radioactivity concentrations can greatly underestimate total levels. – Understanding the Radioactive Ingrowth and Decay of Naturally Occurring Radioactive Materials in the Environment: An Analysis of Produced Fluids from the Marcellus Shale / by Andrew W. Nelson, et al.
The Clean Power Plan Benefits Low-income Communities: NRDC Study
[From a Climate Wire article by Emily Holden, sub. req’d] The Natural Resources Defense Council yesterday released a report touting the rule’s health and economic benefits to rural and low-income communities… - Natural Resources Defense Council
In this edition:
- RFF hosts the US release of a report on China’s renewable energy strategies
- New research on utility bill savings from municipal energy disclosure laws
Note: Registration is still open for Looking Ahead toward Paris: International Perspectives on National Commitments, a policy dialogue hosted by RFF, the Embassy of Sweden, and Mistra Indigo, on April 21 at the House of Sweden.
China’s Renewable Goals
The Chinese government recently reaffirmed its commitment to reducing pollution at its annual session of the National People’s Congress, where it increased its goal for solar power in order to “more than tripl[e] its solar power capacity” by 2020. Read More
Show Us the Money: An Early Look at Utility Bill Savings from Municipal Benchmarking and Disclosure Laws
Recently, my colleague Margaret Walls blogged about two new RFF discussion papers focused on a popular new policy in US cities: municipal energy benchmarking and disclosure requirements. These laws, which require owners of large commercial and multi-family buildings above a certain size threshold to benchmark their buildings’ energy use and disclose that information, are intended to bring some transparency about building energy performance to commercial real estate markets. The hope is that by increasing transparency, these policies will provide incentives for building owners to improve energy efficiency and reduce energy use, thereby reducing greenhouse emissions. The policies constitute an important component of local climate action plans and are believed to have the potential to spur important reductions in energy consumption over time. But how well are they delivering on that potential? Read More
In this edition:
- An option for making flood insurance affordable
- An upcoming event on international climate commitments, in advance of Paris
Flood Insurance Rates Increase
On April 1, rates under the National Flood Insurance Program (NFIP) increased in an effort to “align the cost of insurance with the actual flood risk.” Although many homeowners saw little to no increase, those who live in flood-prone areas can face premiums that are “more than the actual mortgage” of the home. Read More
Using the Social Cost of Carbon in the Bureau of Land Management’s Planning: An Opportunity for a Carbon Price?
In new research (described in an earlier blog post), we lay out a legal argument for how the Bureau of Land Management (BLM) might implement a carbon pricing policy, based on the social cost of carbon, on coal extraction on federal lands (with RFF coauthors Joel Darmstadter, Nathan Richardson, also of the University of South Carolina School of Law, and Katrina McLaughlin). As we mentioned previously, BLM has a mandate to manage public land in a way that provides for multiple uses. This responsibility means that it must account not for just resource extraction or recreation or conservation. BLM must manage the land for multiple uses and also get a sustained yield (economically and for the good of the public) out of the land. Implementing a significant carbon charge on federal coal at the point of extraction (at the royalty stage) might make one of those uses, resource extraction, no longer viable. This would most likely create a legal threat to the use of a carbon charge in this way. But there is another option, described in our research, that BLM might use: it could consider the social cost of carbon in its planning process.
The Council on Environmental Quality’s newly revised draft guidance under the National Environmental Policy Act (NEPA) says that federal agencies should include climate change considerations in their planning efforts. Incorporating a carbon charge at this stage would be using the policy even farther “upstream.” In theory, BLM could examine a parcel of land that could be used for coal development, or grazing, or set aside as a wildlife reserve, and, at that point it, could consider a carbon charge in determining whether this land should be put up for coal leasing. As we note in the paper:
“This would be the earliest possible time to consider the [social cost of carbon, SCC] in shaping overall federal coal activity. Applying the SCC to federal coal could also be done systematically when BLM prepares resource management plans, its basic multiple-use planning activity under the Federal Land Policy and Management Act (FLPMA). This multiple-use planning is a particularly promising place to incorporate full-cost accounting for coal—that is, the full costs and benefits of coal across its complete life cycle. It is early in the coal decision sequence, it includes all BLM lands for coverage and consistency, it creates planning areas of similar resources and recognizes differences among them, it has extensive public engagement, and it is where BLM explicitly applies its mandate to consider multiple uses and environmental trade-offs. Such incorporation gives BLM the opportunity to decide whether given federal lands are suitable for coal leasing, considering (among many other factors) the climate impacts of extracted coal.”
Such an approach might rule out coal leasing for some, but not all, potential parcels. Although a sufficiently high carbon charge might prohibit most federal coal development when considered at the royalty stage, the same charge considered at the planning stage might allow for some federal coal development, particularly on parcels that face fewer competing uses. While the ultimate fate of the proposed NEPA draft guidance remains to be seen, incorporating a carbon charge at the planning stage could present a promising option that is less likely to endanger BLM’s multiple use mandate.
In this edition:
- New research on the legal and economic cases for federal coal carbon pricing
- Analysis on the effects of policy options to reduce traffic congestion and pollution
Charging for Coal’s Carbon
Last week a New York Times op-ed called for the federal government to account for carbon emissions in the price of coal: “The federal government should also take into account the economic consequences of burning coal … [and] the added costs associated with the impacts of greenhouse gas emissions.”
New research from RFF’s Alan Krupnick, Joel Darmstadter, Nathan Richardson (of the University of South Carolina School of Law), and Katrina McLaughlin explains why “federal coal seems like a logical target for launching a carbon pricing policy.” They argue that the Bureau of Land Management “does have the statutory authority and regulatory ability to increase royalty payments on new coal leases to account for externalities related to CO2 emissions.” However, they caution that while the legal case for such a fee seems strong, the economic case “appears noticeably weaker.” Read More
Conversations in the United States about policies to reduce emissions from fossil fuels have normally focused on a number of “downstream” approaches that target the end or intermediate users of fossil fuels. Notably, the US Environmental Protection Agency’s proposed Clean Power Plan addresses emissions from existing electric power plants, and fuel economy standards are reaching for a 50 percent reduction of carbon dioxide (CO2) emissions from the transportation sector.
As an alternative to developing a large number of these downstream policies, an “upstream” approach—targeting fossil fuels as they come out of the ground—might be a better way to go. Such an option recently appeared in a New York Times op-ed and some policymakers are already thinking along these lines. Congressman Jim McDermott (D-WA/7th) recently introduced a bill (H.R. 972) that would require fuel producers and importers to purchase emissions permits. In 2014, Senators Whitehouse (D-RI) and Schatz (D-HI) released draft legislation calling for an upstream carbon tax on all fossil fuels. Even though a new law might not actually be necessary to start implementing upstream regulation, the current timing for such an approach may be right. Sally Jewell, secretary of the US Department of the Interior, recently stated, “What are we doing to achieve a low carbon future? . . . Our task by the end of this administration is to put in place common-sense reforms that promote good government and help define the rules of the road for America’s energy future on our public lands.”
In a new RFF discussion paper, we take a look at coal. Forty percent of US coal is produced on federal land managed by the Bureau of Land Management (BLM). We examine whether BLM could—and perhaps should—impose an upstream carbon charge on this production. Because coal is the most carbon-intensive of fossil fuels, and because our research shows a significant discrepancy between the price of coal from federal lands (around $12 per ton) and the estimated global damages of coal (around $94 per ton, given the administration’s middle estimate of around $46 per ton of CO2 for 2020), federal coal seems like a logical target for launching a carbon pricing policy. (The $46 estimate emerges from research into the social cost of carbon conducted by a series of interagency groups. See further comments below). Read More