This post originally appeared on our EDF+Business blog.
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This post originally appeared on our EDF+Business blog.
Today, the Supreme Court issued an important decision in support of a vital clean energy resource: demand response. The case, FERC v. EPSA, revolves around demand response, a resource that helps keep prices low and the lights on, all while being environmentally friendly.
It’s a significant victory for anyone in favor of a cleaner, cheaper, accessible, and more reliable grid. That describes a diverse group — consumer advocates, environmentalists, economists, states, grid operators, and leading legal scholars all filed in support of a critically important and well-designed policy creating access for demand response in wholesale energy markets.
How Demand Response Works
The incredible support for demand response exists because of how the resource works. Demand response reduces energy demand when power is needed most, rather than increasing supply from costly, carbon–emitting fuels. It relies on people and technology, not power plants, to affordably meet our country’s rising electricity needs. Think of it like crowd-sourced energy reductions, helping to reduce costs for everyone by taking the place of very expensive generation.
The Supreme Court Case
The Federal Energy Regulatory Commission (FERC) is the federal agency responsible for keeping our electricity rates “just and reasonable” (that is, fairly priced). FERC created Order 745 to further that goal, with the Order giving demand response access and equal footing in wholesale energy markets, where electricity is bought and sold. It levels the playing field between demand response and traditional sources of electricity, letting the resource compete alongside others.
And demand response has done more than compete – it’s reduced our use of unneeded, costly electricity – the exact type of electricity that should be limited if one wants “just and reasonable” rates.
In a strong, 6-2 decision written by Justice Kagan and joined by Chief Justice Roberts and Justices Kennedy, Ginsburg, Sotomayor, and Breyer, the Supreme Court ruled in favor of FERC, stating that “[w]e will not read [FERC’s authority], against its clear terms, to halt a practice that so evidently enables the Commission to fulfill its statutory duties of holding down prices and enhancing reliability in the wholesale energy market.”
Continuing Demand Response Benefits
The Supreme Court’s decision ensures that demand response will keep providing important benefits — and these benefits are numerous. For example, demand response saved customers $11.8 billion in the mid-Atlantic region of the United States in 2013 alone. It likewise helped avoid blackouts during the polar vortex in 2014. And it gives customers the choice and opportunity to save money – for the grid and themselves – by taking part in demand response programs. All this, while being environmentally friendly and carbon reducing.
Everyone in Colorado skis, all Oklahomans can rope a calf, and native New Jerseyans like me all talk like Pauly D did on Jersey Shore. Right?
You may also stereotype when it comes to clean energy: Progressive states such as California are pumping out clean, renewable energy while others insist on clinging to old, dirty power plants. Well, it’s more complicated than that.
California, which has a market-based system for cutting carbon pollution, does lead the country. But a number of states, including notably Nevada, Texas and North Carolina, are also making great progress on clean energy – which may surprise some.
Their success is evidence that the supposed divide on clean power may be more about politics than economics and opportunities on the ground.
And that bodes well for the federal Clean Power Plan’s goal of reducing emissions from America’s power plants. Because if Texas is well-positioned to comply, why couldn’t other states do the same?
Energy policies that boost state economies
Texas, home of Big Oil, big hats, and JR Ewing, actually has more energy potential from resources sweeping over its prairies – in the form of wind and sunshine – than from those flowing underneath them. The state leads the nation in wind power and combined heat and power, and has the potential to generate more solar power than any other state.
If energy efficiency used by Austin Energy were extended across the state, it would reduce peak electricity growth by 40 percent, while keeping Texans as high-powered as ever.
Nevada, meanwhile, has also been smart about exploiting its huge solar energy potential. The state’s current renewable energy standard requires utilities to generate 25 percent of its power from renewable resources by 2025, with 6 percent coming from solar energy by 2016.
With more than 250 days of sunshine a year and abundant wind and geothermal energy potential, this goal is well within reach. Nevada’s forward-thinking energy policies and commitment to clean energy are part of the reason Tesla chose it as the location of its multi-billion dollar gigafactory to produce batteries for electric cars.
Finally, in North Carolina, tax credits and a modest renewable energy portfolio standard created opportunities to build a strong clean energy industry.
North Carolina is now one of the top four states in installed solar capacity and second behind California in large, utility-scale solar projects. Clean energy added nearly $5 billion to the state’s economy last year, and today provides nearly 23,000 jobs.
Earlier this year, tech giants like Google, Apple and Facebook told lawmakers that state policies “made North Carolina particularly attractive to [their] businesses.” Retail giants Walmart and North Carolina-based Lowe’s Home Improvement told lawmakers they want more choice and competition when it comes to energy.
North Carolina’s burgeoning clean energy economy suffered a set-back this year, however, when state lawmakers chose not to extend the tax credit – proving that state legislators are not required to take the Hippocratic Oath.
Back-track or invest in the future?
All this will make a big difference when it comes to implementing the Environmental Protection Agency’s Clean Power Plan, which gives each state a target and flexibility for cutting climate pollution.
As much as some leaders in the Lone Star State and elsewhere complain and sue over this rule, they are actually well on their way to meeting their goals under the plan. If state governments would only take advantage of the natural opportunities they have – be more like Nevada and less like the recent back-tracking in North Carolina – they’d be in great shape.
We need to protect ourselves from the trillions in potential damage that Citibank and others say we’d face from unchecked climate change, so the world is moving toward clean energy. Wouldn’t it be better if state political leaders, who have so much to gain and such an achievable path forward, put their efforts in to creating that future rather than clinging to the past?
Forward-looking leaders do, because stereotypes aside, it ultimately comes down to good economics.
This post originally appeared on our EDF+Voices blog.
By Dan Dudek
The New York Times revealed in a Nov. 4 article that China has been burning as much as 17 percent more coal annually than previously thought, citing new Chinese government data.
It was sobering news to all of us who are working to reduce China’s dependency on fossil fuels, but not necessarily a verdict on the country’s – or the world’s – prospects going forward.
It’s important to note, first of all, that China’s revised coal consumption numbers have not changed scientists’ estimates of global carbon dioxide levels in the air. Unlike national emissions data, which is based on fuel consumption statistics, global levels are measured directly.
So what do we make of the news that China, the world’s largest greenhouse gas emitter, has been underestimating coal use since 2000?
China needs good data, and knows it
Significantly higher emissions in any country increase the urgency and difficulty of avoiding the worst impacts of climate change – and this is especially true for an economy the size of China’s. However, it is significant that this story was prompted by the Chinese government reporting its own data corrections, and not by an external watchdog.
China has acknowledged the challenges it faces trying to develop robust emissions estimates, and the new numbers, though troubling, are a sign that the country is making progress in this regard.
This is important not just for the international climate negotiations that kick off in Paris later this month, but also for China’s long-term strategy.
China has made it a priority to upgrade its baseline inventory emissions data, especially for sources that might be included in its national emissions trading system. Good baseline data is a prerequisite to the effective carbon trading and reduction program Environmental Defense Fund has been working toward for 25 years.
Needed now: Deeper emissions cuts
It’s also important to note that while the emission data was revised, China’s growth in coal consumption has actually been declining, a trend that remains unchanged and will likely continue.
The government has recently targeted 6.5 percent economic growth as the official target for the next five years, down from the recent 7- percent rate. Slower growth, air quality concerns, new requirements to invest in renewables and energy efficiency, and the international commitments to peak emissions and introduce a carbon market will all put continued downward pressure on coal.
China’s data correction does not change our basic understanding of what it will take to reach the crucial turning point where global emissions finally level off and begin to decline.
We have long known that much deeper reductions will be required to get us there. The Paris commitments are shaping up to be a major milestone on that road, but won’t by themselves get us where we need to go.
For China, the solution remains a national carbon market that creates the incentives to lower emissions as efficiently as possible. China remains committed to launching the market in 2017.
For all of us who understand the urgency of global climate change, The New York Times story is a reminder that there is still a great deal of work still to be done – in China and beyond.
Image source: Flickr/Nicolò Lazzati
This post originally appeared on our EDF Voices blog.
The ink wasn’t even dry on the Clean Power Plan before some power companies filed lawsuits to challenge these historic public health protections.
One of their key complaints? How much the Clean Power Plan is allegedly going to cost.
In their court filing, these companies claimed that they’ll potentially need to spend “billions of dollars” to comply.
This tactic is nothing new, and it’s something we often hear when the U.S. Environmental Protection Agency (EPA) issues a new regulation that will provide cleaner, healthier air for our communities and families.
But it’s almost always wrong.
In defiance of the “sky is falling” predictions, American industry innovates and figures out ways to comply with new, healthier standards at a fraction of the costs initially projected.
This is exactly what occurred with EPA’s life-saving Mercury and Air Toxics Standards, which are providing crucial reductions of toxic air pollutants including mercury, hydrochloric acid and arsenic from our nation’s power plants.
After EPA proposed the Mercury and Air Toxics Standards in 2011, FirstEnergy told its investors that it expected to spend between $2 billion and $3 billion dollars to comply with the clean air standards.
A little later that same year, FirstEnergy cut its estimate roughly in half — to between $1.3 billion and $1.7 billion.
Fast forward to February 2015 (just two months before the initial deadline to comply with the Mercury and Air Toxics Standards), and FirstEnergy announced that it would spend $370 million on compliance.
In other words, its highest initial cost estimate was more than eight times higher than its actual costs.
These two companies are just a few of the power companies that have decreased their cost estimates for complying with the Mercury and Air Toxics Standards, and other public health and environmental standards, in recent years.
The tens of billions of dollars in expected health benefits from the Mercury and Air Toxics Standards has not decreased, though.
It will save thousands of lives every year, prevent heart attacks and asthma attacks, and help protect the hundreds of thousands of babies born in America every year who are exposed to unsafe levels of mercury in the womb.
It’s important that we keep in mind these misguided “sky is falling” claims about environmental compliance costs as EPA carries out its responsibilities under the nation’s clean air laws to address climate pollution from power plants.
The time tested history of the Clean Air Act is quite the opposite of the “sky is falling” – the sky is clearing, and at far less than the costs predicted by industry.
Seven months ago, I made a strong statement that may have left some people shaking their heads. I said that we can turn the corner on climate change – end the centuries-long rise in greenhouse gas emissions and see them peak and begin to decline – in just five short years.
As it turns out, 2015 is shaping up to be a year of giant steps toward that goal.
In a deeply reported New York Magazine piece, political writer Jonathan Chait calls it “the year humans finally got serious about saving themselves.” Says Chait, “The world is suddenly responding to the climate emergency with – by the standards of its previous behavior – astonishing speed.”
I agree. Here are four reasons I believe we’re headed in the right direction:
1. America is tackling greenhouse gas pollution
The United States remains among the world’s largest per-capita emitters of carbon dioxide and other heat-trapping pollutants. But thanks to this year’s action by the Environmental Protection Agency, America now has a Clean Power Plan that will cut emissions from power plants, our single largest source of carbon, by 32 percent over the next 15 years.
The era of unlimited climate pollution is over.
On the heels of the EPA’s Clean Power Plan came a proposed rule to cut methane from newly built facilities in the oil and gas industry. More needs to be done, but this is an important step in dealing with a potent greenhouse gas that accounts for 25 percent of Earth’s current warming.
These climate laws will help the U.S. meet our target to reduce emissions by 26-28 percent below 2005 levels by 2025, a commitment we made to the international community that is key to getting other large polluters to do their share.
We’ll need further reductions, but this is a very significant start.
2. China is building momentum for global action
The world’s No. 1 greenhouse gas emitter, China submitted its climate plan to the United Nations in June, confirming it will let emissions peak by 2030 – and possibly sooner. I know from my colleague Dan Dudek in China that “sooner” is possible because this is a country that’s serious about climate action.
Pollution is choking Chinese cities and threatening economic growth, but the country’s leaders also see opportunity in the emerging clean energy industry. China has pledged to have 20 percent of its energy come from wind, solar and other non-fossil energy sources within 15 years – a massive investment in a nation of 1.4 billion.
This year alone, China is expected to add 18 gigawatts of new solar capacity. By comparison, the U.S. recently surpassed 20 gigawatts total.
To have China and the U.S. making such significant commitments has transformed the dynamic going into the U.N. climate summit in Paris. Instead of making excuses for inaction, the leading emitters have launched a virtuous cycle of increasing ambition.
That changes everything.
3. Clean energy is lifting people out of poverty
One billion people worldwide still have no energy, and more than 1 billion live in extreme poverty. Turning the corner on climate cannot mean that economies can’t develop.
But just as some developing economies adopted cellular technology without ever having land lines, some will leap-frog the dirty energy phase of economic development and go straight to clean.
In fiscal 2014, the World Bank more than doubled lending for renewable energy projects to nearly $3.6 billion – or 38 percent of its total energy lending.
As Rachel Kyte, the bank’s vice president and special envoy for climate change, recently said, what poverty-stricken people of the world need now is a “a low-carbon revolution.”
And this is starting to happen. In 2014, the emerging economies of China, India, Brazil and South Africa invested $131 billion in clean energy, just 6 percent less than the developed world did.
4. Pope Francis is galvanizing world opinion
When Pope Francis released his much-anticipated encyclical on environmental stewardship in June, he made an urgent moral appeal to the world.
As my colleague Paul Stinson noted at the time, “A leading voice without political boundaries, the pope has the ability to reach people who previously could not or would not face the reality of climate change.”
Pope Francis called on us to push harder to replace fossil fuel with renewable energy sources – and people are listening.
The day he speaks to Congress later this month, a climate rally is expected to draw many thousands to the nation’s capital in a unified call for action. Environmental Defense Fund will be there, too.
The momentum is growing. We’re on our way to turn the corner on climate change – and the race of our lives is on.
This post originally appeared on our EDF Voices blog.