Climate 411

An insurance policy for cutting emissions: New research strengthens the case for climate backstops

Climate backstops are a critical part of a carbon fee that help ensure expected emissions reductions actually occur. More federal climate proposals are using them, including the new America’s Clean Future Fund Act from Senator Richard Durbin. New research on these innovative mechanisms can help advance our understanding of different design options and implications for environmental performance.

Protecting lives during the COVID-19 crisis, confronting systemic racism, and providing much-needed economic relief to workers and businesses should be the top priorities for federal policymakers right now. As attention turns to recovery and rebuilding, we must use the opportunity to act swiftly to tackle the climate crisis, another significant threat to our nation’s health that exacerbates racial and economic inequality.

The policies and programs designed to stimulate the economy must also dramatically cut climate and air pollution – a goal underscored by the new report from the House Select Committee on the Climate Crisis, which outlines a range of bold solutions to climate change. Within the suite of climate and air pollution solutions needed, it will be critical that lawmakers include an economy-wide mechanism that puts an enforceable limit on climate pollution. There are several options for such a mechanism – one is a carbon fee that covers the vast majority of emissions across the economy. Such a fee can and should be designed to distribute costs and benefits in a way that promotes equity. That includes protecting the communities most vulnerable to climate impacts, air pollution and the transition to a clean economy through the use of targeted revenue.

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Posted in Economics, Greenhouse Gas Emissions / Comments are closed

More confirmation that the Trump administration has been disregarding the true costs of climate pollution

A new report highlights the Trump administration’s dangerous efforts to obscure the real costs of climate change, while a major court decision firmly rejects the administration’s approach.

Costly flooding in a Houston area neighborhood in the aftermath of Hurricane Harvey.

A new report from the Government Accountability Office (GAO), an independent agency tasked with providing objective nonpartisan information to policymakers, confirms what we’ve known for years: that the Trump administration has been ignoring the enormous costs of climate change. By ignoring these damages, the administration is turning its back on communities across the nation who are footing the bill for those impacts today.

In addition, a federal court recently issued a clear-cut rejection of the administration’s deceptive math on the cost of methane pollution, another greenhouse gas that is 84 times more potent than carbon dioxide over a 20 year time period. This ruling reinforces the fact that the administration has been blatantly disregarding widely accepted science and economics when it comes to the costs of climate change.

All of this comes amid a raging and widespread pandemic that underscores the absolute necessity of relying on experts and scientific data when crafting policy. With unchecked climate change fueling more devastating storms, droughts, and other public health impacts — all of which hit vulnerable communities the hardest — incorporating accurate costs of climate change in policy decision-making matters now more than ever.

Here is what this new report and court decision reveal about the administration’s backwards and harmful approach to decisions on climate change — and how experts and the courts are wholly rejecting it.

Why undervaluing the cost of climate change is dangerous

To justify its own political agenda, the Trump administration has manipulated the calculations behind the estimated impact of emissions to allow for more climate pollution from major sources like power plants and cars. The new GAO report outlines the steps the administration has taken to drastically underestimate the “Social Cost of Carbon” — a measure of the economic harm from climate impacts that is used to inform policy and government decision-making. These impacts include extreme weather events like flooding and deadly storms, the spread of disease, and sea level rise, increased food insecurity, and more.

After a 2008 court decision requiring the federal government to account for the economic effects of climate change in regulatory benefit-cost analysis, an Interagency Working Group (IWG) comprised of experts across a dozen federal agencies began in 2009 to develop robust estimates of the social costs of carbon that could be used consistently by agencies across the government. These estimates were developed through a transparent and rigorous process based on peer-reviewed science and economics that included input from the National Academy of Sciences and the public — and were periodically updated over time to account for the latest science. More recently, the NAS conducted a thorough assessment to provide guidance on updating the social cost of carbon estimates and suggestions for continuing to build on and strengthen it.

The GAO report underscores the importance of implementing those recommendations, while pointing to the fact that the federal government has done absolutely nothing to follow through. In fact, in 2017 the Trump administration recklessly disbanded the IWG — the very federal entity that already had the mandate to take on this task.

Since then, federal agencies like the EPA have been relying on an “interim cost” to inform important regulatory decisions that is seven times lower than the IWG’s estimate — a move that dramatically underestimates the profound impacts climate change has on families, businesses, taxpayers and local governments. To make matters worse, the administration is dramatically reducing the IWG figure even though it is widely recognized to be an underestimate of the true costs. There is wide consensus that the true costs are much likely significantly higher.

The Trump administration substantially reduces estimates through two key flaws in its calculations, both of which fly in the face of established science and economic principles. First, the reduced estimates ignore that carbon emissions are a global pollutant, omitting important categories of climate change impacts on the United States. Second, they undervalue the harm to our children and future generations by significantly over-discounting future climate impacts.

By vastly undervaluing the costs of climate change — and thus, the benefits of acting on climate — the administration has been able to justify rolling back critical protections such as the landmark federal Clean Car Standards. These important rules offer critical public health benefits and fuel savings for consumers.

A court ruling refutes the administration’s deceptive math on pollution costs

In encouraging news, a recent court decision outright rejected the administration’s deceptive math on a similar metric, the ‘Social Cost of Methane,’ used to estimate the impacts of methane pollution. The Bureau of Land Management, under former Department of Interior Secretary Ryan Zinke, has been using an interim social cost of methane that is more than 25 times less than the estimate from the IWG. The U.S. District Court for the Northern District of California recently overturned the BLM’s attempt to ease protections from dangerous methane leaking, venting and discharging from oil and gas activities on public and tribal lands, where it used a distorted social cost of methane as justification. EDF joined the states of California and New Mexico and a broad coalition of health, environmental, tribal citizen and Western groups to challenge in court the rescission of these vital safeguards.

In the opinion, the judge ruled that the BLM’s decision to rely on a lower interim estimate for the social cost of methane was “arbitrary” and “capricious,” and therefore, “failed to quantify accurately the forgone methane emissions and the resulting environmental impacts.” In addition, the court underscored that “the President did not alter by fiat what constitutes the best available science” on the social cost of greenhouse gas emissions. This is a major win for not only the broad coalition involved in the case, but for the basic principle of science-based decision-making on climate change. The court’s meticulous critique of the flaws in the interim social cost of methane — and the process used to develop it — could be influential in future cases involving the social cost of greenhouse gas emissions. Such a critical ruling like this opens the possibility that the Trump administration and future administrations could be required to properly account for the costs of climate change.

The Trump administration’s unwavering, politically motivated attempts at twisting facts and discrediting experts is putting Americans’ lives, health and financial well-being at risk. Unfortunately, its effort to skew the costs of climate change is far more than a political game. It is already causing real harm to communities across the country suffering from climate impacts — and it will only add to the mounting costs our children and grandchildren will pay. That is why ongoing efforts to uncover and overturn unjust climate decisions are all the more essential.

Posted in Economics, Greenhouse Gas Emissions, Policy / Comments are closed

Clean Energy Innovation: An Important Piece of the Climate Puzzle

Bipartisanship and congressional action aren’t words associated with climate change in recent years. But we may be taking steps away from that stalemate. There is growing momentum in Congress to support innovation in clean energy – which can play an important role in reducing climate pollution.

Members from both parties recognize that investing in innovation can accelerate the development of high-impact breakthrough clean energy technologies. That includes “negative emissions technologies” (NETs) that remove carbon from the air and that scientists say will be needed to meet climate goals. Innovation programs can also help drive down the costs of existing essential options like solar, wind, and electric vehicles.

The House Committee on Science, Space and Technology’s Subcommittee on Energy recently held a hearing to discuss two proposals that would direct the Department of Energy to develop and improve technologies that would reduce emissions from using fossil fuels. For example, DOE would be authorized to spend significant funding on technologies that capture carbon from power generation and industrial facilities as well as those that can cut emissions from difficult to decarbonize parts of the economy, like aviation, shipping, and cement, iron and steel production. Meanwhile, the House version of the Fiscal Year 2020 Energy and Water appropriations bill reflects the growing bipartisan support for innovation. It is a clear rejection of President Trump’s recommendations to cut or eliminate funding for renewable energy development, building and industrial energy efficiency programs, sustainable transportation technologies, and the popular and successful ARPA-E program that invests in high risk, high reward technologies.

These investments in innovation are an important step forward, but they are also not sufficient on their own to solve climate change – we must also act swiftly to put in place policies that set declining limits on greenhouse gas emissions and account for the real costs of that pollution. Together, these policies will lead to deeper pollution reductions, accomplished more quickly and affordably. That’s because a limit and a price on emissions will accelerate demand for clean energy, creating powerful economic incentives to adopt new technologies and providing a market for innovators who develop better ways to cut carbon. Investment in innovation can help make new technology options available, but we also need policies that create a level playing field such that clean technologies can thrive on the timeline and at the scale consistent with meeting our ambitious climate goals.

When it comes to innovation policies specifically, details matter, which is why we are outlining a set of key principles that together can form the foundation for well-designed innovation policy. Of course, not every individual bill can be expected to meet all of these principles, but a comprehensive national innovation strategy should strive to achieve them collectively.

  • Performance-based. The most promising technologies should receive the most funding – our focus should be on potential tons of pollution reduced per dollar invested.
  • Diversified. Investments should take a broad-based approach, encompassing a wide range of technologies that can reduce emissions in sectors throughout the economy – from NETS to emissions-reducing technologies like utility-scale energy storage to building and industrial efficiency to next-generation batteries, nuclear designs, electric vehicles, and grid equipment.
  • Risk tolerant. Government should not shy away from supporting riskier investments in potential breakthrough technologies given their possible impact on reducing pollution.
  • Ambitious. We need to stop adding climate pollution no later than 2050 – that is, producing no more than we can remove, or net-zero emissions. To dramatically transform our energy systems, we will need to at least double overall investments in innovation. That includes clean energy research and development – as well as programs focused on helping entrepreneurs and scientists bring technologies from the lab to the market.
  • Strategic. Policies should aim to leverage private capital as much as possible, and avoid duplicating or “crowding out” private investment.
  • Coordinated. Coordination across government agencies and programs, including within the Department of Energy, is critical to ensure investments are streamlined and their impacts maximized.
  • Adaptive. Programs should collect data to track performance in order to evaluate effectiveness per dollar and to improve with lessons learned over time.
  • Environmental integrity. Monitoring and tracking of emissions reductions is critical – including carbon that’s captured and stored underground or used in products or processes.  It’s also important to ensure full life-cycle accounting of emissions impacts – for example, taking into account land use changes as a result of biofuels production. And all policies should guard against negative environmental or health impacts and respect local and national environmental laws, like the Clean Air and Clean Water Acts.

We must be at least as bold as the climate crisis is urgent. Support for innovation alone won’t do the job – but by pairing a robust innovation push with strong policy frameworks that limit overall greenhouse gases, we can cut pollution at the pace and scale that science demands. We should seek out and embrace every step forward while fighting for the comprehensive action needed to protect our economy, our health, and our children from the impacts of climate change.

Posted in Energy, Policy / Comments are closed

Accelerating clean energy innovation is key to solving the climate crisis

Co-authored by Elgie Holstein

Our nation has a history of tackling big challenges and leveraging the ingenuity of American entrepreneurs to develop solutions that have changed the world – from curing diseases to exploring space to launching the internet.

Today, climate change is one of our most urgent global challenges, for which there is little time left to prevent the most destructive impacts. To combat it, we must bring every bit of our nation’s entrepreneurial creativity and scientific excellence to bear. That means accelerating the deployment of existing low-carbon technologies as well as investing in new and emerging innovations that can transform our economy to 100% clean energy. And we have to do it quickly.

Fortunately, there are recent indications that a clean energy innovation agenda can attract bipartisan support in Congress, even as the debate over broader climate policy remains gridlocked. Recently, in the Republican-controlled Senate, the Environment and Public Works Committee held a hearing focused on a bipartisan bill that would invest in research on cutting- edge approaches such as direct air capture (DAC), a “negative emissions technology” (NET) that might someday be able to suck carbon pollution directly out of the air and store it or recycle it into fuel, fertilizer, and concrete. Read More »

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A growing call for environmental integrity

The recent introduction of bipartisan carbon fee legislation is demonstrating an important pattern taking hold as policymakers focus on climate change solutions. The Energy Innovation and Carbon Dividend Act, like the MARKET CHOICE Act introduced earlier this year by Republican Rep. Curbelo, recognizes that any carbon fee aimed at meeting the challenge of climate change must be designed with environmental performance in mind.

The new legislation is the first time in a decade that lawmakers from both sides of the aisle have come together to put forth serious climate policy. And like the MARKET CHOICE Act, it uses a fee to reduce pollution across the economy and includes “environmental integrity mechanisms” (EIMs) — provisions that tie a carbon fee to clear, measurable pollution reduction goals and keep us on track to meet those goals. EIMs are still a relatively new concept on the climate policy scene, but leading thinkers have begun to pay them significantly more attention, and it is clear they are emerging as a critical component of any serious carbon fee proposal: and with good reason.

A carbon fee – which sets a price per unit of pollution – prompts the economy to respond by providing powerful incentives to reduce that pollution, but it cannot guarantee the environmental result. While energy and economic modeling tools can provide critical insight into possible or likely outcomes, they cannot provide certainty over the magnitude of the impact. That’s why it is critical to include EIMs designed to provide greater assurances that a fee will deliver on its pollution reduction potential. Read More »

Posted in Carbon Markets, Cars and Pollution, Climate Change Legislation, Economics, Greenhouse Gas Emissions, Policy / Comments are closed

Trump Administration misleads Americans about the cost of climate pollution

The Trump Administration is attempting to justify the rollback of crucial environmental and health protections by vastly undervaluing the costs of climate change.

The latest safeguards under attack are the Clean Power Plan, the nation’s first-ever limits on carbon pollution from existing power plants, and the Bureau of Land Management’s vital standards to reduce wasted natural gas from oil and gas facilities on public and tribal lands. They would have health, environmental, and economic benefits worth an estimated billions of dollars annually. But you wouldn’t know it from reading the Administration’s recently revised documents – because of a series of deceptive accounting tricks, including efforts aimed at obscuring the benefits of reducing carbon pollution.

The Trump Administration has used discredited methods to eviscerate the social cost of carbon — an estimate of the costs that carbon pollution inflicts on the public, represented as the dollar value of the total damages from emitting one ton of carbon dioxide into the earth’s atmosphere.

The social cost of carbon is a tool that helps ensure that policymakers consider the health, environmental and economic benefits of avoiding extreme weather, rising temperatures and intensifying smog when they make decisions that affect climate pollution.

Climate change harms businesses, families, governments and taxpayers through rising health care costs, destruction of property, increased food prices and more — so it’s common sense that we should properly account for the value of avoiding these harmful outcomes. But the Trump Administration has systematically undermined and attacked the well-established science of climate change – including the social cost of carbon, which has had a target on its back for a while now.

The most up-to-date estimates of the social costs of carbon were developed by an Interagency Working Group (IWG) of experts from a dozen federal agencies. They were developed through a transparent and rigorous process based on the latest peer-reviewed science and economics, and with input from the public and the National Academy of Sciences.

But in March, President Trump cast aside the results of this thorough and consultative process. He issued an executive order aimed at discrediting the IWG estimates, withdrawing them as government policy, and directing federal agencies to pick their own metric.

The executive order leaves federal agencies to fend for themselves without specific guidance, opens the door to extensive legal challenges, and effectively sets up agencies to cook the books to serve the Administration’s goals.

That’s exactly what EPA Administrator Scott Pruitt and Department of the Interior Secretary Ryan Zinke just did – releasing benefit-cost analyses that massively undervalue the costs of carbon pollution, radically reducing the estimates by up to 97 percent.

The Trump Administration would have us believe that the costs of carbon pollution are near zero. The Administration’s new estimates are only a couple dollars per ton of carbon dioxide – about as much as a cup of coffee or a bus ticket.

Sadly, communities around the country are already seeing just how wrong that is. From longer wildfire seasons to more intense hurricanes, the American public is already bearing the enormous costs of climate change.

Even the IWG estimates – roughly $50 per ton of carbon dioxide based on year 2020 emissions – are almost certainly a conservative lower bound since they do not yet reflect many different types of climate impacts.

A closer look at the Administration’s deceptive math 

There are two major flaws in the Administration’s drastically reduced estimates, both of which fly in the face of established science and economic principles in service of obscuring the very real benefits of climate action.

First, the reduced estimates ignore that carbon emissions are a global pollutant, so they omit important categories of climate change impacts on the United States.

Second, they shortchange the harm to our children and future generations from climate change.

The so-called “domestic-only” estimate

Since the impacts of carbon pollution are felt globally regardless of where the emissions come from, leading researchers and the IWG have appropriately focused on accounting for that full global impact.

In contrast, the Administration’s revised estimates claim to consider “domestic-only” impacts to the United States. But that title is a misnomer – the Administration’s flawed approach ignores important categories of impacts that affect the American public. Climate impacts beyond our borders have costly repercussions for U.S. citizens in the form of changing global migration patterns, economic and political destabilization, and other “spillover” effects.

The National Academy of Sciences specifically rejected the approach the Administration is taking in a report released earlier this year, concluding that:

[C]limate damages to the United States cannot be accurately characterized without accounting for consequences outside U.S. borders.

Economist Richard Newell – president of the think tank Resources for the Future, which is leading an effort to implement the Nation Academy of Sciences’ recommendations to update the social cost of carbon estimates – has criticized the Administration’s approach, saying that considering only direct domestic impacts is:

[U]nnecessarily constrained and unwise for addressing inherently global pollutants like greenhouse gases.

The use of a “domestic-only” number also harms Americans because it undervalues the cost of climate pollution and encourages other countries to similarly undervalue – and over-emit – this pollution.

More than half a dozen leading experts argue:

[The] United States benefits tremendously if other countries set policy based on global rather than local effects.

They also point out that the use of a global estimate can encourage reciprocal climate action elsewhere. For instance, the Canadian government incorporated the U.S. IWG value in its own policy analysis.

Undervaluing the impacts on children and future generations

The Administration’s estimates also use a sharply lower value for the benefits that today’s carbon reductions provide to children and future generations. Again, this is in direct conflict with the weight of expert opinion that supports valuing these impacts even more than we did before the Trump Administration.

The Administration’s estimates “discount” future impacts at 7 percent – a rate significantly higher than the 3 percent central rate of the IWG, and one that is wholly unsupported by the economics literature when it comes to the long-lived intergenerational effects of carbon pollution.

A growing consensus among leading economists supports lower or declining discount rates, as does the Council of Economic Advisors.

As Richard Newell of Resources for the Future points out:

Practically speaking, the use of such a high discount rate means that the effects of our actions on future generations are largely unaccounted for in the new analysis.

In other words, the Administration’s estimates reveal just how little they value protecting American children and generations to come.

The social cost of carbon has profound influence on our policy process and embodies the very real costs of climate change that communities around the country are already feeling.

The Administration’s distortion of these values is illustrative of a frequent strategy of theirs – twisting the facts to validate their desired outcome, and in the process sowing doubt around the overwhelming scientific consensus on climate change.

Unfortunately, while the math the Administration is using is warped, the costs of climate change are still very real – and the American public is footing the bill.

Posted in Clean Power Plan, Economics, Greenhouse Gas Emissions, Policy, Setting the Facts Straight / Comments are closed