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Lawmakers Debate Carbon Tax; Studies Offer Look at Economic Impacts

The Nicholas Institute for Environmental Policy Solutions at Duke University

Editor’s Note: TODAY is the last issue of The Climate Post. Sign up now to receive future mailings like this one to understand developments that could shape the energy and climate landscape. Our mailings deliver timely, in-depth, and fact-based analysis, through thought pieces and research publications, to improve environmental policy making. They also alert subscribers to events that aim to shed light on critical climate and energy issues breaking or on the horizon.

As lawmakers plan to vote on an anti-carbon tax resolution from House Majority Whip Steve Scalise (R-La.) and Rep. David McKinley (R-W.Va.), another Republican is expected to roll out carbon tax legislation as early as next week.

According to a draft copy obtained by ClimateWire, Carlos Curbelo (R-Fla.) is preparing to introduce legislation that would eliminate the federal gas tax and impose a $23-per-ton tax on carbon emissions from energy industry operations. Some portion of the proposed tax, Bloomberg BNA reports, could be dedicated to increasing incentives for carbon capture and storage and clean technology and to assistance for low-income families affected by an uptick in energy costs related to putting a price on carbon.

“It really attempts to capture the political energy of the moment,” said Curbelo, who would not go into details about the pending legislation. “We know that infrastructure investment is highly popular in our country. It’s probably the only issue that [President] Trump and [Democratic nominee Hillary] Clinton agreed on in 2016.”

Tuesday, in a meeting of the House Rules Committee, the pending Curbelo bill came up during a debate over the Scalise and McKinley anti-carbon-tax resolution, which the committee passed in a 7-3 vote along party lines. A vote on that resolution by the House could come as early as Thursday.

A special issue in the journal Energy Economics highlights carbon tax modeling studies conducted through the Stanford Energy Modeling Forum Project. The issue includes an overview of the results co-authored by Brian Murray of the Duke University Energy Initiative and a faculty affiliate at the Nicholas Institute for Environmental Policy Solutions and an article on carbon tax implications for market trends and generation costs by my Nicholas Institute colleague Martin Ross. Comparison of the modeling studies’ results revealed similar conclusions: that a carbon tax is effective at reducing carbon pollution, although the structure of the tax and rate at which it rises are important, and that a revenue-neutral carbon tax would have a modest impact on gross domestic product. Even the most ambitious carbon tax was found to be consistent with long-term positive economic growth.

China, EU Renew Commitments to Meet Paris Climate Commitments

China and the European Union (EU) on Monday reaffirmed their commitment to the Paris Agreement to limit global warming, issuing a joint statement in which they also vow to work together in that pursuit. Amid fear that U.S. withdrawal from the agreement could undermine global cooperation on climate change, the statement issued at the 20th EU-China summit in Beijing said the climate accord is proof that “multilateralism can succeed in building fair and effective solutions to the most critical global problems of our time.”

The statement included plans to push for an agreement on a rulebook for the Paris Agreement after negotiations stalled this year; to release long-term, low-carbon development strategies by 2020; and to increase each side’s efforts before 2020; and to exchange knowledge on clean energy.

Notably, the joint statement extends cooperation on emissions trading schemes. China’s carbon market, which launched late last year, will, when fully implemented, be the largest in the world, covering an estimated 4 billion metric tons of emissions.

China, which has already met its 2020 target for carbon intensity, and the EU, which has met its 2020 emissions reduction target, also renewed their commitment to create a mechanism to transfer $100 billion a year from richer to poorer nations to assist them with climate change adaptation.

California Beats 2020 Emissions Target; Work Left on Transportation

The California Air Resources Board (CARB) released data revealing a decrease of approximately 2.7 percent in the state’s greenhouse gas emissions in 2016—a decrease that dropped the state’s emissions below 1990 levels four years earlier than the state’s 2020 target date specified in Assembly Bill 32.

The emissions reductions owe to a mix of state-level measures that include a mandate that a certain fraction of electricity come from renewable resources, regulation of vehicle emissions, and a carbon pricing and trading program shared with Quebec.

There was an exception to the downward emissions trajectory. The state’s transportation emissions continue to rise. Right now, the Trump administration has plans to ease the corporate average fuel economy, or CAFE standards. California has vowed to stick to its own, stricter standards authorized under the Clean Air Act, but if miles-per-gallon targets for the state are rolled back, California’s transportation emissions could rise further.

For months, the state has been in conversations with the U.S. Environmental Protection Agency (EPA) about its vehicle emissions rules, which several other states (most recently, Colorado) follow. Earlier this week, the newly nominated EPA Administrator Andrew Wheeler met with top California officials about the matter. Although CARB Chair Mary Nichols called the meeting “pleasant,” she said “in terms of if there is a difference between Wheeler and Pruitt on these issues, I have yet to see any. It’s not better or worse; it’s the same.”

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

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Draft Rule to Replace Clean Power Plan Moves Ahead

The Nicholas Institute for Environmental Policy Solutions at Duke University

Editor’s Note: The last issue of The Climate Post will circulate on July 19. Sign up to receive future mailings like this one to understand developments that could shape the energy and climate landscape. Our mailings deliver timely, in-depth, and fact-based analysis, through thought pieces and research publications, to improve environmental policy making. They also alert subscribers to events that aim to shed light on critical climate and energy issues breaking or on the horizon.

The U.S. Environmental Protection Agency (EPA) said on Monday that it sent a proposed rule to reduce carbon dioxide emissions from power plants to the White House Office of Management and Budget (OMB) for review, a standard step before a proposal’s public release and comment.

The proposed rule would replace the Clean Power Plan, which was finalized in 2015 to regulate emissions from existing fossil fuel-fired power plants by setting state-by-state reduction targets. Although not yet publicly released, early reports indicate the new rule will adopt a narrower assessment of the means available to reduce greenhouse gases and therefore will implement less aggressive emissions reduction targets.

In October 2017, the Trump administration issued a Notice of Proposed Rulemaking that called for the Clean Power Plan to be repealed. In December 2017, EPA put out a notice asking the public to submit ideas for a replacement to the rule, which most agree the agency is obligated to produce. The Clean Air Act instructs the EPA to set “standards of performance for any existing source for any air pollutant,” and requires these standards to reflect “the degree of emission limitation achievable through the application of the best system of emission reduction.”

Since April 2017, the U.S. Court of Appeals for the District of Columbia Circuit has extended a temporary stay of the Clean Power Plan five times as the Trump administration contemplates a replacement.

The Monday nomination of Brett Kavanaugh to fill the seat of retiring Supreme Court Justice Anthony Kennedy could influence how litigation over this rule plays out. Kennedy was often the deciding vote in environmental cases brought before the court, including the landmark Massachusetts v. EPA climate change lawsuit in 2007 that laid the legal groundwork for federal action to reduce greenhouse gas emissions under the Clean Air Act. Kavanaugh voiced some skepticism that the EPA has the authority to limit greenhouse gases when his court heard oral arguments on the Clean Power Plan in 2016.

“Global warming isn’t a blank check” for the president to regulate carbon emissions,” he said during oral arguments. “I understand the frustration with Congress,” Kavanaugh added. But he said the rule, rather than Congress, was “fundamentally transforming an industry.”

Pruitt Resigns from the EPA

Scott Pruitt has resigned as administrator of the U.S. Environmental Protection Agency (EPA). Andrew Wheeler, who was confirmed by the Senate as the deputy administrator of the EPA in April, will now serve as the agency’s acting administrator. Wheeler, largely identified by the press as a coal industry lobbyist, began his career as an EPA employee and then oversaw the agency for years as chief of staff of the Senate Environment and Public Works Committee for Chairman James Inhofe.

Pruitt left the EPA facing more than a dozen inquiries into his spending and self-dealing practices and amid debate over his revisitation of six pollution policies during his 17 months. He cited in his resignation letter that these “unrelenting attacks” had taken a toll.

“It is extremely difficult for me to cease serving you in this role first because I count it a blessing to be serving you in any capacity, but also, because of the transformative work that is occurring,” Pruitt wrote.

What’s next is uncertain, but Wheeler has suggested that the EPA likely won’t change its priorities after Pruitt.

“If the environmentalists think [Trump is] going to make promises and we’re going to do the opposite, then there’s not a lot of common ground to work on,” said Wheeler. “I’m going to continue to move forward with those” priorities Pruitt laid out on behalf of Trump.

The Washington Post reported that although policy priorities are expected to remain the same, what may change is the way the EPA talks about deregulatory work.

Culturally, Wheeler also may bring change. In his opening speech with EPA employees, Wheeler reassured agency staff, saying “[t]o the employees, I want you to know that I will start with the presumption that you are performing our work as well as it can be done. My instinct will be to defend your work, and I will seek the facts from you before drawing conclusions.”

Study Finds Coal Bailout Proposal Could Increase Premature Deaths, Carbon Dioxide Emissions

A working paper released by the independent think tank Resources for the Future finds that if  President Donald Trump’s proposed bailout of coal-fired power plants goes into effect in 2019 and 2020 it could lead to the pollution-related deaths of 353 to 815 Americans. The paper indicates that each year the policy could cause 1 death for each 2 to 4.5 of the estimated total 790 coal-mine jobs estimated to be supported by the bailout.

According to the authors, delayed retirement of coal that have announced they will close by the end of 2020 could cause these deaths due to their additional sulfur dioxide and nitrogen oxide emissions. The paper’s modeling simulations show that over the two-year period the policy would increase carbon dioxide emissions by 22 million tons, or about the amount emitted by 4.3 million cars in a year. Applying the policy to nuclear generators would prevent only 24 to 53 premature deaths and 9 million tons of carbon dioxide emissions over the period.

The authors call these mortality estimates “conservative” in part because the number of plants prevented from retiring could be larger than the number modeled.

The assessment, which assumes that the Trump administration’s possible action would delay closure of some 3 percent of U.S. coal-fired generation capacity and 1 percent of U.S. nuclear capacity, is one of the first examinations of the evolving plan to prop up coal and nuclear power plants that are struggling to compete with power plants using cheap natural gas and renewable electricity.

That proposed bailout, outlined in a memo in May, would use a Cold War-era law to keep aging coal and nuclear plants from shuttering. On June 1, Trump ordered U.S. Department of Energy Secretary Rick Perry to take immediate action to keep those plants open.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions

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Study Says China’s Emissions May Have Already Peaked

The Nicholas Institute for Environmental Policy Solutions at Duke University

Editor’s Note: The Nicholas Institute has enjoyed sharing the critical climate and energy stories of the week with our readers for almost a decade, but July 19 will be the last issue of The Climate Post. For us, this weekly post has been a way to help us fulfill one of our missions: to help the public understand topics that could shape the energy and climate landscape. We will continue to pursue that mission through the many products we continue to create to improve environmental policymaking through in-depth and objective, fact-based analysis.

We invite you to connect with important climate and energy topics through thought pieces by our staff, through our events, and through new research publications and policy briefs by signing up to receive future mailings about our work.

As part of the Paris Agreement—a global treaty that aims to limit global warming to well below 2 degrees Celsius above preindustrial levels and to pursue efforts to limit that increase to 1.5 degrees Celsius—China pledged to peak its carbon dioxide emissions by 2030. A new study in the journal Nature Geoscience suggests China’s emissions peaked in 2013 and have declined in each year from 2014 to 2016.

“The decline of Chinese emissions is structural and is likely to be sustained if the growing industrial and energy system transitions continue,” said Dabo Guan, a University of East Anglia climate change economics professor and lead author. “China has increasingly assumed a leadership role in climate-change mitigation.”

The study suggests that slowing economic growth and a decline in the share of coal used for energy has aided in the rapid decrease in China’s rising emissions. These changes in industrial activities and coal use, along with efficiency increases, have roots in the changing structure of China’s economy and in long-term government policies, in particular, creation of China’s nationwide emissions trading scheme.

The policy context and initial program design of that scheme is reviewed by my colleague, Billy Pizer, a faculty fellow at Duke University’s Nicholas Institute for Environmental Policy Solutions, in an article in the journal AEA Papers and Proceedings. It highlights important concerns, discusses possible modifications, and suggests topics for further research.

FERC Rejects PJM Capacity Market Proposals

The Federal Energy Regulatory Commission (FERC), in a 3–2 decision, rejected two proposals filed by PJM as well as a proposal filed by a group of generators operating in PJM’s footprint about how the wholesale electric capacity market should handle state subsidies for power generation. FERC did, however, find that the PJM’s existing capacity market rules are unjust and unreasonable and outlined a framework for a new rule.

PJM, which oversees the grid in parts of the Mid-Atlantic and Midwest, operates a capacity market that allows utilities and other electricity suppliers to procure power to meet predicted demand three years into the future in order to ensure grid reliability. The grid operator and some power producers have argued that subsidized generators are entering into PJM’s capacity market at prices below their actual generation costs, lowering overall market prices and potentially forcing some competitors to shutter their operations.

The order rejects both of PJM’s proposals because FERC found that “they have not been shown to be just and reasonable, and not unduly discriminatory or preferential.” But FERC was “unable to determine, based on the record of either proceeding, the just and reasonable rate to replace the rate in PJM’s Tariff.”

FERC then proposed a framework for a replacement rule—resource offers that are deemed subsidized would be subject to an expanded Minimum Offer Price Rule (MOPR) with few or no exceptions, so as not to artificially lower capacity prices. On the other hand, PJM would have to expand the ability for utilities to purchase less from PJM’s capacity market so they wouldn’t be forced to buy capacity to comply with state policies and then procure a duplicate amount of capacity from PJM’s market.

In PJM’s April filing to FERC, PJM asked FERC to decide between two proposals to deal with the issue of how to address potential pricing impacts of state energy programs in its capacity market and to identify which aspects of the proposals need to be revised. Generators subsequently filed a complaint at FERC, alleging that the PJM capacity rules violate the Federal Power Act and proposing their own solution. But in FERC’s order, filed late on June 29, FERC rejected PJM’s two-part capacity repricing scheme and revisions to the MOPR that aimed to bump up capacity offers into the market from new and existing resources receiving state assistance, subject to certain proposed exemptions. It also rejected the generators’ proposal for a MOPR for a “limited set of existing resources.”

PJM, its stakeholders, and other commenters now have to answer FERC’s questions about how to flesh out FERC’s proposed replacement rule framework. Initial comments are due within 60 days and reply comments are due within 90 days of the publication date of the FERC order in the Federal Register.

Study Zeroes in on Hard-to-Decarbonize Sources

About a quarter of global carbon dioxide emissions from fossil fuels and industrial sources come from hard-to-cut sources, according to a study published in the journal Science.

The authors focused on long-distance shipping and transportation, on cement and steel production, and on provision of a reliable electricity supply, that is, the need, given the variable nature of renewables, for climate-neutral ways to increase output when needed. The demand for these services and products is projected to increase over this century, the study said, allowing absolute emissions from them to grow to equal the current level of global emissions.

“If we want to get to a net zero energy system this century, we really need to be scaling up alternatives now,” said lead author Steven J. Davis of the University of California.

What are those alternatives? Some analyzed by the study are the synthesis of energy-dense hydrogen or ammonia-based fuels for aviation and shipping, new furnace technologies for concrete and steel manufacture, and tools to capture and store hydrocarbon emissions. But deploying these technologies will be costly, say the authors, who also point to another obstacle: the inertia of existing systems and policies.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions

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Court Delays Clean Power Plan Again

The Nicholas Institute for Environmental Policy Solutions at Duke University

Editor’s Note: For nearly a decade, the Nicholas Institute has enjoyed sharing the critical climate and energy stories of the week with our readers. However, July 19 will be the last issue of The Climate Post. For us, this weekly post has been a way to help us fulfill one of our missions: to help the public understand topics that could shape the energy and climate landscape. We will continue to pursue that mission through the many products we create to improve environmental policymaking through in-depth and objective, fact-based analysis.

We invite you to connect with important climate and energy topics through thought pieces by our staff, through our events, and through new research publications and policy briefs by signing up to receive future mailings about our work.

Court Delays Clean Power Plan Again

On Tuesday, the U.S. Court of Appeals for the District of Columbia Circuit issued an order placing litigation on the Clean Power Plan in abeyance for another 60 days. The court also rejected a U.S. Environmental Protection Agency (EPA) request for indefinite suspension of the litigation and ordered the EPA to provide status updates every 30 days.

The Clean Power Plan, which was finalized in 2015, seeks to regulate emissions from existing fossil fuel-fired power plants. This is the fifth time since April 2017 that the court has issued a temporary stay of the plan—as the Trump administration eyes rolling back or replacing the rule.

Following the order, judges have come forward to say they would no longer vote to keep litigation on the Clean Power Plan on hold.

In the order, the judges—Wilkins, Tatel and Millett—express their reluctance to abide further delays. Judge Tatel, joined by Millett, wrote:

“ … I have reluctantly voted to continue holding this case in abeyance for now. Although I might well join my colleagues in disapproving any future abeyance requests, I write separately only to reiterate what I said nearly a year ago: that the untenable status quo derives in large part from petitioners’ and EPA’s treatment of the Supreme Court’s order staying implementation of the Clean Power Plan pending judicial resolution of petitioners’ legal challenges as indefinite license for the EPA to delay compliance with its obligation under the Clean Air Act to regulate greenhouse gases.”

Study: Methane Leaks from U.S. Oil and Gas Industry Higher Than Thought

A newly released study in the journal Science indicates that, the United States oil and gas industry emits fugitive emissions of methane at a rate of 13 million metric tons per year. The study suggests that methane, a powerful driver of global warming and the main ingredient in natural gas, is 60 percent higher each year than estimated by the U.S. Environmental Protection Agency (EPA).

“This paper shows that the emissions of methane from the oil and gas industry are a lot higher than what is currently estimated by the Environmental Protection Agency,” said Ramón Alvarez, a study author from the Environmental Defense Fund (EDF). According to EDF, the researchers found that 2.3 percent of total production per year is leaked into the air. EPA estimates a 1.4 percent leak rate.

“The fact is that the magnitude of emissions are so large that it has a material impact on the climate impact of natural gas as a fossil fuel,” he said.

The authors suggest that the discrepancy owes to the way that the U.S. oil and gas industry measures and monitors methane emissions—at known intervals and at specific parts of equipment—without verification of the leak volume at a given facility as a whole. This methodology means that the industry does not count surprise leakage events, which the authors find are relatively common.

According to the study, methane leaks from natural gas facilities have nearly doubled the climate impact of natural gas. The authors suggest that the 13 million metric tons of methane emitted each year by U.S. oil and gas operations is equal to the climate impact of carbon dioxide emissions from all U.S. coal-fired power plants operating in 2015.

The study, which used infrared cameras and involved more than 400 well sites, suggests that methane leaks from operator errors and equipment failures, unless controlled, might lessen the effectiveness of switching to gas from coal as a climate strategy.

Ontario Plans Exit from Carbon Market

Doug Ford, Ontario’s incoming premier, plans to deliver on his campaign promise to scrap Ontario’s cap-and-trade scheme and leave the North American carbon trading program. Ford announced that he intends to block participants in California and Quebec from trading allowances with Ontario entities after he takes office June 29.

The withdrawal from the joint market would leave Ontario out of the next carbon allowance auction, scheduled for Aug. 14. The news has left California, which began holding joint auctions with Ontario and Quebec in February, exploring its options.

“Pulling them out in a formal way is actually going to take a regulatory change,” the head of California’s cap-and-trade program, Rajinder Sahota, said at a California Air Resources Board workshop. Ontario’s involvement in the program expanded the size of the market by about a quarter.

California said it may take steps in its current carbon market rulemaking package to address Ontario’s planned withdrawal.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions

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Trump Cites Energy Security in Executive Order Rescinding Portions of National Ocean Policy

The Nicholas Institute for Environmental Policy Solutions at Duke University

On Tuesday, President Donald Trump revoked much of the National Ocean Policy put in place in 2010 after the Deepwater Horizon oil spill. The president cited a need to improve energy security.

“Ocean industries employ millions of Americans and support a strong national economy,” Trump wrote in the new executive order. “Domestic energy production from Federal waters strengthens the Nation’s security and reduces reliance on imported energy … This order maintains and enhances these and other benefits to the Nation through improved public access to marine data and information, efficient interagency coordination on ocean-related matters, and engagement with marine industries, the science and technology community, and other ocean stakeholders.”

The order supports drilling and other industrial uses of the oceans and Great Lakes, in contrast to the 2010 National Ocean Policy, which focused largely on conservation and climate change.

Trump’s list of seven ocean policy priorities includes calling for federal agencies to coordinate on providing “economic, security, and environmental benefits for present and future generations of Americans.” Other listed priorities mention the need to “facilitate the economic growth of coastal communities and promote ocean industries,” “advance ocean science and technology,” and “enhance America’s energy security.”

Antarctic Ice Melting Speeds Up

The most comprehensive study to date of Antarctica’s ice sheets has found sharply accelerating ice loss. The assessment published in the journal Nature, funded by NASA and the European Space Agency and performed by a consortium of academic institutes and government agencies around the world, indicates that the rate of loss of Antarctic ice has tripled in the last five years compared to the last two decades.

Whereas Antarctica was losing ice at a rate of 73 billion metric tons per year a decade ago, it is now losing 219 billion metric tons per year, a rate scientists say could contribute six inches of sea-level rise by 2100.

The scientists involved in the study arrived at their finding by combining data from 24 satellite surveys, which resulted in the creation of a new dataset that could improve future projections of sea-level rise by allowing the ice sheet modeling community to test whether their models can reproduce present-day change.

“Thanks to the satellites our space agencies have launched, we can now track [polar ice sheet] ice losses and global sea level contribution with confidence,” said Andrew Shepherd of the University of Leeds, who co-led the study.

The rapid, recent changes were driven almost exclusively by warm ocean waters that are destabilizing the West Antarctic ice sheet’s largest glaciers from below.

Notably, the researchers concluded that increases in the mass of the East Antarctic ice sheet were not nearly sufficient to make up for the rapid decreases in West Antarctica and the Antarctic Peninsula.

Another study published last week in the journal Nature, this one by a team of scientists funded by the National Science Foundation, found that large parts of the East Antarctic ice sheet did not significantly melt millions of years ago, when atmospheric carbon dioxide concentrations were similar to today’s levels. However, the authors cautioned that could change as these concentrations continue to rise above 400 parts per million. They averaged 410 parts per million in April—the highest recorded monthly average.

Draft Report Says World Off Track to Meet 1.5 C Goal

A leaked draft report suggests that human-induced warming would exceed 1.5 degrees Celsius by about 2040 if emissions continue at their present rate, but that countries could keep warming below that level if they made “rapid and far-reaching” changes.

The Paris Agreement, adopted in 2015, set a goal of limiting warming to “well below” a rise of 2 degrees Celsius above pre-industrial times while pursuing efforts to keep warming below 1.5 degrees Celsius. The final government draft of Global Warming of 1.5ºC, an Intergovernmental Panel on Climate Change (IPCC) special report, obtained by Reuters and dated June 4, indicates that government pledges are too weak to meet the 1.5 degrees Celsius goal.

The draft report is set for publication in October, after revisions and approval by governments. In a statement, the IPCC said it will not comment on the contents of draft reports, because the work is ongoing.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions

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California Regulators Request Meeting as Vehicle Emissions Proposal Moves Forward

The Nicholas Institute for Environmental Policy Solutions at Duke University

Editor’s Note: The Climate Post will not circulate next week (June 14). It will return on Thursday, June 21.

Members of the California Air Resources Board (CARB) want to meet with Trump administration officials to discuss the federal government’s specific plans to ease the corporate average fuel economy, or CAFE standards.

“CARB has participated in a number of high-level meetings with the White House and federal agencies, but we have not been given any specific proposals to respond to, and so remain concerned that the agencies are departing from the evidence and the law, as well as failing to honor our historic partnership,” wrote Steve Cliff, CARB’s deputy executive officer in a letter printed by ClimateWire. “This matter is of vital importance to public health and the environment, and it is essential that we have an opportunity to meet with OIRA [Office of Information and Regulatory Affairs].”

California has vowed to stick to its own, stricter standards authorized under the Clean Air Act despite plans by the Trump administration to weaken fuel economy and tailpipe emissions standards. On May 1, seventeen states and the District of Columbia filed a lawsuit in the D.C. Circuit Court of Appeals over the U.S. Environmental Protection Agency’s revisiting of Obama-era vehicle emissions and fuel economy standards last month.

Although it is reported that the new EPA proposal will outline a series of alternatives to the existing standards, the preferred option seems to be a freeze of fuel economy targets at 2020 levels through 2026. EPA and the National Highway Traffic Safety Administration submitted their proposal to the Office of Management and Budget recently. It will undergo review before it is published for public comment.

Closing the Global Energy Financing Gap

The path taken to bring reliable electricity to the more than 2 billion people in the world lacking it has major ramifications for development, global power dynamics and climate change. Government-sponsored development finance institutions are key for delivering energy financing to emerging markets—contributing roughly a third of all investment directly—and playing a critical role in  reducing investment risks and mobilizing private capital into the clean energy space.

The U.S. government’s little-known development finance institution, the Overseas Private Investment Corporation (OPIC), remains underutilized and lacks core financial tools and capabilities. Legislation to establish a new fully-equipped institution to promote investment in developing countries continues to move closer to passage in Congress. A new policy brief by my colleagues at the Nicholas Institute for Environmental Policy Solutions and the Energy Access Project at Duke University outlines the energy financing gaps in emerging markets and analyzes how the new tools and authorities proposed under Better Utilization of Investments Leading to Development Act (BUILD Act) legislation may equip the new U.S. development finance institution to respond to those financing needs.

The stakes are high, as China has made overseas infrastructure investment a centerpiece of its foreign policy. OPIC’s entire investment portfolio across all sectors is currently less than the $25 billion that Chinese policy banks invested in foreign energy projects in 2017 alone. With domestic coal demand on the decline in China, these same government banks are investing an average of $5 billion per year in new overseas coal facilities.

The policy brief finds that a modernized U.S. development finance institution would increase U.S. global influence, open clean energy investment opportunities for U.S. companies in high-growth emerging markets, and provide a more transparent and market-oriented alternative to Chinese government infrastructure financing.

Trump Administration Eyes Coal Bailout

President Donald Trump ordered U.S. Department of Energy (DOE) Secretary Rick Perry “to prepare immediate steps” to stop the closing of coal and nuclear plants, according to a White House statement.

“Unfortunately, impending retirements of fuel-secure power facilities are leading to a rapid depletion of a critical part of our nation’s energy mix, and impacting the resilience of our power grid,” said White House spokeswoman Sarah Huckabee Sanders.

A leaked plan, published by E&E News, calls for the creation of a “strategic electric generation reserve” to promote national defense and maximize domestic energy supplies. It also requests the direct purchases of electricity or capacity from a list of specific coal and nuclear plants over a period of 24 months.

The leaked memo invokes DOE’s emergency powers under section 202(c) of the Federal Power Act, as well as an obscure provision in the Defense Production Act of 1950, enabling the Department to require the performance of private contracts “in preference to other contracts” in order to “promote the national defense.”

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

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Study Examines EVs’ Electricity Grid Role

The Nicholas Institute for Environmental Policy Solutions at Duke University

If California uses electric vehicles (EVs) as mobile power storage, it could eliminate the need to build costly stationary grid storage for energy from renewable sources, according to a new study by the researchers at the U.S. Department of Energy and Lawrence Berkeley National Laboratory in the journal Environmental Research Letters. The researchers suggest that the California Energy Storage Mandate (AB 2514)—which requires procurement of 1.3 gigawatts of energy storage by 2020—can be accomplished through the state’s Zero Emission Vehicle Program as long as controlled charging (one-way power flow) is also widely deployed.

“The capital investment for stationary storage can instead be redirected to further accelerate the deployment of clean vehicles and vehicle-grid integration, and could even be used to pay EV owners when their vehicles are grid-connected with controlled charging,” write the authors. “In this manner, not only are clean vehicles an enabler for a clean electricity grid at substantially lower capital investment, but the avoided costs of supporting renewables with stationary storage can be used to further accelerate the deployment of clean vehicles.”

The research shows that electric vehicles could help California grid operators adapt to the state’s rapid adoption of solar power, which is contributing to a problem known as the “duck curve”—a deep decrease in demand during midday hours, followed by a steep increase just as solar power fades away. The idea is that electric vehicles could help mitigate daytime overproduction and evening energy surges by charging into the grid at predetermined times and destinations throughout the day, when and where demand is low.

The researchers also looked at scenarios in which electric vehicles not only have controlled charging but also send back some of their energy into the grid through “vehicle-to-grid.” They estimated an offset of as much as $15.4 billion in stationary storage investment if just 30 percent of workplace chargers and 60 percent of home chargers allowed EVs to provide power to the grid.

Trump Repeals Rule to Cut Down on Transportation Emissions

The Federal Highway Administration on Wednesday published a notice in the Federal Register repealing a rule promulgated by the Obama administration that would have required states receiving federal dollars to account for and report greenhouse gas emissions created by cars traveling on their roads.

The rule, which temporarily went into effect last fall, required that state transportation departments and metropolitan planning organizations calculate how much and how many cars traveled their roads in order to establish greenhouse gas emissions targets, calculate their progress toward them, and report that progress to the Federal Highway Administration.

“While the GHG [greenhouse gas emissions] measure did not require States to reduce CO2 emissions, a State could feel pressured to change its mix of projects to reduce CO2 emissions,” the Federal Highway Administration wrote.

Study Examines Economic Benefits of Limiting Warming

Limiting global temperature rise to the Paris Agreement’s 2 degrees Celsius warming goal could save the world economy trillions of dollars, according to a new study in the journal Nature. The study, the first to examine how global economic output would be affected under different amounts of warming, concludes that meeting the 1.5 Celsius Paris Agreement goal—the more ambitious of the agreement’s two warming goals—would avoid $30 trillion in damages from heat waves, droughts and floods—a figure far greater than the cost of cutting emissions.

The study suggests that the global economy could generate an additional $20 trillion in gross domestic product compared to one in which temperatures rise by 2 degrees Celsius.

“By the end of the century the world would be about three percent wealthier,” said lead author Marshall Burke of Stanford’s School of Earth, Energy & Environmental Sciences, referencing the 1.5 degrees Celsius target relative to 2 degrees Celsius.

The study analyzed how gross domestic product over the last 50 years correlated with temperature changes and combined those findings with climate model projections of future temperatures to calculate how overall economic output may change under different warming scenarios.

“It is clear from our analysis that achieving the more ambitious Paris goal is highly likely to benefit most countries—and the global economy overall—by avoiding more severe economic damages,” said Noah Diffenbaugh of Stanford University.

Those countries benefiting from a warming limit of 1.5 degrees Celsius represent 90 percent of global population and include almost all the world’s poorest countries as well as the three biggest economies: the United States, China and Japan.

A study published in Nature Climate Change in March put the cost of meeting the 1.5 degrees Celsius goal at three times that of holding temperature rise to 2 degrees Celsius. The costs of the more stringent goal hit heavily in the near term, when deep cuts in transportation and buildings sector emissions would be required. The study did not, however, weigh those upfront costs against the greater economic costs associated with a temperature rise of 2 degrees Celsius.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

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Trump Introduces New Executive Order; Discards Obama Order on Climate

The Nicholas Institute for Environmental Policy Solutions at Duke University

President Donald Trump replaced a 2015 executive order that directed federal agencies to reduce their energy use and greenhouse gas emissions, instead asking agencies to set their own goals for efficiency.

The original executive order, signed by former President Barack Obama in 2015, aimed to reduce the federal government’s greenhouse gas emissions 40 percent in a decade. To do so, it asked agencies to reduce buildings’ energy use by 2.5 percent per year, shrink water use and use clean energy for 25 percent of their energy needs.

The new Trump executive order directs federal agencies to follow the laws related to energy use enacted by Congress “in a manner that increases efficiency, optimizes performance, eliminates unnecessary use of resources, and protects the environment. In implementing this policy, each agency shall prioritize actions that reduce waste, cut costs, enhance the resilience of Federal infrastructure and operations, and enable more effective accomplishment of its mission.”

Although the new order requires agencies to track their efforts in lowering energy use, it does not require them to set goals to limit greenhouse gases.

Report Paints Picture of Sea-Level Rise Risks to National Park Service Sites

A new report from the National Park Service (NPS) projects the risk of climate change-related sea-level rise and storm surge for each of 118 NPS sites situated on or near U.S. coasts. Using datasets from the National Oceanic and Atmospheric Administration (NOAA) and the Intergovernmental Panel on Climate Change, the authors illustrate the potential for permanent coastal inundation and flooding under multiple greenhouse gas emissions scenarios. Their research resulted in a collection of storm surge maps for each studied site.

According to those maps, the parks that will be hardest hit are along the southeast coastline. At risk for the highest sea-level rise is the NPS’s National Capital Region (Washington, D.C., area). At particular risk from storm surge are parks in North Carolina’s Outer Banks, within the Southeast Region.

“Human activities continue to release carbon dioxide (CO2) into the atmosphere, causing the Earth’s atmosphere to warm,” the report indicates. “Further warming of the atmosphere will cause sea levels to continue to rise, which will affect how we protect and manage our national parks.”

The authors highlight significant differences in how coastal areas in the vicinity of NPS sites will experience sea-level change—driven by factors such as variable ocean currents, coastal topography, and the influence of localized land elevation changes. Given those differences, the authors point to the need for site-specific information about local conditions that might influence sea-level rise and storm surge effects.

The final report makes multiple references to the role of humans in climate change. It became the subject of concern for science advocates and some in Congress after drafts obtained earlier this year by Reveal, the publication of The Center for Investigative Reporting, indicated that park service officials had removed those references.

China, NGOs Assess Paris Agreement Progress

China, the world’s largest emitter of greenhouse gas emissions, could meet its pledge to cap carbon emissions ahead of its 2030 schedule, according to China’s chief negotiator on the Paris Agreement in late 2015. Xie Zhenhua said China has already met several objectives it promised to fulfill by 2020, including cutting its carbon intensity by 40 percent to 45 percent three years early.

The Paris Agreement aims to limit global warming to well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit that increase to 1.5 degrees Celsius. The deadline for completing the Paris Agreement’s “rule book” is the November climate summit in Katowice, Poland. The agreement itself goes live in 2020.

Ahead of the 24th session of the Conference of the Parties, a number of organizations and NGOs have assessed progress toward the Paris Agreement’s goals. NGO Mission 2020, in a new report, focuses on how to attain the 1.5 degree goal. It outlines six milestones it suggests are critical to enable global peaking of emissions by 2020, including cities and states implementing policies and regulations to fully decarbonize buildings and infrastructure by 2050 and investment in climate action that surpasses $1 trillion U.S. dollars per year.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

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Trump Directs Administration to Work with California on Fuel Standards

The Nicholas Institute for Environmental Policy Solutions at Duke University

President Donald Trump on Friday tasked Transportation Secretary Elaine Chao and U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt to negotiate fuel economy standards with California officials.

Their orders are to “work with the industry and with the state of California on developing a single national standard so that domestic automakers do not have to comply with two different regulatory regimes,” said Helen Ferre, a White House spokesperson.

It is not at all clear, however, that California is interested in finding a compromise. California has vowed to stick to its own, stricter standards authorized under the Clean Air Act despite plans by the Trump administration to push back on fuel economy and tailpipe emissions standards. On May 1, seventeen states and the District of Columbia filed a lawsuit in the D.C. Circuit Court of Appeals over the EPA’s revisiting Obama-era vehicle emissions and fuel economy standards last month.

The Friday announcement came as automakers met with Trump to discuss a draft proposal developed by the EPA and the National Highway Traffic Safety Administration that The Hill reports would freeze fuel efficiency requirements at 2020 levels for five years. It’s a proposal with which the Trump administration may move forward, according to Reuters.

Study Points to Possible Policies to Preserve Nuclear Plants

Early nuclear plant closures in the United States will mean the loss of zero-carbon electricity, but a new report from the Center for Climate and Energy Solutions (C2ES) suggests state and federal policy options that could preserve existing nuclear power generation. The report finds that when they retire, nuclear reactors, which supply more than half of the country’s zero-emissions power, are being replaced by more carbon-intensive natural gas.

The report points to some operational and technological developments that might put nuclear plants on a firmer footing. First, electrification of other sectors of the economy could increase energy demand, easing pressure on larger and older energy plants like nuclear reactors. Second, midday nuclear power, which may not be needed when solar is available, could be stored as hydrogen and then used as fuel or feedstock. And third, nuclear plants that are paired with renewables could ramp up and down, following demand.

With federal policy to drive nuclear development in the near term unlikely, the report concludes that any long-term decarbonization strategy for the United States would entail policy support for both advanced nuclear and renewables.

“The nut we really want to crack is how renewables and nuclear can work together for each other’s mutual benefit,” tweeted report author Doug Vine, a C2ES senior energy fellow. “We need to have 80% reductions by 2050. We’re not going to get there if renewables and nuclear are fighting each other.”

To preserve the emissions benefits of nuclear energy, the report includes in its policy solutions

state-level policies such as expansion of state electricity portfolio standards to allow nuclear and renewables to work together on a level playing field to one another’s benefit as well as zero-emission credits, already being implemented in some states, to support distressed facilities. Other solutions offered by the report are license renewals by the U.S. Nuclear Regulatory Commission that would allow reactors to operate for 80 years; a “meaningful” price on carbon implemented in power markets; and increased pursuit by government agencies, cities and businesses of power purchase agreements, which give both buyers and sellers some certainty over a specified time period, for nuclear power.

DOE Plan Lays out Steps to Protect Grid from Cyber Threats

A new U.S. Department of Energy plan lays out steps to do more to protect the country’s energy systems and diminish energy interruptions due to the increasing scale, frequency and sophistication of cyber attacks.

“Energy cybersecurity is a national priority that demands the next wave of advanced technologies to create more secure and resilient systems needed for America’s future prosperity, vitality, and energy independence,” said Secretary of Energy Rick Perry. “The need to strengthen efforts to protect our critical energy infrastructure is why I am standing up the Office of Cybersecurity, Energy Security, and Emergency Response (CESER). Through CESER and programs like CEDS, the Department can best pursue innovative cybersecurity solutions to the cyber threats facing our Nation.”

The five-year plan focuses on strengthening preparedness, coordinating responses, and developing the next generation of resilient energy systems in line with the creation of a cybersecurity office—announced earlier this year—to help carry out activities to protect the grid from attack.

The plan calls for research and development into equipment and technologies that would “make future systems and components cybersecurity-award and able to automatically prevent, detect, mitigate, and survive a cyber incident.”

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

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Atmospheric Carbon Dioxide Concentration Sets New Record

The Nicholas Institute for Environmental Policy Solutions at Duke University

For the first time in recorded history, Earth has sustained an atmospheric concentration of carbon dioxide in excess of 410 parts per million—a symbolic red line in the methodical upward march of greenhouse gas concentrations. The April Keeling Curve measurements at the Mauna Loa Observatory are 30 percent higher than the first Keeling Curve measurements, 315 parts per million, at the observatory in 1958, and 46 percent higher than concentrations recorded during the Industrial Revolution in 1880. They are the highest in the 800,000 years for which scientists have good data, thanks to paleoclimate records like tree rings and ice cores.

Ralph Keeling, director of the CO2 Program at the Scripps Institution of Oceanography, which monitors the readings and calculates the one-month averages, said the rate of carbon dioxide concentration in the atmosphere has been increasing faster in the last decade than in the 2000s.

“It’s another milestone in the upward increase in CO2 over time,” said Keeling, who is also the son of Charles David Keeling, creator of the Keeling Curve. “It’s up closer to some targets we don’t really want to get to, like getting over 450 or 500 ppm. That’s pretty much dangerous territory.”

Last year the National Oceanic and Atmospheric Administration’s climate department reported that atmospheric carbon dioxide levels in 2016 were at levels not seen on Earth for millions of years, when temperatures were 3.6 to 5.4 degrees Fahrenheit warmer, and sea level was 50 to 80 feet higher than today.

Powelson Reflects on PJM Fuel Security Announcement, Defense Production Act

What are the primary drivers of change in the PJM Interconnection, which operates the electric grid for a 13-state region? Technology and people. That was the message from air and energy regulators from states in the PJM electricity market at an event co-sponsored by the Great Plains Institute and Duke University’s Nicholas Institute for Environmental Policy Solutions.

The event, keynoted by Robert Powelson of the Federal Energy Regulatory Commission (FERC), focused on change and the tensions revealed as different actors drive these changes or respond to their effects. Powelson reflected on PJM’s late April announcement that it will conduct a study to understand “fuel-supply risks in an environment trending towards greater reliance on natural gas.” PJM said it will conduct a three-phase analysis over several months to determine whether it can withstand a cyberattack on a natural gas delivery system or a prolonged cold snap.

Powelson cautioned that people should not read into PJM’s announcement that PJM may pay coal and nuclear generators to be backstops in the event of fuel delivery interruptions. “I think what PJM is saying is ‘we’re going to look at it and we’re going to do it in a market-based approach.’ There might be other technologies out there that have the same [fuel security] characteristics. It could be an oxidized fuel cell. It could be storage. It’s going to be a level playing field discussion. … It’s going to be done in a fuel-neutral, technology-neutral way.”

He called PJM’s capacity market proposal before FERC “a jump ball” aimed at neutralizing the effects of some state subsidies intended to prop up nuclear. PJM wants FERC to direct operators to update market compensation for power plants to reflect resilience attributes.

Powelson also touched on the U.S. Department of Energy plan to look into whether it can keep some struggling coal and nuclear plants operating by invoking the Defense Production Act—a 1950 law giving the president a broad range of power to require businesses to prioritize contracts for materials deemed vital to national security.

Invoking the act, Powelson said, “would lead to the unwinding of competitive markets in this country.”

Climate Talks Stall, U.N. Schedules Extra Sessions

As the latest round of Paris Agreement talks wind down May 10, delegates are marking their calendars for extra sessions to accomplish what they could not in Bonn, Germany, over the last two weeks: finalize the text of a rulebook for the agreement that aims to limit global warming to well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit that increase to 1.5 degrees Celsius. On Monday, Executive Secretary of U.N. Climate Change Patricia Espinosa said producing a rulebook was impossible at the current conference.

“A single negotiating text. No,” said Espinosa. “That would really not be possible. It will all come together when it comes to the level of the COP [Conference of the Parties], of the conference in December.”

Given insufficient progress in Bonn, U.N. officials announced on Tuesday that they were adding a week-long session in Bangkok in September in order to meet the deadline for a rulebook at the main summit in Katowice, Poland, in December. Without that document, negotiators would have no basis for those talks.

Several issues stalled the Bonn negotiations. Most developed countries want to know how much climate funding they are committing to developing countries, which contributed the least to climate change but suffer its worst effects. They also want to understand how that funding will be adjusted to support countries’ progressive emissions reductions every five years. There is also pushback from developed countries on funding for climate impacts to which developing countries can no longer adapt.

At the Talanoa Dialogue, an international storytelling side event aimed at increasing global ambition to reduce climate change, State Department climate negotiator Kim Carnahan described President Donald Trump’s vision of a “balanced” global energy landscape and said the administration’s “position on the Paris Agreement remains unchanged,” a reference to Trump’s decision to withdraw the United States from the Paris Agreement. She maintained that the United States would ensure the viability of its nuclear power sector, currently its largest single source of no-carbon energy. Carnahan also noted the power sector carbon reductions that have accompanied increased natural gas production from hydraulic fracturing.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.