Climate 411

Carbon markets reward 10 pioneering states. Who’s next?

By Derek Walker / Published: November 21, 2014
Source: Flickr/Nick Humphries

A handful of states are already proving that economic growth and environmental protection can go hand in hand – and they’re using market forces, price signals and economic incentives to meet their goals.

These results are particularly salient as states consider how to comply with the U.S. Environmental Protection Agency’s plan to limit dangerous pollution from power plants.

So let’s take a closer look at what’s happening on our two coasts.


California: 4% cut in emissions, 2% growth

California’s landmark cap-and-trade program is closing out its second year with some strong results. Between 2012 and 2013, greenhouse gas emissions from the 350+ facilities covered by the program dropped by 4 percent, putting California solidly on track to meet its goal to cut emissions to 1990 levels by 2020.

During the same period, the state’s gross domestic product jumped 2 percent.

What’s more, the climate change and clean energy policies ushered in by California’s Global Warming Solutions Act of 2006 helped slash carbon pollution from in-state and imported electricity by 16 percent between 2005 and 2012.

All this while attracting more clean-tech venture capital to California than to all other states combined.

Northeast: GDP rises as emissions and power prices drop

Those who would rather turn east for inspiration can look to the nine-state Regional Greenhouse Gas Initiative, a cap-and-trade system stretching from Maryland to Maine.

Since the RGGI program launched in 2009, participating states have cut their greenhouse gas emissions 2.7 times more than non-RGGI states, while growing their gross domestic product 2.5 times more than non-RGGI states.

The states have experienced these dramatic win-win benefitswhile also seeing retail electricity prices across the region decline by an average of 8 percent.

With 70 percent of Americans supporting EPA’s Clean Power Plan – and given that everyone warms up to the notion of a sound economy – can these carbon markets be replicated elsewhere?

States choose their own path

EPA’s rules aim to cut power plant pollution by 30 percent by 2030, giving states individual reduction targets along withgreat flexibility to meet that national goal.

Hitting the sweet spot of supporting economic growth and environmental protection will be a primary objective, and the options are virtually endless. Energy efficiency, renewable energy, power plant efficiency and cap-and-trade are all good bets.

Expanded markets offer new options

Not surprisingly, EPA mentioned RGGI numerous times in its proposed power plant standards as an efficient way to cut carbon pollution. Since then, experts have suggested that regional markets, or even a single national market in which all 50 states participate, may be a way to make the plan affordable.

States still have some time to ponder their options.

EPA is expected to finalize the rule in summer 2015, and states have another year after that to submit plans to EPA detailing how they intend to meet their targets. Those entering into multistate agreements have three years.

The good news is that they wouldn’t be starting from scratch. The experiences of California and the RGGI states can provide useful, real-world insights as states plot their path toward a clean energy future.

This post originally appeared on our EDF Voices blog

Also posted in Clean Air Act, Clean Power Plan, Economics, Greenhouse Gas Emissions, Policy / Comments are closed

Why these leading companies welcome EPA’s carbon pollution rules

By Tom Murray / Published: November 19, 2014
Copyright: istockphoto.com

Who’s for carbon emission rules? For starters, some of America’s largest companies and most innovative industry leaders, who are moving aggressively to wean themselves off fossil fuel-fired power through energy efficiency and conservation.

So far, more than 120 corporations have come out in favor of the U.S. Environmental Protection Agency’s plan to cut carbon emissions from power plants, including some of our most well-known brands.

It’s not hard to understand why.

Regulatory certainty and a growing market for increasingly competitive renewable energy will help these companies manage risk, meet changing customer expectations and achieve corporate sustainability goals.

Added bonus: They earn recognition for being on the cutting edge of the clean energy economy.

“Just what we need”

The California headquarters of The North Face is 100 percent powered by solar and wind, and it feeds excess electricity into the grid. Other buildings owned by the outdoor products company have similar ambitions.

“EPA’s plan will help spur additional investment in renewable energy and energy efficiency and that’s just what we need,” says James Rogers, North Face’s sustainability manager.

JLL, a commercial real estate giant that has made energy-efficiency a key part of its portfolio, agrees. Since 2007, the company has helped clients reduce greenhouse gas emissions by nearly 12 million metric tons and energy costs by $2.5 billion.

“I’d like to think that more efficiently managing our electricity and power facilities is truly a ‘no brainer,’” writes JLL’s chairman of energy and sustainability services, Dan Probst, who has also spoken publicly in favor of EPA’s plan. “It will reduce greenhouse gas emissions and our impact on the planet, reduce costs for both power companies and consumers, and help drive the economy.”

And in September, IKEA’s chief executive and group president, Peter Agnefjäll, and Steve Howard, the home furnishing company’s chief sustainability officer, marched with 400,000 others in the People’s Climate March in New York City to call for stronger policies on global warming.

“We need strong policy leadership in order for us and others to accelerate innovation,” Agnefjäll noted.

Climate change bad for business

But business leaders at the forefront of the clean energy movement are also driven by concern that unabated climate change will hurt the long-term viability of their businesses.

For example, Starbucks’ sustainability manager Jim Hanna has been warning for several years that soil changes and increased threats from pest infestations are altering the way coffee can be grown. Global warming already poses “a direct business threat to our company,” he has said.

And today, the private sector is becoming increasingly concerned that water scarcity may hamper business growth in coming years.

Resources for businesses

Here at Environmental Defense Fund, we believe that the Clean Power Plan is an opportunity for any business that wants to get ahead of the game.

Building on our long track record of partnerships with the private sector, we’ll be working with businesses to help them make their voices heard as the Clean Power Plan takes shape – and to prepare them for a new reality.

Interested in learning more? We’re hosting a webinar on November 19 to get the conversation started and look forward to the collaboration.

This post originally appeared on our EDF Voices blog

Also posted in Clean Air Act, Clean Power Plan, Economics, Green Jobs, Jobs / Comments are closed

Flexible Pollution Rules can Boost the Economy: 5 Reasons Why

By EDF Blogs / Published: October 28, 2014

By Diane Munns, Senior Director, Clean Energy Collaboration

economy_378x235

Source: Flickr/Brookhaven National Lab

Nobody likes being told what to do.

Gina McCarthy, head of Environmental Protection Agency, knows that. So she asked her agency to craft a plan that leaves it up to states to shape their energy future – as long as they cut carbon emissions from power plants.

Often lost in the heated debate over EPA’s Clean Power Plan, however, is the fact this built-in flexibility will also give a boost to clean technology ventures, and speed up energy innovations already under way in many states. It could bring down costs for consumers, and maybe even give a much-needed boost to our economy.

Here’s how.

1. Flexibility will foster creativity.

All states have different strengths and weaknesses, and their infrastructure varies. Under EPA’s plan, a state can choose to close or upgrade coal plants, join a carbon market such as the Regional Greenhouse Gas Initiative, invest in zero-carbon renewable energy sources, boost energy efficiency programs, or take any other step to meet the individual goal EPA set for the state.

Chances are, many state strategies will be multi-pronged and collaborative. The best and most viable solutions will surface to the top and be exported as best practices to other states. In fact, states and utilities looking to get ahead of the game are already beginning the discussions needed to one day craft plans.

2. State plans can be tweaked and improved over time.

States have 15 years to meet their individual carbon reduction goals. This is not supposed to be a rush job, no matter how urgent the climate challenge.

So a state that needs to abandon plans for a certain new technology, or that wants to switch to a more affordable solution, will likely have time to do so. The long-term planning horizon will allow new technologies and business models to be tested and take hold.

3. As old plants close, new and cost-effective technologies move in.

The EPA rules are being proposed at a time when utilities nationwide are pondering how to best replace aging infrastructure. Three-quarters of all coal-fired power plants are at least 30 years old, which means they only have about a decade left to operate.

This transition is expected to speed up over the next few years as a 2015 deadline for reducing mercury emissions and other harmful pollutants from power plants draws near.

With carbon storage still out of reach, no off-the-shelf technology available to affordably cut pollution from coal plants – and with natural gas, a fossil fuel, not a long-term viable alternative – we expect utilities to increasingly turn to renewable generation and energy efficiency solutions to meet EPA’s goals.

Energy efficiency remains the single best value for the dollar and it can easily be deployed within the 15-year timeframe.

4. A changing energy landscape will bring new business.

As zero and low-carbon technologies become more valuable and competitive over time, there will be more opportunities for companies to move into this space – and to flourish.

For years already, utilities have been switching from coal to natural gas, a cleaner and cheaper fuel that emits about half the carbon coal does. Industry analysts expect this transition to speed up in anticipation of the new power plant rules.

As state regulators push utilities to comply with the EPA emissions targets, look for new opportunities for industry and entrepreneurs to reduce emissions and improve efficiencies at natural gas plants.

Other businesses will scale up investment in alternative energy sources as the market for such technology gains value and broadens. There are already many active players in this emerging industry, and they want to grow in the United States and beyond.

5. Coming: A new way to produce and consume energy.

States working to cut emissions from fossil plants will be exploring new approaches – not just for energy production, but also for how we consume energy. There is “low-hanging fruit,” untapped opportunities for carbon reduction and customer savings, that won’t require additional power plant investments.

Expect EPA’s plan to fuel smarter utility business models where power companies are rewarded for helping consumers save energy rather than wasting it. The environment will benefit, as will American households and businesses.

This post originally appeared on our EDF Voices blog.

Also posted in Clean Air Act, Clean Power Plan, Green Jobs, Greenhouse Gas Emissions, Policy / Read 2 Responses

The Clean Power Plan and the Deployment of Renewable Energy

By Megan Ceronsky / Published: October 22, 2014

(This post originally appeared on Resources for the Future’s Expert Forum on EPA’s Clean Power Plan, on October 2, 2014)

The proposed Clean Power Plan identifies the “best system of emission reduction” to address carbon pollution from power plants as comprised of four building blocks: (1) efficiency improvements at coal-fired power plants; (2) shifts in utilization away from higher-emitting fossil plants towards lower-emitting fossil plants; (3) deployment of zero-carbon generation sources such as wind and solar; and (4) harvesting demand-side energy efficiency improvement opportunities.

This system best satisfies the statutory command of the Clean Air Act, which directs EPA to identify the system that maximizes emissions reductions, considering cost and impacts on energy and other health and environmental outcomes.

This system also reflects what is happening across the country (and indeed, around the world) to reduce carbon pollution—states and companies are using the interconnected electric system as a whole to cut carbon pollution, deploying zero- and low-emitting generation and reducing reliance on high-emitting generation, and doing so flexibly to ensure that reliability is maintained and emissions reductions are achieved cost-effectively.Fifteen states wrote to EPA Administrator Gina McCarthy as the Clean Power Plan was being developed to describe the success they have had in deploying this system, cutting carbon pollution from power plants by 20 percent between 2005 and 2011, with some states achieving reductions of over 40 percent during that period.

Renewable energy is our future.

More than 60,000 megawatts of wind energy capacity have been installed in 39 states and an additional 12,000 megawatts are under construction. Wind power capacity in the United States has increased nine times over since 2005, supporting over 80,000 jobs and driving a new manufacturing sector with over 550 facilities across the country. Solar generating capacity is also rising rapidly—increasing by 418 percent between 2010 and 2014. PG&E has connected more than 100,000 customers with solar panels to the grid, saving the average residential customer with solar panels $130 a month. Costs of renewable generation have been falling rapidly, and power companies such as Xcel, DTE, MidAmerican, Georgia Power, and Austin Energy have announced renewable energy purchases that are outcompeting fossil-fueled alternatives and that will lower customer bills by saving fuel costs.

The Clean Power Plan’s assessment of the potential for renewable energy to reduce carbon pollution bases state targets on an average of existing renewable energy policies in different regions of the country. By taking this approach—effectively looking backward—the proposal fails to reflect the dynamism in renewable energy deployment that is happening across America, and fails to satisfy Section 111’s technology-forcing framework.

The proposed alternative approach, which would consider the technical and economic potential to harvest renewable energy in each state, has the potential to better reflect the country’s vast renewable energy resources. The analysis underlying the alternative approach needs to be updated to reflect current technologies (such as taller wind turbines and distributed generation) and current costs (which are falling rapidly).

An up-to-date analysis of the technical and economic potential for renewable energy to cut carbon pollution will provide a strong legal and technical foundation for the Clean Power Plan, and help facilitate our transition to the clean energy–fueled economy of the future.

Also posted in Clean Power Plan, Economics / Read 1 Response

EPA’s State-by-State Carbon Limits Indicate Smart Policy, Not Arbitrary Rulemaking

By EDF Blogs / Published: August 14, 2014

By Kate Zerrenner

EDF_FB_renewableEnergy_solar (1)In June, U.S. Environmental Protection Agency (EPA) announced – for the first time ever – standards to limit carbon emissions from U.S. power plants, known as the Clean Power Plan (CPP). Currently power plants emit 40 percent of U.S. carbon emissions, but under the proposed Clean Power Plan, the U.S. power sector will cut carbon pollution by 30 percent below 2005 levels.

Since this announcement, the usual suspects have attacked the CPP, calling its proposed state-by-state reduction standards arbitrary. Their claims couldn’t be further from reality. When EPA asked states for feedback on how to best craft this standard, states asked for two things: individual standards and flexibility. And that’s what they got. Anyone familiar with the proposed standards will know they are based on a consistent and objective methodology that takes into account each state’s unique energy portfolio and emissions, as well as built with maximum flexibility in mind.

At first glance, the climate-change-denying crowd dismissed the standards as arbitrary, because the limits vary from state to state. For example, Washington needs to reduce its emissions rate by 72 percent by 2030, while Kentucky only needs to cut its emissions rate by 18 percent over the same period. Texas lies somewhere in the middle with a 39 percent reduction required. So what gives?

How did EPA get those numbers?

Let’s unpack the methods that went into EPA’s carbon pollution limits. EPA’s vision for the plan was to give the states complete ownership and flexibility in reducing overall carbon emissions. EPA decided on a simple greenhouse gas performance metric for each state:

Total power plant emissions in one year ÷ Total electricity generation in one year
= Emissions reduction rate

The states have complete control and flexibility over how to meet the emissions reduction rate.

To figure out each state’s potential to reduce emissions, EPA analyzed the practical and affordable strategies that states and utilities are already using to reduce greenhouse gas emissions from the power sector, such as energy efficiency, improving power plant operations, and using more renewable energy. By analyzing state-specific data, EPA calculated practical targets for each state. Their analysis formally considers four “building blocks” for cleaner power:

  1. Improving the efficiency of existing power plants,
  2. Increasing use of the most efficient natural gas plants,
  3. Using more renewable energy, and
  4. Expanding demand-side energy efficiency—the same low-hanging fruit for which experts have been advocating for years.

States are already on their way

If we look at each state’s proposed reductions individually, it’s clear that EPA’s limits will not crash the economy or tear down the power sector. In fact, in many states it will not be difficult to meet EPA’s limits ahead of schedule.

Washington, with its seemingly onerous 72 percent reduction mandate, had already ordered its largest coal plant to shut down by 2025. Closing that coal plant alone will reduce the state’s emissions by 70 percent, because much of Washington’s electricity comes from hydro power. And Kentucky leaders have already devised a strategy to meet the state’s 18 percent reduction goal.

In Texas – my home state – we’re well on our way to meeting the 39 percent reduction standard set by EPA by simply amplifying current trends, namely relying on more West Texas wind, widening the use of efficient natural gas electricity, and taking advantage of the state’s solar potential. Now Texas leaders should craft the best framework for the state – one that has the potential to bring in billions of dollars directly to our state economy, create more homegrown jobs, and lower Texans’ electricity bills. If state leaders make another “principled stance” against the EPA, like they did with the greenhouse gas permits, we can only expect for Texas to fall behind other states as they race toward the trillion dollar clean energy economy. Come January, EDF urges the Legislature to take the bull by the horns and show the nation how Texas will continue to be a leader in energy.

It’s clear that EPA’s limits were developed with a specific and pragmatic methodology. Variation in reduction goals from one state to another reflects variation in the circumstances of individual states, which EPA wisely took into account. Those who condemn the rules as arbitrary are ignoring the actual basis for the rule.

This post first appeared on our Texas Clean Air Matters blog.

Also posted in Clean Air Act, Clean Power Plan / Read 1 Response

Why Support the Clean Power Plan? Testimony from the EPA Hearings

By EDF Blogs / Published: July 31, 2014

By Dan Upham

Across the country this week, the U.S. Environmental Protection Agency (EPA) held public hearings to solicit comments about its Clean Power Plan, which will put the first-ever national limits on the amount of climate pollution that can be emitted by power plants. EDF’s president, a senior attorney, and a clean energy specialist were among the hundreds of Americans who testified in support of the Plan. As these selections from EDF staff testimonies illustrate, the Plan offers moderate, flexible, and necessary measures to address climate change at the federal and state levels.

It’s necessary: The climate is changing across the U.S.

Image of the DC rally outside the EPA hearings. Source: Heather Shelby

“The stakes are high in Colorado as hotter temperatures, reduced winter snowpacks, and more frequent droughts are expected to decrease Colorado River streamflows.

Our treasured Rocky Mountain ecosystems are especially susceptible to climate change impacts, and high elevations have already experienced temperature increases at rates three times the global average.

Increased warming, drought, and insect outbreaks have increased wildfires and impacts to people and ecosystems throughout the West.” – Graham McCahan, a senior attorney with EDF’s U.S. Climate and Air legal team.

“The Southeast is the region expected to be the most affected by increasing temperatures. Extremely hot days – 95°F or above – could cause a decrease in labor productivity by 3.2% in the construction, mining, utilities, transportation, and agricultural sectors. Extreme heat also is projected to cause 11,000 to 36,000 more deaths each year.” – Greg Andeck, EDF’s North Carolina senior manager, Clean Energy.

“The bottom line is that we cannot continue down the path of unlimited pollution.” – Fred Krupp, EDF’s president.

It’s flexible: It can work well in different states

“Strong carbon pollution standards are consistent with a strong clean energy economy in Colorado.

Solar and wind resources are cheaper than ever before. In 2012, rooftop solar panels cost approximately one percent of what they did 35 years ago, and the cost of solar panels fell by 60 percent from 2011 to 2013. This past May, Xcel Energy [a Colorado utility] announced that it is now acquiring renewable energy at prices that out-compete fossil fuels.” – Graham McCahan

“The plan would allow North Carolina to get credit for steps it already has taken to grow clean energy and invest in energy efficiency. Here are some examples:

  • North Carolina’s solar industry is now ranked 4th in the country in installed solar capacity, thanks to policies that make it easier for investors to finance projects.
  • North Carolina has more than 1,000 clean energy and energy efficiency companies that can help the state meet the Clean Power Plan.

North Carolina demonstrates how a state can move to a clean energy economy in a thoughtful, measured and cost-effective manner.” – Greg Andeck

It’s moderate (and affordable): The cost of inaction is high

“We know that transition to clean energy is not only possible, it’s affordable. In fact, every time EPA has used the Clean Air Act to limit air pollution, it has ended up boosting our economy. Overall, the benefits have outweighed the costs by thirty to one. And every past rule has saved lives – tens of thousands of them.

Hiding from challenges is not what Americans do. And it is certainly the wrong path for us and the generations to come.” – Fred Krupp

It’s imperative: Millions stand to benefit  

“For the millions of kids who will have fewer asthma attacks in the future.

For the workers who will find jobs in new and growing industries.

For the rate payers, who will see their electricity bills go down.

For all of those who will be protected from the most damaging impacts of climate change.

And for our children and grandchildren, who will know that our generation cared enough to leave them a safer, healthier world.” – Fred Krupp

This post first appeared on EDF Voices

Also posted in Clean Air Act, Clean Power Plan, Health, Jobs, Policy / Read 1 Response