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20142013 | 2012 | 2011

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RFF on the Issues is now published on RFF’s blog, Common Resources, and will no longer be posted here. For more from the blog, visit www.common-resources.org.

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June 2014

​June 23, 2014

Extreme Flooding

Cities across the Midwest are preparing for even more floods, following torrential rains and tornados that have already caused significant damage. Some in the area have noted that such flooding has “become more the rule than the exception,” with rainfall increasing in both quantity and intensity.

With increased flooding comes increased claims to the National Flood Insurance Program—and it seems that extreme events and damage are becoming “even more extreme,” according to RFF’s Roger Cooke, Carolyn Kousky, and colleague Erwann Michel-Kerjan of the Wharton Risk Management and Decision Processes Center. They note that “yearly losses can be hopelessly volatile and, as such, historical averages are not good predictors of future losses” and suggest that “we may need to rethink our risk management strategies.” 

Shale Gas Liability

A Texas family was recently awarded $2.9 million in a lawsuit against Aruba Petroleum, in “one of the first successful US lawsuits alleging that toxic air emissions from oil and gas production have sickened people living nearby.” One of Aruba’s arguments in the case was that the family could not prove that the emissions were coming from Aruba wells.

RFF’s Nathan Richardson argues that liability rules should be revised for shale gas development issues to not only protect the public, but to help specify when companies are responsible and “whether they could be sued.” In new research by Richardson and RFF Visiting Scholar Sheila Olmstead of the University of Texas at Austin, the authors write that while most discussions of shale risk mitigation focus on regulatory measures, the existing legal liability system “could be adapted to address many of the potential risks of shale development.”

Climate Crash

In a New York Times op-ed, former Secretary of the Treasury Henry Paulson, Jr. paralleled the current issues with climate change to the 2008 financial market crash: “We’re staring down a climate bubble that poses enormous risks to both our environment and economy. The warning signs are clear and growing more urgent as the risks go unchecked.” (He also discussed this topic at RFF previously.) Paulson is not the only one taking this approach. In a special lecture at RFF earlier this year, Nobel Laureate Robert Engle explained how financial models can be used to evaluate environmental risk, noting: “I think the fact that environmental stocks, on average, are viewed as underperforming stocks is kind of an important observation because that means people are willing to pay more for them . . . they’re hedging this environmental long-run risk.”

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​June 16, 2014

Natural Gas in EPA’s Plan

Analysis that accompanied EPA’s Clean Power Plan predicts that “natural gas [will] edge out coal to become the most common fuel for power plants by 2030.” The EPA says that this could have significant environmental benefits because “natural gas emits about 40 percent less carbon than coal for the same amount of energy.”

There will be economic benefits as well, according to RFF researchers. In a recent blog post, RFF’s Alan Krupnick writes: “With the new plan, the demand for natural gas will increase even more. In the old days, this would have led to big increases in costs and prices to bring that gas to market. But the shale gas revolution has changed all that.” Research by Krupnick, RFF’s Stephen P.A. Brown, and Margaret Walls on the cost of a similar plan “shows that the natural gas revolution can shave a [a billion dollars] off of the plan’s cost.”

Insuring against Climate Change

Recently, a major insurance company dropped the lawsuits it filed against Chicago municipalities who it says are failing to prepare for climate change. The company argued that the cities and suburbs have been aware of the increasing impact of global warming on regional rainfall “since the 1970s” and that the lawsuits were intended to “encourage cities and counties to take preventative steps to reduce the risk of harm in the future.”  

At a recent RFF seminar (video now available), experts questioned whether disaster events that are exacerbated by climate change and globalization are becoming increasingly uninsurable. RFF Fellow Carolyn Kousky noted that “insurability is a dynamic concept that changes over time,” requiring risk management tools that can accommodate levels of financial and scientific uncertainty to keep insurance profitable for its writers and affordable for its buyers. (Related: See “How Much Do Weather-Related Disasters Cost?” for Kousky’s examination of the costs and why they are increasing.)

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​June 2, 2014

EPA’s Clean Power Plan
RFF researchers on the regulation of greenhouse gas emissions from existing power plants
Today, the Obama administration proposed a new rule to reduce emissions from existing power plants, using EPA’s authority under the Clean Air Act. EPA Administrator Gina McCarthy commented: “The glue that holds this plan together, and the key to making it work, is that each state’s goal is tailored to its own circumstances, and states have the flexibility to reach their goal in whatever way works best for them.” (Note that there is still time to register for RFF’s special event on June 5, where experts will discuss the challenges and opportunities of this approach.)
RFF experts on greenhouse gas emissions and Clean Air Act regulatory issues have examined various flexible approaches that the states might take to reduce emissions from power plants under the Clean Air Act. Below are some highlights.
On cost-effectiveness:

On state implementation:

  • Nathan Richardson notes that “allowing states to choose unique policy paths is sensitive to local conditions and creates a policy laboratory” where “states aren’t just responsible for enforcing federal rules or meeting federal targets, but are the primary regulators, with control over the program’s structure and stringency.”
  • Dallas Burtraw says: “I don’t think we will end up in a world where there are 50 different approaches in each of the states. For one reason, many states do not have the resources to really give form to an approach that has not already been thought through by their neighbors. There’s going to be leading states and maybe some states that will follow.”
On international targets:
  • Dallas Burtraw and Matt Woerman find that EPA’s proposed emissions reductions “could be expected to take the United States past 15 percentage points of the 17 percentage-point reduction from 2005 levels that President Obama pledged in Copenhagen in 2009.”
For more work by RFF researchers on these topics, visit www.rff.org/cleanairact.

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May 2014

​May 19, 2014

Managing Coastal Flooding Risks
Alabama port cities, such as Mobile, have the potential to be devastated by “as much as 25 feet of water” from rising seas, according to federal studies. However, local governments can “adopt land use strategies that manage risks effectively,” writes RFF’s Carolyn Kousky. For example: “More flexible property rights, such as rolling easements, have been suggested to allow for private use of the shore until inundation occurs.” RFF’s Margaret Walls suggests that communities might want to consider transfer of development rights to bring about such land use change. She notes: “Importantly, there is no direct cost to the government except the administrative costs of running the program.”
Ice Sheet Collapse
In two recent studies, scientists have reported that the West Antarctic ice sheet has entered an unstoppable “chain reaction” melting phase. One of the study’s authors notes that the “thinning of the ice in recent decades is most likely related to climate change” but that it is difficult to predict how efforts to stop global warming would affect the melt.
At a recent RFF seminar, panelists discussed the challenges of predicting the effects of climate change on ice sheets (video available)—including issues with quantifying the uncertainty associated with the melt. In new research, RFF Chauncey Starr Chair in Risk Analysis Roger Cooke writes that communication about uncertainty must also be improved: “We are now facing decisions that could eventually impact the habitability of the planet as we know it, and we will make those decisions without knowing exactly how current actions affect the future climate . . . . The way forward starts with getting the uncertainty narrative right."

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​May 12, 2014

The US National Climate Assessment
RFF researchers on emissions, sea level, ecosystems, water, adaptation, and poverty 

Last week, the US Global Change Research Program released the National Climate Assessment, which concluded “that the evidence of human-induced climate change continues to strengthen and that the impacts are increasing across the country.” In a statement about the assessment, RFF Vice President for Research Molly Macauley said, “The good news is that there are a lot of sensible strategies available. Many are economically beneficial on their own terms and these might be the ones for highest priority to enable this country to prepare effectively for an uncertain future.”
RFF researchers have proposed such strategies for addressing various issues highlighted in the National Climate Assessment.
On reducing fossil fuel emissions: 
On sea-level rise:
  • Carolyn Kousky describes a three-part strategy for managing shoreline retreat, noting: “Property owners accepting the notion that their right to a property is not indefinite in the face of sea-level rise is a necessary, and difficult, first step.”

On protecting ecosystems:

On managing water resources:

On planning for adaptation:

  • Daniel Morris, Molly Macauley, Ray Kopp, and Richard Morgenstern write: “The design of national adaptation policy must . . . be resilient against failure in the face of extreme climate-related scenarios and . . . flexible enough that it can meet the needs of local actors across the country in a timely manner and allow for major directional shifts as needed if existing policy proves insufficient.”

On climate change and poverty:

  • Joseph Stiglitz notes the connection between environmental policies and inequality in societies, explaining that “small interventions can have very big effects . . . . An example on a national scale that is relevant in many developing countries is the adoption of more efficient cook stoves.”

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​May 5, 2014

Looking Ahead with Exelon

Energy provider Exelon has announced its purchase of Washington-based Pepco, forming a "large electric and gas utility in the Mid-Atlantic region" to service about 10 million customers. On Tuesday, May 13, Exelon CEO and President Chris Crane will join RFF President Phil Sharp for an RFF Policy Leadership Forum to discuss shifting energy trends and landscapes facing today's utility providers. Tune in for a live webcast of the event and tweet questions using the hashtag #AskRFF.

CSAPR Authority Upheld

In a 6–2 decision, the Supreme Court has upheld the US Environmental Protection Agency's authority, under the Cross-State Air Pollution Rule (CSAPR), to regulate air pollution from power plants that affects downwind states. The rule was previously struck down by a lower court after litigation was brought by opponents who call the regulation "costly to the economy."

Research on CSAPR by RFF’s Dallas Burtraw, Karen Palmer, Anthony Paul, and Matt Woerman reveals that "changes in natural gas supply and electricity demand overwhelm the effects associated with these environmental regulations. . . . Industry, policymakers, and the public will want to carefully separate the effects of these changes when evaluating the economic consequences of pending environmental regulations." They conclude that CSAPR can be implemented "apparently with little disruption to the sector, especially in comparison with the normal disruptions associated with a changing world."

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April 2014

​April 28, 2014

Droughts and Groundwater

Lawmakers in California recently proposed the nation's first water efficiency standards for new toilets and faucets, which are expected to save the state 8.2 billion gallons of water in the first year. The standards should help relieve pressure on water providers in what is expected to be "a hot and dry future for the state."

California's drought "presents a catch-22 for the state and its residents," writes RFF Fellow Yusuke Kuwayama in an article for Resources magazine. "Water shortages will increase reliance on declining groundwater supplies, but the unsustainable use of this resource has contributed to the severity of the drought." He suggests that the creation of groundwater markets could serve the state's "changing conditions and demands" while preventing large declines in water tables.

North American Energy

North America's potential for energy independence through oil and gas extraction faces a number of significant challenges, according to a new report by the New York Times. The survey of Canadian, American, and Mexican production highlights numerous regulatory and economic challenges facing the industry, including the enforcement of new energy laws, the unpredictability of future markets, and clashes between international interests.

In a new commentary in Resources, RFF's Ray Kopp and Alan Krupnick suggest that drafting an energy-specific agreement akin to NAFTA, an "E-NAFTA," could help integrate the interests of North American countries and energy producers: "The negotiation of an E-NAFTA will raise domestic political and economic issues in each of the three countries as well as significant cross-border concerns. . . . While challenging, a coordinated consideration of these issues—whether bilateral or, better still, trilateral, and whether within a NAFTA framework or not—has much to recommend."

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​April 21, 2014

Mercury Regulations Upheld

Last week, the US District Court of Appeals for the DC Circuit upheld the US Environmental Protection Agency's (EPA's) authority to enforce its Mercury and Air Toxics Standards (MATS). The court ruled that the standards are "substantively and procedurally valid," despite concerns that the rules would severely increase electricity rates.

Various studies have attempted to predict the potential impacts of MATS. RFF’s Blair Beasley, Matt Woerman, Anthony Paul, Dallas Burtraw, and Karen Palmer attempted to reconcile the results of this research and found that the "studies that most closely match the regulatory requirements as laid out in the final MATS rule and do not include other proposed EPA regulations . . .[demonstrate] less severe impacts on the electricity market."

Beijing Pollution

The rapid growth of Beijing's economy, population, and energy use—along with pollution from surrounding provinces—is to blame for the city's continued air quality problems, according to the Beijing Environmental Protection Research Institute. China's government has drafted ambitious plans to cut future coal consumption, but challenges remain, including "big polluting industries and growth-obsessed local authorities."

In an interview with Resources magazine, RFF Visiting Fellow Mun Ho suggests that changes in China's demographics have facilitated support for more restrictive pollution policies: "[F]or a long time now, given the large-scale, low-income situation in China, growth has been the key priority. This is changing, now that China is developing more of a middle class. The emphasis now is on the quality of life. The quality of the environment, accordingly, is much higher on the agenda, but it is a difficult problem."

Local Shale Impacts

Video and presentations are now available from "Exploring the Local Impacts of Shale Gas Development," an RFF seminar held on April 10. Panelists discussed "the good, the bad, and the uncertain" impacts, including the effects of shale gas development on property values (with results from a study by RFF researchers). More information is available at RFF’s shale gas development resource page: www.rff.org/shalegasrisks.

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​April 14, 2014

Note: There is still time to register for the April 17th seminar, "From the Gulf to the Arctic: What Have We Learned since the Deepwater Horizon Spill?" Join RFF for two distinguished panels featuring experts from the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, the National Oceanic and Atmospheric Administration, the Bureau of Ocean Energy Management, the US Department of Energy, and more.

Regulations for New Power Plants

US Environmental Protection Agency (EPA) Administrator Gina McCarthy said last week that although the new regulations for existing power plants will not be "aspirational standards," they will allow emissions targets to be achieved through a combination of strategies. This may signal a different direction from the rules for new power plants, and could provide states the flexibility needed to keep many older facilities open.

In a comment to EPA, RFF's Nathan Richardson explains why separating regulations for new coal and gas plants, as EPA is currently proposing, could sharply limit the flexibility available under rules for existing plants. He writes: "Here's hoping EPA has combined the categories. If they have not, I do not see how the agency can fulfill its promise to preserve existing [flexible] state climate programs."

European Shale Gas

Government and industry calls to increase hydraulic fracturing efforts in Europe are being met with widespread skepticism by local residents. Observers in the United Kingdom note that the island nation’s dense population and relatively complicated geography make it "everything that North Dakota isn’t," while some view fracking as being "out of step" with the rising popularity of alternative energy sources.

While Europe's recoverable shale gas reserves are "only slightly less than those in the United States," the success of the US shale boom relied on a number of factors, according to RFF’s Zhongmin Wang and Alan Krupnick. In a history of the US shale boom, they write that "high natural gas prices, favorable geology, private land and mineral rights ownership, market structure, water availability, and natural gas pipeline infrastructure" were key ingredients, but "the most important factor was innovations in technology," often supported by government research and development programs.

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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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