Climate 411

Updated analysis strengthens the case for Pennsylvania’s cap on power sector emissions

By Rama Zakaria / Published: August 13, 2020

This post was co-authored by Drew Stilson, Senior Analyst, U.S. Climate Policy at EDF

In an update to a previous analysis from EDF and M.J. Bradley & Associates, our latest modeling shows significant environmental benefits stemming from Pennsylvania’s proposed plan to cap power sector carbon emissions and participate in the Regional Greenhouse Gas Initiative, known as RGGI.

RGGI is a collaboration of ten northeast states that is designed to lower carbon pollution from the power sector. Many businesses, environmental groups and the public support placing a limit on carbon as a necessary and effective way to address climate pollution from electricity generation.

Pennsylvania’s power sector is the fifth largest emitter of carbon pollution in the U.S., making it one of the most significant sources of carbon emissions in the country. To address emissions from the state, Gov. Tom Wolf signed an historic executive order last year directing the state’s Department of Environmental Protection to develop a regulation that is compatible with RGGI following Wolf’s commitment to reducing Pennsylvania’s climate pollution by 26% by 2025 and 80% by mid-century, compared to 2005 levels.

In April, the Pennsylvania Department of Environmental Protection (DEP) announced a starting emissions budget of 78 million tons of carbon dioxide in 2022, with the cap declining three percent annually through 2030, in line with other RGGI states’ trajectories. To evaluate the impacts of a more protective emissions budget, EDF and M.J. Bradley & Associates updated their previous analysis using a starting budget and trajectory closely aligned with the DEP cap. This analysis looked at several different scenarios based on a range of fuel prices and policies in surrounding states and found even greater environmental benefits with the updated cap trajectory. The analysis was completed prior to availability of data related to potential impacts of the COVID-19 pandemic on carbon emissions, demand and recovery. Below we have a section describing additional analysis and considerations in a COVID-19 world.

By modeling these scenarios, we can draw useful insights about expected trends in emissions, electricity generation sources, and power sector costs based on a range of different factors. Energy models, like the one used in this analysis, are not crystal balls that predict exactly what emissions or costs will be in the future, but they provide useful insights about the directional impacts of climate policies compared to a business-as-usual (BAU) scenario with no carbon limit.

Here are some of the key takeaways from the updated analysis:

1. An updated cap reduces emissions well below Business as Usual

A more protective cap, like the one proposed by DEP, would significantly reduce power sector emissions in Pennsylvania relative to the business-as-usual scenario. The future emissions trajectory under BAU is uncertain, but by placing an enforceable cap on the power sector, Pennsylvania protects against emissions increases expected to occur by the middle of the decade due to falling natural gas prices and locks in reductions to well below BAU levels. Our analysis compared the RGGI-consistent trajectory, based on a level close to DEP’s proposed emissions cap, to a range of possible BAU scenarios and found substantial reductions compared to BAU for a range of natural gas prices.

Based on our analysis, a RGGI-consistent cap trajectory in the 12-state RGGI region, including Pennsylvania, would reduce annual climate warming emissions by 43 million tons in 2030 across the region compared to the scenario where Pennsylvania does not participate.

The results show that even while emissions may be anticipated to fall in the near-term under a business-as-usual scenario, they are expected to go back up the middle of the decade. A RGGI-consistent cap in Pennsylvania goes far beyond what the state could achieve without a limit on carbon. Importantly, participation in RGGI will bring Pennsylvania much closer to meeting its climate goals and a fully decarbonized power sector, which will not be achieved under business-as-usual.

CO2 Emissions in Pennsylvania

2. Pennsylvania’s carbon limit will reduce carbon pollution across the region

By capping their own power sector emissions, Pennsylvania’s policy will reduce annual carbon emissions in the Eastern Interconnect by roughly 20 million tons by 2030. This means that even accounting for shifts in power generation between states in the region that might result from a RGGI rule, the overall emissions from the region in total are expected to fall with the cap in place.

This result demonstrates that while some leakage – the shifting of emissions out-of-state due to increased electricity imports – may occur, it does not outweigh the benefits of the program, because overall emissions from the region are substantially lower than BAU levels. An effective leakage mitigation mechanism, like placing emissions associated with imported electricity under the cap, can achieve even greater regional reductions.

Eastern Interconnect: Reduction in CO2 Emissions Compared to BAU (million tons in 2030)

*EDF modeled a cap that is roughly 5% higher than the cap proposed by PA DEP on April 23, 2020.

3. The proposed cap provides more support for zero-emitting resources

RGGI’s cap-and-trade approach to reducing power sector emissions is technology-neutral and ensures the most cost-effective deployment of zero-emissions resources to meet the required reductions. As we noted in our previous blog post, BAU conditions would likely lead all nuclear capacity in Pennsylvania to retire by 2030. Under a more protective cap, support from the price placed on carbon emissions will result in roughly twice as much nuclear generation in 2030 compared to EDF’s previously modeled, less stringent cap.

In-state Generation Mix and Est. Exports (TWh in 2030)

*EDF modeled a cap that is roughly 5% higher than the cap proposed by PA DEP on April 23, 2020.

4. RGGI will bring jobs and economic opportunity to Pennsylvania

While this analysis did not look specifically at macroeconomic impacts or evaluate potential reinvestment portfolios for allowance proceeds, we know from experience that RGGI produces significant economic benefits to states. DEP recently released analysis that projects a net increase of 27,000 jobs in the Commonwealth from RGGI, as well as significant benefits to public health from pollution reductions.

The nature of the RGGI program keeps costs low – by allowing the price on carbon to drive reductions and allowing plants to trade emissions allowances, companies can identify and implement the most cost-effective measures to achieve emission reductions.

Pennsylvania can implement this policy while maintaining significant electricity exports. In fact, modeling results show a 65% increase in net exports in 2030 compared to 2018, as shown in the chart above. This indicates that Pennsylvania can continue to generate revenue by exporting electricity while simultaneously reducing its climate impact. Most of these exports are to other RGGI states, so the overall pollution from the region is not affected.

Other studies have shown that by driving investments in energy efficiency, RGGI has already reduced consumer energy bills, boosted the economy and produced enormous public health benefits. By encouraging cleaner methods of generating electricity, RGGI has reduced air pollution, helping save hundreds of lives, preventing thousands of asthma attacks, and saving billions of dollars in health-related economic costs. DEP’s analysis shows that the program will reduce SO2 emissions by up to 67 thousand tons and NOx emissions by up to 112 thousand tons in the state by 2030.

Electricity bill modeling by the Analysis Group found that the average residential electricity bill in RGGI states will be 35% lower in 2031 than it is today, due in part to investments in energy efficiency – an approach Pennsylvania can follow to yield benefits for its own ratepayers. EDF and M.J. Bradley & Associates’ modeling found that allowance prices are expected to remain under $10 per ton through 2030 in most scenarios, showing that even with a more stringent cap, the impact to ratepayers will be minimal.

5. Implications of the COVID-19 pandemic

A recent analysis from Rhodium Group demonstrates that the COVID-19 pandemic has impacted the transportation sector and its emissions more than the power sector, but there have been some effects on electricity generation. Demand has weakened in the power sector and emissions have accordingly declined, a trend expected to continue through the mid-2020s before reductions flatten, according to the analysis. Coal-fired generation was expected to further decline due to its lack of economic competitiveness with more cost-effective, clean sources, and COVID-19 augments this trend. However, Rhodium notes that “COVID-19 will leave a legacy of a more carbon intensive economy compared to our pre-COVID baseline without additional policy action,” because while COVID-19 does force emissions lower it reduces economic output even more, which means we are becoming more carbon intensive – emitting more pollution per unit of GDP. This demonstrates that we need policies in place to continue to drive down and ensure emissions reductions, with the added benefit that proceeds from programs like RGGI could be reinvested to help rebuild cleanly after COVID-19 and help ensure fairness for impacted workers and communities as transition continues.

Room for more ambition

EDF applauds the Pennsylvania DEP for moving forward with capping power sector emissions and for selecting a cap trajectory that ensures significant reductions below business-as-usual. Our analysis shows that the benefits of the program continue to accrue with even more ambitious caps, and an emission reduction trajectory aligned with deep decarbonization is imminently feasible for the region. A deep decarbonization trajectory that gets close to zero by 2040 with leakage mitigation mechanism in place could reduce annual emissions 111 million tons across the Eastern Interconnect by 2030. Further, a deep decarbonization trajectory brings even more solar capacity into the region’s electricity generation mix and maintains all of the state’s existing nuclear fleet (except for retirements that have already been announced). Higher allowance prices resulting from a deep decarbonization trajectory would generate more proceeds for the state to invest in clean energy, energy efficiency, and other job-creating programs. Legislation just introduced in the state legislature also underscores additional important priorities for investing proceeds, including in ratepayer protection programs and to benefit impacted fossil fuel workers and communities.

EDF commends DEP for its ambition in capping power sector emissions, and we encourage the department to move forward with the proposed RGGI rule to deliver the climate, public health and reinvestment benefits that are strongly supported by Pennsylvanians.

 

Also posted in Carbon Markets, Cities and states / Comments are closed

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

By Susanne Brooks / Published: August 10, 2020

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.

Read More »

Also posted in Economics / Comments are closed

Seven Senate Republicans join growing momentum to support struggling clean energy industry

By Chris Worrell / Published: July 30, 2020

Last week, a group of Republican Senators pushed Congress to support relief for the clean energy industry, even as several of their colleagues from fossil fuel producing states pushed back against these efforts.

The clean energy sector has been hit especially hard during the COVID-19 crisis. According to an analysis of Department of Labor data, more than 620,000 workers in these occupations have been laid off since March, with most of those continuing to seek unemployment. Those numbers account for 15% of the clean energy workforce and are more than double the number of clean energy jobs created since 2017. This loss is a significant change from the pre-COVID economy where clean energy was one of the nation’s strongest sectors, growing 70% faster than the economy as a whole.

The clean energy sector plays a critical role in U.S. energy independence,is a powerful economic tool to reduce climate pollution, and has wide bipartisan support. Read More »

Also posted in Cities and states, Green Jobs, Jobs, Policy / Comments are closed

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

By Susanne Brooks / Published: July 22, 2020

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.

Also posted in Economics, Policy / Comments are closed

The broad coalition defending America’s state and national clean car standards in court

By Jim Dennison / Published: July 21, 2020

(Correction: This blog previously referred to a Blue Green Alliance estimate that the Clean Cars rollback would cost 200,000 jobs. That estimate was for the proposed rollback. We have now included the Trump administration’s own analysis of the final rollback, which found it would cost as many as 140,000 job-years.)

The legal battle over America’s Clean Car Standards is now in full swing.

EDF and a broad coalition that includes 23 states from all regions of the country recently filed court documents defending both state and national clean car standards against attacks from the Trump administration.

23 states from across the country have joined the coalition defending our nation’s Clean Car Standards.

The Trump administration recently finalized a rule that would roll back our national Clean Car Standards. This rollback would cause more than 18,000 premature deaths, cost Americans $244 billion at the gas pump, and produce as much climate pollution as running 68 coal plants for five years. The administration has also launched an unprecedented attack on states’ long-standing authority to protect people from vehicle pollution.

EDF and a group of public health and environmental groups, state and local governments, and businesses from across the economy have filed petitions challenging the rollback in court. And we recently filed a brief in a separate lawsuit arguing against the administration’s attack on state authority to limit vehicle emissions.

The broad coalition litigating to defend clean car standards includes:

  • 23 States and several cities that comprise a majority of America’s population and represent every region, from Michigan to North Carolina, Colorado, and California (seen in the map above)
  • Three Air Quality Management Districts responsible for maintaining safe, healthy air in their regions
  • 12 Public Health, Consumer, and Environmental Organizations including EDF, Center for Biological Diversity, Chesapeake Bay Foundation, Communities for a Better Environment, Conservation Law Foundation, Consumer Federation of America, Environment America, Environmental Law and Policy Center, Natural Resources Defense Council, Public Citizen, Sierra Club, and Union of Concerned Scientists
  • Dozens of Major Businesses from across the economy, including Advanced Energy Economy (whose more than 70 members include Microsoft, Google, Apple, Facebook, Lyft, Cummins, Bloomberg Energy, Comcast, Trane, and Apex Clean Energy), National Coalition for Advanced Transportation (whose 17 participating members include Tesla, Rivian, Chargepoint, and Plug In America), and 20 major power companies

In litigation over the attack on state clean car standards, our coalition has been joined by a dozen amici curiae, who have filed briefs as “friends of the court” in support of state authority. These amici include:

  • 147 Members of Congress from 32 states and the District of Columbia
  • Five Former Department of Transportation Secretaries and Four Former EPA Administrators from both Democratic and Republican administrations, as well as former EPA officials Michael Walsh and Margo Oge and Clean Air Act architect Thomas Jorling
  • Leading Researchers and Professors including University of Michigan law professor Leah Litman, New York University School of Law’s Institute for Policy Integrity, and seven climate science professors at California universities
  • Five Major Medical and Public Health Organizations including the American Thoracic Society, American Lung Association, American Medical Association, American Public Health Association, and California Medical Association
  • Four State and Local Government Organizations including the National League of Cities, U.S. Conference of Mayors, and International Municipal Lawyers’ Association, as well as the National Association of Clean Air Agencies
  • Two National Parks Organizations including the National Parks Conservation Association and Coalition to Protect America’s National Parks
  • Edison Electric Institute, the trade association representing all U.S. investor-owned power companies
  • Lyft, which has recently committed to providing 100% of its rides using electric vehicles by 2030

Additionally, six major automakers – Ford, Honda, Volkswagen, BMW, Rolls Royce, and Volvo – have independently entered into voluntary frameworks with California for continued nationwide pollution reductions from their vehicles, in recognition of California’s authority under the Clean Air Act and the continuing need for state leadership.

Protecting well-established state authority

Last September, the Trump administration purported to withdraw California’s authority to set vehicle pollution standards at a more protective level than the federal government, as well as other states’ authority to adopt these California standards. The Clean Air Act has always recognized California’s authority, which is based on the state’s historic leadership in setting vehicle standards and the need to address its serious pollution problems.

California has used this authority to set pathbreaking standards like its Zero Emission Vehicle standards, which 11 other states have adopted. Most recently, Nevada has joined New Mexico and Minnesota in announcing its plans to adopt these standards. This is just one recent example of states and businesses leading the way to lower transportation emissions. Others include California’s ongoing work to develop Advanced Clean Car 2.0 standards, its recently-finalized Advanced Clean Trucks standards (which will lead to electrification of all new medium- and heavy-duty trucks in the state by 2045), a clean trucks agreement by 15 states representing 35% of the national truck fleet (which aims to electrify 30% of new trucks in these states by 2030 and all of the states’ new trucks by 2050), and Lyft’s announcement that, in partnership with EDF, it will reach 100% electric vehicles by 2030. Defending California’s authority will be key in maintaining this momentum.

EDF and our allies have brought a legal challenge to the Trump administration’s attack on state authority. We recently filed briefs arguing that the administration’s reckless departure from longstanding precedent is arbitrary, capricious, and contrary to applicable law. The dozen amicus briefs added further breadth and depth to our coalition’s legal support for state authority.

Defending the Clean Car Standards from a rollback that harms public health, the economy, and the environment

On April 30, the Trump administration finalized a rollback that would eviscerate the national Clean Car Standards, cutting the required annual reduction in fleetwide climate pollution from about 5% to just 1.5%. Analysis by EDF shows that the rollback will result in an additional 1.5 billion tons of climate pollution, cause more than 18,000 premature deaths, and cost Americans $244 billion at the gas pump. The Trump administration’s own analysis shows that the rollback will cut as many as 140,000 job-years from the automotive sector (see page 24,988 of the Final Rule). That’s the amount of work that would employ 140,000 people full-time for one year.

Michigan Attorney General Dana Nessel told the New York Times that the rollback will be especially harmful to auto industry jobs in her state, so it’s no surprise that many automakers disagree with the administration’s approach. Ford, Honda, Volkswagen, BMW, and Rolls Royce have declined to defend the rollback in court and reaffirmed their voluntary frameworks with California. And electric vehicle manufacturers Tesla and Rivian are among the businesses challenging the rollback.

The rollback is based on massive technical and economic errors and fails to meet core statutory requirements to reduce pollution and maximize fuel economy. In fact, by the Trump administration’s own analysis, the rollback will result in net harm to Americans.

Protective clean car standards deliver critical climate, health, and consumer benefits, and EDF – along with our many partners and allies – will continue working to defend them.

You can find all the legal briefs in the cases on our website.

Also posted in Cars and Pollution, Cities and states, Clean Air Act, EPA litgation, Health, Jobs, News, Partners for Change, Policy / Comments are closed

The case against the Trump administration’s rollback of the Clean Power Plan

By Lance Bowman / Published: June 16, 2020

The Environmental Protection Agency will file a legal brief today defending its decision to dismantle the Clean Power Plan and replace it with the harmful and cynically misnamed Affordable Clean Energy (ACE) rule.

But nothing EPA says can alter the fact that ACE is destructive, costly, and unlawful. EPA projects that ACE will reduce power sector emissions by a mere 0.7 percent by 2030, and will increase pollution at nearly one in five of the nation’s coal plants, two-thirds of which are located in minority and low-income communities.

In the face of a growing and ever-perilous climate crisis calling for meaningful action, we expect EPA will claim the Clean Air Act does not permit the agency to do more to reduce emissions from the nation’s largest industrial source of carbon pollution. This claim severely distorts the statutory requirements.

EDF filed suit last summer as part of a broad coalition of states, cities, other health and environmental advocates, power companies, and clean energy trade associations. In April, the coalition filed legal briefs showing that EPA has ample authority — and a clear obligation — under the Clean Air Act to require meaningful reduction of carbon pollution from power plants. These briefs collectively demonstrate that EPA’s repeal of the Clean Power Plan is based on a gross misreading of the Clean Air Act, and the agency’s replacement rule, premised on the same misreading, fails to live up to the statutory command that power plants use the “best system of emission reduction” to limit their carbon pollution.

Here are the key arguments we’ve made against the Clean Power Plan rollback and ACE.

Read More »

Also posted in Clean Air Act, Clean Power Plan, EPA litgation, News, Partners for Change, Policy / Comments are closed