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  • Policy Briefs

    Analyzing EPA’s Vehicle-Emissions Decisions

    May 1, 2018

    The Environmental Protection Agency sets greenhouse gas emissions standards for cars and light trucks, and it periodically reevaluates these standards to make sure that car manufacturers can comply. In April 2018, EPA withdrew its previous determination that standards for model year 2022–2025 vehicles were appropriate and would improve public welfare, now saying that more recent information suggests that the standards are too stringent.

    Our policy brief shows that EPA’s claim—that new information indicates that the assumptions underlying the previous determination are unrealistic—is not supported by the evidence. In fact, the opposite is the case. Recent trends in fuel prices, vehicle sales, automaker compliance, and safety all indicate that the existing 2022–2025 standards can be met at low cost while delivering large benefits to consumers and the economy. EPA’s decision to withdraw the standards will instead cause regulatory uncertainty that will hurt the automotive sector while also harming the environment.

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  • Reports

    Capacity Markets and Externalities

    April 30, 2018

    Many states are taking action on climate change by paying zero- and low-emitting electricity generators for avoiding the emissions that fossil-fuel-fired resources would otherwise emit. These “externality payments” help level the playing field between emitting and non-emitting generators. Critics of these policies argue that these payments might negatively affect the efficiency of wholesale electricity markets by reducing capacity prices, which heavily affect how generators enter and exit the market.

    Our report shows why the premises underlying recent reforms, which seek to shield capacity markets from the potential price impact of pollution externality payments, are flawed. The report argues that redesigning capacity markets in reaction to these state policies shows concern for only private generation costs and disregards the fact that externality payments help correct market failures associated with air pollution, improving economic efficiency.

    Rushed market design changes based on the unsupported assumption that state policies negatively affect capacity markets may actually harm the functioning of the markets, while potentially undoing states’ efforts to combat pollution and climate change.

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  • Reports

    Managing the Future of Energy Storage

    April 24, 2018

    Many policymakers assume that increasing deployment of energy storage will automatically reduce greenhouse gas emissions, in part by helping to integrate renewable energy resources with intermittent and variable generation. This report explores situations in which energy storage systems can in fact lead to increased emissions, and offers reforms to correct for poor incentives while ensuring that energy storage can provide the maximum benefit possible to the grid.

    Policy reforms that account for the range of benefits provided by storage, including reduced air pollution, are required at both state and federal levels. This report recommends that policymakers (1) focus on accurately pricing externalities caused by greenhouse gases; (2) eliminate entry barriers for energy storage systems; (3) and eliminate barriers that energy storage systems face to receiving multiple value streams for the various services they provide. The report outlines steps to realize each of these three goals and provides an overview of state and federal actions currently under way.

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  • Academic Articles/Working Papers

    Environmental Standards, Thresholds, and the Next Battleground of Climate Change Regulations

    April 11, 2018

    Regulations to curtail climate change have the additional benefit of reducing air pollution by accelerating the shift away from carbon-intensive and high-polluting energy such as coal. The benefits from reducing just one air pollutant – particulate matter – account for almost half of the quantified benefits of the Obama Administration’s Clean Power Plan. Regulatory opponents have launched an aggressive attack on the use of these benefits to justify climate change regulations. They claim that these benefits are not real, are accounted for in other regulations, or should not be considered because they are indirect benefits. This Article collects and analyzes for the first time the robust support for valuing particulate matter and other air pollution reduction benefits. Following an examination of the scientific literature, longstanding agency practices under administrations of both major political parties, and judicial precedent, the authors conclude that particulate matter benefits deserve a meaningful role in regulatory cost-benefit analysis.

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  • Issue Briefs

    How the Trump Administration Is Obscuring the Costs of Climate Change

    March 23, 2018

    When federal and state policymakers account for the impacts of climate change, they regularly use a tool called the Social Cost of Carbon (SCC). The SCC puts a dollar value on the most significant, quantifiable damages caused by each additional ton of carbon dioxide emitted. The most recent estimate of the cost is at least $51 per ton and rising over time. But now, turning its back on years of work, the Trump administration has disbanded the federal group that developed the SCC, and produced a new “interim” estimate claiming that each ton of carbon dioxide causes as little as $1 in climate damages.

    This issue brief describes how the Trump Administration reached this misleading number by ignoring the interconnected, global nature of our climate-vulnerable economy and obscuring the devastating effects that climate change will have on younger and future generations. Though the administration has been proposing rollbacks of environmental rules using this problematic SCC estimate as justification, we explain why federal agencies and state governments should continue using the most recent estimate by the Interagency Working Group that developed the SCC.

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  • Reports

    Valuing Pollution Reductions

    March 23, 2018

    Distributed energy resources (DERs)—grid-connected, small-scale electric generators such as rooftop solar installations, micro-turbines, combined heat and power systems, customer backup generators, and distributed energy storage systems—are a growing part of the U.S. electric system. They can help avoid the high levels of greenhouse gases and local air pollution produced by traditional energy sources. As their use grows, state electric utility regulators are seeking to compensate DERs accurately for the benefits they offer, including reductions in pollution that contributes to climate change and harms human health.

    This report shows how regulators can calculate the types and amount of pollution avoided, and then monetize these benefits for use in policy. This flexible blueprint allows states to consider tradeoffs between accuracy and ease of administration, pick the tools that are most accurate given the tradeoffs, and update their methods when feasible. This methodology would allow utility regulators to implement technology-neutral policies that incentivize DERs when and where they are most beneficial to society.

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  • Academic Articles/Working Papers

    Federal Lands and Fossil Fuels

    March 23, 2018

    The Department of the Interior is tasked with managing the nation’s mineral resources and must earn a “fair market value” for the use of federal lands and resources. But in recent years, Interior’s coal, oil, and natural gas leasing programs have been criticized for failing to keep pace with developments in modern technology, shortchanging taxpayers, and failing to adequately account for climate change and other environmental effects.

    This Article suggests a rational path forward for federal fossil fuel leasing. Just as a private company would seek to maximize net revenue in its operations, Interior should seek to manage its program to provide maximum net benefits to the public, to whom public resources belong. This includes accounting for all of the costs and benefits of leasing—including environmental and social costs—and adjusting the fiscal terms of its fossil fuel leases to recoup unmitigated externality costs. The Article describes how maximizing social welfare is consistent Interior’s statutory mandates, legislative history, judicial precedent, and principles of executive review that instruct agencies to maximize the net benefits of their policy choices. The reforms suggested here can significantly increase revenue for states and the federal government while reducing greenhouse gas emissions, illustrating the utility of using fiscal reform as a policy lever in the absence of comprehensive climate change legislation.

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  • Academic Articles/Working Papers

    Monumental Decisions

    March 19, 2018

    One of the most controversial and hotly contested legal issues in the public lands space is whether a President can reverse or diminish a national monument established by a prior President, without express Congressional authorization. President Trump has taken unprecedented actions by sharply reducing the boundaries of national monuments, and by reversing a moratorium on new offshore oil and gas leasing enacted by President Obama. In new legal scholarship, Jayni Hein argues that the powers granted to the President in the Antiquities Act and Outer Continental Shelf Lands Act (OCSLA) operate in one direction only: towards preservation. Presidents do not have the authority to rescind or diminish national monument designations, nor to re-open previously withdrawn areas to offshore leasing. Congress, alone, retains this authority over public lands.

    In examining the extent of presidential power over protected public lands, courts should look to the Antiquities Act and OCSLA, but also the broader context of public land management, including the public trust doctrine. Interpreting these two statutory provisions to confer a one-direction power to the President is consistent not only with statutory text, the relevant constitutional framework, and legislative history, but also with the enduring national narrative that public lands should be regulated according to principles of democratic decision making, especially where important public trust interests are at stake. While allowing relatively unencumbered presidential actions to protect special places and natural resources, they reserve to Congress the more “monumental” power to modify or abolish national monuments and to allow withdrawn offshore lands to be leased for fossil fuel extraction.

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  • Academic Articles/Working Papers

    Managing the Future of the Electricity Grid: Energy Storage and Greenhouse Gas Emissions

    March 19, 2018

    Recent advances in technology and the consequent decline in manufacturing costs are making energy storage systems a central element of energy and climate change policy debates across the nation. Energy storage systems have the potential to provide many benefits such as lower electricity prices at peak demand times, deferred or avoided new capacity investments, and reduced greenhouse gas emissions. Indeed, both federal and state policymakers are enthusiastically encouraging more energy storage deployment with the belief that energy storage systems will help reduce greenhouse gas emissions from the electricity sector by making intermittent and variable renewable energy resources such as solar and wind more attractive.

    This article challenges this common assumption that increased energy storage will necessarily reduce greenhouse gas emissions. We first explore the conditions under which energy storage systems can cause an increase in greenhouse gas emissions contrary to the intent of the policymakers. As policymakers start to rely more heavily on energy storage systems to achieve clean energy goals, this insight is crucial to inform the stakeholders in the energy and climate policy debates. Furthermore, we show that the current regulatory and policy landscape falls short of providing sufficient incentives for a desirable level of deployment of energy storage or sufficient safeguards to ensure that more energy storage deployment is indeed beneficial. We suggest policy reforms that can correct these inefficiencies and discuss the jurisdictional roles between state and federal regulators in implementing these reforms.

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  • Academic Articles/Working Papers

    Computationally Assisted Regulatory Participation

    March 10, 2018

    With the increased politicization of agency rulemaking and the reduced cost of participating in the notice-and-comment rulemaking process, administrative agencies have, in recent years, found themselves deluged in a flood of public comments. In this Article, the authors argue that this deluge presents both challenges and opportunities, and they explore how advances in natural language processing technologies can help agencies address the challenges and take advantage of the opportunities created by the recent growth of public participation in the regulatory process. They also examine how scholars of public bureaucracies can use this important new publicly available data to better understand how agencies interact with the public. To illustrate the value of these new tools, the authors carry out computational text analysis of nearly three million public comments that were received by administrative agencies over the course of the Obama administration. The findings indicate that advances in natural language processing technology show great promise for both researchers and policymakers who are interested in understanding, and improving, regulatory decision-making.

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