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Transport of Hydraulic Fracturing Waste from Pennsylvania Wells: A County-Level Analysis of Road Use and Associated Road Repair Costs

Pennsylvania’s rapid unconventional oil and gas development—from a single well in 2004 to more than 6700 wells in 2013—has dramatically increased unconventional oil and gas waste transport by heavy trucks. In an article published in the Journal of Environmental Management, researchers at the Nicholas Institute for Environmental Policy Solutions and the U.S. Geological Survey report that transportation of waste associated with the development of unconventional oil and gas in Pennsylvania increases the cost of road repairs not only in Pennsylvania but in counties in the surrounding states of West Virginia, Maryland, New Jersey, Ohio, and New York. Between July 2010 and December 2013, the estimated cost to repair roads damaged by trucks transporting unconventional oil and gas waste ranged from $3 million to $18 million. Although the majority of these costs were concentrated in Pennsylvania (79 percent), Ohio counties absorbed some of them (16 percent). The study includes an interactive graphic for visualization of the data.   

Authors: Lauren A. Patterson and Kelly O. Maloney

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Hydraulic Fracturing and Water Use

Climate and Energy

Water Policy

Environmental Economics

State Policy

Journal Articles

Effect of Existing and Novel Policy Options on the Sustainable Development of Regional Bioenergy Systems: Lessons and Future Directions

What are the most appropriate policies to facilitate regional bioenergy systems in furtherance of environmental, social, and economic objectives? A multi-year research project funded by the U.S. Department of Agriculture’s National Institute of Food and Agriculture has attempted to answer that question for the southeastern United States. Project analyses found few policies targeted to the upstream portions of the supply chain in the region, suggesting that efforts to encourage sustainable bioenergy markets should be cognizant of the dynamics of feedstock production and use. Investigation of bioenergy market participation identified non-production objectives, structural and social constraints, and market-related attributes that could influence market participation decision making. It also suggested that policies specific to individual markets might be more effective than uniform national initiatives in encouraging participation. Modeling of potential policies to facilitate development of regional bioenergy systems suggested that feedstock dynamics play a critical role in outcomes. A region-wide renewable portfolio standard—a policy characterized by few restrictions on the location of feedstock production and use—led to increases in forest carbon and decreases in greenhouse gas emissions at multiple scales. Forcing feedstock production and use to occur in particular locations might have the opposite outcome. The effectiveness of regional bioenergy systems will depend on the responsiveness of policy to social, economic, and resource conditions.

Authors: Christopher S. Galik, Tibor Vegh, Robert C. Abt, and Gregory Latta

 

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Climate and Energy

Regional Bioenergy

Environmental Economics

Energy Sector

Modeling

Southeast

Working Papers

Ongoing Evolution of the Electricity Industry: Effects of Market Conditions and the Clean Power Plan on States

The electricity industry is evolving as changes in natural gas and coal prices, along with environmental regulations, dramatically shift the generation mix. Future trends in gas prices and costs of renewables are likely to continue moving the industry away from coal-fired generation and into lower-emitting sources such as natural gas and renewables. The U.S. Environmental Protection Agency’s Clean Power Plan (CPP) is likely to amplify these trends. The CPP rule regulates emissions from existing fossil generators and allows states to choose among an array of rate-based and mass-based goals. The analysis in this paper uses the electricity-dispatch component of the Nicholas Institute for Environmental Policy Solutions’ Dynamic Integrated Economy/Energy/Emissions Model to evaluate electricity industry trends and CPP impacts on the U.S. generation mix, emissions, and industry costs. Several coordinated approaches to the Clean Power Plan are considered, along with a range of uncoordinated “patchwork” choices by states. The model results indicate future industry trends are likely to make compliance with the Clean Power Plan relatively inexpensive; cost increases are likely to be on the order of 0.1% to 1.0%. Some external market conditions such as high gas prices could increase these costs, whereas low gas or renewables prices can achieve many of CPP goals without additional adjustments by the industry. However, policy costs can vary substantially across states, and may lead some of them to adopt a patchwork of policies that, although in their own best interests, could impose additional costs on neighboring states.

Authors: Martin T. Ross, David Hoppock, and Brian C. Murray

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Climate and Energy

Clean Air Act

Policy and Design

Environmental Economics

State Policy

Working Papers

Cost Distribution Impacts of Clean Power Plan Compliance Pathways

Under the Clean Power Plan, different utilities and power producers are likely to be in different positions: some will benefit from the rule, and others will face high compliance costs. This cost distribution may lead to monetary transfers—redistributions of money, income, or value from one party to another that are not necessarily driven by a change in the corresponding cost of production—among utilities and other power producers, between generators and consumers, and among consumers of different utilities. The regulatory system for each state’s electric utilities and the strength of regional electricity markets will play a major role in determining how the cost distribution and potential transfers play out, especially for ratepayers. This policy brief explores the cost distribution impacts for electricity producers of rate-based and mass-based compliance, respectively. It also considers how wholesale markets may mediate these producer impacts of rate- and mass-based compliance. It then turns to the implications for electricity consumers under various market and regulatory structures. Finally, it identifies opportunities to address distributional impacts if states wish to do so. It finds that states adopting a mass-based compliance approach can use allowance allocation to largely control monetary transfers within a state. States adopting a rate-based compliance approach lack this direct control mechanism.

Authors: David Hoppock and Sarah Adair

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Climate and Energy

Clean Air Act

Policy and Design

Environmental Economics

State Policy

Policy Briefs

Meeting Renewable Energy and Land Use Objectives through Public–Private Biomass Supply Partnerships

This study in Applied Energy explores whether creation of localized bioenergy markets near existing military installations in the southeastern United States could address military renewable energy generation objectives while reducing urban encroachment. To stimulate creation of these markets, it models the use of public–private partnerships, pairing stable installation demand with stable supply from surrounding landowners. It employs the SubRegional Timber Supply (SRTS) model and the Forest and Agricultural Sector Model with Greenhouse Gases (FASOMGHG) to assess how markets influence forest and agriculture land use, renewable energy production, and greenhouse gas (GHG) mitigation at the regional and national levels. When all selected installations increase bioenergy capacity simultaneously, it finds increased preservation of forest land area, increased forest carbon storage in the region, and increased renewable energy generation at military installations. Nationally, however, carbon stocks are depleted as harvests increase, increasing GHG emissions even after accounting for potential displaced emissions from coal- or natural gas-fired generation. Increasing bioenergy generation on a single installation within the Southeast has very different effects on forest area and composition, yielding greater standing timber volume and higher forest carbon stock. In addition to demonstrating the benefits of linking two partial equilibrium models of varying solution technique, sectoral scope, and resource detail, results suggest that a tailored policy approach may be more effective in meeting local encroachment reduction and renewable energy generation objectives while avoiding negative GHG mitigation consequences.

Authors: Christopher S. Galik, Robert C. Abt, Gregory Latta, Andreanne Meley, and Jesse D. Henderson

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Climate and Energy

Bioenergy

Environmental Economics

Energy Sector

Natural Resources

Modeling

Journal Articles

Weighing the Costs and Benefits of Climate Change to Our Children

In making climate change mitigation or adaptation investments, we need to think about how we value the welfare of future generations compared to our own. Assuming that future generations will be better off than our own, just as we are better off than our ancestors, a common formula for “discounting the future” recommends paying only 5 cents today for every dollar of benefits 100 years from now. This article in the journal the Future of Children describes three reasons to put more value on future benefits. First, other interpretations of preferences or observed data could increase the weight we place on future benefits by as much as a factor of five. Second, future climate change impacts, particularly those related to the loss of environmental amenities that have no close monetary substitutes, could be undervalued. Third, the risk that a warming climate could cause sudden and catastrophic changes that would drastically alter the size of the population could be misunderstood. Ultimately, many choices about how we value future generations’ welfare come down to ethical questions, and many of the decisions we must make come down to societal preferences—and those choices and decisions will be difficult to extract from data or theory.

Authors: Simon Dietz, Ben Groom, and William A. Pizer

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Climate and Energy

Environmental Economics

Journal Articles

Mass-Based Trading under the Clean Power Plan: Options for Allowance Allocation

Many states are considering mass-based allowance trading programs to meet federal Clean Power Plan (CPP) requirements. Under a mass-based trading approach, states work with a certain number of allowances, or an allowance “budget,” that matches the total emissions limit for each year of the program. States have many options for distributing the allowances that power plants will need to cover their carbon dioxide emissions. They can directly give the allowances to specific parties, set them aside for a specific purpose, auction them, or use some combination of these options. Allowance distribution, more commonly known as “allocation,” may be the single-most important decision states will make when implementing mass-based trading programs. In making that decision, each state will want to carefully consider its goals, especially given that the total value of all allowances in its allowance budget is likely to dwarf the actual resource expenditures needed to bring its power plants into compliance. Allowance allocation determines how that value and CPP costs are distributed among electricity producers, consumers, and other stakeholders. States and the EPA have considerable experience with various allocation mechanisms. Consequently, the implications of different choices, which depend on a state’s economic regulatory context, are known. This paper describes the choices and their effects as well as explores potential goals and the allowance allocation methods best suited to achieve them.

Authors: Franz Litz and Brian Murray

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Climate and Energy

Clean Air Act

Policy and Design

Working Papers

The Many Possible Futures of the Regulation of Greenhouse Gas Emissions

Some parties are saying that the unusual decision by the U.S. Supreme Court to delay an important greenhouse gas regulation does not bode well for the future of the rule. But how does the future of this particular regulation, the Clean Power Plan (CPP), affect the future of climate policy in general? This article focuses on how three possible outcomes of CPP litigation might affect future climate policy.

Author: Christina I. Reichert

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Climate and Energy

Clean Air Act

Journal Articles

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

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