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20142013 | 2012 | 2011

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April 2014

April 7, 2014

State Implementation of the Clean Air Act

The draft of a rule by the US Environmental Protection Agency (EPA) that would create strict new limits on power plant emissions has reached the White House. While critics have expressed concern about the rule’s effect on the coal industry, EPA Administrator Gina McCarthy says that it offers flexibility and recently noted that the agency is working “hand in hand” with the states on implementation of the regulation.

RFF’s Dallas Burtraw notes that flexibility and cooperation with the states are two key aspects for successful implementation of this regulation. Building on his research on reducing carbon emissions, he recently answered frequently asked questions about the costs, challenges, and advantages of regulating power plant emissions at the state level under the Clean Air Act. Video highlights and full text of the FAQs about state implementation of the Clean Air Act are available online, as part of RFF’s resource page on regulating carbon emissions under the Clean Air Act.

The Natural Gas Revolution

Last week, the US Energy Information Administration announced that US energy imports had declined to a 20-year low. Advances in hydraulic fracturing “drove net imports down 19 percent in 2013 from 2012,” which could also bode well for the push to increase natural gas exports in the future.

However, critical questions still remain about the sustainable development and use of this resource, according to a new report by RFF’s Alan Krupnick, Ray Kopp, Kristin Hayes, and Skyler Roeshot. They write: “It is time to take stock about what is known, what is uncertain, and what is unknown about the economic and environmental consequences of the natural gas revolution.” The research team identified 24 questions which, if resolved, “would fundamentally advance the debate around how to sustainably develop natural gas.”

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March 2014

March 31, 2014

Exporting LNG
Recently, several congressional committees have held hearings to review the benefits and implications of expediting exports of liquid natural gas (LNG). While industry has supported such proposals, environmental groups remain concerned about how increased gas use will contribute to more greenhouse gas emissions (especially methane).

“Greenhouse gas emissions need to come down. But fighting exports of gas and oil is way down the list of actions that will be effective and economically sensible,” says RFF’s Alan Krupnick. In a recent blog post, he writes: “To the extent our exports make gas prices in Europe and Asia lower, that may enable more fuel substitution away from coal, lowering greenhouse gas emissions.” Read more commentary on LNG exports from RFF experts here, here, and here.

Local Impacts of Shale Gas

While discussions about natural gas exports have taken the national (and international) stage, local communities around the country continue to feel the direct effects (both positive and negative) of shale gas development. Some regions are experiencing economic booms, while others are eyeing potential risks. On April 10, RFF is hosting a seminar to illuminate the pros and cons of such impacts, including research on the boom-and-bust cycles, how impact fees are being used in local economies, effects on residential property values, and observed changes in truck traffic and accidents in local communities (infographic). Register for the seminar or watch on the web at www.rff.org/live.  

Returning Carbon Tax Revenue

British Columbia’s carbon tax, touted as “the most significant carbon tax in the Western Hemisphere,” seems to be working—reducing gasoline use and causing consumers to change their habits. It was also designed to be “revenue neutral,” with the collected funds being returned to citizens in the form of tax breaks. (Note research at RFF, cited in the article, says a carbon tax in the United States could be both efficient and cost-effective.)

In a recent interview with Resources magazine, RFF’s Dallas Burtraw says, “Introducing a tax on dirty goods, such as carbon dioxide, and using the revenue to offset preexisting taxes on things that we want to see—such as more labor and more capital investment—can be good for the economy.” He explains that this world view reflects the perspective that “the atmosphere is the common property of individuals even though government plays a role in how to manage it.” Read the full interview or listen to the podcast: Putting a Price on Carbon: Who Gets the Revenue?

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Climate Change Information

The White House announced that it is collaborating with Google to gather and publish data on climate change, with the goal of helping communities prepare for changes in temperatures and water levels “as easily as they use Google maps to get driving directions.” The joint effort will also feature a high-resolution mapping initiative to track climate-related changes to sea levels.

RFF’s Molly Macauley notes that “the quantity and quality of our information will play a critical role in determining the effectiveness of public and private responses [to climate change].” However, in this Resources article, she writes that such information comes at a price, and outlines four principles for deciding if the information “delivers sufficient bang for the buck.”

Effects of Fuel Efficiency Standards

According to Bloomberg researchers, policy initiatives and alternative vehicles may keep Californians from using nearly a billion gallons of transportation fuel per year by 2020. Federal fuel efficiency regulations will become the main source of reductions in gasoline use, causing the state to experience a “significant shift in the make-up” of both transportation fuel demand and the types of vehicles driven.

But in a review of federal fuel economy standards, RFF’s Joshua Linn cautions that “the effectiveness of the standards at reducing fuel consumption and associated greenhouse gas emissions depends, in large part, on the extent to which consumers increase vehicle miles traveled because of the lower driving costs—that is, the magnitude of the rebound effect for passenger vehicles.” In a blog post with RFF’s Clayton Munnings, they note that despite the rebound effect, the benefits seem to outweigh the costs of such policies.

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March 18, 2014

Ukraine Energy Aid

In response to the unfolding Ukrainian crisis, some in the US have advocated using natural gas exports as a way of reducing Russian leverage on Ukraine. However, removing gas export restrictions would still leave the US unable to effectively challenge Russian gas export decisions. In fact, even if the United States had the capacity to export meaningful quantities of liquefied natural gas (LNG), Ukraine does not yet have the terminal and gasification infrastructure to receive shipments of natural gas via the Black Sea. In a recent blog post, RFF’s Joel Darmstadter cites such factors as making it unrealistic to believe that US gas exports could have a “a decisive impact over the next few years, much less on current events.”

Belief in Climate Change

Recently a group of Senate democrats held an all-night session to draw attention to the “impacts of climate change and the benefits addressing it will bring to [the] country.” They called for a need to take action, noting that “climate change is real.”

Results from a new survey by RFF, Stanford University, and USA Today show that a large majority of Americans also believe climate change to be an existing and serious problem, with three out of four respondents stating that it “has occurred in the past century and will likely continue.” RFF President Phil Sharp commented on the consistency of public’s belief in global warming, noting that “hardcore skeptics remain a tiny fraction of the nation.”

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March 3, 2014

Clean Air Act Court Review

The Supreme Court recently heard arguments in Utility Air Regulatory Group v. EPA, a case that questions the Environmental Protection Agency’s (EPA) authority to consider greenhouse gas emissions in Clean Air Act permits. Plaintiffs argue that the agency’s move to require such permits has imposed “far-reaching and near-ridiculous regulatory burdens” on states and industries.
RFF’s Nathan Richardson notes that while the case doesn’t directly concern any other parts of EPA’s plans to regulate carbon under the Clean Air Act—including performance standards for power plants, which he calls “the most important part of EPA’s climate regulations”—there’s some reason to worry that a loss for EPA could affect those performance standards indirectly.
China’s Smog Court Case
A man in northern China has become the first person to sue the government over the region’s severe smog. Li Guixin has requested that his city’s Environmental Protection Bureau “perform its duty to control air pollution according to the law.” Observers note that smog has worsened in China despite the increase in anti-pollution mandates and policies.
China’s severe smog problems may not have an easy regulatory fix. As RFF’s Mun Ho writes: “China may be winning battles but not the wars on emissions control, because its faith in mandates has met its match: an economy that is growing too fast, and atmospheric challenges that are too multifaceted for even the smartest planners to tame . . . . Such complexities caution against assuming that poor air quality results only from a failure to try to prevent it.

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February 2014

February 24, 2014

State Drilling Regulations

A bipartisan association of 12 governors recently founded the “States First” initiative to promote states as the “primary and appropriate regulators” of oil and gas development, citing that they “know their territories best.” Opponents claim that shifting away from federal oversight would mainly benefit the oil and gas industry while promoting regulatory negligence.

In the RFF report, The State of State Shale Gas Regulation, RFF experts explore the differences among shale gas–related regulations in each state, finding a great degree of heterogeneity. They find that states already play a large and diverse role in regulating shale gas development, though it is unclear whether heterogeneity is fully justified by underlying state differences. Maps of the different regulations in each state can be found here.

Truck Emissions Standards

The Obama administration recently announced that it will set new fuel efficiency standards for heavy-duty trucks and buses. The standards would take effect by 2016 and would be paired with new tax credits for makers of truck engines, bodies, and trailers to support the development of light and efficient environmental “super trucks.”

These new standards would build upon the original regulations first launched in 2011. RFF’s Winston Harrington and Alan Krupnick  reviewed the original standards, noting that they offered greater benefits than costs, and that they largely had industry support.  However, they warned that the next round of standards would very likely be far more costly. 

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February 18, 2014

Crude Oil Exports

A pair of Senate Democrats has called for a “comprehensive analysis” of the potential effects of lifting the ban on US crude oil exports, including how it might impact gasoline prices. Experts predict that crude oil producers will “struggle to find a market” for their product by the end of the year due to the export constraints and inadequate domestic processing and distribution capacity.

According to new research by RFF’s Stephen P.A. Brown, Charles Mason, Alan Krupnick, and Jan Mares: “US refineries are better suited to process heavy crude oil, while refineries in other countries are better suited to process light crude oil. As a result, lifting the ban on US crude oil exports would allow for a more efficient distribution of crude oil among refineries in the Western Hemisphere and elsewhere in the world” and, ultimately, reduce gas prices. Read the complete RFF issue brief here: Crude Behavior: How Lifting the Export Ban Reduces Gasoline Prices in the United States.

Destroying Ivory Stockpiles

Nations around the globe are taking actions to “curb a global boom in wildlife trafficking,” with a new ban in the US on elephant ivory and a decision by Hong Kong to destroy its “massive stockpile” of ivory. However, prices on the existing illegal stockpiles have begun to climb, leaving some to believe that “destroying ivory to drive down demand doesn't make a lot of economic sense.”

In a new blog post, RFF Senior Fellow Carolyn Fischer comments that governments are placing a “big bet” in destroying stockpiles in “hope that the publicity will deter demand among even consumers who were willing to purchase illegally.” A risk is that “destroying stockpiles sends a signal that the ivory resource is even more scarce—driving up prices and raising the value of illegal stockpiles.”

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February 10, 2014

Changes to Endangered Species Protection

Recently, Republicans in Congress proposed a series of changes to the Endangered Species Act (ESA). Their report recommends transferring more regulatory power to states and “curtail[ing] litigation from wildlife advocates

In a recent issue of Resources magazine, Lynn Scarlett, Rebecca Epanchin-Niell, and Matthew McKinney write that while the ESA faces various challenges, it also “provides an effective framework to meet these challenges, particularly as efforts pivot away from a species-by-species approach and toward incorporating species protection within larger, landscape-scale efforts that use incentives to engage private landowners and nonprofit partners.” New strategies for increasing the effectiveness of the ESA were also discussed at this RFF First Wednesday Seminar (video available).

Carbon Tax Impact

New data released last week by the Australian government show that electricity emissions have dropped 7.6 percent since the introduction of a carbon tax in July 2012. Experts suggest that a greater emissions impact could be achieved if businesses believed that carbon pricing “was here to stay” and current carbon prices were increased.

RFF’s Anthony Paul, Blair Beasley, and Karen Palmer examined imposing a carbon tax on the US electricity sector and found that a lower tax “reduces emissions by reducing demand and through the substitution of gas for coal, whereas [a higher tax] induce[s] switching to wind and nuclear generation.” As current conversations about controlling power sector emissions in the US focus on regulations under the Clean Air Act, RFF’s Dallas Burtraw, Joshua Linn, Karen Palmer, and Anthony Paul also examine a variety of options that might be taken by the US Environmental Protection Agency and the states. While they identify various cost-effective options, they also point out that “flexible approaches that may be possible under the Clean Air Act in fact do introduce a shadow price on emissions.”

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February 3, 2014

Energy and climate in the State of the Union

Last week’s State of the Union address emphasized gains made in the energy sector as well as future promises of development and change. Below are highlights of recent analysis by RFF researchers on the various policy ideas mentioned in President Obama’s address.

On energy independence:

On natural gas: 

On fuel efficiency standards for cars and trucks:

On renewable energy:

On greenhouse gas regulations:

On climate change:

On issues not mentioned in the speech:

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January 2014

January 27, 2014

EU Goals and the Post 2020 Climate Negotiations

While many nations (including the United States) have had little public discussion regarding the post-2020 climate agreement to be adopted in Paris next year, public debate has been ongoing in Europe for some time. Last week, the European Commission announced new targets, recognizing that approaches should accommodate “the need for economic growth and industrial competitiveness."

In a new issue of Resources magazine, RFF’s Brian Flannery writes that “the ultimate climate agreement is more likely to reflect bottom-up pledges based on national priorities and circumstances.” He suggests this approach may foster greater participation and long-term progress than approaches tied to strict, mandatory global outcomes.

Regulating Power Plant Emissions

The US Environmental Protection Agency’s move to propose carbon pollution standards for existing power plants has prompted some in Congress to cry foul. Republican leadership called the regulations “a new, expanded front in [the Obama administration’s] war on coal,” and argued that the rules “would effectively ban coal-fired power plants from being built in the future.” However, not all Republicans seem to agree on that idea.

RFF’s Nathan Richardson, an expert on these regulations, notes that if the Clean Air Act “destroys the American coal industry, it will not have acted alone.” He explains: “Cheap natural gas and environmental regulation that has nothing to do with climate...have already dealt coal a serious, and possibly mortal, blow.”

Philanthropy for Parks

Recently, US Secretary of the Interior Sally Jewell said that “budget paralysis in Washington has forced her to seek help from the private sector.” Specifically, she called upon private donors to finance a youth conservation corps “to put 100,000 youths to work on public lands.”

In new research, RFF’s Margaret Walls examines a trend in which public parks and conservancies rely largely on private donations to replace slashed government budgets. She cautions that while such philanthropy might work for specific projects, it can also bring an uncertainty in the year-to-year revenue stream needed for critical operational expenses.

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January 21, 2014

Sea Level Rise

While scientists continue to study rising sea levels, research has found that land on the densely populated East coast is also sinking, making it a “global hot spot for a rising sea level over the coming century.” Coastal communities are beginning to look for answers, and city planners remain uncertain about how bad it will get—and how fast.

RFF’s Roger Cooke notes that his method for developing “structured expert judgment” can help quantify uncertainty—and it has also been applied specifically to questions about sea level rise. (More on this can be seen in an RFF First Wednesday Seminar, “Ice Sheets on the Move”). In the meantime, RFF’s Carolyn Kousky suggests an option for climate-ready coastal development that “allows us to enjoy all the ocean has to offer, and yet reduces the risks” of oceanfront flooding.

Strategies for Sustainable Businesses

A recent op-ed in The Guardian said that businesses interested in embedding sustainability practices can “effect radical change through their greatest asset: their workforce.” However, in a new issueof Resources magazine, RFF’s Jim Boyd writes that often environmental behaviors are still motivated by profit. He writes: “Conservationists can focus their advocacy around new, reformed, or expanded government policies to internalize a broader suite of environmental costs on businesses, regulate or prohibit activities at odds with conservation goals, or subsidize desirable conservation behaviors.”

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January 13, 2014

Perception of Shale Gas Risks

An Associated Press review of reports of water contamination associated with oil and gas drilling found significant differences in the way complaints are recorded at the state level. For example, Texas collects the most comprehensive data on resident-submitted issues, whereas Pennsylvania tallies “raw numbers of complaints.” The review noted that “the lack of detail in some state reports could help fuel public confusion and mistrust.”

The public’s impression of potential well contamination can directly impact the housing market for surrounding homes, according to new research at RFF. RFF Visiting Fellow Lucija Muehlenbachs and coauthors write: “Access to a safe, reliable source of drinking water is an important determinant of a property’s value. Even a perceived threat to that access can have detrimental effects on housing prices.”

Linking Carbon Markets

Quebec and California formally linked their cap-and-trade systems this month. While this program could serve as a model for other regions, some in Quebec worry that “money could flow out of the province” when billions of dollars of allowances are purchased in 2015.

According to research by RFF’s Dallas Burtraw, Karen Palmer, Clayton Munnings, Paige Weber, and Matthew Woerman, concerns about allowance price dynamics are well-founded. They write that formal linking “come[s] with political economy consequences, as some interests will benefit and some will lose.” However, incrementally aligning the programs could “help anticipate and possibly dissipate the wealth transfers ” that create such consequences. Quebec Environmental Minister Yves-François Blanchet recently spoke at RFF on linking the Quebec and California markets; watch the video here.

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