RFF Vice President for Research and Senior Fellow Molly Macauley prepared this overview for colleagues as we entered 2016, highlighting connections among critical current events and policy developments and the work of RFF experts helping to shape the dialogue.
Events in 2015—and, as I write this, events as 2016 unfolds—are of major geopolitical, economic, and social magnitude. RFF experts have elevated the quality of public debate on many such issues in ways that very few others can, building on data-driven research that is unique in its objectivity and in its context of painstakingly acquired and nuanced institutional knowledge. RFF experts work hard to “get it right,” providing the most salient analysis of today’s critical energy challenges and more. Below is a glance at these pressing issues and RFF’s important contributions:
- As of early January 2016, global crude oil prices are at their lowest in over a decade. Nationwide, the average price of gasoline is under $2 per gallon in the United States, hovering at the lowest levels seen since 2009. Whether energy supply abundance is a short run occurrence or a new normal, it already has profound influence. History really is in the making. Congressional action allowed US companies to begin exporting oil on January 1, 2016—the first time since the oil embargo 40 years ago. A detailed analysis by RFF experts of the likely effects of exports on gasoline prices and carbon dioxide emissions was widely cited in the run up to this landmark decision:
- Department of the Interior Secretary Sally Jewell recently placed a temporary moratorium on new leases of federal coal reserves and here, too, RFF researchers are at the ready, already assessing the likely outcomes of this action:
- In early 2015, Mexico took steps toward market-based reforms in the electricity sector. To our north, Canada is under new leadership and remains a well-endowed and environmentally sensitive player in the energy and electricity sectors. Imagine fuller integration of the North American energy market, with consequences for enhanced electricity reliability, greater coordination on renewable energy policy, reinforcement against regional oil shocks, and collaboration on the management of conventional and greenhouse gas air pollutants. In late 2015, RFF was tapped by the US Department of Energy to lead a workshop series on integrated fossil fuel and electricity markets. A research collection by RFF experts, together with colleagues in Canada, Mexico, and the United States provides further leading-edge thinking:
- The US Environmental Protection Agency’s Clean Power Plan holds promise for reducing carbon pollution from existing power plants, but the details of implementing the final rule remain uncertain. With the Electric Power Research Institute, RFF experts are continuing a series of public dialogues on the regulation of existing power plants:
- Expert Forum on EPA’s Clean Power Plan: Comments on the Federal Plan and Trading Rules (video and presentations available)
- The Impact of the Clean Power Plan: Modeling for Strategic Insights (video and presentations available)
- Also last summer, Senators Sheldon Whitehouse (D-RI) and Brian Schatz (D-HI) introduced the American Opportunity Carbon Fee Act, a major legislative attempt toward pricing carbon. Later in the year, Senator Bernie Sanders put forth another approach to carbon pricing in the Climate Protection and Justice Act. Economists and policy experts at RFF have long carried out research on carbon pricing options, including a tax on carbon, emphasizing quantitative assessment of the effects on economic growth; aggregate and sectoral employment; and national, regional, and household energy prices. A major multi-year donor grant begun in 2015 will allow RFF experts to carry out further detailed modeling and empirical studies, policy analyses, and public meetings, reinforcing RFF’s leadership in informing the carbon tax debate:
Turning to issues related to other critical environmental wealth and associated prosperity in the United States, 2015 and early 2016 present more major developments:
- Federal lands—about 28 percent of the land in the United States—are a huge part of national wealth. On western rangelands, spanning 11 states and home to threatened species, 2015 brought massive and prolonged wildfires, furthering stressing capacity to manage these lands and protect dependent species. On this, RFF experts and colleagues at the US Forest Service, US Fish and Wildlife Service, Bureau of Land Management, and state agencies are working together in ongoing collaborations, blending ecology and economics, to shape strategies that cost-effectively meet multiple and complex biophysical objectives—no small task.
- The United States is experiencing, yet again, a spectrum including extreme drought, water rationing, and unusual winter flooding. Loss of life and property to flooding in the Midwest this winter is further taxing the nation’s emergency response capacity. Truly sound solutions developed by RFF experts center on managing land differently to avoid flood damages; in some cases, well-designed actions can also increase the sales prices of nearby homes:
- In related work, RFF experts led two new National Academies studies for the Federal Emergency Management Agency on the affordability of flood insurance, covering how flood insurance premiums are set, the effect of risk-based flood insurance pricing on property values, data and modeling gaps, and the linking of flood insurance premium assistance with mitigation efforts (the National Academies reports are here and here). On the affordability of premiums, RFF experts have created a particularly innovative solution in the form of community flood insurance:
- In November, after years of deliberations, the Food and Drug Administration issued a landmark ruling, approving a type of genetically engineered salmon for human consumption. The salmon grows to market size about twice as fast as regular salmon. The implications are vast: production of genetically modified animals could require fewer resource inputs and result in less environmental pollution. Can future regulatory action on genetically engineered animals be streamlined? On this, see a wonderfully insightful RFF blog post:
- Last but not least, 2016 marks 50 years since the plight of the whooping crane led the nation to formally consider legislation for endangered species, resulting in the passage of the 1966 Endangered Species Preservation Act, the precursor to the Endangered Species Act. Conservationists, ecologists, economists, and others have learned a great deal about what works (and what doesn’t) in managing species. A sweeping review and a host of innovative, specific recommendations by RFF experts and collaborators, including conservation ranchers and practitioners, are in a new report from the Ecological Society of America. If implemented, these recommendations promise to transform the nation’s effectiveness in managing its species portfolio for generations to come:
These are the headlines today. And in each case, RFF is at work in relevant, consequential research and policy analyses. I close happily in noting an article in the January 2, 2016 issue of The Economist, A New Age of Discovery, which tells of tall mountains, deep caves, ocean depths, and dense forests yet to be explored by humankind. What delights me is that the journey described here is not only to understand, but to value, these natural resources—and that’s what RFF is all about. Onward, to 2016.
