On the Issues: Funding Clean Energy, Vehicle Fuel Standards, and More

Matt Fleck, Ceilidh Kern, and Annie McDarris

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:

How are international and national financial institutions facilitating transitions to clean energy?

Two agreements from a recent climate finance conference in France make around $300 billion in funding available over the next decade for developing and climate-vulnerable countries. Such funding from financial institutions can help spur private investment in climate projects; developing nations may need over $2 trillion in annual clean energy investment to stay on track with international climate goals and meet energy demand. In the United States, the US Department of Energy has over $400 billion in loans available for clean technology projects. Jigar Shah, who leads the Loan Programs Office at the US Department of Energy, recently joined RFF President and CEO Richard G. Newell at an RFF Policy Leadership Series event to discuss how his office facilitates the deployment of these clean technologies. “Our North Star is making sure technologies the [the US Department of Energy] has spent 45 years inventing actually get across that bridge to bankability,” Shah says. Listen to the full conversation on the Policy Leadership Series Podcast here.

Who would benefit from more stringent emissions standards for passenger vehicles?

A faster decarbonization of the US transportation sector could provide widespread benefits for public health, according to a recent report from the American Lung Association. The reduction in pollution could prevent over 89,000 premature deaths by 2050 if the US power sector fully decarbonizes and all new passenger vehicle sales are zero-emission vehicles by 2035. The US Environmental Protection Agency has proposed new emissions standards for passenger vehicles that would cut emissions from the transportation sector, though not to the extent assumed in the American Lung Association report. In a new article on the Common Resources blog, RFF Senior Fellow Joshua Linn examines how the benefits and costs of the proposed standards would be distributed across consumers of new vehicles. “The proposed emissions standards would substantially increase overall social welfare and … lower-income households that buy new vehicles would disproportionately enjoy those benefits,” says Linn.

How could we assess the economic value of biodiversity, and what would be the benefits of protecting globally shared ecosystems?

Members of the United Nations have adopted a treaty that protects ocean wildlife and establishes rules for commercial activities in international waters, which fall outside national jurisdictions. The protections in the treaty will go into effect once 60 nations have ratified the agreement. While the treaty is focused on the health of ocean ecosystems, protecting the ocean also may yield significant benefits in economic terms. In a recent article in Resources magazine, Sir Partha Dasgupta, a professor emeritus at the University of Cambridge, discusses the economic value of ecosystems and the costs of failing to acknowledge that value in policy and economic models. “By acknowledging [the] interconnections [between humans and nature] explicitly, stakeholders can better assess and manage risk, policymakers can govern and distribute resources, societies can sustain their needs, and humans can cultivate the type of biodiversity and healthy ecosystems that are necessary for a healthy planet,” says Dasgupta.

Expert Perspectives

In Focus: Financing the Energy Transition in Developing Nations

Annual investments in clean energy projects in developing nations may need to increase around sevenfold, according to a report that was copublished by the International Energy Agency. In the latest installment of In Focus, RFF Vice President for Research and Policy Engagement Billy Pizer discusses how international financial institutions and developing nations themselves can facilitate private investment for clean energy projects.

Resources Roundup

Crafting Effective Cap-and-Invest Policies

In New York State, policymakers are in the process of developing the New York Cap-and-Invest program, which aims to reduce emissions statewide while investing in New York communities. Georgetown Climate Center, Columbia’s Sabin Center for Climate Change Law, and Resources for the Future are hosting a series of webinars to share important information on cap-and-invest design and help inform the development of the program. Session 1 on July 6 focused on California’s cap-and-invest program. “One lesson that is really pivotal to California’s success has been the leadership from green entrepreneurs,” said RFF Senior Fellow Dallas Burtraw during the session. Session 2 on July 13 will focus on lessons from Washington State’s cap-and-invest program. Register here to attend this event virtually.

Enduring Support for Coal in West Virginia

The state government in West Virginia has supported the coal industry even as this support contributed to increased electricity rates for West Virginians. Jamie Van Nostrand, former director of the Center for Energy and Sustainable Development at West Virginia University and current chair of the Massachusetts Department of Public Utilities, joined the latest episode of the Resources Radio podcast to discuss this support, how it has affected West Virginia ratepayers, and how recent policies could influence the state’s energy future. “You had utilities around the country that were embracing low-cost natural gas, … embracing renewables … We didn’t get any of that in West Virginia. Instead … we took on three coal plants,” Van Nostrand says.

Filling in the Information Gaps for Excess Emissions Events

Excess emissions occur when facilities pollute more than they are permitted to by law. These events, which can happen during facility startups, shutdowns, or malfunctions, can have a significant impact on environmental and public health. In a recent episode of the Resources Radio podcast, Nikos Zirogiannis, an assistant professor at Indiana University, discusses the frequency and impacts of excess emissions events and how additional data could help inform government responses. “People have the right to know if, when, and what types of pollutants they are being exposed to … Facilities should be 100 percent transparent with the public if and when things go wrong,” Zirogiannis says.

How Effective Will the Inflation Reduction Act Be at Achieving Decarbonization?

Experts expect the Inflation Reduction Act (IRA) to accelerate the decarbonization of the US economy. To what degree it will be able to do so, however, remains a subject of debate. In a new article in Science, RFF’s Dallas Burtraw, Maya Domeshek, Kevin Rennert, Nicholas Roy, and coauthors examine projections from nine independent models to gain a better understanding of the direct impacts of IRA on achieving US climate goals. “Overall, the analysis suggests that IRA may have its largest effects in the power sector, as its incentives amplify trends already underway and lower decarbonization costs,” they say.

Decarbonizing Alternative Energy Sources

Currently, hydrogen is primarily produced using natural gas, which generates greenhouse gas emissions and can offset the potential benefits of hydrogen as a zero-carbon fuel source. The 45V tax credit within the Inflation Reduction Act, which the US Department of the Treasury will decide how to implement, aims to address this problem by incentivizing low-emissions methods of producing hydrogen fuel, such as electrolysis powered by renewable energy. In a new report, RFF’s Aaron Bergman and Kevin Rennert explore potential scenarios for the implementation of this tax credit, along with the scenarios’ impacts on carbon emissions. “Balancing the goal of driving down the cost of [hydrogen that is produced with an electrolyzer] with the potential for increased emissions (before the grid is fully decarbonized) is a central tension facing Treasury in writing its 45V rules,” the authors say.

#ChartOfTheWeek

Data source: Climate Central. Chart design by Axios Visuals.

The number of days with weather conditions that are hospitable to mosquitoes—so-called “mosquito days”—is trending upward in Washington, DC, according to a report from Climate Central. Rising temperatures in the United States, as well as other changing climate conditions, may be contributing to the increase in mosquito days in many cities and regions throughout the country. The increase in mosquito days between 1979 and 2022 was highest in the Northeast and the Ohio Valley; the South and Southeast experienced the most mosquito days on average in a given year.

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