The Center for Climate and Energy Solutions seeks to inform the design and implementation of federal policies that will significantly reduce greenhouse gas emissions. Drawing from its extensive peer-reviewed published works, in-house policy analyses, and tracking of current legislative proposals, the Center provides research, analysis, and recommendations to policymakers in Congress and the Executive Branch. Read More
A year after the Clean Power Plan was finalized, on August 3, 2015, it is already having a tangible impact on how states are thinking about carbon emissions from power plants - and even other sources - and are working to confront the climate challenge.
Before the Supreme Court temporarily halted the plan in February, most states had launched the required public stakeholder outreach.
As we’ve learned from our engagement with states through the C2ES Solutions Forum, even after the stay, many of those conversations have continued, and they’ll affect how states approach climate change regardless of the outcome of the Clean Power Plan’s judicial review.
A few states, like West Virginia, have stopped all Clean Power Plan conversations. Others, like Washington and California, are moving forward to reduce emissions beyond what the Clean Power Plan would require.
The vast majority, including states as diverse as Virginia and Wyoming, fall somewhere in the middle – thinking about, discussing, or working on potential implementation options.
Many states, like South Carolina, are talking about cleaner power because of the forces already affecting the sector today. Consider:
- Between 2005 and 2015, U.S. power sector emissions fell 20 percent as a result of a shift from coal to natural gas, increased renewable energy, and level electricity demand.
- Last year, nearly two-thirds of new electric capacity added to the grid was renewables.
- Some states are grappling with how to help the No. 1 source of zero-emission power, nuclear, remain competitive in a changing marketplace.
- Utility regulators are trying to determine how to integrate rooftop solar panels, which are surging in popularity, into the system.
For most programs under the Clean Air Act, the Environmental Protection Agency (EPA) sets emission targets, and the states determine how to reach them. The Clean Power Plan is no different. But as states began thinking through how to develop an implementation plan, they found themselves having new and different conversations with new and different colleagues.
For some state environmental officials, Clean Power Plan outreach was the first time they had spoken with their public utility regulators about electric reliability and with other stakeholders about the effects of electricity rates and energy efficiency programs on low-income communities.
State energy offices, city governments, state legislatures, utilities, clean power providers, and energy users of all kinds have been brought into the discussions, deepening relationships and broadening understanding. For example, Arizona started a robust public input process, including everyone from utilities to civic groups, that is continuing after the stay with three more meetings in 2016.
The energy sector is changing rapidly, and the Clean Air Act requires action to bend the curve toward even lower emissions. These stakeholders will have to work together to reduce greenhouse gas emissions in a meaningful and economically efficient way, and these new relationships will help make that happen.
The Clean Power Plan also prompted some states to examine potential implementation pathways. They often found they could reduce emissions with less expense and policy push than they had assumed. Most modeling efforts (see the Rhodium Group, MJ Bradley and Associates, and the Bipartisan Policy Center) have found even lower compliance costs when regional or national cooperation (e.g. interstate trading) is factored in, with some costs approaching zero.
States have also been learning from one another. Over the past 18 months, C2ES has helped convene stakeholders in conversations across the country to look at common themes and examine how market-based strategies can help states create plans that businesses can support and cities can help implement.
Through the Clean Power Plan process, business leaders and state and city officials across the country have learned about the opportunities and challenges of reducing greenhouse gas emissions.
Continuing to analyze options, do modeling and conduct stakeholder outreach, even if it falls short of writing a state plan, will have tremendous value as states consider their energy futures and when judicial review of the Clean Power Plan is complete. Evolving toward a cleaner energy system has both environmental and economic benefits, so we encourage states to continue exploring pragmatic, common-sense approaches to reach that goal.
Statement of Bob Perciasepe
President, Center for Climate and Energy Solutions
July 25, 2016
On the U.S. Environmental Protection Agency (EPA) finalizing two Clean Air Act findings on greenhouse gas emissions from aviation:
EPA’s endangerment finding today on greenhouse gas emissions from aircraft is a sensible step toward a fair, global approach to reducing the climate impact of airline travel.
In initiating a process to establish domestic standards, the United States is showing the leadership needed to reach an agreement on a market-based system to cost-effectively limit airline emissions when the International Civil Aviation Organization meets in September.
Together, an ICAO climate agreement and steps later this year to reduce HFCs under the Montreal Protocol would build very substantially on the Paris Agreement, and would demonstrate strong cooperation between the public and private sectors in meeting our climate challenge.
To speak to a C2ES expert, contact Laura Rehrmann at firstname.lastname@example.org
About C2ES: The Center for Climate and Energy Solutions is an independent, nonpartisan, nonprofit organization advancing strong policy and action to address climate change. Learn more at www.c2es.org.
Achieving the United States' Intended Nationally Determined Contribution
More than 180 nations representing more than 95 percent of global greenhouse gas emissions offered “intended nationally determined contributions” (INDCs) to the Paris Agreement reached in December 2015. The United States’ INDC is an economy-wide target to reduce net greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025. Available analyses suggest that the United States could reduce emissions by more than 22 percent with policies either already in place or soon anticipated. Options for achieving further reductions to meet the 2025 target may include additional policies, technological advances, and stronger action by cities and companies. Concerted efforts across multiple fronts could reasonably produce the reductions needed to meet the goal. Specifically, this paper looks at the progress that has been achieved since 2005, the effect existing and proposed policies will have by 2025 as well plausible steps to fill the gap.
Last year, I spoke to a Slate reporter who asked why the Obama Administration had not invested more in electric vehicle (EV) charging infrastructure. Last night, the administration took steps to reduce transportation emissions by making charging easier and more affordable and by leading the way through a unified, national effort.
The administration announced several initiatives to promote EV adoption. Notably, $4.5 billion in funding has been designated to support guaranteed loans for the installation of new EV charging stations. The administration also plans to develop a guide for federal funding, financial, and technical assistance for EVs and EV charging infrastructure, as well as invest in research and partnerships that will expand EVs’ consumer appeal.
Range anxiety, or a simple lack of available charging options, continues to impede the growth of the EV market. The administration announced $4.5 billion in guaranteed loans through the U.S. Department of Energy’s (DOE) Loan Program Office to install EV charging stations. Expanding federal loans to include EV charging stations may help remove a major impediment to investing public charging by reducing the cost of capital.
A 2015 C2ES report recommended government loans in the short term to help stimulate the growth of public charging infrastructure and create a sustainable charging network. The report found that charging service providers face difficulties earning a return on investments for public charging projects, but could develop profitable business models with government financial support.
The administration is proposing to develop federal standards to assist with developing networks of DC fast charging stations, which can charge an EV in 30 minutes or less. The U.S. Departments of Energy and Transportation will produce a guide to federal funding programs, financing incentives, and technical assistance for EVs and charging stations. The intervention of the federal government may help create some more consistency between charging networks with varying standards and processes, and the guide may establish an authoritative and inclusive resource for all stakeholders to turn to for a better understanding of EVs.
The proposal leverages existing programs, such as the congressionally approved 2015 FAST Act designating travel corridors for alternative fueling stations, to help expand DC fast charging networks.
This figure illustrates the business challenge facing charging service providers. Over the expected life of the charging equipment, the direct revenue for the provision of charging services is less than the cost of owning and operating the charging station.
The White House’s announcement also includes new funding for research to cut EV charging time down to 10 minutes, which would appeal to consumers used to fueling gasoline-powered cars. Consumers may find charging easier with the inclusion of new companies in DOE’s workplace charging program and utility commitments to deploying new EV infrastructure.
There may be some criticism about why the federal government is investing this funding in EVs, and not other clean transportation technologies such as natural gas or hydrogen. EVs currently hit the sweet spot of offering greater carbon reduction potential than natural gas vehicles, with the capacity to get even cleaner as the electric grid decarbonizes, while attracting greater support from automakers and consumers than hydrogen fuel cell vehicles. Twenty-six EV models were sold in the United States last month, with automakers pledging many more models in the coming year.
Now that the transportation sector has become the largest U.S. greenhouse gas-producing sector, these initiatives will help bring clean transportation to consumers by making EV adoption easier and more enjoyable.
Statement of Bob Perciasepe
President, Center for Climate and Energy Solutions
June 29, 2016
On the North American Climate, Clean Energy, and Environment Partnership Action Plan:
By pledging to power their economies with more clean energy, the leaders of Canada, Mexico and the United States are showing the way toward a more sustainable future.
Generating half of North American electricity from non-emitting sources by 2025 is ambitious but it’s achievable.
By developing goals and strategies for 2050 and beyond, the three countries also will be charting a clearer course toward achieving the aims of the Paris Agreement, and setting a strong example for other countries.
Canada, Mexico and the United States have connected economies. Working together can make all three economies stronger and more sustainable, and reduce the costly risks of climate change.
To speak to a C2ES expert, contact Laura Rehrmann at email@example.com
About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonprofit, nonpartisan organization promoting strong policy and action to address the challenges of energy and climate change. Learn more at www.c2es.org.
Back in 2005, the U.S. Energy Information Administration projected that, under current policies, U.S. energy-related carbon dioxide emissions would increase nearly 18 percent by 2015.
They did not.
In fact, emissions fell – by more than 12 percent. So we were off by 30 percent.
As Yogi Berra may have said: It's tough to make predictions, especially about the future. We didn’t know then the impact a variety of market and policy factors would have on our energy mix. And we don’t know now all of the factors that could help us meet, or exceed, our Paris Agreement pledge – to reduce our net emissions 26-28 percent below 2005 levels by 2025.
U.S. emissions have fallen over the last 10 years due to factors that include:
- Growth in renewable energy
- Level electricity demand
- Improved vehicle efficiency
- A shift in electricity generation from coal to natural gas.
An unanticipated abundance of cheap natural gas has transformed the U.S. electricity mix. Coal-fired generation has fallen from 50 to 33 percent of the mix, while less carbon-intensive, natural gas-fired generation has risen from 19 to 33 percent.
The last 10 years also included a major economic downturn, which in 2009 drove electricity sales below 2005 levels. Despite a return to positive economic growth in the following year that continues through today, electricity sales have remained flat. Declines in manufacturing; improvements in energy efficiency, including in buildings, lighting, and appliances; warmer winters; and increased use of on-site generation like rooftop solar panels are the likely drivers.
What will happen in the next 10 years?
Certainly, the electric power sector will continue to decarbonize. It is not unreasonable to assume that natural gas will play an even larger role, while coal will play a substantial albeit diminishing role in the electricity mix.
Here are some other factors that are hard to quantify now, but could affect how quickly we transition to a clean energy future:
More zero-emission electricity
Increased clean and renewable electricity production, spurred by the Environmental Protection Agency’s Clean Power Plan and congressional tax credit extensions for wind and solar, could reduce renewable power costs, which have already been dropping. In other words, economies of scale could lead to higher deployments and lower emissions than currently forecast.
Wind and solar generation have grown nearly twelve-fold since 2005, nearly eight times greater than what was expected back then. In the 2016 Annual Energy Outlook, wind and solar generation are projected to increase 2.5 times by 2025. Historical precedent would tend to suggest that this is a highly conservative estimate.
However, sustained low prices in wholesale power markets from low natural gas prices and a proliferation of renewable electricity sources could harm another zero-emission source: nuclear. In particular, we could see natural gas continue to replace zero-emission merchant nuclear plants, moving us in the wrong direction, unless remedies are implemented. Also, low wholesale prices would tend to discourage new renewable generation.
More zero-emission vehicles
Electric vehicles (EVs) make up less than 1 percent of new U.S. car sales. But as their prices drop and range expands, the adoption rate could accelerate over the next 10 years, spurring important reductions from what is now the largest emitting sector. In one sign of growing demand, more than 400,000 people have put down a deposit for a Tesla Model 3 EV that won’t even be on the market until 2018.
Advances in battery storage could drive the transformation of the transportation sector and would provide obvious benefits to the electric power sector as well.
Meanwhile, automakers are exploring alternative fuels: natural gas, hydrogen fuel cells, and biofuels. And more than a dozen states and nations have formed a Zero-Emission Vehicle (ZEV) Alliance to encourage ZEV infrastructure and adoption.
Action by cities, the magnitude of which is not easily captured by national macroeconomic models, could lead to greater than anticipated emission reductions. Starting with the groundbreaking Mayors Climate Protection Agreement in 2005, initiatives are evolving to connect cities with each other to exchange knowledge and achieve economies of scale for new technologies.
More cities are exploring ways to generate additional reductions by 2025. These include: more energy-efficient buildings; better tracking of electricity and water use, innovative financing for more efficient generation, appliances and equipment; and improved public transportation and promotion of electric vehicles.
Last, but not least, steps taken by companies beyond regulatory requirements could produce greater emission reductions than we can foresee. Companies are investing in clean energy projects, reducing emissions throughout the supply chain, establishing internal carbon pricing, and helping customers reduce their carbon footprint. More than 150 companies have signed the American Business Act on Climate Pledge.
C2ES and The U.S. Conference of Mayors are teaming up to encourage city and business leaders to work together to reduce greenhouse gas emissions. Imagine how effective we can be when we coordinate climate action.
A 2015 UNEP report suggests that beyond each countries’ individual commitments to the Paris Agreement, actions by sub-national actors across the globe can result in net additional contributions of 0.75 to 2 billion metric tons of carbon dioxide emissions in 2020.
The United States has significantly reduced its greenhouse gases over the past decade, and has put in place policies ensuring continued reductions in the years ahead. With so many resources and tools at our disposal, it is clear that we can meet or exceed our climate goal. The only uncertainty is how we will do it.
Event: Innovation to Power the Nation
Technology, policy, and business experts discuss how innovative technology and policy can help us reach our climate goals at Innovation to Power the Nation (and World): Reinventing Our Climate Future at 1 p.m. ET on Wednesday, June 29. Watch the livestream.
Speakers include Patent and Trademark Office Director Michelle K. Lee; C2ES President Bob Perciasepe; Dr. Kristina Johnson, CEO of Cube Hydro Partners; Nate Hurst, Chief Sustainability & Social Impact Officer at HP; and Dr. B. Jayant Baliga, inventor and director of the Power Semiconductor Research Center at North Carolina State University.
Cities often lead the way on greenhouse gas reductions, even though they rarely control the operation of the power plants that supply their energy. So how can city initiatives work together with the federal Clean Power Plan to reduce carbon emissions from power plants?
One option is the Clean Energy Incentive Program (CEIP). The U.S. Environmental Protection Agency (EPA) included this early-action program as part of the Clean Power Plan and recently released program design details.
The program is voluntary. If a state chooses to participate, then certain renewable and energy efficiency projects can receive early action credits, including a federal match from EPA. These credits can be used for complying with the Clean Power Plan, so they provide additional financial incentives for clean energy projects.
While we can’t know the full value of the CEIP without knowing how many states participate and how power plants in those states comply with the Clean Power Plan, C2ES estimates the CEIP could drive up to $7.4 billion of private spending on clean energy projects across the country.
A key aspect of the CEIP is its support of project development in low-income communities. Solar and energy efficiency projects in these communities receive double credit, and a special reserve pool is created to make sure these projects can compete with large renewables for credits. This type of project development can support four key goals of city leaders:
1. Taking action to fight climate change;
2. Reducing energy bills for low-income residents;
3. Bringing jobs and investment to the community; and
4. Delivering co-benefits of renewable energy like cleaner air and water.
City leaders have the know-how to channel CEIP credits to their communities, but they will need to partner with their states and businesses to succeed.
Once states choose to participate, city leaders can help articulate the benefits of the CEIP. Cities can also provide data and support to project developers to streamline CEIP projects, especially low-income community projects that often face more hurdles. For example, they could help businesses locate communities that would host projects, work with utilities to identify potential projects, and build public-private partnerships to finance renewable energy.
How does it work?
Step 1: EPA creates a matching pool for each state. The amount of CEIP match available is limited, and EPA will divide the total pool among the states before the program gets started. If a state does not use its full share of the match, those credits will be retired. In other words, the CEIP is use it or lose it. Half of each state’s pool is reserved for low-income community projects and the other half for renewable projects like wind, solar, geothermal, or hydroelectricity.
Step 2: Interested states include the CEIP as part of their implementation approach. States must submit a plan to EPA that details how they will implement the Clean Power Plan. States that opt-in to the CEIP would have to declare that as part of their plan, and then they could receive the EPA match. If states opt out, then clean energy projects within their borders would not be eligible.
Step 3: New clean energy projects are developed in participating states. CEIP credits go only to new projects – renewable projects that start generating electricity on or after Jan. 1, 2020 or low-income energy-efficiency projects that start delivering energy savings on or after Sept. 6, 2016.
Step 4: New clean energy projects benefit the community. CEIP credits are awarded for electricity generated (renewables) or saved (energy efficiency) in 2020 and 2021. Starting in 2022, these projects are eligible for other financing opportunities under the Clean Power Plan.
Step 5: CEIP projects receive tradeable credits. States will verify how much clean energy a project is producing, then distribute the appropriate amount of CEIP credits (half from the state’s pool and half from EPA) to eligible projects. The project developers that receive the credits can sell them to power plants that need them to comply with the Clean Power Plan. CEIP projects don’t need the credits themselves because only fossil fuel-fired power plants are covered by the regulation. The value of CEIP credits will be determined by how power plants reduce their emissions.
The dates in the CEIP design details may change, depending upon the outcome of the legal challenge against the Clean Power Plan.
The CEIP will be open for public comment this summer. Once finalized, it will help promote new clean energy development in communities across the country. Its focus on low-income communities aligns it with other city priorities in addition to fighting climate change. The short timeframe of the program will make public-private collaboration a key to success in attracting CEIP projects.
C2ES, through our Alliance for a Sustainable Future with The U.S. Conference of Mayors, can be a valuable resource on climate policies like the CEIP. By communicating technical information in a meaningful way and facilitating the conversations between cities and businesses, we can advance clean and efficient energy.
Details of the Clean Energy Incentive Program
Under its final Clean Power Plan (CPP), the U.S. Environmental Protection Agency (EPA) established the Clean Energy Incentive Program (CEIP) to encourage early action in meeting CPP objectives. The CEIP is a voluntary program for states to incentivize renewable and energy efficiency projects by giving them assets that will be tradable in Clean Power Plan markets. On June 16, 2016, EPA proposed design details for the CEIP.
This fact sheet has been developed by C2ES in support of the Alliance for a Sustainable Future, in partnership with The United States Conference of Mayors. For more information about the Alliance, see: http://www.allianceforasustainablefuture.com
Policy Considerations for Emerging Carbon Programs
With climate action gaining momentum around the country, policymakers at the city, state, and federal level are all considering policy tools they can use to achieve their goals. Many market-based options exist that can deliver differing co-benefits. Discussions and collaboration with other jurisdictions and with affected businesses can also improve the policy outcome.
Innovation is an essential component to meet the challenges of climate change. Better ways to produce, store, conserve, and transmit energy will help the U.S. and other nations meet the ambitious goals set at the United Nations climate change conference held in Paris in December 2015.
Join the Director of the U.S. Patent and Trademark Office, Michelle K. Lee, and a panel of technology, energy, and climate experts for a discussion on how present and future innovation can change the course of our planet’s future. Questions to explore will include:
- What do we need do more, do differently, do faster, to change course and evolve our energy system to be clean, efficient, accessible, dependable and low-carbon?
- Where do we need breakthroughs in technology to really make a difference?
- What policies would help drive the innovation we need? What business model innovation is needed?
June 29, 2016
1:00 - 3:00 p.m.
Carnegie Institution for Science Auditorium
1530 P St. NW Washington , DC 20005
Hon. Michelle K. Lee
Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office
Dr. B. Jayant Baliga
Director, Power Semiconductor Research Center, North Carolina State University
National Inventors Hall of Fame Inductee, 2016, Insulated Gate Bipolar Transistor
Chief Sustainability & Social Impact Officer, HP
Dr. Kristina Johnson
Chief Executive Officer, Cube Hydro Partners National Inventors Hall of Fame Inductee, 2015, Polarization Control Technology
President, Center for Climate and Energy Solutions
Moderator: Amy Harder
Energy Reporter, The Wall Street Journal
See full bios of speakers