Energy and the
Environment in 2014
The Politics of Climate Change
The Politics of Climate Change
The number of Americans who believe global warming isn't happening has risen to 23 percent, up 7
percentage points since April 2013.
The latest survey, taken in November 2013, finds that the majority of Americans — 63 percent —
do believe in climate change, and 53 percent are "somewhat" or "very" worried about the
consequences.
The proportion of people who do believe in climate change has been steady since April 2013, but
the proportion of those who say they "don't know" whether climate change is happening dropped
6 percentage points between April and November 2013, suggesting that many "don't knows"
moved into the "not happening" category.
The Politics of Climate Change
Sixteen percent are "alarmed,“ sure that global warming is happening and concerned about it.
On the opposite end of the spectrum are the "dismissive," who comprise about 15 percent of the
public and who almost all see global warming as a conspiracy theory or hoax.
Changing either of these two groups' opinions about climate change is nearly impossible.
The Politics of Climate Change
The "doubtful," 12 percent of the public, are inclined to disbelieve climate change and may be
difficult to convince.
Another 23 percent of the country is "cautious" — they believe climate change is happening, but
are uncertain and tend to see the threat as distant.
The cautious are among the Americans most open to hearing the scientific evidence about climate
change, so are their neighbors, the disengaged, who make up about 5 percent of the public and
who have given climate change little thought.
The Politics of Climate Change
“Going down an up escalator”
Losing Control of the Issue
In 2002, President Bush proposed the Clear Skies Initiative, a national cap-and-trade legislative
proposal to reduce emissions of SO2, NOX, and mercury by roughly 70 percent from the power
sector.
Absent legislation, EPA finalized CAIR and CSAPR, lowering allowable emissions of SO2 and NOX
using the authority granted under the Clean Air Act.
Losing Control of the Issue
Among the companies, advocacy groups, and state governments challenging the EPA actions, a
central argument involves CSAPR’s compliance timeline.
January 1 is far too soon, objectors say, to retrofit plants, build replacement capacity, or make other
changes needed to comply with CSAPR’s limits on emissions of sulfur and nitrogen oxides.
The CSAPR emissions budgets vary from state to state and unit to unit, but the budget for Texas
would require a 47-percent reduction in SO2 emissions, and Luminant estimated it would have to
reduce its sulfur emissions by more than 60 percent.
Losing Control of the Issue
“The reaction by the industry has been close to horrified,” says David Buente, a partner at Sidley
Austin who, among other things, represented American Electric Power in its successful defense of a
major greenhouse gas lawsuit before the Supreme Court this past term
Losing Control of the Issue
“Immediate and irreparable harm.”
“It comes down to resource adequacy.”
An ERCOT report, Impacts of the Cross-State Air Pollution Rule on the ERCOT System, published
September 1.
ERCOT estimated the CSAPR budgets outlined in EPA’s July final rule would result in between 1,200
MW and 6,000 MW of generating capacity being forced offline in ERCOT in various months,
depending on the scenario. The study states that “had this incremental reduction been in place in
2011, ERCOT would have experienced rotating outages during August.”
Losing Control of the Issue
Using the NOX Budget Trading Program as a model, CAIR grants states the option of participating in
a market-based cap-and-trade program to reduce both SO2 and NOX emissions.
As part of the program, EPA set emission caps for SO2 and NOX for the affected region based upon
what can be achieved in a cost-effective manner. The emission allowances then were apportioned
to the states.
States must achieve their required emission reductions by either participating in the EPAadministered interstate cap-and-trade system for the power sector, or by choosing an alternate
approach that is subject to EPA approval. Under the regional NOX Budget Trading Program, all
states affected by the rule joined the optional cap-and-trade program to lower ozone season NOX
emissions
Losing Control of the Issue
The Clean Air Act (CAA) is generally very prescriptive, sections 108, 109, and 112 focus on mercury
(and other air toxics), Sulfur dioxide (so2) and particulates.
Section 111 doesn’t follow that pattern – it was written to cover pollutants not identified
specifically. That ambiguity created the EPA opportunity for rule 111(D).
Under section 111 – the EPA follows a two-step process in implementing emissions rules:
1.
For existing sources, EPA issues emissions guidelines
2.
States then issue performance standards for stationary sources within their jurisdiction.
Losing Control of the Issue
In addition to ceding the management of climate change adaptation to the EPA, America has also
allowed the highly-subsidized renewable energy industry to control the public debate over best
approaches to cleaner air:
Countless public opinion surveys now show public support for renewables consistently in excess of
70%
Renewables – Costs,
Explicit & Unexpected
“China, America, and the European union spend $140 billion a year on subsidizing renewable
energy – it is hard to say which policies are having the greatest effect.” –The economist, “Curbing
climate change”, Sep. 2014
Worldwide renewable energy policies and investments have reduced ghg emissions by
approximately 600 million tons, cumulatively.
By way of comparison:
◦
◦
◦
◦
Nuclear energy has reduced ghg emissions by 2.2 billion tons,
Hydropower has reduced ghg emissions by 2.6 billion tons,
Rainforest preservation reduced ghg emissions by 3.2 billion tons,
Energy and vehicle efficiency have reduced ghg emiisions by 10.03 billion tons.*
*Ibid, Table: “To Slash or to Trim”
Renewables – Costs,
Explicit & Unexpected
Renewables – Costs,
Explicit & Unexpected
The shift to renewables - especially the explosion of rooftop solar - has turned electric system
planning virtually on its head. In California, which aims for a 33% share of renewable energy by
2030, the problem is the so-called "Duck Curve" which depicts how solar energy production
peaks at mid-day. But that just floods the system with so much output that power prices can
actually go negative.
According to Brad Bouillon, director of day-ahead and real-time market operations support for
the California ISO, the "belly" of the Duck Curve this year has already fallen to levels not
expected until 2016. That means that "net load" to supplement wind and solar is too small even
to justify running the most economical base load units.
Renewables – Costs,
Explicit & Unintended
And while solar and wind energy may replace much retired fossil capacity, the renewables won't
be able to supply the same collection of attributes, vital to reliability, such as inertial
momentum, reactive power, frequency regulation, or voltage stability and support.
And so, at a key moment in the conference, FERC's acting chairman Cheryl LaFleur asked "Do we
need a different set of standards," LaFleur asked, "for a different kind of system?
China, again, ahead of the U.S.
China is the world’s largest producer of solar panels – in fact, over 60% of the panels sold in
America come from china.
China dominates the production of the 21st century minerals essential to renewables,
computers, and cell phones: china produces over 90% of the world’s supply of “rare earth”
minerals.
Market Solutions to
Global Problems
Since the advent of the acid rain SO2 cap-and-trade program, the market-based regulatory
approach for reducing air emissions has shown remarkable environmental results at costs far
below original projections. The cap-and-trade approach establishes an emissions cap and then
distributes "allowances" to emit equal to the cap, granting sources the opportunity to find the
most efficient way to meet the environmental goal
Market Solutions to
Global Problems
GHG regulations will certainly affect how we generate electricity in this country. If they didn’t,
what would be the point? The real question is how will they do that: with a prescriptive and
painful top-down regime, or with flexibility for market-based innovation?
A constitution-based federalist approach would allow states to continue taking the lead in
reducing emissions – even as EPA promulgates so-called “guidelines,” in Clean Air Act parlance.
Market Solutions to
Global Problems
EPA’s authority under the Clean Air Act to extend compliance deadlines for individual companies
that are taking steps to comply but need more time; consent decrees and financial incentives
from FERC and regional transmission organizations
Market Solutions to
Global Problems
So we face an ironic and unfortunate political dichotomy. States like Nebraska, which seem
intent on fighting GHG regulation, eventually could find themselves forced to comply with an
inflexible set of EPA mandates.
Meanwhile, states that take their cue from EPA might foster new investment through flexible,
market-based regulation. Federalist ideals might motivate both responses, but innovation will
first become necessary in the states that accept the challenge of global climate change
China, again, ahead of the U.S.
China is currently the world leader in investment in and development of new nuclear power
facilities. Not only are 28 conventional nuclear reactors under construction, but China is also
actively developing Generation IV nuclear concepts.
By 2015, China will have 36 Gwe installed nuclear capacity, about 2% of its electricity power supply,
with a projected 70 Gwe by 2020. The Chinese National Nuclear Corporation expects to invest $120
billion by 2020 in new reactors.
China's motivation is profound. Coal supplies over 70% of China's energy, which makes it the
leading source of greenhouse gas emissions in the world, and the target for those concerned about
climate change. Coal's dominance leads to very poor air quality, but China has limited options for
replacing its coal-fired capacity, as its natural gas resources are insufficient.
Market Solutions to
Global Problems
The RGGI modeling not only helped show that low allowance prices could contribute to reducing CO emissions without
imposing unreasonable costs on consumers, it also demonstrated that investment in end-use efficiency reduces consumer
exposure to energy costs. In short, clean energy policies, with an emphasis on energy efficiency, could cost effectively help
secure the emission reductions the states originally set out to achieve.
Since its first auction in 2008, RGGI states have raised more than $1.5 billion. They have done this with allowance prices
clearing between roughly $2.00 and $3.00. Today, sharing auction revenues in proportion to the energy produced by their
fossil generation, the states invest over half that amount in energy efficiency, thereby helping to keep the costs of RGGI
allowances low.
Market Solutions to
Global Problems
“Better Growth, Better Climate,” published by Felipe Calderon and Nicholas Stern, with help from
Nobel economists Michael Spence and Daniel Kahneman:
Better urbanization, smarter city planning with more open space, and easier commutes;
Doubling support for agriculture and forest research & development, from $16 billion to $32 billion
a year – while phasing out inefficient farm subsidies
More hydropower, more nuclear power, more energy and vehicle efficiency.
Net result: lower electric costs, lower total fuel costs, more open-space, shorter commutes, lower
food costs. And a 24 billion tons per year reduction in ghg – nearly reaching the safety mark set by
the IPCC.
Renewables – Costs,
Explicit & Unexpected
Nuclear and hydropower generated 6,000 terawatt-hours of energy in 2011
Wind power generated 450 terawatt-hours,
Solar power generated less than 60 terawatt-hours.*
*Ibid
Key consideration
Every word in this presentation came from one of the following sources:
◦ The Economist
◦ Fortnightly, the bi-weekly publication of public utilities reports
◦ Livescience.com
There is no Conservamerica editorialization or opinion in this power point.
ConservAmerica
Recommended Positions
Cleaner, Here, Now
◦ America should take advantage of domestic natural gas supplies through responsible fracking – this
abundant fuel source is clean, affordable, and has the potential to return manufacturing jobs to the U.S.
Nuclear power and hydropower: the cleanest & cheapest power in the world
◦ Tax incentives and regulatory rate processes should incent more nuclear and hydropower to reduce ghg
emissions and decrease electric costs for consumers
ConservAmerica
Recommended Positions
Efficiency benefits every customer
◦ Vehicle, building, and appliance efficiency provide far greater reductions in ghg emissions than
renewable energy
◦ Increased efficiency reduces electric rates, gasoline prices, and home heating and cooling costs
Smarter cities, improved agriculture, and healthier forests
◦ R&d credits for agriculture should be doubled, and inefficient subsidies eliminated
◦ Building efficiency