Developing Effective and Viable Policies for GHG Mitigation
In Search of Effective and Viable Policies to Reduce GHG Emissions Article by Nicolas Burger, Liisa Ecola, Thomas Light & Michael Toman Environmental Pollution Policy: A US Approach Lead Discussion Jenkins Macedo, MA February 14, 2013
Are we on track to fulfill our commitment inreducing GHG emissions by 17% to 2005 levels by 2020?
U.S. GHG Emissions Mitigation TargetSource: WRI 2013
KEY FINDINGS FROM THE WRI 2013 REPORTv “Without new action by the U.S. Administration, greenhouse gas (GHG) emissions will increase over time. The United States will fail to make the deep emissions reductions needed in coming decades, and will not meet its international commitment to reduce GHG emissions by 17 percent below 2005 levels by 2020.”v “The U.S. EPA should immediately pursue “go-getter” emissions reductions from power plants and natural gas systems using its authority under the Clean Air Act. These two sectors represent two of the top opportunities for substantial GHG reductions between now and 2035.”v “The U.S. Administration should pursue hydrofluorocarbon (HFC) reductions through both the Montreal Protocol process and under its independent Clean Air Act authority. Eliminating HFCs represents the biggest opportunity for GHG emissions reductions behind power plants.”v “U.S. states should complement federal actions to reduce emissions through state energy efficiency, renewables, transportation, and other actions. States can augment federal reductions.”v “New federal legislation will eventually be needed, because even go-getter action by federal and state governments will probably fail to achieve the more than 80 percent GHG emissions reductions necessary to fend off the most deleterious impacts of climate change.”Source: WRI, 2013
World Resources Institute’s Recommended Approaches to GHG Mitigationv “Lackluster” scenario that aggregates reductions at the lower end of what is technically feasible, therefore representing “low regulatory ambition.”v a “Middle of the Road” scenario that combines reductions “generally in the middle of the range considered technically feasible and corresponding to moderate regulatory ambitions.”v a “Go-Getter” scenario that combines higher-feasibility reductions with “higher regulatory ambition.”
Global Carbon Cycle (Billion Metric Tons Carbon)
U.S. Anthropogenic Greenhouse Gas Emissions by Gas, 2001 (Million Metric Tons of Carbon Equivalent)
U.S. Primary Energy Consumption and Carbon Dioxide Emissions, 2001
Trends in Atmospheric Concentrations andAnthropogenic Emissions of Carbon Dioxide
Carbon Intensity by Region, 2001-2025(Metric Tons of Carbon Equivalent per Million $1997)
OBJECTIVE OF THE PAPERTo develop effective and viable pollution policies that would harness economic incentives while reducing greenhouse gas emissions.
POLICIES LESSONS FROM THE PASTv Clinton’s Administration Partnership for New Generation of Vehicles o private-public partnership focused on technology improvementsv Clinton’s British Thermal Unit Energy Tax o It includes tax rates based on the carbon content of the fuel.v Corporate Average Fuel Economy (CAFÉ) standards o It requires automobiles manufacturers to meet minimum fuel efficiency standards (cars and light trucks).
The Obama Administrationv American Clean Energy and Security Act (2009) o Cut CO2 emissions by 17% to 2005 levels by 2020v American Power Act (failed to pass 60% Congress)v 2010 Obama Administration proposed the Carbon Pollution Standard for new power plants only half the emission compared to uncontrolled plant. o Pollution limits on existing plants needs to also be considered.v National Renewable Electricity Program (2011) o Requires Utility companies to generate 80% of their electricity from no- or low-carbon pollution sources by 2035.
GHG Mitigation Policies: “Should Anticipate the Unexpected.”v Coverage changesv Changes in approachesv Stringency of GHG controls (Why are these aspects important?)v Incentives for innovation
RESTRUCTURING GHG MITIGATION POLICIESv Obama Administration GHG Cap and Trade Program o GHG Emissions limitation o Allowances to quantify emissions o Less emitter can trade their allowance to others o Market systems that promote economic development
Downstream Vs. Upstream Approach to Cap and Tradev Measures and restricts actual emissions (DS)v Emitters have sufficient allowances to match their emissions (DS).v Linked to the production of fossil fuels rather than emissions itself (US).v Allowances are based on the Carbon content of fuel and its implied emissions per unit of fuel use (US).v Congressional proposals (a combination of these approaches)
Other Regulatory Approaches to Reduce CO2 Emissions v Carbon Tax o Taxing fossil fuels based on their Carbon content and the associated amount of CO2 that is emitted per unit of fuel used. o Expended to include the other GHGs potential to global warming relative to CO2 emissions. v Hybrid system of cap-and-trade o allocates free allowances to large fossil energy users (industrial and power plants). v Tighter Fuel-economy and other energy-efficiency standards o buildings, appliances, and other end users.
RESTRUCTURING POLLUTION POLICIES: “The Normative Criteria.” Cost- effectiveness GHGAdaptability to Change Emissions Fairness Mitigation Incentives for Innovation
Cost-effectiveness (Utilitarianism)v Achievement of goals at least cost society (i.e., the cap-and-trade approach)-cost-benefit analysis. o The extent and means of mitigating pollution is individualized to sources, which tend to make viable economic choices. o Involves broad, consistent coverage of emissions sources, a relatively low cost of implementing regulation, and reasonable predictable rules and procedure to reduce uncertainties associated with operation.
Fairness (Environmental Justice)v GHG mitigation measures may disproportionately impact the livelihoods of certain households and Workers. o Designing policy that reflects a broader spectrum of societal judgment of “fair burden sharing of compliance cost” for different groups (i.e., gasoline tax along with lump-sum rebates scale against households income). Any idea? o Alleviating economic adjustment cost associated with GHG mitigation policy through temporary compensations (returning portion of the revenue generated to workers or communities whose economies are adversely affected by the reduce of coal use or high cost of electricity. o Instituting a system that target the burden of the cost of compliance to those who produce the most GHG emissions and obtain the greatest economic benefit by doing so (i.e., designing allowance allocation in the cap-and-trade).
Incentives for innovation (Sustainable Development)v Necessary to expand affordable long-term GHG mitigation option.v Economic rewards for technological innovation that reduce GHG emissions.v Incentives-based policies such as cap-and-trade, carbon-based fossil fuel tax, help drive demand for lower-emissions technologies that will adversely reduce the cost of compliance.v The government can finance and carry out research and development (i.e. include research laboratories).
Adaptability to change overtime (Flexibility of the Policy)v Policy framework that can be changed over time to meet the attitudinal, behavioral and institutional change toward GHG emissions.
Q1. The development of GHG mitigation policiesrequires identifying and quantifying pollutants that needto be reduced. Should the cap-and-trade system or carbontax only include stationary sources and exclude mobilesources? Or can the two merge in regulatory approaches inregulating GHG emissions?
Q2. How do we distribute the direct andindirect costs of regulating GHG mitigationamong those being regulated and across variousparts of the larger economy?
Q3. Why is it relevant when formulating GHGmitigation measures or regulations to rethink theadverse impacts on the livelihoods and workers insome communities?
Q4. Which analytical framework (discussed by Salzman& Thompson, Jr.) would you ascribed to the authors’approach in framing environmental pollution policy?
Q5. In what ways can incentives for innovation have a negative orpositive cost-effectiveness?
SOURCESU.S. Energy Information Administration (2004). GHG. URL: http://www.eia.gov/oiaf/1605/ggccebro/chapter1.html. Accessed:02/10/2013.World Resources Institute (WRI 2013). “Can the U.S. Get There from Here? Using Existing Federal Laws and State Action to ReduceGreenhouse Gas Emissions.” URL: http://www.wri.org/publication/can-us-get-there-from-here. Accessed: 02/12/2013.Lisa Friedman (2013). “U.S. May Not Meet Greenhouse Gas Emissions Pledge without More Action.” URL: http://www.scientificamerican.com/article.cfm?id=us-may-not-meet-greenhouse-gas-emissions-pledge-without-more-action. Accessed:02/08/2013International Food Policy Research Institute (2012). “Carbon Dioxide Emissions in Developed and Developing Countries.” URL:http://www.ifpri.org/sites/default/files/bk_2012_gfpr_ch04_fig01.png. Accessed: 02/08/2013U.S. Environmental Protection Agency (2012). URL:http://www.epa.gov/climatechange/science/indicators/ghg/global-ghg-emissions.html. Accessed: 02/07/2013World Resources Institute (2008). “US GHG Emissions Flow Chart.” URL:http://www.wri.org/chart/us-greenhouse-gas-emissions-flow-chart. Accessed: 02/09/2013.Institute for Energy Research (2012). “U.S. Energy-Related Carbon Dioxide Emissions Declining.” URL:http://www.instituteforenergyresearch.org/2012/07/20/u-s-energy-related-carbon-dioxide-emissions-are-declining/. Accessed:02/08/2013.Todd Stern (2012). “Special Envoy to the Climate Change Meeting in Durbai, UAE.” URL:http://unfccc.int/resource/docs/cop18_cmp8_hl_statements/Statement%20by%20USA.pdf