Category Archives: Setting the Facts Straight

Reality check: Society pays for carbon pollution and that's no benefit

By | Bio | Published: February 4, 2014

This open letter, co-authored by Jeremy Proville and first published on EDF Voices, was written in response to a New York Times article citing Dr. Roger Bezdek’s report on “The Social Costs of Carbon? No, The Social Benefits of Carbon.”

Dear Dr. Bezdek,

After seeing so many peer-reviewed studies documenting the costs of carbon pollution, it’s refreshing to encounter some out-of-the-box thinking to the contrary. You had us with your assertion that: “Even the most conservative estimates peg the social benefit of carbon-based fuels as 50 times greater than its supposed social cost.” We almost quit our jobs and joined the coal lobby. Who wouldn’t want to work so selflessly for the greater good?

Then we looked at the rest of your report. Your central argument seems to be: Cheap fuels emit carbon; cheap fuels are good; so, by the transitive property of Huh?!, carbon is good. Pithy arguments are fine, but circular ones aren’t.

First off, cheap fuels are good. Or more precisely, cheap and efficient energy services are good. (Energy efficiency, of course, is good, too. Inefficiency clearly isn’t.) Cheap energy services have done wonders for the United States and the world, and they are still doing so. No one here is anti-energy; we are against ruining our planet while we are at it.

The high cost of cheap energy

Yes, the sadly still dominant fuels—by far not all—emit carbon pollution. Coal emits the most. Which is why the cost to society is so staggering. Forget carbon for a moment. Mercury poisoning from U.S. power plants alone causes everything from heart attacks to asthma to inhibiting cognitive development in children. The latter alone is responsible for estimated costs of $1.3 billion per year by knocking off IQ points in kids. All told, coal costs America $330 to 500 billion per year.

Put differently, every ton of coal—like every barrel of oil—causes more in external damages than it adds value to GDP. The costs faced by those deciding how much fossil fuel to burn are much lower than the costs faced by society.

None of that means we shouldn’t burn any coal or oil. It simply means those who profit from producing these fuels shouldn’t get a free ride on the taxpayer. Conservative estimates indicate that carbon pollution costs society about $40 per ton. And yes, that’s a cost.

Socializing the costs is not an option

As someone with a Ph.D. in economics, Dr. Bezdek, you surely understand the difference between private benefits and social costs. No one would be burning any coal if there weren’t benefits to doing so. However, the “social benefits” you ascribe to coal are anything but; in reality they are private, in the best sense of the word.

If you are the one burning coal, you benefit. If you are the one using electricity produced by burning coal, you benefit, too. To be clear, these are benefits. No one disputes that. It’s how markets work.

But markets also fail in a very important way. The bystanders who are breathing the polluted air are paying dearly. The costs, if you will, are socialized. Society—all of us—pays for them. That includes those who seemingly benefit from burning coal in the first place.

Your claim that what you call “social benefits” of coal dwarf the costs is wrong in theory and practice. In theory, because they are private benefits. As a matter of practice because these (private) benefits are very much included in the calculations that give us the social costs of coal. What you call out as the social benefits of coal use are already captured by these calculations. They are part of economic output.

Our indicators for GDP do a pretty good job capturing all these private benefits of economic activity. Where they fail is with the social costs. Hence the need to calculate the social cost of carbon pollution in the first place.

So far so bad. Then there’s this:

Plants need carbon dioxide to grow, just not too much of it

In your report, you also discuss what you call the benefits of increases in agricultural yields from the well-known carbon dioxide fertilization effect. It may surprise you to hear that the models used to calculate the cost of carbon include that effect. It turns out, they, too, in part base it on outdated science that ought to be updated.

But their science still isn’t as old as yours. For some reason, you only chose to include papers on the fertilization effect published between 1902 and 1997 (save one that is tangentially related).

For an updated perspective, try one of the most comprehensive economic analysis to date, pointing to large aggregate losses. Or try this Science article, casting serious doubt on any claims that carbon dioxide fertilization could offset the impacts on agricultural yields from climate change.

Farmers and ranchers already have a lot to endure from the effects of climate change. There’s no need to make it worse with false, outdated promises.

Coal lobby speaks, industry no longer listens

It’s for all these reasons that, to borrow the apt title to the otherwise excellent New York Times story that ran your quote: “Industry Awakens to Threat of Climate Change”. And it’s precisely why the U.S. government calculates the social cost of carbon pollution. Yes, sadly, it’s a cost, not a benefit.

To our readers: Want to get involved? The White House has issued a formal call for public comments on the way the cost of carbon figure is calculated, open throughFebruary 26. You can help by reminding our leaders in Washington that we need strong, science-based climate policies.

Also posted in Economics, Greenhouse Gas Emissions, Science | 1 Response, comments now closed

Why the cost of carbon pollution is both too high and too low

By | Bio | Published: January 23, 2014

(This post originally appeared on EDF Voices)

Tell someone you are a “climate economist,” and the first thing you hear after the slightly puzzled looks subside is, “How much?” Show me the money: “How much is climate change really costing us?”

Here it is: at least $40.

That, of course, isn’t the total cost, which is in the trillions of dollars. $40 is the cost per ton of carbon dioxide pollution emitted today, and represents the financial impacts of everything climate change wreaks: higher medical bills, lost productivity at work, rising seas, and more. Every American, all 300 million of us, emit around twenty of these $40-tons per year.

The number comes from none other than the U.S. government in an effort to uncover the true cost of carbon pollution. This exercise was first conducted in 2010. It involved a dozen government agencies and departments, several dozen experts, and a fifty-page, densely crafted “technical support document,” replete with some seventy, peer-reviewed references and an even more technical appendix.

Cass Sunstein, the Harvard legal scholar of Nudge fame, who was co-leading the process for the White House at the time, recently declared himself positively surprised how the usual interest-group politics were all-but absent from the discussions throughout that process. This is how science should be done to help guide public policy.

The cost of carbon pollution is too low

The number originally reached in 2010 wasn’t $40. It was a bit more than half as much. What happened? In short, the scientific understanding of the impacts of rising seas had advanced by so much, and the peer-reviewed, economic models had finally caught up to the scientific understanding circa 2007, that a routine update of the cost of carbon number resulted in the rather dramatic increase to near $40 per ton. (There are twenty pages of additional scientific prose, if you want to know the details.)

In other words, we had been seriously underestimating the cost of climate change all along. That’s the exact opposite of what you hear from those who want to ignore the problem, and the $40 itself is still woefully conservative. Some large companies, including the likes of Exxon, are voluntarily using a higher price internally for their capital investment decisions.

And everything we know about the science points to the fact that the $40 figure has nowhere to go but up. The more we know, the higher the costs. And even what we don’t knowpushes the costs higher still.

Howard Shelanski, Sunstein’s successor as the administrator of the Office of Information and Regulatory Affairs (OIRA, pronounced “oh-eye-ruh”), has since presided over a further update of the official number. In fact, this one didn’t incorporate any of the latest science. It was simply a minor technical correction of the prior update, resulting in a $1 revision downward. (The precise number is now $37, though I still say $40 at cocktail parties, to avoid a false sense of precision. Yes, that’s what a climate economist talks about at cocktail parties.)

And once again, it all demonstrated just how science ought to be done: Sometimes it advances because newer and better, peer-reviewed publications become available. Sometimes it advances because someone discovers and fixes a small mathematical error.

Your input is needed

While announcing the correction, Shelanski added another layer of transparency and an opportunity for further refinements of the numbers: a formal call for public comments on the way the cost of carbon figure is calculated, open through January 27 February 26th.

We are taking this opportunity seriously. EDF, together with our partners at the Natural Resource Defense Council, New York University School of Law’s Institute for Policy Integrity, and the Union of Concerned Scientists, is submitting formal, technical comments in support of the administration’s use of the cost of carbon pollution number as well as recommending further revisions to reflect the latest science.

The bottom line, as economists like to put it, is that carbon pollution costs society a lot of money. So as the technical experts trade scientific papers, you can help by reminding our leaders in Washington that we need strong, science-based climate policies.

Update (on January 24th): The official comment period just was extended for another month, through February 26th. More time to show your support.

Also posted in Economics, Greenhouse Gas Emissions, Science | 1 Response, comments now closed

New Power Plant Rule: Strong, Smart, and Legally Sound

By | Bio | Published: January 10, 2014

Yesterday EPA published its revised proposed Carbon Pollution Standards for new power plants. When finalized, these standards will be the first national limits on the amount of carbon pollution emitted by new power plants in the United States. The standards will finally require new coal-fired power plants — the largest source of carbon pollution in our country — to install carbon capture technology and sequester the climate-destabilizing carbon pollution they produce underground.

Back in 2011, after testing this technology at a power plant in West Virginia, American Electric Power’s former CEO and president Mike Morris told investors:

We’re encouraged by what we saw. We’re clearly impressed with what we learned and we feel that we have demonstrated to a certainty that carbon capture and storage is in fact viable technology for the United States and quite honestly for the rest of the world going forward.

It is now 2014. The technology is being deployed across the world, and here at plants in Canada, Mississippi, California, and at two plants in Texas. EPA’s standards will ensure that the United States is leading the energy revolution — in carbon capture technologies as well as in clean renewable energy and energy efficiency.

Of course these realities did not stop the attacks from industry lawyers.

Jeff Holmstead, Counsel to the Electric Reliability Coordinating Council — a coalition of coal-dependent energy companies — released a statement arguing that we just can’t do it … can’t produce clean, safe, affordable power. He is wrong. These standards are common sense and legally sound. Not only are carbon capture technologies — long in use in other industries — being deployed in the power sector across the world, but renewables are taking off.

Between 2011 and October of 2013, wind generation in the United States increased by over 40%.  In April of 2013, the United States had a record month for wind power with generation of over 17,000 gigawatt hours. In 2012, rooftop solar panels cost approximately 1 percent of what they did 35 years ago. Since 2008, as the cost of a solar module dropped from $3.80/watt to $.80/watt, solar deployment has jumped by about 10 times.

We can, and we will build the low-carbon power sector of the 21st century—and we will not let those companies still investing in the dangerous, harmful energy technologies of the past dictate our future.

Also posted in Clean Air Act, Greenhouse Gas Emissions, News, Policy | Comments closed

New Study — Web of Entities Invests Heavily in Obstructing Climate and Clean Energy Progress

By | Bio | Published: January 6, 2014

A few days ago, the Wall Street Journal reported that Peabody Coal Company is one of the top five worst performing stocks of 2013.

In a year when the S&P 500 was up 29 percent and the Dow rose by 26 percent, Peabody Coal’s stock plummeted by 28 percent.

While most investors recognize the serious environmental and financial risks associated with coal and its pollution, not all do.

Drexel University Professor Robert Brulle reviewed IRS data from 2003 to 2010 and found a web of entities investing over $900 million annually in organizations dedicated to obstructing climate progress and fighting the deployment of safe, clean energy in America.

If you take a closer look at those specific organizations identified in Brulle’s study, you’ll find that several of them are involved – now – in extensive efforts to obstruct climate and clean energy progress under the nation’s clean air laws and leading state programs.

Take a look at these examples:

The Landmark Legal Foundation, Competitive Enterprise Institute and FreedomWorks all just filed briefs before the U.S. Supreme Court challenging the Clean Air Act’s requirement that, at the time of their design and construction, large industrial sources deploy cost-effective modern pollution control technologies to mitigate their climate pollution.

In its challenge to clean air measures for climate pollution, the Competitive Enterprise Institute and FreedomWorks brief (filed along with Southeastern Legal Foundation) relies extensively — and chillingly — on the tobacco industry case FDA v. Brown & Williamson Tobacco Corp. and the legal attacks on our nation’s efforts to eliminate the scourge of youth tobacco addiction:

The Court’s approach to FDA’s assertion of regulatory authority over tobacco products has direct relevance in the present case and should control the outcome here.

(That’s from page 7 of their brief. The Supreme Court has already considered – and rejected – this misguided legal attack in the context of EPA's authority to regulate climate pollution.)

Earlier this year, the Landmark Legal Foundation unsuccessfully asked the U.S. Supreme Court to review EPA’s science-based determination that six greenhouse gases endanger the health and welfare of current and future generations. They tried to challenge EPA’s determination, anchored in extensive science reflecting decades of research, by ridiculously questioning whether this finding is a “scientific judgment.” (see page 11 of their brief)

The Competitive Enterprise Institute also litigated to overturn New York Republican Governor George Pataki’s leading efforts to cap and reduce the climate pollution from fossil fuel power plants in New York and to participate in a broader regional pollution control program, the Regional Greenhouse Gas Initiative.

On December 5th, New York’s appellate court affirmed the decision of the state’s trial court firmly rejecting these legal attacks.

In his study, Brulle also chronicles the “evidence of a trend toward concealing the sources of [climate obstructionism] funding through the use of donor directed philanthropies” such as the Donors Trust.

A closer look at funding by the Donors Trust through its most recent IRS Form 990 (2011) indicates $1,189,730 in grant funding provided to an organization called the Committee for a Constructive Tomorrow (CFACT).  CFACT is a major outlet for climate denialism.

CFACT, too, just filed a brief with the U.S. Supreme Court in which it asserts that the overwhelming scientific consensus on human-induced climate change is “tenuous, biased, inaccurate, incomplete, unsupported by actual observations, and lacking in scientific integrity.”

The recent scientific findings of the world’s leading scientists set out in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change found that climate change is unequivocal and its impacts are unprecedented and profound.

Another organization that has received support from the Donors Trust according to the Trust’s IRS Form 990 (2011) is the Judicial Education Project.

They also just filed a brief with the U.S. Supreme Court challenging the federal government’s authority to regulate greenhouse gas emissions from the nation’s largest sources of such pollution. The brief alleges that the Environmental Protection Agency exceeded its authority under the U.S. Supreme Court’s 2007 landmark case, Massachusetts v. EPA, in which the Court stated that the “harms associated with climate change are serious and well recognized.”

Earlier this year, the Mercatus Center — another group identified by Brulle’s research — submitted adverse comments on proposed clean air standards for cars and gasoline by calling into question the extensive body of peer reviewed science linking particulate pollution and mortality.

It is well documented that these clean air standards for cars and gasoline will provide healthier, longer lives. They have also won the support of diverse interests, including the American Lung Association and the U.S. auto industry, because of the dual benefits of reducing health-harming pollutants and enabling more efficient clean car technologies.

Recently, the Landmark Legal Foundation joined by the Cato Institute — both groups identified in Brulle’s research — challenged the Department of Energy’s adoption of improved appliance efficiency standards for microwaves.

The microwave standards will lead to less energy use, consumer cost savings and pollution reductions. Landmark Legal Foundation and the Cato Institute objected to DOE’s consideration of the societal benefits of mitigating carbon pollution. Patrick Michaels, a well-known climate denialist, co-authored the Cato comments. Landmark asked DOE to immediately halt implementation and rescind the Rule.

DOE has denied the request to upend these common sense energy conservation standards for our nation.

And it is not surprising that Peabody Coal Company, too, has just filed a brief in the U.S. Supreme Court objecting to the Clean Air Act requirement that our nation’s largest industrial emitters use modern pollution controls to mitigate climate pollution.

Peabody’s brief begins by asserting that “[w]hether and how to regulate GHGs [greenhouse gases] remains a highly debated, contentious issue in Congress, agencies and the courts.” (Page 2 of their brief)

But Brulle’s research elucidates how Peabody’s assertion is a tautology. Through massive funding of groups dedicated to climate obstructionism, Brulle documents how climate change remains contentious because there is a vast climate change counter-movement dedicated to making it so:

[A] number of conservative think tanks, trade associations, and advocacy organizations are the key organizational components of a well-organized climate change counter-movement (CCCM) that has not only played a major role in confounding public understanding of climate science, but also successfully delayed meaningful government policy actions to address the issue.

Climate change is happening. The toll exacted from extreme weather — fueled in part by climate change – on human life and our economy is profound, and reaches from the ravages wrought on New York and New Jersey by Hurricane Sandy to the tragic flooding in the Rockies.

However, the solutions are at hand.

In 2012, wind power was “the number one source of new U.S. electric generation capacity for the first time—representing 43 percent of all new electric additions and accounting for $25 billion in U.S. investment.”

And even more recently, in November 2013, 100 percent – ALL – of the new electrical power in America came from renewable energy.

While Peabody’s stock falls and its rhetoric rises, and while the forces of obstructionism fight clean energy, the winds of change are blowing briskly.

Brulle’s study is a clarion call for moms, dads, grandparents, aunts, and uncles to resolve that in 2014 we will work together to fight for clean air and clean energy for our children — and for all children.

In spite of a well-funded group of obstructionists, we can prevail.

We can secure climate progress and clean energy for our nation, for our communities and for our future.

Also posted in EPA litgation, Greenhouse Gas Emissions, News, Policy | 1 Response, comments now closed

There They Go Again: Oil Industry Opposition to Protecting Children from Toxic Lead Pollution

By | Bio | Published: February 11, 2011

The Clean Air Act is under siege. Powerful voices claim that we cannot afford both clean air and a strong economy.   

There they go again.   

These are the same arguments that EPA opponents have been making since 1970. Even the most successful EPA clean air programs have been subject to these same attacks when they were first proposed – in court challenges and in repeated attempts to roll back public health protections over the years.  

"Sky is falling" claims from leaded gas proponents could have derailed protections for children's health   

Few regulatory programs in history match the success of EPA's removal of lead from gasoline. Yet even this effort faced the same type of pessimism and obstructionism that EPA faces today. From the beginning of the fight to take lead out of gasoline, the oil industry and the lead additive producers said it could not be done, and even that there was no need for it to be done. 

As the first of the energy shocks of the 1970s stretched gas lines around city blocks, oil industry representatives testified to EPA that the lead phase-down would cause them to lose profits, prevent them from funding future oil exploration, and make gasoline unaffordable. One lead additive manufacturer ran an ad in major newspapers claiming the lead phase-down would waste one million barrels of oil a day (the Washington Post ran an article about it on December 3, 1973.) Phillips Petroleum estimated that producing unleaded gasoline would consume between 300,000 and 600,000 barrels of additional crude oil a day and require from $8 to $15 billion in refinery capital investment (that's from a Los Angeles Times story about a possible "Gas Octane War," printed on December 30, 1974.)   

The oil and additive industries vigorously attacked both the sufficiency and validity of scientific studies that linked lead additives to harmful public health impacts. And they kept up these attacks until leaded gasoline was finally and definitively banned by regulations issued in the 1980s.   

In 1978, in 1982 and again in 1985 the industries that profited by selling tetraethyl lead tried to reverse the progress of the lead phase-down. Public health won out, but only after 15 years of defending against attacks by the companies who profited from lead pollution.   

What really fell? The amount of toxic lead in children's blood   

We have all reaped striking benefits from EPA's removal of lead from gasoline, as the level of toxic lead in the blood of American children dropped along with lead emissions to the air. EPA reports that between 1980 and 2009, lead levels in America's air fell by 93 percent, largely as a result of EPA's requirement to remove lead additives from gasoline.   

As the levels of lead measured in America's air plummeted, so too did the level of lead measured in the blood of American children. In 2005, the Centers for Disease Control reported that blood lead levels had fallen 98 percent since it originally collected data from American children in 1976 through 1980. In that earlier period, more than eighty eight percent of children sampled had harmful blood lead levels. Public health experts attribute most of this stunning decline to the successful removal of lead from gasoline.   

Percentage of children 1–5 years old in the U.S. population with elevated blood lead levels   

   

EDF's The Clean Air Act at 35 [pdf], page 6, data from CDC   

Lead is a neurotoxin that particularly harms children's cognitive development and behavioral skills and also contributes to hypertension in adults and premature death. Avoiding these negative health effects has yielded tremendous economic benefits.   

In its exhaustive peer-reviewed study of the costs and benefits of the Clean Air Act between the years 1970 and 1990, EPA estimated that the single year 1990 mean monetized benefit resulting from the reduction of lead air pollution was more than $150 billion.   

Yet the lead additive industry valued its profits more than these health benefits. It took courage for EPA to face down the predictions of doom about taking lead out of gasoline. Our children are breathing healthier air today because EPA did its job and protected public health.  

Today, we need your help to prevent a new wave of attacks on vital clean air protections for our, and our children's, health. Read more about how the same "sky is falling" claims are now being made about other types of toxic air pollution — like mercury. 

You might also want to read:  

Debunking Clean Air Scare Tactics: Part One, Acid Rain  

There They Go Again, Part Two: Mercury Controls on Power Plants  

 

Also posted in Clean Air Act, Health | 1 Response, comments now closed

There They Go Again, Part Two: Mercury Controls on Power Plants

By | Bio | Published: December 14, 2010

"And they said it couldn't be done …"

When it comes to cleaning up pollution, never underestimate the power of innovation.

Five years ago, the Environmental Protection Agency (EPA) faced a court deadline to regulate mercury pollution from power plants. Mercury is a potent neurotoxin that harms brain development in fetuses and growing children. But some in the utility industry argued that the technology was not available to achieve rigorous pollution reductions.

In 2005, EPA accepted those claims and issued a weak rule — one that was later thrown out by a federal appeals court.

EPA will take up the issue of the toxic pollution discharged from power plants soon — this coming March. Hopefully, they will keep in mind that industry pessimists who said it could not be done were wrong.  Fast-moving innovation is delivering cost-effective mercury reductions right now, while growing America's clean air technology industry. So this time around, EPA should not listen to the "sky is falling" claims — and should move ahead with rules that will protect Americans'  health. 

Here's more about the 2005 mercury rules:

Coal industry claims ACI technology isn't feasible

Coal-fired power plants are the largest human-made source of mercury emissions in the United States. In 2004 and 2005, EPA considered several means to reduce power plant mercury emissions. The protective solution to implement the Clean Air Act would have required each coal-fired power plant to reduce mercury emissions by 90 percent through Activated Carbon Injection (ACI), a control technology that had been used in the waste-to-energy industry for many years and was already being successfully used by coal-fired power plants by the early 2000s.

But some members of  the coal-fired utility industry claimed that ACI technology was many more years away from full-scale deployment, and projected that it would be 2018 before ACI could be feasibly installed at most power plants:

  • A spokesman for the Electric Reliability Coordinating Council urged EPA to use "realistic assumptions about the current state of mercury control technology." (Nesmith, Jeff, Rules on Mercury to Be Fine-Tuned, Atlanta Journal-Constitution, April 30, 2004, p. A6.)
  • An official with Indianapolis Power & Light Company stated "If we can get a man to the moon, I'm sure we can get to 90 percent [mercury reduction] over time, just not now." (Webber, Tammy, EPA Orders Industry to Cut Mercury by 70%, Indianapolis Star, March 16, 2005, p. A1.)
  • EPA's final rule mirrored industry claims:  "Although EPA is optimistic that such controls may be available for use on some scale prior to 2018, it does not believe that such controls can be installed and operated on a national scale before that date."

ACI technology proven feasible and cost-effective

Utility industry pessimists were wrong about the feasibility, scalability and cost of using ACI to reduce mercury pollution from coal-fired power plants. After EPA issued its weak rule (the one that was thrown out in court), many state and local governments stepped up to the plate and required power plants to protect public health from mercury pollution. Responding to the demand created by these state and local controls, companies have delivered cost-effective mercury control technology that is performing even better than hoped for.

As of June 2010, a large number of coal-fired power plants have ordered or installed mercury control technology – so many that, combined, they generate more than 62,000 megawatts of electricity, which is enough to serve more than 60 million American homes. Here's a list of all those plants. Overwhelmingly, they have chosen to install ACI technology — the same kind that Clean Air Act pessimists dismissed five short years ago as unrealistic and impractical.

The Government Accountability Office reports that ACI systems have become even more effective at removing mercury from flue gas as they have been deployed in the electric utility industry. The GAO says, "Data from power plants shows that these boilers have achieved, on average, reductions in mercury emissions of about 90 percent” — and that applies to a variety of coal types burned in different boiler configurations. The GAO also says that this magnitude of reduction can be expected from the boiler configurations used at nearly three-fourths of the coal-fired utility boilers in the U.S.

Costs and benefits of ACI technology

ACI technology has turned out to be an efficient and affordable pollution control, and the cost of capturing mercury from power plants has dropped dramatically.

According to the Department of Energy's National Energy Technology Laboratory, the 2008 cost to capture a pound of mercury was 1/6 the 1999 price. Advancements in the sorbents used to remove mercury have allowed ACI to be used for a wider range of coal qualities than was expected in 2005 (read more in this GAO report [PDF].) ACI systems now cost a fraction of other air pollution control devices.

"But there they go again …"

In spite of all the powerful evidence that mercury controls are available and highly cost-effective in protecting human health, some industry voices continue to argue against requiring them.

For instance, the U.S. Chamber of Commerce — ignoring the facts — still claims that mercury control solutions are not available.

Some in the utility industry persuaded EPA to bet against mercury control innovation the last time around, and as a consequence, EPA set policies that recklessly failed to protect human health. But state action and a nimble U.S. clean air technology industry has proven, yet again, that America can innovate to deliver the pollution reductions we need to protect our health and the health of future generations.

Now we need EPA to carry out the law to ensure all Americans are protected by clean air standards addressing toxic mercury from power plants.

Also posted in Energy, Policy | 1 Response, comments now closed

Debunking Clean Air Scare Tactics: Part One, Acid Rain

By | Bio | Published: December 2, 2010

There they go again. Economic meltdown. Higher consumer costs. Massive job losses. These are among the predictions of doom surrounding EPA's current and forthcoming round of clean air protections. If they sound familiar, they should. Time and again, from the enactment of the Clean Air Act in 1970 to today, prophets of doom have predicted that disastrous consequences would flow from cleaning the air we all breathe. And time and again, those dire predictions have been wrong. The Clean Air Act has protected American health and our environment for decades while our economy has grown. It is a legislative success story that continues today.

This series will examine what the naysayers have said about Clean Air Act protections and how those wild predictions compare to the statute's actual record of protecting Americans from toxic air pollution and its devastating effects on human health and the environment. We start with the acid rain program in the Clean Air Act Amendments of 1990.

Part One: The Acid Rain Program

These maps compare annual wet sulfate deposition at the time of the 1990 Clean Air Act Amendments and today's deposition levels, depicting the extraordinary progress that has been made. Source: NADP data.

Predictions of Doom

Twenty years ago, and twenty years after enacting the modern Clean Air Act, Congress took up the matter of acid rain, which was devastating ecosystems across the East and Northeast. Acid rain is caused by air pollution including sulfur dioxide emissions from coal-fired power plants. For the first time ever, the Clean Air Act Amendments of 1990 used the groundbreaking tool of a market-based cap and trade system to reduce sulfur dioxide emissions.

Industry fought the acid rain program with scare tactics throughout the legislative debate, warning that it would wreak havoc on the economy:

  • The Edison Electric Institute predicted the Clean Air Act Amendments would cost the electric utility industry up to $4.5 billion a year.
  • The Business Roundtable projected the total economic cost would be $104 billion a year.
  • American Electric Power Company warned of "the potential destruction of the Midwest economy."
  • In an editorial that dismissed the scientific case for reducing acid rain, the Atlanta Journal and Constitution warned that "Americans can expect their power bills to skyrocket for nothing."

Protecting our Health and Environment

Twenty years later, peer-reviewed EPA studies required by the Clean Air Act show that sweeping public health benefits have resulted from the reductions in air pollution achieved under the 1990 Clean Air Act Amendments. While the legislative debate about acid rain focused on environmental harm, public health reaped great benefits because sulfur dioxide pollution from power plants forms not only acid rain, but also particulate pollution that is particularly dangerous to breathe.

EPA estimates that the pollution reductions achieved under the 1990 Clean Air Act Amendments will in this year alone:

  • Save 160,000 lives,
  • Avoid 130,000 cases of acute bronchitis and 130,000 heart attacks,
  • Prevent 86,000 emergency room visits,
  • Keep children in school and prevent 3,200,000 lost school days and
  • Keep workers on the job and prevent 13,000,000 lost work days.

These profound public health benefits are paired with dramatic reductions in sulfate deposition, and damaged environments have begun to recover from the ill effects of decades of acid rain.

Costs and Benefits

Not surprisingly, the cost of achieving the tremendous public health and environmental benefits of the Clean Air Act Amendments of 1990 were a fraction of industry forecasts, and significantly below EPA's own projections. In 1990, power companies predicted that reducing sulfur dioxide pollution would cost $1000-$1500 per ton and electricity prices would increase up to 10% in many states (Factsheet, Committee on Energy and Commerce, Industry Claims About the Costs of the Clean Air Act [PDF], June 16, 2009). In fact, the actual pollution reduction cost has been between $100 and $200 per ton for most of the program, and electricity prices fell in most states. Acid rain has been dramatically reduced and the limits on sulfur dioxide pollution were met faster and at a strikingly lower price than anyone expected in 1990.

The benefits to public health and the environment outweigh these costs many times over. EPA's analysis of the costs and benefits of the Clean Air Act projects that in 2020 the benefits of the 1990 Clean Air Act Amendments will exceed the costs of compliance by a factor of 30 to 1. Studies by the Office of Management and Budget and private researchers support these conclusions as well.

The predictions of doom in 1990 overlooked the power of American innovation unleashed by the goals of the Clean Air Act Amendments and the market-based system Congress established to achieve them. Unlike previous programs that specified what pollution controls must be used, the acid rain program set enforceable and descending limits on total pollution, but let industry experiment, innovate and find the most cost-effective means to lower pollution. These results are a striking rebuke to the critics who said it could not be done.

Also posted in Health, Policy | 10 Responses, comments now closed

API Misses the Mark: Why Refineries Will Do Just Fine Under ACES

By | Bio | Published: August 25, 2009

The American Petroleum Institute (API) recently took a break from hosting anti-cap-and-trade rallies for oil company employees, and used its spare time to put out a study claiming the American Clean Energy and Security Act (ACES) would be unfair to American oil refineries. Unfortunately their study uses some dubious assumptions – and makes some even more questionable claims.

API’s study (carried out by consulting firm Ensys Energy) outlines two major complaints.

  • First, API whines that the bill only sets aside 2.25 percent of emissions allowances for refiners, while the electricity sector gets 35 percent of the available allowances.
  • The second, related claim is that ACES would increase the cost of doing business so much that companies would turn to cheaper overseas refineries instead.

Before we even address those complaints, there’s one thing I have to point out — API is relying on bad modeling and cherry-picked results to create its case.

  • The results quoted in API’s news release come from running a scenario that severely restricts international offsets and allows no expansion of low-carbon technologies beyond what would happen without a clean energy bill. There’s no basis for those assumptions, but they do manage to skew the results to make refineries look more vulnerable.
  • However, if we consider the “basic case” (or, “most likely”) model outcome in Ensys’ report, it is clear that the activity of domestic refineries is expected to increase compared to their current levels.

But let’s ignore the study results for a minute, and just take a look at API’s two complaints.

First, API seems to think refineries are getting picked on because they aren’t getting as many free allowances as the electricity sector. But — they ignore the reasons why the two are not comparable.

  • The electricity sector allowances they’re talking about actually benefit American consumers. The allowances are first handed to local distribution companies, or LDC’s, but the value of the allowances doesn’t stay there. LDCs are required to use the value of those allowances to protect consumers from electricity price increases. Giving allowances to the LDC’s really means giving allowances to American ratepayers.
  • Oil refineries, in contrast, are private companies whose owners are free to pocket any money they get from their emissions allowances. So giving allowances to oil refiners really means — giving money to oil refiners. (API might like those two ideas equally, but no one else does.)

Of course, if the oil refiners were willing to accept the same regulations as utilities, and guarantee that their emissions allowances would be used to lower the price of a gallon of gasoline, that’s an idea worth discussing. API’s study doesn’t put that offer on the table, though.

Second, API says that America could become dangerously dependent on foreign refineries. (API President Jack Gerard says, "Climate legislation should not come at the expense of U.S. economic and energy security.")

But – U.S. refineries have cornered 90 percent of the market for domestic gasoline. Homegrown refineries dominate the market because there are, inherently, strong cost advantages for domestic production, and little incentive to send business overseas.

  • Different states have different regulations governing oil refining, which favors local businesses and makes it difficult or impossible for foreign refineries to compete.  In fact, in other environmental scenarios, such as emissions standards for cars, industries claimed exactly that – no company could possibly create 50 slightly different products to sell under 50 different state rules, and only local businesses could thrive under those conditions.
  • It’s also significantly easier and cheaper to ship crude oil than refined gasoline. That makes it much more efficient to import crude oil and do the refining right here at home. That’s a physical difference that won’t go away if we pass a clean energy bill.

EDF did our own analysis of the impact of climate legislation on oil refineries.  Here’s what we found:

  • The expected added cost from a clean energy bill, per gallon of refined gasoline, is less than one cent per gallon.
  • Analysis also suggests that refiners can be expected to pass on the majority of any cost increase to their customers.
  • As a result, between 1.4 and 1.7 percent of total allowances would be enough to compensate domestic refineries – in full — for the added costs associated with reducing their process emissions.
  • Since ACES allocates 2.25 percent of allowances to oil refiners, EDF believes the allocations set out in ACES are more than generous.

Given all this, the bill should not affect the competitiveness of American refineries.

A larger problem might be the unfortunate effect of API’s study on the average American consumer. Outside the industry, a lot of people don’t draw a distinction between “oil” and “gasoline.” A quick read of news articles about the study could imply that ACES will increase America’s dependence on foreign oil – when one of the most valuable aspects of the bill is that it will do just the opposite. Under ACES, the EIA predicts that the U.S. would reduce its consumption of oil by 344 million barrels in the year 2030 alone. That’s a vital benefit to our national security as well as our environment.

A whopping amount of our own oil and the imported oil would still be refined into gasoline here, in spite of API’s fears. After all, even their own biased study predicts increasing U.S. refinery activity.  All in all, clean energy legislation is still good for all Americans – including oil refineries.

Also posted in Climate Change Legislation, Economics | 2 Responses, comments now closed

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