Each week, we’re compiling the most relevant news stories from diverse sources online, connecting the latest environmental and energy economics research to global current events, real-time public discourse, and policy decisions. Here are some questions we’re asking and addressing with our research chops this week:
How can policymakers design a clean electricity standard that both reduces emissions and allows flexibility?
Until recently, the Biden administration had argued that a clean electricity standard is essential for achieving its environmental plans. But last week, White House National Climate Advisor Gina McCarthy suggested that major climate provisions, including a clean electricity standard, might not appear in the final infrastructure bill—even if the administration still sees climate action as a priority. This possible shift reflects legislative realities, given that conservatives in the Senate have balked at new climate spending and moderates have resisted efforts to speed a major package through the Senate’s reconciliation procedure. The administration’s approach also could be a response to debates among some policymakers and environmental groups about how to actually design a clean electricity standard. Some progressive groups hope that a standard does not inadvertently incentivize the production of nuclear power or natural gas and have pushed Congress to pass an explicitly renewable standard. But administration officials have said that nuclear power is crucial for the administration’s decarbonization goals, and some research—including from RFF—suggests that giving partial credit to natural gas could push coal out of the electricity system more quickly.
An article from the new issue of Resources magazine—themed on a comprehensive view of the tools that policymakers can use to help decarbonize the major sectors of the US economy—discusses strategies for decarbonizing the power sector. RFF’s Kathryne Cleary and Karen Palmer highlight various tools that can reduce power sector emissions, such as a carbon price; renewable portfolio standards; and increased funding for research, development, and demonstration of nascent technologies. They also elaborate on the potential of a clean electricity standard to reduce emissions and allow flexibility, noting that several states already have implemented their own standards and that policies can be designed to include sources like nuclear power or fossil fuel plants fitted with carbon capture technologies. But additional challenges exist for federal policymakers, as Cleary and Palmer note: “A federal [clean electricity standard] would have to ensure that the policy takes states’ existing resource portfolios into account when establishing targets, to avoid a scenario in which polluting states bear most of the costs of compliance.”
Related research and commentary:
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What can be done to ensure that federal programs related to climate change and disaster aid do not impose burdens on vulnerable communities?
Last month, President Joe Biden unveiled a plan to double funding for climate mitigation projects, pledging to prioritize communities that are “too often overlooked.” But some experts worry that additional funds for the Building Resilient Infrastructure and Communities program through the Federal Emergency Management Administration (FEMA) will end up exacerbating existing problems; only a small proportion of applications to the program this year have come from the small, low-income communities originally targeted. Research shows that many of FEMA’s programs reflect existing inequities: a report earlier this year from FEMA’s advisory panel notes that the agency’s disaster aid programs have privileged whiter, wealthier communities at the expense of vulnerable areas. While not designed to be explicitly discriminatory, FEMA’s programs often require burdensome applications; award more money to those who have the resources to appeal initial grant decisions; and tie grants to property values, which has burdened formerly redlined, majority-Black neighborhoods. As climate change intensifies and extreme weather events become increasingly common, FEMA’s leaders are now reckoning with how to reform its programs.
At the third event in an ongoing series about environmental justice that’s jointly hosted by RFF and the Urban Institute, panelists discussed the impacts of extreme weather on vulnerable communities and explored how government policies can be improved to help more communities adapt to climate change. RFF University Fellow Carolyn Kousky contended that more federal funds should be devoted to “risk reduction,” pointing to FEMA’s Building Resilient Infrastructure and Communities program as an example of the federal government beginning to marshal more resources around climate mitigation. But the panelists also largely agreed that existing federal programs can be slow, bureaucratically complex, and hard to access, especially for communities struggling in the wake of a major disaster. “The rules that exist at the federal level don’t incorporate local realities—especially realities in marginalized areas,” concluded Earthea Nance of Texas Southern University. For more insights from Kousky and Nance, along with Eric Tate of the University of Iowa and Sonal Jessel of WE ACT for Environmental Justice, watch a recording of the event.
Related research and commentary:
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What strategies may be most effective for policymakers who hope to speed deployment of electric vehicles and reduce transportation emissions?
The US Senate Committee on Finance recently passed the Clean Energy for America Act, which would expand the existing tax credit for buyers of electric vehicles (EVs) beyond the current $7,500 subsidy. If the bill gets signed into law, EV buyers would receive $2,500 more for purchasing an EV built in the United States and another $2,500 for purchasing an EV made by union workers. These standards also would apply to all automakers; the act would remove the current ceiling on vehicle sales, which applies the credit only to companies that have sold fewer than 200,000 EVs. The Finance Committee’s decision to advance the bill comes after the Biden administration promised to reduce US emissions and proposed spending $174 billion to boost the EV industry through an infrastructure bill. Biden has also proposed creating a nationwide EV charging network of over 500,000 stations and replacing government-owned vehicles such as USPS trucks with electric models. But not all legislators are on board with Biden’s efforts to speed the deployment of EVs: while negotiating with Biden over the infrastructure plan, Senate Republicans offered $4 billion for EV subsidies—just 2.2 percent of Biden’s proposed spending.
In a new blog post, RFF’s Joshua Linn and Wesley Look contend that subsidies for EVs will need to be designed carefully to have an appreciable effect on emissions. The Biden administration has moved to reverse Trump-era policies that weakened fuel economy standards and ended statewide Zero Emission Vehicle (ZEV) programs; the scholars say such efforts could substantially reduce emissions over the next decade. However, Linn and Look point out that adding billions of dollars of subsidies to the mix would have a negligible effect on further emissions reductions, largely because of interactions between the subsidies and ZEV standards. The scholars propose an alternative approach that incorporates both a subsidy and a tax. “Instead of offering a $7,000 subsidy for each EV,” they offer up as an example, “Congress could spend much less in total—but provide the same relative incentive to buy an EV—by jointly subsidizing EV purchases in the amount of $3,500 and taxing non-EV purchases $3,500.”
Related research and commentary:
This week's #FactOfTheWeek comes from a new episode of Resources Radio about the benefits of funding advanced energy technologies.
Matt Palmer / Unsplash
10 times the benefits
As RFF Fellow Daniel Shawhan explains on a new episode of Resources Radio this week, sizable benefits would follow the funding of advanced energy technologies at spending levels similar to those authorized by the Energy Act of 2020. The benefits of these investments would exceed the costs by more than 10 times if a clean electricity standard were implemented in tandem.
