Climate 411

New Truck Efficiency Standards Are Great News for American Innovation

By Jason Mathers / Published: January 31, 2014

We’ve partnered with businesses, builders, and local communities to reduce the energy we consume. When we rescued our automakers, for example, we worked with them to set higher fuel efficiency standards for our cars. In the coming months, I’ll build on that success by setting new standards for our trucks, so we can keep driving down oil imports and what we pay at the pump.

– 2014 State of the Union Address

First, here’s the bad news:

Climate pollution from America’s heavy trucks is projected to increase by more than 130 million tons between now and 2040. That’s expected to be the largest increase in emissions from any single source.

The average new heavy-duty diesel truck sold last year got slightly less than six miles per gallon.

Most of these trucks travel upwards of 120,000 miles and burn more than $80,000 worth of fuel per year.

This inefficiency has real costs for our economy. We import millions of barrels of oil to fuel heavy-duty trucks. Businesses, both small and large, spend billions on the fuel needed to move freight. You and I pay for this too, when we buy those products.

Now here’s the good news:

It doesn’t have to be this way. We have the tools today that we need to change this.

We have the technology to decrease freight truck emissions. We can cut 20 percent off our current trajectories by 2030, and go much further by 2040.

In fact, a recent analysis by the American Council for an Energy-Efficient Economy found that it’s realistic to expect new trucks to achieve something approaching a 40 percent fuel consumption reduction, compared to 2010 trucks, within the next decade,

Well-designed federal standards can foster the innovation necessary to bring more efficient and lower emitting trucks to market. Manufacturers need to be confident in market demand in order to develop and launch efficiency improvements. Scaled production can drive down costs, further enhancing the payback truck fleets will experience through lower fuel bills.

EDF has set out a blueprint for rigorous greenhouse gas and fuel efficiency standards. Through smart, well designed policies and American innovation, we can cut climate pollution and save fuel costs while strengthening our security and winning the race to deploy clean energy technologies in the global marketplace.

Many companies already have developed — and are bringing to market — the tools we need to meet a strong standard.

Examples include:

Eaton, a manufacturer of truck transmissions — they’ve launched a powertrain package that can improve fuel efficiency by up to six percent.

Cummins, Inc. and Peterbilt Motors Co., which build truck engines and manufacture trucks, respectively – they partnered last year to build a truck that uses 50 percent less fuel than typical long-haul tractors, according to an article in the Indianapolis Star. It averaged 9.9 miles a gallon in road tests. They did this through a suite of improvements; including capturing otherwise wasted thermal energy.

Smart Truck Systems, a supplier of aerodynamic products to the trucking industry – they have a product that can cut fuel consumption from tractor-trailer combination trucks by over 10 percent through advanced aerodynamics.

Also available to us:

To understand the positive economic potential of adopting strong truck fuel efficiency standards, we only need to look back to the start of this month.

On January 1st, our nation’s biggest trucks became subject – for the first time ever – to fuel efficiency standards. These standards cover trucks from large pick-ups to tractor-trailers. They will cut climate pollution by almost 300 million tons while saving truck operators $50 billion.

For combination tractor-trailer trucks, these standards will cut annual fuel costs by more than $18,000 at today’s prices. The fuel savings will pay back the increase in upfront costs in less than five months.

Companies that rely on trucking to move goods stand to benefit significantly too. These companies will see a decrease of around eleven cents in the total cost-per-mile to move freight. Across their supply chain, large freight shippers will save millions of dollars each year because of this rule.

These are real savings that businesses, big and small, are starting to see in their bottom line today.

These first generation standards were created with the broad support of the trucking industry and many other key stakeholders. Among the diverse groups that supported the standards were the American Trucking Association, Engine Manufacturers Association and the Truck Manufacturers Association, the United Auto Workers — and of course EDF.

But this is just the beginning.

With the right political and commercial will, we can build on the partnership created during the development of the current standards to find common ground on the next phase of truck efficiency rules.

We can do this in a way that enables American businesses to thrive, cuts the need for imported oil by hundreds of millions of barrels a year, and slashes climate pollution by more than 100 million tons a year.

That’s why it was great to hear President Obama’s call to action in the State of the Union Address about the next phase of truck standards. We already knew that we could do it – now it looks like we will.

(Click here to read more about this issue, including EDF’s blueprint for rigorous greenhouse gas and fuel efficiency standards)

Also posted in Cars and Pollution, Economics, Policy / Comments are closed

The Silver Bullet Of Climate Change Policy

By Gernot Wagner / Published: January 24, 2014

(This post originally appeared on Forbes)

By Bob Litterman and Gernot Wagner

Whenever the conversation turns to climate change, someone is sure to opine that there’s no silver bullet. The issue is simply too complex to have one solution. When you focus on all the changes that need to occur to reduce greenhouse gas emissions globally it seems like a multifaceted approach is the only way forward.

Most of the world’s vexing problems share that feature. Mideast peace, nuclear non-proliferation, Eurozone stability, and plenty of other national security problems have no single right plan of attack. Some past plans might have brought us tantalizingly close to a seeming solution, but then reality started interfering once again, reconfirming the complexity of it all.

Climate change must surely be in that category. No single country, no single technology, no single approach can seemingly solve this one for us once and for all. Picking a single technology will almost inevitably end in some form of disappointment. Bureaucrats, the saying goes, ought not to try to pick winners. Leave that to venture capitalists for whom failure is a way of life. For every Apple and Facebook, there are dozens who never make it out of the garage. And clean technology doesn’t yet even have a single Apple and Facebook as the standout approach revolutionizing the field.

Source: NYU

It turns out, though, that how you frame the issue is crucial. If you think like an engineer there are dozens of challenges. If you think like an economist, there is one. It’s guiding the ‘invisible hand’. How can you create the appropriate incentive to decrease the pollution that’s causing climate change? For that, the government need not be in the business of picking winners at all. What it should—and can—do is identify the loser that’s been clear for decades: greenhouse gas pollution. And the solution is equally clear: create incentives to reduce emissions by pricing it. If we make this one change, most other actions that are needed will follow.

That’s what the European Union has done by capping carbon emissions from its energy sector, including large industrials, covering almost half of total carbon emissions. That’s what California is doing with over 80 percent of its total global warming emissions. It’s what China is experimenting with in seven city and regional trials, including in Beijing and Shanghai. All these systems put a price on greenhouse gas pollution.

On the other side of the ledger, there are still much larger incentives to consume fossil fuels in many other countries. The International Energy Agency estimates that global subsidies are well over $500 billion. These subsidies, which incentivize emissions, sadly dwarf the paltry incentives to reduce them. Free marketeers, small government advocates, and others who dislike distorting government subsidies should be appalled at the tax money poured into fossil fuels.

There’s one simple principle that’s been around in economics for so long that no economist worth his or her degree would question the conclusion: increase the price, watch the quantity demanded go down. It’s such a universal truism that economists call it the “Law of Demand.” Generations of graduate students have estimated the effects of price on demand for anything from the generic widget to demand for car miles driven. People may be irrational at times, but one thing that we know for sure is that they respond to incentives.

Everything we know from decades of the study of human behavior would lead us to believe that carbon pollution will go down as the price on emissions increases. The only interesting question is by how much.

The prescription then for anyone seriously concerned about climate change is simple: price carbon to the point where its now unpriced damages are incorporated into the price, and get out of the way. It’s simple. It works. It’s conservative to the core.

It’s also a silver bullet solution if there ever was one.

Bob Litterman is a Partner at Kepos Capital, LP. Gernot Wagner is a senior economist at the Environmental Defense Fund.

Also posted in Economics, Policy / Authors: / Read 1 Response

A Milestone in a Vitally Important Clean Air Act Case Before the Supreme Court

By Pamela Campos / Published: January 23, 2014

This week, we saw another milestone in a vitally important Supreme Court case about the Clean Air Act and our environment.

On Tuesday, EDF and a coalition of environmental groups joined with the U.S. Environmental Protection Agency (EPA) and 15 states in filing briefs to defend EPA’s rules requiring new and rebuilt industrial sources to use cost-effective technology to limit climate pollution.

(The states are New York, California, Connecticut, Delaware, Illinois, Iowa, Maine, Maryland, Massachusetts, New Hampshire, New Mexico, Oregon, Rhode Island, Vermont, and Washington, plus the City of New York. You can read all the briefs here.)

In October, the Supreme Court denied review of EPA’s historic endangerment finding and clean cars standards, and granted review of a single question: whether EPA permissibly concluded that the regulation of greenhouse gas emissions from motor vehicles triggered the application of the Clean Air Act’s Prevention of Significant Deterioration (PSD) and Title V permitting programs to sources of greenhouse gases.

The permitting programs at issue – PSD and Title V – ensure that large new industrial sources use modern cost-effective solutions to mitigate climate pollution in the same way they have effectively addressed other pollutants under the nation’s clean air laws, and facilitate compliance with the entire range of Clean Air Act programs.

The Clean Air Act is clear that both programs apply to large sources emitting “any air pollutant,” and EPA’s regulations have required PSD and Title V permits for large sources of air pollutants subject to regulation for decades.

The petitioners in this case and those filing amicus briefs on their behalf, many of whom are tied to a $900 million effort to obstruct progress on climate and clean energy, want to upend these long-standing protections.

In the process, they present readings of the Clean Air Act that would exclude common-sense modern pollution controls for climate pollution — as well as hydrogen sulfide, sulfuric acid mist, and other air pollutants long regulated under our nation’s clean air laws.

The central theme in their arguments? Someday, EPA might apply these clean air protections to too many emissions sources.

So let’s take a look at greenhouse gas permitting over the last three years:

  • As of this writing, approximately 140 permits have been issued nationwide.
  • Permits cover industries ranging from iron and steel plants to cement plants to power plants.
  • Almost all states are handling their own greenhouse gas permitting.

Meanwhile, EPA is carefully considering next steps for greenhouse gas permitting requirements, including options for lowering the number of sources that might require permits in the future.

The next milestones in the case are coming up soon. Reply briefs are expected on February 15, and the Court will hear oral argument on Monday, February 24.

In the meantime, you can read more about the case here.

Also posted in Clean Air Act, EPA litgation, News, Policy / Comments are closed

Why the cost of carbon pollution is both too high and too low

By Gernot Wagner / Published: January 23, 2014

(This post originally appeared on EDF Voices)

Tell someone you are a “climate economist,” and the first thing you hear after the slightly puzzled looks subside is, “How much?” Show me the money: “How much is climate change really costing us?”

Here it is: at least $40.

That, of course, isn’t the total cost, which is in the trillions of dollars. $40 is the cost per ton of carbon dioxide pollution emitted today, and represents the financial impacts of everything climate change wreaks: higher medical bills, lost productivity at work, rising seas, and more. Every American, all 300 million of us, emit around twenty of these $40-tons per year.

The number comes from none other than the U.S. government in an effort to uncover the true cost of carbon pollution. This exercise was first conducted in 2010. It involved a dozen government agencies and departments, several dozen experts, and a fifty-page, densely crafted “technical support document,” replete with some seventy, peer-reviewed references and an even more technical appendix.

Cass Sunstein, the Harvard legal scholar of Nudge fame, who was co-leading the process for the White House at the time, recently declared himself positively surprised how the usual interest-group politics were all-but absent from the discussions throughout that process. This is how science should be done to help guide public policy.

The cost of carbon pollution is too low

The number originally reached in 2010 wasn’t $40. It was a bit more than half as much. What happened? In short, the scientific understanding of the impacts of rising seas had advanced by so much, and the peer-reviewed, economic models had finally caught up to the scientific understanding circa 2007, that a routine update of the cost of carbon number resulted in the rather dramatic increase to near $40 per ton. (There are twenty pages of additional scientific prose, if you want to know the details.)

In other words, we had been seriously underestimating the cost of climate change all along. That’s the exact opposite of what you hear from those who want to ignore the problem, and the $40 itself is still woefully conservative. Some large companies, including the likes of Exxon, are voluntarily using a higher price internally for their capital investment decisions.

And everything we know about the science points to the fact that the $40 figure has nowhere to go but up. The more we know, the higher the costs. And even what we don’t knowpushes the costs higher still.

Howard Shelanski, Sunstein’s successor as the administrator of the Office of Information and Regulatory Affairs (OIRA, pronounced “oh-eye-ruh”), has since presided over a further update of the official number. In fact, this one didn’t incorporate any of the latest science. It was simply a minor technical correction of the prior update, resulting in a $1 revision downward. (The precise number is now $37, though I still say $40 at cocktail parties, to avoid a false sense of precision. Yes, that’s what a climate economist talks about at cocktail parties.)

And once again, it all demonstrated just how science ought to be done: Sometimes it advances because newer and better, peer-reviewed publications become available. Sometimes it advances because someone discovers and fixes a small mathematical error.

Your input is needed

While announcing the correction, Shelanski added another layer of transparency and an opportunity for further refinements of the numbers: a formal call for public comments on the way the cost of carbon figure is calculated, open through January 27 February 26th.

We are taking this opportunity seriously. EDF, together with our partners at the Natural Resource Defense Council, New York University School of Law’s Institute for Policy Integrity, and the Union of Concerned Scientists, is submitting formal, technical comments in support of the administration’s use of the cost of carbon pollution number as well as recommending further revisions to reflect the latest science.

The bottom line, as economists like to put it, is that carbon pollution costs society a lot of money. So as the technical experts trade scientific papers, you can help by reminding our leaders in Washington that we need strong, science-based climate policies.

Update (on January 24th): The official comment period just was extended for another month, through February 26th. More time to show your support.

Also posted in Economics, Science, Setting the Facts Straight / Read 1 Response

New Power Plant Rule: Strong, Smart, and Legally Sound

By Megan Ceronsky / Published: January 10, 2014

Yesterday EPA published its revised proposed Carbon Pollution Standards for new power plants. When finalized, these standards will be the first national limits on the amount of carbon pollution emitted by new power plants in the United States. The standards will finally require new coal-fired power plants — the largest source of carbon pollution in our country — to install carbon capture technology and sequester the climate-destabilizing carbon pollution they produce underground.

Back in 2011, after testing this technology at a power plant in West Virginia, American Electric Power’s former CEO and president Mike Morris told investors:

We’re encouraged by what we saw. We’re clearly impressed with what we learned and we feel that we have demonstrated to a certainty that carbon capture and storage is in fact viable technology for the United States and quite honestly for the rest of the world going forward.

It is now 2014. The technology is being deployed across the world, and here at plants in Canada, Mississippi, California, and at two plants in Texas. EPA’s standards will ensure that the United States is leading the energy revolution — in carbon capture technologies as well as in clean renewable energy and energy efficiency.

Of course these realities did not stop the attacks from industry lawyers.

Jeff Holmstead, Counsel to the Electric Reliability Coordinating Council — a coalition of coal-dependent energy companies — released a statement arguing that we just can’t do it … can’t produce clean, safe, affordable power. He is wrong. These standards are common sense and legally sound. Not only are carbon capture technologies — long in use in other industries — being deployed in the power sector across the world, but renewables are taking off.

Between 2011 and October of 2013, wind generation in the United States increased by over 40%.  In April of 2013, the United States had a record month for wind power with generation of over 17,000 gigawatt hours. In 2012, rooftop solar panels cost approximately 1 percent of what they did 35 years ago. Since 2008, as the cost of a solar module dropped from $3.80/watt to $.80/watt, solar deployment has jumped by about 10 times.

We can, and we will build the low-carbon power sector of the 21st century—and we will not let those companies still investing in the dangerous, harmful energy technologies of the past dictate our future.

Also posted in Clean Air Act, News, Policy, Setting the Facts Straight / Comments are closed

EPA Publishes Proposed Standards to Limit Carbon Pollution from New Power Plants

By Mandy Warner / Published: January 8, 2014

November of 2013 was the warmest November on record.

It was also was the 345th consecutive month (that’s almost 29 years!) with a global temperature above the 20th century average, according to the most recent data from NOAA.

So while some folks may be dismissing climate change because of the current blisteringly cold weather in parts of the U.S., we are still very clearly seeing the long-term trend of warming that experts at leading scientific and government agencies (like NASA and many, many others) agree is occurring.

This long-term trend of warming and the serious consequences at stake underscores the need to address carbon pollution now.

Here’s some good news on that front:

Today, the U.S. Environmental Protection Agency (EPA) published its proposed standards to limit carbon pollution from new power plants in the Federal Register.

There are currently no national limits on carbon pollution from power plants, the single largest source of this pollution in the United States.

The standards published today will help ensure that we get our power from cleaner sources, and that we reduce climate-destabilizing pollutants like carbon dioxide.

Cleaner power means healthier lives for millions of Americans.

We are learning more and more about the impact of climate change on human health. From increased asthma attacks to disease and sanitation concerns, a changing climate will have a significant impact on Americans’ health now and in the future.

  • In one recent study, Harvard researchers found that high temperatures correlated with more hospital visits for five conditions including kidney, glandular, and urinary tract problems; accidents; and self-harm.
  • In another study, researchers found that those suffering from allergies or asthma are likely going to have to cope with earlier pollen seasons for some allergenic species in a changing climate.

Health groups, states, moms, environmental groups, and businesses have all expressed support for common-sense limits on carbon pollution. About four million Americans have written to EPA in support of carbon pollution standards for power plants.

This opinion piece from the American Medical Association may best sum up the health risk if we don’t act:

If physicians want evidence of climate change, they may well find it in their own offices. Patients are presenting with illnesses that once happened only in warmer areas. Chronic conditions are becoming aggravated by more frequent and extended heat waves. Allergy and asthma seasons are getting longer. . . . Rising air and water temperatures and rising ocean levels since the late 1960s have increased the severity of weather, including hurricanes and droughts, and the production of ground-level ozone. That means more asthma and respiratory illnesses, more heat stroke and exhaustion, and exacerbation of chronic conditions such as heart disease.

Fortunately, we have the technology to meet our clean energy and human health goals, and EPA’s standards will play a key role in getting us there.

Cost-effective, low-carbon energy solutions are being deployed across the country now. They are creating homegrown, good jobs while protecting Americans health and prosperity.

In fact, ALL of the new electric power that came online in November in America was from renewable energy.

In 2012, wind power was:

[T]he number one source of new U.S. electric generation capacity for the first time—representing 43 percent of all new electric additions and accounting for $25 billion in U.S. investment.

However, there are opposition forces working to derail EPA’s efforts to address carbon pollution.

We need all of the support we can muster to ensure EPA goes forward with its commonsense standards that will help ensure the healthier, clean energy future we know we must achieve for the sake of our children and grandchildren.

Please tell EPA you support a clean energy future for our children

Also posted in Clean Air Act, Health, News, Policy / Comments are closed