Tag: climate policy

Climate Change Reality for the United States

Source: http://www.4cleanfuels.com/fuels4.php

Written by Nathaniel Berger

During the past several years, the United States has experience numerous events of extreme weather patterns ranging from massive wildfires in Colorado to the 4th warmest winter in U.S. history.[1] Many parts of the country experienced seventy degree days in December.

Ninety-seven percent of scientists say man-made climate change is real.[2] However, the remaining 3% of scientists are quite loud in their efforts to deny climate change. Those who deny the occurrence of climate change take the scientific truth, and mislead, deny, and suppress it so much that little progress can be made. The media further exacerbate the problem when they give each side equal air time, insinuating whether intentionally or not, that these messages are both equally supported and valid.

However, despite the 3% of scientists’ denial, climate change is happening, and the U.S. needs to do its part to lower carbon emissions. The European Union and many other nations around the world have made pledges through the Kyoto Protocol and other initiatives to lower carbon emissions through renewable energy creation, carbon offsets, and more. Germany’s solar energy accounts for nearly a 1/3 of the nation’s energy.[3]

Unfortunately, the U.S. has not embarked on such a serious renewable energy path, refusing to join the Kyoto Protocol or even establish a national energy policy. While many states have set forth renewable energy standards, these acts are insufficient as the U.S. is one of the top carbon emitters.

Despite the minimal efforts made in the United States to reduce carbon emissions, the U.S. experienced the lowest carbon emissions in 20 years in the first half of 2012.[4] Many are claiming that the U.S. has finally decided to truly work to reduce carbon emissions. Sadly, I think that these people are far too optimistic. Few scientists actually think that these reductions in carbon emissions will last.

When the CO2 emissions reductions were analyzed, researchers found that 43% of the decline was a result of the mild winter that much of the U.S. experienced, 21% of the decline was attributed to coal-to-gas generation, and only a measly 6% was left for increased wind generation.[5] In terms of weather conditions, the mild winter is not likely to be a recurring theme in coming years, and even if it is, it will likely bring with it increasingly hot summers that will require more energy consumption through increased air conditioning.

While natural gas usage has increased significantly, the switch to natural gas is only a temporary fix for carbon emissions. First, the switch to natural gas is largely a result of economic factors that have resulted in shockingly low natural gas prices. According to Michael McElroy, Professor of Environmental Studies at the Harvard School of Engineering and Applied Sciences, the impact of the decreased price of natural gas was most prevalent in the East South Central and South Atlantic regions of the U.S. because those regions have the highest level of electricity generation from coal.[6] Few economists expect these low prices to remain long term, which may result in a small comeback of coal. However, McElroy does argue that if the United States wanted to continue to economically impact the relative price of electricity generation between coal and natural gas, a carbon tax of only $5 per ton of CO2 would make a significant difference in electricity generation. The U.S. would save 31 million tons of CO2, and the price of electricity would rise only minimally.[7] I think this solution is perfectly reasonable especially when one considers our growing national debt. However, it is unlikely to be part of any tax reform due to the unwillingness of major political figures to put the environment and climate change on their political agendas.

Second, natural gas brings its own environmental impacts. Natural gas obtained through hydraulic fracturing is associated with water contamination and earthquakes. Many states such as, Ohio and Pennsylvania, are already noticing some of these impacts. Because of the fast-paced nature of the industry, it has been difficult for many states to develop the regulatory system fast enough to keep up with the production goals of companies interested in hydraulic fracturing. North Carolina’s Department of Environment and Natural Resources has worked to assess the potential impacts. Currently, they are recommending that with the proper guidelines and safety regulations that hydraulic fracturing can occur safely with minimal environmental impact. The only problem is that they are still unsure of what the potential impacts are, the size of those impacts, and how quickly they may impact human health.[8]

Natural gas will not lower carbon emissions sufficiently to prevent continued climate change. It has a different set of problems from coal, but it has problems all the same. Therefore, it is only one part of the solution to climate change. It should not be seen as the end all be all. Therefore, it is vital for people to only see natural gas as a transition fuel from coal to renewable energy. People need to remember that renewable energy means that we can never run out. No one can say that about coal or even natural gas. Renewable energy is the only long-term way to reduce carbon emissions before the impacts of climate change become more extreme, and people are less able to adapt. Renewable energy is also economically crucial to the United States. Renewable energy technology is the technology of the future. If the United States wants to maintain at the forefront of the world economy, it will have to invest in renewable energy. And, if we want to maintain the world, we need to transition to renewable energy sooner rather than later.



[1] http://www.huffingtonpost.com/2012/09/06/extreme-weather-climate-timeline-infographic_n_1861334.html

[2] http://content.usatoday.com/communities/sciencefair/post/2010/06/scientists-overwhelmingly-believe-in-man-made-climate-change/1#.UFkdQY45s21

[4] http://green.blogs.nytimes.com/2012/08/17/a-20-year-low-in-u-s-carbon-emissions/

[5] http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/14/why-the-recent-plunge-in-u-s-carbon-emissions-may-not-last/

[6] http://www.seas.harvard.edu/news-events/press-releases/carbon-emissions-natural-gas

[7] http://www.seas.harvard.edu/news-events/press-releases/carbon-emissions-natural-gas

[8] http://www.ucsusa.org/clean_energy/our-energy-choices/coal-and-other-fossil-fuels/how-natural-gas-works.html

We’re from the government and we’re here to help

Imagine you are in the market for a new light truck.  Let’s say it’s a new Ford Explorer.  You go to your favorite Ford dealer and the helpful salesperson tells you that she has two 2011 Explorers with identical performance and features.  One of these cars costs $2000 more and gets 49.6 mpg, the other gets 27.5 mpg.  You are the type of driver who buys a new car with cash every 10-12 years and drives it into the ground.  So you do some quick calculations using a 7% discount rate and figure that you will save nearly $5,200 in gasoline over the life of the car.  That’s a net gain of $3,200 over the life of the car.  Moreover, you will recoup your additional expenses in the first four years of ownership.  Your friend who is shopping with you, finances all of his vehicles. But you run the calculations for him and discover that even if he finances the car over 60 months, he will save $12 per month during the loan period.

If this deal sounds good to you, you are in luck.  This is exactly the deal that the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) claim to be offering in their newly proposed regulation for increased fuel efficiency standards, laboriously titled “2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards” [FactSheet, Full Notice of Proposed Rulemaking (800+ pages)].

The goal of the proposed NHTSA rule is to increase the average industry fleet-wide fuel economy for cars and light trucks to 40.1 mpg by 2021 and to 49.6 mpg by 2025.  The simultaneous rule by EPA, which is based off the fuel economy standards proposed by NHTSA, limits greenhouse gas emissions from vehicles to 163 grams per mile (g/m) by 2025.  The claim is that these standards can be met and in so doing, consumers will actually save an average of $3,200 per vehicle over the life of a new car.  We are from the government and we are here to help!

There is a lot of flexibility built into this rule.  There are options to earn credits for over-compliance, which can both be carried forward (banking) and carried back (borrowing).  There are allowances for credit transfer between cars and light trucks and even credit trading across manufacturers.  There is also plenty of flexibility built into the GHG standards allowing for credits for air-conditioning improvements, off-cycle improvements, an electric vehicle multiplier, and credits for hybridization of full size trucks.  All of these sources of regulatory flexibility should lower the costs of attaining the standard and allow each manufacturer to attain the standard in a cost-effective way given its fleet.

Still, the presentation of benefits and costs suggests a free lunch.  Actually, a lunch that you are paid $3,200 to eat.  Even with all of these cost-lowering flexibility measures, this seems hard to swallow.  And it should be, because it is wrong.

To see why the costs are much higher than the analysis suggest, image you are back at the Ford dealer.  The salesperson presents a new 2011 Explorer, which gets 27.5 mpg and tells you that this car retails for $22,000.  Then she shows you a 1997 model-year Ford Explorer that has never been driven or owned (the odometer reads 0), but this 1997 Explorer has been tweaked to get 49.6 mpg.  She’ll sell you this modified 1997 model Explorer for $24,000.  What do you choose?  Many of you will get the 2011 model with the worse gas mileage.  Some of you might buy the 1997 model car with the better gas mileage, but clearly your cost is not just $2000.  It’s the monetary costs ($2,000) plus the difference in performance/features between the 1997 and the 2011 model.

What the benefit-cost analysis conducted by NHTSA and EPA says is that by 2025 the car manufactures can produce a car that has the same performance as 2011 cars on the market today, but gets double the gas mileage.  This car will cost $2,000 more than cars sold today.  But nobody expects that absent this regulation 2025 models will perform like 2011 models.  We expect innovation in performance, features, safety, etc.  The real cost of the regulation is how much of this we will give up between now and 2025 in order to get a doubling of the fuel economy of vehicles.

I have blogged before about my frustration that the right insists that all regulation is job-killing.  But I’m equally frustrated when the left insists that regulations are costless. Maybe doubling fuel economy is a good idea.  Maybe the benefits to us of reduced carbon emissions, reduced oil consumption, increased national security, are worth trading off more horsepower, torque, or other features.  Maybe not.  But that is what a benefit-cost analysis should be helping us decide.   We want jobs, economic growth, clean air, clean water, good schools, etc.  The challenge is how to balance out those competing desires with our limited resources.  It may not be a great sound bite, but it is the truth.

1997 Ford Explorer

2011 Ford Explorer

The California Effect

I was all set to write a blog this week about the recent enactment of a fairly comprehensive cap-and-trade program in California.  But then, my mentor Rob Stavins, sent around his blog and I realized there was probably no point in re-writing what he had done so well.

So I link you to Professor Stavins’ blog where he discusses a recent paper he wrote with Professor Joe Aldy (double-Dukie) that examines several different options for pricing carbon. The paper looks in detail at regional initiatives such as the one just enacted in California.

<For students, if you want credit for you comments, please come back here to make them.  If you leave comments on Professor Stavins’ blog, the graders won’t necessarily find them.>

Profile: Travel; Relationship Status: It’s Complicated

We all wear several different hats.  I’m a professor, a wife, and a mom (probably in reverse order of importance).  In trying to lead a balanced life we may sometimes struggle with conflicts among these roles.  Similarly many of us find ourselves with multiple labels:  environmentalist, feminist, economist, global citizen.  In trying to live a purposeful life we may also run into situations in which there are conflicts created by these various labels.

I run into the latter conflict every time I’m confronted with the carbon footprint of my own travel.  One of my goals is to have a lower environmental impact.  But another goal is to live as a global citizen and, in particular, to raise my children as global citizens.  One of the most transformative experiences of my life was the year I spent as an exchange student in Germany. Learning another language, culture, and way of living is critical in our globalized economy.  And I believe that it is critical for successful negotiation of solutions to our global environmental problems.

I intend to expose my children to as many other countries and cultures as I can (and not just at Epcot) so that they can appreciate the myriad of human differences as well as appreciate the fundamental ways in which we are all the same. But that involves getting on planes.  Big planes.  Traveling long distances.  Emitting a lot of carbon dioxide.

Sit down with any carbon footprint calculator and watch it skyrocket the with every plane trip.  If you think you can reduce carbon emissions from other areas (by buying local food or driving around town less) you are probably wrong.   Let’s take an example from my own life.  Last year I went to Switzerland with my daughter and my mother.  That’s three coach-class round trips tickets from RDU to Zurich which works out to be approximately 4.71 tons of carbon.  My reasonably long daily commute from Raleigh to Duke results in about 12,000 miles per year on my Honda Odyssey minivan and that is equivalent to 5.32 tons of carbon.  So if I never drove to work I could offset one trip to Europe, but smaller changes (that I have made) like carpooling one day and working from home one day, won’t be sufficient.[i]

So how do we reconcile this conflict.  Many advice sites suggest that you decrease your travel or take a “stay-cation” in order to lower your travel footprint.  I think this is fundamentally wrong-headed.   Even if you don’t care about experiencing other cultures, there is something odd about advocating for cleaner air at the Grand Canyon and then not travelling to see it!  So here are my recommendations for reconciling travel and carbon emissions.  I look forward to hearing yours!

  1. Travel consciously.  Pick your vacations to maximize your exposure to new experiences and cultures.  It’s fine to enjoy a beach vacation, but try to avoid an an-inclusive resort where you will only meet other Americans and will never experience any local culture.
  2. Stay longer.  Rather than take many short trips, consider a yearly vacation where you stay 2 weeks or longer.  This reduces the number of plane trips and the associated carbon, and also allows you to really get to know a place.
  3. Stay local.  This isn’t always a great idea.  If you are in an area where safety is a concern, you might want to stick to larger international chains.  But if you are travelling to a relatively safe place, consider forgoing the international chains and staying at a locally-owned hotel or resort.
  4. Consider offsets.  I’m not entirely sold on this one, largely because I feel like in the absence of a carbon policy, whether I purchase offsets or not probably makes no difference to overall climate change (see my first post of the semester).  But should we ever get a climate policy, carbon offsets will be a key component of cost-effectiveness.  If the marginal utility I get from travel exceeds the price of carbon, I should pay for someone else to reduce carbon and take my trip.  You can do this now, voluntarily through several major sellers of carbon offsets.

[i] All estimates of carbon emissions were calculated using the carbon footprint calculator at Carbonfund.org.