Climate 411

Three Climate Leadership Openings Corporate America Can’t Afford to Miss

By Ben Ratner, Senior Manager, Corporate Partnerships Program

Too much ink has been spilled on the anti-climate furor of the Koch brothers. If we lose on climate, it won’t be because of the Koch brothers or those like them.

It will be because too many potential climate champions from the business community stood quietly on the sidelines at a time when America has attractive policy opportunities to drive down economy-endangering greenhouse gas emissions.

Corporate executives have the savvy to understand the climate change problem and opportunity. They have the incentive to tackle it through smart policy, and the clout to influence politicians and policy makers. Perhaps most importantly, they can inspire each other.

And today, they have a chance to do what they do best: lead. Corporate climate leadership has nothing to do with partisanship – it’s ultimately about business acumen.

For starters, here are three immediate opportunities smart companies won’t want to miss.

1. Clean Power Plan: Will spur new jobs and investments.

The Obama administration’s plan will cut emissions from coal plants by 30 percent by 2030. This is expected to trigger a wave of clean energy investment and job creation. It will also seize energy efficiency opportunities and take advantage of America’s abundant and economic supply of natural gas.

Every company with an energy-related greenhouse gas footprint has something to gain from a cleaner power mix. Each one of those companies therefore has a stake in theClean Power Plan.

Google and Starbucks – two large and profitable American companies by any standard – are among more than 200 businesses that have already stepped up to voice their support.

Who will follow them?

2. First-ever methane rules: Will make industry more efficient.

The U.S. Environmental Protection Agency’s upcoming methane emission rules are another opportunity for business leaders to weigh in.

The rules are part of a White House plan that seeks to reducemethane emissions – a major contributor to global warming and resource waste – by almost half in the oil and gas industry.

Globally, an estimated 3.6 billion cubic feet of natural gas leaks from the sector each year. This wasted resource would be worth about $30 billion in new revenue if sold on the energy market.

Some oil and gas companies that have already taken positive steps include Anadarko, Noble and Encana, which helped develop the nation’s first sensible methane rules in Colorado.

Engaging to support strong and sensible national standards isa good next step for companies in this space. And for others with a stake in cleaning up natural gas, such as chemical companies, and manufacturers and users of natural gas vehicles.

3. New truck standards: Can help companies cut expenses and emissions.

New clean truck standards are scheduled for release this summer. Consumer goods companies and other manufacturers stand to see significant dollar and emissionsavings as they move their goods to market.

Cummins, Wabash, Fed Ex, Con-Way, Eaton and Waste Management are among those that applauded the decision to move forward with new standards.

Putting capitalism to work

American business leadership is still the global standard and will remain so if it adds climate policy to its to-do list. While it will take time to build the bi-partisan momentum for comprehensive national climate legislation, there are immediate opportunities to move the needle.

Which companies will take the field?

Image source: Flickr/Don McCullough

This post originally appeared on our EDF Voices blog.

Also posted in Clean Power Plan, Economics, Energy / Comments are closed

Better Fuel Efficiency for Heavy Duty Trucks — A Target Worth Setting

1200px-Kenworth_truck

“Kenworth truck” by Lisa M. Macias, U.S. Air Force via Wikipedia

A pair of critical analyses were just released that, together, make clear the need for a strong second generation heavy truck fuel efficiency and greenhouse gas standard.

The first piece is the U.S. Energy Information Agency’s (EIA) preliminary Annual Energy Outlook for 2015. I went right to the projection of fuel efficiency for new heavy trucks in 2020, which is 7.0 miles per gallon, and compared that to the projection for 2030, which is 7.2 miles per gallon. A three percent increase in efficiency for a decade is not too impressive.

As a result of this lack of projected progress on fuel efficiency and other factors, EIA expects that greenhouse gas emissions from heavy trucks will increase more than any other single end-use source by 2040 – an additional 120 million metric tons a year.

The other recent analysis is from The International Council on Clean Transportation. It released two papers on heavy truck fuel efficiency: one reviewed the potential of current and emerging efficiency technology; the other examined the cost effectiveness of these technologies.

Among the group’s findings are:

  • Already available tractor-trailer technologies can achieve 9 miles per gallon, deliver payback periods of less than a year, and be widely deployed in the 2020 to 2025 time frame.
  • Advanced efficiency technologies, now emerging in the marketplace, can double fuel economy to 11 to 12 miles per gallon, with payback periods of 18 months or less in the 2025 to 2030 time frame.
  • Diverse technology approaches – meaning technology packages with differing contributions from aerodynamic, engine, and other technologies – can achieve similar efficiency results.
  • Even under very conservative assumptions — fuel prices remaining as low as $3.10 per gallon diesel, higher technology costs, and a high discount rate of 10 percent — the most advanced technology packages have payback periods of only 1.4 to 2.2 years.
  • Typical first owners of tractor-trailers with efficiency technology packages up to 9 miles per gallon would see fuel savings 3 to 9 times greater than the upfront technology cost over the period of ownership.

ICCT’s findings demonstrate that we have the technology to cost-effectively cut truck fuel consumption in half compared to 2010 levels. EIA’s projections demonstrate that, without well designed performance-based standards, truck manufacturers are unlikely to deploy these highly cost-effective solutions.

There is good news in EIA’s report, too. The 7.0 miles per gallon in 2020 is up from 6.0 miles per gallon in 2012. The increase can be attributed to the first round of Heavy Truck Fuel Efficiency and Greenhouse Gas Standards set by President Obama in 2011.

We know that well-designed fuel efficiency standards work because we are seeing it in the market today. For the second generation standards that will be announced this spring, we urge the administration to incentivize the full scale deployment of the advanced technologies highlighted in the ICCT analysis.

Also posted in Cars and Pollution, Economics / Read 1 Response

A Win for Cleaner Air and a Stronger Economy: Court Dismisses Challenges to Fuel Efficiency and Greenhouse Gas Standards for Big Trucks

Source: Flickr/MoDOT Photos

Source: Flickr/MoDOT Photos

Today, the U.S. Court of Appeals for the Washington D.C. Circuit dismissed challenges to America’s historic, first-generation standards to improve fuel efficiency and reduce greenhouse gas emissions from large trucks and buses.

The Environmental Protection Agency (EPA) and Department of Transportation (DOT)  standards are based on common sense, highly cost-effective technologies that will make our nation’s fleet of large trucks and buses more efficient while also reducing harmful, climate-destabilizing pollution, limiting our dependence on foreign oil, and saving money for both truckers (in the form of lower fuel costs) and all Americans (in the form of lower shipping costs).

These cross-cutting benefits have won broad-based support for the standards — including support from America’s truck and engine manufacturers, from states, and from public health and environmental groups.

In response to President Obama’s announcement of these first generation standards in 2011, many of these organizations sent letters of support. Here are just a few examples:

Cummins Inc. recognizes the benefits for the country of a National Program to address greenhouse gases (OHOs) and fuel efficiency from medium and heavy-duty trucks and buses. Cummins fully supports the adoption of such a National Program and welcomes this opportunity to be a partner in helping to advance that goal.
Cummins Inc.

[Daimler] is committed to working with EPA and NHTSA, the states, and other interested parties to help address three of the most pressing issues facing the U.S. today and into the future: greenhouse gas reductions, fuel efficiency improvements, and increased energy security.
Daimler Trucks North America

These standards apply to vehicles manufactured between 2014 and 2018. That means they are now in their second year of effectiveness, and they are driving technological innovations that are cleaning our air and helping American truck manufacturers to thrive. Through October of 2014, sales of fuel efficient trucks were 20 percent higher than their 2013 levels. 2015 is projected to be even stronger, with forecasts suggesting it will be the third strongest year ever for truck sales.

Martin Daum, president and CEO of Daimler Trucks North America, put it succinctly:

[These standards] are very good examples of regulations that work well.

That is very good news, because the President has announced that EPA and DOT will soon issue second-generation greenhouse gas and fuel efficiency standards for large trucks. We anticipate that those standards will be proposed late this spring or early in summer.

Many of the same companies that stood with the President in announcing a blueprint to develop the second phase standards also collaborated on the first generation clean trucks standards. Among those supporting the President’s announcement of second phase standards are major U.S. manufacturers and fleets such as Conway, Cummins, Eaton, Wabash National, Waste Management and the American Trucking Association.

The second generation standards will create an important opportunity to further reduce greenhouse gases and enhance the fuel economy of our nation’s trucks.

EDF is calling on the Environmental Protection Agency and Department of Transportation to set new standards for heavy trucks that cut fuel consumption by 40 percent in 2025 compared to 2010. That equates to an average of 10.7 miles per gallon for new tractor-trailer trucks. Technology solutions are available today to meet the goal, and strong standards will further drive innovation.

In fact, Daimler Trucks North America may have provided the best example yet of our future potential with its entry in the Department of Energy Super Truck program. Daimler announced that its team has:

[A]chieved 115 percent freight efficiency improvement, surpassing the Department of Energy program’s goal of 50 percent improvement.

Daimler’s truck registered 12.2 miles per gallon recently – a leap above the six miles per gallon typical of pre-2014 trucks.

Rigorous second generation standards will also secure critical benefits:

When Americans stand together, we can forge big gains in strengthening our economy and protecting our environment.

Also posted in Cars and Pollution, Clean Air Act, News, Policy / Comments are closed

New Climate-Economic Thinking

By Gernot Wagner and Martin Weitzman

Each ton of carbon dioxide emitted into the atmosphere today causes about $40 worth of damages. So at least says standard economic thinking.

A lot goes into calculating that number. You might call it the mother of all benefit-cost analyses. It’s bean-counting on a global scale, extending out decades and centuries. And it’s a process that requires assumptions every step along the way.

The resulting $40 figure should be taken for what it is: the central case presented by the U.S. Government Interagency Working Group on Social Cost of Carbon when using its preferred 3% discount rate for all future climate damages. But it is by no means the full story.

Choose a different discount rate, get a different number. Yale economist Bill Nordhaus uses a discount rate of slightly above 4%. His resulting price is closer to $20 per ton of carbon dioxide. The Stern Review on the Economics of Climate Change uses 1.4%. The resulting price per ton is over $80.

And the discount rate is not the only assumption that makes this kind of a difference. In Climate Shock, we present the latest thinking on why and how we should worry about the right price for each ton of carbon dioxide, and other greenhouse gases, emitted into the atmosphere. There are so many uncertainties at every step—from economic projections to emissions, from emissions to concentrations, from concentrations to temperatures, and back to economics in form of climate damages—that pointing to one single, final number is false precision, misleading, or worse.

Of course, that does not mean that we shouldn’t attempt to make this calculation in the first place. The alternative to calculating the cost of carbon is to use a big fat zero in government benefit-cost calculations. That’s clearly wrong.

Most everything we know about what goes into calculating the $40 figure leads us to believe that $40 is the lower bound for sensible policy action. Most everything we know that is left out would push the number higher still, perhaps much higher.

As just one example, zero in on the link between carbon concentrations in the atmosphere and eventual temperature outcomes. We know that increasing concentrations will not decrease global temperatures. Thank you, high school chemistry and physics. The lower bound for the temperature impact when carbon concentrations in the atmosphere double can be cut off at zero.
In fact, we are pretty sure it can be cut off at 1°C or above. Global average temperatures have already warmed by over 0.8°C, and we haven’t even doubled carbon concentrations from preindustrial levels. Moreover, the temperature increases in this calculation should happen ‘eventually’—over decades and centuries. Not now.

What’s even more worrying is the upper tail of that temperature distribution. There’s no similarly definitive cut-off for the worst-case scenario. In fact, our own calculations (based on an International Energy Agency (IEA) scenario that greenhouse gas concentrations will end up around 700 parts per million) suggest a greater-than-10% chance of eventual global average warming of 6°C or above.

Focus on the bottom row in this table. If you do, you are already ahead of others, most of whom focus on averages, here depicted as “median Δ°C” (eventual changes in global average surface temperatures). The median is what we would expect to exceed half the time, given particular greenhouse gas concentrations in the atmosphere. And it’s bad enough.

But what really puts the “shock” into Climate Shock is the rapid increase in probabilities of eventual temperatures exceeding 6°C, the bottom row. While average temperatures go up steadily with rising concentrations, the chance of true extremes rises rapidly:

That 6°C is an Earth-as-we-know-it-altering temperature increase. Think of it as a planetary fever. Normal body temperatures hover around 37°C. Anything above 38°C and you have a fever. Anything above 40°C is life-threatening.

Global average warming of 3°C wouldn’t be unprecedented for the planet as a whole, in all of it geological history. For human society, it would be. And that’s where we are heading at the moment—on average, already assuming some ‘new policies’ to come into play that aren’t currently on the books.

It’s the high-probability averages rather than low-probability extremes that drive the original $40 figure. Our table links greenhouse gas concentrations to worryingly high probability estimates for temperatures eventually exceeding 6°C, an outcome that clearly would be catastrophic for human society as we know it.

Instead of focusing on averages then, climate ought to be seen as a risk management problem. Some greenhouse gas concentration thresholds should simply not be crossed. The risks are too high.

This kind of focus on temperature extremes is far from accepted wisdom. We argue it ought to be.

Gernot Wagner and Martin L. Weitzman are co-authors of Climate Shock (Princeton University Press, 2015). This post was originally published by The Institute for New Economic Thinking.

Also posted in Economics, Energy / Comments are closed

Experts Agree: We Can Preserve Electric Reliability While Protecting Public Health Under the Clean Power Plan

power-poles-503935_1920Last June, the Environmental Protection Agency (EPA) proposed the first ever national carbon pollution standards for existing power plants. Fossil fuel-fired power plants account for almost 40% of U.S. carbon dioxide emissions, making them the largest source of greenhouse gas emissions in the nation and one of the single largest categories of greenhouse gas sources in the world.

Under the Clean Power Plan, these emissions will decline to 30% below 2005 levels by 2030 – accompanied by a significant decline in other harmful pollutants from the power sector, such as sulfur dioxide and oxides of nitrogen. The power sector is already halfway to this target, already 15% below 2005 levels.

The EPA has carefully designed the Clean Power Plan to provide extensive flexibility so that states and power companies can continue to deliver a steady flow of electricity while deploying cost-effective measures to reduce carbon pollution over the next fifteen years.

The Clean Power Plan:

  • Allows states and power companies to determine the optimal timing of emission reductions over a ten year-long averaging period starting in 2020;
  • Allows states to decide how to most cost-effectively reduce carbon pollution, including through market-based programs and clean energy policies that have been successfully used around the country; and
  • Allows states to cooperate with one another in complying with the long-term reduction goals.

In addition, the Clean Power Plan preserves the ability of grid operators to deploy long-standing tools and processes that have been successfully used in the past to keep the electric grid functioning reliability during periods of significant change. EDF has released a white paper identifying these well-established tools and practices, and describing how they will continue to ensure a reliable grid under the Clean Power Plan.

Grid operators are well-equipped to ensure reliability as we transition to a cleaner and more efficient power sector, just as they have under all previous Clean Air Act regulations. EPA’s proposed Clean Power Plan is eminently achievable, reliable, and cost-effective – and integral to our climate security, human health and prosperity.

Ample tools and practices exist to ensure a clean and reliable grid

Grid operators have long-standing tools and practices available to ensure that our nation’s grid continues to provide power reliably. These include well-established planning principles that have motivated large amounts of new generation year in, year out. Since 2000, roughly 30 gigawatts of new generation have been added per year, largely consisting of low or zero-emitting resources such as wind turbines and natural gas combined cycle power plants. Over the next two years, the solar industry alone expects to add another 20 gigawatts of power. In addition, reliability is ensured through tools and practices including:

  • Transmission Upgrades: Because upgraded transmission infrastructure can help move generation more easily, transmission upgrades can enhance reliability without needing to add new generation.
  • Long-term forecasting: Grid planners and reliability regulators forecast the needs of the electric grid years in advance. By determining how much transmission and generation will be needed, any long-term reliability issue can be identified and resolved quickly and effectively.
  • Reliability Must-Run (“RMR”) Contracts: Short term contracts that, in the case of sudden and unexpected retirements or plant losses, require a unit to be kept operational until reliability can be ensured through the use of longer term tools.
  • Operating Procedures: Manuals and standard practices exist to ensure that, in the case of particular reliability scenarios, grid operators know the best way to respond.

These tools are already in use throughout the country, and have proven extremely effective in maintaining reliability over the last few decades – even as the power sector has begun a rapid transition towards cleaner sources of electricity, and has implemented important public health protections under the Clean Air Act. In the Mid-Atlantic region, for example, roughly 12,500 MW of coal-fired power plant capacity retired from 2010 to 2014 due to economic reasons. Employing these well-established tools and practices, the region saw a large quantity of new resources added, without reducing reliability.

Clean energy resources and reliability

In complying with the Clean Power Plan, states and power companies will be able to draw on reliable, low-cost clean energy resources like demand response, renewable energy, and energy efficiency. Energy efficiency is almost three times cheaper than the next cheapest alternative and primed for enormous growth. Resources like demand response help prevent blackouts, such as in the case of the 2013 polar vortex. And renewable energy continues to grow, with states such as Maine, California, and Iowa already using it to meet close to one quarter of their entire demand.

No reliability crisis has resulted from implementing clean air standards

Claims that we can’t have clean air and a reliable power grid are as old as the Clean Air Act itself — and have never proven accurate. As far back as the 1970s, a power company issued an ad claiming the lights would go out as a result of the Clean Air Act. In recent years, some power companies that oppose public health protections under the Clean Air Act have made similar claims that the Mercury and Air Toxics Standards and Cross-State Air Pollution Rule will harm electric reliability.

These assertions have consistently been discredited: in the 45-year history of the Clean Air Act, no emission standard has ever caused the lights to go out. This is a testament both to the rigorous process and analyses EPA relies on to develop Clean Air Act standards, as well as the effective tools that grid operators and other authorities use to manage reliability on a short-term and long-term basis.

Numerous states, power companies, and reliability experts have indicated that the Clean Power Plan is achievable

A diverse collection of energy experts and power company officials have recently made comments noting the feasibility of achieving the emission reduction goals of the Clean Power Plan; describing their experience in reducing carbon emissions in a cost-effective way as well as explaining approaches to ensure reliability is maintained while making progress to reduce carbon emissions.

Written Testimony of Kathleen Barrón, Senior Vice President, Exelon Corporation, Before the Federal Energy Regulatory Commission: Technical Conference on EPA’s Clean Power Plan (Feb. 19, 2015):

Exelon strongly supports EPA’s goal of reducing carbon emissions from the electric power sector. As EPA notes in the Clean Power Plan, the current level of carbon emissions is environmentally unsustainable, and action must be taken now in order to prevent significant, irreversible environmental damage and major economic loss. By providing regulatory certainty, well-designed carbon reduction rules will be a driving force to modernize our aging electric system so that our customers will continue to have a safe and reliable electric system to support our Nation’s economic growth.”

Written Testimony of Susan F. Tierney, Ph.D, Analysis Group, Before the House Comm. on Energy and Commerce: Hearing to Examine EPA’s Proposed 111(d) Rule for Existing Power Plants (Apr. 14, 2015):

The Clean Power Plan provides states a wide range of compliance options and operational discretion that can prevent reliability issues while also reducing carbon pollution and compliance costs. Experience has shown that such approaches allow for seamless, reliable implementation of emissions-reduction targets. By contrast, many stakeholders’ concerns about the Clean Power Plan presume inflexible implementation, are based on worst-case scenarios, and assume that policy makers, regulators, and market participants will stand on the sidelines until it is too late to act. There is no historical basis for these assumptions.”

Joshua Epel, Chairman, Colorado Public Utilities Commission, Before the Federal Energy Regulatory Commission: Western Regional Technical Conference on EPA’s Clean Power Plan (Feb. 25, 2015).

In Colorado we have charted our own course to decarbonize our electric system. . . . Now when the Clean Power Plan is finalized I believe that Colorado as a state will come up with an approach which will meet the revised goals . . . . I’m very pleased with some of the steps we have taken with just approved unprecedented amounts of utility scale solar . . . . We are doing a lot with wind, we are doing a lot with innovat[ive] approaches actually passed by the legislature. . . . So we think there’s a lot of innovative tools for Colorado to use.”

Flexibility in the Clean Power Plan

EPA’s Clean Power Plan wholly preserves the ability of grid operators, power companies, and other institutions to deploy the well-established tools and practices that ensure the reliable operation of the power grid.

The Plan provides state-wide goals for emission reductions, while affording states ample flexibility in how those goals must be met. States are not limited to using any particular pathway to meet the Plan, and can deploy a variety of existing and new policies to meet the state-wide greenhouse gas reduction goals, including flexible market-based tools. This already existing flexibility allows grid operators the freedom to use long-standing and tested actions to ensure reliability.

Although the Clean Power Plan represents an important step forward for our country, it builds on a nation-wide trend toward a cleaner and more efficient power sector that is already under way. As noted above, carbon emissions from the power sector are already 15% lower than in 2005 – reflecting a sharp decline in coal-fired power generation, as well as a significant increase in natural gas generation and renewables and rising investment in energy efficiency.

Since 2005, many fossil fuel-fired power plants have also installed modern pollution controls in response to state and federal clean air standards adopted to protect public health from harmful particulates, ozone-forming pollution, and toxic air pollutants such as mercury and arsenic.

The robust system of reliability safeguards described above has responded deftly to these developments, ensuring a consistent and reliable supply of affordable power while helping reduce harmful air pollution. There is every reason to believe that the Clean Power Plan, with its extended implementation timeframe and numerous compliance flexibilities, will similarly achieve important reductions in air pollution without compromising electric reliability.

For more information please read our white paper: Protective Carbon Pollution Standards and Electric Reliability

Also posted in Clean Air Act, Clean Power Plan, Energy, News / Read 2 Responses

Let There Be No Doubt: We Can Cut Truck Emissions & Fuel Use Today

(This post originally appeared on our EDF+Business blog)

The can-do spirit of American automotive engineers has been on full display over the past few weeks, as truck manufacturers unveil innovation after innovation to boost the efficiency of heavy trucks that move companies’ freight cross-country.

It is crystal clear that we possess— today— the know-how to dramatically cut fossil fuel consumption and greenhouse gas emissions from heavy trucks. Moreover, we can do this while saving consumers hundreds of dollars annually and giving trucking companies the high-quality, affordable equipment they require.

DTNA Super Truck HighSome of the recently-announced advances include:

All of these fuel-saving solutions are available today thanks to the acumen of engineers at these leading manufacturers. The first round of well-designed federal fuel efficiency and greenhouse gas standards are also driving innovations like these to the market.

Even so, the strides we are making today should only be the beginning.

Daimler’s Super Truck Doubles Efficiency

The team at Daimler Trucks North America provided the best example yet of our future potential with its entry in the Department of Energy Super Truck program. DTNA announced its team has “achieved 115 percent freight efficiency improvement, surpassing the Department of Energy program’s goal of 50 percent improvement.” Its truck registered 12.2 mpg recently – a leap above the 6 MPG typical of pre-2014 trucks.

Improvements where made across the platform, including electrified auxiliaries, controlled power steering and air systems, active aerodynamics, a long-haul hybrid system, and trailer solar panels. Engine efficiency advancements were particularly noteworthy – given the permanence of such solutions.  The Detroit Diesel engine reported a 50.2 percent engine brake thermal efficiency which was combined with further improvements from engine downspeeding and the use of a waste-heat recovery system.

Daimler’s fantastic results demonstrate that – when given a goal anchored in science, economics and innovation – our engineers can deliver phenomenal results.    Daimler should now lead the way in driving these solutions to national and global scale.

Setting the Bar Higher on Fuel Efficiency and Emissions

The time has come to give our engineers a new goal.

EDF is calling on the Environmental Protection Agency and Department of Transportation to set new fuel efficiency and greenhouse gas standards for heavy trucks that cut fuel consumption by 40 percent in 2025 compared to 2010.  This equates to an average of 10.7 mpg for new tractor-trailer trucks.

President Obama has called for new standards. These are expected to be announced late spring and were sent to the White House Office of Management and Budget for review this past week.

The first generation standards have created a strong, industry-supported foundation on which the coming standards can be built. These standards push improvements in all aspects of trucks through complementary engine and vehicle standards.  In fact, Daimler – a leading manufacturer of heavy trucks with the engineering prowess to set the high bar of 12.2 mpg for the Super Truck program – has recognized these standards as “very good examples of regulations that work well.”

We Have The Technology

Let there be no doubt that if we set a bold goal for 2025 we will meet it:

Setting a bold goal will help us take these technologies from the test track to the highway over the next decade, helping companies reduce both their costs and carbon risks, while delivering benefits for communities’ air quality and the climate.

Also posted in Cars and Pollution, Clean Air Act, Policy / Comments are closed