Publications - Working Papers

Primer on GHG Regulation of Stationary Sources under the Clean Air Act: Interaction of Tailoring Rule and Proposed NSPS

May 2012 - by Jonas Monast and Jeremy M. Tarr

On March 27, 2012, the U.S. Environmental Protection Agency proposed a performance standard to limit greenhouse gas (GHG) emissions from new fossil-fuel-fired power plants. This primer begins with a background summary of Clean Air Act regulations that control GHG emissions. Subsequent sections discuss the regulation of large stationary sources, such as power plants, refineries, and industrial facilities. Finally, this primer explains the interaction of the proposed new source performance standard (NSPS) with other regulations controlling GHG emissions from large stationary sources.

Building Change towards Full Cost Water: Lessons from the Rate Setting Process

April 2012 - by David Gordon, Bill Holman

To ensure the country's changing water demands and evolving environmental challenges are met, the water industry must find new strategies and partners to map a new way forward. A new paper by the Nicholas Institute for Environmental Policy Solutions highlights the importance of rate setting strategy. By analyzing disparate rate cases, the authors show that common strategies can exist with regard to rate setting procedures no matter how different the utility.

What Makes Carbon Work? A Sensitivity Analysis of Factors Affecting Forest Offset Viability

March 2012 - by Christopher S. Galik and David M. Cooley

Early implementation experience and a handful of empirical analyses in the literature indicate that the supply of forest carbon offsets may be constrained by, among other factors, transaction costs, access to markets, and carbon accounting rules and regulations. To more fully explore this issue, we use a forest growth and carbon accounting model to assess the relative influence of several key accounting, financial, and market variables on forest carbon offset project viability. We find that project performance, indicated by sequestration rate and project profitability, varies widely across the three project/forest type combinations evaluated here. The effects of carbon price and project length vary in both magnitude and direction from project to project. Project accounting considerations, including baseline establishment method and deductions for “leakage” and other factors, tend to figure prominently in each project, but vary in their absolute effect. These initial results suggest that choice of accounting protocol is a critical decision facing landowners considering forest offset projects. Results also suggest that a one-size-fits-all accounting approach may fail to maximize either landowner participation or the representation of forest types or management systems.

The Effect of Assessment Scale and Metric Selection on the Greenhouse Gas Benefits of Woody Biomass

February 2012 - by Christopher S. Galik and Robert C. Abt

Recent media attention has focused on the net greenhouse gas (GHG) implications of using woody biomass to produce energy. In particular, a great deal of controversy has erupted over the biomass accounting techniques used to evaluate these GHG effects. This paper informs the present debate over the GHG effects of woody biomass use by conducting a comparative analysis of these accounting techniques. It compares these techniques in a hypothetical scenario in which coal-fired power plants in Virginia add woody biomass to their fuel mix—a process known as “cofiring.” It finds that these techniques strongly influence the calculated GHG balance. The paper also assesses the relative effect of the accounting approach on differences in GHG balance, and concludes with implications for policy makers.

Determining the Least-Cost Investment for an Existing Coal Plant to Comply with EPA Regulations under Uncertainty

February 2012 - by David Hoppock, Dalia Patino Echeverri, and Etan Gumerman

Low natural gas prices and forthcoming Environmental Protection Agency (EPA) regulations for coal plant emissions, coal wastes, and thermal-generation cooling systems are forcing utilities and utility regulators to decide whether to retrofit or to retire and replace existing coal plants. To help utility commissions and other interested parties make informed investment decisions and quantify cost risk for ratepayers, researchers at Duke University will make the Risk Based Decision Model available to the public. The model can be employed to estimate the impact of abrupt changes, or “shocks,” and the cost of making “bad” investments that are later abandoned. To demonstrate the model, this paper models the least-cost investment decision for Louisville Gas and Electric’s Mill Creek coal-fired power plant to meet the forthcoming EPA regulations under uncertainty using publicly available data.

Considering Shale Gas Extraction in North Carolina: Lessons from Other States

November 2011 - by Sarah Plikunas, Brooks Rainey Pearson, Jonas Monast, Avner Vengosh and Rob Jackson

Because North Carolina has no active oil and gas production and no existing regulatory framework for this industry, it has a unique opportunity to build a program from the ground up. This paper looks at the environmental and health concerns surrounding hydraulic fracturing to extract natural gas trapped below the ground, and shares regulatory approaches other states are taking to reduce these risks. Further, it focuses on several measures North Carolina lawmakers should understand when considering whether, and under what conditions, to allow shale gas extraction in the state.

Stacking Ecosystem Services Payments: Risks and Solutions

September 2011 - by David Cooley and Lydia Olander

A wide variety of incentive programs and markets have arisen to pay landowners for ecosystem services--the benefits that healthy ecosystems provide, such as water filtration, biodiversity, habitat protection, and carbon sequestration. This raises questions about whether landowners can receive more than one payment for ecosystem services generated from the same parcel of land, a practice known as "stacking." This paper outlines the different types of ecosystem service credits that can be stacked, and introduces a conceptual framework that can help policy makers and project developers determine whether a stacked project is meeting the objective of replacing or enhancing ecosystem services. It also identifies three specific circumstances in which stacking can lead to a negative outcome for ecosystem services and puts forward specific policy proposals to address these issues.

Myths and Facts About Electricity in the U.S. South

September 2011 - by Marilyn A. Brown, Etan Gumerman, Xiaojing Sun, Gyungwon Kim, Kenneth Sercy

This paper identifies six myths about clean electricity in the southern United States. These myths are either propagated by the public at-large, shared within the environmental advocacy culture, or spread imperceptibly between policy makers. Using a widely accepted energy-economic modeling tool, the paper exposes these myths as half-truths and the kind of conventional wisdom that constrains productive debate. In doing so, it identifies new starting points for energy policy development.

A Cooperative Federalism Framework for CCS Regulation

September 2011 - by Jonas J. Monast, Brooks Rainey Pearson, and Lincoln F. Pratson

Coal is the dominant energy resource used for power generation across the globe, and projections suggest this will remain the case for years to come. While coal is an abundant, low-cost domestic energy resource, it is also the most carbon-intensive of all of the fossil fuels. The amount of existing coal-fired infrastructure, the ongoing importance of coal to the nation’s economy, the political support for the coal industry in the U.S. Congress, and the nation’s need for stable, affordable base load power generation all suggest the ability to capture carbon emissions and store them in underground geologic formations—a process commonly referred to as carbon, capture, and storage, or CCS—will likely be an important option for mitigating climate change.

Opportunities to Reduce Greenhouse Gas Emissions through Transportation Reauthorization and Energy Policy

August 2011 - by Craig Raborn

The United States transportation sector not only accounts for a significant portion of domestic greenhouse gas (GHG) emissions, but it is also the fastest-growing source of these emissions. In fact, emissions from surface transportation activity—travel on roads and by rail—account for about 80% of the country’s total transportation GHG emissions. This Nicholas Institute for Environmental Policy Solutions paper summarizes the potential for GHG reductions from policies influencing the transportation sector. It also presents and discusses the expected costs for individual strategies and shows how combined policies might distribute emissions reductions and costs between individual policies.

Show Me the Money: Energy Efficiency Financing Barriers and Opportunities

July 2011 - by Namrita Kapur, Jake Hiller, Alan Abramson, Robin Langdon

A new paper by Duke University’s Nicholas Institute for Environmental Policy Solutions and the Environmental Defense Fund explores how organizations can overcome the challenges to energy efficiency financing. This paper briefly characterizes energy efficiency market sectors; describes the major players in the energy efficiency financing market; describes the key barriers facing each market sector; reviews primary internal and external financing strategies used by each market sector; summarizes our investor discussions; and offers conclusions and recommendations for catalyzing large-scale deployment of capital to the energy efficiency sector.

A Review of U.S. Efforts in Water and Sanitation

June 2011 - by Cheryl Choge, Courtney Harrison, Peter McCornick, and Ryan Bartlett

Access to safe water and sanitation has expanded significantly around the world in recent years, in part because of efforts by the United States, which has been increasingly active in the water, sanitation, and hygiene (WASH) sector through engagement by the government, foundations, NGOs, faith-based organizations, academia and the private sector. The Nicholas Institute for Environmental Policy Solutions at Duke University has assessed the momentum, funding and effectiveness of this engagement since 2005, when the Nicholas Institute and the Aspen Institute held a forum on WASH challenges. This report references recommendations from that forum and presents the results of recent structured interviews with over 45 stakeholders active in the WASH sector. These stakeholders provided invaluable insights on what has been achieved, what has changed, and what requires attention. Particular consideration was given to the efforts of the U.S. government (USG).

An Interactive Assessment of Biomass Demand and Availability in the Southeastern United States

March 2011 - by Christopher S. Galik and Robert C. Abt

The following report evaluates the implications of biomass use at multiple levels of demand and under various policy scenarios across the southeastern United States. It represents the culmination of a four month joint research effort between North Carolina State University, the Nicholas Institute for Environmental Policy Solutions at Duke University, and Environmental Defense Fund. It provides background on the methodology used to conduct the analysis, as well as an overview of an associated Biomass Demand Interface Tool that can be used to view the results. Collectively, these allow for the simultaneous evaluation of dozens of demand scenarios on multiple metrics of concern, thus providing the beginnings of a comprehensive overview of the range of impacts that increasing demand for forest biomass may have in a given state or region.

Demand for REDD Carbon Credits: A Primer on Buyers, Markets, and Factors Impacting Prices

February 2011 - by Joshua D. Schneck, Brian C. Murray, Christopher S. Galik, and W. Aaron Jenkins

This paper provides an overview of the demand for forest carbon, including potential buyers and their objectives, markets for forest carbon, and forces that affect the price of forest carbon. It is intended for parties and organizations who are considering developing forest carbon projects, as an aid to understanding the changing market and demand for forest carbon credits. While the primary focus of the paper is on markets and demand for REDD credits—credits arising from projects that reduce emissions from deforestation and degradation—much of the information is applicable to afforestation and reforestation projects, as well as improved forest management.

Climate Change Impacts and Adaptation in Nepal

January 2011 - by Ryan Bartlett, Luna Bharati, Dhruba Pant, Heather Hosterman, Peter McCornick

The impacts of climate change on water resources will have wide-reaching implications for agricultural systems and food security around the globe. This is especially true for Nepal, a poorly developed country where a high percentage of the population is dependent on agriculture for its livelihood. It is thus crucial for Nepal’s leaders and resource managers to draft and begin implementing national adaptation plans. This working paper aims to create a more comprehensive understanding of how these impacts will be realized at different scales in Nepal, from household livelihoods to national food security, and the many institutions governing the ultimate adaptation process. It concludes with potential solutions for how the country can overcome the many hurdles it faces in the adaptation process as it continues to develop.

Transportation Infrastructure Spending and Climate Outcomes: Effects of Reinvesting Transportation Carbon Fee Revenues in Transportation Infrastructure

December 2010 - by Craig Raborn

Avoiding the Glorious Mess: A Sensible Approach to Climate Change and the Clean Air Act

October 2010 - by Jonas Monast, Tim Profeta, and David Cooley

In March 2010, the Nicholas Institute for Environmental Policy Solutions at Duke University, the Duke University School of Law, and the Center for Law, the Environment, Adaptation, and Resources (CLEAR) at the University of North Carolina School of Law convened many of the nation’s legal experts on the Clean Air Act for an event in Durham, North Carolina, to examine the options for regulating GHGs under the Act. This report builds upon some of the ideas discussed at that meeting and described in recent publications, with the goal of identifying a viable approach to GHG regulation through the current Clean Air Act in the event that Congress does not act on comprehensive climate legislation.

The Potential Role for Management of Public Lands in Greenhouse Gas Mitigation and Climate Policy

August 2010 - by Lydia Olander, David Cooley, Christopher Galik

Public lands, including federal and state lands, offer significant opportunities for increasing greenhouse gas (GHG) mitigation from the management and restoration of forests, rangelands, and wetlands. This paper provides a rough estimate of the potential mitigation opportunities from public lands, including near-term sequestration generated from an elimination of timber harvests in public forests and improving management of some rangelands. It also presents policy options that decision makers and land managers can pursue to increase mitigation on public lands. This is a revised version of a paper that was published in July 2010.

The Near-Term Market and Greenhouse Gas Implications of Forest Biomass Utilization in the Southeastern United States

August 2010 - by Robert C. Abt, Christopher S. Galik, and Jesse D. Henderson

Renewable Energy in the South: A Policy Brief

July 2010 - by Marilyn A. Brown, Etan Gumerman, Youngsun Baek, Cullen Morris, Yu Wang

This working paper assesses the economic potential of renewable electricity generation in the South under alternative policy scenarios. Using a customized version of the National Energy Modeling System (NEMS), we examine the impact of 1) expanded and updated estimates of renewable resources, 2) a Renewable Portfolio Standard (RPS), and 3) a Carbon-Constrained Future (CCF). Under the Expanded Renewables Scenario, renewable electricity generation doubles the output of the Reference forecast for the South. If a Federal RPS is imposed or the policies represented by our CCF scenario are implemented, we estimate that 15% to 30% of the South’s electricity could be generated from renewable sources. Among the renewable resources, wind, biomass, and hydro are anticipated to provide the most generation potential. As the integration of renewable sources expands through the modeled time horizon, wind gradually out-competes biomass in the renewable electricity market. Cost-effective customer-owned renewables could also contribute significantly to electricity generation by 2030 in the South, under supportive policies.