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This Week in the RFF Library Blog

Each week, we review the papers, studies, reports, and briefings posted at the “indispensable” RFF Library Blog, curated by RFF Librarian Chris Clotworthy.

Power Plants Are Not Built on Spec: 2014 Update
[Fierce EnergyJust 2.4 percent, at the most, of generation capacity constructed in 2013 was developed solely for sale into organized electricity markets, according to a report released by the American Public Power Association (APPA).  In 2013, almost all new generation capacity was supported by long-term power purchase agreements or ownership, and only 6 percent of all capacity constructed that year was built within the footprints of one of the regional transmission organizations (RTO) with mandatory capacity markets, the report, “Power Plants Are Not Built on Spec: 2014 Update,” says. – via American Public Power Association

Potential Impacts of the EPA Clean Power Plan
[The Hill] A study commissioned by the coal industry and other business groups found that the Environmental Protection Agency’s (EPA) carbon rule for power plants could cost at least $366 billion. The analysis, written by Nera Economic Consulting, said that people in 43 states would see double-digit percentage increases in their electricity bills, with at least 20 percent increases in 14 states. Meanwhile, the carbon dioxide reductions would only limit global warming by 0.02 degrees and sea level rises by 0.01 inch, researchers said… – via NERA Economic Consulting

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Looking at the Effects of a Carbon Tax across States

RFF-DP-14-25-CoverThe use of revenue from a carbon tax or cap-and-trade program substantially affects who gains and who loses as a result of the policy; indeed, it is often more important than the effect of the carbon tax itself. In a previous RFF discussion paper, we (together with RFF’s Dallas Burtraw and Richard Morgenstern, and Jared Carbone of the Colorado School of Mines) examined how the initial distribution of the costs across income groups in the United States varied under three different ways to use the revenue generated by a $30 per-ton carbon tax: returning the money via cuts in taxes on labor income, cuts in taxes on capital income, or a equal-sized rebate for every person.  (See the blog entry about this paper for more detail).

Our new discussion paper, written with the same team of researchers, follows up by looking at the distribution of costs across states, for the same set of policies.  Our methodology is very similar to the earlier paper: we used a dynamic overlapping-generations model to predict price and quantity changes for a range of consumption goods and income sources, and combined that with government data on income from different sources and spending on different goods in each state to estimate how those price changes affect each state. Using RFF’s Haiku electricity market model, we estimated the effects on the price and quantity of electricity consumed in each state, which varies substantially based on characteristics of the local electricity market. Read More

More Natural Gas, Less Warming?

The unexpected energy revolution caused by the rapid growth in North American shale gas production has produced benefits related to the economy, jobs, energy security, and local air pollution, and has contributed to a decrease in US greenhouse gas emissions. However, as my colleagues and I report in a new study published online today by Nature Advance Online Publication (fee required), its overall impact on global greenhouse gas emissions appears to be surprisingly small. In fact, we find that even a very significant expansion in the availability of less-expensive natural gas (up to 300 percent) would have little effect on growing global greenhouse gas emissions.

Because abundant, lower-cost gas is displacing coal in electricity production (where it emits 50 percent less carbon dioxide than coal to produce the same amount of energy), many believed that the recent US natural gas boom could help slow climate change. However, according to our study, globally more-abundant, competitively priced natural gas would displace all energy sources—including both higher-emitting coal and lower-emitting (and relatively more expensive) nuclear and renewable energy technologies, such as wind and solar. In additon, decreasing energy costs accelerates economic growth and increases energy use. Read More

RFF on the Issues: Fuel economy improvements; Climate action health benefits

Fuel Economy Improvements

EPA has reported that the average fuel economy achieved by new vehicles in the United States reached a record 24.1 miles per gallon in 2013. The agency “credited the gains to President Obama’s climate agenda,” which aims to increase the fuel efficiency of the US vehicle fleet and reduce greenhouse gas emissions through existing and future requirements laid out by the country’s corporate average fuel economy (CAFE) standards.

In the latest issue of Resources magazine, RFF’s Alan Krupnick, Joshua Linn, and Virginia McConnell propose a series of research questions to consider during the midterm review of light-duty CAFE standards. The authors write: “The next several years will be an important time for research that can enhance this evaluation and inform future policies. . . . Major questions remain about consumer and manufacturer responses to the regulations and the best methods for estimating the costs and benefits.” For more information, see a four-part blog series and infographic by the authors on midterm CAFE review topics.

Climate Action Health Benefits

A new study by Harvard University, Syracuse University, and Boston University indicates that EPA’s proposed Clean Power Plan has the potential to “prevent thousands of premature deaths and hospitalizations, and hundreds of heart attacks” annually in the United States. The study’s authors note that the specific benefits of these regulations are dependent on which policies are included in the final iteration of the Clean Power Plan.

At a recent RFF Policy Leadership Forum, EPA Administrator Gina McCarthy highlighted the potential for climate action to improve public health, emphasizing that “climate change supercharges the risks to our health and our economy.” McCarthy also described the economic benefits of improving public health through the regulation of emissions from power plants, stating that “every dollar we invest through the Clean Power Plan will return seven dollars in health benefits.” Video and transcript of the event are now available.


This Week in the RFF Library Blog

Each week, we review the papers, studies, reports, and briefings posted at the “indispensable” RFF Library Blog, curated by RFF Librarian Chris Clotworthy.

Energy Darwinism II — Energy Storage: Game Changer for Utilities, Tech & Commodities
[] A major new report from researchers at investment bank Citigroup predicts that the payback for rooftop solar plus battery storage systems will, by 2020, beat the payback on solar-only systems now. Its forecasts are based on the assumption that battery storage costs will halve over the next 5, 6 or 7 years to around $230/KWh. That would make storage financially attractive enough to increase manufacturing and further accelerate the fall in battery storage system costs towards $150/KWh. – via Citibank

MIT Climate CoLab Proposals for a U.S. Carbon Price
[From a Climate Wire article by Niina Heikkinen, sub. req’d] Last week, the Massachusetts Institute of Technology Center for Collective Intelligence announced the winners of the 2014 Climate CoLab, a project that uses crowdsourcing to develop effective proposals to mitigate the effects of climate change. Contestants from around the world have proposed hundreds of ideas that were evaluated and voted on by judges and Climate CoLab members, eventually narrowing the field to 34 winners in 17 categories. One of the more politically contentious categories was a prompt to design a national carbon price in the United States. The judges selected two winning proposals in the category, one that would create a carbon tax, and the other, a cap-and-trade program with a twist. – via MIT Climate CoLab

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Designing Cost-Efficient Surveillance to Control Invasive Species

Invasive species can cause substantial reductions in a region’s ecological, industrial, and human welfare, and often require significant control expenditures. The Emerald Ash Borer, for example, established itself in the United States in the early 1990s and has caused the death of hundreds of millions of ash trees and is estimated to cause billions of dollars of costs and damages annually.  Currently, New Zealand is threatened by the establishment of similar wood borers and bark beetles, pests that pose a substantial threat to the country’s forest industry, as well as to its urban and natural forests. In a new journal article, with New Zealand colleagues Eckehard G. Brockerhoff (Scion), John M. Kean (AgResearch), and James A. Turner (AgResearch), we ask: How much should New Zealand invest in surveillance, and where should traps be placed, to cost-efficiently monitor for new wood borer and bark beetle invasions?

To control newly established invasions and limit their damages, new populations must first be detected. And the sooner that an invasion is detected, the less expensive and more successful eradication or control efforts are likely to be—lessening the costs and damages associated with the invading species.  Greater investment in surveillance upfront reduces the expected costs and damages from new invasions, but this can be quite costly; and gauging what level of surveillance spending will produce the most cost-effective results, and where on the landscape those resources should be targeted, is difficult for managers and policymakers to assess. Read More

Improving the Efficiency of Coal Plants under EPA’S Clean Power Plan

This is the sixth in a series of questions that highlights RFF’s Expert Forum on EPA’s Clean Power Plan. Readers are invited to submit their own comments to the questions and/or the responses using the “Leave a Comment” box below. See all of the questions to date here.

RFF asks the experts: how can coal power plants reduce emissions and be made more efficient—and at what cost (building block #1)?

The emissions rate targets assigned to states are built on four building blocks that EPA says represent best practice in reducing emissions throughout the electricity system. Building block #1 focuses on measures to make coal plants more efficient. EPA seeks comment on its proposed finding that the average heat rate for coal power plants (the heat content of fuel input per unit of electricity output) could be improved by 6 percent on average across the fleet. Do such opportunities exist, and at what cost? Would they lead to emissions reductions?



“The evidence suggests EPA’s finding is technically plausible and economically reasonable—given that the agency adopts a flexible approach to achieve compliance.”
—Dallas Burtraw, Darius Gaskins Senior Fellow, Resources for the Future (See full response.)




“EPA’s conclusion that 4 percent improvement using “best practices” is possible at no or low cost was based upon an analysis [that]… did not consider any technical aspects of the facility, or if any characteristics changed over the 11 year period, including a change in operating mode… whether the facility conducted a retrofit …or if the facility changed coals.”
—Anthony Licata, Partner, Licata Energy (See full response.)




RFF on the Issues: Global wildlife declines; US emissions rise

Global Wildlife Declines

New research by the World Wildlife Fund and the Zoological Society of London has revealed that the global population of vertebrate species has dropped 52 percent in the past four decades. The Living Planet Reportpoints to human activities as the primary reason for the decline,” and names habitat destruction, pollution, and the introduction of invasive species as the biggest ongoing threats to biodiversity.

In the newest issue of Resources magazine, RFF’s Rebecca Epanchin-Niell highlights strategies to prevent and mitigate invasive species impacts, and notes that the economic and environmental damages caused by invasive species are likely to be exacerbated by the “wild card” of climate change. She writes: “The hallmark characteristic of invasive species is their adaptability, and it is possible they will be best positioned to take advantage of longer growing seasons, expanded ranges, and other phenomena associated with a warming world.”

US Emissions Rise

The US Environmental Protection Agency has reported that US greenhouse gas emissions rose in 2013, up 0.6 percent—or about 20 million metric tons—from 2012. The increase was “driven by the continued dependence on coal by power plants” in the electricity sector, a problem that EPA hopes to address through the building blocks used to create the “best system of emission reduction” in its proposed Clean Power Plan.

In a new Resources infographic, RFF’s Anthony Paul and Sophie Pan assess the four building blocks individually to determine the emissions reductions that would result if one or more did not survive legal scrutiny. Paul and Pan note in a blog post that block #1 (dealing with heat rate improvements at coal boilers) makes reduction contributions similar to those of blocks #3 (clean energy) and #4 (energy efficiency), with block #2 (concerning natural gas generation) making the largest contribution.

This Week in the RFF Library Blog

Each week, we review the papers, studies, reports, and briefings posted at the “indispensable” RFF Library Blog, curated by RFF Librarian Chris Clotworthy.

Natural Gas: Federal Approval Process for Liquefied Natural Gas Exports
What GAO Found. Since 2010, of 35 applications it has received that require a public interest review, the Department of Energy (DOE) has approved 3 applications to export liquefied natural gas (LNG) and 6 applications are conditionally approved with final approval contingent on the Federal Energy Regulatory Commission’s (FERC) issuance of a satisfactory environmental review of the export facility. DOE considers a range of factors to determine whether each application is in the public interest. After the first application was conditionally approved in 2011, DOE commissioned a study to help it determine whether additional LNG exports were in the public interest. Since the 16-month study was published in December 2012, DOE issued 7 conditional approvals (one of which became final) and 1 other final approval (see fig. below). In August 2014, DOE suspended its practice of issuing conditional approvals; instead, DOE will review applications after FERC completes its environmental review. – via US Government Accountability Office

Sage Grouse Habitat Produces $1 Billion in Recreational Spending
[U-T San Diego] Visitors to federal rangelands with significant tracts of sagebrush pumped about $1 billion into the economy in 11 Western states last year, according to a study released Tuesday by advocates of protecting sage grouse across the region. The study is the first of its kind to examine the direct and indirect economic impacts of recreation spending tied to U.S. Bureau of Land Management property with habitat for sagebrush-dependent species, according to the Pew Charitable Trusts. – via The Pew Charitable Trusts

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The Role of Renewable Energy in EPA’s Clean Power Plan

This is the fifth in a series of questions that highlights RFF’s Expert Forum on EPA’s Clean Power Plan. Readers are invited to submit their own comments to the questions and/or the responses using the “Leave a Comment” box below. See all of the questions to date here.

RFF asks the experts: Does EPA make appropriate assumptions regarding the deployment of renewable energy in its proposed Clean Power Plan?

One way for states to reduce their carbon emissions is to expand their renewable and low-carbon power generating capacity; this is building block #3 in EPA’s proposed Clean Power Plan. EPA assumes that each state can increase its renewable energy generation to achieve a “best practices” scenario—a level it says is “reasonable and consistent” with existing policies that have already been implemented by a majority of states. This assumption directly influences the stringency of each state’s carbon emissions target. Does EPA make appropriate assumptions regarding the deployment of renewable energy in its proposed Clean Power Plan?

megan-ceronsky“The Clean Power Plan . . . bases state targets on an average of existing renewable energy policies in different regions of the country. By taking this approach—effectively looking backwards—the proposal fails to reflect the dynamism in renewable energy deployment that is happening across America.”

—Megan Ceronsky, Director of Regulatory Policy & Senior Attorney, Climate & Air Program, Environmental Defense Fund (See full response.)


jeremy-richardson“Despite the potential for improvement, the important message here is that EPA’s framework provides an opportunity for states to include renewables in their compliance plans. States are free to go beyond the levels of renewables that EPA estimated in order to meet their emissions rate reduction target—and they should, since this is a cost-effective option nationwide.” 

—Jeremy Richardson, Senior Energy Analyst, Union of Concerned Scientists (See full response.)


ray-williams“The reasonableness of the assumption underlying the renewables building block depends on: (1) the renewables market potential in each region; and (2) the ability of the state and the key participants in each state to realize this potential in a reasonable period of time. . . . There may remain an opportunity to improve the construction of this building block.” 

—Ray Williams, Director, Long-Term Energy Policy, Energy Procurement Department, Pacific Gas & Electric (See full response.)