In the News

Jason Schwartz, legal fellow at the Institute for Policy Integrity, a nonpartisan research organization at the New York University School of Law, published a report last month that found that up to 259 lives could be saved every year in New York City if it disallowed the use of residual oils for heating. He said that the current bill was a great accomplishment on the state level, but more action needs to be seen here in the city to clean the air. “This bill is doing a lot,” he said. “But it’s focused on number two heating oil, so we still need action at the city level to transition New York City customers from the dirtiest heating oil to cleaner types.”

The EPA can and must proceed with new rules — but it must do so using market-based mechanisms that will not clash with possible future congressional actions.

New York City has some of the dirtiest air in the country, but now there is a move to cut down on one especially potent source of pollution.

The CLEAR Act would spur green energy investment while avoiding regional disparities, according to a new study by the Institute for Policy Integrity at New York University School of Law. The legislation would cap national greenhouse gas emissions, auctioning off all allowances for emissions and then refunding 75 percent of federal revenues to taxpayers, using the other 25 percent to invest in green technologies.

Indeed, as an April 2010 studyfrom the Institute for Policy Integrity at the New York University School of Law found, “It would take more than ten consecutive years without a single flood claim for the median premium payments to cover the deficit,” assuming the U.S. Treasury doesn’t charge the program interest on the debt. “Assuming median losses and a 5% interest on the program’s debt,” authors J. Scott Holladay and Jason A. Schwartz continue, “the repayment window rises to over 100 years. The program, as currently structured, will never repay its debt.”

Researchers at the New York University School of Law found that the legislation would generate good, “green jobs” in areas such as construction, solar power and mass transit because a predictable carbon price spurs investment in efficiency and cleaner-energy solutions.

According to an EPA analysis released Monday, the Kerry-Lieberman climate bill—also known as the American Power Act—would cost $146 per year per household. The only catch? The EPA didn’t assess the benefits of the bill, particularly the fact that it’s a necessary step for averting the worst effects of climate change. And that’s unfortunate, because when you look at what the $146 per year would buy us, it’s a pretty good deal.

The EPA can and must proceed with new rules—but it must do so using market-based mechanisms that will not clash with possible future congressional actions. It is bound by law to proceed, but it can move wisely by laying groundwork that will come at the lowest possible costs to business and will mesh well with the legislation Congress will hopefully enact someday soon.

Some have tried to assess such impacts. In a study of energy-climate legislation last year, the nonpartisan Institute for Policy Integrity found that the House bill would generate between $750 billion and $1 trillion in total benefits between 2012 and 2050.

But Scott Holladay, an economics fellow who works on climate issues for the Institute of Policy Integrity cautioned that while he agrees that meeting biomass demands will involve cutting down whole trees and lead to increased emissions, the numbers in the report should be taken with a grain of salt. “My main concern is this a very static look at the issue, it doesn’t take into account the feedback effect,” Holladay said. “It doesn’t seem like they take into account as forest becomes more scarce the price of wood will go up and the price of this as fuel will go up as well,” potentially prompting switches to other energy sources, he said.