Climate Compass Blog

It’s No Joke: Fighting Climate Change Can Save Money and Reduce Oil Dependency

The federal government took the opportunity on April Fool’s Day to show the world the United States is not joking about its commitment to reducing greenhouse gas (GHG) emissions. The U.S. EPA and U.S. DOT have jointly produced a standard that will reduce CO2 emissions by 1 billion metric tons over the lifetime of vehicles covered and on average save consumers around $3,000 in fuel costs over the life of each vehicle purchased in 2016. The new rule requires the corporate average fuel economy (CAFE) for new passenger cars and light-duty trucks to be 35.5 miles per gallon by 2016. It will also limit carbon dioxide emitted from those vehicles to 250 grams per mile on average. The vehicle emissions rule shows how one policy can achieve multiple goals – reduce our dependence on foreign oil and reduce our nation’s GHG emissions.

The implementation of this regulation is a nod to complementary policies that combat climate change. As an organization that has long pushed for a comprehensive market-based mechanism, we are acutely aware of the importance of pricing carbon. However, putting a modest price on carbon, by itself, would not significantly reduce greenhouse gas emissions from this sector. For example, EPA’s analysis of the House-passed climate and energy bill found that the bill would cause the price of a gallon of gasoline to only rise by $0.13 in 2015, $0.25 in 2030, and $0.69 in 2050. The rule finalized Thursday addresses this problem directly by setting an increasingly more stringent standard for reducing GHG emissions but allowing vehicle manufacturers the flexibility to find the most cost-effective technologies to achieve those standards.

In evaluating regulations like these, one important factor to consider is coverage. The new vehicle rule covers over 60 percent of greenhouse gas emissions from the transportation sector. Other sources of emissions in transportation such as aviation, ships, and heavy-duty trucks will require additional actions (see our paper on aviation and marine transportation). EPA has announced its intent to propose GHG standards for heavy duty trucks in June of this year.

Another important factor to consider when evaluating regulations is cost. In order to meet the new standards, vehicle manufacturers will have to make fuel efficiency (as opposed to increased engine horsepower) one of their primary areas of focus for research and development. In doing so, future vehicles will cost more than they would without this rule. However, fuel savings over time will more than make up for that additional upfront cost.

The program is estimated to conserve 1.8 billion barrels of oil over the lifetime of vehicles covered under the rule. Reducing our overall oil consumption can reduce our reliance on foreign oil, which can translate into cost savings. A study by the U.S. EPA and the Oak Ridge National Laboratory estimated that a reduction of U.S. imported oil results in a total energy security benefit of $12.38 per barrel of oil, in part by reducing defense spending. Co-benefits like these are an important part of determining the worthiness of a policy. In the case of the new vehicle rule, the U.S. has taken a big step towards reducing its oil dependency and increasing its energy security.

Nick Nigro is a Solutions Fellow

Finding the Sweet Spot for Offshore Drilling

The Obama Administration made some important announcements about offshore drilling last week. And in the near and medium term, we believe increasing U.S. oil production is compatible with successful efforts to significantly reduce U.S. greenhouse gas (GHG) emissions.

Offshore drilling has been much talked about lately. Expanding offshore drilling in the federal outer continental shelf (OCS) areas and increasing oil and gas revenue sharing for nearby coastal states is part of the package of climate and energy policies being negotiated by Senators Kerry, Graham, and Lieberman.

What Would Ronald Reagan Do About Climate Change?

This provocative question is raised by a new website, Climate Conservative, that launched today.  The site challenges some of the ideological dynamics about climate change and encourages conservatives to look beyond the echo chamber of talk radio to the facts and history of climate change.  It traces conservative thinking about environmental action through conservative thinkers from Edmund Burke to Barry Goldwater and Ronald Reagan and relates how such thinking should apply to tackling the problem of climate change.

The website features some radio ads that are set to go on air in selected markets this week as well.  The ads highlight steps President Reagan took on international environmental cooperation, remarkably, described in his own words.  For instance, Reagan overruled skeptics about the effects of ozone-depleting chemical to pursue the Montreal Protocol to remarkable effect.  It’s a fantastic parallel to the current need of conservatives to take on climate skeptics and do what’s environmentally and economically right for the country.

From Shop Floor to Top Floor

From factory floors to corporate boardrooms, energy efficiency is top of mind for a growing number of businesses and their employees. Leading companies are pioneering new energy efficiency strategies that result in greater productivity, robust financial savings, and a lower carbon footprint. Today, we released a major study that examines key practices of a diverse collection of corporations at the vanguard of innovative energy efficiency solutions.

The report, From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency, features insights from detailed research and analysis collected over nearly two years. The study represents the centerpiece of our Corporate Energy Efficiency Conference next week in Chicago.

The Other Carbon

Most development and analysis of climate change policies have focused on reducing carbon dioxide and other greenhouse gases (GHGs), which are widely recognized as the major contributors to climate change. And as we blogged about last year, far less attention has been given to black carbon (BC). However things may be changing. Inspired by University of California – San Diego professor Veerabhadran Ramanathan’s Foreign Affairs article, “The Other Climate Changers,” the United States House Select Committee on Energy Independence and Global Warming held a hearing last Tuesday to investigate the impacts of black carbon pollution. The takeaway message from this hearing is that BC policies should be complementary to efforts to reduce GHG gases. Reductions in emissions of black carbon would have near-term effects on reducing global warming that are not possible from actions directed at carbon dioxide and other long-lived gases. Reducing BC is good for the environment, public health, and creates jobs. We recently published a detailed primer on BC science and policy.

Both professors Ramanathan and Tami Bond of University of Illinois at Urbana-Champaign gave an overview of the science of black carbon – uncombusted materials like soot and smoke. A growing body of evidence indicates that soot and smoke are major contributors, possibly second only to carbon dioxide, to human-induced global warming. BC warms the air by absorbing sunlight in the atmosphere, changes rainfall patterns and, when deposited on snow and ice, accelerates melting. According to Professor Ramanathan, BC’s warming effect is around 40 to 70 percent of that of carbon dioxide. However, unlike carbon dioxide, black carbon does not accumulate in the atmosphere; it stays in the atmosphere for a few weeks, so the impacts are more concentrated in the areas where they are produced, and reducing BC emissions would have near-term benefits in those areas.

BC is produced by both natural processes and human activity from the incomplete combustion of fossil fuels, biofuels, and biomass. According to Professor Ramanthan, the regional effects of BC are particularly large over the Arctic, Africa, and Asia. BC leads to increased melting of snow and ice in the Arctic, Sahelian drought, and decreased monsoon rainfall. Primary sources include diesel engines, small industrial sources, residential coal and solid biofuels for cooking and heating, and agricultural and forest fires.

Since the impacts of BC are regional, there are significant local environment, public health, and economic benefits of reducing BC emissions. Reducing BC emissions in India for example, would not only produce environmental benefits of cleaner air and negate rainfall loss, but would also save lives. Professor Ramanathan’s calculations indicate that replacing cook stoves in India with advanced biomass stoves could prevent 2 million deaths from the reduction of particulate matter produced by traditional stoves. Mitigating BC emissions would also prevent reduced rainfall and reduced agriculture yields.

According to another panelist, Conrad Schneider, Advocacy Director of the Clean Air Task Force, reducing BC emissions can create clean jobs here in the United States. Even though BC isn’t much of a climate forcing in the U.S. and a potentially expensive source of reductions, there is a billion dollars worth of work to reduce diesel’s BC emissions. For example, retrofitting 11 million diesel engines in the U.S. today could achieve the same environmental benefit as removing 21 million cars from the road, would save approximately 7,500 lives through reduced particulate matter pollution, and create tens of thousands of domestic jobs.

In order to get the environmental, economic, and public health benefits of reduced BC emissions, all the witnesses agreed that action must be taken. For more information, please check our white paper on the climate impacts of black carbon.