Publications

Filter by Topic:

Filter by Author:

Filter by Type:

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
 

Filters

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

Filters

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

Filters

Climate and Energy

Policy and Design

Low Carbon Technologies

Adaptation

Book Chapters

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

Filters

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

Filters

Climate and Energy

Clean Air Act

Journal Articles

Biogas in the United States: Estimating Future Production and Learning from International Experiences

The substitution of biogas, an energy source derived from biological feedstock, for fossil natural gas (NG) can mitigate the build-up of greenhouse gases in the atmosphere, making it an attractive renewable energy source in a carbon-constrained future. Although upgraded, pipeline-quality biogas can augment the NG market supply in the United States, researchers and energy industry experts have little studied its long-term potential. This article estimates (1) levelized costs of energy for biogas production facilities operating with landfill waste, animal manure, wastewater sludge, and biomass residue feedstocks; (2) feedstock and technology pathway-specific biogas supply functions; and (3) the aggregate national biogas supply potential for the United States by 2040. Under a range of specified assumptions, generation of biogas could be expanded to approximately 3–5 percent of the total domestic NG market at projected prices of $5–6/MMBtu; the largest potential source comes from thermal gasification of agriculture and forest residues and biomass. As market signals have not spurred widespread adoption of biogas in the United States, policy incentives similar to those used in the European Union may be necessary to increase its production and use. Bioenergy policy in the European Union and the resulting market penetration achieved there provides important lessons for how biogas markets in the United States can overcome barriers to market expansion and, in doing so, provide substantial climate mitigation benefits.

Authors: Brian C. Murray, Christopher S. Galik, and Tibor Vegh

Filters

Environmental Markets

Climate and Energy

Bioenergy

Regional Bioenergy

Environmental Economics

Energy Sector

Journal Articles

The EPA’s 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 policy brief 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 among plan pathways, and discusses the EPA’s timeline for finalizing the federal plan and model rules.  

Authors: Julie DeMeester and Sarah Adair

 

 

Filters

Climate and Energy

Clean Air Act

Policy and Design

State Utility Regulation

Policy Briefs

Unbundling Water Rights: A Blueprint for Development of Robust Water Allocation Systems in the Western United States

This report lays out a blueprint for transitioning to robust water rights, allocation, and management systems in the western United States—a blueprint ready for pilot testing in Nevada’s Diamond Valley and Humboldt Basin. If implemented, the blueprint’s reforms would convert prior appropriation water rights into systems that keep water withdrawals within sustainable limits, allow rapid adjustment to changing water supply conditions, generate diverse income streams, and improve environmental outcomes. The blueprint’s essential element is unbundling of existing water rights. In law and economics, property rights are often described as a bundle of sticks. When applied to a water right, unbundling involves separating an existing right into its specific, component parts. In an unbundled system, each part is defined and can be managed and traded separately. During the unbundling process, as proposed here, the value of each component is enhanced, and the taking of property rights is avoided. Unbundling brings clarity to water rights and reveals the true value of the water, because willing buyers and sellers are able to trade with one another with dramatically reduced transaction costs. “Liquid markets” emerge. Shares, a primary product of the unbundling, can be used to finance innovation, and opportunities for improving environmental outcomes are increased through the transparent value of water rights shares and allocations. If water managers in Nevada find that an unbundled water rights system is more desirable than the current system, they can use this report’s proposed reforms and schedules to facilitate the transition to it. Although the state engineer and governor’s office may have sufficient perquisites to proceed without the support of new legislation, implementation would be easier if underpinned by legislation.

Author: Michael Young

Filters

Climate and Energy

Water

Agriculture

Allocation

Reports

Do Protected Areas Reduce Blue Carbon Emissions? A Quasi-Experimental Evaluation of Mangroves in Indonesia

Mangroves provide multiple ecosystem services such as blue carbon sequestration, storm protection, and unique habitat for species. Despite these services, mangroves are being lost at rapid rates around the world. Using the best available biophysical and socio-economic data, the authors present the first rigorous large-scale evaluation of the effectiveness of protected areas at conserving mangroves and reducing blue carbon emissions in the journal Ecological Economics. The analysis examines the success of protected areas in Indonesia between 2000 and 2010, finding that their use has avoided the loss of 14,000 hectares of mangrove habitat and approximately 13 million metric tons (carbon dioxide equivelent) of blue carbon emissions. 

Authors: Daniela A. Miteva, Brian C. Murray, and Subhrendu K. Pattanayak

Filters

Climate and Energy

Oceans and Coasts

Ecosystem Services

Environmental Economics

Blue Carbon

Journal Articles

Why Have Greenhouse Emissions in RGGI States Declined? An Econometric Attribution to Economic, Energy Market, and Policy Factors

The Regional Greenhouse Gas Initiative (RGGI) is a consortium of northeastern U.S. states that limit carbon dioxide emissions from electricity generation through a regional emissions trading program. Since RGGI started in 2009, regional emissions have sharply dropped. This analysis uses econometric models to quantify the emissions reductions due to RGGI and those due to other factors such as the recession, complementary environmental programs, and lowered natural gas prices. It shows that without RGGI, emissions would have been 24 percent higher. The program accounts for about half of the region’s post-2009 emissions reductions, which are far greater than those achieved in the rest of the United States.

Authors: Brian C. Murray and Peter T. Maniloff

Filters

Climate and Energy

Environmental Economics

Climate Change Policy

Energy Sector

Modeling

States & Regions

State Policy

Journal Articles

Pages