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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.

Green Subsidies and the WTO
This paper provides a detailed explanation how the law of the World Trade Organization regulates environmental subsidies with a focus on renewable energy subsidies. The paper begins by discussing the economic justifications for such subsidies and the criticisms of them and then gives examples of categories of subsidies. The paper provides an overview of the relevant World Trade Organization rules and case law, including the recent Canada-Renewable Energy case. The paper also makes specific recommendations for how World Trade Organization law can be improved and discusses the literature on reform proposals. The study finds that because of a lack of clarity in World Trade Organizaion rules, for some clean energy subsidies, a government will not know in advance whether the subsidy is World Trade Organization-legal. – via World Bank / by Steve Charnovitz

The True Value of Solar
The ability to accurately calculate the value of solar can be a useful tool for helping to integrate increasing amounts of distributed solar PV onto the grid. It’s also a critical tool that can help utilities, regulators and stakeholders make rational planning decisions and design effective incentives as they integrate distributed energy with the century-old power grid. – via ICF / by Steve Fine, et al. [Free download with registration]

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The Final Stage of IPCC AR5 – Last Week’s Outcome in Copenhagen

This post originally appeared on Robert Stavins’s blog, An Economic View of the Environment.

Some of you may recall that following the Government Approval Sessions for the Summary for Policymakers (SPM) of Working Group 3 (WG3) of the Fifth Assessment Report (AR5) of the Intergovernmental Panel on Climate Change (IPCC) in Berlin last spring, I expressed my disappointment and dismay regarding that process and its outcome in regard to the greatly abbreviated text of the SPM on the topic for which I was responsible, “International and Regional Cooperation.”  I expressed my frustration (and my hopes for the future) in two essays at this blog:

Is the IPCC Government Approval Process Broken?, Posted on April 25, 2014

Understanding the IPCC: An Important Follow-Up, Posted on May 3, 2014.

Last week, I was in Copenhagen for what was essentially the final stage of the five-year enterprise of research, writing, and government approval of the various reports of IPCC AR5, namely the government approval sessions for the Synthesis Report (SYR), which summarizes and synthesizes the key findings from the three Working Group reports.

While I was in Copenhagen and since my return, many people have asked me how it went.  “Was it as bad as last time?”  “Was the material on international cooperation that was deleted in Berlin reinserted, or did it remain out?”  “Did other material get deleted?”  This essay provides my response to those and some related questions.

The Outcome in Copenhagen

First of all, here’s the simplest headline statement:  Things improved significantly at the Synthesis Report (SYR) government approval sessions in Copenhagen last week, but in saying this, I am only referring to the material for which I’ve been responsible.  Let me explain.

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Should we all take a bit of lithium?!

You might have seen the September 13, 2014, New York Times op-ed titled “Should we all take a bit of lithium?” which was the Times‘ 7th most emailed story of the 30 days following its publication. It came to our attention about a week after it was published, when we found a Times-reading friend squeezing an eyedropper of lithium into a glass of drinking water, without a prescription. We were concerned.

The op-ed advocated consuming trace quantities of lithium—much lower quantities than are used to treat clinical depression. The argument was that even very small amounts of lithium lift mood and promote neuron growth, so that people who consume just a little lithium will have fewer psychological problems. Others have even suggested adding lithium to the public water supply (or to soft drinks), much as we now add fluoride to drinking water to prevent tooth decay.

The Times op-ed began with a 1990 study of 27 counties in the Texas panhandle, which found that counties with more lithium in their groundwater had lower rates of suicide, homicide, and rape. It then pointed to a broad review, which found that 9 out of 11 studies (the exceptions were in England and Maryland) obtained similar results suggesting that areas with higher levels of waterborne lithium tend to have lower suicide rates and other indicators of good mental health.

As professors with expertise in water and public health, we view this type of evidence skeptically. The finding that suicide rates are lower in high-lithium counties doesn’t necessarily imply that trace quantities of lithium prevent suicide. It could instead mean that high-lithium counties happen to have other characteristics that are associated with low levels of suicide. As acknowledged by the academic review (p. 812), one “major risk in [these] studies is confounding bias.” Lithium could be confounded with some other protective factor, and if it is, then the results of the lithium studies could be biased. The list of potentially confounding influences on county suicide rates is long. Since 1897 research has associated suicide rates with demographic and social characteristics including age, religion, education, and social isolation—and there are surely other influences on suicide that we don’t even known about. Studies of suicide and waterborne lithium have typically controlled for only a handful of known confounders. Some studies haven’t controlled for confounders at all.

We were also bothered by the failures to replicate the basic result in England and Maryland. While it is easy to dismiss a single publication for one reason or other, the published literature may be just the tip of the iceberg. It may be that other researchers failed to find an association between suicide and lithium in drinking water, but did not publish the result, or reported their results selectively. This happens all the time. Researchers who fail to find what they expect are less likely to seek publication, and when researchers do try to publish disappointing results, journals are less likely to accept their work.

We decided to try and replicate the results ourselves. As it happens, the US Geological Survey (USGS) has collected data on groundwater lithium in 936 wells in 217 counties in 29 states. We linked that data to county suicide rates, which are monitored by the CDC. (There are several different versions of the CDC suicide rates; we used the version that is “smoothed” and “age-adjusted” to compensate for the fact that some counties have older or younger residents than others.)

We started with our home state of Texas. The USGS data include groundwater lithium levels for 23 Texas counties, all in the panhandle, which we assume are approximately the same as the 27 Texas panhandle counties where that 1990 study, mentioned in the Times op-ed, found that counties with more groundwater lithium had less suicide.

But here is what those Texas panhandle counties look like today.

Figure 1 Olmstead

















The association has reversed. In 1990 it was negative—more groundwater lithium, less suicide. But today the association is positive—more lithium, more suicide. Using modern data, we can’t replicate one of the earliest and best-known results on suicide and waterborne lithium.

What happened to change the pattern? Well, 24 years have passed. Groundwater lithium changes very slowly—it comes from ancient rocks in the aquifers—but the population of the Texas panhandle has changed a bit in a quarter-century, and the parts of the population most prone to suicide may have shifted from low-lithium to high-lithium counties.

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RFF on the Issues: Flood insurance pricing; EU emissions deal

Flood Insurance Pricing

Last week marked the two-year anniversary of Hurricane Sandy’s landfall on the US East Coast, which resulted in more than $50 billion worth of damage. Flood damage from Sandy was severe.  For New York City, new flood insurance maps are being finalized in 2016.  These new maps might cause “the number of city dwellers living in an area where flood insurance is mandatory [to] nearly double from 218,000 people to 400,500 people.”

In a new blog post (and related RFF discussion paper), RFF’s Carolyn Kousky and Leonard Shabman discuss factors that cause the pricing of National Flood Insurance Program (NFIP) policies to differ from those of private companies. They point out that “NFIP pricing has incorporated other program goals that are at times at odds with its ability to cover payouts for all insured losses out of program revenue,” contributing to the NFIP’s estimated $24 billion debt.

EU Emissions Deal

The European Union has reached an agreement to reduce its total emissions by 40 percent from 1990 levels by 2030, a move that it hopes “will send a strong signal to other big economies and all other countries.” The deal represents a significant collaborative milestone ahead of the United Nation’s 2015 Paris climate conference, though some environmental groups view it as a “weak compromise,” thanks to a number of regulatory provisions used to accommodate carbon-heavy and regulation-averse countries.

In the current issue of Resources magazine, RFF’s Dallas Burtraw notes that climate action by the European Union is also being hobbled by an emissions allowance surplus within its “key weapon” —the EU Emissions Trading System. Burtraw writes: “The surplus has created a problematic decline in the price of emissions allowances, which dropped as low as €2.81 in April 2013. . . . While low prices are generally good news, these are an order of magnitude lower than the estimated €32 to €63 needed to motivate investments necessary to achieve the European Union’s emissions reduction target.”


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.

Remote Sensing of Fugitive Methane Emissions from Oil and Gas Production in North American Tight Geologic Formations
[Energy Guardian] Some ten percent of natural gas produced in drilling fields like those in the Bakken and Eagle Ford shale – most of which is methane — leaks into the atmosphere, according to a study published in the journal Earth’s Future, E&E reports.

[Abstract] In the past decade, there has been a massive growth in the horizontal drilling and hydraulic fracturing of shale gas and tight oil reservoirs to exploit formerly inaccessible or unprofitable energy resources in rock formations with low permeability. In North America, these unconventional domestic sources of natural gas and oil provide an opportunity to achieve energy self-sufficiency and to reduce greenhouse gas emissions when displacing coal as a source of energy in power plants. However, fugitive methane emissions in the production process may counter the benefit over coal with respect to climate change and therefore need to be well quantified. Here we demonstrate that positive methane anomalies associated with the oil and gas industries can be detected from space and that corresponding regional emissions can be constrained using satellite observations. – via Earth’s Future

Drilling Deeper: A Reality Check on U.S. Government Forecasts for a Lasting Tight Oil & Shale Gas Boom
[]  …The report examines EIA’s forecasts for 12 shale plays that together cover 82% of tight oil (tight oil refers to oil recovered from shale formations, not to be confused with oil shale) and 88% of shale gas production. Basically, Post Carbon finds the same “extremely optimistic” outlook at work. Although the report predicts fairly robust activity in the near term, it predicts that tight oil will be far lower than the EIA predicts over its 2040 timeline, absent the discovery of significant new plays. – via Post Carbon Insitute

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Canada–Renewable Energy: Implications for WTO Law on Green and Not-So-Green Subsidies

Pages from RFF-DP-14-38In the Canada–Renewable Energy/Feed-In Tariff case of 2013, the European Union (EU) and Japan brought a case to the World Trade Organization (WTO) against Canada, questioning the validity of Ontario’s decision to combine a generous feed-in tariff (FIT) with a local content requirement (LCR) promoting the growth of renewable energy-related manufacturing. Under this LCR, the minimum required domestic content for large wind installations was set at 50 percent and the minimum for solar voltaic installations was 60 percent—requirements that the European Union and Japan saw as institutionalized domestic content discrimination in violation of WTO policies. In a new RFF discussion paper with Steve Charnovitzof the George Washington University Law School, we summarize the legal arguments of the case, compare and contrast them with the economics of renewable energy policies, and examine the Appellate Body’s findings, highlighting a number of important implications of the Appellate Body’s reasoning.

The European Union and Japan soundly won their case against Canada when it was first brought before the WTO panel. The complainants argued that by enforcing a minimum required domestic content level, Ontario was violating WTO provisions on three separate counts: Read More

A Look at How the NFIP Differs from a Private Insurance Company

CoverFlood insurance in the United States is offered through the federal National Flood Insurance Program (NFIP). The 2005 hurricane season sent the program massively into debt to the US Treasury. As the deficit grew, Congress focused its attention on the program’s pricing policies. One focus was on the roughly 20 percent of policyholders who pay discounted premiums because their properties were built before the land was mapped as a high flood hazard area. Attention was also focused on whether the premium revenue collected from NFIP policyholders would be sufficient to pay future claims. Rate changes became the subject of congressional reform in 2012 and again in 2014.

Throughout these discussions, private sector pricing, often used interchangeably with the notion of actuarial pricing, has been used as a benchmark for NFIP rates. In addition, congressional legislation calls on the Federal Emergency Management Agency to report on how its premiums compare with what a private insurer might charge. In a new discussion paper, “Pricing Flood Insurance: How and Why the NFIP Differs from a Private Insurance Company,” we explain why, within constraints set by law, the NFIP may currently employ actuarially sound pricing principles. At the same time, because of restrictions on its pricing and operations, the NFIP is not collecting enough premium revenue to cover payouts over the long run, which would not occur with a private insurance company and creates a fiscally unsound program. Indeed, the NFIP is unlikely to be able to recover from its current debt, which now stands at roughly $24 billion. Read More

RFF on the Issues: State energy efficiency; Ending the oil export ban

State Energy Efficiency

The American Council for an Energy-Efficient Economy has released its 2014 scorecard evaluating and ranking state energy efficiency, concluding that states saved a total of 24 million megawatt hours of power in the past year. The scorecard noted that states are “truly at the forefront of energy efficiency policy in the US,” with state investments in such programs increasing from $2.5 billion to $7.5 billion per year over the past 8 years.

Register now for an upcoming webinar co-hosted by RFF and the Electric Power Research Institute on the role of state-based energy efficiency in EPA’s proposed Clean Power Plan. This topic is also discussed in the fourth installment of RFF’s Expert Forum on the Clean Power Plan, where participants gauge options for states to improve energy efficiency.

Ending the Oil Export Ban

A new report by the US Government Accountability Office (GAO) suggests that ending the country’s ban on crude oil exports would lower consumer gas prices and support economic growth “with implications for employment, investment, public revenue, and trade.” The report, which was based on a review of studies pertaining to the ban, also noted that eliminating the ban would likely increase greenhouse gas emissions as well as the risk of spills during the transportation of crude.

RFF’s Alan Krupnick and Stephen Brown from the University of Nevada, Las Vegas, comment on the GAO’s review of export ban studies—one of which was published by RFF—in a new blog post. They write: “The GAO study provides a service by carefully comparing the four studies … [then] goes beyond all of these studies by considering the implications of lifting the ban on exporting crude oil from the US strategic petroleum reserve (SPR). We agree that the SPR should be rethought.”


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.

Ozone Air Quality Standards: EPA’s 2015 Revision
[Energy Guardian]  The nonpartisan Congressional Research Service has quietly given some advice to lawmakers: Don’t believe the most dire warnings about the costs of the Obama administration’s upcoming rule on allowable levels of smog-producing ozone. In an Oct. 3 report on the status of the planned ozone proposal by the Environmental Protection Agency, CRS said annual costs likely would run into the billions of dollars. – via Congressional Research Service

EPA Study: Negligible Benefits to Soybean Production from Pesticide Linked to Bee Deaths
[Salon] The EPA has yet to do much about neonicotinoids, the class of pesticides implicated in the United States’ mass bee die-offs, but it has started looking into them. And the results of an extensive review into one such pesticide, commonly applied to soybean seeds, presents another compelling reason to ban them: using them, the agency found, isn’t any better than using no pesticides at all. – via US Environmental Protection Agency

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Crediting Early Action under EPA’s Clean Power Plan

This is the seventh 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: Should EPA credit early action taken by the states? If so, how?

A key question when developing any new climate policy is how to treat existing policies that already reduce emissions. In EPA’s Clean Power Plan, the agency proposes that actions taken by states since June 2, 2014 could count toward compliance efforts—which are slated to be measured from 2020. However, some feel that EPA is penalizing early adopters by not recognizing actions taken before this date. If EPA counted all actions taken by states before 2020 toward compliance, early adopters would likely be more fully rewarded; but such an approach might also award credit to actions that would have happened regardless of the Clean Power Plan and consequently decrease the emissions reductions achieved under the plan.

frank-prager“Unquestionably, the proposed Clean Power Plan would establish more aggressive targets in states that committed early to clean energy leadership. This is bad policy on every level.”
—Frank Prager, Vice President, Policy and Strategy, Xcel Energy (See full response.)




megan-ceronsky“There are, of course, highly compelling reasons to begin to take action now to reduce carbon pollution. . . . These are simply common sense actions, with tremendous co-benefits—and the existence of an initial compliance date for the long-awaited carbon pollution standards does not alter that common sense.”
—Megan Ceronsky, Director of Regulatory Policy and Senior Attorney, Climate and Air Program, Environmental Defense Fund (See full response.)


vince-hellwig“Michigan does not agree with this proposed cutoff date and instead recommends adopting EPA’s proposed option of recognizing emissions reductions that existing state requirements, programs, and measures have achieved starting from the end of 2005.”
—G. Vinson Hellwig, Senior Policy Advisor, Michigan Department of Environmental Quality (See full response.)