Climate 411

Two new analyses: significant benefits for Pennsylvania from historic move to limit carbon pollution

(This post was co-written by Mandy Warner)

Two new analyses show significant opportunities for Pennsylvania under environmental protections that are compatible with the Regional Greenhouse Gas Initiative – commonly known as RGGI.

RGGI is a collaboration of nine northeast states that is designed to lower carbon pollution from the power sector. Pennsylvania Governor Tom Wolf signed an historic executive order last month directing the state’s Department of Environmental Protection to develop a regulation that is compatible with RGGI. That order followed Wolf’s commitment to reducing Pennsylvania’s climate pollution by 26 percent by 2025 and 80 percent by mid-century, compared to 2005 levels.

Pennsylvania has the fifth dirtiest power sector in the nation, and the power plants operating in Pennsylvania emit more carbon pollution than all the other power plants in the nine northeastern states in RGGI combined. A binding, declining limit on carbon pollution is a necessary element of any strategy to address this problem.

Two studies underscore the value of Pennsylvania’s actions:

  • EDF and M. J. Bradley & Associates released a new analysis that found there could be significant economic and emissions reduction benefits for Pennsylvania from setting a binding, declining limit on power sector carbon pollution, and creating a flexible, market-based mechanism to achieve that limit. The analysis was based on policy specifications, inputs, and assumptions developed by M.J. Bradley & Associates at the direction and on behalf of EDF, with feedback from participating stakeholder companies.
  • A recent report by Resources for the Future had similar findings.

Here are five key takeaways from both of these analyses.

  1. Pennsylvania has a significant opportunity for cost-effective pollution abatement by limiting carbon pollution and linking with RGGI

While carbon pollution from Pennsylvania’s power sector has declined in recent years, driven primarily by market trends including cheap natural gas prices, it is projected to start increasing again. By mid-2020, under business-as-usual forecasts with no carbon limits, both analyses found Pennsylvania’s power sector carbon pollution would be more than 30 percent higher than current levels.

By setting a binding, declining limit on power sector carbon pollution and creating a flexible, market-based mechanism to achieve that limit, Pennsylvania can significantly reduce its carbon pollution at low cost.

The EDF and M.J. Bradley & Associates analysis found that linking with RGGI and designing the program in a way that ensures all electric power used in Pennsylvania is covered under the cap could lower carbon pollution by more than 35 percent and produce roughly $200 million in net savings for Pennsylvania in 2030. That’s compared to business-as-usual scenarios with no carbon limit.

The lower costs are due to reduced need for capital expenditures like building new power plants, and to declining fossil fuel costs – both driven by more of the existing nuclear fleet remaining in operation.

Resources for the Future’s analysis similarly found that linking with RGGI could lead to significant carbon pollution reductions in Pennsylvania with no observable increases in electricity prices.

Earlier studies have also demonstrated the benefits of RGGI. By driving investments in energy efficiency, RGGI has already reduced consumer energy bills, generated net economic benefits for participating states, and has  produced enormous public health benefits. RGGI has helped save hundreds of lives, prevented thousands of asthma attacks, and saved billions of dollars in health-related economic costs.

According to electricity bill modeling by the Analysis Group, the average residential electricity bill in RGGI states will be 35 percent lower in 2031 than it is today, due to investments in energy efficiency.

Linking Pennsylvania with RGGI could offer further benefits – including allowing for emissions trading, which can lower total costs and make Pennsylvania’s program resilient to unexpected changes in weather or other events that could affect electricity markets while still preserving state autonomy and programs.

  1. Limiting carbon pollution and linking with RGGI provides support for existing and new zero-emission generation

Placing a binding, declining limit on carbon pollution – and then letting the carbon pollution limit drive a price in the energy market – provides Pennsylvania with a technology-neutral approach that ensures the most cost-effective deployment of zero-emission resources to meet the state’s climate goals.

The EDF and M.J. Bradley & Associates analysis found that under business-as-usual scenarios using EDF’s reference natural gas price assumptions, all nuclear capacity in Pennsylvania retires by 2030.

According to the analysis, linking with RGGI and designing the program in a way that ensures all electric power used in Pennsylvania is covered under the cap can help support the state’s existing nuclear fleet – retaining roughly 50 percent of the fleet in 2030.

Resources for the Future similarly found that limiting carbon pollution and linking with RGGI would forestall expected nuclear retirements, increasing Pennsylvania’s nuclear generation by up to 280 percent in 2026 relative to business-as-usual scenarios.

The natural gas prices used by Resources for the Future for their analysis are higher than currently observed, which would allow nuclear capacity to remain profitable with greater ease than may be possible with lower natural gas prices. But the preservation of existing nuclear capacity is a robust result under all scenarios that limit carbon pollution across both analyses, providing valuable insight into the role a limit on carbon pollution can play in preserving assets that are zero-emitting.

The EDF and M.J. Bradley & Associates analysis also found that linking with RGGI can increase wind and solar generation in Pennsylvania by almost 75 percent in 2030 compared to current levels. Resources for the Future found that limiting carbon pollution and linking with RGGI could generate up to 25 percent more wind and solar generation in Pennsylvania by 2026 compared to business-as-usual scenarios.

  1. Pennsylvania can reduce carbon pollution while increasing net exports from the state

The EDF and M.J. Bradley & Associates analysis shows that limiting carbon pollution and linking with RGGI would enable Pennsylvania to achieve its environmental objectives at low cost while at the same time increasing net exports from the state at least nine percent in 2030 compared to current levels.

Pennsylvania can also design its program to shift allowance value to producers with updating output-based allocation, which can increase gas and nuclear generation and energy exports in the state. According to Resources for the Future, the production incentive from output-based allowance allocation can increase exports from Pennsylvania above business-as-usual levels by 2026. Most of these exports are to other RGGI states so the overall pollution in the region is unaffected.

Resources for the Future also finds that using an output-based allowance allocation to non-emitting producers can provide incentives to shift generation in Pennsylvania from fossil fuel to zero-emitting sources, further decreasing carbon pollution in Pennsylvania and nationally.

  1. Smart policy design can amplify these benefits and further lower overall pollution

When a state or group of states puts a limit on carbon pollution, particularly in states that are served by a multi-state wholesale electricity market, emissions leakage to emitting sources that are not covered under the program is always a concern.

While both analyses demonstrate clearly that such leakage will not even come close to dwarfing the significant climate benefits of Pennsylvania’s program, it may partially erode the potential for greater pollution reductions. Linking programs can help reduce leakage but is not sufficient to fully mitigate it.

The EDF and M.J. Bradley & Associates analysis finds that an effective leakage mitigation mechanism, such as putting emissions associated with imported power under the cap, can lower overall carbon pollution – driving 75 percent more reduction in pollution in the Eastern Interconnect in 2030. The analysis also shows that leakage mitigation can help provide more support for Pennsylvania’s existing nuclear fleet and lower overall system costs, more than doubling nuclear generation in the state and lowering system costs by roughly $330 million in 2030 compared to no leakage mitigation.

Pennsylvania has options available today to mitigate leakage concerns and ensure that the state is not disadvantaged in the broader marketplace relative to other states that choose not to control carbon pollution. Resources for the Future has shown that an output-based allowance allocation to producers has the potential to result in negative leakage.

Regional transmission organization PJM Interconnection is also looking into ways to enhance technical capabilities to support state policy choices such as carbon limits. As part of its Carbon Pricing Senior Task Force, PJM is actively exploring with its stakeholders what data needs and frameworks can best support state carbon outcomes in the context of a regional market. They are also considering ways to ensure that states that are controlling carbon are seeing those policy choices accurately reflected.

This PJM stakeholder process provides an important opportunity for Pennsylvania to engage to ensure the state has the information it needs to deploy the policy frameworks that can effectively mitigate leakage.

  1. More ambitious carbon pollution limits can provide even further benefits

The EDF and M.J. Bradley & Associates analysis also finds that more ambitious carbon pollution limits (in line with deep decarbonization trajectories) with leakage mitigation can accelerate pollution reductions, retain all of the state’s existing nuclear fleet, and incent new clean energy resource builds – all at lower system costs compared to business as usual scenarios with no carbon limit.

According to the analysis, more ambitious carbon pollution limits can increase solar capacity in Pennsylvania by more than 10 times, leading to an increase in renewable generation of more than 130 percent in 2030 compared to business-as-usual scenarios.

Public support for concrete climate policy is sky-high in Pennsylvania

There is strong support in Pennsylvania for moving forward to reduce carbon pollution.

A poll conducted by EDF Action earlier this year found that 79 percent of Pennsylvania voters support regulations to reduce carbon pollution. That includes 66 percent of state Republicans polled.

Major Pennsylvania power companies, including Exelon and FirstEnergy, applauded Governor Wolf’s executive order. The Pennsylvania Chamber of Commerce noted that “climate change is real” and that the business community needs to be “at the table to discuss solutions.”

The time for action is now

It is becoming increasingly urgent to address climate change. That means it is critical for Pennsylvania to move forward without delay, and put in place an ambitious program to secure carbon pollution reductions and lock in public health benefits at the lowest cost.

The good news is that Pennsylvania can build on planning it has already completed as part of previous compliance work. Governor Wolf’s executive order sets a deadline of July 31, 2020 for a proposed rule to cut carbon emissions to be presented to the Environmental Quality Board. But there’s no reason not to move forward more quickly.

We urge Governor Wolf to develop a proposed rule to submit to the Air Quality Technical Advisory Committee at its February meeting. That would help create certainty about the state’s emissions trajectory on a short-term time horizon, including creating regulatory certainty for affected industries.

Posted in Cities and states, Energy, Greenhouse Gas Emissions, Policy / Comments are closed

Trump’s ACE Rule May Especially Harm Vulnerable Communities

(This post was co-authored by EDF intern Laura Supple)

The Trump administration’s latest attack on clean air protections may cause the greatest harm to the most vulnerable communities – according to EPA’s own projections.

In June, the Trump administration repealed the Clean Power Plan – America’s first and only nationwide limit on carbon pollution from existing power plants – and replaced it with a pollution-enabling rule that, by EPA’s own numbers, would increase climate pollution in many states compared to no policy at all.

Experts have warned that under the Trump replacement, called the ACE rule, many parts of the country would also see increases in health-harming sulfur dioxide and nitrogen oxides pollution that lead to soot and smog. While the Administration has tried to downplay the public health consequences of the new rule, EPA’s projections show that vulnerable communities around the nation will likely suffer the most from these dangerous pollution increases.

Read More »

Posted in Cities and states, Clean Air Act, Clean Power Plan, EPA litgation, Greenhouse Gas Emissions, Health, News, Policy / Comments are closed

A Chorus of Opposition to the Final ACE Rule

(This post was co-written by EDF intern Laura Supple)

The Trump administration has finalized a rule that throws out the Clean Power Plan – America’s first and only nationwide limit on carbon pollution from existing power plants – and replaces it with a “do nothing” rule that, by EPA’s own numbers, would actually increase dangerous climate and smog-forming pollution in many states compared to no policy.

A broad and diverse group including political leaders, business representatives, and public health advocates have come out in strong opposition to the rollback. You can find all their responses here.

Here are some of the most notable comments. Read More »

Posted in Cities and states, Clean Air Act, Clean Power Plan, Greenhouse Gas Emissions, Health, News, Partners for Change, Policy / Comments are closed

Wheeler’s Clean Power Plan rollback misses a huge opportunity for cost-effective pollution reduction

Co-authored by Laura Supple and Rama Zakaria

The Trump administration is expected to soon finalize a rule that will throw out the Clean Power Plan – the first and only nation-wide limit on carbon pollution from existing power plants – and replace it with a “do-nothing” rule. Unlike the common-sense, market-based approach of the Clean Power Plan, the final rule is expected to mirror Wheeler’s proposed replacement–which contains no binding limits on carbon pollution, leaving it to the states to establish standards based on only a narrow and ineffective menu of operational efficiency tweaks for coal-fired power plants.

EPA’s own analysis has shown that this proposed replacement would increase climate pollution and dangerous soot and smog pollution, causing thousands of additional deaths and childhood asthma attacks every year compared to the Clean Power Plan, and may even increase pollution in several states compared to having no policy at all. In addition to disregarding the health and wellbeing of Americans, the proposed rule represents a tragic lost opportunity to achieve the deep, cost-effective reductions in pollution that are needed to address the urgent threat of climate change – and move the U.S. forward into a clean energy economy.

Here are four reasons why:

Power companies are making bold commitments to cut pollution, investing in cleaner technologies that deliver high-quality power at low cost to consumers

Power companies are setting ambitious goals to reduce pollution and increase the share of renewable technologies in their energy mix. Some of the largest power providers in the country have recognized the long-term economic value of renewable power and cleaner energy, setting their own targets to reduce pollution well below what the Clean Power Plan requires.

Xcel Energy, a utility serving 3.6 million customers across 8 Midwestern states, has already reduced carbon pollution by about 38% below 2005 levels while keeping costs low for its consumers. According to Xcel, its residential customer electric bill has decreased 3% in the past five years and is on average $28 lower per month than the national average. Xcel also recently ramped up its own ambitions, committing to cut carbon pollution 80% below 2005 levels by 2030, and achieve 100% clean power by 2050.

Other companies are also joining the trend towards decarbonizing their electricity mix, including Idaho Power, which has committed to 100% carbon-free electricity by 2045, and Platte River Power Authority, which aims to provide 100% renewable energy by 2030.

States and cities across the country are also setting bold targets to reduce pollution and expand the use of renewable energy. Seven states, 11 counties, and 125 U.S. cities have committed to 100% renewable energy, and at least 27 states have long-term policies establishing quantitative energy savings targets. These initiatives are making energy supplies more robust, reliable, and affordable, demonstrating that ambitious pollution reduction strategies can be good for the environment, good for business, and good for consumers.

Power sector trends have made deeper reductions achievable and cost-effective

Thanks in part to the ongoing market shift towards a cleaner electricity resource mix, the power sector is decarbonizing faster than was predicted just a few years ago.

In 2015, when the Clean Power Plan was finalized, the Energy Information Administration (EIA) projected baseline power sector carbon dioxide pollution would drop 10% from 2005 levels by 2030. Based on recent trends and technological developments, however, EIA’s most recent projections estimate that power sector carbon pollution would be at 34% below 2005 levels by 2030 – surpassing Clean Power Plan targets – even without federal climate regulation.

To be clear, we need the long-term regulatory signal established by meaningful federal regulation to ensure these trends continue and secure pollution reductions. Now more than ever, it is imperative that EPA use this momentum to set even greater climate protection targets in order to achieve the rapid reductions in carbon pollution that scientists say are necessary to avoid the worst impacts of climate change.

Plummeting costs of clean energy technologies are making pollution reduction more affordable and economical than ever

Targets for the Clean Power Plan relied on the National Renewable Energy Laboratory’s (NREL) 2015 Annual Technology Baseline projections of renewable energy costs. In its latest 2018 report, NREL predicted that the costs of onshore wind in 2030 would be 28% lower than 2015 projections, and utility-scale solar PV costs could be up to 68% lower.

These projections match trends we see on the ground. Recent filings from Xcel Energy to the Colorado Public Utilities Commission include proposals for wind power between $11 to $18/MWh – cheaper than the operating cost of all existing coal plants in Colorado – and solar-plus-storage bids not much higher than standalone solar. Last year, NV Energy reported even lower bids, setting record-low prices in its solar and solar-plus-storage request for proposals.

Overall, electricity from renewables is already cheaper than electricity from fossil fuels in many parts of the country. PacifiCorp, a majority-coal power provider, recently found it could save money by retiring 60% of its coal fleet by 2022 and replacing those units with renewables. In a 2019 analysis, Energy Innovation reported that the U.S. has officially entered the “coal cost crossover,” finding that local (within 35 miles) wind and solar generation could replace 74% of U.S. coal plants at an immediate cost savings to customers. By 2025, 86% of coal power plants could be replaced with local renewable generation.

Recent modeling shows far more ambitious and cost-effective pollution reductions can be achieved

Several studies demonstrate just how ambitious climate targets could be – with the right set of regulatory and market-based strategies. A range of analyses show that far greater reductions in carbon pollution can be achieved at low cost.

In 2015, EPA estimated the cost of achieving the Clean Power Plan targets to be in the range of $24 to $37 per ton of carbon over the 2022 to 2030 compliance period. Recent updated analysis using the same power sector model, however, found that much more ambitious carbon pollution reductions of more than 50% below 2005 levels are possible at similar costs to the Clean Power Plan.

EIA also found that even greater reductions of 68% below 2005 levels could be achieved by 2030 at modest cost. A 2016 study by the Union of Concerned Scientists showed that in a “Mid-Cost Case”, power sector carbon pollution limits of 76% below 2005 levels by 2030 could be cost-effectively achieved. Modeling by Columbia University Center and Rhodium Group also suggest that similar strategies could cut power sector carbon pollution by 72 to 76% below 2005 levels by 2030.

At a time when the threats of climate change have never been more apparent, EPA must move forward on climate action with emission reduction targets that surpass the ambition of the Clean Power Plan and protect human health and the environment from dangerous pollution. Instead, Wheeler’s proposed replacement misses a tremendous opportunity to secure deep reductions in carbon pollution and propel the U.S. into a clean energy future.

Posted in Clean Power Plan, Economics, Energy, Health, News / Comments are closed

Pennsylvania has cost-effective opportunities to reduce carbon pollution – new report

Six states could see significant opportunity and low costs if they put in place protections against carbon pollution from the electricity sector, according to a new report.

The report, by Resources for the Future, looked at Pennsylvania, North Carolina, Minnesota, Wisconsin, Illinois, and Michigan.

It found that taking two steps – setting a binding, declining limit on power sector carbon pollution, and creating a flexible, market-based mechanism to achieve that limit – could reduce cumulative carbon pollution by 25 percent in the next decade at low cost. The findings also suggest that even greater ambition is feasible for the six states.

Thirteen states not covered by the report already have – or are about to have – regulations that limit carbon pollution from their electricity sector. Other states, including Pennsylvania, are actively seeking opportunities to reduce emissions and deploy clean energy.

The new report has three key takeaways for Pennsylvania:

Read More »

Posted in Carbon Markets, Cities and states, Economics, Energy, Policy / Comments are closed

Four reasons why Wheeler’s Clean Power Plan “replacement” will lead to more pollution

EPA Administrator Andrew Wheeler has sent a draft rule that would roll back the Clean Power Plan to the White House for review – a step that suggests the rule is close to being finalized and released.

If this final rule looks anything like the hopelessly flawed and inadequate proposal that was released last August, it will scrap the Clean Power Plan – our nation’s only national limit on carbon pollution from the power sector – in favor of a “do-nothing” program that could actually increase pollution from inefficient, highly-polluting coal-fired power plants.

Even as the nation reels from wildfires, flooding, and hurricanes exacerbated by climate change, Wheeler’s proposal would place no meaningful limits on one of our nation’s largest contributors to climate-destabilizing pollution.

If our experience with the proposal is any guide, we can also expect the release of the final rule to be accompanied by a bevy of misleading assertions that Wheeler’s “replacement” for the Clean Power Plan is just as effective in protecting climate and public health.

Wheeler has already been making such claims. For instance, in testimony before the House of Representatives last month, Wheeler said that EPA’s proposed replacement for the Clean Power Plan would reduce carbon pollution from the power sector by 34 percent once fully implemented, and would go a long way towards meeting our carbon reduction goals for the country. These comments build on Wheeler’s claims during his Senate confirmation process that equated his replacement to the Clean Power Plan.

Here are four reasons why his claims are false: Read More »

Posted in Clean Air Act, Clean Power Plan, EPA litgation, Greenhouse Gas Emissions, Health, News, Policy / Comments are closed