In June, the US Environmental Protection Agency (EPA) announced a proposed rule for reducing carbon dioxide emissions from existing power plants. Using its authority under the Clean Air Act, EPA set state-specific targets for emissions rates reductions (Figure 1). However, many questioned how this proposed plan would impact actual emissions from the electricity sector and how these reductions could be achieved.
In new analysis, RFF’s Anthony Paul and Sophie Pan estimated actual carbon dioxide emissions reductions by converting the proposed targets from emissions rates to tons of emissions (Figure 2). EPA gives states the option to convert their rate targets into mass (tons) targets, and their choices will be consequential. If a state adopts a rate target, the amount of carbon emitted will depend on how much electricity is produced. Power generation would increase with brisk economic growth or an influx of electric vehicles, and corresponding emissions would increase even while still complying with the rate target. A mass-based target would ensure a consistent emissions outcome, but states and utilities would have to find ways to reduce emissions more if power generation increases.
EPA also selected four “building blocks” as the “best system of emissions reduction” for states to meet their targets (Figure 2). But which building blocks will survive legal challenge? Figure 2 shows possible futures for emissions reductions if any of the building blocks fall. If just building block #1 survives, only the emissions reductions represented in light blue in Figure 2 will be made, and EPA will lose the opportunity to make meaningful reductions in emissions across the sector.
This is the eighth 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.
EPA’s proposed Clean Power Plan sets carbon emissions targets for each state, denoted in pounds of carbon dioxide per megawatt-hour of electricity, but does not explicitly mention a carbon tax as an option for states to achieve their targets. Some argue that a carbon tax represents a simple and effective way to reduce emissions. A state that wishes to use a carbon tax to comply with the Clean Power Plan would likely have to convince EPA that this approach would allow the state to achieve its emissions target. Should EPA allow states to use a carbon tax to comply with the Clean Power Plan and, if so, how could a state demonstrate the associated carbon emissions reductions?
“We believe EPA should revise its proposal to be consistent with a state carbon tax as a primary means of achieving the emissions guidelines. . . . Just as for other compliance strategies, a state can demonstrate through economic modeling that its carbon tax program is likely to achieve the emissions standard set by EPA.”
—Michael Wara, Associate Professor and Justin M. Roach, Jr. Faculty Scholar, Stanford Law School (See full response.)
—Adele Morris, Fellow and Policy Director for the Climate and Energy Economics Project, The Brookings Institution (See full response.)
“EPA should allow states to achieve their carbon intensity targets through an upstream cap-and-permit system . . . [such a system] is preferable to a carbon tax or fee without an upstream cap—even if the fee is accompanied by dividends—because it sets the quantity of carbon that can be burned rather than the price.”
—Peter Barnes, Entrepreneur and Author of With Liberty and Dividends For All (See full response.)
“EPA’s Clean Power Plan allows cap and trade as a compliance option, so it is natural to allow carbon taxes as well. … However, EPA needs to be careful about how that option is implemented.”
—Roberton Williams III, Senior Fellow and Director of Academic Programs, Resources for the Future (See full response.)
Climate Change Opinions
Members of Congress have offered a wide range of responses to the Intergovernmental Panel on Climate Change’s Fifth Assessment Synthesis Report, demonstrating the partisan divide over climate change. Senator James Inhofe (R-OK) released a statement that the climate report would “cripple the global economy,” and Representative Eliot Engel (D-NY) emphasized that “irreversible problems” could result if the report’s findings were ignored.
While Democrats and Republicans may be divided in Congress, a new Resources article reveals that the American public largely supports taking action to mitigate climate change. RFF University Fellow Jon Krosnick of Stanford writes: “Our surveys suggest that Americans have been overwhelmingly ‘green’ on climate change issues for many years, despite a barrage of natural disasters, media events, and campaign speeches that one might have imagined would impact such opinions.
Clean Power Plan Impacts
Members of the North American Electric Reliability Corporation (NERC), the utility-funded nonprofit regulator for US electricity distribution, say that the proposed timeline for the US Environmental Protection Agency’s Clean Power Plan “does not provide enough time to develop sufficient resources” to ensure the reliability of the electricity grid by the plan’s 2020 deadline. A report released by NERC suggests delaying the Clean Power Plan’s initial deadline to allow more grids to adopt “reliability enhancements.”
In an installment of RFF’s Expert Forum on the Clean Power Plan, RFF’s Dallas Burtraw comments on the ability of existing natural gas combined cycle units to increase their average capacity in order to meet the electricity demands of US grids as coal usage declines. Burtraw notes that increasing capacity to a 70 percent average—part of the Clean Power Plan’s building blocks— “could be more costly than what is revealed by recent trends for newer plants,” depending on where plants are located in the electricity system.
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]
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:
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.
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 know 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.
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.
By Jon A. Krosnick, Nuri Kim, and Bo MacInnis.
Polling Americans about climate change reveals a largely united desire for government action—and other surprises.
On many issues, public opinion is so evenly divided that it does not provide a clear signal to government—but that’s not true on the issue of climate change. During the past 17 years, our research team has been tracking Americans’ opinions. Most recently, we teamed up with RFF to conduct in-depth surveys of Americans on climate change and energy policies. Polls were administered in December 2013 (in partnership withUSA Today) and again in June 2014 after the Obama administration’s proposal on June 3 to regulate greenhouse gas emissions from existing power plants through the Clean Air Act.
Our surveys suggest that Americans have been overwhelmingly “green” on climate change issues for many years, despite a barrage of natural disasters, media events, and campaign speeches that one might have imagined would impact such opinions.
As the Obama administration continues its efforts to restrict greenhouse gas emissions, these surveys allow us to compare the administration’s actions with the American public’s beliefs about global warming and preferences regarding government efforts to address it.
Over the years in which we’ve tracked public opinion, we have seen very little change in various “fundamental” beliefs about climate change:
Has the Earth been warming?
- According to our latest survey results, 73 percent of Americans believed that the world’s temperature has probably been increasing over the past 100 years, down a little from the 77 percent we observed in 1997 (Figure 1).
Has warming been caused by human activity?
- Seventy-eight percent of Americans said that if warming has been happening, it’s been due to human activity—the same percentage we found in 1997 (Figure 1).
Will warming continue?
- And 76 percent said that the world’s temperature will probably go up during the next 100 years if nothing is done to prevent it.
Is warming a threat?
- In 2013, 60 percent of Americans said that the increase in the world’s temperature during the past 100 years was a bad thing.
- Sixty-six percent of Americans said that if the world’s average temperature goes up 5 degrees Fahrenheit during the next 75 years, that would be bad as well, about the same as the 61 percent of Americans who said so in 1997.
- Only 32 percent of Americans said in 2013 that global warming will hurt them personally either a great deal or a lot if nothing is done to reduce it in the future, but 67 percent believed that global warming will hurt future generations a great deal or a lot.
- Eighty-one percent of Americans said that global warming will be a very serious or somewhat serious problem for the United States.
- An equally large majority, 83 percent, said global warming will be a very serious or somewhat serious problem for the world if nothing is done to reduce it.
These majorities have been quite consistent over the years since 1997. So we see that most Americans are “green” on this issue, and they have been for some time.
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.”
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
[CleanTechnica.com] …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
In 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