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:
Is new legislation moving toward a practice of addressing environmental justice concerns?
Last week, House Democrats introduced the Environmental Justice for All Act, which would expand the National Environmental Policy Act (NEPA); mandate consideration of cumulative impacts under the Clean Air Act and Clean Water Act; and impose new fees on oil, gas, and coal industries to support communities in the transition away from fossil fuels. The legislation represents a unique approach by incorporating input from environmental justice groups at every level of the drafting process. While details of the bill conflict with the Trump administration’s pursuit of NEPA rollbacks and expansion of oil and gas development, the legislation’s more enduring legacy might be its novel process: the bill’s sponsors involved stakeholders from the environmental justice movement and prioritized the environmental concerns of “communities of color, low-income communities, and tribal and indigenous communities.”
This week on the Resources Radio podcast, University of Michigan professors Samuel Stolper and Catherine Hausman explore the intersections of environmental justice and economics. Hausman and Stolper discuss their new research, which identifies misinformation as a key factor in generating environmental inequalities. Stolper provides one example of incomplete scientific information that’s had a disproportionate impact on vulnerable communities: “The Environmental Protection Agency has an ambient lead standard on the books ... It has changed precisely once over the last 20 years, and that was in 2008, and the standard was tightened. It dropped from 1.5 micrograms per cubic meter to 0.15 micrograms per cubic meter … Who is bearing the burden of that misinformation? What are the consequences of us having been wrong?”
Related research and commentary:
As demand for coal declines, how effective are federal policies that incentivize coal-powered energy production?
The Trump administration announced plans last week to resume coal leasing on public lands, after the Bureau of Land Management’s court-mandated environmental assessment claimed that the policy shift would “result in a negligible increase in greenhouse gas emissions.” Environmentalist groups have questioned these findings, especially given that federal lands already account for around 40 percent of American coal production. And while the administration warned of the economic consequences of limiting coal production when it first tried to lift the Obama-era moratorium in 2017, demand for coal has since declined rapidly, and asset managers are increasingly contemplating divestment. Still, reflecting the administration’s persistent support of coal power, an Interior Department spokesman framed the policy shift as a boon to domestic fossil fuel production, saying, “the Department of the Interior has ended the war on American energy and coal.”
Another federal coal policy is generating similar scrutiny: the tax credit promoting “refined coal,” which ostensibly produces less pollution than “regular” coal. The credit, first introduced in 2004 and up for extension in 2021, amounts to nearly $1 billion in annual subsidies to coal producers that provide evidence of emissions reductions. But new research from RFF’s Brian Prest and Alan Krupnick—following their earlier assessment that the policy is not functioning as intended—finds minimal evidence of environmental and health benefits. Most notably, as this week’s #ChartOfTheWeek above makes clear, the tax credit has caused a net increase in CO2 emissions and only modest environmental and health benefits from reductions in NOx and SO2 emissions. “Policymakers are right to be concerned about the burden the policy places on taxpayers and society,” they write in their new blog post that summarizes the research.
Related research and commentary:
As FERC unveils significant new orders such as the MOPR, how consequential are its latest orders, which impact New York State?
FERC recently issued new orders affecting the capacity market that serves New York, potentially complicating the state’s energy goals, which require the state’s electricity to come from 100 percent carbon-free resources by 2040. While the head of the New York Independent System Operator (NYISO) has since made clear that the new orders are not expected to immediately interfere with New York’s clean energy goals, critics have claimed that the new orders are similar to FERC’s recent MOPR order in PJM’s capacity market, which targets subsidized resources. That MOPR order generated backlash primarily from environmental organizations, who feared that its implementation would arbitrarily discriminate against clean energy resources in favor of fossil fuels—although RFF Research Associate Kathryne Cleary contended in a recent blog post that “the reality of how this order will affect energy in PJM is more nuanced.”
Now, in a new blog post, Cleary and Senior Fellow Karen Palmer assess the anticipated impacts and significance of FERC’s new orders. Ultimately, they find that the new rules will not immediately be detrimental to clean energy, as the orders affect only certain “load zones” in New York, not the areas of the state where most clean power is currently generated. Still, Cleary and Palmer caution that if these rules are eventually applied across the entire state, New York would face significant barriers to achieving its ambitious clean energy goals—absent other policy mechanisms, like carbon pricing. For more context on the potential impacts of the new orders, take a look at their new blog post, and for background on how electricity markets function in the United States, read up on the topic in their new explainer.
Related research and commentary:
45Q&A: A New Series of Comments on the 45Q Tax Credit for Carbon Capture, Utilization, and Storage (CCUS)
How does the IRS plan to administer its 45Q program? Is IRS guidance doing enough to balance flexibility and stimulus on the one hand, with fiscal responsibility and environmental benefits on the other? RFF’s Jay Bartlett and Alan Krupnick approach these questions with their first blog post in the new series: 45Q&A.
After Congress first enhanced the 45Q program in February 2018 to incentivize new CCUS projects, the Internal Revenue Service (IRS) recently released guidance documents that outline how the program will be implemented. Bartlett and Krupnick summarize their assessment of this new guidance in their recent blog post and plan to publish a series of articles analyzing the implications, ambiguities, and future opportunities of 45Q as more guidance is released. Keep an eye out for our continuing coverage at the Resources website, in our recurring “On the Issues” blog posts, and in our weekly newsletter.