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Doubling the Value of Water in the American West

Progress on water reform in the western United States has been slow. Little discussed are opportunities to increase the value of water rights and to improve the ways that they are defined. This policy note in Water Economics and Policy reflects on Unbundling Water Rights: A Blueprint for Development of Robust Water Allocation Systems in the Western United States, a Nicholas Institute report that builds on lessons from Australia’s search for a water rights and management framework that would increase the contribution that water makes to the economy, the environment, and communities.

Author: Mike Young

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Environmental Markets

Water

Allocation

Journal Articles

A Spatiotemporal Exploration of Water Consumption Changes Resulting from the Coal-to-Gas Transition in Pennsylvania

During the early stages of Pennsylvania’s coal-to-gas transition, extraction and generation of coal and natural gas contributed to a yearly 2.6–8.4% increase in the state’s water consumption. Although some areas experienced no change in water consumption, others experienced large decreases or increases. Consumption variations depended on available natural gas resources and pre-existing power-generating infrastructure. This analysis estimates monthly water consumption associated with fuel extraction and power generation within Pennsylvania watersheds between 2009 and 2012. It also provides the first comprehensive representation of changing water consumption patterns associated with the state’s coal-to-gas transition at the sub-basin level. The analysis shows that water consumption for natural gas energy extraction and production increased throughout the period, while for coal extraction and production it decreased. Water use for natural gas generation increased 67%, particularly in the Philadelphia and Pittsburg areas; water use for hydraulic fracturing increased nine fold in southwest and northeast Pennsylvania. By contrast, water use for coal extraction and production decreased 13%. In some areas, increased water consumption resulting from hydraulic fracturing was offset by decreased water consumption for power generation as plants switched from coal to natural gas. An interactive map and chart highlighting the changes can be accessed at www.nicholasinstitute.duke.edu/hydraulic-fracturing. These findings indicate the importance of considering the implications of energy production and generation choices in the context of both energy extraction and production sectors and of doing so at smaller-than-state-level scale.

Authors: Lauren A. Patterson, Sarah M. Jordaan, and Laura Diaz Anadon

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Water

Working Papers

The Clean Power Plan and Electricity Demand: Considering Load Growth in a Carbon-Constrained Economy

Release of the Clean Power Plan (CPP) marks a significant moment in U.S. climate policy, but a host of economic, technological, and regulatory factors are also driving significant change in the electricity sector, complicating state regulatory decision making. Ensuring access to reliable and affordable electricity while protecting public health is a central goal of state regulation of electric utilities. Thus, expectations about the future of the electricity sector in general, and the future of electricity demand and emissions trajectories in particular, will likely play an important role in state CPP decisions. This policy brief discusses load growth—rising electricity demand—in the context of CPP design choices and demonstrates that it may occur under either a rate-based or mass-based approach. Following a brief overview of the Clean Power Plan and state choices, including rate-based and mass-based performance standards, it summarizes recent trends in load growth and carbon dioxide emissions in the U.S. electricity sector, showing how electricity demand growth in the United States has been low for more than a decade while the carbon intensity of electricity generation has declined. It then explores how both rate-based and mass-based plans can accommodate load growth and future emissions. Although no CPP approach limits electricity generation growth to meet new demand, rate-based approaches and mass-based approaches that cover only existing sources also allow emissions from new sources to increase. Mass-based plans that cover new sources would not limit electricity generation growth, but they would limit emissions from all covered sources.

Authors: Sarah Adair, Christina Reichert, Julie DeMeester, and David Hoppock
 

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Climate and Energy

Clean Air Act

Policy and Design

State Utility Regulation

Environmental Economics

State Policy

Policy Briefs

Incremental Climate Policy via the Clean Air Act

The Nicholas Institute for Environmental Policy Solutions' Jonas Monast and Christina Reichert write in the American Bar Association's publication Trends that tegulators implement climate policy based on the law Congress enacts, not the law they may wish Congress would enact. For the Obama Administration, that law is the existing Clean Air Act. More Clean Air Act-based climate policy is on its way. In October 2015, the White House announced forthcoming regulations limiting emissions of climate-forcing hydroflurocarbons, and the Clean Power Plan potentially sets the state for carbon dioxide limits for existing facilities and other sectors. Step-by-step, the U.S. Environmental Protection Agency is developing a broad strategy to reduce the nation's greenhouse gas emissions using existing statutory authority.

Authors: Jonas Monast and Christina Reichert

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Climate and Energy

Clean Air Act

Policy and Design

State Utility Regulation

Environmental Economics

State Policy

Journal Articles

Enhancing Home Energy Efficiency through Natural Hazard Risk Reduction: Linking Climate Change Mitigation and Adaptation in the Home

In the absence of comprehensive federal climate policy, the task of climate change mitigation and adaptation will fall to a variety of actors, including homeowners, who can install energy-saving retrofits and take steps to reduce risk of losses from natural disasters. Importantly, the fundamental attributes of retrofit initiatives to reduce loss from climate change and weather events are similar to the attributes of increased energy efficiency retrofits. But the promotional language and incentive structures of energy efficiency initiatives and those of risk-reduction initiatives differ, suggesting a natural experiment that has been replicated through the recent proliferation of retrofit programs. This essay in Innovations in Home Energy: A Sourcebook for Behavior Change explores insights from this experiment for homeowner response well beyond the single-program or single-objective evaluations conducted in the past. These insights can inform complex trade-offs among adaptation and mitigation options as well as facilitate “future proofing”—activities that reduce risk associated with a host of possible future scenarios.

Authors: Christopher S. Galik, Douglas Rupert, Kendall Starkman, Joseph Threadcraft, and Justin S. Baker

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Climate and Energy

Policy and Design

Low Carbon Technologies

Adaptation

Book Chapters

Coastal “Blue” Carbon: A Revised Guide to Supporting Coastal Wetland Programs and Projects Using Climate Finance and Other Financial Mechanisms

Coastal wetlands conservation and restoration efforts aim to preserve biodiversity and generate benefits to local communities. A diverse portfolio of financing sources has been used for these efforts, including philanthropy, multi- and bilateral aid, in-country governmental funding, tourism-related and other usage fees, and fees and levies associated with wetlands-centric extractive industries. More recently, recognition of coastal wetlands as carbon sinks has opened the door for wetland managers to explore funding sources directed toward climate change mitigation. But finding appropriate funding sources to set up a coastal wetland carbon project or to develop a national carbon program (which includes or is solely focused on coastal wetlands) is often a challenge. Additionally, carbon finance alone often cannot support the necessary management activities. This report updates Keep It Fresh or Salty: An Introductory Guide to Financing Wetland Carbon Projects and Programs (2014). It uses revised guidance for program and project developers (governments, NGOs, local communities) and extends analysis to other finance avenues that can link and complement carbon activities with non-carbon-based financing sources such as debt-for-nature swaps. Rather than recommending one mechanism over any other, it encourages users to think holistically about the range of benefits provided by coastal wetlands conservation for climate mitigation and adaptation in order to optimize the full range of financial mechanisms.

Authors: D. Herr, T. Agardy, D. Benzaken, F. Hicks, J. Howard, E. Landis, A. Soles, and T. Vegh, with prior contributions from E. Pidgeon, M. Silvius, and E. Trines

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Oceans and Coasts

Marine Ecosystem Services

Law and Policy Mangement

Environmental Economics

Blue Carbon

Reports

Agricultural Support Policy in Canada: What Are the Environmental Consequences?

This paper reviews annual government spending on Canadian agriculture that attempts to stabilize and enhance farm incomes. Since 2010, two-thirds of the $3 billion spent on agriculture went into stabilization programs to support farm incomes. This level of support raises questions about the environmental consequences of enhanced agricultural production. Canadian government expenditures on environmental initiatives in agriculture, as a share of farm income, are more than 10 times smaller than those in the United States and the European Union. Canadian stabilization programs have modest impacts on production, but chemical and fertilizer input use may be higher than in the programs' absence. One possible course of action is to introduce cross-compliance between program payments and environmental objectives. However, there are no requirements that Canadian producers receiving support comply with environmental standards. Although cross-compliance could be considered in the Canadian context, policies that directly target specific environmental issues in agriculture may have greater impact.

Authors: Alison Eagle, James Rude, and Peter Boxall

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Ecosystem Services

Land

Journal Articles

Data Intelligence for 21st Century Water Management

The 2015 Aspen-Nicholas Water Forum, brought together a select group of water experts to explore water and big data to understand how the emergence of large, but dispersed, amounts of data in the water sector can best be utilized to improve the management and delivery of water for a more sustainable future. Understanding what water data we have, how we collect it, and how to standardize and integrate it may well be a prerequisite to taking action to address a wide range of water challenges. The report from the 2015 forum captures ideas and sentiments expressed by the group and concludes with five points: The rise of big data and new measurement technologies can transform the way that water is managed in the coming decades; However, water data must be synthesized more rapidly than government agencies’ current pace of analysis; A national water data policy is needed that standarizes data integration and storage for more effective water management across sectors; Overcoming privacy constraints would help to maximize the potential of water data; and Accurate assessments of water risk require better matched data sources and data analytics at the individual site level.  

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Water

Reports

New Sources and the Clean Power Plan: Considerations for Mass-Based Plans

On August 3, 2015, the U.S. Environmental Protection Agency (EPA) finalized the first national greenhouse gas regulations for fossil fuel-fired power plants under the Clean Air Act. The regulations comprise separate rules for new and existing sources. The rule for existing sources, called the Clean Power Plan, requires states to develop plans and implement performance standards that reflect rate-based (pounds of CO2 per megawatt hour of generation) or mass-based (total tons of CO2 from covered sources) emissions guidelines established by the EPA. For states considering mass-based plans, whether to cover emissions from new units that are also subject to the new source standards is a threshold question. For any state that elects to cover new sources, the EPA provides a presumptively approvable additional emissions budget—or “new source complement.” This policy brief explores the implications of including or excluding new sources in mass-based state plans. It considers factors such as expected load growth, whether the choice to include or exclude new units affects the generation mix between new and existing units, and the corresponding requirement to address the risk that emissions could shift from existing sources to new sources—so-called leakage—in a state plan that covers only existing units. The brief concludes that states may face a tradeoff in their decision to include or exclude new sources—a finding based on three factors. First, covering new sources may make it harder or easier to comply, depending on assumptions about future electricity demand and the resources that will meet that demand. Second, covering new sources would provide a consistent economic signal to existing and new sources with a similar emissions profile. In contrast, excluding new sources may lead to power market distortions. Third, covering new sources would improve the environmental integrity of the program by eliminating the risk of leakage.

Authors: Sarah Adair and David Hoppock

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Climate and Energy

Clean Air Act

Policy and Design

Policy Briefs

Clean Power Plan: Understanding and Evaluating the Proposed Federal Plan and Model Rules

On August 3, 2015, the U.S. Environmental Protection Agency (EPA) finalized carbon dioxide (CO2) emission guidelines for two categories of existing power plants under section 111(d) of the Clean Air Act. The final rule, referred to as the Clean Power Plan, requires each state to develop its own plan that applies equivalent standards of performance to affected units. If a state fails to submit an adequate plan, the Clean Air Act authorizes the EPA to develop and implement a federal plan for the state. In a separate action, the EPA proposed mass- and rate-based versions of a federal plan as well as mass- and rate-based model rules, which states could choose to adopt or to adapt by substituting their own provisions subject to EPA approval. The proposed model rules are similar to but more flexible than the federal plan proposals. This article in the Environmental Law Reporter summarizes the final Clean Power Plan rule, describes the mass- and rate-based proposed federal plans, identifies areas in which the model rules differ, highlights key issues for states and other stakeholders as they evaluate the tradeoffs between plan pathways, and discusses the EPA’s timeline for finalizing the federal plan and model rules.

Authors: Julie DeMeester and Sarah Adair

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Climate and Energy

Clean Air Act

Journal Articles

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