Energy & Technology
January 11, 2011
Pew Center Contact: Tom Steinfeldt, (703) 516-4146
NEW REPORT EXAMINES PATHS TO CLEANER, MORE SECURE
U.S. TRANSPORTATION SOLUTIONS
Pew Center on Global Climate Change Study Examines the Policies, Technologies & Public Attitudes
Needed to Cut Greenhouse Gas Emissions & Oil Dependence
WASHINGTON, D.C. – Transportation – literally our economy’s driving force – presents major energy and climate challenges in terms of oil dependence and greenhouse gas emissions. A new report released today by the Pew Center on Global Climate Change examines cost-effective solutions to begin to cut U.S. transportation emissions and oil use now and move toward cleaner, alternative fuels.
From burning oil, transportation accounts for more than one-fourth of all U.S. GHG emissions. The report, Reducing Greenhouse Gas Emissions from U.S. Transportation, identifies reasonable actions across three fronts – technology, policy, and consumer behavior – that could deliver up to a 65 percent reduction in transportation emissions from current levels by 2050.
“The Gulf oil disaster tragically reminds us that our oil dependence carries significant risks for our security and environment,” said Eileen Claussen, President of the Pew Center on Global Climate Change. “Cost-effective transportation solutions exist now to begin to manage these risks. By supporting meaningful policies as citizens and choosing advanced technologies as consumers, we will drive the nation toward a cleaner, safer transportation future.”
Authored by David L. Greene of the Howard H. Baker, Jr. Center for Public Policy and Steven E. Plotkin of Argonne National Laboratory, the study provides three plausible scenarios of improved transportation efficiency and reduced GHG emissions through 2050, with technology progress and policy ambition increasing from the first to third scenario. The scenarios show emissions reductions of 17 percent, 39 percent, and 65 percent below 2010 levels by 2050. The findings were based on a wide range of existing transportation literature and the authors’ own analysis.
Policies can pull existing technology to market, support future technology development, and correct market failures to reduce oil dependence, the report finds. Effective policies, such as performance standards, pricing mechanisms, and RDD&D, should be employed now and adapted over time as we learn how technologies and polices perform in the real world.
Today’s technologies, if widely used, can already make substantial gains in fuel efficiency and emission cuts, while a fuel mix of electricity, biofuels, and hydrogen could significantly reduce gasoline-powered vehicles by mid-century, the report states. In fact, freight truck emissions could be slashed by 30 to 50 percent with current technology and achieve greater reductions over the next several decades.
Starting now and sustaining efforts to cut transportation emissions over time is critical. The interplay between policies, technologies, and the choices of citizens and consumers can drive adoption of cleaner transportation solutions across the economy.
For more information about global climate change and the activities of the Pew Center, visit www.c2es.org.
The Pew Center was established in May 1998 as a non-profit, non-partisan, and independent organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.
With EPA’s recent announcement of timelines for additional regulation of greenhouse gases (utility and refinery sectors) and the arrival in town this week of the new Congress, the shouting about EPA’s regulatory actions has already begun. Many of these claims are clearly political posturing – the facts are that schools, churches, and libraries will NOT be subject to regulations, there will NOT be a moratorium on all new industrial facilities for at least 18 months, and new coal plants will NOT be banned. But it is also true that regulating greenhouse gases (GHGs) has the potential to substantially impact our economy and is critical to reducing the risks and costs associated with climate change. The critical challenge facing EPA is how to properly balance the costs of reducing GHG emissions against the benefits of limiting climate change. How EPA balances these interests demands a serious discussion. In an effort to lower the volume and better inform future discussions about EPA’s use of its regulatory authority, the following are key factors that should be considered.
1. EPA is not overreaching by regulating greenhouse gases (GHGs) under the Clean Air Act but is doing so in direct response to the Supreme Court’s 2007 ruling in Mass. v. EPA.
Some have incorrectly claimed that EPA has overstepped its authority in regulating greenhouse gases and is attempting to regulate GHGs even though Congress failed to pass climate legislation last year. In fact, it is the Supreme Court in 2007 that clarified that EPA had the authority to regulate GHGs under the existing Clean Air Act. EPA had denied a petition by some states and environmental groups calling on it to begin regulating GHGs under the existing Clean Air Act. The Supreme Court rejected EPA’s claim that the Clean Air Act does not apply to GHGs and held that these emissions meet the definition of an “air pollutant” under the Act. The court held that “under the Act’s clear terms, EPA can avoid promulgating regulations only if it determines that greenhouse gases do not contribute to climate change or if it provides some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do.” Based on its extensive review of the scientific evidence in its endangerment finding, EPA reached the only conclusion that the evidence supported – that GHG emissions cause or contribute to air pollution, which may reasonably be anticipated to endanger public health or welfare and, therefore, are subject to regulation under the Clean Air Act.
2. EPA’s regulations will not require unproven technologies, impose excessive costs at a time when our economy is hurting, or harm small and previously unregulated sources.
There are legitimate concerns that the Clean Air Act was not developed specifically with GHGs in mind and these emissions are different in fundamental ways from traditional hazardous and criteria pollutants covered by the Act. As a result, EPA has gone to great lengths to “tailor” its regulations -- for example, with respect to new source permitting -- in such a way that only the largest sources of GHGs are covered. This tailoring rule has been challenged in courts (along with all other GHG regulations). If it is overturned, Congressional intervention would likely be necessary. But the Clean Air Act includes many provisions that minimize compliance costs, and many of its fundamental requirements apply equally well to regulating GHGs. For example, the Act requires that technological feasibility and costs be considered in setting emission performance standards and allows for different requirements for new and existing sources. In its guidance to states on what constitutes “best available control technology,” EPA has focused on energy efficiency technologies as a means to achieve both reductions in GHG emissions and cost savings to firms. The agency has also made it clear that the use of coal as a fuel can be continued under its guidelines. While EPA regulations will impose some costs on firms, based on guidance to date, those costs are likely to be modest and will result in far greater benefits than costs to society.
3. Delaying any EPA regulatory actions would be bad for business and bad for the climate.
Delaying regulations by EPA will allow some firms to avoid compliance costs in the near term but will increase overall costs over the longer term. For firms in states already facing GHG requirements (e.g., utilities in 10 northeast and mid-Atlantic states, large emitters in California), any delay in EPA regulations are not likely to alter the requirements they face. For firms in other locations that are planning facilities with long lifetimes, some are likely to install the same technology that would be required by EPA in an effort to avoid more expensive retrofits in the near future. These firms would prefer the certainty of knowing what regulatory requirements they must meet prior to making large capital investments. Finally, delay in reducing GHG emissions will result in greater economic harm throughout our society as families and communities face the costs associated with increases in extreme weather (droughts and floods), impacts from sea level rise, limits on the availability of water resources, and other climate impacts.
4. EPA’s regulatory actions are not a form of backdoor cap and trade or an energy tax.
Congress rejected a comprehensive cap-and-trade approach to regulating GHG in its last session. EPA’s approach does not rely on a cap-and-trade regime and is far from comprehensive. EPA’s regulations focused first on the transportation sector with the issuance of widely supported standards for light-duty vehicles and proposed standards for medium and heavy-duty vehicles. On the stationary source side, EPA first targeted the largest new sources and major modifications of existing sources and recently announced plans to develop new source performance standards for the electric utility and refinery sectors. Such standards are the traditional approach used under the Clean Air Act and are generally implemented through state programs.The regulations are being developed on a timeframe consistent with Clean Air Act requirements covering other pollutants to allow covered sources the flexibility of developing compliance plans that cost-effectively meet a comprehensive set of requirements.
5. EPA is not attempting to meet the same reduction requirements that were rejected by the last Congress.
The House-passed climate change bill called for reductions in GHG emissions of 17 percent of 2005 levels by 2020, increasing to reductions of over 80 percent by 2050. EPA’s use of the Clean Air Act is not likely to produce emission reductions of the magnitude or in the timeframe set forth in the legislation proposed last year.
6. Important questions do need to be addressed in moving forward.
EPA’s initial set of regulations represent an important beginning in addressing the risks associated with climate change but also raise important issues. In moving forward, several questions will need to be addressed:
* How will EPA’s regulation be implemented in a manner consistent with current and future state actions?
* Given market forces driving utilities toward increased use of natural gas, the regulatory uncertainty that currently exists, and the age and fuel mix of the current utility fleet, what is the likely future role of coal in this sector?
* As EPA moves forward in regulating stationary sources through the use of emission performance standards, how might it be able to provide flexibility to regulated sources to achieve cost-effective reductions?
* How might EPA regulatory actions specific to utilities interact with possible Congressional interest in a clean energy standard?
Steve Seidel is Vice President for Policy Analysis
Greenhouse gas (GHG) emissions come from diverse sources across the economy. The magnitude of emissions and diversity of sources means that no single technology, policy, or behavioral change will be able to “solve” climate change. Rather, a portfolio of solutions is needed. A wide range of technologies already exist, or are currently under development, to facilitate greenhouse gas emission reductions.
The Climate Techbook is an online resource for information on reducing greenhouse emissions from all sectors. The Techbook is comprised mostly of technology summaries that include how the technology works, how it can reduce GHG emissions, and what policy options exist to help promote it. The Techbook also contains sectoral overviews that provide high-level summaries of GHG mitigation opportunities and policy options in the major GHG-emitting sectors of the economy.
Emissions by Sector
The chart to the right shows the percent of greenhouse gas emissions from each of the five key economic sectors in the United States. Greenhouse gas emissions data come from the U.S. Environmental Protection Agency’s Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2011. Click on a sector to learn more about the emissions from that sector, as well as the technologies that can help lower emissions.
Technologies by Sector
Select a technology or a sectoral overview. The sectoral overviews define each sector, the major sources of greenhouse gas emissions, and policies that would help reduce emissions. The technology summaries include how each technology works, how it can reduce greenhouse gas emissions, and what policy options exist to help promote it. Note that certain technologies can play a key role in more than one sector.
The C2ES Energy Portal: We use energy every day: in our homes, on our jobs and when we travel. This energy portal is designed to simply explain where our energy comes from (Source) and where it gets used (Sector). Read More
By Eileen Claussen
December 20, 2010
2010 was a year of highs and lows.
On the high side were global temperatures; 2010 will mark the hottest year in recorded history. At the start of the year, there was also the short-lived high of thinking we might be on the precipice of meaningful action in the U.S. Congress to protect the climate. Finally, at year’s end the climate talks in Cancún delivered (surprise!) tangible results in the form of agreement on key elements of a global climate framework.
But alas, the lows won out for most of 2010 as a trumped-up email controversy, continuing economic unease, and growing anti-government sentiment in the United States undermined the effort to forge lasting climate solutions at all levels.
Congress. Until quite recently, the Pew Center and many others were actively supporting cap and trade as the number-one climate policy solution. After the House passed a fairly comprehensive energy and climate bill in June 2009 that had a cap-and-trade system at its core, we actually thought that it might become the law of the land.
Before long, however, it became eminently clear that the Senate would not be able to pass a similar bill. The 2010 U.S. elections, which brought more doubters of climate change into the halls of Congress, only made it clearer that comprehensive climate action is off the table for now.
EPA. With Congress unable to pass comprehensive climate legislation in 2010, attention turned to what EPA might be able to do under existing authorities. And it turns out that EPA can do quite a lot by taking reasonable steps that have garnered critical support from the business and environmental communities. In late October, for example, the agency announced a sensible proposal to reduce greenhouse gas emissions and improve fuel efficiency for medium and heavy-duty vehicles. This was followed by a November announcement that will go a long way to making sure that new industrial facilities use state-of-the-art technologies to boost efficiency and reduce emissions.
Of course, opponents of these and other EPA regulations will surely raise a ruckus, and there will be loud cries in Congress to delay the regulations and even cut funding for the EPA. But the possibility remains that the agency could conceivably begin to chip away at U.S. emissions in the months and years ahead.
State Actions. Looking beyond Washington, state capitals were the focus of creative thinking and leadership on the issue of clean energy in 2010. Massachusetts, for example, set a statewide energy efficiency standard in 2010 supported by $1.6 billion in incentives. Meanwhile, California voters upheld the state’s greenhouse gas reduction law by defeating Proposition 23. This marked the first direct vote on addressing climate change in the United States, and it won in an overwhelming fashion.
But the overall story regarding climate action in the states was more mixed. While several regional climate initiatives continued to push forward, the November elections brought to the nation’s statehouses a group of new leaders who adopted strong stands against climate action in their campaigns. We will stay tuned to see how their campaign rhetoric translates into governing.
International. The agreement reached by international negotiators in Cancún in December closed out 2010 on a positive note. The Cancún Agreements import the essential elements of the 2009 Copenhagen Accord into the U.N. Framework Convention on Climate Change, including a stronger system of support for developing countries and a stronger transparency regime to better assess whether countries are keeping their promises. The Cancún Agreements also mark the first time that all of the world’s major economies have made explicit mitigation pledges under the Convention.
Of course, the ultimate goal of the continuing international talks should be a legally-binding climate treaty, but in Cancún we saw countries agreeing on incremental steps that will deliver stronger action in the near term and lay the foundation for binding commitments down the road.
Looking Ahead. Looking ahead, I believe 2011 holds promise only if those of us who support climate action can learn from what happened in 2010. In recent years, domestic and international efforts largely centered on a “big bang” theory of trying to achieve everything at once. Instead, it’s instructive now to take a cue from Cancún and accept that a step-by-step approach to building support for climate solutions offers our best shot at progress.
Calling on the new Congress to pass cap and trade or similarly comprehensive solutions will be a nonstarter, for example. But there may be an opportunity on Capitol Hill for less sweeping steps to reduce U.S. emissions.
Supporters would do well to spend the next several months laying the groundwork for incremental solutions by strengthening communications with the public. We need to do a better job of helping people understand both the risks and the opportunities presented by climate change. In the same way we buy fire insurance to protect against an event that has a statistically small chance of happening but would result in severe damage, acting now to cut emissions reduces our vulnerability to severe events that are likely to become more common in a warming world. And the success of the “No on Prop 23” campaign in California suggests that there remains a healthy appetite among the general public and in the business community (which provided substantial support for the effort) to back well-framed climate solutions.
After a year of highs and lows, we still must aim high in our efforts to address one of the greatest challenges of our time. But we should also heed the lessons of the past year and work for more modest victories now that can keep us on the path to longer-term solutions.
This post also appears in National Journal's Cancún Insider blog.
CANCUN – We’ll see tomorrow here in Cancún whether countries are ready to move past binding-or-nothing in the international climate effort.
For the past five years, negotiators have deadlocked over whether and how to extend a legally binding climate regime beyond 2012, when the first Kyoto targets expire. In that time, over countless sessions, the U.N. climate talks have produced little in the way of tangible results.
Cancún is an opportunity for a more sensible approach.
From commercial airplanes from Virgin Atlantic to a U.S. Navy fighter jet, powering airplanes with biofuels has been long been a goal of the airline industry. Following test flights by a number of airlines and the U.S. Department of Defense, Lufthansa will be the first to offer a biofuel-powered commercial flight in April of 2011. Though a 50-50 mix of biofuels and jet fuel (traditional kerosene) will power only one of the aircraft’s engines, the German airline is achieving a considerable milestone. The program is a 6-month trial using the Hamburg-Frankfurt route to evaluate the wear and tear of biofuels on an aircraft engine. The program should reduce the airline’s carbon footprint by about 1,500 metric tons of CO2 in total (the annual emissions of about 300 cars) and cost about 6.6 million euros. The plane is no slouch either – an Airbus A321 has a seating capacity of 220 and a range of 3,000 miles.
On November 10, 2010, the Environmental Protection Agency (EPA) released guidance to be used in implementing “best available control technology” (BACT) requirements for greenhouse gas (GHG) emissions from major new or modified stationary sources of air pollution. Under the Clean Air Act (the Act), major new sources or major modifications to existing sources must employ technologies aimed at limiting emissions from these sources.
Under the Act, the BACT requirements for a given facility are to be established in a way that addresses the specific conditions of the facility and reflect the maximum degree of emission reduction that has been demonstrated through available methods, systems, and techniques, while accounting for the economic, energy and environmental considerations of the facility. In most states, the state environmental agency, rather than US EPA, will be issuing the permit to the facility.
The use of BACT to limit emissions of regulated pollutants from facilities has been part of the Clean Air Act for decades. Its first application to GHG emissions occurred in February 2010, when Calpine Corporation voluntarily agreed to an air permit that included a BACT determination for GHGs at a new power plant in California. The approved power plant included a slightly more efficient generation unit than had been initially proposed.
The new EPA guidance itself is technical in nature. Most importantly, under the guidance, covered facilities will generally be required to use the most energy efficient technologies available – much as was the case with the Calpine facility – rather than be required to install particular pollution control technologies. Among other things, carbon capture and sequestration technology will not be considered BACT except in extremely rare circumstances, such as when a facility is located next to an operating oil field whose operator wants to purchase carbon dioxide for enhanced oil recovery. Nor will the guidance require that specific types of fuels be used. In particular it does not require that proposed coal burning power plants switch to natural gas. The guidance also includes particular guidance for biomass facilities, stating that biomass itself could be considered BACT. EPA has indicated that it intends possibly to pursue additional rulemaking next year that may eliminate biomass burning facilities altogether from this permitting process. Overall, the BACT guidance maintains the same steps for individual BACT determination for GHGs that have long been used for BACT determination for traditional air pollutants.
In an earlier rulemaking, EPA established the threshold limits for which major new or modified sources would be required to meet BACT requirements. In its “tailoring” rule, EPA specified that beginning January 2, 2011, only sources that were already subject to BACT for “criteria” air pollutants (such as sulfur dioxide and nitrogen oxides) and had emissions of GHGs that exceeded 75,000 tons per year would have to meet BACT for GHGs. In July 2011, these requirements will be extended to apply also to any new source with GHG emissions above 100,000 tons per year and any modified source that increases GHG emissions by more than 75,000 tons per year.
More information from C2ES:
A new report, Post-Partisan Power, puts forth several interesting ideas for how the United States can accelerate technological progress to advance U.S. energy security and global climate protection. The authors are Steven F. Hayward of the American Enterprise Institute (AEI), Mark Muro of the Brookings Institution, and Ted Nordhaus and Michael Shellenberger of the Breakthrough Institute. The report has created a buzz, in part because of the “man bites dog” nature of the story – Brookings and AEI agree on something! And they are saying “post-partisan” out loud in these hyper-partisan times.
The authors recommend a number of initiatives that ought to be no-brainers – invest more in energy science and education, overhaul the energy innovation system by increasing funding for the new Advanced Research Projects Agency-Energy (ARPA-E) and developing regional energy innovation centers, reform energy subsidies, use military procurement and competitive deployment to drive innovation and price declines, and pay for all this through a very small carbon tax or electricity fee. The major critique of the report, best articulated by Harvard economist Rob Stavins, is that these recommended steps are necessary but not sufficient – i.e., it is all very well for the government to invest in these technologies, but we also need to create a market for them through a strong carbon price or serious greenhouse gas reduction requirements.
The authors have responded that they didn’t mean to imply that their recommendations include all we need to solve our energy and climate problems. However, their subtitle, “How a limited and direct approach to energy innovation can deliver clean, cheap energy, economic productivity and national prosperity,” makes it sound an awful lot like they did. And their opening critique of “both sides of the debate” on climate and energy is dismissive of pricing in general and cap and trade in particular – noting, for example, cap and trade’s defeat in the Senate but not its victory in the House, and saying pricing has not succeeded in reducing emissions in Europe, when in fact it has. But let’s set that aside for the moment.
The more intriguing question this report raises for me is why the energy and climate debate is so stuck and why even the modest proposals described in “Post-Partisan Power” face an uphill battle.
The report’s authors lament our irrational energy subsidies and dysfunctional federal support system for energy innovation, and I agree substantively with their critique and their proposed fixes. But this irrationality and dysfunctionality have persisted for a long time. Each energy source has a powerful constituency for federal subsidies and tax breaks. And for each DOE lab in the current national network that does most of our federal energy research, powerful regional interests protect the status quo.
Similarly, policy analysts have made an airtight case for decades that pricing policies are both effective and cost-effective at reducing emissions, but for the most part politicians and the public have resisted such policies. We seem to prefer our regulatory costs to be high and hidden rather than low and transparent.
What is going on? I’m not sure, but I can think of at least two partial answers. The first is our political system’s focus on the size of government rather than its efficacy. The “great debate” in this election is whether the government should be bigger or smaller, not whether government is effectively doing whatever tasks it is assigned. The key critique of cap and trade was that it was a tax and that it looked like too much government, when the debate should have been about its efficacy in reducing emissions and minimizing costs. We measure success or failure of federal action with respect to a particular energy source by the size of the budget or tax breaks devoted to it, not whether such action is effectively driving innovation or bringing down technology costs. Hayward et al. suggest we fix this through better program design, but that will not be easy. It requires a transformation of our nation’s political thinking at a very deep level.
The second answer is specific to the energy system. It is an inconvenient truth that fossil fuels have some really attractive characteristics as energy sources. They are abundant, seemingly cheap (if one doesn’t take into account their environmental or energy security impacts, and of course the market price does not do so), and “energy-dense” (meaning they can produce a lot of energy per unit of volume and mass). They have also been used for a long time, and their use has co-evolved with extensive fuel distribution infrastructure and fuel-using equipment. Thus, shifting away from these fuels requires displacing a suite of interdependent incumbent technologies.
This problem is really different, in kind and in scale, from any the U.S. government or the U.S. economy has wrestled with before. It is not like computer innovation, where a new set of technologies created new markets for new services; or airplanes, in which military procurement dominated an emerging market. To move away from the energy system we have, which meets our private needs very nicely, to one that may have lower social costs but higher private ones (at least for some transitional period), is going to be very difficult. Hayward et al. hope that we can eat our cake and have it, too, by finding new technologies that have both lower social costs and lower private costs. But substantially increasing government investment won’t guarantee this outcome – certainly not by itself. Rather the United States must make climate protection and national security a priority, and develop and implement a conscious, ambitious, and comprehensive national strategy with full public support. This is a daunting challenge.
Judi Greenwald is Vice President for Innovative Solutions
At a time when political gridlock in Washington has blocked climate legislation, EPA and NHTSA have jointly come forward with a sensible proposal that will substantially reduce oil consumption and greenhouse gas (GHG) pollution from heavy-duty trucks. EPA and NHTSA’s proposed new rules build on their recent success in finalizing GHG and fuel efficiency standards for cars and light-duty trucks. Once again, the two agencies collaborated with industry to make sure their standards accomplish environmental and energy security goals in a practical manner.
The transportation sector is responsible for 27 percent of our nation’s GHG emissions. Within this sector, heavy-duty vehicles are the second largest source of emissions (after light-duty vehicles), accounting for 20 percent of the sector’s total. The new proposal covering heavy-duty vehicles (long-haul trucks, large pick-ups and vans, school and transit buses, and utility trucks) manufactured from 2014 through 2018 is estimated to reduce emissions by 7-20 percent from these vehicles (depending on the category of truck) from current levels, achieving an overall reduction of 250 million metric tons of carbon dioxide over the life of the vehicles sold during this five-year period. As a result, emissions in 2030 from this fast growing subsector will be 9 percent below what they would have been in the business as usual case. The proposed rule is also estimated to reduce oil consumption by 500 million barrels over this same period.
Cost and Benefits
To achieve the proposed standards, truck manufacturers will need to modify their vehicles drawing from a range of existing technologies including improvements in aerodynamic designs, lower rolling resistant tires, advanced transmissions, and reduced idling. The agencies report that the cost of meeting the standard for many trucks will be recouped in less than 2 years in the form of fuel savings. The regulatory impact analysis accompanying the proposed rule looks at both the costs and benefits of meeting the proposed standards. It shows the following:
Estimated Lifetime Discounted Costs and Benefits for 2014-2018 Model Year Heavy-Duty Vehicles
|3 percent discount rate||$ billions|
The bottom line is clear – with a net benefit to society of $41 billion, the proposed rule is a worthwhile investment in reducing both our reliance on foreign oil and our emissions of greenhouse gases.
Steve Seidel is Vice President for Policy Analysis