October 1, 2014
-
Policy Integrity Argues Offshore Leasing Case in DC Circuit Court
The government’s offshore leasing system fails to account for uncertainties about environmental harms—the system ignores “option value,” a well-established economic technique that quantifies the value of delaying decisions to acquire crucial information. This leads to risky over-exploitation of natural resources, Michael Livermore recently argued before the U.S. Court of Appeals for the D.C. Circuit, representing the plaintiff in Center for Sustainable Economy v. Jewell. The case could have significant implications for all government natural resource leasing programs. A ruling is expected in the coming months.
-
New Report on Wildfires and the Social Cost of Carbon
Climate change is expected to make wildfires more frequent and intense, raising U.S. wildfire damages by tens of billions of dollars a year by 2050. As part of our Cost of Carbon Pollution project with EDF and NRDC, Policy Integrity economics fellow Peter Howard authored a recent report that provides the first estimate of the future costs of climate change-induced wildfires. These costs are currently omitted from the government’s social cost of carbon estimate, and the report lays the groundwork for their future inclusion.
-
In the News: Offshore Drilling and Option Value
“The U.S. government could learn important lessons on offshore leasing from financial markets and oil companies,” Jayni Hein and Michael Livermore recently wrote in an op-ed in The Hill. Their piece explains the importance of accounting for option value in order to properly analyze the economics of natural resource extraction. “To make the federal leasing system fair—and to catch up to the private sector—option value should be factored into all government leases for resource extraction,” they write.
-
On the Docket: Net Metering
More than 40 states have “net metering” laws that allow solar-powered households to sell some of the electricity they generate back into the grid for a fixed price. Some utilities argue that this forces them to fund additional grid maintenance and modernization without appropriate compensation. Other groups argue that the climate benefits of distributed renewables are being undervalued by many states. Policy Integrity recently began a research project on the economics of net metering, and will soon submit public comments highlighting concerns with a proposed plan to weaken Wisconsin’s net metering rules.
-
Staff Spotlight: Economics Fellow Burcin Unel
Burcin Unel joined Policy Integrity in July 2014 as an economics fellow. Prior to joining Policy Integrity, Dr. Unel held faculty positions at the University of Florida and Bogazici University in Istanbul. Her research is in applied microeconomics, industrial organization, and health economics and policy. At Policy Integrity, she is currently conducting research on the economic models behind net metering policies and the employment impacts of government regulations.