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
Market Mechanisms: Understanding the Options
The most recent study on climate change by the U.S. National Academy of Sciences concluded that, “Climate change is occurring, is caused largely by human activities, and poses significant risks for—and in many cases is already affecting—a broad range of human and natural systems. (See Climate Change 101: Science and Impacts.) The combustion of fossil fuels has contributed to the expansion of the global economy since the start of the Industrial Revolution. It has also substantially increased the concentration of carbon dioxide, the primary greenhouse gas in the atmosphere. The cumulative impact of these emissions poses significant economic risks. Policies to reduce emissions are required if we are to avoid the most costly damages of a rapidly changing climate. This brief describes how market-based policies can achieve climate goals more cheaply and efficiently than alternative policy structures—all while driving innovation to develop more cost effective, clean energy solutions that will serve as the foundation for strong economic growth throughout the 21st century.
With the U.S. Environmental Protection Agency as the headline sponsor, the first annual Climate Leadership Conference will be held from February 29-March 1, 2012, in Fort Lauderdale, Florida. The conference will bring together leaders from business, government and academic institutions, and the non-profit community interested in exchanging ideas and information on how to address climate change while simultaneously running their operations more competitively and sustainably.
The conference includes a gala to honor recipients of the Climate Leadership Awards, a new national awards program to recognize exemplary corporate, organizational, and individual leadership in response to climate change. U.S. EPA, in partnership with C2ES, The Climate Registry (The Registry), and the Association of Climate Change Officers (ACCO), sponsor the awards.
Featured conference speakers include:
- Nancy Sutley – Chair, White House Council on Environmental Quality
- Gina McCarthy – Assistant Administrator, Office of Air and Radiation, U.S. Environmental Protection Agency
- Mary Nichols – Chair, California Air Resources Board
- Eileen Claussen – President, Center for Climate and Energy Solutions
- Network with leaders from the public and private sectors, including federal and state government officials, industry leaders, and nonprofit experts
- Attend the Climate Leadership Awards Gala, which is held in conjunction with the conference
- Hear insights from winners of the 2011 Climate Leadership Awards for the Supply Chain, Organizational and Individual Leadership categories
Conference attendees will learn about and exchange solutions on topics including
- Leveraging Clean Energy Opportunities
- Managing Climate Risks and Building Resilience
- Supply Chain Strategies
- Disclosures and Questionnaires
- Setting and Achieving GHG Reduction Goals Education & Engagement
- Strategies Making the Business Case for Climate Response
Any sponsorship or advertisements appearing in these materials do not imply endorsement, recommendation, or favor by the United States Government or the U.S. Environmental Protection Agency.
Statement of Eileen Claussen
President, Center for Climate and Energy Solutions
January 24, 2012
We share President Obama’s enthusiasm for homegrown solutions to America’s energy challenges. Without question, America has the resources and know-how to produce more energy at home, strengthening both our economy and our national security. But protecting the climate also has to be part of the equation. If we sensitively develop domestic reserves, get serious about ramping up new energy sources, and push efficiency across the board, we can both meet America’s energy needs and dramatically shrink our carbon footprint.
Even if comprehensive legislation remains off the table for now, we can make important progress tackling these challenges piece by piece. C2ES is working with policymakers and stakeholders on ways to expand enhanced oil recovery using captured carbon dioxide – an approach that can boost domestic oil production while reducing greenhouse gas emissions. Similarly, we’re working with automakers, environmentalists and others on a plan for integrating plug-in electric vehicles into the U.S. electrical grid. We look forward to sharing the results of these and other C2ES initiatives aimed at practical solutions to our twin climate and energy challenges.
Contact: Tom Steinfeldt, 703-516-4146
Read the full transcript of the 2012 State of the Union Address
The Center for Climate and Energy Solutions (C2ES) was named the world’s top environmental think tank in a global survey of top public policy research institutes.
The University of Pennsylvania’s 2011 Global Go-To Think Tank Rankings are based on a survey of more than 1,500 policymakers, scholars, journalists, think-tank executives and others worldwide. The survey assessed more than 5,300 organizations nominated in 30 categories to create a global list of top think tanks by region and policy area.
C2ES’s predecessor organization, the Pew Center on Global Climate Change, was named the world’s top environmental think tank in the same survey in 2009. The center began operating as C2ES in November 2011, and is listed in the new survey under its former name.
“While our name has changed, we remain as committed as ever to fact-based analysis and common-sense solutions to our climate and energy challenges,” said C2ES President Eileen Claussen. “We are thrilled to again be recognized as the world’s top environmental think tank. I’d like to commend the C2ES staff and thank all of our partners and supporters in the United States and abroad for helping to make this possible.”
The independent, nonpartisan center provides impartial information and analysis on energy and climate challenges; convenes policymakers and stakeholders to work toward consensus solutions; works with members of its Business Environmental Leadership Council and others to promote on-the-ground action; and promotes pragmatic, effective climate and energy policies at the state, national and international levels.
The annual survey, first published in 2007, is directed by James G. McGann, assistant director of the University of Pennsylvania’s International Relations Program and director of the Think Tanks and Civil Society Program.
The World Resources Institute and Chatham House ranked second and third, respectively, among the study’s top 30 environmental groups. Brookings Institution was named the top overall think tank. Additional categories in which the report ranks organizations include health policy, international development, and security and international affairs, among others.
The complete study, released in January 2012, is available online here.
More about C2ES's work to advance climate and energy solutions can be found here.
For the second year in a row, unprecedented numbers of extreme weather events have occurred across the globe. However, more of 2011’s impacts occurred in the United States. From the drought in Texas to the floods in the Midwest and Northeast, this past year underscored the huge economic costs associated with extreme weather. While specific weather events are not solely caused by climate change, the risks of droughts, floods, extreme precipitation events, and heat waves are already climbing as a result of climate change. This year reminded us of our vulnerability to those events.
Australia's Carbon Pricing Mechanism
Australia’s Clean Energy Future plan is a comprehensive set of national policies aimed at reducing greenhouse gas emissions and driving investments in clean energy. At its core is a carbon pricing mechanism starting in July 2012 and covering approximately 60 percent of Australia’s emissions. The pricing mechanism begins with a fixed carbon price for the first three years, then transitions to a cap-and-trade program. Revenue generated by the carbon price will be used to ease costs for households and industry and for investment in renewable power, energy efficiency, and other low-carbon alternatives. This brief summarizes the carbon price mechanism and other key features of the Clean Energy Future plan.
On November 8, 2011, the Australian Senate gave final approval to the government’s Clean Energy Future climate change plan outlining a series of measures to reduce greenhouse gas (GHG) emissions and drive investment in clean energy. A central element of the plan is a carbon pricing mechanism directly covering 50 percent of Australia’s emissions and providing direct financial support for renewable energy, energy efficiency, reducing emissions from land-use and forestry, and other elements. The mechanism starts with a fixed price for the first three years from 2012 to 2015 (AUD 23, rising with inflation to about AUD 25 at the end of the fixed-price period). It then transitions from 2015 to 2018 to a cap-and-trade program, with a price cap and price floor. Regulations to implement the plan are being developed. Other principal elements of the plan include:
- A long-term target of reducing GHG emissions 80 percent below 2000 levels by 2050;
- Over 50 percent of revenue generated from the carbon price is returned to households, particularly low-income ones, through tax relief and greater family benefit payments;
- Revenue generated by the program, along with additional government resources, will be used to ease the impact on trade-exposed industries and workers, and boost investments in renewable power, energy efficiency and other low-carbon alternatives;
- Implementation of the plan is expected to cost the government AUD 4.3 billion over the first four years, over and above revenue generated;
- Emissions from sectors not directly covered by the carbon price, such as certain fuels and synthetic gases, are indirectly addressed through changes to existing levies and taxes;
- Politically sensitive sectors are carved out of the mechanism: agriculture is addressed separately through an incentive-based scheme, and road transport fuels are largely exempt from the carbon price;
- Three new governance institutions are established to administer, oversee, and advise on all areas of the plan.
For those of you who came to our website today expecting to find information and resources from the Pew Center on Global Climate Change, please don’t click away. Today we announced an exciting transition. We are now C2ES — the Center for Climate and Energy Solutions. In addition to changing our name, we’ve refreshed our mission and strategic approach, updated our website, and made other changes to ensure that we can continue to craft real solutions to the energy and climate challenges we face today.
Yes, a great deal has changed in the last 24 hours. But what hasn’t changed is the need for straight talk, common sense and common ground. Today’s climate and energy issues present us with real challenges — and real opportunities as well. This is about protecting the environment, our communities and our economy. And it is about building the foundation for a prosperous and sustainable future.
This op-ed appeared in CQ Researcher.
By Jay Gulledge
The risk of extreme weather is rising because of climate change. In the United States, long-term trends show an increasing number of heat waves and heavy downpours and longer, more destructive droughts and wildfires. Climate models simulate these same trends when scientists examine the effects of increases in global warming’s main ingredient – greenhouse gases.
Risk is the best way to understand the link between climate change and extreme weather. Just as smoking and high cholesterol are risk factors for heart disease, natural cycles and global warming are risk factors for extreme weather. This year’s weather impacts have been particularly severe because multiple risk factors are aligned: A long, intense La Nina – a temporary cool period in the equatorial Pacific Ocean that is associated with extreme temperatures, droughts, and flooding in other parts of the world – is occurring at the same time we are experiencing the warmest decade in at least 130 years. The big difference between these risk factors is that natural cycles come and go, whereas global warming increases over time as atmospheric greenhouse gases grow, constantly adding more weather risk to the climate system.
Escalating weather impacts are cutting deeply into the economy. The world’s largest re-insurance company says the number of weather- and climate-related disasters worldwide more than doubled over the past 30 years. Economic losses attributable to weather variability run $485 billion annually. Several multi-billion-dollar events have occurred this year, including Texas’ worst single-year drought, the Mississippi floods, and Hurricane Irene, which is expected to rank among the ten costliest hurricanes in U.S. history. As the weather becomes more volatile, economic risk will continue to grow.
As recent weather events teach us more and more about our vulnerabilities, the taxpayer-funded National Flood Insurance Program is already $18 billion in debt. Because most of the damage from Hurricane Irene is not privately insured, this financially-strapped program is under pressure once again. And the Federal Emergency Management Agency (FEMA) is running out of money to respond to disasters, even as Congress bickers over how to refill the coffers.
Flood insurance is the federal government’s second-largest fiscal liability after social security. Ignoring rising climate risk will only allow these hidden costs to suck up more taxpayer money. Reducing greenhouse gas emissions and adapting to changes already under way bends down the risk curve, just as exercise and medical insurance lower health risks. If we don’t take these steps, our children and grandchildren will inherit a more dangerous and costlier climate.
Jay Gulledge is the Senior Scientist and Director of the Science and Impacts Program at the Pew Center on Global Climate Change.
Although much of the discussion about climate change impacts has focused on increases in temperature and the rise in sea level, changes that impact our nation’s water resources could have the greatest impact on society. A quick glance at recent newspaper headlines—heavy spring rains leading to massive flooding of the Mississippi River, historic drought covering large parts of Texas, and extensive wildfires spreading across Arizona—provides more than enough evidence of how vulnerable we are to water-related extreme events.
While these events have led some to ask whether they are caused by climate change, this question misses the mark. Individual weather events are not “caused” by any single phenomenon—and climate change’s contribution to individual events will not be resolved cleanly in the years to come. What virtually all climate scientists agree on, however, is that the climate is already changing, all weather events now form under different conditions than they used to, and this change is increasing the probability of extreme weather events happening. It makes sense to learn what we can from actual events and avoid getting caught up in an irresolvable debate about why a particular event happened. We would be better served by learning more about what is at risk from extreme events and what we can do to better manage and minimize those risks.
A recent interagency draft report, National Action Plan: Priorities for Managing Freshwater Resources in a Changing Climate, highlights both the extensive economic and social risks that we face as a nation from the impact of climate change on water resources and the critical steps we need to take to begin facing up to these challenges.
The report documents the changes in our climate system that are already evident and are likely to increase over time. Warmer air and sea surface temperatures and rising sea levels are only part of the picture. Total precipitation has increased by about 5 percent over the past 50 years, and the amount of precipitation that occurs during the heaviest downpours has increased by 20 percent. However, regional variations appear likely with increased precipitation in the northern part of the country while areas in the south, particularly in the southwest, are likely to get drier. The strengthened hydrologic cycle puts wet areas at risk of getting wetter while dry areas are at increased risk of drought. Areas dependent on water from melting snow packs may also face substantial changes as more precipitation falls as rain rather than snow and as earlier snowmelt changes the timing and quantity of water availability.
The implications of these changes cut a wide swath across our economy and environment. Water availability is critical in sectors as diverse as agriculture, electricity generation (hydroelectric, but also fossil fuel generation and nuclear power), heavy transport, mining and mineral exploration, and storm water management. Beyond economic factors, water is also critical to ecosystem wellbeing, wildfire management, and public health.
In order to more effectively manage these risks, and to enhance the resiliency of our water resource systems, the report sets out six general recommendations and 24 specific actions that should be undertaken by federal agencies and their partners. It calls for a more formal planning process, highlights the need for improved information, enhanced capacity building, better integration across related issues, and better tools for assessing vulnerabilities, and recommends expanded water use efficiency.
These actions are by no means a cure-all for the challenges we face in managing the increasing demands on our water resources in a changing climate. Nor are they a substitute for slowing the rate and magnitude of climate change through reducing emissions of greenhouse gases. The most effective risk management strategy is to avoid the risk all together. But with climate change already underway, we are too late to avoid some changes, and adaptation will be critical to reducing economic and environmental costs. We need only to look at the costs and suffering from recent extreme weather events to understand the risks we face.
Comments on the draft plan are being accepted until July 15, and can be submitted to: http://www.whitehouse.gov/administration/eop/ceq/initiatives/adaptation/freshwater-plan
Steve Seidel is Vice President for Policy Analysis
While Environmental Protection Agency (EPA) regulations on greenhouse gases (GHGs) and other air pollutants are on firm political and legal footing, attacks on them continue. Claims have been made that the costs of regulation are extreme or, contradictorily, that the government has not conducted any cost analysis of these regulations.
On the side that the costs are too high, one figure bandied about recently is that all government regulations are costing the economy $1.75 trillion annually, and $280 billion of that stems from compliance with existing environmental regulations. Those figures came from a study by two Lafayette College professors done for the Small Business Administration (SBA). Yet, as widely reported, the Congressional Research Service, and even the professors themselves have disputed the methodology of the study and its use in the current frenzy of political shots at environmental regulations. In a Congressional Research Service (CRS) report, the methodology of the SBA report was faulted for, among other things, allowing for double counting of costs. The Lafayette College study simply adds together other previous studies on individual regulations, regardless of the approaches and methodologies of those calculations. The CRS report quotes the Office of Management and Budget (OMB) as having written that such a methodology is an “inherently flawed approach.”
More distressingly for those who care about making informed decisions about the economic impacts of regulation, that large figure is not balanced against any benefits those regulations might have. According to the CRS report, the authors of the Lafayette College stated that they were never asked to include benefits in their analysis. The authors were quoted as saying the report was “not meant to be a decision-making tool for lawmakers or federal regulatory agencies to use in choosing the ‘right’ level of regulation. In no place in any of the reports do we imply that our reports should be used for this purpose. (How could we recommend this use when we make no attempt to estimate the benefits?)” On the contrary, as we have explained before, the benefits of Clean Air Act regulations have far outstripped the costs in major studies.
As for those who say no economic analyses were ever done of these regulations, all federally promulgated regulations undergo a cost-benefit analysis before implementation. This requirement stretches back many presidential administrations, with each administration offering adjustments to the process. The basis for current analysis is found in Executive Order 12866, signed in 1993 by President Clinton, which provided a significant overhaul to the review process and, among other things, requires
Each agency [to] assess both the costs and the benefits of the intended
regulation and, recognizing that some costs and benefits are difficult to
quantify, propose or adopt a regulation only upon a reasoned determination
that the benefits of the intended regulation justify its costs.
President Obama reaffirmed the inclusion of cost-benefit analysis in the regulatory process in Executive Order 13563 at the beginning of 2011.
Turning specifically to the GHG regulations implemented by the Administration, where regulatory requirements have been imposed the analyses required by OMB have been conducted and are readily available. Some critics have complained that there was not a cost-benefit analysis done of the EPA’s 2009 Endangerment Finding for GHGs. Such claims miss the fact that the Endangerment Finding was a scientific ruling that GHGs cause climate change, posing a threat to public health and welfare, and motor vehicles emit GHGs contributing to those risks. Since there were no regulatory requirements to reduce GHG emissions in this rulemaking, a cost-benefit analysis was inappropriate.
When it comes to actually reducing GHGs from emitting sources, such analyses would be appropriate, and federal agencies are required to include them as part of the rulemaking process. EPA has done so. The first rule on GHGs , the light-duty vehicle GHG emission standards promulgated jointly with Department of Transportation’s Corporate Average Fuel Efficiency standards, was issued with a Regulatory Impact Assessment that offered almost five hundred pages of detailed qualitative and quantitative analysis of the costs and benefits of the rules. The findings were that the GHG standard for light duty vehicles has an estimated cost of $52 billion and benefits of $240 billion: benefits outweighing costs by better than 4 to 1.
Upon the implementation of the light duty vehicle standards, the New Source Review program for stationary sources of GHGs was automatically triggered – without any regulatory action taken by EPA – therefore no separate cost-benefit analysis was legally required of this step. However, when EPA went through the regulatory process to create the tailoring rule to lower the compliance requirements for stationary sources, it was required to undertake an analysis. The Regulatory Impact Assessment of EPA’s tailoring rule is available on its website and includes an in-depth qualitative and quantitative analysis of the reduced permitting costs from the tailoring rule regulation now in effect for stationary sources. As EPA continues its rulemaking for New Source Performance Standards for utilities and refineries, fully documented regulatory impact analyses will be conducted and made available for comment with the proposed rule.
Thus, despite the claims to the contrary, EPA has in the past and will continue in the future to analyze the costs and benefits of GHG regulations. It is also clear that, to date, GHG regulations imposed by the EPA under the Clean Air Act have vastly greater benefits than costs.
Michael Tubman is the Congressional Affairs Fellow