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2013 | 2012 | 2011
December | November | October | September | August | July | June | MayApril | March | February | January
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December 2013

December 16, 2013

Cross-State Air Pollution

A “slim majority” of Supreme Court Justices appear in favor of federal regulations imposed by the Cross-State Air Pollution Rule, which addresses air pollution that drifts across borders. While opponents to the rule say that the US Environmental Protection Agency is overreaching and usurping states’ rights, others say the agency is trying to “serve as an ‘honest broker’ between competing state interests.”

In a recent Marketplace interview, RFF’s Dallas Burtraw notes that downwind areas that currently have poor air quality “typically will have more stringent requirements on facilities located in those states” than upwind areas that contribute to the problem. New regulations would impose greater costs on upwind states, but Burtraw points out that states in the Northeast are already paying a “hidden tax”—health impacts from being exposed to air pollution.

Post-Sandy Green Infrastructure

One year after Hurricane Sandy, New Jersey residents are making efforts to invest in environmentally sustainable storm protection. Oceanfront locals aim to “make the coast more resilient by using ‘soft’ infrastructure projects,” such as beach replenishment and wetland conservation, which also offer “recreational and other benefits that improve everyday life” for communities.

In a recent Resources article, RFF’s Anna Brittain writes: “Investing in green infrastructure may be worthwhile, even if more costly than traditional approaches, because the social and environmental benefits may exceed the additional costs.” Research in RFF’s Center for the Management of Ecological Wealth focuses on a variety of ways to build resilience through green infrastructure—read more here.

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December 9, 2013

Social Cost of Carbon and Electricity

The White House has revised the data used in its evaluation of the social cost of carbon (SCC), resulting in a change from $21 to $38 per metric ton in the central case estimate. The technical support document is open for public comment and officials are interested in understanding “the strengths and limitations of the overall approach.”

Imposing a carbon tax on power generation based on the SCC would change the mix of technologies and fuels used to produce electricity, according to RFF’s Anthony Paul, Blair Beasley, and Karen Palmer. In new research focusing on a range of SCC values, the authors find that lower SCC estimates favor gas substitutions for coal, whereas “higher estimates induce switching to wind and nuclear generation.”

Limits to Ingenuity

A group of researchers from the Rensselaer Polytechnic Institute examined the effort of villagers in China to replace the dwindling bee population by pollenating apple trees by hand—which resulted in a 30 to 40 percent growth in apple production. However, the authors caution against “the danger of allowing the logic of the market to drive conservation policy.”

According to RFF’s James Boyd, humans cannot always depend on ingenuity to “save the day.” He writes: “It’s also hard to imagine how we would innovate our way around the loss of natural resources important to our cultural identity or sense of beauty and wonder. There aren’t many substitutes for the relatively untouched expanse of Alaska’s North Slope if what matters to you is its very wildness.” Boyd also moderated a discussion between historians, ecologists, economists, psychologists, and entrepreneurs to examine such issues. Video is available here.

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November 2013

November 25, 2013

State Species Regulation

Newly proposed legislation allowing for more flexible land use could give states the power to opt out of Endangered Species Act (ESA) regulations. The bill would also require congressional approval for additions to the federal endangered species list, as well as compensation for some private property owners affected by the ESA.

The ESA will be the focus of RFF’s next First Wednesday Seminar, Species Conservation under the Endangered Species Act, on December 4. RFF’s Rebecca Epanchin-Niell will lead panelists in a discussion of the strategies needed to overcome the challenges to effective implementation of the ESA. Register to attend in person or watch via live webcast and Tweet questions using #AskRFF. Read more about new tools for conservation under the ESA in the latest issue of Resources magazine.

Flood Insurance Reform Delay

Congress has yet to reach an agreement that would delay implementation of the Biggert-Waters Flood Insurance Reform Act, which will remove artificially low insurance rates in high-risk areas though the gradual elimination of discounts and subsidies. However, some have voiced concerns about the severity of the changes for many coastal homeowners.

RFF’s Carolyn Kousky and Howard Kunreuther of the University of Pennsylvania’s Wharton School argue that delaying the act “could impede the financial soundness of the [National Flood Insurance Program].” Insurance rates kept artificially low do not accurately reflect information to homeowners about the risks they face. The authors recognize that affordability must still be addressed, however, and suggest enhancing the Biggert-Waters Act with a voucher system coupled to a low-interest loan program for investments in hazard mitigation.

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November 18, 2013

Biofuel Land Use

The Associated Press recently published an exposé on ethanol-driven land-use changes in the United States, detailing the “secret environmental cost” of creating new agricultural land for corn growth. The report prompted a “fierce response” from members of the biofuels industry, who disagree with many of the AP's figures.
New research by RFF’s Roger Sedjo and Anne Riddle, along with Ohio State University Professor Brent Sohngen, notes that corn is not the only source for ethanol, and that industrial forests and plantations on lower-quality, marginal lands can “economically produce large levels of biomass without compromising crop production,” mitigating conflicts over land use.
Fracking’s Impacts on Water
An increasing number of oil and gas drillers are employing water recycling methods to ease the effect of drought on natural gas production. The recycling systems are being adapted rapidly by companies operating in critically dry regions such as Texas, and use methods aimed at “helping drillers [to] use less fresh water and dispose of less wastewater.”
In a recent review of the existing scientific literature, RFF’s Yusuke Kuwayama and Alan Krupnick, together with RFF Nonresident Fellow Sheila Olmstead of the University of Texas, Austin, say that “the water quantity impacts of unconventional fossil fuels are, on average, not significantly worse than for conventional fossil fuels.” However, they find that “water quality concerns associated with unconventional fossil fuels are likely to be more serious” than concerns about water quantity, and “more serious for the unconventional than the conventional fuels.”
Regulating Power Plant Emissions
A new poll by RFF University Fellow Jon Krosnick of Stanford University shows that more than 75 percent of Americans believe global warming to be “real, serious, and man-made.” Results indicate that although a geographic majority of people want the government to limit power plant emissions, there is not much support for increased fees on electricity use.
According to RFF’s Dallas Burtraw and Matt Woerman, tradable performance standards issued under the Clean Air Act could achieve reductions with minimal impacts on retail electricity prices. However, they note that this approach is less economically efficient than a carbon tax or cap-and-trade policy.

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November 11, 2013

Updating the Cost of Carbon

The Office of Management and Budget recently released updated values of the social cost of carbon (SCC) and said that a new public comment process would be forthcoming. Revisions to the SCC have become a contentious topic, generating concerns about the US Environmental Protection Agency’s plans for carbon standards for power plants and questions from Republican leadership about agency transparency.

RFF’s Joel Darmstadter and Alan Krupnick noted that the complicated nature of SCC research and calculation means that “unanimous acceptance of such an estimated number is nearly impossible.” The authors conclude that the recent critique of the Interagency Working Group’s SCC estimation process is less substantive than meets the eye. Darmstadter also joined RFF’s Jan Mares in examining the global effects of an SCC value, highlighting a “distributive justice element” needed to help poorer countries adapt to energy policies.

Offshore Drilling Reforms

SNL Financial recently examined the inadequate number of safety reforms implemented by the Department of the Interior after the 2010 Deepwater Horizon explosion.  Since the incident, 25 recommendations have yet to be addressed. Safety experts noted that some of the reforms are complicated, including “establishing a system to track investigation recommendations to verify that they get implemented.”

In research done at the request of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, RFF’s Art Fraas, Richard Morgenstern, and coauthors Lynn Scarlett  and Timothy Murphy recommend how agencies that manage deepwater drilling can improve regulatory capacity and safety performance. They note the value of external review and recommend independent, third-party audits and peer review, which “should become formal, regular requirements of the agency’s oversight.”

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November 4, 2013

Natural Gas Vehicles

Boasting smaller carbon footprints, lower fuel prices, and less mechanical corrosion, natural gas vehicles already number in the millions in countries such as Iran and Argentina. The United States could be next, as “issues that have limited [natural gas] use in cars are being rethought.”

Learn more about this topic on November 13 when RFF’s Richard Morgenstern, Arthur Fraas, and Winston Harrington present new research at an RFF First Wednesday Seminar, “Cheaper Fuels for the Light-Duty Fleet.” They will discuss the economic, environmental, and security gains associated with natural gas–based fuels, as well as the regulatory and political challenges that accompany their use. Register here to attend in person or watch the webcast live and tweet your questions to #AskRFF.

West Coast Carbon Pact

The governors of California, Oregon, and Washington and British Columbia’s environmental minister have signed a pact to encourage the use of clean energy while mitigating climate change impacts. The “Pacific Coast Action Plan” begins to align carbon policies in the region and pledges to move forward on new plans to price carbon. The leaders believe that the group initiative will better allow the region to reach its emissions reductions goals.

Regional efforts in the United States and Canada are already primed for a carbon agreement in many ways, according to a report by RFF’s Dallas Burtraw, Karen Palmer, Clayton Munnings, Paige Weber, and Matt Woerman. They point out that many jurisdictions in the western United States and Canada have already linked their carbon pricing approaches “through cooperation and sharing of information, mutual learning, and borrowing from each other’s program design.” And, California has formally linked its carbon market with Quebec. Burtraw and Munnings also note that the intent to align policies “means that California, Oregon, and Washington are more likely to influence the US Environmental Protection Agency as it moves to craft regulations under the Clean Air Act.”

 

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October 2013

October 31, 2013

Saving Endangered Species 
Wildlife workers in Africa have revised the number of elephants they believe have been poisoned by impoverished Zimbabwe locals since July. Over 300 African elephants have died as a result of cyanide ingestion, allowing poachers to harvest and sell their tusks in illegal ivory trades, which have more than doubled since 2007. Current conservation efforts in the region have failed to protect the species, whose dwindling population has been classified as “vulnerable” by the World Wildlife Fund.
Though operating within a more developed and accountable framework, US conservation efforts still face challenges of their own, according to RFF’s Rebecca Epanchin-Niell and coauthors Lynn Scarlett and Matthew McKinney. In a recent issue of Resources magazine, they examine the opportunities for improving the 40-year-old Endangered Species Act’s sustainability and efficacy, stressing the importance of comprehensive and collaborative approaches to funding, management, conservation, and private sector involvement. The authors say that future generations will benefit from “larger, landscape-scale efforts that use incentives to engage private landowners and nonprofit partners” in future species protection measures.
Hazardous Materials Transportation
The Canadian National Railway is defending its safety record after its third major derailment this month involving hazardous materials. The train’s contents, which included crude oil and petroleum gas, were similar to those involved in the fatal Lac-Mégantic accident in July, which left 47 dead. The high numbers of accidents involving the transportation of hazardous materials have many concerned about the capacity of current Canadian infrastructure to handle future increases in fossil fuel and chemical transportation.
Similar questions are being asked in the United States, where shale gas extraction has increased dramatically in the last few years. In a recent blog post and upcoming report, RFF’s Lucija Muehlenbachs and Alan Krupnick examine the relationship between shale gas development and traffic accidents in Pennsylvania involving shale-related transportation. They find a positive correlation between well numbers and traffic accidents, and are able to link the accidents to shale development due to the “large degree of spatial and temporal variation of shale gas well development and knowing whether a heavy truck was involved in the accidents.”
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October 23, 2013

Australia’s PM Takes on Carbon Tax
Australian Prime Minister Tony Abbot revealed a draft bill last week that would repeal the country’s controversial carbon tax. The current per-ton tax, introduced by previous PM Julia Gillard, began as a fixed-price emissions scheme that would switch to market trading in 2015. Abbot’s alternative plan, which pays companies that keep pollution below a set standard, is viewed by many as “a less efficient way of cutting emissions.”
Policymakers weighing a carbon tax can alternatively use the social cost of carbon (SCC) as a pricing basis, an option examined within the electricity sector by RFF’s Anthony Paul and Karen Palmer. Focusing on Interagency Working Group estimates for future SCC prices, they find that for a carbon tax set at the SCC mean estimates, the vast majority of electricity sector emissions reductions will come from reduced electricity demand and substitution of natural gas-fired generation for coal-fired generation. According to their research, non-emitting generation sources, such as renewables or nuclear, would achieve significant market penetration only with higher tax rates. The authors also note that SCC pricing offers “weaker long-run incentives for expanded renewable and nuclear generation” than a comparable cap-and-trade program.
Finding Funds for State Parks
National parks and the local economies surrounding them may have lost about $76 million per day during the shutdown, but their state counterparts enjoyed a generous uptick in admissions during the closure. Many state parks spent 16 days swamped by unusually large crowds of visitors, with some even requesting backup to help with the influx of tourists turned away from national forests, waters, and other affected landmarks.
Keeping these state parks fiscally sustainable has become an increasingly difficult challenge, notes RFF researcher Margaret Walls. In a recent Resources article and full report, Walls examines the efficacy of a range of revenue sources for state parks, including user fees, privatization, dedicated public funds, and  private donations. Outdated practices and the recent recession, she says, mean that “a fresh approach to financing parks and open space” that goes beyond standard public funding is needed.

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October 16, 2013

Space Debris in “Gravity”

Alfonso Cuarón’s “Gravity” may have enchanted critics and enjoyed the best October opening ever, but the movie also sparked a flurry of debate about its scientific accuracy and implications. The destructive space junk depicted in the film has become a popular talking point, with some media outlets wondering if a real-world “rocket tax” could be used to hold governments and corporations more responsible for material they send into orbit.

Thinking about space as a global “commons” is critical to solving problems such as excess space junk, according to RFF’s Molly Macauley. In a recent Resources issue, Macauley said that this debris is “one more form of pollution that can be addressed through policy mechanisms like deposit-refunds or tradable permits.” Resource and environmental economics, she noted, could also be used to set debris growth standards and account for policy enforcement costs.

Fixing Flood Reform

The Biggert-Waters Flood Insurance Reform Act began increasing some high-risk policyholders’ premiums on October 1st. The reform is an effort to make the National Flood Insurance Program (NFIP) self-sustaining, while preventing its benefits from flowing “disproportionately toward repeatedly devastated properties and to the wealthy.” Though the act is disliked by some politicians in areas most affected by these hikes, local efforts to delay the bill have been stalled by the government shutdown.

To ensure flood insurance remains affordable for all policyholders, RFF’s Carolyn Kousky and Howard Kunreuther propose coupling it with “a means-tested voucher with hazard mitigation requirements to be financed with low-interest loans.” Distributing vouchers parallel to new risk-based pricing would make insurance attainable for low-income homeowners and the NFIP more sustainable, while keeping communities aware of their relative flood risks.

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October 7, 2013

Shale Gas Challenges in China
Though China may hold the world’s largest share of “technically recoverable shale gas resources,” extracting the gas is likely to be troublesome and expensive. Challenges involving resource accessibility, water availability, and corporate culture are already leading to doubts about China’s ambitious production aims, and “few analysts think Beijing will be able to meet the [production] goals set out in its five-year plan for 2011–2015.”
To make large-scale production feasible, China will first need to develop technology to overcome its expense barriers, according to RFF’s Alan Krupnick and Zhongmin Wang, who lead RFF’s new Consortium for Energy Economics and Policy in China. They note that the price of shale gas extraction in China is “widely reported to be several times higher than that in the United States,” suggesting that solutions should be coupled with efforts to generate a policy and market environment in which firms have the incentive to make investments and would eventually find it profitable to produce shale gas.”
Expectations for Electric Cars
Toyota chairman and Prius pioneer Takeshi Uchiyamada recently noted that “the day when an affordable vehicle that could supplant, in a widespread way, the existing internal combustion fleet may be a long way off.” In a recent speech in DC, he discussed financial concerns and technology obstacles for electric vehicles, such as a need for batteries that can travel longer distances with shorter charging times, and acknowledged that such obstacles will not disappear any time soon.
In the final installments of an electric vehicle blog series on Common Resources, RFF’s Joshua Linn and Virginia McConnell agree that “greater cost reductions will be needed for [electric vehicles] to dominate the vehicle market without subsidies.” They find that consumer subsidies do make the vehicles more competitively priced, and other manufacturer subsidies create strong incentives for technology improvements. However, whether good economic arguments exist for either is up for debate.
 

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September 30, 2013

Coal Exports
Labor groups in Washington state have said that the state’s more stringent environmental review of a proposed terminal to export coal could slow the project and “would be a regulatory nightmare.’’ Environmentalists opposed to the development have stated concerns ranging from water pollution and traffic issues to “helping China with a new source of dirty fossil fuels.”
However, using these resources to help meet foreign demand “would be one of the few lifelines left for the American industry to survive on,” says RFF Senior Fellow Joel Darmstadter. He notes that while environmental concerns are valid, “the economic rationale for coal export plans seems unassailable,” especially given that “it is almost certain that US exports merely displace Colombian, Australian, Indonesian, or other coal supplies” that would meet global demands.
US Emissions
Last week a US State Department report to the United Nations said the country is on track to meet “President Obama's pledge to cut [greenhouse gas emissions] 17 percent below 2005 levels by 2020.” Research released last year by RFF’s Dallas Burtraw and Matt Woerman reached the same conclusion, despite the fact that there remains work to be done.
In a blog post for Common Resources, Burtraw and Woerman write, “Our point is to say the runner is ‘on pace’ at the 14th mile in a marathon, but still has a way to go. What happens ultimately will depend on the existing source standards...”—which they call the “most significant climate-related policy decision a president has ever faced.”
 

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September 23, 2013

New Power Plant Regulations
On Friday, the US Environmental Protection Agency (EPA) released regulations limiting carbon emissions from new power plants. The limit for new coal-fired plants would be 1,100 pounds of carbon emissions per megawatt hour, but there would be "operational flexibility" to achieve those levels, according to EPA.
EPA also kept coal and most gas plants in the same source category, despite giving them different standards. This, notes RFF’s Nathan Richardson, “makes flexibility (i.e., trading) possible, or at least much simpler, under the [existing source performance standards] that EPA and the states will issue in the near future.”
Designing a Fair Carbon Tax
Last week, Senator Barbara Boxer (D-CA) said she is examining the possibility of including a carbon emissions fee in tax reform. While she and Senator Bernie Sanders (I-VT) introduced similar legislation earlier this year and promised to “ensure that pollution reduction is not a regressive tax,” guaranteeing that low-income families will not be disproportionately affected remains a challenge.
In a new article in the latest issue of Resources magazine, RFF’s Daniel Morris and Clayton Munnings explain how “the regressive impacts of a carbon tax can be addressed by well-crafted policy.” They examined more than 20 years of economic research and found that “measuring impacts in terms of annual income may overstate regressivity.” They suggest that using annual consumption indicators instead could result in “an almost neutral impact” from a carbon tax.
Methane Emissions at Shale Gas Wells
A study released last week by experts at the University of Texas, Austin, and funded by the Environmental Defense Fund found that new shale gas wells that were being prepared for gas production “captured 99 percent of the escaping methane.” These reported leaks were smaller than estimated by the federal government, and “considerably smaller than some critics of shale gas had feared.”
In a new blog post, RFF’s Alan Krupnick and Nathan Richardson, experts on the environmental impacts of shale gas development, write that the study is “important new evidence in favor of gas as a climate-friendly fuel.” They note that these results are similar to EPA’s most recent estimates of methane leakage, and although the specific results related to the details of the two studies are quite different, “the close correspondence in total emissions helps validate both approaches.”

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September 16, 2013

Affordability of Flood Insurance
This year, the Biggert-Waters Act of 2012 will remove the subsidies from many home flood insurance policies to reflect “the full ‘risk-based’ rate,” triggering significant rate increases for many homeowners. This has caused business groups, politicians, and others to call for a delay of “some of the largest increases until the 2015 fiscal year.”
In a new RFF issue brief, RFF Fellow Carolyn Kousky and co-author Howard Kunreuther of the University of Pennsylvania’s Wharton Risk Management and Decision Processes Center write that the National Flood Insurance Program (NFIP) “must address affordability, but that this should not be done through discounted premiums.” They propose a new approach: creating a voucher program coupled with financing risk reduction measures through low-interest loans. “By requiring hazard mitigation,” they write, “future disaster losses would be reduced for both the NFIP and for the low- and moderate-income families.”
Carbon Tax Referendum
Prime Minister-elect of Australia and Leader of the Liberal Party Tony Abbott said that the parliamentary election in his country was a “referendum on the carbon tax.” In the United States, however, perception is split. Rep. Earl Blumenauer (D-OR) was quoted saying that he doesn’t think it’s “an international referendum on a carbon tax,” while Rep. Corey Gardner (R-CO) said “I think it’s very much a warning.” And Sen. Sheldon Whitehouse (D-RI) feels that “ultimately a [US] fee on carbon pollution is inevitable.”
Although political debates will continue, RFF’s Raymond Kopp, senior fellow and director of RFF’s Center for Climate and Electricity Policy, believes that “it’s time to end the discussion of the impact a carbon tax would have on US economic growth . . . it has no substantial impact.” He cites new analysis by RFF researchers showing that a “broad-based, revenue-neutral tax on carbon dioxide emissions would have imperceptible effects on macroeconomic growth as measured by GDP.” Read the full report here or watch a video discussion of the findings here.
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September 9, 2013

The Social Cost of Carbon
A federal Working Group recently estimated the "social cost of carbon" at around $43 per ton—some two-thirds above an estimate of two years ago. That such a number could serve as the basis for a carbon tax or increased regulations has stirred political apprehensions.  But, as RFF’s Joel Darmstadter and Alan Krupnick note, the Working Group analysis has also resonated positively.
In a separate post on RFF’s blog Common Resources, Darmstadter and Krupnick discuss what some have judged as a rejection of the Working Group's effort by MIT’s Robert Pindyck. They write that “a closer parsing of his statements suggests that his point is to stop overselling the precision of [the models] while pressing ahead with a [social cost of carbon] to get the process started.”
Sweden and California as Climate Leaders
Last week, President Obama met with the Swedish Prime Minister to discuss partnering on clean energy issues. He called the nation “an extraordinary leader” in tackling climate change, noting “we can learn from it.”
In the United States, California has played a leading role in developing programs to combat climate change, and RFF’s Dallas Burtraw and colleagues have worked closely with the Golden State to help its leaders implement smart policies. Recently, RFF co-hosted a conference with the Swedish Mistra Indigo program and the ClimateWorks Foundation in San Francisco to analyze the success that California and Sweden have had in forging new ground toward mitigating climate change. Read a summary of the conference, including perspectives from the 19 expert panelists, here: What is the Value of Being First? Perspectives from the California and Sweden Experiences.
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August 2013

August 19, 2013

BLM’s Proposed Hydraulic Fracturing Rule
In June, the Bureau of Land Management (BLM) announced that it was extending the public comment period on its proposed hydraulic fracturing rule due to a “high level of interest.” Some critics of the rule have stated that it “will cost the industry as much as $345 million per year,” while others say that the rule is “very fracking-friendly.”
But how different are the proposed federal rules from existing state rules? According to new research at RFF, the “. . . BLM rules do not appear to impose significant requirements beyond existing state regulations . . . Moreover, in some regulatory areas (notably setback requirements) states generally have requirements whereas BLM does not.” In a new blog post on Common Resources, co-authors of the research Nathan Richardson and Alan Krupnick note: “Our read of this analysis is that BLM rules should be more focused on areas not adequately or consistently regulated at state level. One candidate would be tighter restrictions on flowback/produced water containment, which is not well addressed in some states.”
Recommendations for Obama’s Climate Plan
New EPA Administrator Gina McCarthy recently touted President Obama’s climate plan in a speech in Colorado, noting the president’s commitment to act on climate issues with or without Congress. However, the plan has been criticized by environmentalists as “more PR than plan,” and by others as “all pain–no gain.” One thing that all sides seem to agree on is that getting actual positive results from the plan will be a challenge.
Former RFF President Robert Fri noted that in addition to the challenging political environment, it will be “even harder to continue to produce [results] over the decades that the climate will be changing.” In a recent blog for the Huffington Post, he gives three recommendations for creating durable and flexible policies to address climate issues, based on a report from the American Academy of Arts and Sciences: 1) keeping promises, 2) evaluating results, and 3) creating winners.
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August 12, 2013

Benefits of Protecting Mangroves
A new report published by The Nature Conservancy and Wetlands International explains how protecting coastal ecosystems, such as mangroves, can provide “coastal defense services,” reducing the risk of storm and flooding damages. However, the report cautions that development along coasts poses a significant threat to mangrove habitats and the protection they provide.
In an interview and podcast for the new digital issue of Resources magazine, RFF’s Juha Siikamäki notes that although “coastal development can create very high returns,” preserving mangroves can have economic benefits: they not only protect against storms, but they also store substantial amounts of carbon in their biomass. He notes that because mangroves are forests, preserving these “blue carbon” ecosystems may “be a natural fit under the REDD umbrella”—that is, under programs to reduce emissions from deforestation and forest degradation (REDD).
A Model for Coastal Development
Business is booming for contractors in Connecticut who specialize in raising houses off the ground and onto posts, pilings, or piers. Since the state’s coasts were hit by severe storms in both 2011 and 2012, many homes are being forced to adapt, facing a bill that can reach up to $100,000 per home.
RFF’s Carolyn Kousky argues for finding a “middle way” between abandoning coastal areas and building costly structures. She writes that Pelican Bay, Florida, is “a potential model of such ‘climate ready development.’” With mangroves providing storm buffers between high-rise condos and the beach and solar and electric trams running along the protected boardwalk, the value of this development is “enhanced by combining beach access with access to natural areas.”
For more research by RFF fellows on the benefits of green infrastructure and protecting blue carbon ecosystems, visit RFF’s Center for the Management of Ecological Wealth on the web: www.rff.org/cmew.
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August 5, 2013

Regulating Greenhouse Gases from Power Plants
On Wednesday, the House Appropriations Subcommittee on Interior, Environment, and Related Agencies voted to cut the budget of the Environmental Protection Agency (EPA) by 34 percent. This would “prohibit the administration from spending on greenhouse gas rules for power plants,” despite a presidential memo directing the agency to do just that.
New research by RFF’s Dallas Burtraw and Matt Woerman reviews a key approach outlined by the president: using flexible approaches for regulating power plants, possibly through the Clean Air Act. They note that this approach gives states a leading role in the implementation of the regulation (subject to EPA approval), and recommend the EPA “evaluate a portfolio of stringency criteria to evaluate plans that introduce flexible approaches in different ways.” The authors also propose various metrics that the EPA should consider.
Interior Fracking Regulations
Also on Wednesday, the House Natural Resources Committee voted to block the Department of the Interior’s proposed rules regulating hydraulic fracturing (fracking) on federal lands. Committee Chairman Doc Hastings (R-WA) was quoted saying that “duplicative, costly, and burdensome federal regulations are unnecessary and would hinder American energy production.”
In a blog post for Common Resources, RFF’s Nathan Richardson and Alan Krupnick write that similar arguments “miss the mark.” They explain that “the federal government’s rights are identical to those of any landowner” and that “the federal government . . . frequently require(s) users of those lands . . . to follow rules that go beyond general state regulations.”
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July 2013

July 29, 2013

Effects of Fracking on Drinking Water
Last week the House Committee on Science, Space, and Technology Subcommittees on Environment and Energy held a joint hearing to review the Environmental Protection Agency’s research into the effects of hydraulic fracturing (fracking) on drinking water. It was reported that House Republicans “slammed . . . EPA attempts to link hydraulic fracturing to water pollution” outside the scope of the study.
Despite a recent Department of Energy study showing no such drinking water contamination, research by RFF experts has found that there does exist a “disconnect between the views of experts . . . and the views of the public regarding impacts on wells and aquifers.” They noted that in general, the public is concerned about possible contamination of groundwater, and this perception could be negatively impacting the prices of homes that are dependent on well water.

Impacts of Sea Level Rise

A recent report from the Maryland Commission on Climate Change projects that the state should “plan for relative sea-level rise of 2.1 feet by 2050.” It also notes that planning for sea level rise is challenging because of uncertainties in future greenhouse gas emissions and sea level rise modeling, “particularly regarding the rate of loss of the mass of polar ice sheets.”
RFF University Fellow James Sanchirico of the University of California, Davis reviewed several policy options to help communities adapt to rising sea levels and coastal erosion, such as banning seaside development beyond a certain boundary and developing rolling easements. A recent RFF First Wednesday seminar also examined methods for quantifying the uncertainty around melting ice sheets, including the possibility that sea levels could rise higher than expected. A presentation by Wily Aspinall of the University of Bristol explained the “Cooke Method” for developing scientific data from the judgment of experts, which was developed by RFF Senior Fellow Roger Cooke. Read more about how this method can be applied to predicting impacts of natural disasters here.
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July 22, 2013

Unnatural Disasters

Last month’s Black Forest fire in Colorado was the second-most costly fire in the state’s history. The El Paso County Sherriff’s Office “ruled out natural causes of the blaze,” which destroyed 486 structures.

RFF’s Sheila Olmstead and Carolyn Kousky agree that “a big part of each natural disaster isn’t ‘natural’ after all.” In an article for Resources magazine, they write: “US wildfire suppression, for example, is largely funded by federal and state taxpayers, not homeowners in fire-prone places, creating an implicit incentive to develop these areas. Our research confirms that in the western United States, development is greater on lands benefiting from federal suppression efforts, all else equal.”

Carbon Tax Impacts
NPR’s Planet Money recently tallied up the impact that a carbon tax would supposedly have on one average person as $410 for the first year. They discussed that the collected revenue could be returned to the public in lump sum rebates or—a “smarter” way—via income tax cuts.
In preliminary research results, RFF’s Jared Carbone, Richard Morgenstern, Rob Williams, and Dallas Burtraw find that “using carbon tax revenues to lower capital taxes (corporate taxes or personal income rates on interest, dividends, or capital gains) produces the largest economic benefits, roughly offsetting the economic cost of a carbon tax.” Returning the revenues to the public through reductions in payroll taxes or personal income taxes is less economically efficient than through capital tax reductions, though the differences are modest. However, lump sum rebates is the worst option for the economy. Watch a video of their results here and learn more about the impacts of a carbon tax here.
Coastal Flooding
The Senate Appropriations Committee last week approved a measure to delay increasing federal flood insurance premiums in the states that would be hit the hardest by the increases, such as Florida and Louisiana. However, critics of the delay are concerned that “people whose homes are at lower risk of being flooded will have to pay higher premiums to subsidize those living in flood zones.”

Following Hurricane Sandy, research by RFF’s Carolyn Kousky and Erwann Michel-Kerjan of the Wharton School of the University of Pennsylvania found that “many homeowners who sustained flood damage from Sandy did not have flood insurance policies,” with around only five percent of homes covered in some affected areas. View their results for New York and New Jersey, by zip code, in two maps here.

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July 15, 2013

Energy Efficiency Labels

Energy efficiency labels are widely used in the United States and elsewhere around the world. For example, the United Arab Emirates recently implemented a mandatory system to label all home appliances with energy ratings. The labels will “provide information on how much electricity an appliance uses in a year, plus the star rating to show how energy efficient it is.” The goal is to help consumers make comparisons between appliance models and save money on energy costs.

RFF Board Member Richard Newell of Duke University and RFF Associate Research Director Juha Siikamäki note that surprisingly little is known about how consumers respond to information in such labels. In a survey of US homeowners to better understand the effectiveness of these programs, they found that both the type of information and its representation in the label matter, but that “simple information on the economic value of saving energy was the most important element guiding more cost-efficient investments in appliance energy efficiency.”

Paying for State Parks

Summer is high season for many state parks, with visitors enjoying weekends outdoors and children attending summer camps. RFF’s Juha Siikamäki notes that “state parks contribute roughly one-third of all nature recreation in the United States. The estimated . . . value is considerably larger than the annual operation and management costs of state parks.”

However, recently states have faced serious budget issues, with some having to increase their fees and others cutting back on upkeep in attempts to close the gaps. In a recent RFF report, Research Director and Senior Fellow Margaret Walls analyzes various methods used to finance state parks. She writes that parks need to be wary of over-relying on user fees, and suggests that the creation of state park endowment funds (through voluntary private contributions) may hold some promise as one component of a balanced private-public financing approach.

Electric Vehicles

With the Obama administration promoting electric vehicles, some states and industries have begun to follow suit. Connecticut is planning to increase electric charging stations from 81 to 200 by the end of the year, and Ford recently announced a discount on its electric Ford Focus for 2014. However, challenges still exist to widespread adoption of this new technology.

A new series of blog posts by RFF’s Joshua Linn and Virginia McConnell explores the myths and realities of electric vehicles in the marketplace. In their second installment, Linn and McConnell question if vehicles sales have met expectations, writing that, “Sales of both [the Volt and the Leaf] have lagged manufacturers’ original sales expectations, but other sales metrics suggest more mixed results.”

Special note: RFF was recently ranked 4th in the global think tank rankings by the International Center for Climate Governance. RFF was also ranked 7th in the top environment think tanks in the 2012 Global Go To Think Tanks Report by the University of Pennsylvania. Notably, RFF is one of only two think tanks to appear in the top ten in both rankings.

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July 1, 2013

The President’s Climate Speech
Last week President Obama released his plan to combat climate change, focusing on a variety of ways to increase the nation’s energy security while improving energy efficiency and reducing greenhouse gas emissions. Below are highlights of recent analysis by RFF researchers on the various policy ideas mentioned in the plan.
On what wasn’t included in the speech:
On the natural gas development:
On energy independence:
On renewable energy and biofuels:
On fuel efficiency standards for cards and trucks:
On improving home energy efficiency:
On a clean energy standard:

June 2013

June 24, 2013 
This Week at RFF: On Wednesday, RFF’s Center for Climate and Electricity Policy is hosting “The Role of a Carbon Tax in Tax Reform and Deficit Reduction.” On Thursday, RFF’s Center for Energy Economics and Policy is hosting “Findings from RFF’s Initiative: Managing the Risks of Shale Gas Development.”
Energy Efficiency Policies
In the coming weeks, President Obama will be releasing his plans to combat climate change, according to White House energy and environment adviser Heather Zichal, who said the plans will likely focus on “improving the energy efficiency of appliances,” among other policies.
Improving the efficiency of residential and commercial buildings should be high on the list [of potential energy efficiency policies] as these sectors account for over 40 percent of current energy use,” writes RFF Research Director Margaret Walls. Her research comparing heating, cooling, and water heating equipment subsidies, low-interest loans, and standards suggests key differences among these policy approaches.
  • Subsidies can encourage consumers to purchase efficient equipment, reducing energy use and emissions, but they are relatively high cost;
  • Loans are cost-effective but have limited impact; and
  • Standards lead consumers to purchase equipment that just meets the standard—in contrast to subsidies, which can encourage the purchase of very high efficiency equipment—and they may encourage consumers to hold on to older equipment longer.
Climate Adaptation
Discussions about adapting to climate change seem to be on the rise. While mayors around the country have been developing specific adaption plans for their cities, the federal government has been working to determine its role.
In Reforming Institutions and Managing Extremes: US Policy Approaches for Adapting to a Changing Climate, a team of more than 20 RFF researchers and colleagues present adaptation policy options across a wide array of topics. They note that the most effective policy recommendations will: “provide specific guidance for federal rulemaking; create connections and synergy with other policy areas; address inefficiencies in current federal legislative and regulatory policy; supply information and data to enable policymakers to better understand risk and uncertainty; embed flexibility and responsiveness into management structures; and address equity and social justice concerns.”
June 17, 2013 
The Role of a Carbon Tax
In July the Senate Environment and Public Works Committee, chaired by Senator Barbara Boxer (D-CA), will discuss a carbon tax bill that would impose a fee on fossil fuel producers at the source, rather than on emissions from power plants. The bill, sponsored by Senator Bernie Sanders (I-VT), “would return 60 percent of those revenues to residents to help offset costlier energy.”
RFF’s Rob Williams, Richard Morgenstern, Jared Carbone, and Dallas Burtraw have developed a new model to examine the implications of such a bill, exploring how the economy, the environment, and consumers will be affected by a carbon tax under a variety of scenarios, such as providing consumer rebates from the revenue. On Wednesday, June 26, they will explain the results from the model, which is the only model of its kind to look at distributional impacts across current and future generations of people. Register here to attend in the seminar in person or watch online at www.rff.org/live.
Flood Protection in NY
Last week New York Mayor Michael Bloomberg proposed a $20 billion plan to protect the city from future storms and floods. The proposal included using “green” infrastructure—such as dunes and wetlands along the beach—to reduce storm surge. Analysis by RFF researchers shows that investing in green infrastructure can “lower flood risk and provide an array of other environmental services.” Read more about RFF’s research on green infrastructure here.
Another aspect of Mayor Bloomberg’s proposal is to provide funding to help homeowners pay for increased flood insurance. RFF’s Carolyn Kousky and Erwann Michel-Kerjan from the Wharton School at the University of Pennsylvania found that a lack of flood insurance in many areas of coastal New York and New Jersey was a significant issue as properties were inundated by Hurricane Sandy. An infographic in the new issue of Resources magazine shows the low insurance take-up rates in New York and New Jersey, as compared to Sandy storm surge estimates.
June 10, 2013 
Social Cost of Carbon
The US federal government is now using a higher figure for the social cost of carbon in federal regulations. “Instead of assuming that the harm caused by carbon-dioxide emissions comes to $22 per ton in 2013, regulators are now using a figure of about $36 per ton.”
As part of Considering a Carbon Tax, a research initiative in RFF’s Center for Climate and Electricity Policy, RFF researchers answered frequently asked questions from policymakers and industry leaders. They explained that, “a carbon tax reaching about $30 per ton of carbon dioxide by 2020 would be needed to reduce domestic, energy-related carbon dioxide emissions by approximately 10 percent.”
Sea Level Rise
A new study co-funded by the National Science Foundation and the National Aeronautics and Space Administration shows that melting ice sheets and glaciers accounted for around 75 percent of sea level rise between 2005 and 2011, resolving a discrepancy in how to measure sea level rise. One glaciologist said that the “findings ‘give us confidence in all the kinds of data’ that are used to assess sea-level change.”
On Wednesday, June 12, RFF will host a First Wednesday Seminar on this topic, where an expert panel will discuss the uncertainties of future sea level rise and the information that policymakers need to understand both the science and the uncertainty. Register now to attend Ice Sheets on the Move or watch live via webcast at www.rff.org/live.

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June 3, 2013 
California’s Cap-and-Trade Funds
Last month California Governor Jerry Brown released a plan to borrow $500 million from the state’s cap-and-trade proceeds for the state general fund to balance other climate-related expenditures. Critics have voiced opposition to the plan, citing that the funds generated from the program were designed to support new projects that further reduce greenhouse gas emissions.
RFF’s Dallas Burtraw notes that the magnitude of revenue from the auction will increase by roughly $6 billion beginning in 2015, making bold investments possible. Burtraw writes “Revenue from the auction might be returned directly back to households or used to make investments that improve the state. This is the key decision that should be of interest to all Californians.”
BLM Fracking Rules
Recently the US Bureau of Land Management (BLM) released “its first update of hydraulic fracturing regulations in three decades.” This sparked criticism from some, who called the proposal “redundant federal regulation.”
However, RFF’s Nathan Richardson and Alan Krupnick believe that “These arguments miss the mark.” They note that in this role, BLM is acting as a landowner—not a regulator—who has the right to impose restrictions on the use of that land. “Attacking BLM’s proposal as federal overreach into state affairs hinders real debate about the rules’ content, and about the right balance of federal, state, and local drilling regulation in general,” they write on Common Resources.

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May 2013

May 20, 2013 

Note that RFF on the Issues will not be distributed on Monday, May 27, in observance of Memorial Day.

Adapting Infrastructure Planning

Communities are continuing to be challenged by a disaster recovery framework that “is primarily aimed at rebuilding and repairing infrastructure in place.” Citing RFF research, a new report by the Government Accountability Office stresses the importance of providing “the ‘best available’ climate-related information for infrastructure planning.”

RFF Vice President for Research Molly Macauley says that such information can inform state and local decisions about infrastructure that needs to be resilient to the extremes of floods, heat waves, and other stress. However, she recommends prioritizing investments in information, noting that “not all information has value, and perfect information is not often worth the cost of acquisition,” and offers further suggestions for what to prioritize here.

Ice Sheets on the Move

A new project between NASA, the US Geological Survey, Time magazine, Google, and Carnegie Mellon University shows time lapse satellite images from the past 30 years of change on the Earth’s surface. One set demonstrates the retreat of Alaska’s Columbia Glacier from 1984 through 2011. This rapidly melting ice could raise global sea levels by several feet in the coming years.

RFF Chauncey Starr Senior Fellow Roger Cooke, one of the world’s leading authorities on mathematical modeling of risk and uncertainty, is moderating an RFF First Wednesday Seminar on June 12 that will examine how to quantify the uncertainty around the effects of climate change on ice sheets. Panelists will discuss how policymakers can use the available data and better understand the uncertainty. RSVP for this event here.

Environmental Information in Developing Countries

Last week the editorial board of Nature wrote about the importance merging economic and environmental agendas, noting: “Poorer nations are entitled to follow the path to prosperity . . . But it is in all of our interests to find a more sustainable way for them to do so.” However, developing nations often lack the institutional capacity to effectively use conventional command-and-control regulation.

A new book co-authored by RFF Senior Fellow Allen Blackman provides a case study of an alternative approach in Indonesia based on public disclosure of information about polluters’ environmental performance. They note that the program “has helped raise the average rate of compliance with environmental regulations from thirty to seventy percent

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May 13, 2013 

Genetically Engineered Trees 

American chestnut trees may be on the rise again due to a genetic engineering breakthrough that protects them from a debilitating fungus. If the transgenic chestnuts can be successfully integrated into woodland ecosystems, similar genetic engineering methods may be able to reestablish other trees.

In Resources magazine, RFF Associate Research Director and Fellow Juha Siikamäki discusses the potential for bioengineering to create a “blight-resistant American chestnut.” This was the topic of an RFF First Wednesday Seminar that featured a panel of experts involved in the Forest Health Initiative. Watch the video from the event to learn more. 

Biomass Emissions

The debates continue about the carbon emissions—or carbon neutrality—of burning biomass for fuel. “The [United Kingdom’s] government's own research has shown that using wood from whole UK conifers results in an increase in emissions of 49 percent compared with coal.” 

However, RFF Senior Fellow Roger Sedjo says that the emissions should be measured using a life cycle assessment—a method that measures the environmental impacts of a product over its lifetime, from raw material extraction through disposal. In new research, he examines three different approaches  to life cycle assessment and finds that, “given sufficient time and assuming that complete regeneration replaces harvest, all three approaches will generate no net emissions for their respective forest since each becomes a fully regulated forest in which growth equals harvest.” 

Responding to Ecological Loss 

In a recent article for Resources magazine, RFF Senior Fellow and Co-Director of the Center for the Management of Ecological Wealth Jim Boyd notes the difficulty of applying traditional market-driven methods to ecological issues, which can lead to underinvestment in information about the best ways to mitigate ecological loss. Last week, RFF hosted a seminar on such limits to ingenuity, focusing on the role of new technologies (such as genetically modified organisms), the capability to substitute for nature, and the ethics of certain innovations to limit ecological loss. Watch the full video from the seminar here.

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May 6, 2013 
Costs of Disaster Relief
A new report from the Center for American Progress shows that extreme weather events have cost the federal government $136 billion in relief efforts since 2011. The federal government’s role in hurricane relief in particular has jumped from a 26 percent share of the costs (pre-Katrina) to 69 percent (post Katrina).
In a post to Common Resources, RFF Visiting Scholar Lynn Scarlett questions if taxpayers should “continue to foot the bill for measures to protect communities in areas at high risk from natural disasters.” She notes that the choice is complicated because communities may opt to implement cost-effective ways to reduce risks. There are also costs that are unaccounted for from such weather events, as noted by RFF Fellow Carolyn Kousky. She says that natural disasters also result in non-monetary costs—loss of family heirlooms, emotional stress, and environmental degradation—for which valuation or compensation are difficult.
Methane Leakage
The US Environmental Protection Agency recently lowered its estimate of the amount of methane that is leaked during natural gas production. However, as noted by the Associated Press, “the estimates aren’t based on independent field tests of actual emissions, and some scientists said that’s a problem.”
Regardless of leaks, the venting of methane during the drilling and hydraulic fracturing process is one of the environmental risks that all experts in a recent RFF survey most frequently chose as a priority for mitigation. The survey, conducted by researchers in RFF’s Center for Energy Economics and Policy, asked experts from government agencies, industry, academia, and nongovernmental organizations to identify the most significant environmental risks to developing shale gas. See the full results at www.rff.org/shaleexpertsurvey.
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April 2013

April 29, 2013 
Special Event: In the past, innovation has been able to address natural resource limits. However, RFF’s Center for the Management of Ecological Wealth asks “Are there substitutes for wilderness, wildness, and natural beauty? Can we substitute our way out of ecological problems? Are there limits to ingenuity?” Register online to attend “The Promise and Limits of Ingenuity” on May 6 from 9:30 a.m. to 12:30 p.m. EDT at RFF.
Carbon Tax Effects
Last week the Senate Finance Committee introduced the idea of a carbon tax in a list of “prominent tax reform options.” Many have noted that such a tax could negatively impact the poor, and the Committee has said that it would be a challenge to maintain the progressivity of the tax. 
RFF’s Daniel Morris and Clayton Munnings analyzed over 20 years of economic research to explain the distributional consequences of a carbon tax. They note that lower-income households could be compensated for increases in electricity and gas prices resulting from a carbon tax through direct rebates or targeted tax swaps, and maintain that “when accounting for how households anticipate spending over time . . . a carbon tax begins to appear more progressive than previously suggested.”
The History of Shale Gas
Driven by the US natural gas boom, many countries are beginning to develop their own shale gas reserves and are facing challenges in balancing environmental protection with cheaper energy and economic growth.
“The key question for policymakers in countries attempting to develop shale gas resources is how to generate a policy and market environment in which firms have the incentive to make investments and would eventually find it profitable to produce shale gas,” writes RFF Fellow Zhongmin Wang and Senior Fellow Alan Krupnick in new research about  the history of shale gas development in the United States.

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April 22, 2013 

Living “Green”
Today is Earth Day and groups around the globe are contemplating what it means to live sustainably and make “green” choices.
RFF Senior Fellow and Research Director Margaret Walls discusses “how to live, work, and play more sustainably” in a Wall Street Journal video discussion with actor Ed Begley, Jr. and Kateri Callahan of the Alliance to Save Energy. She says that one roadblock is that people lack information about the impacts of their energy use and options for reducing consumption. Walls also suggests ways to close the information gap in an online post for the Journal.
Pipeline Spills
The March 29 oil pipeline spill in Mayflower, Arkansas, “released at least 157,000 gallons of crude oil,” which ran through neighborhoods and yards.  The premier of Alberta, Canada, recently said that such spills “are very isolated incidents,” although as noted in the above article, according to the Pipeline and Hazardous Materials Safety Administration, “between 2008 and 2012, US pipelines spilled an average of more than 3.1 million gallons of hazardous liquids per year.”
In a recent blog post, RFF Fellow Lucija Muehlenbachs and Beia Spiller examined the data on pipeline spills. While they note that "the number of major spills greater than 250 barrels has been decreasing over time," they also caution that "it is important to consider pipeline integrity for decades to come—the Arkansas pipeline was 63 years old." They conclude that a more in-depth examination of the data would be a worthy exercise.

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April 15, 2013 

Carbon Markets

California’s Air Resources Board and Governor Jerry Brown approved a proposal to link California’s carbon market with Quebec’s, to allow for greater investment in low-carbon technologies, more flexibility for companies to trade carbon permits, and larger reductions in greenhouse gas emissions.

RFF’s Dallas Burtraw, Karen Palmer, Clayton Munnings, and Matt Woerman, along with Paige Weber from Yale University, recently introduced a framework to help policymakers who are working to link cap-and-trade markets. They note: “The incremental alignment of program elements—which we call ‘linking by degrees—can capture benefits in program administration, build institutions and political support, and may influence the design of expected rules governing greenhouse gas emissions under the US Clean Air Act.“ They also apply the framework to California’s cap-and-trade program and the Regional Greenhouse Gas Initiative, finding that “the two markets are nearly ready to formally link.”
Eradicating Extreme Poverty
Last week, World Bank President Jim Yong Kim announced that, “The world can end extreme poverty by 2030.” He calls for continued sustainable growth in the developing world, and cites climate change as “a fundamental threat to economic development and the fight against poverty.” 
In his Resources 2020 lecture at RFF, Nobel Laureate Joseph Stiglitz noted that “inequality ought to be a fundamental consideration when fashioning environmental policies.” He continued: “In democracies, the desperately poor tend to have less of an interest in pursuing policies designed to protect the environment, because their most important concern is doing whatever’s necessary to get out of the current situation. So societies with more inequality will get less support for good environmental policies.” Read an excerpt from the lecture here or watch the full video here.
Energy Tax Reform
The Obama administration is having bipartisan discussions on energy tax policy issues. Administration officials have said that maintaining the production tax credit for renewable energy is a priority, which they hope will be maintained in the tax code. 
However, in new research, RFF Fellow Joshua Linn and Clayton Munnings examined five renewable electricity policies and found that the production tax credit “is the least cost-effective policy.” They suggest “[financing] the subsidy from a charge to consumers rather than out of general tax revenue,” to stabilize electricity prices, which can cause increased electricity consumption.
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April 1, 2013 

Funding New Energy Technologies

A new initiative by the US Department of Energy is funding research and projects to improve clean energy products. Assistant Secretary of Energy David Danielson noted that one of the goals of the initiative is to improve the cost-competitiveness of these technologies, a move that would ultimately remove their dependence on subsidies.

RFF Research Director and Senior Fellow Margaret Walls was invited to discuss government financing for new energy technologies in a Wall Street Journal online forum, where she calls for the implementation of a price on carbon: “The most important first step to bring these technologies to market is not direct government financing but a carbon price. . . . As carbon-intensive fossil fuels become more expensive, private industry will . . . search for new low-cost alternatives. And as consumers demand more efficient products to lower their energy costs, industry will have incentives to provide them.” She also explains how a carbon tax could be implemented.

China’s Shale Gas

Royal Dutch Shell will spend $1 billion annually to explore China’s shale gas resources as part of a contract to begin developing shale gas in the country. Developing China’s large reserves could significantly help the country overcome its energy and environmental challenges.

In an interview with the Cheung Kong Graduate School of Business in China, RFF Fellow Anthony Liu, a visiting assistant professor of economics at the school, discussed these issues: “Shale gas will have two major macroeconomic impacts on China if it is developed to scale. First, it will lower the cost of energy. . . . Second, it will create new jobs.” He also noted that “a reduced reliance on coal and a greater reliance on natural gas would definitely improve air quality and would certainly reduce the carbon intensity of the economy.”

Water Management

A study of the Colorado River Basin shows water shortages in effect across the US Southwest as a result of climate change. Water conservation across sectors, reuse in cities, and watershed management have been suggested as possible mitigation actions.

Lynn Scarlett, RFF visiting scholar and co-director of RFF’s Center for the Management of Ecological Wealth, analyzes water governance in the United States, especially challenges that arise from multi-jurisdictional water systems. She suggests that meeting these water management challenges requires a mix of “new management tools that emphasize integrated and adaptable water management; filling in governance gaps with additional networking glue; and identifying misalignments of specific policy tools that deter coordination.” An interview with Lynn Scarlett on this issue is also available.

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March 2013

March 25, 2013 

Genetically Modified Foods

Select US grocery stores announced that they will not sell genetically modified salmon, despite the Obama administration’s preliminary approval of the product. Whole Foods also said that it will label all genetically modified foods by 2018—a requirement many advocacy groups have pressured the FDA to implement for all grocery stores.

At an RFF First Wednesday seminar moderated by Visiting Scholar Randall Lutter, experts in agricultural biotechnology discussed the future of genetically modified foods, debating how labeling products as genetically modified could affect the marketing, consumption, and economic sustainability of these foods. Video of the seminar is available here.

EPA Emissions Regulations

Reports suggest that implementation of EPA’s proposal to regulate greenhouse gas (GHG) emissions from new power plants will likely be delayed to ensure it can withstand potential legal challenges. However, RFF’s Dallas BurtrawArthur FraasKaren Palmer, and Nathan Richardson note that other issues exist. In comments submitted to EPA about its original proposal for new power plants, they raised concerns about the need to reduce regulatory uncertainty regarding existing power sources, as well as carbon capture-and-storage technology. They recommended “that EPA should move toward flexible GHG performance standards that allow trading, banking, and averaging among new and existing sources in different classes of emitters—not just the electric power sector.”

Adaptation Efforts 

While several states are drafting plans to better prepare homes, businesses, and infrastructure for weather disasters resulting from climate change, Governor Paul LePage of Maine recently halted the creation of his state’s climate adaptation strategy. However, with such weather events now considered threats to national security, it is unclear what role the states can or should play in these efforts. 

RFF Vice President for Research Molly Macauley recently noted: “The effects of climate change will primarily be local, but they won’t fall within neat state governmental boundaries. There is a key federal government role both in terms of implementing new policies and jettisoning some current ones that prevent a sensible response.” For example, Senior Fellow Winston Harrington proposed a competitive grant program to award funding to state and local agencies to conduct research on and implement innovative adaptation strategies. RFF University Fellow Kerry Smith suggests implementing flexible pricing policies for services such as water and power that reflect real conditions, such as drought or electricity scarcity, to control for increases in demand during extreme events.

 

March 18, 2013 

Coal and Natural Gas Exports
Many recent debates have centered on oil and natural gas exports, given increases in production. Some are supportive of expanding producers’ market access, while others have appealed to the Obama administration or proposed moratoria on these exports, citing environmental and energy security issues.
RFF Senior Fellow Joel Darmstadter tackled this complex issue, examining the impacts of natural gas and coal exports on domestic prices and the environment. He finds that “even an elevated amount of [natural gas] exports will leave domestic prices well contained” and that “it is almost certain that US exports merely displace Colombian, Australian, Indonesian, or other coal supplies that would fill the breach created by US export restrictions.”
Shale Gas Impacts on Surface Water
The potential effects of shale gas development on water quality in Pennsylvania have been of concern to residents and environmentalists, with much of the attention focused on groundwater. However, recent research by RFF scholars shows that shale gas experts are also concerned about potential impacts on surface water. 
In a new study published in the Proceedings of the National Academy of Sciences, RFF’s Sheila Olmstead, Lucija Muehlenbachs, Jhih-Shyang Shih, Ziyan Chu, and Alan Krupnick found statistically significant water quality impacts from shale gas development wastewater treatment and runoff from activity related to shale gas infrastructure in Pennsylvania: “While much of the public concern and controversy around shale gas development has focused on its impacts on groundwater, our findings indicate that there are risks to rivers and streams.” Muehlenbachs elaborated on Common Resources that the data show no evidence of “systematically dumping or accidentally spilling wastewater into nearby streams. . . . Chloride entered indirectly, via waste treatment plants.”
Fisheries Management
On Tuesday, the Senate Committee on Commerce, Science, and Transportation Subcommittee on Oceans, Atmosphere, Fisheries, and Coast Guard is holding a hearing titled, “Developments and Opportunities in US Fisheries Management.”
According to RFF Nonresident Fellow James Sanchirico and coauthor Kailin Kroetz, individual transferable quotas (ITQs) “have been found to significantly reduce the likelihood that fish stocks are overfished and that fishermen compete to catch as much as possible as fast as possible by capping the aggregate industry-wide catch and guaranteeing fisherman a share of the catch.” This system eliminates the “race to fish” that exists under traditional “derby-style” management systems, while encouraging economic efficiency and healthy fishing communities and ecosystems.

 

March 11, 2013 

Coal in India

Coal India expects to import 20 million tons of coal to meet the demand of newly commissioned power plants—in addition to existing plants—across India.

In an article for Resources magazine, RFF Senior Fellow Maureen Cropper and Kabir Malik of the University of Maryland note that “the increased use of cheap coal resources comes at a heavy cost.” They examine India’s reliance on coal, finding that “approximately three-quarters of the premature deaths associated with coal-fired power plants in India are attributable to [sulfur dioxide] emissions. In response, the country needs to consider controlling this harmful pollutant.”
China’s Carbon Tax
China is deferring introduction of a carbon tax until after this year because of concerns that such a tax may impede economic growth. The country has recently pledged to limit greenhouse gas emissions, improve energy efficiency initiatives, and establish several pilot carbon trading programs.
RFF Fellow Anthony Liu, who also teaches at the Cheung Kong Graduate School of Business in Beijing, writes that “A carbon tax in China is a great idea.” He notes that it would help lessen air and water pollution and allow for continued economic development while reducing carbon emissions. However, he raises questions about how the tax would be implemented.
Natural Gas Vehicles
Natural gas is becoming increasingly popular as a fuel for trucks, buses, and other commercial vehicles. Yet widespread enthusiasm for natural gas cars remains low among consumers due to a lack of refueling stations and higher upfront costs.
Alan Krupnick, RFF senior fellow and director of the Center for Energy Economics and Policy, analyzes the likelihood of natural gas becoming a viable fuel for passenger vehicles. He notes, “While a hybrid is more expensive than its gasoline-fueled counterpart by almost $400 per year, the natural gas Civic is $721 more expensive per year when the annualized cost of a home-fueling unit is included.”

Rainforest Preservation

Ecuador’s largest oil company is approaching rural communities throughout the country for permission to begin extracting oil from their land. Some Ecuadorans welcome the prospect of economic development, while others are concerned about the effects on some of the world’s most diverse habitats within the Amazon rainforest.
RFF University Fellow Billy Pizer (Duke University) elaborates on an interview he gave on NPR’s Planet Money on this topic, stressing the importance of valuing “the oil being extracted versus the forest that was being preserved.” The option of exchanging international aid contributions for halting oil development and avoiding deforestation creates a complicated precedent that could “encourage other countries to threaten to destroy their own forests unless the world pays up.”

 

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March 4, 2013
 

Safety Measures for Deepwater Drilling

The federal civil trial on the 2010 BP Deepwater Horizon spill commenced last week, with experts raising concerns about BP’s culture of prioritizing cost cutting and increasing production over ensuring adequate safety measures.

In a report prepared by RFF experts at the request of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, authors Mark Cohen, Madeline Gottlieb, Joshua Linn, and Nathan Richardson examine the importance of a “safety culture” in avoiding accidents in high-risk industries. They identify several policy changes to incentivize a stronger safety culture, such as raising the liability cap and requiring risk-based fees. Other key recommendations related to the oil spill can be found here.

Paying for Natural Disasters

The New Madrid Floodway diverts Mississippi River floodwater from reaching Cairo, Illinois, but local residents have taken to farming the floodway land when not in use. Now, residents are calling on the Army Corps of Engineers to fund the $165 million remodel of the floodway to better accommodate crop cultivation.  

Lynn Scarlett, RFF Visiting Scholar and Co-Director of the Center for the Management of Ecological Wealth, writes that the level of risk, relative costs of doing nothing or relocating, and alternative mitigation strategies must be considered before projects are funded with taxpayer dollars. Similarly, RFF’s Sheila Olmstead and Carolyn Kousky raise concerns about “development in risky locations,” and find that “Federal polices can alter the incentives individuals face to locate in hazardous areas…or invest in risk-reducing measures.”

Carbon Tax Debates

Last week, a study by the National Association of Manufacturers found that a carbon tax could lead to reduced consumption, job loss, real wage reductions, and other negative impacts. On that same day, The Brookings Institution released a policy proposal in favor of a carbon tax, asserting that it could replace costly subsidies and encourage economic activity.  

On February 27, experts from RFF, the American Enterprise Institute, and Harvard, Stanford, and Duke Universities discussed the potential costs and benefits of a carbon tax at a seminar co-sponsored by RFF and the International Monetary Fund’s Fiscal Affairs Department: “Comprehensive Tax Reform and Climate Policy.” Full video of the discussion is available here.

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February 2013

February 25, 2013 

Carbon Tax Announcements

Earlier this month, Senator Barbara Boxer (D-CA) introduced legislation calling for a tax on carbon and methane emissions in an effort to mitigate the effects of greenhouse gases. She proposed allocating the tax revenue toward consumer rebates and clean energy projects. China has also recently announced a decision to implement a carbon tax, which it calls an “environmental protection tax,” although it is unclear how such a tax will interact with its current cap-and-trade program.
In an article for Resources magazine, Ian Parry (formerly of RFF and currently with the International Monetary Fund) and RFF’s Rob Williams review various climate policies and find that “a carbon tax…has a substantial cost advantage over cap-and-trade systems” because of the opportunity to use revenues to substitute for tax increases. Both authors will join an expert panel this Wednesday at RFF to discuss the role a carbon tax might play in reforming the US tax code: “Comprehensive Tax Reform and Climate Policy.” Register for the event here.
Cloud Seeding
The Indonesian government has begun cloud seeding—injecting chemicals into clouds to increase the frequency of rain production—to help prevent further flooding in Jakarta. Even though this strategy will bring more precipitation, experts believe that inducing rain to fall over the ocean, before the clouds reach land, can help avert flooding.

2005 Nobel Laureate in Economic Sciences Thomas Schelling recently spoke at RFF on the topic of geoengineering as part of the Resources 2020 lecture series. He highlighted the need to cautiously test such experiments, but also expressed concern about potential unknown global implications: “There would probably need to be recognition that if a nation is harmed, [from the effects of geoengineering] whether it can sue the perpetrators…or ask for compensation? Would any international body assume jurisdiction?” Video of the full lecture is available here
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February 11, 2013 

Results from RFF’s Survey of Shale Gas Experts

In a recent letter, Senator Wyden (D-OR) called for balanced regulations on hydraulic fracturing that protect public health and the environment, especially in terms of air and water quality.
Potential risks to surface water and air quality are also highlighted as priorities in a new report by experts in RFF’s Center for Energy Economics and Policy. A key finding in the report is a high degree of consensus among experts from government agencies, industry, academia, and nongovernmental organizations about the specific environmental risks to mitigate. Read more about the survey and experts here.
Traffic Congestion
Washington, DC tops the list for worst traffic congestion in the United States for the second straight year. The research shows that “unless something is done about traffic, the economic recovery will put more wheels on the road and create more congestion.”
Research by RFF scholars examines congestion in the DC area, finding that while high-occupancy vehicle (HOV) lanes may have “disappointed their many advocates,” converting HOV lanes into high-occupancy/toll (HOT) lanes could be a win-win. They note, “People pay HOT lane tolls only if they are more than compensated by the value of travel time savings, and drivers remaining in adjacent unpriced lanes benefit from reduced congestion.”
Energy Efficiency Gap
A new report on improving energy efficiency finds that consumers need better information about efficiency opportunities, and suggests that “Congress should reform and extend federal tax incentives that promote energy efficiency.”
Strategies to improve information can help address the energy efficiency gap—the failure of consumers to make seemingly economically beneficial investments in energy efficiency—according to research by RFF Research Director and Senior Fellow Karen Palmer and Kenneth Gillingham of Yale University. However, they note that tax incentives may not generate the desired effect and instead suggest a tax on emissions, which would “raise the price of energy, making energy efficient products more financially attractive.”
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February 4, 2013 

Gasoline Tax

While many states continue to raise revenue for transportation infrastructure through gasoline taxes, Virginia Governor Bob McDonnell recently proposed eliminating the gas tax in his state and replacing it with an increased sales tax allocated to transportation.
RFF Thomas J. Klutznick Senior Fellow and Research Director Margaret Walls agrees that the gas tax will generate even less revenue in the future due to greater fuel efficiency, alternative fuel vehicles, and changes in driver habits. She also notes that a gas tax has other limits, such as not addressing congestion issues, and suggests “mov[ing] beyond the long-standing political stalemate over increasing the gas tax to think creatively about new policy choices and funding approaches.”
Perceptions about Climate Change
According to a recent survey, the weather seems to influence American voters’ views on climate change from day to day. When interviewed on unseasonably warm days, independent voters “tend to agree with the scientific consensus regarding anthropogenic climate change. On unseasonably cool days, they tend not to.”
This week, RFF’s First Wednesday Seminar Series returns to look beyond “what people think” to “why these perceptions have formed.” Lynn Scarlett, RFF Visiting Scholar and Co-Director of the Center for the Management of Ecological Wealth, will moderate “The Media, Science, and Cognition: How We Shape Our Understanding of Environmental Issues.” Register for the event here or watch the webcast at www.rff.org/live.
Flood Insurance Program 
A comprehensive aid package for Hurricane Sandy victims passed the Senate last week and was signed into law by President Obama. The $50.5 billion package is the second federal action taken to assist victims and repair damages in New York and New Jersey—the first was a $9.7 billion bill to fund flood insurance claims and extend the scope of the National Flood Insurance Program.
RFF Fellow Carolyn Kousky, along with Okmyung Bin and John Bishop of East Carolina University, examine the question of whether the National Flood Insurance Program disproportionately benefits wealthier counties.  Although the authors “find no evidence that the NFIP disproportionally advantages richer counties,” they acknowledge that, “Payments may be slightly progressive because nationally speaking, riskier areas tend to be lower income despite discussions of mansions on the Florida coast.”
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January 2013

January 28, 2013 

Climate Change in Obama’s Second Term

In President Obama’s inaugural address, he stated that the United States will “respond to the threat of climate change” by leading efforts such as developing sustainable energy sources.
However, RFF’s Clayton Munnings and Nathan Richardson noted that, “However much climate hawks enjoyed the president’s speech . . . there was nothing concrete to reassure them climate is not once again a low priority relative to other issues. Words are welcome, but political action is what matters.” In a new post on Common Resources, they ask, “Will the president prioritize bold, smart action from EPA, or real support for legislation creating a carbon price? Maybe.”
Carbon Markets
The resiliency of the European Union’s carbon market is being questioned as carbon prices have fallen to their lowest levels ever. A vast oversupply of permits with few buyers could result in a complete collapse of the market: "Until there is a clear will to give legislative support to this market we cannot expect participants to keep believing in it."
A new RFF discussion paper by Duke University’s Richard Newell, William Pizer, and Daniel Raimi examines carbon markets, assessing challenges, lessons learned, and opportunities. They note that confidence plays an important role: “Governments cannot provide certainty where it does not fundamentally exist. Looking forward, however, authorities need to be clearer and more orderly about policy revisions and recognize the consequent impacts on market price, market participants, and future market confidence.”
Economic Inequality
In a recent article, Joseph Stiglitz, a Nobel Laureate and Columbia University professor, proposed that inequality is impeding economic growth in the United States, and cautioned, “Economic inequality leads to political inequality and a broken decisionmaking process.”
RFF hosted Stiglitz as part of its Resources 2020 Nobel Laureate lecture series, where he discussed how this economic inequality impacts environmental policy: “Environmental degradation is…especially a problem for the poor for obvious reasons – their position is more precarious, and when things go wrong…there are fewer ways to respond. So in this sense, inequality ought to be a fundamental consideration in fashioning environmental policies.” Video of his lecture is available here.
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January 22, 2013 

Black Carbon

A new study asserts that black carbon—soot emitted from diesel engines and wood or coal-fired stoves—is “the second-largest human contributor to climate change,” and reducing these emissions could result in immediate cooling.
In Resources magazine, Drew Shindell of the NASA Goddard Institute writes that reducing black carbon emissions would not only have implications for global warming, but it would also help to improve public health and food security. He notes that the fine particulates in soot can be inhaled, causing cardiovascular disease and lung cancer, and that reducing emissions in places where “seasonal timing of crops coincides with high concentrations of ozone” would result in higher yields.
Greenhouse Gas Emissions in China
A recent report released by the China Meteorological Administration measured carbon dioxide levels in Qinghai province at 392.2 parts per million—the highest level of emissions since data collection began in 1990. Triggered by a combination of “industrial emissions, automobile exhaust, and coal burning for winter heating,” extreme levels of greenhouse gas emissions have recently caused heavy smog across northern China.
RFF Visiting Scholar Mun Ho, along with colleagues Jing Cao and Dale Jorgenson, examined policies to reduce emissions in China that would also result in “co-benefits,” such as reduced environmental health damages and global warming risk. They find that “the hidden co-benefits that accompany carbon mitigation tax policies could exceed the mitigation costs and produce a ‘win-win’ solution for China’s future carbon abatement and sustainable development.”
Rising Sea Levels
A 2007 Intergovernmental Panel on Climate Change estimate that sea levels could rise up to 23 inches by 2100 has been reevaluated in a new study, with updated predictions of up to three feet. The original estimate did not take into consideration contributions from melting ice sheets because of a lack of information, which accounts for the discrepancy.
The latest study uses a technique to incorporate uncertainty called structured expert judgment (SEJ), developed by RFF Chauncey Starr Senior Fellow Roger Cooke. The method was used to develop a consensus estimate from various expert predictions. He describes the contribution of SEJ to difficult questions like melting ice sheets in a recent Common Resources post.
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January 14, 2013 

Green Infrastructure and Flooding

In the wake of Hurricane Sandy and other weather disasters of 2012, experts are drawing connections between climate change and the rising costs of frequent disasters, noting that “weather-related disasters in North America have increased five-fold in the last 30 years, costing $1 trillion in damages.”

RFF experts Carolyn Kousky, Sheila Olmstead, Margaret Walls, Adam Stern, and Molly Macauley explore whether strategically place natural lands and open space—“green infrastructure”—could serve as “a cost-effective substitute for the pipes, dams, levees, and other gray infrastructure that have typically been used to manage local and regional flood risk.” They note that such investments could also provide benefits like better water quality and groundwater source protection. 

Heat Warning Systems

With 34,008 daily high records set across the country, 2012 was the hottest year ever.  Although natural variability played a role, many scientists agree that greenhouse gas emissions also contributed and warn of more likely heat extremes to come.

An RFF report by Jonathan Samet of the University of Southern California’s Institute of Global Health recommends implementing a heat warning system to prepare for such conditions: “Measures that might be taken to protect the public include media announcements, the activation of support networks, the implementation of a ‘heatline,’ taking steps to protect susceptible groups, and providing air‐conditioned shelters.”
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