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Transmission Planning for the Energy Transition
Rethinking Modeling Approaches
This report examines the critical role of modeling details and assumptions that transmission planners frequently ignore. We first provide an overview of the wide array of choices planners have when designing traditional transmission planning models. We then discuss how planners need to rethink these choices to account for the rapidly evolving energy system and the additional uncertainties climate change brings. Finally, we present a modeling case study to show how important these modeling choices could be for transmission outcomes.
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The Continued Need for SEC Action on Climate-Related Disclosures
How New California and E.U. Requirements Reinforce the Economic Case for the SEC’s Proposed Rule
On March 21, 2022, the Securities and Exchange Commission (SEC) proposed a rule that would require SEC registrants (both domestic and foreign) to provide climate-related disclosures in certain SEC filings. Since the release of the SEC Proposal in March 2022, other jurisdictions, including California and the European Union, have adopted climate-related disclosure regimes. Like many federal rules, the SEC Proposal included an assessment of its costs and benefits. This report examines how the California and E.U. disclosure regimes may affect the baseline for that cost-benefit analysis and, consequently, the SEC’s assessment of the incremental costs and benefits of its proposal. Overall, we find that the new disclosure regimes do not undermine the economic case for the SEC Proposal; if anything, they bolster it.
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The Social Cost of Carbon
Options for Applying a Metric in Flux
Many states and other jurisdictions are grappling with how to value greenhouse gas emission reductions and trying to understand the rapidly developing climate economics and science involved in this task. Frequently, state governments and other jurisdictions value greenhouse gas emissions in policymaking using a tool known as the social cost of carbon.
While applying the social cost of carbon is conceptually simple, the appropriate value to place on the metric is in flux. In late 2022, the federal government released new, updated values of the social cost of carbon in draft form which, for now, remain unfinalized. So what estimates of the social cost of carbon should states and other entities use during this transition period? This policy brief explores the available options.
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Wildfire, Power Shutoff, and Residential Energy Storage Adoption
Extreme weather poses a growing threat to electrical grid stability. On-site battery storage connected to solar power —known as a solar-plus-storage system—can buffer the impact. Despite its crucial benefits, the widespread adoption of this technology is hindered by its high costs. This study examines the impact of recent salient events—namely, preemptive power shutoffs to prevent wildfires, or Public Safety Power Shutoffs (PSPSs)—on residential solar-plus-storage adoption. I demonstrate that while communities at risk of wildfires lacked proactive investments before wildfire seasons, prolonged PSPSs increased solar-plus-storage adoption during the subsequent two months. This increased storage uptake can be attributed to heightened awareness of the need for backup power. Additionally, households’ choices between purchasing and leasing options were influenced by latent wildfire hazards and education levels. These findings highlight the role of risk awareness in promoting storage adoption and underscore the potential for using public information to enhance wildfire preparedness. -
Targeted Regulation for Reducing High-Ozone Events
Working paper
Nitrogen oxides (NOx) are a precursor to ground-level ozone, a pernicious pollutant that is harmful to human health and ecosystems. Despite decades of regulations and a sharp decline in NOx emissions, episodic high-ozone events prevent many areas from attaining air quality standards. Theoretically, spatially or temporally differentiated emissions prices could be more cost effective at reducing such events than a uniform price. To test this prediction, with data from EPA and NOAA spanning 2001–2019, this working paper uses novel empirical strategies to estimate (1) the link between hourly emissions and high-ozone events and (2) hourly marginal abatement costs. These estimates form the basis for simulations that compare uniform and differentiated emissions pricing. Consistent with economic theory, differentiated pricing is substantially more cost effective at reducing high-ozone events, but this advantage depends on the accuracy of the estimated NOx–ozone relationship.
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