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 feasible are the current goals of the proposed Clean Electricity Performance Program, which Democrats intend to include in the reconciliation bill?
The fate of infrastructure legislation is uncertain as policymakers debate key environmental policies and the time line for voting on two separate bills. Initially, Democratic leaders agreed to split up President Joe Biden’s jobs and families agenda into two pieces of legislation—one to be passed with bipartisan support, and another to be passed through the Senate’s reconciliation process—and eventually pass both bills in tandem. But Speaker of the House Nancy Pelosi (D-CA) had promised to vote this week on the bipartisan bill that already passed the Senate, though Democratic policymakers still cannot agree on what provisions should feature in the more far-reaching reconciliation package. For instance, Senator Kyrsten Sinema (D-AZ) reportedly would rather see a carbon price than increased taxes for corporations and wealthy individuals, while Senator Joe Manchin (D-WV) has worried that the planned Clean Electricity Performance Program (CEPP) could waste taxpayer dollars if utilities are already increasing the amount of clean electricity they provide.
In a new blog post, RFF Senior Research Associate Kathryne Cleary describes the current design of the CEPP and how the program may spur additional investment in renewables. The CEPP, which Cleary says would be “the most ambitious clean electricity policy to date at the federal level” if it passes, requires electricity suppliers to increase their share of clean electricity by 4 percent annually, providing grants to those that do and penalizing those that fall short. Cleary contends that evidence from US states suggests that a 4 percent rate of annual growth in clean electricity is reasonable and that the program, by only starting payments to utilities at 1.5 percent growth, is not poised to pay for action that would have occurred anyway without the legislation. “In most cases, the CEPP likely will provide support for additional investment in renewables, rather than subsidize existing investments,” Cleary writes.
Related research and commentary:
How can policymakers looking to curb methane emissions be more successful at accurately and actively monitoring methane leaks?
This month, President Biden and EU leaders set a goal to reduce global methane emissions by 30 percent over the next decade. The pledge comes soon before the pivotal COP26 convening this November, where US and EU leaders will lobby other nations to commit to reducing methane emissions. The Biden administration is working to curb domestic methane emissions on various fronts, with a methane fee under consideration for the reconciliation package and the US Environmental Protection Agency (EPA) finalizing new methane regulations that are more aggressive than rules previously in place. Critics argue that these initiatives primarily target oil and gas, while ignoring other industries such as agriculture, and that stringent rules could impose unfair burdens on small oil and gas producers. The Biden administration also must contend with the fact that tracking methane emissions accurately has long posed a challenge for federal regulators.
On a new episode of Resources Radio, University of Texas at Austin Research Associate Professor Arvind Ravikumar discusses the challenge of reducing methane emissions from oil and gas production. Ravikumar makes clear that sources of methane emissions can be diverse and that systems to monitor for methane leaks can be improved. Pointing to his own research, Ravikumar stresses the need for improved and more frequent collection of data on methane leaks, given that EPA methodology—which has important implications on methane mitigation policies internationally—doesn’t adequately account for the problem of “super-emitters.” Given the rising interest in a federal methane fee and similar policies, Ravikumar cautions, “If these types of policies are not based on direct and frequent measurements of methane emissions, they are not going to work. There’s absolutely no substitute for frequent and direct measurements of methane.”
Related research and commentary:
How would new fuel economy standards impact emissions reductions that result from increased sales of electric vehicles?
President Biden has set a goal that 50 percent of all vehicles sold in the United States by 2030 should be electric and has eyed increasingly ambitious fuel economy and greenhouse gas standards as a strategy to speed progress. The Biden administration already has proposed a 5 percent annual fuel economy increase through model year 2026 and reportedly plans to draft more stringent rules for implementation in subsequent years. Electric vehicles (EVs) are one avenue through which automakers can comply with these standards; if a higher share of vehicles in an automaker’s fleet are electric, then manufacturers can sell more cars that are less fuel efficient while still complying with federal mandates. Currently, automakers receive additional greenhouse gas credits for each EV they sell. This “over-crediting” of EVs relative to how much they actually reduce emissions is designed to incentivize automakers to sell more EVs. But critics worry that this policy design is unhelpful for reducing transportation emissions, as it reduces the relative effectiveness of the fuel economy standards.
In a new blog post as part of an ongoing series about fuel economy standards, RFF’s Benjamin Leard, Joshua Linn, and Virginia McConnell consider how the Biden administration’s proposed standards will impact EV sales and reduce emissions. The scholars note that, according to analyses of the proposed standards conducted by federal agencies, the large majority of projected emissions reductions are likely to come from increasingly efficient gasoline-powered vehicles, rather than increased deployment of EVs. As EV sales increase, the expected emissions reductions from EVs will increase, too—but by model year 2026, agencies still expect gasoline vehicles to account for about 86 percent of total emissions reductions. The scholars also point out that over-crediting electric vehicles “dampens the effects of the fuel economy standards on EV sales,” and they encourage federal agencies to be more transparent about whether this over-crediting ultimately is cost-effective.
Related research and commentary:
Is the proposed Clean Electricity Performance Program feasible? Consider our #FactOfTheWeek.
As currently designed, the Clean Electricity Performance Program requires utilities to increase the share of clean electricity they provide by 4 percent each year. Evidence from US states suggests that the goal is attainable: Iowa, for instance, saw a 15.9 percent increase in clean energy generation in just one year, from 2019 to 2020.