Climate 411

Creating a cleaner and more affordable power sector in North Carolina

For more than a year, dozens of advocates and stakeholders – including the electric utilities – have been working together on North Carolina’s Clean Energy Plan development process, which calls for creating a 21st century energy system that is clean, affordable, reliable and equitable. As discussions have progressed in ongoing working groups to explore policy pathways for climate action and systemic utility regulatory reform of North Carolina’s power sector, we recently learned that over the past several months, the major electric utilities across the southeast have been engaged in a separate dialogue on a proposal to create an automated market for trading among the utilities.

We must not let these conversations distract from real opportunities to achieve Governor Cooper’s ultimate goal of moving North Carolina to a clean energy future. The electric power sector is the largest source of climate-warming pollution in North Carolina, making up 35% of the state’s emissions. Gov Cooper has committed the state to doing its part to address pollution from this sector, and both the state and Duke Energy have set goals to achieve net zero carbon emission from the power sector by 2050.

What we know about the proposed Southeast Energy Exchange Market (SEEM)

According to Duke Energy, the proposed Southeast Energy Exchange Market (SEEM) will provide cost savings to customers, increase renewable penetration in the state, and would not limit the opportunity for more robust regulatory reform solutions. Details of this potential automated market remain vague. However, based on the limited information released to date, the SEEM proposal lacks any formal governance structure and appears to be focused primarily on the expansion and automation of a process already in place for these electric utilities to buy and sell electricity from each other. Therefore, it is unclear exactly what consumer benefits will be realized from the multi-million dollar investment in the SEEM and what oversight authority North Carolina regulators will have to ensure those benefits are delivered to North Carolina ratepayers. Absent a significant increase in transparency from the region’s electric utilities, the details, costs, and benefits associated with the SEEM proposal will likely remain unclear. What is already clear, however, is that SEEM alone will be insufficient to deliver the solutions being considered in NC’s ongoing stakeholder processes. 

Reform of the state’s more than 100-year-old electric power sector is sorely needed to accommodate the needs of today. Given the escalating costs associated with conventional, polluting energy sources like coal and gas, and the declining costs of renewables like solar, wind and energy storage, it is clear that new incentives for increased investment in and expanded use of clean energy sources must be a pillar of reform as well. Additionally, power sector reform should include incentives and requirements for pollution reductions that serve to drive dirty energy sources to retirement more quickly, while helping the state achieve its emissions reduction goals.

Joining a proven climate initiative

With North Carolina communities increasingly on the frontlines of extreme weather events including catastrophic flooding driven by climate change-fueled hurricanes, it’s time for the state to take concrete actions to limit carbon pollution. Even while state-led stakeholder work proceeds, there is a proven policy option for reducing emissions that North Carolina could implement now that would achieve many of the Clean Energy Plan goals, as well as the objectives Duke Energy has laid out in its climate commitment: North Carolina can put an enforceable limit on power sector carbon pollution and join the Regional Greenhouse Gas Initiative (RGGI). RGGI is a collaboration of ten Northeast and Mid-Atlantic states designed to reduce carbon pollution from the power sector by placing a declining cap on greenhouse gas emissions. New Jersey also joined the program in 2020, Virginia will be joining in 2021, and Pennsylvania is poised to initiate a regulatory process that – if completed – would facilitate its collaboration as well.

The RGGI model is rigorous enough to ensure North Carolina delivers crucial pollution reductions but flexible enough to facilitate the most effective ways to achieve them.

By requiring electric utilities to pay for the carbon pollution they emit with a price on carbon, RGGI incentivizes investment in low-carbon and carbon-free energy sources, while also creating financial incentives to remove polluting energy sources more quickly. Specifically, RGGI’s flexible “cap-and-invest” framework works by placing a cap on total power sector carbon emissions from participating states to limit pollution; that cap decreases over time to drive emission reductions at power plants in each participating state. Companies buy and sell allowances that let them emit a certain amount under the predetermined cap as supply and demand set the price of an allowance. This gives companies a strong incentive to save money by cutting emissions in the most cost-effective ways, which minimizes costs for consumers. And importantly, RGGI has proven compatible with a variety of approaches for electricity markets in its different states.

This framework has a track record of success. Since 2009, RGGI states have reduced power plant carbon emissions by 47%, which outpaces other states’ reductions over the same time. RGGI has also created significant health benefits by reducing co-pollutant emissions of particulate matter, air toxics, and ground level ozone, which all have adverse health impacts on the people of North Carolina. In fact, a recent study from the Columbia Center for Children’s Environmental Health found that between 2009 and 2014, air quality improvements from RGGI created an estimated $191 million and $350 million in cost savings.

As more states begin taking steps to join this alliance working together to reduce emissions, North Carolina should do the same, ensuring that as conversations continue to unfold regarding electric power sector reform, there is absolute clarity around the industry’s emission reduction trajectory. Such a framework will help ensure the delivery of a healthier, more affordable, cleaner energy system. Plus, polling shows that the majority of North Carolina voters support new policies to reduce climate pollution.

In the last century, policymakers crafted rules for an electric power sector that transformed our economy and improved the quality of life for countless North Carolinians. There is no question that our state’s energy markets need reform, and it’s up to us to ensure that any new model is designed in a way that serves the interests of North Carolinians – not just the utilities and their shareholders. Today, North Carolina has a similar opportunity – as we did in the last century – to reach for a better future. Let’s make sure that no matter what approach regulatory reform takes, North Carolina is not leaving pollution outcomes up to chance or leaving the most effective tool on the shelf.

Read more about the benefits of the Regional Greenhouse Gas Initiative (RGGI) in this fact sheet.

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Four reasons why investing in clean energy is essential for rebuilding the economy

Working upon wind turbine, over 80 meters of high in a wind farm.

As federal lawmakers continue to debate different approaches for jump-starting our economy in the wake of the COVID-19 pandemic, they must also consider how the investments we make today can be designed to avoid the worst environmental, social and economic impacts of climate change in the long run. Amid much disagreement, one promising area of investment continues to stand out: clean energy.

A big investment in clean energy, clean transportation, energy efficiency deployment and R&D can generate substantial returns on job growth and emissions reductions. Boosting these areas now can be a critical step toward building a 100% clean economy over the next 30 years, a science-based goal that calls for allowing no more climate pollution produced than can be removed from the atmosphere across all sectors of the economy.

Here are four reasons to include major investments in clean energy in our recovery plans: 

  1. Clean energy jobs have been increasing rapidly…

First and foremost, federal policymakers should recognize that clean energy jobs were already growing rapidly before COVID-19. From 2015-2019, the clean energy sector was adding jobs 70% faster than the overall US economy. Before the pandemic, 3.4 million Americans across all 50 states and the District of Columbia worked in clean energy occupations — renewable energy, energy efficiency, grid modernization, clean vehicles and fuels. That means there are more people with clean energy jobs than work in real estate, banking, or agriculture in the U.S. and three times the number that work in fossil fuels.

But like many sectors, the clean energy industry has been hard hit by the pandemic, with more than 500,000 clean energy workers still unemployed, about 15% of the pre-pandemic clean energy workforce. Immediate support from federal lawmakers is needed, and given the upward trajectory before COVID-19, it could help get the industry back on track.

  1. … and clean energy jobs have much more room to grow

Multiple analyses reveal that stimulus support for key elements of a clean economy is a smart way to generate good-paying jobs that can help lift the US out of the recession and sustain long term growth. One study found that clean energy investments create three times more jobs than an equivalent investment in fossil fuels. According to a new report from E2, federal clean energy stimulus investments totaling $99.2 billion — with targeted and strategic investments in renewable energy, energy efficiency and grid modernization — could generate 860,300 full time direct, indirect and induced jobs that would last at least five years (a total of 4.3 million job-years). This level of stimulus and the resulting jobs would add $330 billion in economic activity, more than triple the amount of investment. And if anything, this may be an understatement: the Department of Energy conservatively estimated, based on third-party evaluations of six key clean energy R&D portfolios, that a taxpayer investment of only $12 billion yielded net economic benefits of more than $388 billion, nearly 33 times the initial investment.

Investments in energy efficiency have an additional benefit: Besides creating jobs, these investments create energy savings that can pay back the initial investment and more. A recent analysis from the American Council for an Energy Efficient Economy found that several proposed energy efficiency investments could result in 165,000 jobs per year for four years through 2023 over the lifetime of the investments and savings. Over time, these investments would result in more than $120 billion in energy bill savings while reducing more than 900 million metric tons of CO2 emissions.

Moving toward a cleaner, more efficient transportation sector can also lead to significant job creation. Tax incentives for electric vehicles, which includes expanding tax credits for electric passenger vehicles and charging stations and creating a new credit for electric trucks, could generate 10,000 jobs per year for the first four years. Furthermore, key labor stakeholders, including the BlueGreen Alliance and UAW, believe that the transition to EVs can represent a big opportunity for domestic manufacturers, with minimal job disruption, if the appropriate policies are in place to support domestic workers.

All in all, big investments now could lead to even bigger returns.

  1. Enormous environmental and health benefits

The economic rationale for investing in clean energy is clear, but the climate and health benefits make it a slam dunk. A new report from the Environmental Defense Fund and Datu found that the number of annual severe weather disasters, including hurricanes, floods, wildfires and other events has increased four-fold since 1980, costing US taxpayers more than $1.75 trillion. The frequency, severity, damage — and costs — from these severe weather events will only worsen without strong action to curb emissions. And we know from past experience, like with Hurricane Harvey in 2017 or with searing heat waves over the last few months, these impacts will not fall on Americans evenly — the most vulnerable, such as communities of color and low-income households living in flood-prone areas, will bear the brunt of inaction.

The health benefits of a clean economy cannot be overstated either, and policies must be designed to address systemic inequities that put people of color at greater risk for the impacts of pollution. The transportation sector, including cars, buses and trucks, as well as the energy sector, including coal-fired power plants and refineries, comprise some of the largest sources of harmful air pollution in the US, which increases rates of asthma, heart disease and other health issues. All told, estimates reveal that air pollution causes between 90,000 to 360,000 deaths a year in the U.S.

But this burden is not borne equally. Research from the Rhodium Group estimates that the average Black American is exposed to 46% more diesel particulate matter emissions and 22% more air toxic respiratory hazards than the average white American. For Latino Americans, that exposure is 41% and 17% higher respectively. And studies continue to highlight how indigenous communities experience an unjust burden of environmental pollution, including from agricultural, mining, waste dumping, and more. EDF found that oil and gas methane emissions on Navajo Nation were 65% higher than the national average.

Air pollution exacerbates the heart and lung conditions that make COVID-19 more deadly, and it’s no coincidence that communities bearing the brunt of this pollution — Black, Latino, and Indigenous communities — are the same ones suffering the most from the pandemic today. A shift toward clean energy can help lift these heavy burdens from pollution and not only improve these communities’ health outcomes, but also help build a stronger, healthier and more equitable workforce.

  1. Clean energy is popular on both sides of the aisle

Many federal policymakers and candidates are already taking notice of the preponderance of evidence justifying clean energy investments — and they are responding with serious and ambitious proposals. In July, House lawmakers passed the $1.5 trillion Moving Forward Act, an infrastructure package that includes $70 billion in clean energy investments as well as clean energy tax credit extenders and provisions to curb emissions. As discussed, this level of investment could spur significant job growth, while getting the US on a path to a 100% clean economy. And more than ever before, candidates are running on clean energy as a key pillar of their economic plans and calling for dramatic cuts in pollution across major emitting sectors, like transportation, buildings and industry.

Extending clean energy tax incentives and investments has long been a priority for many Congressional Democrats, but recently, a group of Senate Republicans also voiced support for policies that will bolster jobs and innovation across the clean energy economy. At the same time, polling continues to reflect widespread bipartisan support for clean energy: According to a June 2020 Morning Consult poll, 66% of voters believe clean energy investments will strengthen the US economy and benefit workers.

Support for clean energy is ultimately only one piece of a complete policy package that can rebuild our economy in a way that tackles critical climate, health and equity challenges. Policymakers must also look at ways to bolster adaptation, resilience and innovation — and ultimately, enact a comprehensive policy solution that limits climate pollution across the economy.

In short, while there is much work to be done to get the US on the path toward recovery and a stronger, 100% clean economy, investments in clean energy are a vital step.

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New report: How economic development policies can support fossil fuel communities in the move to a clean economy

This first report in a new joint research series by Environmental Defense Fund and Resources for the Future examines US federal economic development programs and policies that can revitalize communities that have been historically reliant on fossil fuels. Daniel Raimi, Wesley Look, Molly Robertson of RFF and Jake Higdon of EDF contributed to the report described in this blog post.

For a long time, Boone County, West Virginia was a vibrant coal community at the center of Appalachia, ranked consistently as the top county for coal production in the state. At one point, the county was able to capitalize on a surplus of revenue, derived largely from the state’s coal severance tax, to fund new sports fields and judicial buildings. But the decline in US coal production over the last decade, driven by increasingly competitive energy alternatives, including wind and solar, led to mine closures in West Virginia — and an exodus of coal workers and their families. Boone County’s budget diminished along with the closures: Its General Fund Revenue fell by half in the last five years.

In 2019, local officials faced a $2.5 million budget shortfall, forcing them to make difficult cuts to essential community services.

The surrounding communities reliant on coal as an economic driver, including the families of workers, local business owners, teachers, nurses, and more, have struggled to find new opportunities in the wake of its downfall. The effects of the COVID-19 pandemic have exacerbated this trend in the short term. And in the long run, the necessary move to a clean economy will not only disrupt coal communities, it will impact communities reliant on oil and gas and other industries reliant on fossil fuels. Economic development policies can be a lifeline for these communities, putting them on a path to diversify and revitalize local economies through public and private sector funding. 

Our first report in this research series on fairness for fossil fuel workers and communities aims to give federal policymakers an understanding of the tools at their disposal to generate new economic opportunities in communities affected by transition to a clean economy. This entails examining both existing federal economic development programs and proposals. In our analysis, we divide economic development programs into those that explicitly target regions where natural resources (particularly fossil fuels) underpin the local economy, and those that have a broader geographic scope. We then categorize each set of programs into two types of intervention: capacity building and financial support. Capacity-building programs provide organizations with technical assistance, research support, and other skills that can help them implement successful local economic development programs. Financial support involves funding federal, state, and local programs, non-profits, and private entities through grants, loans, or other mechanisms.

Key insights

Our review of these programs, and our examination of the empirical literature on their effectiveness, yields five key insights into how federal economic development policy can be utilized to ensure a fair transition to a clean economy.

  1. First and foremost, we find that federal intervention can help support medium- and long-term economic development in numerous local contexts. The available empirical studies, while limited, show that both geographically targeted programs and those with a broad geographic and economic scope can lead to increased employment, greater business stability, and other local economic benefits.
  2. The existence of many federal, state, and local economic development programs means that any successful attempt to deliver fairness for workers and communities will require substantial coordination across governmental bodies and with local stakeholders. A lack of coordination across federal programs has been highlighted as a potential challenge by numerous researchers, and recent efforts have sought to better coordinate and streamline the array of existing federal economic development programs.
  3. Existing economic development programs can be augmented or redirected to support fossil fuel-dependent communities and workers, even if a given program was not originally designed for that purpose. Numerous programs examined in our report have offered support to communities facing economic challenges for over half a century or more. For instance, the POWER Initiative, which leverages an array of existing programs to deliver economic development and other programming in close partnership with energy communities, could be an important model for federal policy that invests in workers and jobs.
  4. Federal programs explicitly targeting economic development have limited funding, with just $80 million designated to support economic development in fossil energy communities. This level of spending would need to grow considerably to support the many workers and communities affected by the shift toward clean energy.
  5. Finally, because the transition to a clean energy economy will have geographically concentrated economic effects, policies supporting economic development in the most affected communities will most likely need to be geographically targeted. But policy design matters. Some geographically-targeted programs, such as Appalachian Regional Commission (ARC) grants, have seen success in delivering long-term income and employment growth in natural resource dependent communities. Others, such as the Secure Rural Schools program, have failed to support their intended beneficiaries (i.e., schools) and created planning challenges for local governments, businesses, and residents due to uncertain funding levels. Policymakers should design and implement geographically-targeted policies carefully and with these divergent experiences in mind.

What’s next?

Supporting economic development in fossil fuel dependent communities and regions comprises one category of solutions in the complex set of challenges associated with the transition to a clean economy. Over the next few months, we will publish more reports, blogs and materials in this series to address other key policy mechanisms that can support workers and communities in transition, including investments in environmental remediation, infrastructure, workforce development programs, labor standards, clean energy, and public benefits, such as unemployment compensation and public health care. EDF’s aim is to complement the work that groups like Just Transition Fund and BlueGreen Alliance have been leading in this space, by sharing useful insights on existing policies and programs designed to deliver on the promise of fairness for fossil fuel workers and communities.

Read the full economic development report here.

Learn more about this series here.

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New research series: Ensuring fairness for workers and communities in the transition to a clean economy

EDF and Resources for the Future (RFF) partner on a new research series to inform policymaking on fairness for fossil fuel workers and communities in transition.

Coal burning plant in Conesville, Ohio.

Coal burning plant in Conesville, Ohio.

The shockwaves from the COVID-19 pandemic continue to reverberate across the United States, with tens of millions unemployed and workers in every sector in need of support. The energy sector is reeling from the impact — especially the many workers and communities living in coal-dominated regions already grappling with job loss.

In Northeast Wyoming, the Powder River Basin region experienced the largest round of coal mine layoffs in years. In West Virginia, Longview Power — cited as the most efficient coal-fired power plant in the country — filed for bankruptcy. And in Somerset County, Pennsylvania a local coal mine went “indefinitely idle” and laid off 100 workers. These are just a few examples from this spring that reveal how the steep drop in energy demand, largely a result of shutdowns to contain the spread of COVID-19, exacerbated loss in the coal industry. But they don’t capture the whole story.

The loss of these coal jobs will cause a ripple effect beyond the workers: these families will see a drop in income, making it harder to make ends meet, and may also lose health care and other critical benefits. Surrounding businesses — from restaurants to gas stations — will see a drop in customers and the communities and towns dependent on taxes from the coal industry for building roads and schools face an uncertain future too.

But well before the coronavirus outbreak, coal-dependent regions were already facing chronic job loss, public health crises, and other hardships. The rise of cheaper energy alternatives, including the dramatically improving costs of wind and solar power, has been steadily moving the needle toward a low-carbon economy in the US.

For years, many coal communities anticipated the gradual decline in jobs and revenue; few were prepared for the free fall from coronavirus.

As policymakers consider the best way to get the economy going again, hard-hit energy communities can be crucial workers in the clean economy of the future. Fortunately, implementing science-based policies that can get us on a safer path to a clean economy and avert the worst impacts of climate change can go hand-in-hand with generating well-paying jobs and economic security. By making fairness for workers and communities a primary goal, policymakers can ensure that communities where the economy is heavily dependent on the production, transformation, and use of fossil fuels are not only protected in this transition – but prepared to play a central role.

Introducing a New Research Series

As the US accelerates the shift to a low-carbon economy, all forms of climate, environmental, and energy injustice should be dismantled – and that includes tackling the disproportionate burdens working people may face as economic opportunities shift. These principles have been brought together by labor groups, the environmental community, and policymakers to varying degrees over the years in the concept of “just transition.” EDF and Resources for the Future (RFF) are partnering to analyze policies in one strand of this greatly needed area of solutions: addressing the needs of fossil fuel workers and communities in this transition. 

While labor groups have been discussing fairness policies for fossil fuel workers for quite some time, conversations in the policy community are just starting to gain traction: the Just Transition Fund and numerous groups across coal communities recently released the National Economic Transition Platform to support coal communities facing crisis. And the BlueGreen Alliance, a coalition of labor unions and environmental organizations, released its Solidarity for Climate Action platform in 2019, where it outlines the principle of “Fairness for Workers and Communities” to address the needs of working people affected by the transition. These platforms provide a critical policy framework for economic transition.

At the same time, in the broader US policymaking and advocacy arena, there is limited understanding of the existing policies and programs designed to deliver on this promise – and how effective they have actually been. To help fill that gap and arm policymakers and advocates with the tools they need, EDF and RFF are conducting a systematic review of policy models and mechanisms that can support workers and communities in regions where fossil fuels – coal, oil, and natural gas production and/or consumption – have been a leading employer and driver of prosperity. These reports will be released throughout fall 2020 and will cover the following key policy topics: economic development; energy, environment, and infrastructure; workforce development; and public benefits. These will culminate in a final synthesis report and be accompanied by additional domestic case studies and international policy analyses.

To be clear: this series does not intend to suggest that the solution is matching every fossil fuel worker with a clean energy job. The reality is much more complicated. Preparing these workers for job opportunities in clean energy, efficiency, and manufacturing – or in other viable industries that may be a better fit – is just one part of the solution. The insights drawn from this series will address many crucial aspects of ensuring fairness for workers and communities that may be overlooked – from providing financial support for local businesses to worker benefits like reliable pensions and health protections.

Why this Research Matters Now and Beyond COVID-19

Although this series reviews policies that were implemented prior to the COVID-19 pandemic, the effects of this crisis on the energy sector make these findings even more relevant, as shown by the three coal communities in Wyoming, Pennsylvania, and West Virginia. To understand why that is, policymakers must factor in the pandemic within the larger trajectory for energy growth in the US:

  • Coal: Coal mining jobs have declined by two-thirds since 1985, and hundreds of heavily-polluting coal-fired power plants have closed in the last decade, out-competed by cheaper renewables and natural gas in the power sector. US coal power generation is expected to plunge another 25 percent in 2020, according to the EIA.
Coal mining jobs

Coal mining jobs have declined by two-thirds since 1985. Source: Bureau of Labor Statistics

  • Oil & Gas: Even before the pandemic, investors were pushing oil and gas companies to rethink their business models and set net-zero emissions targets. After experiencing a price free-fall in 2020, some analysts predict that peak oil consumption may come sooner than expected.
  • Clean Energy: Conversely, the clean energy industry has moved well ahead of total U.S. employment growth over the last five years, adding jobs 70 percent faster than the overall economy. Like other energy sectors, clean energy has experienced acute job loss from COVID-19, but unlike the others, it was poised to expand in the long-run and become an integral part of the low-carbon economy that scientists agree is necessary to avoid costly climate impacts.

Regardless of how transition and economic redevelopment looks in different regions, a fully decarbonized economy must deliver well-paying, family-sustaining union jobs that propel us toward a clean future. This research can give policymakers the insights they need to ensure that fossil fuel workers and their communities, who have powered our country for decades, are fully prepared to build a stronger and more equitable 21st century clean economy.

Learn more about the full series on fairness for workers and communities here.

For more background on how the clean energy transition affects workers and communities, visit this page.

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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.

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Getting 100% Clear on 100% Clean

Scientists agree that to maximize our chances of averting the worst impacts of climate change, we must stop adding climate pollution to the atmosphere by soon after mid-century. As one of the world’s most advanced economies, the U.S. must reach that goal no later than 2050 – which means transitioning to a 100% clean economy. If this sounds like an ambitious goal, that’s because it is. But it is also what’s needed to protect our economy, our health and our kids’ future.

Why a 100% Clean Economy?

For decades, scientists have warned that catastrophic climate change will result from continued unchecked greenhouse gas emissions. And for decades, our emissions have continued to grow.

Last fall, a Special Report from the Intergovernmental Panel on Climate Change (IPCC), the United Nations body made up of leading scientists from around the world and responsible for assessing the science related to climate change, found that to meet the goals of the Paris Agreement, it will be necessary for the world to achieve net-zero carbon dioxide emissions (adding no more pollution to the atmosphere than we can remove) by soon after midcentury. We also need to achieve deep reductions in other greenhouse gas pollutants like methane. Continued delay will only deepen the challenge, and require us to reduce our emissions even more rapidly.

We’re already seeing the impacts of climate change in communities across the country from record flooding, devastating wildfires, scorching heat waves, and bigger and more damaging storms. Although the impacts are local, climate change is a global problem – which is why the IPCC outlined a global goal. But there are several reasons why the U.S. should strive for achieving a 100% clean economy as soon as possible.

First, the U.S. is the second largest emitter in the world, behind only China. Reaching net-zero emissions globally will only be possible with U.S. leadership. Second, over our history, the U.S. is responsible for by far the most emissions of any other country, more than 85% above China, the second biggest emitter. (Check out this Carbon Brief animation to see the relative emissions contributions of top emitting countries since 1750.) The U.S. has played a major role in creating this problem – we must also play a major role in the solution.

Furthermore, tackling the climate challenge is also just good business. By transitioning as rapidly as we can to 100% clean energy across our economy – including the power sector as well as transportation and industry – we will unleash the power of American innovation to develop cheaper, more efficient clean energy technologies. As global momentum on climate action continues to build, clean energy manufacturing will be an increasingly important industry. Innovative solutions developed by American entrepreneurs can be deployed around the world, helping lower the costs of global emissions reductions while strengthening American industries.

What Exactly Does 100% Clean Mean?

As we substitute zero carbon energy sources like wind and solar for fossil fuels like coal and natural gas, we reduce emissions. We’ve made a lot of progress on this front: according to the National Renewable Energy Laboratory, from 2007-2017, renewable electricity generation more than doubled, and wind and solar generation went from less than 1% of our electricity mix to more than 8%. But we can – and must – do a lot more.

Other sectors of the economy, however, such as air travel, or steel, cement and chemicals manufacturing, are very likely to be difficult and expensive to decarbonize with the technologies we have available or are developing today.

That’s where carbon dioxide removal technologies (CDRs) can play an important role. In comparison to technologies like solar or wind, which generate carbon-free energy, CDRs actually remove carbon dioxide from the atmosphere. As long as we remove as much carbon from the atmosphere as we put into it, we’ll have achieved net-zero emissions – or a 100% clean energy economy.

There are many different types of CDRs, from natural approaches like increasing the amount of forest land and adopting sustainable farming practices, to technologies like direct air capture (DAC) that can suck pollution directly out of the air and store it underground or reuse it in products like fuel, fertilizer, or concrete.

How Do We Do It?

That’s a good question. We know that we are going to need to rapidly shift to cleaner sources of generation in the electricity sector, expand the use of clean electricity in sectors across the economy, advance energy efficiency – and also remove carbon from the atmosphere. The strategies we’ll need to pursue will vary by sector, and given the rapid pace of technology development over the last several years, it’s hard to know which zero-carbon technologies will end up being the most cost-competitive and easy to scale by 2050.

That’s why it’s important that the 100% clean economy goal is focused squarely on environmental results – cutting the pollution that causes climate change without specifying specific technology solutions. This allows for maximum opportunities to deploy a portfolio of technologies and approaches while providing incentives to innovators to find new effective and efficient low-, no-, and negative-emission technologies.

We can achieve this goal, but it will require policies that set declining limits on greenhouse gas emissions; account for the real cost of that pollution; stimulate the research, development and deployment of innovative technologies; and incentivize rapid action, especially in the sectors of the economy that look most challenging to decarbonize.

Climate change is an urgent problem that demands an urgent solution. The time is now to commit to a 100% clean economy that will be cleaner, safer, and more prosperous for all Americans.

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