Economics

Advancing public and private policymakers’ understanding of the complex interactions between climate change and the economy is critical to taking the most cost-effective action to reduce greenhouse gas emissions. Read More
 

Options for Mobilizing Clean Energy Finance

Options for Mobilizing Clean Energy Finance

June 2015

By Patrick Falwell

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Clean energy and energy efficiency technologies are decreasing in cost and demonstrating their reliability as they are deployed around the world. Financial institutions are becoming increasingly willing to offer traditional financial structures and terms for clean energy projects. At the same time, accelerated public and private investment in these technologies is needed to meet national and global greenhouse gas emission reduction targets.

Patrick Falwell
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Key Insights from a Solutions Forum on Carbon Pricing and Clean Power

Key Insights from a Solutions Forum on Carbon Pricing and Clean Power

April 2015

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States will have tremendous flexibility to choose how to reduce carbon emissions under the Clean Power Plan. One idea states are exploring is putting a price on carbon. The first C2ES Solutions Forum — held on April 15, 2015 — brought together legal and economic experts, state environmental directors, and business leaders to explore the potential use of market mechanisms to reduce these damaging emissions efficiently and cost-effectively.

For more information about the C2ES Solutions Forum, see: http://www.c2es.org/initiatives/solutions-forum

Key insights and highlights from the event on carbon pricing and clean power include:

  • Most economists agree that the most efficient way to address climate change is to put a price on carbon.
  • The U.S. Environmental Protection Agency (EPA) has given states tremendous flexibility to determine the best way to achieve emission targets.
  • Virtually every state is already engaged in some activity that reduces emissions.
  • Market-based options available under the proposed Clean Power Plan go beyond creating or joining a cap-and-trade program or instituting a carbon tax.
  • States and businesses generally agree that market mechanisms are a proven, least-cost way to reduce emissions.
  • States believe support from the business community will be essential to adopting market-based options.
  • State and business leaders recognize the need to talk to one another about the best way to reduce emissions.
  • States are concerned about having enough time to develop market-based policies.
  • State and company representatives see a role for EPA to help states after the Clean Power Plan is finalized. 

C2ES will continue the conversation with states and businesses to share insights and innovative ideas that will help us get to a clean energy future. Our second Solutions Forum on May 18 will explore improving energy efficiency, which reduces emissions, through information and communication technologies. Our third event on June 25 will examine how to finance clean energy technology and infrastructure.

States will have tremendous flexibility to choose how to reduce carbon emissions under the Clean Power Plan. One idea states are exploring is putting a price on carbon. The first C2ES Solutions Forum — held on April 15, 2015 — brought together legal and economic experts, state environmental directors, and business leaders to explore the potential use of market mechanisms to reduce these damaging emissions efficiently and cost-effectively. This document summarizes key insights and highlights from the event.
Jason Ye
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Market Mechanisms: Understanding the Options

Market Mechanisms: Understanding the Options

April 2015

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Climate change poses a significant risk for a broad range of human and natural systems. Policies to reduce emissions are critical if we are to avoid the most costly damages associated with a rapidly changing climate. Compared to traditional command-and-control regulations, market-based policies can more cost-effectively reduce greenhouse gas (GHG) emissions by creating financial incentives for GHG emitters to emit less. Ten U.S. states and many jurisdictions outside the United States have established market-based programs to reduce GHGs. Market-based policies would be among the options available to states to reduce GHGs from power plants under the U.S. Environmental Protection Agency’s proposed Clean Power Plan. This brief describes the theory behind market-based approaches; their success in cost-effectively reducing GHGs and other emissions; and a range of market-based options, including: a carbon tax, a cap-and-trade program, a baseline and credit program, a clean or renewable electricity standard, and an energy efficiency resource standard.

 

 

 

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Carbon Pricing Proposals of the 113th Congress

Comparison of Carbon Pricing Proposals in the 113th Congress

December 2014

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Six proposals to put a price on carbon were introduced in the 113th Congress (2013-2014). Five would establish a carbon tax (also called a “carbon pollution fee”) and one would establish a cap-and-dividend program (a cap-and-trade program that would rebate program revenues to consumers).

This brief compares the proposals by key attributes, highlighting similarities and differences. The proposals are:

  • The Climate Protection Act of 2013 (S.332) introduced by Sens. Bernie Sanders (I-VT) and Barbara Boxer (D-CA) on February 14, 2013;
  • The Managed Carbon Price Act, 2014 (H.R.4754) introduced by Rep. Jim McDermott (D-WA) on May 28, 2014;
  • The Healthy Climate and Family Security Act of 2014 (H.R.5271) introduced by Rep. Chris Van Hollen (D-MD) on July 30, 2014; and
  • America’s Energy Security Trust Fund Act of 2014 (H.R.5307) introduced by Rep. John Larson (D-CT) on July 31, 2014;
  • The American Opportunity Carbon Fee Act (S.2940), introduced by Sen. Sheldon Whitehouse (D-RI) and Sen. Brian Schatz (D-HI) on November 19, 2014; and
  • The State Choices Act introduced (H.R.5796) by Rep. John Delaney (D-MD) on December 4, 2014.

 

Jason Ye
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The Role of Clean Energy Banks in Increasing Private Investment in Electric Vehicle Charging Infrastructure

The Role of Clean Energy Banks in Increasing Private Investment in Electric Vehicle Charging Infrastructure

December 2014

by Matt Frades, Janet Peace, and Sarah Dougherty

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This paper explores how Clean Energy Banks, or other similar organizations aimed at leveraging public funds to attract private investment in clean energy deployment, could help reduce the barriers to EV charging infrastructure by (1) supporting the development of viable business models for charging services in the near term and (2) helping scale up private capital investments into EV infrastructure in the longer term.

 

Janet Peace
Matt Frades
Sarah Dougherty
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Clean Cities Webinar

Promoted in Energy Efficiency section: 
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Nick Nigro and Dan Welch of C2ES will report in the state of the plug-in electric vehicle (PEV) market.

Nick Nigro and Dan Welch of C2ES will report in the state of the plug-in electric vehicle (PEV) market.

Moderated by Linda Bluestein, National Clean Cities Co-Director.

This webinar is open to the general public, and no pre-registration is required. To join the webinar:

Visit the Clean Cities webinars page for more details:

 

Don't toss out the good electricity with the bad

One way to reduce power plant carbon emissions is to reduce the demand for electricity. Encouraging customer energy efficiency is one of the building blocks underpinning the Environmental Protection Agency’s (EPA) Clean Power Plan. But the plan does not distinguish among uses of electricity. That means, without further options, the Clean Power Plan could inadvertently discourage states from deploying electric vehicles (EVs), electric mass transit, and other technologies that use electricity instead of a dirtier fuel.

In all but very coal-heavy regions, using electricity as a transportation fuel, especially in mass transit applications, results in the emission of far less carbon dioxide than burning gasoline. In industry, carbon emissions can be cut by using electric conveyance systems instead of diesel- or propane-fueled forklifts and electric arc furnaces instead of coal boilers.

Under the proposed power plant rules, new uses of electricity would be discouraged regardless of whether a state pursues a rate-based target (pounds of emissions per unit of electricity produced) or a mass-based target (tons of emissions per year).

EPA has a few options to make sure regulations for power plants would not discourage uses of electricity that result in less carbon emissions overall.

Risky Business report shows need to act on climate change

You expect a business leader to keep a close eye on the bottom line and to act when a threat is clear. As C2ES and others have noted, it is increasingly clear to many business leaders that climate change is a here-and-now threat that we all -- businesses, government and individuals -- must address.

Today’s “Risky Business” report lays out in stark numerical terms the likely economic impact of climate change on U.S. businesses and the U.S. economy. The initiative – co-chaired by former New York City Mayor Michael Bloomberg, former Treasury Secretary Henry Paulson, and former hedge fund manager Tom Steyer – brings high-profile attention to this issue in the hopes that highlighting the risks and potential costs will help spur action to manage the impacts and curb climate-altering emissions.

The report’s outline of the many costs of climate impacts is likely an underestimate. For example, the impacts of diminishing groundwater are difficult to calculate and are not included.

Pricing carbon - What are the options?

Judging from the climate policy debate in Washington, one might conclude that carbon pricing is only a concept, or something being tried in Europe.

But in fact, 10 U.S. states (California and the Northeast states in the Regional Greenhouse Gas Initiative) have carbon trading programs. That means more than a quarter of the U.S. population lives in a state with a price on carbon. And a growing number of nations and provinces around the globe are turning to carbon pricing to cost-effectively reduce greenhouse gas emissions and encourage energy innovation.

Over the years, C2ES has closely examined the many ways available to price carbon, including a cap-and-trade system, an emissions tax, and a clean energy standard with tradable credits.

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