Climate 411

The Hydrogen Hubs are here. What do communities think about them?

In October, the White House announced the selection of seven Hydrogen Hubs around the U.S. to be a part of the Department of Energy (DOE)’s Regional Clean Hydrogen Hubs Program (H2Hubs), which will deploy $7 billion toward projects over eight to twelve years (or sooner). Launched under the Bipartisan Infrastructure Law, the Hydrogen Hubs program aims to create networks of hydrogen producers, consumers and infrastructure – and is likely to set many precedents that may scale-up in a clean hydrogen economy, ranging from technological strategies to the standard approaches for community engagement. Hub developers now enter their next, more in-depth planning phases to secure the coveted DOE funding and to eventually start building out the Hubs.

Selected regional clean hydrogen hubs

A primary challenge for these programs lies in translating strong technological innovation practices into responsible and collaborative on-the-ground infrastructure projects. This requires extensive engagement and partnership with local communities – a core part of EDF’s BetterHubs objectives – to mitigate potential harms and ensure the projects deliver positive outcomes and avoid additional related burdens for local communities. This is especially salient in the case of environmental justice communities, which have borne the burden of decades of environmental impacts and are a stated priority for DOE’s engagement as part of the Hub’s program.

While all Hub developers are required to engage and negotiate a Community Benefits Plan with communities, there are many details yet to be determined for most Hub proposals – including how best to engage communities, which communities will be impacted, and how to design and populate Community Oversight Committees. Underlying the success of these processes is the assumption that communities are starting from a position of empowerment. Have they been provided with access to information about what hydrogen development is, what it requires, the context that brings these specific projects to their neighborhoods? Have they been made aware or included in the planning of Hub proposals in their area? If they desire additional information and outreach, how would they like to be involved, and what kind of information would they trust and prefer?

EDF partnered with Morning Consult to conduct a survey in early October, during the week when Hub selection announcements were made. We asked community members who were located in zip codes associated with the 22 final stage DOE applications (as identified by Rystad Energy) a range of questions related to their area’s Hydrogen Hub application and received 600 responses.

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Posted in News / Comments are closed

New York is developing a cap-and-invest program to cut climate pollution. How would it work?

As a major next step in achieving New York’s climate targets, Governor Hochul and state agency officials are developing rules for a cap-and-invest program. A bold and equitable program would aggressively cut climate pollution, while supporting and investing in clean and healthy communities around the state.

This rulemaking could be game-changing for New York — and for the nation.

New York would be the third state in the country to put a declining cap — or limit — on emissions across its economy, building on successful models from California and Washington state. And critically, this program is coming together right as new analysis underscores the need for leading states to follow through on their climate commitments and drive national climate progress.

Here’s what to know about how a cap-and-invest program would work in New York as these rules come together.

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

One year into its cap-and-invest program, Washington state looks to build upon its landmark climate law

Photo of mountain in Washington state

Results were released today for Washington’s fourth quarterly cap-and-invest auction, which was held on December 6th. The results from this sold-out auction show continued strong demand for allowances in the program, which has brought in substantial revenue for the state of Washington to reinvest in its communities. This is the final auction of 2023, marking the end of this program’s first year of auctions, which in total have generated close to $2 billion for Washington communities. The revenue has already begun to be distributed to different projects that benefit communities across the state, including expanding public transportation in rural areas and improving pedestrian and bicyclist safety, with much more investment to come.

December auction results

At the auction, administered by the Department of Ecology (Ecology), participating facilities submitted their bids for allowances. Washington’s major emitters are required to hold one allowance for every ton of greenhouse gas that they emit, with the total number of available allowances declining each year. This declining cap requires Washington’s businesses to reduce their climate pollution in line with the state’s climate targets. Here are the results, released today:

  • All 7,142,146 current vintage allowances offered for sale were purchased, resulting in the 4th consecutive sold out quarterly auction.
  • The current auction settled at $51.89, $29.69 above the floor price of $22.20, and $11.14 below Washington’s last quarterly auction price of $63.03.
  • This auction is projected to generate roughly $370 million in revenue, which will be invested into Washington communities to enhance climate resilience, create jobs, and improve air quality. A report from Ecology confirming the amount of revenue raised in this auction will be published on January 4.

What these results mean

The settlement price for this auction is a very promising indication of strong and stable demand in the Washington market. Covered entities are still eager to acquire allowances early in the program, but the fact that this auction settled below the Allowance Price Containment Reserve (APCR) trigger price shows that those entities also feel more confident in their ability to secure enough allowances or to further reduce their emissions.

The lower settlement price in this auction compared to recent auctions could be driven by a few factors; for one, this could be the result of previous APCR auctions fulfilling their role as price stabilizers in a market with high demand. APCR allowances were budgeted out ahead of time when the cap-and-invest program was originally designed, and they’re still under the overall allowance budget set by Ecology in order to keep Washington on track with its climate targets. Making these additional allowances available at a predetermined and transparent price point through the APCR helps to stabilize allowance prices in the program, and that’s precisely why Ecology designed this feature into the program from the start. Entities who were able to secure additional allowances at the two APCR auctions held this year may have felt more confident in this auction that they don’t need to scramble to out-bid other entities to buy up allowances.

Another factor that may have driven slightly calmer demand in this auction is the recent decision by Washington’s Department of Ecology to officially pursue linkage with the joint California-Quebec market, known as the Western Climate Initiative (WCI). The December auction was the first auction to be held following this decision, and this step towards a larger, linked market with greater access to more allowances may have given covered entities more confidence in their ability to obtain allowances in the future through this broader market. Read on for more information about this milestone decision, what it means, and what’s next!

Looking ahead: Linkage and the legislative session

In case you missed it, early last month the Department of Ecology officially announced its intention to pursue linkage with the California-Quebec market. This decision is a significant milestone in the linkage process, and if California and Quebec follow suit, it would lead to a tri-jurisdictional system operated jointly by all three parties. California, Quebec, and Washington would all be able to pool their supply of emission allowances and hold shared auctions. As we’ve written previously, these jurisdictions all stand to benefit from a linked market as it can drive faster cuts in climate pollution and support a more stable, predictable market for all participants.

Before that happens though, there are a lot of things to get done. California and Quebec each have their own processes to go through and there’s some legislative fine-tuning that Ecology is planning to request in order to make the linkage process as smooth as possible.

That means potentially making small, strategic updates to the Climate Commitment Act (CCA) to build alignment with the joint California-Quebec program, with the goal of making it easier to operate as a single, linked market. The CCA is the landmark climate policy that Washington passed in 2021 that placed a firm, declining limit on climate pollution while also providing new tools for tackling local air pollution and creating the cap-and-invest market. Thanks to the CCA, Washington is one of only a few states in the nation that’s actually on track to meet its targets. Now, state leaders have an opportunity to scale up the state’s climate action by ensuring that Washington’s cap-and-invest market is ready to deliver enhanced climate and cost-savings benefits as part of a linked market.

As things progress in the legislative session, we’ll be keeping an eye on all things CCA and linkage — stay tuned for our updates and analysis!

Posted in California, Carbon Markets, Cities and states, Economics, Energy, Greenhouse Gas Emissions, Policy / Comments are closed

Duke Energy’s proposed investment in fossil fuels will leave customers with higher bills and more pollution

In the last few years, North Carolinians have seen eye-popping electricity bills. Bill increase after bill increase has compounded, resulting in 20+ percent higher monthly bills for most ratepayers in our state. The main driver? The volatile cost of natural gas, which accounts for a larger and larger portion of the energy mix that North Carolinians depend on.

And yet, instead of curbing use of a risk-intensive fuel source that has had such a detrimental effect on customers, Duke Energy is proposing a huge investment to build even more gas power plants. Why? State policy guarantees Duke a profitable return on investment for its spending on infrastructure like power plants. The more costly the investment, the higher the return for the company and its shareholders.

There’s no free market for electricity in North Carolina. With no meaningful competitor to provide customers the option to choose a different energy provider, Duke dominates the market and the company’s expensive investment plans are entirely in line with what should be expected from a profit-seeking monopoly utility taking advantage of a captive customer-base.

North Carolinians deserve the facts about Duke’s decisions, how it impacts their lives and how their leaders can protect them. Here’s what you should know: 

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Posted in Cities and states / Comments are closed

EDF’s new equity map shows state efforts to make the energy transition fairer for all

(This post was written by EDF interns Cyera Charles and Remeny White)

Across the U.S. states are passing laws that will ensure greater equity as we transition to a clean energy system. EDF has developed an interactive map – based on our new report, the State Climate Equity Survey – that documents states’ efforts to make their energy transition more equitable and healthier.

Our new map identifies which states require, allow, or promote consideration of equity and environmental justice in agency decision-making and budget-setting.

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Posted in Cities and states, Energy, News / Comments are closed

Financial Market Regulators Release Guidance Contemplating Oversight of VCM

This blog was authored by Holly Pearen, Lead Counsel for People & Nature at the Environmental Defense Fund.

Proposed Guidance from Financial Market Regulators Could Improve Integrity and Transparency in the Voluntary Carbon Market

Many of the world’s largest companies have committed to net zero, and high-quality carbon credits are increasingly seen as a key tool for meeting ambitious climate commitments. As a result, interest in voluntary carbon markets is surging: A 2023 survey found that nearly nine in 10 business leaders see carbon credits as an important component of corporate sustainability strategies. 

However, almost 40% of the companies surveyed noted that the voluntary carbon market’s “lack of regulation and transparency requirements” prevented deeper investment and indicated that improvements in price and intermediary transparency would increase their use of carbon credits as part of a wider sustainability strategy. Financial market regulators are in a unique position to directly address this significant barrier to investment and help rebuild trust, boost integrity and add critical investor protections in the voluntary carbon market.

Two proposals released in early December outline the important role of financial market regulators and offer specific suggestions for action.

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Posted in Carbon Markets, News, United Nations / Comments are closed