Selected category: Economics

Underhanded maneuvers to repeal the Clean Power Plan put Americans’ lives and health at risk

(EDF’s Ben Levitan co-authored this post)

Environmental Protection Agency (EPA) Administrator Scott Pruitt says he will sign a proposal tomorrow to repeal the Clean Power Plan – America’s only nationwide limits on carbon pollution from fossil fuel power plants.

If the proposal matches what we’ve already seen in a leaked draft, it would be one of the most deeply harmful and reckless actions an EPA Administrator has ever taken. It would cost thousands of American lives, harm public health in myriad other ways, and lead to years of costly delays in combating the urgent threat of climate change.

Administrator Pruitt would have to go to great lengths to obscure and ignore these harmful consequences. When EPA issued the Clean Power Plan in 2015, it estimated that the plan would create up to $54 billion in annual benefits, including:

  • The prevention of up to 3,600 premature deaths every year
  • The prevention of 90,000 childhood asthma attacks every year
  • The prevention of 300,000 missed school and work days every year.

By comparison, EPA concluded that the annual costs would be much lower. And in the two years since the Clean Power Plan was issued, new analyses – including this one from New York University’s Institute for Policy Integrity – have concluded that compliance with the Clean Power Plan has become dramatically cheaper as a result of the plummeting costs of clean energy.

Yet the draft proposal for repealing the Clean Power Plan seems to rely on a significantly higher costs estimate, and much lower benefits. How is that possible?

A careful look at the numbers shows that the Administrator Pruitt’s EPA cooked the books for this proposal. They used discredited methodologies to artificially inflate costs, and to mask the consequences for our climate and obscure the thousands of lives that could be lost as a result of their repeal of the Clean Power Plan.

Here are four tactics that Administrator Pruitt has employed in the leaked proposal to inflate the costs and hide the benefits of the Clean Power Plan:

1. Disregarding lives saved by the Clean Power Plan

EPA’s original analysis of the Clean Power Plan found that it would avoid thousands of premature deaths each year by reducing particulate matter pollution – yielding up to $34 billion in annual health benefits in 2030.

According to the American Lung Association, particulate matter pollution causes permanent damage to lung development in children, aggravates asthma and other respiratory problems, increases hospitalizations, and increases deaths from heart and lung diseases including lung cancer.

The Clean Power Plan would reduce exposure to this pollution across the country – avoiding these health harms and premature deaths.

Administrator Pruitt’s draft proposal assumes away those benefits by asserting – contrary to established medical research – that there is zero health impact from reducing particulate matter pollution below certain “threshold” levels. The proposal also suggests that EPA can count only the climate benefits associated with carbon pollution, with no consideration to any health benefits at all.

This claim that there is a “threshold” level of particulate pollution below which it does not harm human health is directly contradicted by the American Heart Association and was completely discredited many years ago by an expert panel convened by EPA under the George W. Bush Administration. It also runs contrary to EPA’s long-standing practice.

As EPA itself recently explained in a court brief:

The best scientific evidence, confirmed by independent, Congressionally-mandated expert panels, is that there is no threshold level of fine particulate pollution below which health reductions are not achieved by reducing exposure.

Ignoring the deaths and harm to Americans’ health that would result from repealing the Clean Power Plan is unconscionable. The plain truth is that undoing the Clean Power Plan would deprive Americans of billions of dollars in health benefits and put then at increased risk for premature death.

2. Artificially inflating the costs of the Clean Power Plan

EPA originally anticipated that parties would comply with the Clean Power Plan in part through investments in demand-side energy efficiency, “a highly cost-effective means” for reducing carbon pollution from the power sector.

Demand-side energy efficiency measures help consumers save electricity, resulting in lower electric bills for hard-working Americans, less pollution, and a more reliable electric grid. Investments in energy efficiency are largely offset by the electricity savings that result.

Yet the upside-down accounting in the draft proposal adds those energy efficiency investments to the costs of the Clean Power Plan without deducting the electricity savings those investments yield. This makes it look like the power sector is paying for both energy efficiency and the electricity that it no longer needs to produce. Therefore, this upside-down accounting includes billions of dollars of imaginary electricity costs – for electricity that will never be generated or purchased.

The draft proposal adds the cost of this imaginary electricity to its estimate of Clean Power Plan benefits — to represent the “benefit” of not having to purchase electricity that was never produced in the first place. When comparing costs and benefits, this imaginary electricity is a net wash ­– but it enables EPA to inflate its estimate of the plan’s costs by up to $19.3 billion in 2030.

The draft proposal also uses a higher discount rate of 7 percent for energy efficiency investments – providing no meaningful justification for a choice that further inflates costs by $6.2 billion.

The cumulative effects of adding the cost of imaginary electricity and using a higher discount rate increases costs by up to $25.5 billion in 2030.

3. Shortchanging the benefits of reducing carbon pollution

Administrator Pruitt’s proposal aggressively undercuts the social cost of carbon. That's the estimate of damages that climate pollution causes for our families and communities – from more intense hurricanes and heat waves, more wildfires, and the many other threats of climate change.

By using an unrealistically low figure, the proposal severely undervalues the benefits of the Clean Power Plan’s carbon reductions.

The original Clean Power Plan utilized an estimate of the social cost of carbon developed over many years by experts from a dozen federal agencies who used the best available science and repeatedly considered public input.

The draft proposal for repealing the Clean Power Plan has new, misleading values that use unsound methods rejected by independent experts to yield a lower estimate of the Plan’s benefits.

The draft proposal simply ignores important categories of carbon reduction benefits

The new proposal claims to count only the domestic U.S. impacts of carbon pollution, even though this pollution causes worldwide harm. A recent report by the National Academy of Sciences affirmed the importance of counting global benefits, explaining that the benefits of reducing carbon pollution would be dangerously undervalued if every country used a domestic-only social cost of carbon.

The draft proposal’s “domestic-only” cost estimate also ignores significant harms to the U.S. that arise from climate change impacts in other countries – including “global migration, economic destabilization, and political destabilization,” and “[l]ower economic growth in other regions [that] could reduce demand for U.S. exports, and lower productivity [that] could increase the prices of U.S. imports.”

For these reasons, the National Academy of Sciences concluded earlier this year that:

Climate damages to the United States cannot be accurately characterized without accounting for consequences outside U.S. borders.

Administrator Pruitt’s approach flies in the face of that expert advice.

The draft proposal short-changes our children by discounting pollution reduction benefits for future generations

The new proposal also uses a sharply lower value for the benefits that today’s carbon reductions provide to future generations.

The original Clean Power Plan “discounted” the future benefits of carbon reductions at a rate of three percent per year, based upon the findings of the inter-agency working group.

But the new proposal uses discount rates as high as seven percent, without any justification – a value that is much higher than recommended by the National Academy of Sciences or the economics literature.

The cumulative effects of ignoring global impacts and increasing the discount rate are dramatic. In the original Clean Power Plan, EPA estimated climate benefits of $20 billion in 2030 (using a three percent discount rate). The draft proposal to repeal the Clean Power Plan estimates climate benefits of just $0.5 billion in 2030.

Click to enlarge

 

4. Ignoring how low-cost clean energy means the Clean Power Plan will be even more affordable

In the two years since EPA finalized the Clean Power Plan, the plan’s goals have become even more achievable and low-cost than originally projected – thanks to electricity sector developments including the sharply declining costs of renewable energy.

But the new draft proposal has made no attempt to update its economic analysis, and does not appear to acknowledge that recent studies of the Clean Power Plan have found compliance costs are now much lower than EPA originally estimated.

Instead, Administrator Pruitt is proposing to repeal this life-saving, economically beneficial public health protection before even bothering to properly consider the latest data.

The recent report from the Institute for Policy Integrity highlights the falling costs of complying with the Clean Power Plan and points to several power sector developments that explain this trend.

The report presents several recent economic analyses conducted by independent, non-governmental entities that estimate substantially lower compliance costs than EPA projected in 2015. For instance, a June 2016 analysis by M.J. Bradley & Associates, using the same electric sector model as EPA but updating several inputs, finds that compliance would cost up to 84 percent less than EPA originally estimated.

EPA recognized and evaluated many of these precise studies as part of its Clean Power Plan deliberations. Yet for the sake of repealing the Clean Power Plan, Administrator Pruitt has decided to ignore these studies.

America deserves better

The Clean Power Plan is the most significant step the U.S. has ever taken to address the crisis of climate change. Once fully implemented, it will provide enormous public health benefits – making Americans safer, healthier, and more productive.

If Administrator Pruitt is intent on rolling back a life-saving protection for human health and the environment, the American people at least deserve an honest evaluation based on the best available data.

Unfortunately, it looks like he’s using underhanded maneuvers and deceptive accounting gimmicks to justify rescinding the Clean Power Plan instead – and the consequences for the health and safety of Americans will be all too real for decades to come.

Also posted in Clean Power Plan, Energy, Health, News| Comments are closed

Climate and clean energy progress continues in spite of Clean Power Plan repeal rumors

According to news reports, Environmental Protection Agency (EPA) Administrator Scott Pruitt is planning to start the process of repealing the Clean Power Plan very soon.

This seriously flawed and misguided effort would be a dangerous step backwards for public health and climate protections.

However, as the Trump Administration continues to unravel these protections, the transition to a clean energy future is accelerating. States, cities, and power companies are responding to the ongoing attacks by forging ahead with ambitious actions to slash carbon pollution in order to respond to the threat of climate change and accelerate the clean energy revolution.

Clean Power Plan repeal?

The Clean Power Plan is a common-sense rule to safeguard public health by reducing carbon pollution from power plants to 32 percent below 2005 levels by 2030.

The Clean Power Plan would prevent:

  • 3,600 premature deaths each year
  • 1,700 heart attacks each year
  • 90,000 asthma attacks each year

Administrator Pruitt reportedly intends to propose repealing the Clean Power Plan in the coming days.

If so, EPA will likely issue an “Advance Notice of Proposed Rulemaking” (ANPR) to solicit public input on a replacement rule – a protracted process that is likely to lead to a far weaker standard.

The ANPR process could lead to years of harmful and unjustified delay in implementing urgently needed limits on carbon pollution from fossil fuel power plants.

Forging ahead to a clean energy future

The U.S. power sector has already made enormous strides in deploying clean energy resources and slashing greenhouse gas emissions.

American Wind Energy Association

 

Solar Jobs Census 2016The Solar Foundation, interactive map

Globally, the International Energy Agency (IEA) reported yesterday that renewables accounted for almost two-thirds of new capacity installed.

  • Solar additions worldwide grew faster than any other fuel last year, including coal and natural gas.
  • Over the next five years, the IEA projects renewable capacity to grow by over 920 gigawatts – a 43 percent increase by 2022.

Meanwhile, by the end of 2016, carbon pollution from U.S. power plants had already declined to 25 percent below 2005 levels – meaning the power sector is already almost 80 percent of the way to achieving the Clean Power Plan’s 2030 targets.

A new report by the Institute for Policy Integrity highlights the falling costs of complying with the Clean Power Plan. The report points to several market and policy developments including low natural prices, declining renewable energy costs, the 2015 renewable energy tax credit extensions, and state programs supporting the adoption of clean energy technologies.

The Clean Power Plan targets have become a floor for forward-looking states and companies that acknowledge the Clean Power Plan was a first step towards realizing the promise of a low-carbon power sector.

Yet this shift towards clean energy – driven by market forces and accelerating subnational action – is no substitute for decisive federal action that will ensure continued and accelerated progress in achieving the emissions reductions required to stem the tide of climate change.

The U.S. Energy Information Administration projects that without the Clean Power Plan, carbon emissions from the power sector will increase by 2030 – reversing the current downward trajectory in the United States and leaving the country behind as the global clean energy revolution continues.

To keep us moving forward, state and local officials are stepping up their game by cutting carbon pollution and switching to clean energy in spite of — and in direct response to — President Trump’s rollbacks.

  • Fourteen states and Puerto Rico, accounting for more than 10 percent of U.S. carbon emissions from the power sector, pledged as part of the new U.S. Climate Alliance to reduce their greenhouse gas emissions consistent with the goals of the Paris Agreement, as well as meet or exceed their Clean Power Plan targets.
  • 381 mayors (and counting) representing more than 67 million Americans also pledged to honor the Paris Agreement goals and work to meet the 1.5° Celsius global temperature target. Dozens of cities have committed to move to 100 percent clean energy.
  • Colorado Governor John Hickenlooper signed an executive order in July 2017 committing the state to slash greenhouse gas emissions to 26 percent below 2005 levels by 2026, consistent with U.S. goals under the Paris Agreement. “The vast majority of our residents, and indeed the country, expect us to help lead the way toward a clean and affordable energy future,” Governor Hickenlooper said in a press release.
  • Nine states comprising the Regional Greenhouse Gas Initiative (RGGI) in August announced a proposal to cut carbon pollution from the power sector an additional 30 percent between 2020 and 2030 – a 65 percent reduction below the original 2009 pollution cap. The proposal demonstrates bipartisan commitment to combat climate change, with five Republican and four Democratic governors helming the RGGI states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont). Meanwhile, both New Jersey gubernatorial frontrunners have pledged to rejoin RGGI after this year’s election.
  • Virginia regulators are working to establish a “trading-ready” program to slash power plant carbon emissions in response to an executive order Governor Terry McAuliffe signed in May 2017. “Today, I am proud to take executive action to cut greenhouse gases and make Virginia a leader in the global clean energy economy,” Governor McAuliffe said when he signed the order.
  • California affirmed its position as a global leader on climate progress with a bevy of actions in the past year. In September 2016, legislators passed SB 32, which requires the state to slash greenhouse gas emissions to 40 percent below 1990 levels by 2030. In July 2017, the state secured a 10-year extension to its landmark cap-and-trade program and strengthened tools to improve local air quality in a bipartisan effort. “All over the world, momentum is building to deal seriously with climate change,” Governor Jerry Brown said in July. “Despite rejection in Washington, California is all in.”
  • At least 20 states and the District of Columbia have adopted ambitious greenhouse gas reduction targets, with most aiming for an 80 percent reduction by 2050 below baselines ranging from 1990 to 2006. Twenty-nine states and D.C. have binding renewable portfolio standards in place, while eight more have set renewable portfolio goals. Twenty states have set mandatory energy efficiency targets, while eight more have set energy efficiency goals.

The nation’s largest power companies are similarly pledging to slash carbon pollution and deploy renewable energy resources as they embrace the rapid transition to a clean energy economy.

  • The CEO of American Electric Power (AEP), the country’s largest generator of electricity from coal, had this to say in response to President Trump’s decision to withdraw the U.S. from the Paris Agreement: “I think it's really important for us to stay engaged from an international community standpoint, particularly addressing large issues. And not withstanding that, we're continuing on our path of moving to a clean energy economy.” AEP has cut carbon pollution by 44 percent since 2005, and has plans to add more than eight gigawatts of wind and solar in the coming years.
  • Duke Energy, the nation’s largest power producer, this year announced plans to reduce carbon emissions to 40 percent below 2005 levels by 2030. “Our next major investment platform focuses on generating cleaner energy,” said CEO Lynn Good. “Our retirement of more than 40 older, less efficient coal units, coupled with the addition of clean natural gas plants and renewables, is driving our emissions reduction.”
  • DTE Energy Co. announced plans in May 2017 to curb its carbon emissions more than 80 percent by 2050 by closing coal-fired power plants and adding new gas-fired generation and renewables. “Not only is the 80 percent reduction goal achievable – it is achievable in a way that keeps Michigan's power affordable and reliable,” DTE Chairman and CEO Gerry Anderson said. “There doesn't have to be a choice between the health of our environment or the health of our economy; we can achieve both.”
  • Xcel Energy committed in June 2017 to achieving a 60 percent reduction in carbon emissions by 2030, relative to 2005 levels. In August, the company announced plans to retire two coal-fired units in Colorado, continuing its progress towards a cleaner generating portfolio. In addition, Xcel’s massive new investments in renewable energy –including a proposal to add 3,380 megawatts of wind generation across seven states –will help the company generate 40 percent of its energy from renewables by 2021.
  • Berkshire Hathaway Energy subsidiary MidAmerican Energy has announced a goal to provide 100 percent renewable energy, including a $3.6 billion project to add 2,000 megawatts of wind, which will expand wind energy to 85 percent of the company’s sales. Said CEO Bill Fehrman: “Our customers want more renewable energy, and we couldn’t agree more.”
  • Minnesota Power, a division of ALLETE, plans to provide 44 percent of its electricity from renewable resources by 2025. Said one executive, “We look forward to working with our customers and regulators to continue down the path toward a safe, reliable, cleaner and affordable energy future.”

The imperative of addressing climate change, overwhelming public support for climate action, and clear market trends towards lower-carbon energy resources are driving states, cities, and power companies to lead the way to a low-carbon future.

If governors, mayors, and power sector CEOs continue to take steps to reduce carbon pollution, they will realize the tremendous benefits of a clean energy economy — thousands of new jobs, critical public health protections, and increasingly resilient communities and infrastructure.

The Trump Administration’s effort to repeal the common-sense Clean Power Plan – its latest attack on life-saving safeguards for our children’s health – will not change the reality of climate change or the accelerating transition to an economy powered by low-carbon energy.

However, without a quick return to meaningful federal progress, the U.S. will fall further behind in the global clean energy revolution – one that could lead to shared prosperity and enormous opportunities for millions of Americans.

Also posted in Clean Power Plan, Energy, Greenhouse Gas Emissions, News| Comments are closed

DOE seeks unprecedented action to exempt coal from competitive markets

(This post was co-authored by EDF’s Rama Zakaria)

Secretary of Energy Rick Perry today announced a sweeping and unprecedented proposal to pay coal and nuclear power plants, a move that would increase electricity bills and climate pollution for Americans.

The proposal would impose a new cost on all electric ratepayers that would be paid primarily to owners of coal plants, undercutting billions of dollars of investment by people risking their capital to compete in and transform our energy markets.

The decision, based on mischaracterized reliability concerns, ignores a recent Department of Energy (DOE) report Secretary Perry commissioned that found no reliability concern. The report’s finding is consistent with voluminous literature and evidence that concludes there are no signs of deteriorating reliability on the grid today, and cleaner resources and new technologies being brought online are strengthening reliability.

DOE’s proposal will increase electricity bills and hurt American families

DOE’s proposal provides cost recovery for uneconomic baseload generators such as coal-fired power plants at the expense of Americans’ electricity bills, families and communities’ health, and the environment.

Cost recovery, put simply, means that no matter how expensive coal-fired power gets Americans must foot the bill. No matter how old, expensive, or dirty a coal plant may be, it would be paid to remain online at the expense of cleaner, newer, and less expensive energy resources.

Such regulatory intervention would stand in the way of an economic and efficient electric grid required by law and would impose massive financial losses on the companies that have been investing to build a new and lower cost power system.

Multiple studies have already shown that coal generators that are retiring are old, inefficient units that are relatively expensive to operate. According to one study, coal units that announced plans to retire between 2010 and 2015 were 57 years old – well past their intended life span of 40 years. These units are not retiring prematurely; they are retiring because they are unable to compete against cheaper, more efficient, and cleaner resources.

As Secretary Perry’s own report stated, coal retirements are primarily driven by low natural gas prices. Yet with this proposal, DOE again appears determined to ignore competitive market forces and instead attempt to bail out coal-fired power plants, no matter the cost to Americans. Not only would this increase electricity bills for the public but also unnecessarily expose the public to dangerous and harmful air pollution.

The costly solution to a non-existent problem

A wide range of literature, including DOE’s own baseload study, confirm that electric reliability remains strong and bulk power system resilience continues to improve. Yet, DOE ignores its own findings and suggests that coal bailouts are needed for reliability and resiliency. Not only is DOE trying to solve a problem that doesn’t exist, it is doing so by forcing ratepayers to pay for a solution that doesn’t work.

DOE’s proposal would compensate coal units for a 90-day on-site fuel supply, yet just recently we saw in the aftermath of Hurricane Harvey that W.A. Parish, one of America’s largest coal plants, was forced to shutter two of its units after its coal piles were flooded. Indeed, available data indicates that coal plants fail more than any other resource.

In contrast, clean energy resources are increasingly demonstrating their ability to support reliable electric service at times of severe stress on the grid. For instance, wind energy contributed critical power during Hurricane Harvey. In another example, during the 2014 polar vortex – when frozen coal stock piles led to coal plant failures – wind and demand response resources were increasingly called upon to help maintain reliability.

Cleaner resources and new technologies boost grid reliability and resiliency

Many studies have highlighted the valuable reliability services that emerging new technologies, such as electric storage, can provide. DOE’s own report found that cleaner resources and emerging new technologies are creating options and opportunities and providing a new toolbox for maintaining reliability in the modern power system.

FERC has also long recognized the valuable grid services that emerging new technologies could provide. From its order on demand response to its order on frequency regulation compensation, FERC recognized the value of fast and accurate response resources in cost-effectively meeting grid reliability needs. More recently, FERC’s ancillary service reforms recognize that, with advances in technologies, variable energy resources such as wind are increasingly capable of providing reliability services such as reactive power.

Any action should allow all technologies to compete to provide the least-cost solution to a reliable and resilient grid

Essential Reliability Services, such as frequency and voltage support, are already being procured today to meet grid reliability needs. For instance, frequency regulation is procured as part of the ancillary services markets. These markets allow all resources to compete and to provide the necessary grid services at least cost to Americans.

FERC should ensure that any additional action taken in response to DOE’s proposal continues to be fuel-neutral, non-discriminatory and in-market. By doing so, Americans can not only have reliable and affordable electricity but can also reap the benefits of cleaner and healthier environment.

Also posted in Energy, News, Setting the Facts Straight| Read 6 Responses

Americans speak up for clean cars at EPA public hearing

A public hearing today on EPA Administrator Scott Pruitt’s effort to reverse America’s Clean Car Standards drew widespread support for keeping the protections in place.

I got the chance to join more than a hundred people who signed up to testify at the Washington, D.C. hearing – and they overwhelmingly spoke in favor of the Clean Car Standards and praised the benefits they provide for climate security and economic prosperity for our communities and families. (You can read my full testimony here.)

The American public stands to lose vital benefits if the Clean Cars Standards are reversed

The Clean Car Standards are already at work reducing climate pollution, driving innovative new technologies, improving our energy security, and saving American families money at the gas pump. But last month, the Trump Administration announced formal steps to begin reconsidering the existing standards for cars and passenger trucks for model years 2022 to 2025 – which could stop that progress.

Under the standards already in place, people who buy a new car or truck in 2025 would save thousands of dollars on fuel over the lifetime of those vehicles. In total, EPA projects that consumers would save more than $1 trillion because of the standards.

The 86 percent of Americans who finance their vehicle with a five-year loan are expected to immediately realize the cost savings from cleaner, more efficient vehicles. This is true even with recent lower gas prices.

Meanwhile, the Clean Car standards would reduce America’s oil consumption by two million barrels per day by 2025 – more than we import from any single country other than Canada. According to Ret. Lt. General Richard Zilmer:

Over-reliance on oil ties our nation to far-flung conflicts, sends our troops into harm’s way, and endangers them once they’re in conflict zones. Ensuring that the cars and trucks we drive every day go farther on every gallon of gas makes our nation stronger.

The Clean Car program would also eliminate an estimated six billion metric tons of carbon pollution over the life of the vehicles subject to the standards, which is more than a year’s worth of U.S. carbon emissions.

We’re making progress faster and cheaper than expected

EPA’s recent rigorous evaluation of the existing standards found that technologies are developing more quickly and at even lower costs than EPA originally projected – making the standards for the later model years appropriate and even more feasible than was first thought.

Per vehicle compliance costs are significantly lower than those projected in 2012 ($252 lower for cars and $197 lower for trucks as compared to 2012 projections).

 

 

Both the U.S. and world automotive markets are moving forward

Reopening the final Clean Car Standards will create uncertainty, slow innovation and hurt U.S. economic leadership.

Auto manufacturers have strongly recovered from the 2008 recession while increasing vehicle efficiency and cutting pollution

During the height of the economic recession in 2008, the American auto industry was on the verge of collapse. This prompted the Obama Administration to develop a bailout package for the industry, which provided the boost the industry needed to help rebound.

Last year, drivers in the United States bought more cars than ever before – roughly 70 percent more vehicles than during the recession – as fuel economy rose to its highest levels yet.

In total, the auto industry has added nearly 700,000 direct jobs since the recession – supporting several million indirect jobs throughout the economy. Auto manufacturing jobs account for 40 percent of all net jobs added in U.S. manufacturing since the recession.

In a letter supporting EPA’s proposal to reaffirm the Phase 2 standards, the United Auto Workers (UAW) noted:

UAW members know firsthand that Corporate Average Fuel Economy (CAFE) and greenhouse gas (GHG) standards have spurred investments in new products that employ tens of thousands of our members.

Today, the auto industry directly employs millions of Americans and employment at auto dealerships is at its highest level ever. Automakers have recognized this strong financial performance in recent annual reports:

Our solid business results included record profits and an increased worldwide market share. Overall, we achieved our sixth consecutive year of both profit and positive operating-related cash flow, which enabled us to distribute $2.5 billion to our shareholders and grow our regular dividend by 20 percent. – Ford 2015 Annual report, Letter from Executive Chairman William Clay Ford, Jr.

2016 was the best year in its history of more than 130 years. — Daimler 2016 Annual Report, Chairman’s Letter

[Fiat Chrysler] closed 2016 with another record financial performance … all of our segments were profitable and showed improvement over the prior year. – FCA 2016 Annual Report, Letter from the Chairman and the CEO

As so many testified today, Americans want to move forward on clean cars.

At EDF, we're committed to holding Administrator Pruitt accountable if he recklessly rolls back these common sense standards. We hope you'll join us and take action for Clean Cars.

Also posted in Cars and Pollution, Greenhouse Gas Emissions, Jobs, News, Policy| Comments are closed

Electric vehicles enter the here and now

A Ford at an electric car charging station in Buffalo, NY. Photo by Fortunate4now

The high level of confidence that automotive industry leaders have in the future of electric vehicles (EV’s) has been on full display recently.

In just the past few weeks:

This spurt of corporate announcements has been paired with a bevy of statements of international leadership:

These developments are more than just excitement about an emerging solution. They are indicators that the market for EVs is developing faster than anticipated even just last year.

Consider the findings of a new report from Bloomberg New Energy Finance. It found that:

[L]ithium-ion cell costs have already fallen by 73 percent since 2010.

The report updated its future cost projections to reflect further steep cost reductions in the years ahead, with a price per kilowatt-hour in 2025 of $109 and in 2030 of $73.

Cost reductions on this order would result in EVs achieving cost parity with some classes of conventional vehicles by 2025 – and across most vehicle segments by 2029, according to the report. EV sales are expected to really take off once they achieve cost parity with conventional vehicles, as the vehicles are significantly less expensive to fuel and maintain.

The acceleration in the EV market is great news for climate protection too. A recent assessment found that zero-emission vehicles, such as EVs, need to comprise 40 percent of new vehicles sold by 2030 in order for the automotive sector to be on a path to achieve critical mid-century emissions targets. With the momentum in the EV market, we have a critical window to further boost this market by ensuring greater access of electric vehicles and a cleaner electric grid to power them.

Unfortunately, the U.S. has not demonstrated the same appetite for national leadership on EVs as other countries. Even worse, we are going in the wrong direction – with serious implications for our health, climate and economy.

Instead of leading, the Trump Administration is undermining critical clean air and climate protections including the landmark clean car standards for 2022 to 2025. The actions of individual automakers, however, tell a very different story from the “can’t do it” mantra put forth by the Administration.

In their commitments, investments and new product introductions, automotive manufacturers and their suppliers are clearly telling us that low emissions vehicles can play a much bigger role in the near future.

The fact is that automakers can meet the existing 2022 to 2025 federal greenhouse gas standards through deployment of current conventional technology alone. Now, in addition to the robust pathway automakers have through existing technologies, EV adoption rates in the U.S. will be 10 percent in 2025 if the Bloomberg New Energy Finance forecasts hold true. This is further proof that the existing standards are highly achievable. Rather than weaken the standard, the Administration should be pursuing options to further scale EVs over the next decade.

Investing in clear car solutions is sound economic policy. These investments enhance the global competitiveness of the U.S. automotive sector.

This is why the UAW in a letter supporting the existing 2022 to 2025 clean car standards, noted:

UAW members know firsthand that Corporate Average Fuel Economy (CAFE) and greenhouse gas (GHG) standards have spurred investments in new products that employ tens of thousands of our members.

Like other key aspects of the potential of the emerging EV marketplace, the role it can play as an employer has been in the news recently too.

An AM General assembly plant in northern Indiana was acquired by electric vehicle manufacture SF Motors. The company announced that it will make a $30 million investment in the facility and keep on all the 430 employees.

Fittingly, most of the 430 jobs that were saved to manufacture an emerging, clean technology are represented by UAW Local 5 – the oldest continuously operating UAW Local in the country.

Also posted in Cars and Pollution, Energy, Green Jobs, Greenhouse Gas Emissions, Jobs, News, Partners for Change, Policy| Comments are closed

President Trump’s mystery math

By this time, your eyes may have glazed over from reading the myriad of fact checks and rebuttals of President Trump’s speech announcing the United States’ withdrawal from the Paris climate agreement. There were so many dizzying falsehoods in his comments that it is nearly impossible to find any truth in the rhetorical fog.

Of all the falsehoods, President Trump’s insistence that compliance with the Paris accord would cost Americans millions of lost jobs and trillions in lowered Gross Domestic Product was particularly brazen, deceptive, and absurd. These statements are part of a disturbing pattern, the latest in a calculated campaign to deceive the public about the economics of reducing climate pollution.

Based on a study funded by industry trade groups

Let’s be clear: the National Economic Research Associates (NERA) study underpinning these misleading claims was paid for by the U.S. Chamber of Commerce and the American Council for Capital Formation (ACCF) – two lobbying organizations backed by fossil fuel industry funding that have a history of commissioning exaggerated cost estimates of climate change solutions. When you pay for bad assumptions, you ensure exaggerated and unrealistic results.

In the past five years alone, NERA has released a number of dubious studies funded by fossil fuel interests about a range of environmental safeguards that protect the public from dangerous pollution like mercury, smog, and particulate matter – all of which cause serious health impacts, especially in the elderly, children, and the most vulnerable. NERA’s work has been debunked over and over. Experts from MIT and NYU said NERA’s cost estimates from a 2014 study on EPA’s ozone standards were “fraudulent” and calculated in “an insane way.” NERA’s 2015 estimates of the impacts of the Clean Power Plan, which are frequently quoted by President Trump’s EPA Administrator Scott Pruitt and others, have also been rebutted due to unrealistic and pessimistic assumptions.

The study does not account for the enormous costs of climate pollution

In his speech about the Paris agreement, President Trump crossed a line that made even NERA so uncomfortable that it released a statement emphasizing that its results were mischaracterized and that the study “was not a cost-benefit analysis of the Paris agreement, nor does it purport to be one.”

The most important point embedded in this statement is that the study does not account for the enormous benefits of reducing the carbon pollution causing climate change. Climate change causes devastating impacts including extreme weather events like flooding and deadly storms, the spread of disease, sea level rise, increased food insecurity, and other disasters. These impacts can cost businesses, families, governments and taxpayers hundreds of billions of dollars through rising health care costs, destruction of property, increased food prices, and more. The costs of this pollution are massive, and communities all around the U.S. are already feeling the impacts – yet the President and his Administration continue to disregard this reality as well as basic scientific and economic facts.

Cherry-picking an impractical and imaginary pathway to emission reductions

The statistics the President used were picked from a specific scenario in the study that outlined an impractical and imaginary pathway to meet our 2025 targets designed to be needlessly expensive, as experts at the World Resources Institute and the Natural Resources Defense Council have noted. The study’s “core” scenario assumes sector by sector emission reduction targets (which do not exist as part of the Paris accord) that result in the most aggressive level of mitigation being required from the sectors where it is most expensive. This includes an almost 40 percent reduction in industrial sector emissions – a disproportionate level not envisioned in any current policy proposal – which results in heavily exaggerated costs.

An expert at the independent think tank Resources for the Future, Marc Hafstead, pointed out:

The NERA study grossly overstates the changes in output and jobs in heavy industry.

Yale economist Kenneth Gillingham said of these numbers:

It’s not something you can cite in a presidential speech with a straight face … It’s being used as a talking point taken out of context.

The NERA analysis also includes a scenario that illustrates what experts have known for decades – that a smarter and more cost-effective route to achieving deep emission reductions is a flexible, economy-wide program that prices carbon and allows the market to take advantage of the most cost-effective reductions across sectors. Even NERA’s analysis shows that this type of program would result in significantly lower costs than their “core” scenario. Not surprisingly, that analysis is buried in the depths of the report, and has been entirely ignored by the Chamber of Commerce and ACCF as well as President Trump.

Study ignores potential innovation and declining costs of low carbon energy

Finally, the NERA study assumes that businesses would not innovate to keep costs down in the face of new regulations – employing pessimistic assumptions that ignore the transformational changes already moving us towards the expansion of lower carbon energy. Those assumptions rely on overly-conservative projections for renewable energy costs, which have been rapidly declining. They also underestimate the potential for reductions from low-cost efficiency improvements, and assume only minimal technological improvements in the coming years.

In reality, clean energy is outpacing previous forecasts and clean energy jobs are booming. There are more jobs in solar energy than in oil and natural gas extraction in the U.S. right now, and more jobs in wind than in coal mining.

The truth is that the clean energy revolution is the economic engine of the future. President Trump’s announcement that he will withdraw the U.S. from the Paris accord cedes leadership and enormous investment opportunities to Europe, China, and the rest of the world. His faulty math will not change these facts.

Also posted in Clean Power Plan, Energy, Greenhouse Gas Emissions, Jobs, News, Policy| Comments are closed
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