Climate 411

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

By EDF Blogs / Published: December 11, 2023

(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.

Also posted in Energy, News / Comments are closed

The Regional Greenhouse Gas Initiative is at a critical juncture. Here are 3 ways it can put states on the path to meet our climate goals

By Peter Della-Rocca / Published: November 20, 2023

Since the Regional Greenhouse Gas Initiative (RGGI) began well over a decade ago, this group of Eastern states has successfully slashed climate pollution from power plants in half, generated substantial health benefits and raised $3 billion in proceeds that have been invested back into states.

Now this program, which puts a declining cap on power sector pollution, is at a crucial juncture that will determine its impact this decade.

Since February of 2021, RGGI Inc, the organization that oversees RGGI has been conducting its third program review — a process meant to assess RGGI’s successes, impacts and potential design changes. Given the opportunities offered by major investments in the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL), along with the fast-approaching 2030 deadline for the U.S. to reduce emissions by at least 50%, the stakes for the current program review are high.

EDF submitted public comment on the review, urging RGGI Inc to take several key steps as it plans the trajectory of RGGI through 2030 and beyond. First, RGGI Inc should align the program’s emissions cap with national and state climate commitments. Second, RGGI should include an interim target of at least 80% emissions reductions by 2030 to ensure that states take near-term action that lines up with where the power sector needs to be to achieve climate targets. Third, RGGI Inc should create a pathway to cover imported electricity as a means to mitigate emissions leakage (a situation where emissions from non-RGGI states may increase).

As Washington state considers linking carbon market with California-Quebec, this cost-containment tool ensures that its program continues to run smoothly

By Caroline Jones / Published: November 15, 2023

Today, the Washington State Department of Ecology (Ecology) released the results from Washington’s second Allowance Price Containment Reserve (APCR) auction, held on November 8th. At this auction, all 5 million available APCR allowances were sold at the Tier 1 price of $51.90. This auction, along with three previous sold-out cap-and-invest auctions, continues to show strong demand for allowances in Washington’s cap-and-invest program and illustrates the important role of the APCR in providing predictability and stability in allowance prices.

APCRs: A Recap

An APCR is a price containment mechanism that was designed into Washington’s cap-and-invest program as a way to keep allowance prices stable and predictable. It functions similar to a soft price ceiling by ensuring that, if a certain price is reached in a quarterly auction, a separate number of allowances set aside for this purpose become available at a separate APCR auction. Importantly, these allowances are set aside ahead of time and are still part of the overall allowance budget set by Ecology to keep Washington on track to meet its climate targets. By making these allowances available at a transparent and predetermined point, an APCR auction helps to stabilize prices in the market overall.

Want more information about how Washington’s APCR works? Check out our blog from earlier this summer explaining this key program feature.

APCR auction results

At last week’s auction, participating entities submitted bids for APCR allowances at the Tier 1 price of $51.90. All allowances were offered at the Tier 1 price, with none available at the Tier 2 price of $66.68.

Here are the results, released today:

Tier Price 1: 5,000,000 allowances sold at a price of $51.90 per allowance.

In this auction, Ecology offered all APCR allowances at the Tier 1 price, rather than dividing them between Tier 1 and Tier 2 prices. There were also more allowances available at this APCR auction than at August’s APCR auction, with 5 million made available this month compared with just over 1 million in August. Ecology determined that this is an important strategy for increasing market stability by putting downward pressure on compliance costs early in the program, while many covered entities are still developing their strategies for compliance and decarbonization.

What these results mean

This was Washington’s second APCR auction and its implementation shows just how important this feature is as a price-stabilizer. In the first year of this program, covered entities are still in the early stages of figuring out and implementing their plans to reduce their emissions. As these early auctions play out, businesses are inclined to out-bid each other for allowances sooner rather than later — with the expectation that allowances will get more expensive over time. This drives strong demand in these early auctions, illustrating the utility of a cost containment mechanism like the APCR. As covered entities reduce their emissions, they’ll need fewer allowances to cover their pollution — which will lower demand and keep prices low in turn.

An APCR might not be triggered at every quarterly auction, but it was designed into the program from the beginning to keep it functioning smoothly. In doing so, Ecology created a more stable and durable program while utilizing allowances that are still part of the planned allowance budget.

Cutting costs through linkage

Earlier this month, Ecology announced its decision to pursue market linkage with the joint California-Quebec carbon market. This is great news for long-term cost containment and stabilization for Washington and, if also pursued by California and Quebec, could bring about significant advantages for all participating markets. A broader, linked market could drive deeper and faster cuts in climate pollution, lower the cost of compliance for Washington companies and support a more stable, predictable market overall. Ecology’s decision is the start of a process in Washington and we’ll be watching for further developments in the Evergreen State as well as in California and Quebec.

Also posted in California, Carbon Markets, Economics, Energy, Greenhouse Gas Emissions, Policy / Comments are closed

A decade in, California’s cap-and-trade has slashed climate pollution and generated investments — where does it go from here?

By Caroline Jones / Published: November 15, 2023

This year, California marked the 10^th anniversary of its landmark cap-and-trade program, and the Golden State has good reason to celebrate: California saw reduced year-on-year emissions from nearly every sector covered by the program. On top of delivering on critical emissions reductions, cap-and-trade has generated revenue resulting in $9.3 billion implemented through California Climate Investments programs that contribute to emission reductions, support climate equity and improve public health outcomes. And yet, there’s still much more work to be done to ensure that this program delivers reductions at the scale and speed required to avert the worst impacts of climate change while meaningfully supporting overburdened communities.

With a rulemaking in progress to make further necessary improvements to cap-and-trade, here’s what you need to know about what’s coming up through the end of the year and what to pay attention to in the new year.

Also posted in California, Carbon Markets, Energy, Greenhouse Gas Emissions, Policy / Comments are closed

Duke aims to miss state carbon reduction requirements in proposed Carbon Plan

By Will Scott, Southeast Climate and Clean Energy Director / Published: October 17, 2023

Photo credit: Duke Energy via Creative Commons

To comply with its carbon-reduction laws on the books and support healthier communities, North Carolina should be shifting its electricity sources from coal to lower-cost clean energy. But in its latest plan presented to the NC Utilities Commission in August, Duke Energy proposed a coal-to-gas transition – a shift that offers North Carolina households and families higher levels of harmful air pollution and exposure to electricity price spikes via volatile natural gas costs, when compared to the clean energy alternative.

According to a law approved by overwhelming bi-partisan legislative majorities in 2021, North Carolina must reduce its carbon pollution from the power sector 70% below 2005 levels by 2030 and reach carbon neutrality by 2050, supporting a necessary, statewide shift to a clean energy economy. Much of the specifics around getting to those goals, however, are left to the NC Utilities Commission to determine with input from stakeholders and utilities. Duke Energy, the largest utility in North Carolina, plays a major role in achieving those goals, and it must regularly submit updated plans to the Commission outlining how it intends to meet them.

In its first Carbon Plan submitted last year, which detailed different approaches for meeting those goals, Duke also proposed a major build-out of new gas power plants. And again, in its latest Carbon Plan/Integrated Resource Plan (CPIRP), Duke doubled-down on a concerning portfolio that proposes to:

Miss the critical 2030 70% carbon reduction goal.
Almost triple the amount of new gas build out.
Delay offshore wind construction until the 2040s.

Here’s why the NC Utilities Commission should push Duke to submit a stronger plan that prioritizes renewables, not gas, and actually gets the state on track to meet its goals.

Also posted in Greenhouse Gas Emissions / Comments are closed

New tool equips community voices to spur a just energy transition

By Christie Hicks / Published: October 9, 2023

(This post originally appeared on EDF’s Energy Exchange)

Our new website, Community Voices in Energy — a collaboration with Chicago-based Blacks in Green — equips frontline communities to participate as experts in climate and energy proceedings and influence energy investments. By ensuring that community members are able to share their direct experience on the record in public utility commission hearings, the site helps utility regulators to make rulings that lead to a more equitable, healthy and affordable energy future.

Health and economy at stake

Communities located near polluting power plants experience more health problems, including high rates of asthma and lung disease. They also have less wealth, in part because of lower property values and unaffordable energy rates. Yet frontline, BIPOC and low-income communities have historically been excluded from energy regulatory and legal decision-making spaces that directly impact their quality of life.

Energy is among the largest sources of man-made climate pollution in the world, and energy solutions that benefit communities will also be healthier for the climate. A just transition requires equitable distribution of the benefits of clean energy to communities that have been left behind in the past.

A solution emerges in Illinois

In Illinois, regulators this year alone are considering $1.8 billion in rate hike requests from utilities, much of which will repair and extend systems that would lock in fossil-powered energy for generations to come. But cleaner, more affordable, solutions are available.

Environmental Defense Fund, Blacks in Green, and Citizens Utility Board pioneered the idea of bringing community experts into energy proceedings to provide testimony that could be entered into the legal record on which all commission decisions must be based. In a 2022 decision, the Illinois Commerce Commission explicitly acknowledged that EDF and partners raised its awareness that environmental justice communities experienced longer and more frequent power outages than wealthier Chicago communities, while also having fewer resources to recover from disruptions. As a result, the Commission required the utility to address system disparities, rather than only measuring their system as a whole.

Community Voices in Energy website drives energy justice

Our Illinois win encouraged us to expand our work and develop the Community Voices in Energy website, so that our community-centered approach can be replicated and spread around the country. Community expert contributors helped to shape the trainings offered on the website to enable meaningful participation in cases, and we developed the Energy Justice Intervenor certification program to support them.

With tools to frame what a just energy system is and how to get involved, the Community Voices in Energy website equips community members to advocate for a more just and equitable system. Including lived experiences at the forefront of big energy decisions will speed the transition to an equitable, affordable, clean, and healthy energy future for everyone.

Since our launch, we have already heard from federal energy regulators and from other states where energy proceedings threaten to lock in high rates and fossil energy at a moment where we must urgently transition to a clean energy. The new Community Voices in Energy website, and the movement it supports, give hope for our energy future.

Also posted in Economics, Energy, Health, News, Partners for Change / Comments are closed

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