On the Issues: COP27, Clean Energy Transition, and More

Twice a month, 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. Keep reading, and feel free to send us your feedback.

Here are some questions we’re asking and addressing with our research chops this week:

What came out of the most recent global conference on climate change?

The 27th United Nations Framework Convention on Climate Change, also known as the Conference of the Parties or COP27, concluded last month. Following a final session of negotiations, delegates to the conference agreed to establish a fund to address “loss and damage” due to climate change. Nations plan for the fund to facilitate a transfer of money from wealthier nations to developing nations, where the funding can help minimize and address the adverse effects of climate change, such as extreme weather events and sea level rise. Resources for the Future (RFF) scholars who attended COP27 have noted the significance of the discussion around loss and damage. In a recent blog post, RFF President and CEO Richard G. Newell reviews the proposed fund for loss and damage, along with other key takeaways from the conference. “The full details of this agreement … have yet to be determined,” says Newell, “but its adoption by delegates from nearly 200 countries marks a shift in what has been a contentious issue for many years.”

What difficulties should we be prepared for as we carry out a transition to clean energy?

Earlier this week, a group of mostly Western nations imposed a price cap of $60 per barrel on Russian oil. Policymakers from the group aim to limit Russia’s oil-export revenues (which help fund Russia’s invasion of Ukraine) while avoiding increases in global oil prices similar to the one that occurred this past spring. Russia does not plan to adhere to the price cap. Conflicts over energy may be exacerbated during the period of the clean energy transition when both clean energy infrastructure and fossil fuels must be in use. Emily Grubert, an associate professor at the University of Notre Dame, joined the Resources Radio podcast last week to discuss the difficulties associated with this “mid-transition” period. “A lot of things become more structurally likely to happen,” says Grubert. “These things may have more immediate precipitating factors. The notion that you might see massive price spikes and uneven access to fossil fuels is predictable under mid-transition conditions.”

What do US firms and trading partners think of the domestic-production provisions in recent US legislation?

During an official visit to Washington, DC, last week, French President Emmanuel Macron relayed concerns from the European Union that the Inflation Reduction Act unfairly favors US firms. Some industry groups also have voiced concerns about the domestic-content requirements in the Inflation Reduction Act. The law, which President Joe Biden signed in August this year, includes provisions that incentivize or require domestic sourcing of various clean energy technologies. Biden has since suggested that provisions in the law could be changed. In a new blog post, RFF scholars Yuqi Zhu, Aaron Bergman, and Alan Krupnick review comments from potential developers of hydrogen hubs (H2Hubs), which are regional networks of hydrogen producers and consumers that may receive federal funding. “Under the ‘Buy America’ requirements outlined in the funding opportunity announcement [from the US Department of Energy], proposers must source all H2Hub iron, steel, manufactured products, and construction materials from US producers,” they say. “This domestic-procurement provision can be a significant hurdle.”

Expert Perspectives

In Focus: The Role of Research for the Incoming Congress

Election season and the midterms are over, and the 118th Congress is set to begin its first session on January 3, 2023. In the latest installment in our In Focus video series, Kristin Hayes, senior director for research and policy engagement at RFF, talks about the continuing importance of research for the implementation of recent climate policy, like the Inflation Reduction Act, and the development of future climate policy.

Exploring Hydrogen Hubs

A new data tool from RFF’s Industry and Fuels Program tracks proposals in the United States for hydrogen hub projects whose proposers intend to apply for federal funding. The tool also indicates a proposed hub’s location and if a hydrogen hub will use renewable energy to produce its hydrogen fuel. “As the selection process evolves, our new data tool can help highlight certain qualities that Congress and the Department of Energy are looking for in their chosen projects,” says Alan Krupnick, the project lead and a senior fellow at RFF.

Insurance Availability and Affordability under Increasing Wildfire Risk in California

Wildfires are becoming more prevalent and damaging across the western United States, which increases the importance of insurance as a tool for recovery. In a new issue brief, RFF scholars provide background on wildfire risks and insurance policies in California, along with analysis of trends in insurance coverage and costs. “As wildfire losses in California increase,” the authors say, “the cost of insuring homes in high-risk areas will also continue to rise, posing continuing challenges for insurers and policyholders.”

Celebrating Five Years of Satellite Data Research

This week, RFF hosted a capstone event to celebrate the conclusion of the grant period for the VALUABLES Consortium. VALUABLES is a collaboration between RFF and NASA to measure how decisionmakers can use satellite information to benefit people and the environment. “Together, this community developed multiple robust impact assessments on how Earth information science can improve lives and livelihoods,” noted Shanna McClain, a manager at NASA’s Earth Science Applied Sciences Program. Learn more about the event here.

Informing Decisionmaking on Energy and the Environment

“Energy Insights 2022,” a conference that was cohosted by RFF and the Alfred P. Sloan Foundation, concluded today. The conference featured experts from government, academia, nonprofit organizations, and the private sector and highlighted research that could inform decisionmaking on energy and the environment. “Urgency has changed,” said Chris Hansen (D-CO), a state senator in Colorado. “You can see this urgency on reducing emissions and on environmental justice. It’s now incumbent on us in government and research to quickly respond to that call to action.”

Carbon Neutrality in the Western United States

The Intermountain West Energy Sustainability and Transitions (I-WEST) initiative, a coalition of stakeholders in the Intermountain West region of the United States, aims to support a transition to clean energy in the region. This week, I-WEST released a report on the first phase of its transition project. The report outlines preliminary research and analysis of important factors for the region’s transition. RFF Senior Fellow Alan Krupnick served as the policy subject matter expert for the report.

Assessing the Outcomes of COP27

Following the conclusion of COP27, RFF Vice President for Research and Policy Engagement Billy Pizer joined the Environmental Insights podcast to discuss the outcomes of COP27. Environmental Insights is hosted by Robert Stavins, an RFF university fellow and co–vice chair of the RFF board of directors. “We’re now at a place after [the Paris Agreement] where everything is lower stakes, in a sense, because we have the framework in place,” says Pizer. “Everything now is simply moving that framework along to the next step.”

#ChartOfTheWeek

The Infrastructure Investment and Jobs Act and the Inflation Reduction Act have increased the amount of federal funding for wildfire management. To gain a better understanding of the distribution of this funding, scholars at RFF and the Federation of American Scientists collaborated on an interactive data visualization tool, the Federal Wildfire Funding Wheel, that illustrates how the recent laws allocate funding. The collaborators emphasize how a diverse group of stakeholders can take advantage of the tool. “Beyond policymakers and funders, nongovernmental experts and stakeholders may also use the wheel to understand opportunities for engagement and to inform their advocacy to the government,” they say.