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RFF ON THE ISSUES: Colorado task force recommendations; Fossil fuel investment risks

In this edition:

  • Commentary on proposed changes to Colorado’s hydraulic fracturing practices
  • Recommendations for reducing financial risk through climate investments

Colorado Task Force Recommendations

The Colorado Oil and Gas Task Force created to “resolve land-use conflicts” between residents and oil and gas companies has submitted nine recommendations to the state’s governor. The group supported changes giving locals the opportunity to offer input on drilling projects, but “stopped short of supporting proposals to give any more power to local governments.” Read More

Congestion Pricing in Beijing: Who Bears the Burden?

CoverCongestion pricing and driving restrictions offer two different ways for policymakers to address traffic congestion: the former levies fees individuals who drive into or within a designated “charging zone,” while the latter enforces “road-space rationing” (usually based on a car’s permit color or license plate number). Transportation experts strongly recommend the use of congestion pricing due to its efficacy and environmental benefits—so why do many cities choose to implement driving restrictions instead?

Equity concerns have been the biggest obstacle to the adoption of congestion-based pricing, which is seen as less fair to low-income drivers—and thus, less politically appealing—than a rationing system. Despite these concerns, existing evidence on the equity effects of congestion pricing has come only from developed countries, where even low-income individuals often own a car and drive to work. In a new RFF discussion paper, “Who Will Be Affected By A Congestion Pricing Scheme in Beijing?,” I work with my RFF colleague Joshua Linn and Lunyu Xie of Beijing’s Renmin University to examine the distributional consequences of a congestion pricing scheme currently under consideration in China, offering a glimpse into its effects on drivers in countries with developing economies. Our findings suggest that the burden of congestion pricing in Beijing would fall most heavily on wealthy and privileged drivers. Read More

This Week in the RFF Library Blog

Each week, I review the papers, studies, reports, and briefings posted over at the RFF Library Blog.

Colorado Oil and Gas Task Force Final Report
[AP] …[Governor] Hickenlooper spoke on the same day that his oil and gas task force submitted nine recommendations for easing tension created by the oil and gas industry in the state, often when wells are drilled near homes and schools… – via the Keystone Center for the Colorado Oil and Gas Task Force

Anthropogenic Warming has Increased Drought Risk in California
California is currently in the midst of a record-setting drought. The drought began in 2012 and now includes the lowest calendar-year and 12-mo precipitation, the highest annual temperature, and the most extreme drought indicators on record. The extremely warm and dry conditions have led to acute water shortages, groundwater overdraft, critically low streamflow, and enhanced wildfire risk. Analyzing historical climate observations from California, we find that precipitation deficits in California were more than twice as likely to yield drought years if they occurred when conditions were warm. We find that although there has not been a substantial change in the probability of either negative or moderately negative precipitation anomalies in recent decades, the occurrence of drought years has been greater in the past two decades than in the preceding century… - via Proceedings of the National Academy of Sciences by Noah S. Diffenbaugh, Daniel L. Swain and Danielle Touma

Double Impact: Why China Needs Coordinated Air Quality and Climate Strategies
[From Website] …this paper examines China’s current approach to tackling air pollution and carbon mitigation nationally and argues that more incentives are needed if China hopes to meet its “peak carbon” goal by 2030. – via Massachusetts Institute of Technology | Tsinghua University in Beijing / by Valerie J. Karplus

Delivering the Goods: Making the Most of North America’s Evolving Oil Infrastructure
[Oil and Gas Journal] The US crude oil renaissance has created strong demand for expanded US transportation systems, resulting in five primarily challenges, a recent Center for Strategic and International Studies report concluded. – via Center for Strategic and International Studies / by Frank A. Verrastro, Michelle Melton, Sarah O. Ladislaw, Lisa Hyland and Kevin Book

2014 Integrated Energy Policy Policy Update [Transforming California’s Transportation System to Meet Climate Goals]
[Green Car Congress] The California Energy Commission adopted its 2014 Integrated Energy Policy Report (IEPR) Update, which outlines, among many things, how the state is working to transform the transportation system to zero- and near-zero technologies and fuels to meet its climate and clean air goals. This report highlights the importance of incentives in helping speed this transition and specifically explores the role Assembly Bill 8, which makes more than $2 billion available for public investment, can play in helping to achieve this progress. - via California Energy Commission

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Colorado’s Oil and Gas Task Force: Is the glass half full, half empty, or something else?

Colorado Governor John Hickenlooper deserves some credit for creating the state’s Oil and Gas Task Force as a means of reducing the heat around the November ballot. In an effort to cool tensions among Colorado’s oil and gas industry, some local governments, and citizen groups, and as part of a deal to create the task force, a handful of controversial initiatives were withdrawn. Those included a requirement for a 2,000 foot setback from homes (currently 500 feet) and the addition a local environmental bill of rights to the state constitution. Industry-supported measures to withhold oil and gas revenues from communities that ban drilling and to require fiscal impact analysis on all initiatives were also pulled back.

After five months of deliberations, the stakeholder-based task force has issued 9 recommendations to address community concerns with shale gas and tight oil development in the state. Out of 36 recommendations voted on, 7 of the 9 issued were unanimous among the 21-member task force and 2 passed with the required two-thirds majority. Read More

Coordination Challenges and a Policy Option for US and Global Climate Efforts

CoverIn recent years, US climate plans have changed abruptly. In a new RFF discussion paper, with RFF Center Fellow Anthony Paul and Research Assistant Sophie Pan, we examine the challenges for progress—specifically, of coordination among jurisdictions—that presently face policymakers in both the United States and around the world.

The current centerpiece of US policy is the Obama administration’s Clean Power Plan, which would regulate greenhouse gas emissions from the power sector. Regulations are due this summer under the Clean Air Act that will establish a performance standard for emissions reductions—but that will leave states with significant flexibility for implementation, including the option of building regional cap-and-trade programs. This change in the US approach—away from cap and trade at a national level—mirrors, to a degree, shifts seen on the stage of international climate negotiations. There, observers see reason for optimism in the prospects for a bottom-up process to realize nationally determined reduction amounts.

Can this type of bottom-up approach meet the inevitable coordination challenges necessary to achieve an effective outcome? We looked at domestic data from the electricity industry and conclude that current design options can provide real opportunities to advance climate goals effectively—if states can learn new strategies and engage in coalition building. Read More

Resources Magazine: Green Growth for China?

(source: Chris Aston / flickr)

In 2006, China became the world’s largest emitter of CO2. (source: Chris Aston / flickr)

The recent history of China has been one of spectacular economic growth. The country’s GDP soared from 3.43 percent of global GDP in 2000 to 11.35 percent in 2012. Its per capita income of US$6,100 in 2012 puts China in the category of middle-income countries such as South Africa, Egypt, and Thailand.

At the same time, China has experienced very serious environmental degradation. Its energy consumption has increased rapidly, and it overtook the United States as the world’s largest energy consumer in 2010. Coal has been China’s dominant source of energy, accounting for 66.6 percent of the country’s total primary energy consumption in 2012. Given this heavy reliance on coal, China became the world’s largest carbon dioxide (CO2) emitter in 2006, and in 2012 it accounted for 29 percent of global CO2 emissions.

In addition, China’s air, water, and soil have been polluted to alarming degrees. Extreme air pollution in China, for example, is making international headlines, and this is not just anecdotal: In March 2014, China’s Ministry of Environmental Protection announced that only 3 of the 74 large Chinese cities it monitors met official stan­dards for air quality in 2013.

The environmental situation is so dire that the country’s prior consensus of focus­ing on economic growth over environmen­tal protection has broken down, spawning interest in the potential for green growth strategies for China. “Green growth” is a politically attractive term because it speaks simultaneously to two key challenges currently faced around the world: economic growth needed to improve the living standards of the world’s growing popula­tion, and measures needed to address the issues of environmental sustainability and climate change.

Sweeping energy and environmental policies—such as China’s enormous effort to decarbonize its energy system through increased reliance on wind and nuclear generation—are one crucial step toward a green growth path. But they will not succeed without the support of changes to the country’s institutional rewards system and governance structures, which until now have prioritized GDP growth over environ­mental protection.

The Relationship between GDP Growth and the Environment

Green growth is generally used to mean economic growth that is environmentally sustainable. Thus it carries with it the claim that environmental protection is, at a mini­mum, compatible with economic growth. When economists think about the relation­ship between GDP growth and the environ­ment, they often point to the environmental Kuznets curve.

Read the rest of this article.

RFF ON THE ISSUES: Nuclear fleet costs; Climate geoengineering options

In this edition:

  • Insight into the costs associated with operating nuclear utility fleets
  • Commentary on the importance of studying climate modification techniques

Nuclear Fleet Costs

A bipartisan group of Illinois lawmakers, with the support of power company Exelon and others, recently rolled out legislation that would reward power generators “for producing environmentally friendly electricity.” Exelon said the initiative would allow nuclear plants in the state that are at risk of closing prematurely to “compete with other low-carbon power generators—including wind, solar, water, and clean coal” on equal footing. Read More

The IPCC at a Crossroads

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

Love it or hate it, the Intergovernmental Panel on Climate Change (IPCC) plays a very important role in global climate change policy around the world. This is because its reports enjoy a degree of credibility that renders them influential for public opinion, and – more important – it is because the reports are accepted as the definitive source on all matters climate change by international negotiators working under the United Nations Framework Convention on Climate Change (UNFCCC). In previous essays at this blog, I have written both about problems with the IPCC process (Is the IPCC Government Approval Process Broken?, April 25, 2014) and about its significant merits (Understanding the IPCC: An Important Follow-Up, May 3, 2014; The Final Stage of IPCC AR5 – Last Week’s Outcome in Copenhagen, November 4, 2014).

The IPCC is now at a crossroads. Its Fifth Assessment Report (AR5) is now complete and largely successful (see my previous essays cited above). But, like many large institutions, the IPCC has experienced severe growing pains. Its size has increased to the point that it has become cumbersome, it sometimes fails to address the most important issues, and – most striking of all – it is now at risk of losing the participation of the world’s best scientists, due to the massive burdens that participation entails.

The good news is that this is a moment of considerable opportunity for addressing these and other challenges, because the direction of future assessments is now open for discussion and debate. Indeed, as I write this, the 195 member countries of the IPCC are meeting in plenary in Nairobi, Kenya, to discuss – among other topics –the future of the IPCC.

A Potentially Important Meeting on Another Continent

Just one week before the Kenya IPCC sessions commenced, another, much smaller meeting took place about 4,000 miles northwest of Nairobi – in Berlin, Germany. Twenty-four participants with experience with the IPCC met in Berlin for a three-day workshop on the future of international climate-assessment processes, from February 18th through 20th. The aim of the workshop was to take stock and reflect on lessons learned in past assessments – including those of the IPCC – in order to identify options for improving future assessment processes.

Participants included social scientists who contributed in various capacities to AR5 and earlier IPCC assessments, users of IPCC reports (from national governments and intergovernmental organizations), and representatives of other stakeholder groups. Participants came from both developed and developing countries, and discussions were held under Chatham House rules, with no public attribution of any comments to individuals.

The workshop (titled “Assessment and Communication of the Social Science of Climate Change: Bridging Research and Policy”) was co-organized by four academic and research organizations based in Europe and the United States: Fondazione Eni Enrico Mattei (FEEM, Italy), the Harvard Project on Climate Agreements (USA), the Mercator Research Institute on Global Commons and Climate Change (MCC, Germany), and the Stanford Environmental and Energy Policy Analysis Center (USA).

Possible Ways Forward for the IPCC

As I noted above, now is a moment of considerable opportunity, because the future of the IPCC is open for discussion and debate, including at the meeting taking place this week in Nairobi. In this context, two of my co-organizers – Carlo Carraro of FEEM and Charles Kolstad of Stanford – and I have written a brief memorandum, based on our reflections on the Berlin workshop discussion. We describe a set of specific challenges and opportunities facing the IPCC, and provide options for improving the IPCC’s process of assessing scientific research on climate change. The complete memorandum is available here for your reading, and so I won’t attempt to summarize the highlights in this blog post, but simply note that our analysis focuses on five areas:

  • Improving integration and coordination across IPCC working groups, and enhancing the interface between scientists and governments;
  • Enhancing the interface between the IPCC and various social scientific disciplines and communities;
  • Increasing efforts – in innovative ways – to facilitate contributions of expertise from developing countries;
  • Increasing the efficiency of IPCC operations and ensuring the scientific integrity of its work products through targeted organizational improvements; and
  • Strengthening outreach and communications.

I should also note that Carraro served as Vice-Chair, and Kolstad and I served as Coordinating Lead Authors, all of Working Group III of the IPCC’s Fifth Assessment Report, but our organizing of the workshop and our authoring of this new memorandum were carried out in our roles as researchers, and completely independently of our former official capacities with the IPCC.

The Path Ahead

The memorandum is only the first of several products that will be forthcoming from this initiative. Over the coming months, we will produce a comprehensive report from the workshop (in time for the IPCC’s next meeting in October of this year, as well as the subsequent UNFCCC meeting in Paris in December). When that report is available, I will be pleased to bring it to the attention of readers of this blog.

Examining the BP Deepwater Horizon Oil Spill and the Making of a Consumer Boycott

CoverInformation on consumer boycotts and their participants is highly relevant for many corporations. A 2005 survey found that 36 percent of consumers polled across 17 countries had personally boycotted at least one brand, a likely troublesome figure for marketers. But what makes a boycott worth noting for companies or observers? To help answer that question, my colleagues, Alvin Lee and Michael Polonsky of Australia’s Deakin University, and I created a model for market-level boycott intensity that distinguishes between the levels of egregiousness—an event’s severity—and the preferences consumers associate with them, something that the existing literature on consumer boycotts fails to address. In a new RFF discussion paper, “Egregiousness and Boycott intensity: Evidence from the BP Deepwater Horizon Spill,” we also explore the relationship between boycott intensity and media coverage, due to the latter’s ability to influence consumer awareness about egregious events.

In order to test our model empirically, we turned to data collected during the Deepwater Horizon oil spill. The spill represents a single significant event—but its egregiousness changed over time based on reported levels of leaking oil. It also provided us with an easy way to conceptualize the distinction between egregiousness levels and consumer perceptions—the oil spill’s overall severity didn’t change after it was stopped, but consumers’ negative feelings of the event declined over time. Using our market-level model, we determined an area’s boycott intensity by measuring decreases in BP brand’s market share across 257 US counties. Read More

This Week in the RFF Library Blog

Each week, I review the papers, studies, reports, and briefings posted over at the RFF Library Blog.

Easing the Transition to a More Distributed Electricity System: The Changing Roles of Consumers, Utilities and Regulators Within the Regulatory Compact
Multiple compounding factors are driving national movement toward a more modern electricity grid, one that enables a cleaner energy future. This landmark report offers a unique look at easing that transition, and offers five insightful approaches for state utility regulators who, ultimately, will facilitate this transition through the rules and regulations that govern the electricity system and electric utilities. “IREC seeks to provide regulators with some practical pathways for consideration as they address the changing roles and interests of customers and utilities,” says IREC’s Regulatory Program Director, Sara Baldwin Auck. - Interstate Renewable Energy Council (IREC)

Building the Knowledge Base for Climate Resiliency: New York City Panel on Climate Change 2015 Report
[New York Magazine]  …According to the report:

  • Mean annual temperature increased 3.4 degrees Fahrenheit between 1900 and 2013.
  • Mean annual precipitation increased 8 inches between 1900 and 2013.
  • Sea levels in NYC have risen 1.1 foot since 1900.

And it’s only going to get worse… – Annals of the New York Academy of Sciences (Jan. 2015)

The Integrated Grid: A Benefit-Cost Framework
[PennEnergy] In its new benefit-cost framework for an integrated grid, the Electric Power Research Institute (EPRI) is laying out a transparent, consistent and repeatable process through which utilities and others can use the methodology to evaluate the benefits of distributed energy storage, for instance, throughout the entire power system, and equally calculate the cost, according to EPRI president and CEO Michael Howard. – Electric Power Research Institute

The Liquid Carbon Challenge: Evolving Views on Transportation Fuels and Climate
[From a Climate Wire article by Debra Kahn, sub. req’d] …University of Michigan research professor John DeCicco wrote a study finding that the current method of calculating the carbon emissions associated with transportation fuels is essentially meaningless. – John M. DeCicco

Two NAS Reports on Geoengineering Techniques for the Removal of Greenhouse Gases

[Dot Earth]  The panels’ overarching bottom line is straightforward:

There is no substitute for dramatic reductions in the emissions of CO2 and other greenhouse gases to mitigate the negative consequences of climate change, and concurrently to reduce ocean acidification.

There are no big surprises in the voluminous reports, but they do provide a great guide to both the scientific and societal issues attending using “climate interventions” — the reports’ phrase for geoengineering techniques — to counter humanity’s continuing intervention: the release of tens of billions of tons of carbon dioxide a year. National Academy Press

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