U.S. States & Regions

States and regions across the country are adopting climate policies, including the development of regional greenhouse gas reduction markets, the creation of state and local climate action and adaptation plans, and increasing renewable energy generation. Read More
 

Addressing California cap and trade concerns

California’s cap-and-trade program received court affirmation this month that the state has authority to auction allowances. But questions remain about the program’s future.

California lawmakers are evaluating ways to achieve the state’s 2030 greenhouse gas reduction goal. One option, championed by Governor Brown, is to extend its cap-and-trade program. But some lawmakers are concerned the program isn’t delivering the expected revenues for state clean energy programs. Others worry it doesn’t do enough to provide equitable environmental co-benefits.

Could the single step of extending the program address these concerns? To some extent, yes.

The debate in Sacramento

Under California’s cap-and-trade program, operating since 2013, emissions are down and economic productivity is up.

But there are some areas of concern. Auction revenues are down. As I’ve noted before, low carbon prices don’t mean a cap-and-trade program isn’t working. They just mean the required emissions reductions are cheap. But California legislators want to use auction revenue to fund other projects like planting trees in urban areas and putting rooftop solar panels in disadvantaged communities. More importantly, a recent analysis shows emitters are more likely to be near disadvantaged communities, raising concern Californians won’t enjoy the co-benefits, like cleaner air, equally.

Legislators have proposed extending the cap-and-trade program through 2030, although they are debating restricting how it operates. Discussion continues about replacing cap-and-trade with a carbon tax approach. This tax proposal would seek to address the first concern, that allowance prices are too low to fund desired programs. Other debate centers around restrictions to force more emissions reductions to occur inside the state. Current rules allow for reductions at sources of electricity outside California, or at limited offset project sites in the U.S. and Canada.

Economic theory tells us that limiting emissions through a cap-and-trade program will achieve the environmental objective at the least cost, through business innovation. Could lowering the cap address other key concerns as well?

Tighter cap = higher revenues

The California Air Resources Board’s (CARB) 2017 Climate Change Scoping Plan Update (Scoping Plan) evaluates policy options to achieve the 2030 goal. The regulator’s preferred approach is to keep existing programs (like the state’s aggressive 50 percent Renewable Portfolio Standard), extend the cap-and-trade program, and require extra emissions reductions at in-state refineries. Its analysis concludes this would meet the 2030 goal, using market-based approaches to minimize costs while prioritizing in-state reductions.

Using the information in the Scoping Plan, let’s examine how CARB’s preferred policy approach would address concerns about revenue and equity.

First, compare actual auction revenue in 2016 with projections of how revenue might change if the cap-and-trade program were extended (see Table 1). Making some conservative assumptions, revenues could double by 2020, from $2 billion without an extended cap to $4 billion with an extended cap. The increase comes mostly from increased allowance demand that would be expected if the business community receives a long-term policy signal in favor of cap-and-trade. Auction revenue could reach $5 billion in 2025, even as the cap (and the number of allowances sold) declines.

Table 1. Relationship between allowance supply and state revenue.
2016 values are calculated from CARB data. Projections for 2020 are based on CARB’s projected auction volumes and our conservative price estimates. Projections for 2025 are estimated assuming a linear cap decline and no significant changes to program allocation rules. Current program rules set a minimum auction price of $15.40 in 2020. The minimum price would be $19.70 in 2025 under the current escalation rate.

Illustrative scenario

Annual allowance sales at auction (tons, all vintages*)

Annual average auction clearing price ($/ton)

Annual state revenue ($)

2016 actual values

168,076,078

$12.73

$2,139,608,473

2020 projection, BAU policy**

133,632,293

$15.40

$2,057,937,311

2020 projection, extended cap-and-trade policy***

259,197,485

$16.00

$4,147,159,760

2025 projection, extended cap-and-trade policy***

211,618,003

$25.00

$5,290,450,075

*The vintage is the first year in which the allowance is eligible for compliance. California currently auctions a small number of allowances three years in advance (“future vintages”), to promote price discovery and liquidity in the market.
**Assumes auctions are subscribed at same level as 2016, but no future vintages offered.
***Assumes current and future vintage auctions are fully subscribed
Source: CARB data and C2ES calculations.

These calculations are based on the observation that allowance demand (and prices) increase when businesses receive policy signals that buying allowances will be a good long-term investment. Experience in both Europe and the U.S. Northeast’s Regional Greenhouse Gas Initiative has borne this out. Each of those markets has had periods of low prices. When rulemakers responded by tightening the cap, allowance prices increased.

A key point from those experiences is that the market didn’t wait to respond after the agreed cuts took place – prices increased as soon as the legislation was passed. Legislators can boost state revenue for greenhouse gas reduction programs today by committing to the market through 2030.

Tighter cap = greater co-benefits

But what about concerns that the trading provision doesn’t allow disadvantaged communities to enjoy equal co-benefits, like fewer criteria air pollutants (SO2, NOx, PM 2.5), from the regulation?

It is worth noting that the cap-and-trade program is not the state’s sole policy measure aimed at reducing greenhouse gases. Figure 1 shows the reductions each measure in CARB’s preferred plan is expected to produce. The total reductions needed to meet the 2030 target are estimated at 680 million tons (Mt). CARB expects other policies will reduce at least 339 Mt and potentially 489 Mt (the figure shows the high value). The cap-and-trade program is expected to make up the difference, or 28-50 percent of the required reductions.

While a detailed analysis is required to estimate cap-and-trade compliance pathways, it is reasonable to assume that improved energy efficiency and substituting cleaner fuels would play a major role. These actions also reduce criteria air pollutants as a co-benefit. A potential 50 percent cut in these pollutants would make a big difference in the air quality near covered sources.

Figure 1. Projected emissions reductions from the policies included in the Scoping Plan analysis. 

Solid black dashes show historic statewide emissions. The dotted line shows a trajectory to meet California’s 2020 and 2030 targets. The colored areas show the reductions from each policy measure, including the potential new refinery reduction measure. The blue dashed area shows the reductions that the cap-and-trade program would need to achieve to meet the 2030 goal.
Source: California Air Resources Board

While cap-and-trade is not a perfect policy tool, it provides emissions certainty while minimizing costs to society. Economic theory and experience show that extending (and lowering) the cap can cause near- and long-term market impacts. These include increased auction revenue and reduced criteria air pollutant emissions, and help address concerns about revenue and equity through the existing cap-and-trade program alone. Other policy options are available – such as modifying the trading rules or creating additional location-specific reduction targets. But legislators may have a simpler option that takes advantage of the flexibility of market mechanisms: Cut the cap, and let businesses respond.

(Ashley Lawson is a Senior Solutions Fellow at C2ES. Next on the Climate Compass blog: How carbon capture could play a greater role in the ARB Scoping Plan.)

 

Bob Perciasepe's statement on President Trump’s executive order related to climate change

Statement of Bob Perciasepe
President, Center for Climate and Energy Solutions

March 27, 2017

On President Trump’s executive order related to climate change:

President Trump’s actions reflect a fundamental misreading of the economic stakes – and economic opportunities – presented by climate change.

America’s communities and businesses are already bearing the rising costs of extreme weather, sea level rise and other climate impacts, all of which will intensify with more global warming. The “social cost of carbon” is a sensible tool to prudently factor those very real economic costs into government decision-making. Ignoring those costs won’t make them go away.

On the other side of the ledger, the clean energy transition already underway is a powerful engine of economic growth Nuclear energy, renewables, natural gas, and carbon capture and storage technology all have a role to play in creating clean energy opportunity and jobs. The U.S. power sector is getting cleaner every year thanks partly to state and federal policies, but largely to market forces that the Clean Power Plan is designed to accelerate. Withdrawing federal leadership will only jeopardize this promising clean energy transition and the jobs that go with it.

C2ES works every day with leading U.S. companies that see unchecked climate change as a growing risk to their businesses, and see smart investments in climate solutions as a way to create jobs and profits and strengthen their competitiveness abroad. But to keep moving in the right direction, these companies need greater certainty. Instead, the administration’s actions promise confusion, litigation and delay.

An “America first” climate policy must recognize the risks and benefits to the entire U.S. economy and harness market forces to deliver cost-effective solutions. Whatever the impact of President Trump’s executive orders, the administration will face a continuing scientific and economic imperative – and a legal obligation – to deliver credible alternatives. As an organization committed to building bridges and consensus, C2ES is prepared to work with the administration on meaningful climate solutions.

--

To reach a C2ES expert, contact Laura Rehrmann at rehrmanl@c2es.org, 703-516-0621

About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonpartisan, nonprofit organization working to forge practical solutions to climate change. Our mission is to advance strong policy and action to reduce greenhouse gas emissions, promote clean energy, and strengthen resilience to climate impacts. Learn more at www.c2es.org.

Federal Vehicle Standards

Light-Duty Vehicle Standards Timeline (1975-2012)

Recent Legal History

Light-Duty Vehicle Standards (Model Years 2012 to 2025)

Medium and Heavy-Duty Standards

Why Consumers Undervalue Fuel Economy 

Calculating Light-Duty Vehicle CAFE Then and Now

Light-Duty Vehicle Program Flexibilities 

For more information

Overview

The transportation sector is now the largest source of U.S. carbon dioxide emissions, according to measurements from the Energy Information Administration, passing the energy sector in carbon dioxide emissions in late 2016. Cars and light-duty trucks are responsible for approximately 61 percent of transportation emissions. Medium- and heavy-duty vehicles, which include tractor-trailers, large pickups and vans, delivery trucks, buses, and garbage trucks, produce approximately 23 percent of transportation emissions.

The federal government has regulated the fuel economy of cars and light-duty trucks for decades, with the final rules in 2012 increasing fuel economy and decreasing greenhouse gas emissions. A 2010 rule raised the average fuel economy of new passenger vehicles to 34.1 miles per gallon (mpg) for model year 2016, a nearly 15 percent increase from 2011. A second rule, finalized in 2012, aims to raise average fuel economy to up to 54.5 mpg for model year 2025, for a combined increase of more than 90 percent over 2011 levels. The standards are also expected to reduce the carbon intensity of these vehicles by 40 percent through 2025.The standards were adopted by the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) with the cooperation of major automakers and the state of California. Together, the standards represent the largest step taken by the federal government directed at climate change.

Other benefits include improving U.S. energy security and cost savings for drivers. The car rule for model years 2017 to 2025 is projected to cut annual U.S. oil imports by an additional 6 percent, or 400,000 barrels per day, by 2025 over projections without the rule. When combined with the rule for model years 2012 to 2016, U.S. oil imports are expected to decline by more than 2 million barrels per day by 2025. The higher cost of vehicles with fuel efficiency improvements will be far outweighed by fuel savings, with the average driver saving thousands of dollars over the lifetime of a model year 2025 car compared to a model year 2010 car.

Fuel economy and greenhouse gas standards were first established for medium- and heavy-duty vehicles in 2011. In August 2016, EPA and NHTSA finalized new Phase Two fuel economy standards for model years 2021-2027.  

 

Figure 1: Transportation sector CO2 emissions by source

Emissions sources by type

Source: U.S. Environmental Protection Agency (EPA), Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2013 (Washington, DC: U.S. Environmental Protection Agency, 2015), http://www.epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2015-Main-Text.pdf.

Figure 2: Rolling 12-month CO2 emissions by sector

Lines show how the rolling 12-month CO2 emission totals from the transportation and power sector have changed from January 2014 to November 2016 (refer to the left-hand axis for the units). Transportation sector emissions surpassed power-sector emissions in March 2016. Columns represent each sector's percentage of total energy-related CO2 emissions for the 2014 and 2015 calendar years. The power sector's share plummeted from 2014-2016, while transportation’s share continued to climb (refer to the right-hand axis). Source, U.S. Energy Information Administration, 2016. https://www.eia.gov/totalenergy/data/monthly/#electricity

 

Light-Duty Vehicle Standards Timeline (1975-2012)

The federal government has regulated fuel economy through standards for cars and light-duty trucks for decades. The 1973 Arab oil embargo prompted Congress to pass legislation in 1975 that introduced Corporate Average Fuel Economy (CAFE) standards for new passenger vehicles only. The purpose was to improve the fuel economy of the passenger vehicle fleet to reduce oil imports.

NHTSA, an agency within the U.S. Department of Transportation (DOT), administered the original CAFE program while EPA was responsible for establishing the testing and evaluation protocol for assessing compliance and calculating the fuel economy for each manufacturer. These responsibilities are the same today.

CAFE is the sales-weighted average fuel economy (in mpg) of the passenger cars or light-duty trucks for a manufacturer's fleet. See Calculating Light-Duty Vehicle CAFE Then and Now below for details of how EPA determines compliance. NHTSA fines manufacturers that are out of compliance. NHTSA has so far collected more than $850 million in fines over the life of the CAFE program.

Since 1975, a number of changes have been made to the standards. Figure 3 provides an annotated history of the U.S. CAFE standards. A number of other countries have also instituted fuel economy standards, with most establishing more aggressive targets than the United States. See here for more details.

FIGURE 3: Fuel economy standard for passenger vehicles from MY1978-2025.


Source: NHTSA Summary of Fuel Economy Performance, NHTSA MY2017-2025 Factsheet

1.     1978-1985: Congress sets car standard (1978-1985)
2.     DOT sets truck standard to max feasible (1979-1996)
3.     DOT decreased car standard (1986-1989)
4.     DOT sets car standard to 27.5 mpg (1990-2010)
5.     Congress freezes truck standards at 20.7 mpg (1997-2001)

6.     Bush Admin issues new truck targets (2005-2007)
7.     EISA changes CAFE to footprint standard (2008-present)
8.     Obama Admin issues new car & truck standards (2012-2016)
9.     Obama Admin issues new car & truck standards (2017-2025)

Recent Legal History

Under the federal Clean Air Act, California is the only state with the ability to set air emission standards for motor vehicles, as long as these standards are as stringent as the federal standards and the state receives a waiver from EPA. Once California receives an EPA waiver, other states can adopt California's standards.

In 2002, California enacted the Clean Cars Law (AB 1493) to set vehicle emissions standards for greenhouse gases. In April 2007, the Supreme Court ruled that EPA has the authority to regulate greenhouse gas emissions from the transportation sector under the Clean Air Act. In December 2007, a judge threw out a lawsuit by automakers attempting to block California from implementing AB 1493. The intersection of fuel economy standards and greenhouse gas emission standards was beginning to become clear (see here for more on California vehicle standards).

In June 2009, EPA granted a waiver allowing California to regulate greenhouse gas emissions from vehicles within the state beginning with model year 2009. On September 15, 2009, EPA and NHTSA issued a joint proposal to establish new vehicle standards for fuel economy and greenhouse gas emissions for model years 2012 to 2016, which were finalized on April 1, 2010. The joint proposal reflected an agreement among EPA, NHTSA, California, and most major automakers. California promptly agreed to adopt the federal standards in lieu of its own separate standard and maintained agreement with federal standards for model years 2017 to 2025 under the 2013 waiver granted for its Advanced Clean Car regulations.

Both the EPA and the California Air Resources Board reviewed the feasibility and appropriateness of vehicle standards for model years 2022-2025 in a midterm review. The EPA, NHTSA, and CARB released a draft Technical Assessment Report in July 2016 that informed a proposed determination by the EPA in November 2016 to maintain the current federal fuel economy standards. After opening a comment period that was required to conclude by 2018, the EPA issued a final determination on January 12, 2017 that maintained federal fuel economy standards through 2025. The final determination cited the success of automakers in meeting early fuel economy requirements and the seven-year growth in the U.S. automakers as reasons to expect that automakers could affordably continue to meet the standards. CARB’s own midterm review, which relied heavily on the Technical Assessment Report, found that automakers were successfully and affordably deploying advanced technologies to meet fuel economy requirements and the state’s Zero Emission Vehicle program.

Light-Duty Vehicle Standards (Model Years 2012 to 2025)

The latest passenger vehicle standards, finalized in August 2012, cover passenger cars, light-duty trucks, and medium-duty passenger vehicles, from model year 2017 to 2025. The standards build off those set in April 2010 for model years 2012 to 2016. The standards are based on the vehicle's footprint, which is a measure of vehicle size (see Calculating Light-Duty Vehicle CAFE Then and Now). 

Because NHTSA cannot set standards beyond model year 2021 due to statutory obligations and because of the rules' long time frame, a mid-term evaluation is included in the rule. Thus, standards for model years 2022 through 2025 are considered "augural" – or a prediction -- by NHTSA. The comprehensive evaluation by both EPA and NHTSA will allow for any compliance changes if necessary for the later years covered by the rule.

In March 2017, the Trump administration reversed the EPA’s January 2017 decision to finalize federal fuel economy standards set for 2022-2025. The EPA will review the financial and technological feasibility of the expected standards, and if any revisions are required, the agency will undertake a formal rule-making. Public comments on the original rule will be reopened through early 2018.As seen in Table 1, the greenhouse gas standard from EPA requires vehicles to meet a target of 163 grams of carbon dioxide equivalent (CO2e) per mile in model year 2025, equivalent to 54.5 mpg if the automotive industry meets the target through only fuel economy improvements.

TABLE 1: Projected Emissions Targets under the Greenhouse Gas Standards (g CO2e/mi)

 

2012

2013

2014

2015

2016

2017

2018

Passenger Cars

261

253

246

235

225

212

202

Light Trucks

352

341

332

317

298

295

285

Combined Cars & Light Trucks

295

286

276

263

250

243

232


 

2019

2020

2021

2022

2023

2024

2025

Passenger Cars

191

182

172

164

157

150

143

Light Trucks

277

269

249

237

225

214

203

Combined Cars & Light Trucks

222

213

199

190

180

171

163

As seen in Table 2, the fuel economy standard from NHTSA requires vehicles to meet an estimated combined average of up to 48.7 mpg in 2025. This estimate is lower than the mpg-equivalent of the EPA target for 2025 mentioned above (54.5 mpg) , because it assumes that manufacturers will take advantage of flexibility available under the law designed to reduce the cost of compliance. See Light-Duty Vehicle Program Flexibilities for more information.

TABLE 2: Projected Fuel Economy Standard (mpg).

 

2012

2013

2014

2015

2016

2017

2018

Passenger Cars

33.6

34.4

35.2

36.4

38.2

39.6

41.1

Light Trucks

25

25.6

26.2

27.1

28.9

29.1

29.6

Combined Cars & Trucks

29.8

30.6

31.4

32.6

34.3

35.1

36.1


 

2019

2020

2021

2022

2023

2024

2025

Passenger Cars

42.5

44.2

46.1

48.2

50.5

52.9

55.3 

Light Trucks

30.0

30.6

32.6

34.2

35.8

37.5

39.3

Combined Cars & Trucks

37.1

38.3

40.3

42.3

44.3

46.5

48.7

 

This table is based on CAFE certification data from model year 2010, a car-truck sales split from the Energy Information Administration's Annual Energy Outlook for 2012, and future sales forecasts by JD Power.

Medium- and Heavy-Duty Vehicle Standards

Medium- and heavy-duty trucks make up only 5 percent of vehicles on the road but account for about a fifth of U.S transportation emissions. This category includes tractor-trailers, large pickups and vans, delivery trucks, buses, and garbage trucks.

In August 2016, EPA and NHTSA finalized new fuel economy standards for model years 2021-2027, building on earlier standards put in place in 2011 that were the first of their kind in the world.

The earlier standards, for model years 2014 to 2018, are cumulatively projected to save a combined $50 billion in fuel costs, 530 million barrels of oil, and 270 million metric tons of carbon emissions over the lifetime of the heavy-duty vehicles.

EPA estimates the new phase 2 standards for model years 2021-2027 will cut greenhouse gas emissions 25 percent from the final Phase 1 emissions standards, reducing greenhouse gas emissions by about 1.1 billion metric tons. EPA estimates the rules will also reduce oil consumption by nearly 2 billion barrels, and lower fuel expenditures by $170 billion over the life of vehicles sold under this standard. 

In model year 2027, the buyer of a new vehicle would recoup the extra cost of technology used to achieve the standard within:

•    2 years for tractor/trailer combos

•    3 years for pick-ups and vans

•    4 years for vocational vehicles

EPA’s proposed Phase 2 standards would be phased in from model years 2021 to 2027, though proposed standards for some categories of box trailers begin in model year 2018. All proposed CO2 and petroleum use reductions are relative to the final Phase 1 standards, which are being implemented through 2017, with the exception of trailers, which had not previously been regulated. Notably, Phase 2 standards use different methodologies and test procedures, and should not be construed as directly comparable to Phase 1 standards. Trailer emissions can be reduced with the following technologies:

•    Aerodynamic Technologies (different standards apply to Box and Non-Box Trailers)

•    Tire Rolling Resistance

•   Tire Pressure Systems

•    Weight Reduction

Table 3 defines the breakdown for medium- and heavy-duty vehicles by weight.

TABLE 3: Vehicle class breakdown for medium- and heavy-duty vehicles

Class

2b

3

4

5

6

7

8

Gross Vehicle Weight Rating (lb)

8,501 – 10,000

10,001 – 14,000

14,001 – 16,000

16,001 – 19,500

19,501 – 26,000

26,001 – 33,000

>33,000

 

The proposed standards described below represent Alternative 3 of the proposed standards, which would take effect in 2021 and would provide a full 10 years of lead time. Standards are divided into four segments.

  1. Combination Tractors, which are responsible for almost two-thirds of fuel consumption from medium- and heavy-duty trucks, would achieve a 24 percent reduction in fuel consumption by model year 2027.
  2. Trailers Pulled by Combination Tractors, which were not included under Phase 1 standards, would achieve a 9 percent reduction in fuel consumption by model year 2027.
  3. Heavy-Duty Pickup Trucks and Vans would have to improve fuel economy by 16 percent by model year 2027. The standards rely on a "work" factor, which considers the vehicle's cargo capacity, towing capabilities, and whether it has 4-wheel drive. Similar to the light-duty standards, the standards are based on the manufacturer's sales mix.
  4. Vocational Vehicles (delivery trucks, buses, garbage trucks) would achieve a 24 percent reduction in fuel consumption by model year 2027.

TABLE 4: Fuel Consumption Standards for Tractor-Trailers for Phase 1, Model Years 2014-2018

 

Day cab

Sleeper cab

 

Class 7

Class 8

Class 8

2014–2016 Model Year Gallons of Fuel per 1,000 Ton-Mile

Low Roof

10.5

8.0

6.7

Mid Roof

11.7

8.7

7.4

High Roof

12.2

9.0

7.3

2017 Model Year and Later Gallons of Fuel per 1,000 Ton-Mile

Low Roof

10.2

7.8

6.5

Mid Roof

11.3

8.4

7.2

High Roof

11.8

8.7

7.1

 

TABLE 5: Fuel Consumption Standards for Combination Tractors for Phase 2, Model Years 2021-2027

 

 

Day cab

Sleeper cab

 

Class 7

Class 8

Class 8

2021 Model Year Gallons of Fuel per 1,000 Ton-Mile

Low Roof

10.36

7.91

7.1

Mid Roof

11.12

8.39

7.66

High Roof

11.15

8.41

7.44

2024 Model Year Gallons of Fuel per 1,000 Ton-Mile

Low Roof

9.8

7.49

6.68

Mid Roof

10.52

7.95

7.22

High Roof

10.47

7.9

6.94

2027 Model Year Gallons of Fuel per 1,000 Ton-Mile

Low Roof

9.45

7.21

6.3

Mid Roof

10.16

7.66

6.84

High Roof

9.82

7.44

6.32

 

TABLE 6: Fuel Consumption Standards for Vocational Vehicles for Phase 1, Model Years 2014-2018

Regulatory subcategories

Light Heavy-Duty Class 2b-5

Medium Heavy-Duty Class 6-7

Heavy Heavy-Duty Class 8

Fuel Consumption Mandatory Standards (gallons per 1,000 ton-miles) Effective for Model Years 2017 and later

Fuel Consumption Standard

36.7

22.1

21.8

Effective for Model Years 2016

Fuel Consumption Standard

38.1

23.0

22.2

Fuel Consumption Voluntary Standards (gallons per 1,000 ton-miles) Effective for Model Years 2013 to 2015

Fuel Consumption Standard

38.1

23.0

22.2

 

TABLE 7: Fuel Consumption Standards for Vocational Vehicles, for Phase 2, Model Years 2021-2027

Regulatory subcategories

Light Heavy-Duty Class 2b-5  (CI/SI)

Medium Heavy-Duty Class 6-7 (CI/SI)

Heavy Heavy-Duty Class 8 (CI)

Fuel Consumption Standards  (gallons per 1,000 ton-miles) for Model Year 2021

Urban (CI/SI)

29.1 / 36

18.5 / 22.8

19.4 / 24.1

Multi-Purpose

30 / 37

18.7 / 23.1

19.6 / 24.3

Regional

31.2 / 38.6

18.3 / 22.6

18.6 / 23

Fuel Consumption Standards (gallons per 1,000 ton-miles) for Model Year 2021

Urban (CI/SI)

27.9 / 35.1

17.6 / 22.2

18.7 / 12.4

Multi-Purpose

28.7 / 36.1

17.8 / 22.4

18.9 / 23.6

Regional

29.9 / 37.6

17.5 / 22.1

17.9 / 22.4

Fuel Consumption Standards (gallons per 1,000 ton-miles) for Model Year 2027

Urban (CI/SI)

26.7 / 33.6

16.9 / 21.3

17.9 / 22.1

Multi-Purpose

27.5 / 34.7

17.1 / 21.5

18 / 22.3

Regional

28.7 / 36.1

16.7 / 21

17.1 / 21.2

NHTSA and EPA designed the standards based on the kind of work the vehicles undertake. Heavy-duty pickup trucks and vans must meet a standard specified similarly to passenger vehicles, gallons of fuel per mile and grams of CO2e per mile. The other two categories must meet a standard based on the amount of weight being hauled (fuel consumed or grams of CO2e emitted per ton of freight hauled a defined distance). Vocational vehicles are separated by two classes of engine: Compression-Ignition (CI) and Small-Spark Ignition (SI).

Why Consumers Undervalue Fuel Economy

U.S. fuel economy and greenhouse gas standards exist because individual drivers tend to value savings from fuel economy much less than society as a whole, which leads to more oil consumption than would occur if societal benefits were taken into account. The benefits to society of higher fuel economy include, but are not limited to, reduced impacts on global climate, improved energy security, and overall consumer savings. But those benefits are not top of mind when a consumer buys a car.

In addition, when making purchasing decisions, most people assume a dollar today is worth more than a dollar in the future since the dollar today can be invested and grow in value over time. The value people assign to a dollar in the future compared to a dollar today is known as the discount rate, or the interest rate they would expect on a dollar invested today. For example, a discount rate of 20 percent means consumers assume they will make 20 percent interest annually on money invested today, which is unlikely. Thus, the higher the discount rate a consumer uses, the more likely a consumer is to invest that money instead of spending it on a product. 

David Greene from Oak Ridge National Laboratory found that the value consumers place on fuel economy savings for cars varies widely, but empirical research reveals a discount rate between 4 and 40 percent. The discount rate that society puts on fuel savings is much closer to 4 percent, meaning consumers often substantially undervalue fuel economy.

Calculating Light-Duty Vehicle CAFE Then and Now

Each automaker's fleet-wide average fuel economy consists of three potential fleets: domestic passenger cars, imported passenger cars, and light-duty trucks. (The split between domestic and imported cars exists to support domestic automobile production.) With its focus on fuel efficiency, the standard must capture the fuel economy of each vehicle traveling the same number of miles. The harmonic mean of the fleet accomplishes this task (versus the simpler arithmetic mean). That is, instead of dividing the sum of the fuel economy rates in mpg for each vehicle by the total number of vehicles (the arithmetic mean), the reciprocal of the arithmetic mean is used as follows:

 

Where Production is the number of vehicles produced for sale for each model and TARGET is the fuel economy target for the vehicle.

Before 2008, the target fuel economy was the same for all vehicles. In 2008, NHTSA changed the target to a bottom-up one based on attributes of each vehicle instead of a top-down uniform target across an entire automaker's fleet. The vehicle footprint target for light-duty trucks through model year 2016 and for automobiles through model year 2025 is determined as follows:

 

where FOOTPRINT is the product of the vehicle's wheelbase and average track width in square feet, a and b are high and low fuel economy targets that increase from 2012 to 2025 and are constant for all vehicles, and c and d are adjustment factors. Parameter c is measured in gallons per mile per foot-squared, and parameter d is measured in gallons per mile.

For light-duty trucks beginning in model year 2017, an additional variation of the TARGET calculation is considered. This additional variation establishes a "floor" term, which prevents any footprint target from declining between model years. The definitions of parameters a, b, c, and d correspond to e, f, g, h, accordingly. However, the values of these parameters are different.

 

The idea behind an attribute-based standard is that the level of difficulty of meeting the standards is the same for smaller and larger vehicles. A uniform standard, on the other hand, is easier to meet for smaller vehicles (i.e., those with a smaller footprint) than for larger vehicles.

Light-Duty Vehicle Program Flexibilities

The EPA and NHTSA programs have a number of features to make compliance for manufacturers more cost-effective, while also encouraging technological innovation like plug-in electric vehicles. Since there are two programs to comply with, the details of both programs are stipulated below.

  • Credit Trading System: Both programs include a credit system allowing manufacturers to carry efficiency and greenhouse gas credits forward by up to five years and backward up to three years to achieve compliance and avoid fines. Manufacturers can also transfer credits between cars and trucks of their fleet and trade credits with other manufacturers. Additionally, CO2 credits generated for EPA compliance from model year 2010 to 2016 can be carried forward as far as model year 2021.
  • Air Conditioning Improvements: Both programs allow manufacturers to use air conditioning (A/C) system efficiency improvements toward compliance. For the NHTSA program, credits will depend on fuel consumption reductions. The EPA program allows credits for reductions in fuel use and refrigerant leakage, as well as the use of alternative refrigerants with lower global warming potential.
  • Off-Cycle Credits: Current test procedures do not capture all fuel efficiency and greenhouse gas improvements available. Technologies that qualify for additional credit might include solar panels on hybrid vehicles, active aerodynamics, or adaptive cruise control. In addition, manufacturers can apply for credit for newer technologies not yet considered if they can provide sufficient data to EPA.
  • Zero Emission, Plug-in Hybrid, and Compressed Natural Gas Vehicle Incentives: To encourage plug-in electric vehicles, fuel cell vehicles, and compressed natural gas (CNG) vehicles, EPA has included a credit multiplier in the rule for model years 2017 to 2021. In the compliance calculation for GHG Emissions, all-electric and fuel cell vehicles count as two vehicles beginning with model year 2017 and phasing down to 1.7 by model year 2021. Plug-in hybrid electric vehicles begin with a multiplier of 1.6 in model year 2017 and phase down to a value of 1.3 by model year 2021. Electric and fuel cell vehicles sold during this period will count as emitting 0 grams of CO2e per mile. There is no multiplier for model years 2021 to 2025 and EPA limits the zero-grams credit based on vehicle sales during this period. The cap for model years 2021 to 2025 is 600,000 for companies that sell 300,000 of these vehicles from model year 2019 to 2021 and at 200,000 otherwise. Beyond that number, manufacturers of electric and fuel cell vehicles will need to account for their upstream emissions (i.e., electricity generation or hydrogen production) using accounting methodologies defined in the rule.

    EPA has also included credit multipliers for CNG equivalent to plug-in hybrid electric vehicles: 1.6 in model year 2017 and a phase down to 1.3 by model year 2021. Unlike electric and fuel cell vehicles, GHG emissions from CNG vehicles will be measured by EPA.

    In contrast, NHTSA does not believe it has the legal authority to offer credit multipliers. Existing legal authority does allow NHTSA to incentivize alternative fuels, like natural gas, however, by dividing vehicle fuel economy by 0.15; in other words, an electric, fuel cell, or CNG vehicle that has a fuel economy of 15 mpg-equivalent will be treated as a 100 mpg-equivalent vehicle.

  • Truck Hybridization: Both programs offer incentives to add battery-electric hybrid support to full-size trucks. Mild hybrid pickup trucks (15-65 percent of braking energy is recaptured) would be eligible for a per vehicle credit of 10 grams of CO2e per mile during model years 2017 to 2025 so long as the technology is incorporated into 20 percent or more of the company's model year 2017 full-size pickup production, ramping up to at least 80 percent by model year 2021. Strong hybrid pickup trucks (at least 65 percent of braking energy is recaptured) would be eligible for a credit of 20 grams of CO2e per mile per vehicle during model years 2017 to 2025 as long as the technology is used in at least 10 percent of the company's full-size pickup trucks.

For more information

C2ES Events at the 6th Annual Climate Leadership Conference

Promoted in Energy Efficiency section: 
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Mariott Chicago DowntownChicago9 a.m. -- 11 a.m.How Cities Are Driving a New Climate Future11 a.m. -- 12:30 p.m.What Makes Infrastructure Resilient?

Climate Leadership ConferenceThe Center for Climate and Energy Solutions and The Climate Registry co-convene the Climate Leadership Conference each year around the prestigious Climate Leadership Awards. The CLC is dedicated to professionals addressing global climate change through policy, innovation, and business solutions.

Climate Leadership Conference
March 1-3, 2017 at the Marriott Downtown Chicago

See Our Speakers
Register Here
 

C2ES will host or co-host the following events at the 2017 Climate Leadership Conference.

March 1, 2017
9 a.m. -- 11 a.m.

How Cities Are Driving a New Climate Future

Hosted by: C2ES and the Great Lakes and St. Lawrence Cities Initiative

This event highlights two important aspects of local climate action: 1) how cities and their leaders are using their platform to facilitate transformative climate solutions, and 2) how cities and private actors are implementing local solutions. Speakers will engage attendees in a discussion about how cities are driving the new climate future through political leadership and action, and present tangible ideas that attendees can take home and put into practice. Who should attend? Local leaders, practitioners and private sector partners.

March 1, 2017
11 a.m. -- 12:30 p.m.

What Makes Infrastructure Resilient?

Hosted by: C2ES

What makes infrastructure resilient? Cities and businesses across the country are taking action to strengthen the resilience of their buildings, transportation systems, energy and water services, and telecommunication systems to climate change. This session will explore issues associated with resilient infrastructure, including challenges and barriers, priorities, innovative solutions, and opportunities for collaboration. Facilitated discussions will allow participants to discuss some of these issues based on their own experiences, and exchange ideas about infrastructure needs and opportunities.

Speakers

Darcy Immerman
Senior Vice President, Resiliency
AECOM
 
Emilie Mazzacurati
Founder & CEO
Four Twenty Seven
 
Michael Mondshine
Vice President
WSP | Parsons Brinkerhoff
 
Katy Maher
Resilience Project Coordinator
C2ES
 
Janet Peace, Ph.D.
Senior Vice President, Policy and Business Strategy
C2ES

 

Year Ahead: We must strengthen climate action wherever possible

When I wrote a blog a year ago taking stock of the strengthening climate change effort, I reflected on a year of unprecedented progress, capped by the Paris Agreement, and outlined ways we could build on those successes.

At the beginning of the new U.S. administration, the outlook is unfortunately far different.  Now, our challenge is to preserve as much of this progress as we can, and to devise new strategies to continue strengthening climate action wherever possible.

Despite coming setbacks, it’s worth reminding ourselves that we have a solid base to work from. Thanks in part to strong policies, but also to growing market forces, the U.S. is on the path to a clean-energy transition, and the continued momentum is strong.

A few examples, just since the election:

·      Some of the world’s wealthiest entrepreneurs, including Bill Gates, Richard Branson, and Mark Zuckerberg, launched a billion-dollar fund to invest in cutting-edge clean energy technologies.

The new policy landscape won’t be clear for some time and is likely to evolve. But as we monitor the early signs, and take soundings with policymakers and stakeholders around the country and around the world, we are coming to a clearer view of immediate imperatives, and of opportunities that may lie ahead.

One imperative is ensuring that the United States remains a reliable partner in the global climate effort – by staying in the Paris Agreement, and by working constructively with other countries to establish sound rules for its implementation. 

We were encouraged to hear Secretary of State nominee Rex Tillerson note the importance of the United States staying at the table. Indeed, the Paris Agreement reflects long-standing bipartisan principles. It fully preserves national sovereignty while providing a means of holding other countries accountable. U.S. businesses benefit from full access to the clean energy markets the agreement helps drive.

We were encouraged also to hear EPA Administrator nominee Scott Pruitt express respect for the “endangerment finding” underpinning the regulation of greenhouse gases under the Clean Air Act. What is critical is how EPA chooses to fulfill the inherent legal obligation to regulate emissions, starting with the power sector.

While the Clean Power Plan appears unlikely to survive, decarbonization of the power sector is already underway. Thanks to improved energy efficiency and a more diverse energy mix, emissions dropped more than 20 percent over the last decade. Last year was the third in a row that renewables accounted for more than half of new U.S. power capacity.

Continued tax credits enjoying strong bipartisan support will help sustain that growth.  State-level conversations on lower carbon energy policies are continuing as states, cities and utilities find economic opportunity in modernizing the power sector. But the imperative remains: We need an overarching federal framework to deliver sustained, cost-effective emission reductions. We urge the new administration and Congress to get on with the job.

In the near term, we see opportunities for bipartisan steps that benefit both the climate and the economy and strengthen the foundation for a longer-term clean energy transition. These include:

Incentivizing carbon capture, use and storage.

Carbon capture technologies like those deployed this month in Texas are essential to meeting the climate challenge. Senate Majority Leader Mitch McConnell was among the bipartisan sponsors of a bill last year to help advance these technologies by supporting the use of captured CO2 in enhanced oil recovery, as recommended by a coalition of industry, labor, and environmental groups we help lead. We expect similar legislation in this Congress.

Advancing nuclear energy.

Bipartisan bills have already been introduced in the House and Senate to spur advanced nuclear technologies. Nuclear is our largest source of zero-carbon energy and the only one that provides continuous baseload power. It will have to play a significant role in any realistic long-term climate strategy.

Modernizing our infrastructure.

A viable infrastructure package could open significant opportunities to address climate change while creating jobs and growth. Examples include:

  • A modernized electric grid that can better distribute renewable power and is more climate-resilient.
  • Expanded charging and refueling networks for electric, natural gas and hydrogen vehicles.
  • Roads and bridges that can better withstand more frequent extreme weather.

One reason we’re confident of continued momentum is that the vast majority of the American people support it. In a Yale survey conducted after the election, nearly 70 percent favored staying in the Paris Agreement. And 70 percent – including a majority of Republicans – supported strict carbon limits on existing coal plants.

Business leaders, too, recognize the growing risks of climate impacts, and the opportunities to create new products, services and jobs.

And a growing number of cities are finding they can save money and create jobs by encouraging energy efficiency and clean energy and transportation.

At C2ES, while we are bracing for setbacks, and are prepared to defend against reversing course, we also will continue working as hard as ever to bring diverse interests together to make progress wherever we can. We face significant new challenges. But from the local to the global level, we’ve got strong momentum. And we can’t turn back.

 

C2ES again ranks among top environmental think tanks

Press Release
January 26, 2017
Contact Laura Rehrmann, rehrmannl@c2es.org

C2ES again ranks among top environmental think tanks

WASHINGTON -- The Center for Climate and Energy Solutions (C2ES) is honored to be recognized once again as one of the world’s leading environmental think tanks.

C2ES ranked fourth among environment policy think tanks in the University of Pennsylvania’s 2016 Global Go To Think Tank Index, based on a worldwide survey of more than 2,500 scholars, academics, public and private donors, policymakers, and journalists.

C2ES was also recently named the top U.S. energy and environment think tank by Prospect magazine for helping lay the groundwork for the Paris Agreement.

“C2ES’s consistently high ranking is a tribute to our unique ability to bring together diverse stakeholders to achieve practical, commonsense solutions,” said C2ES President Bob Perciasepe. “We work with companies, cities, states, and national governments to develop and implement economically sound, innovative policies to reduce greenhouse gas emissions, promote clean energy, and strengthen resilience to climate impacts.”

“I congratulate and thank our outstanding staffers, supporters, partners, and board members, including Board Chairman Ted Roosevelt IV, who have helped C2ES achieve and maintain our success,” Perciasepe said.

This is the 10th year for the University of Pennsylvania’s Think Tanks and Civil Societies Program to rank the world’s 6,846 leading think tanks. According to the report, the top environmental think tanks “excel in research, analysis and public engagement on a wide range of policy issues with the aim of advancing debate, facilitating cooperation between relevant actors, maintaining public support and funding, and improving the overall quality of life.”

--

About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonpartisan, nonprofit organization working to forge practical solutions to climate change. Our mission is to advance strong policy and action to reduce greenhouse gas emissions, promote clean energy, and strengthen resilience to climate impacts. Learn more at www.c2es.org.

Building Standards for State Buildings


The Leadership in Energy and Environmental Design (LEED) Green Building Rating System is a voluntary standard that was created by the U.S. Green Building Council to provide a complete framework for assessing building performance and meeting sustainability goals. LEED emphasizes state of the art strategies for sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality.

Volkswagen Settlement Funding: What Cities Should Know

Volkswagen Settlement Funding: What Cities Should Know

December 2016

Download the fact sheet (PDF)

In October 2016, the U.S. government granted final approval of a $14.7 billion settlement against Volkswagen (VW) for equipping more than 500,000 of its diesel vehicles to cheat U.S. vehicle emissions tests in violation of the Clean Air Act. Volkswagen will spend $10 billion on vehicle buybacks and $4.7 billion to mitigate the pollution from these cars and invest in green vehicle technology. This latter amount will be split between two investment programs that states, cities, and tribes can use to expand alternative vehicle projects and access to zero emission vehicles (ZEVs). Cities can play a key role, starting now, by identifying local emissions-cutting and zero-emission vehicle deployment projects that could benefit from increased investment and proposing ideas to states and Volkswagen about ways these funds can best be leveraged.

Since October 25, 2016, when the $14.7 billion settlement for claims related to emissions testing “defeat devices” installed in 2.0 liter diesel-powered vehicles was finalized, Volkswagen (VW) has resolved additional legal challenges with the U.S. Department of Justice. On December 20, 2016, a settlement for claims related to emissions testing “defeat devices” installed in 3.0 liter diesel-powered vehicles was announced, setting aside $1 billion for vehicle buy-backs and fixes and $250 million dedicated toward nitrogen oxide mitigation and zero emission vehicle investments. On January 11, 2017, VW agreed to plead guilty to criminal felony counts and a pay $2.8 billion criminal penalty.  VW also agreed to settle civil environmental, customs, and financial claims by paying $1.5 billion to the U.S. Environmental Protection Agency and U.S. Customs & Border Patrol.

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Bob Perciasepe's remarks at Harvard University

PREPARED REMARKS BY BOB PERCIASEPE

PRESIDENT, CENTER FOR CLIMATE AND ENERGY SOLUTIONS

CHALLENGES FOR THE NEW PRESIDENT

HARVARD UNIVERSITY CENTER FOR THE ENVIRONMENT

Cambridge, MA

November 15, 2016

I want to thank Doctor (Daniel) Schrag and the Harvard University Center for the Environment for inviting me to speak. And my thanks to all of you for coming to listen. Dan and I have been talking for some time about my coming up from Washington to do a lecture. I’m not sure either one of us had quite this backdrop of current events in mind.

What a week. I know folks are still processing what happened seven nights ago and what happens next. The truth is: Elections have consequences. That’s why it’s so important to exercise our right to vote.

It’s too soon to tell exactly what steps the next administration will take on climate and energy policy. The rhetoric of campaigning doesn’t always exactly match the realities of governing. We hope President-elect Trump and his advisers take some time to study the issues and hear a broad range of perspectives.

They’ll find that a majority of Americans support stronger climate action.

They’ll find that many cities and states are promoting energy efficiency, deploying renewable energy, and supporting alternative fuel vehicles.

And they’ll find that business leaders recognize the rising costs of climate impacts, and also see opportunities in clean technologies. You could say they want to “win” in the growing global clean-energy economy.

This evening, I want to explore three questions:

  • What are the climate and energy realities facing this president, and all of us?
  • What might we expect from a Trump Administration?
  • And what can we do to promote environmentally responsible policies in the years ahead?

To put my remarks in context, it helps to know a little bit about my organization C2ES – the Center for Climate and Energy Solutions. C2ES is a nonpartisan, nonprofit think tank. We work to forge practical solutions to climate change. Our mission is to advance strong policy and action to reduce greenhouse gas emissions, promote clean energy, and strengthen resilience to climate impacts.

We believe a sound climate strategy is essential to ensure a strong, sustainable economy. I want to underline that.  It’s a conviction our think tank was founded on.  And it’s a message I hope you’ll leave here with tonight: Environmental and economic progress go hand in hand.

I came to C2ES a little over two years ago because of its reputation:

  • As a Trusted Source of impartial information. We rank regularly among the top environmental think tanks in the world.
  • As a Bridge-Builder. We bring city, state, and national policymakers together with businesses to achieve common understanding.
  • As a Policy Innovator. We explore market-based solutions and other practical policy approaches.
  • And as Catalyst for Business Action. We work with Fortune 500 companies to strengthen business support for climate policy.

The idea of bringing disparate groups together is part of our DNA. Here are four quick examples:

At the international level, C2ES brought together negotiators from two dozen countries for a series of private discussions that helped lay the groundwork for the landmark Paris Agreement.

Our Solutions Forum is fostering collaboration to reduce emissions, mobilize climate finance, and strengthen resilience to climate impacts. That last one -- climate resilience -- is relatively new.  With communities experiencing climate impacts here and now, it’s something we can’t afford to ignore.

We recently partnered with The U.S. Conference of Mayors to create the Alliance for a Sustainable Future, whose goal is to strengthen public-private cooperation.

And our multi-sectoral Business Environmental Leadership Council is the largest U.S.-based group of companies devoted solely to addressing climate change.

That’s who we are and where I’m coming from. Now, let’s look at the some of the realities facing the next administration.

Realities on the Ground

Depending on your point of view, this was either a “Change Election” or a “Fear of Change Election.” What I can tell you is that it wasn’t a “Climate Change Election” because nobody was talking about it.

Climate change didn’t come up once in any of the presidential debates.  The only question about energy policy came from that guy in a red sweater, Ken Bone. Climate change was not top of mind in the voting booth. Asked before the election where climate change ranked among their concerns, voters put it No. 19 out of 23.

But when asked where they stand, the majority of Americans – of all political viewpoints -- support climate action.  A majority of Democrats, Independents, and Republicans support funding renewables research, providing tax rebates for energy-efficient vehicles or solar panels, and regulating carbon dioxide as a pollutant.

Americans support climate action because they understand that climate change is occurring, and that human actions are largely responsible.

Here are a few more facts:

  • 2014 was the hottest year globally ever recorded. Until 2015. 2016 has been even hotter.
  • Climate change is a matter of science, but also a matter of dollars and cents. This year, the United States experienced a dozen billion-dollar disasters.
  • Climate impacts like rising sea levels and more frequent and intense heatwaves, downpours, and droughts threaten the way we all live our lives.
     

Another reality is that our energy landscape has already changed. This isn’t your grandfather’s energy system. When I was born, the United States didn’t get any commercial power from natural gas or nuclear. Zero. Now those two sources together are responsible for more than half of our electricity.

Let’s talk a minute about those two. First, natural gas. Thirty years ago, before many of you were born, it was illegal to use natural gas in a power plant.  Now it makes up more than a third of U.S. electricity supply. Coal makes up another third of our energy mix, down from about half 10 years ago.  This change is due in large part to market forces. Natural gas is inexpensive, so utilities have switched to if from coal.

These same market forces are posing a challenge for nuclear energy. Nuclear is responsible for more than 60 percent of zero-carbon electricity in the United States – It’s the biggest source. A number of reactors have been closing prematurely, which could make it even harder to meet our climate goals.

Renewables have been surging as costs have plummeted. Wind and solar generation have grown nearly twelve-fold since 2005. That’s nearly eight times greater than expected.
Thanks to diversifying our energy mix, and improving energy efficiency, power sector emissions have fallen by more than 20 percent in the past 10 years.  We’re moving in the right direction.  The challenge will be to keep doing so.

What to expect

What can we expect from the new administration? I’ve been getting two questions for the past week: What will happen to the Clean Power Plan? And what will happen with the Paris Agreement? So let’s talk about those.

Every new president usually halts regulations that are in the process of being formulated, so we can expect that. For a final regulation, like the Clean Power Plan, a simple stroke of the pen can’t undo it. It’s a process. First, they’d have to do a rule-making, which requires public comment.  Then, they'd need to come back with an alternative plan. That’s because under previous Supreme Court rulings, EPA is still under a legal obligation to reduce greenhouse gas emissions. It’s mandatory. They’ll be sued if they don't.

The Clean Power Plan is currently in the courts. So we could find ourselves replacing the current legal uncertainty with new and different legal uncertainty.

On a positive note, the Clean Power Plan prompted a lot of state environmental officials, public utility regulators and other stakeholders to sit down together for the first time to talk about electricity reliability, efficiency and affordability. We hope those conversations bear fruit.

There’s no doubt that the Clean Power Plan could reduce power plant emissions faster and further than no plan at all. But progress has already been made and I think there are ways it can continue.

Mr. Trump has also said he wants to “cancel” the Paris Agreement. The bottom line is that he could legally pull the U.S. out of it. Let’s think through, practically, how that would work out for us. Consider that virtually every country in the world has committed to taking climate action. The Paris Agreement is a bottom-up, flexible framework. It relies on peer pressure. If we want to hold other countries accountable, we have to hold up our end. If we walk away from our commitments, we also give up being a player in the innovative energy and transportation technologies that can create U.S. jobs. China, Brazil and the US led the world last year in employment in renewable energy.

The Paris Agreement has widespread support among the business community. Eleven major companies we work with, including Berkshire Hathaway Energy, Microsoft, National Grid, and Shell, signed onto a C2ES statement applauding governments for bringing the agreement into force so quickly this month. Businesses say the agreement provides long-term direction, promotes transparency, and addresses competitiveness.

Because the Paris Agreement is flexible, there are a lot of ways for an individual country to tailor its efforts. It was also designed to be durable – It can survive shifts in political currents. The nearly 100 other countries that have already ratified it are reducing emissions for a variety of reasons, including economic opportunities and health benefits to their people. I expect they will remain committed to moving forward.

As for what else we can expect – we’ll have to wait and see. From opening up public lands and offshore areas to more drilling to re-assessing pipelines to appointing agency leaders with very different priorities from the past eight years, we’re going to see changes.

What we can do

So that brings me to my final question tonight: What can we do to promote environmentally responsible policies in the years ahead? Let’s look at four vantage points – federal, state, local, and business.

First: The executive branch has been the focus of climate action for a number of years.  That’s going to change. I want to posit that it may be time to return our focus on the legislative branch. Three areas where bipartisan support already exists are: building infrastructure, incentivizing carbon capture technologies, and preserving the nuclear fleet.

Both presidential candidates talked about the need to modernize our aging infrastructure. That’s not just roads and bridges. We need to modernize our electric grid to move renewable power from where it’s generated to where it’s needed. We need to improve the natural gas pipeline system to reduce leaks. And we need to expand electric vehicle charging. The electric grid should be able to accommodate clean energy technologies like energy storage, time-of-day pricing, and grid-to-vehicle interfaces.

Millions of miles of pipes carrying drinking water and wastewater are nearing end of life.  And it takes a lot of energy to move a gallon of water. The nation’s utilities lose about $2.6 billion dollars annually from trillions of gallons of leaked drinking water.

Infrastructure projects can also help communities be more resilient to extreme weather, make communities more livable, increase property values, and save energy and water. And, of course, infrastructure projects create jobs.

The second area where we could make progress is carbon capture, use and storage, or CCUS. Some of you might be skeptical about this as “clean coal.” The truth is, there’s no scenario for achieving the emission cuts we need globally without carbon capture. We need to keep emissions out of the air not only from coal and natural-gas power plants around the world, but also the industrial sector like steel, chemical, and cement plants. The industrial sector is responsible for more than 20 percent of U.S. greenhouse gases.

Right now, there are bipartisan bills in the House and Senate that would spur carbon capture technology. Imagine Senate Majority Leader Mitch McConnell and Hillary Clinton’s running mate, Senator Tim Kaine, on the same bill. It’s true.

A third area where we might get some bipartisan agreement is preserving our nuclear fleet. There’s a bill right now that both Senators Whitehouse and Inhofe support. From a climate perspective, it doesn’t make sense to prematurely close nuclear plants when, in the short- and medium-term, they cannot realistically be replaced by zero-emission power sources. Keeping these reactors operational also buys us time to address energy storage and transmission challenges to support more renewable generation.

Let me add one more area as a possibility where we might see some agreement at the federal level: helping the communities most affected by the transition to clean energy. Remember that market forces – not regulations -- have mainly been driving the decline of coal.  And natural gas will continue to displace coal in our power generation fleet at current prices.  There are no plans for new coal-fired power plants in the United States. What coal communities need is opportunities for new jobs. The United States could be world leaders in manufacturing clean energy and transportation technologies. More Americans work now in the solar industry than work in either oil & gas extraction or coal mining. It will take a concerted effort involving education and training, but we have to help.

Moving to the states, which have always been the incubators of policy, we’ve seen a lot of progress on clean energy. Twenty-nine9 states require electric utilities to deliver a certain amount of electricity from renewable or alternative energy sources. Ten states that are home to a quarter of the US population already have a price on carbon and are successfully reducing emissions. Those states are California and the nine Northeast states, including Massachusetts, in the Regional Greenhouse Gas Initiative (RGGI). RGGI has added $243 million in value to Massachusetts’ economy. Massachusetts has also been named the most energy efficient state in the country for the last six years.

Every state has either an operational wind energy project, a wind-related manufacturing facility, or both. Some of the biggest wind energy producers are Texas and Iowa. They won’t want to reverse the economic prosperity they’ve seen as a result. America’s first offshore wind farm has just come online off Rhode Island, launching new industry with the potential to create jobs in manufacturing and the marine trades.

Time and again, we’ve seen leadership at the state level and I expect that will continue.

On environmental policies, so much often comes down to the local level.  Many cities have already taken the ball and are running with it. They’re improving the energy efficiency of buildings, deploying cleaner energy, and encouraging cleaner transportation.

Cities see the real and rising risks of climate change. They’re dealing with the impacts now. They also see opportunities to for energy and transportation systems that are cleaner and more efficient than today. To keep their efforts moving forward, partnership and collaboration will be key, especially between cities and companies.

That’s why we at C2ES recently launched a partnership with The US Conference of Mayors called the Alliance for a Sustainable Future. The main goal is to spur public-private cooperation on climate action and sustainable development in cities. Santa Fe Mayor Javier Gonzales is leading the steering committee. Founding sponsors include JPMorgan & Chase Co., Duke Energy, and AECOM, and the mayors of Austin, Des Moines, New York City, and Salt Lake City.

Finally, business leadership has been and will continue to be crucial in transitioning to a clean energy and clean transportation future. A C2ES study found more than 90 percent of the companies in the S&P Global 100 Index see climate change as a business risk. They see rising sea level and more frequent and extreme heat waves, downpours and drought damaging and disrupting their facilities and operations, supply and distribution chains, and water and power supplies.

More than 150 companies -- from Alcoa to Xerox -- signed the White House American Business Act on Climate Pledge.  They committed to cutting emissions, reducing water usage, and using more renewable energy. Business leaders see opportunities in clean energy and transportation.

Here’s another thing to think about, the power of the consumer. In the past year, three in 10 Americans say they’ve rewarded companies for taking steps to address climate change.

The reality is that we have strong momentum in the right direction.  Our economy has begun decarbonizing. Power sector emissions are down, thanks largely to market forces and to incentives for renewable energy that have strong bipartisan support. Many cities, states and companies, along with a number of congressional Republicans, want to keep that momentum going. Smart investments and technological innovation have started America on a clean-energy transition. Building on that momentum will protect communities from rising climate damages and will contribute to strong and sustained economic growth.

The longer we wait to address climate change, the costlier it will be. I urge all of you to work at the local and state level to support common-sense policies that lead us toward a sustainable future.

The Alliance for a Sustainable Future

             

The Alliance for a Sustainable Future

A partnership of C2ES and The U.S. Conference of Mayors

U.S. cities and businesses are exploring how to prepare for climate impacts and how to address the emissions that are the cause – by improving energy efficiency and deploying more clean energy and transportation.

Both see sustainability as a smart strategy for the future.

That’s why The U.S. Conference of Mayors (USCM) and Center for Climate and Energy Solutions (C2ES) formed the Alliance for a Sustainable Future: to bring cities and businesses together to play a more significant role in shaping sustainable communities and achieving climate goals.

NEW: Survey of Mayors on Climate Action
Cities across the country are showing leadership in promoting renewable electricity, low-carbon transportation, and energy efficiency, according to preliminary results of a survey jointly conducted by USCM and C2ES. Download a summary of the findings to date.

 


“Cities are our nation’s economic powerhouses, making them a key proving ground for policies to increase energy efficiency, deploy clean energy, and foster clean transportation.”

- Santa Fe Mayor Javier Gonzales, Alliance Co-Chair


 

Cities and businesses are each doing their part to demonstrate climate leadership.

Cities are leading by:

Companies are leading by:

  • Investing in clean energy projects
  • Reducing emissions throughout the supply chain
  • Setting an internal carbon price
  • Helping customers reduce their carbon footprint.

 

Together, cities and businesses can accelerate the momentum toward a more sustainable, low-carbon future. The Alliance for a Sustainable Future creates a framework for mayors and business leaders to develop concrete approaches to reduce carbon emissions, speed deployment of new technology, and respond to the growing impacts of climate change.

Goals of the Alliance

  • Inform and engage mayors, city officials, and business leaders so that strategic opportunities can be identified and explored;
  • Empower local leaders to contribute to the design and implementation of state climate plans and other supporting federal, state, and local initiatives;
  • Build new public-private partnerships; and
  • Raise the profile of city and business contributions in accelerating sustainable development, resilience, and climate action to help implement international commitments.  

City and business leaders in the alliance will identify barriers to action and share research and analysis on climate and sustainable development solutions. By building crucial links between cities and companies, the alliance aims to spur innovative partnerships.

The alliance will also identify local, state, and federal policies, support action, and explore how those policies can produce new partnerships among cities and the business community.

In the first year of work, the Alliance will produce a suite of case studies and insights that highlight how cities and businesses are working together to reduce emissions and increase resilience. The Alliance Steering Committee has identified three action areas representing substantial opportunities for city and private sector action:

  • efficient buildings
  • low-emission vehicles/transportation
  • low-carbon electricity.

These areas present emerging opportunities for cities and businesses to leverage their purchasing power and increase their influence the local market. Success requires business engagement and finding complementary state and federal action.

The Alliance for a Sustainable Future was formed in June 2016. Santa Fe Mayor Javier Gonzales and Salt Lake City Mayor Jackie Biskupski are the chair and vice chair of the Steering Committee, which consists of founding sponsors JPMorgan Chase & Co., Duke Energy, and AECOM, and the mayors of Austin, Des Moines, New York City, and West Sacramento.

At the alliance’s first public event Sept. 21, 2016, at Climate Week NYC, a panel of city and business leaders discussed ways cities and the business community can work together to reduce carbon emissions.

Read more about the Alliance for a Sustainable Future

For more information, contact C2ES Director of Sustainability and Engagement Amy Morsch.

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