Recent Projects

This summer, California passed Assembly Bill 398, extending the state’s well-regarded cap-and-trade program until 2030. The California Air Resources Board held a public workshop on October 12, 2017, on implementing the provisions of AB 398. The Board requested feedback on a number of specific issues to aid it in finalizing the cap-and-trade regulations, including on setting a price ceiling for emissions allowances and unsold allowance allocation. In our comments to the Board, we focused on these two issues, making recommendations for developing regulations under AB 398 that help ARB fulfill its statutory mandates to take into account the externalities associated with greenhouse gas emissions and promote overall societal well-being.

In September, Energy Secretary Perry asked the Federal Energy Regulatory Commission (FERC) to adopt a new rule that would guarantee plants with 90-day on-site fuel, mostly coal and nuclear plants, full cost recovery. We submitted an initial set of comments in response to their Notice Inviting Comments, and we have now submitted reply comments.

In September 2017, a federal court overturned the Bureau of Land Management’s (BLM’s) decision to delay a rule that is designed to prevent private industry from wasting natural gas resources in mining activities on public land. In its decision to delay the rule, BLM had not considered the benefits that would be forgone. Now, BLM has proposed a second delay. Our comments to BLM argue that the agency manipulated the calculation of forgone benefits from delay—particularly, the calculation of the social cost of methane—in ways that are completely inconsistent with the best available science, the best practices for economic analysis, and the legal standards governing rational decisionmaking. The 2016 Waste Prevention Rule’s benefits exceed its costs by as much as $200 million per year, and thus the proposal to suspend the rule is arbitrary and capricious.

We filed these joint comments with the Environmental Defense Fund, the Natural Resources Defense Counsel, the Sierra Club, and the Union of Concerned Scientists.

In July, Governor Hickenlooper issued Executive Order D2017-015, Supporting Colorado’s Clean Energy Transition, which called for an update to the 2015 Colorado Climate Plan. We took this opportunity to share our recent guide, The Social Cost of Greenhouse Gases and State Policy, along with a letter encouraging Colorado state agencies to use the social cost of carbon in all major regulatory, resource management, and electricity decisions with possible climate effects.

Net metering, the predominant approach to compensating distributed solar generation in the U.S., essentially pays households with solar panels a flat retail rate for every kilowatt hour they send back to the grid. In response to the Department of Energy’s request for information on the costs and benefits of net energy metering, we submitted Richard Revesz and Burcin Unel’s law review article on net metering and distributed electricity generation. The paper analyzes the benefits and costs of distributed generation, and identifies ways for state policy to better match consumer compensation for solar generation with the energy system and environmental benefits that it provides. It also includes information that is relevant to the RFI including the identification and categorization of the costs and benefits of net energy metering policies.

The U.S. Forest Service’s final approval of a coal mine expansion in Colorado continues to ignore climate damages, despite a 2014 ruling by the U.S. District Court of Colorado asking the Forest Service to disclose the effects greenhouse gas emissions from the project in its Environmental Impact Statement. Our objection to the Forest Service’s decision argues that it cannot legally ignore climate costs, which are not difficult to quantify, while also monetizing the economic upside of changing these coal leases. This objection echoes our previous comments to the Forest Service on the West Elk mine expansion.

Energy Secretary Rick Perry’s controversial proposal to subsidize coal and nuclear plants could have terrible consequences for consumers and public health, as our recent comments and op-ed in US News highlight. In September, Perry asked the Federal Energy Regulatory Commission (FERC) to adopt a new rule that would guarantee coal and nuclear plants their full costs plus a profit, so long as they keep 90 days of fuel on site. Perry claims that these “fuel-secure” plants ensure grid reliability and resilience, but neither he nor FERC adequately define these terms or explain why such a measure is justified.

Nevada’s Senate Bill 65, passed in 2017, directs the state’s Public Utilities Commission to prioritize the sources of electricity that provide the greatest economic and environmental benefits, including considering the potential costs of carbon, when reviewing utilities’ resource plans. Our joint comments with Western Resource Advocates and the Environmental Defense Fund offer guidance to the Commission on how to evaluate the potential costs of carbon. Specifically, we recommend that the Commission should require the utilities’ resource plans to use the Social Cost of Carbon as developed by the federal government in 2016 to evaluate the potential costs of carbon associated with different electricity sources. We also submitted joint comments replying to stakeholder feedback, offering specific feedback on how the Commission can modify its regulations to accomplish the intent of the bill.

In December 2016, the National Highway Traffic Safety Administration (NHTSA) finalized a rule that updates civil penalties for car manufacturers that violate fuel economy standards. NHTSA is now reconsidering the rule, claiming it would have a significant negative economic impact. The agency provides no evidence that economic circumstances have changed since the rule’s finalization to make the rule more costly. Our comments argue that the agency should not proceed with the proposed reconsideration, because it inadequately explained why it changed positions. If the agency does continue with the reconsideration, both the Inflation Adjustment Act and economic cost-benefit analysis would justify an update to the penalties rates rather than maintaining the original penalty rate from 1975.

In August, Environmental Protection Agency and National Highway Traffic Safety Administration announced their intentions to reconsider greenhouse gas and fuel economy standards for light-duty vehicles for model years 2022-2025. Our comments show that the employment effects from the standards are likely to be small, and we provide details on the short comings and biases of industry analyses that purport to show large employment effects. In contrast, the comments explain that the standards will help reduce numerous externalities, resulting in large welfare gains for consumers and the creation of valuable environmental benefits.