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.
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.”
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.”
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:
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.
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.”
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.