On the Issues: Inflation Reduction Act Anniversary, Demand for Hydrogen, and More

Matt Fleck, Ceilidh Kern, and Elizabeth Wason

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 much will the Inflation Reduction Act reduce greenhouse gas emissions?

Since the Inflation Reduction Act became law one year ago as of next week, researchers have sought to understand how the law will be implemented and how it will affect US emissions of greenhouse gases. Current modeling suggests that the law will help the United States achieve significant emissions reductions, though not enough to meet US goals under the Paris Agreement, say Resources for the Future (RFF) researchers Maya Domeshek and Nicholas Roy. Domeshek and Roy coauthored a recent journal article in Science on modeling the emissions outcomes of the law and joined the latest episode of the Resources Radio podcast to discuss the analysis and the authors’ findings. “What makes this study unique is the ability to look across so many studies and try to figure out what we can learn that is robust,” says Domeshek. “We see pretty dramatic decreases in emissions in the power sector across the models, something around 47–83 percent below 2005 levels by 2030.”

How much federal funding is needed to facilitate expanded clean hydrogen production?

The US Department of Energy has proposed a plan to spend up to $1 billion to boost demand for hydrogen fuel that is produced through processes with low emissions, which also is known as clean hydrogen. The agency already has allocated $7 billion for the creation of hydrogen hubs, which are regional networks of hydrogen producers and consumers, though officials have voiced concerns about low demand for clean hydrogen as the hubs ramp up production. But why exactly the agency wants to ramp up its own spending on these hubs remains unclear, say RFF researchers Aaron Bergman and Alan Krupnick. In a new article on the Common Resources blog, Bergman and Krupnick consider the timing of the agency’s funding announcement and the rationale behind the funding. “The agency should consider waiting until a clear need for the money arises later in the process—or provide a much more complete justification for why the money is needed now,” they say.

With wildfire season getting longer and wildfires becoming more intense, what new considerations are emerging for health and safety?

The carbon emissions that wildfires in Canada have released into the atmosphere this year have more than doubled the previous annual record, according to the Copernicus Atmosphere Monitoring Service, a component of the EU Space Programme. Observers are still tracking more than 1,000 wildfires in Canada, and experts expect emissions to continue to rise until later in August. Concerns about far-reaching wildfire smoke and poor air quality likely will persist, as well, says Matthew Wibbenmeyer, an RFF fellow. Wibbenmeyer says in a recent blog post, originally published as an op-ed in Barron’s, that episodes of dangerously low air quality will recur, even in cities that are distant from active wildfires. The health costs of low air quality will increase, too. “Decisionmakers will need to rise to the challenge in the coming decades to keep Americans safe and healthy, both near and far away from lands where fires burn,” he says.

Expert Perspectives

US Electric Vehicle Sales Break Record in Second Quarter of 2023

Sales of new electric vehicles (EVs) in the United States exceeded 295,000 between the beginning of April and the end of June, according to an industry analyst—a record for EV sales in a quarter, despite the implementation of more stringent requirements for a tax credit in the Inflation Reduction Act that subsidizes the cost of passenger EVs.

“These sales may be showing us that consumers want EVs, in general,” says Beia Spiller, a fellow at RFF and director of RFF’s Transportation Program. “But how the Inflation Reduction Act has been influencing EV demand is less clear. While the law can offer credits of up to $7,500 for EV purchases, only a few EVs are eligible for the full credit, due to restrictions around the sale price and origin of the materials in the vehicle, among other conditions. Some of these conditions—particularly those around the critical minerals for batteries—will only become more restrictive over time. I expect that a relatively small fraction of new EV buyers will be able to take advantage of the full tax credit in the coming years. Fortunately, the Inflation Reduction Act provides significant funds for investments in a broad network of EV chargers, and the proposed new vehicle efficiency standards from the federal government promote more EV sales, so demand and supply for EVs should continue to grow.”

Resources Roundup

Electrifying Fleets of Large Vehicles

Medium- and heavy-duty vehicles account for 26 percent of total emissions from the US transportation sector, despite comprising only 5 percent of vehicles on the road. In a recent episode of the Resources Radio podcast, RFF Fellow Nafisa Lohawala discusses federal efforts to electrify medium- and heavy-duty vehicles and the opportunities and challenges of electrifying these fleets. “This is … an opportune moment to electrify these large vehicles, because the electric technology is there,” Lohawala says.

Evaluating a Policy Option that Aims to Benefit Environmental Justice Communities

When companies violate environmental regulations, the US Environmental Protection Agency allows them to mitigate the cash penalty with projects that aim to protect the environment or improve public health. The agency also encourages companies to complete these projects in areas that historically experience environmental injustice. In a new article on the Common Resources blog, RFF University Fellow Lucija Muehlenbachs and coauthor Pamela Campa discuss the extent to which environmental justice communities benefit from these projects. “If the primary goal is to address environmental justice concerns, then the policy misses the mark, because the richest and whitest communities are the main beneficiaries of the projects,” they say.

Engaging Global Stakeholders in the Discussion about Solar Geoengineering

As the global community considers strategies to combat climate change, solar geoengineering has emerged as a potential tool to limit rising temperatures. In a recent episode of the Resources Radio podcast, Shuchi Talati, founder and executive director of the Alliance for Just Deliberation on Solar Geoengineering, discusses the science behind solar geoengineering and the importance of inclusive, democratic engagement in discussions about using the technology. “One of the things that is missing from solar geoengineering is the knowledge to be able to participate. Before you can actually build structures to get public input into anything, people have to understand what something is,” says Talati.

Translating Energy, Environmental, and Economic Issues for Everyone

Improving the accessibility of information about climate change has grown more important as the effects of climate change have become more frequent and severe. In a recent interview published by the Euro-Mediterranean Center on Climate Change, Resources Radio podcast producer Elizabeth Wason and podcast co-host Kristin Hayes discuss the importance of accessible science communication. “Technical terms aren’t part of the conversation—or, if they appear, are defined clearly alongside any minimal use of acronyms,” say Wason and Hayes. “The podcast is deliberately casual, and we might say that the primary aim is to draw people in, rather than push information out.”

The Future of Coal-Fired Power Plants in the United States

The US Environmental Protection Agency (EPA) has proposed new standards that limit greenhouse gas emissions from coal-fired power plants, depending on the scheduled retirement dates of the facilities, among other factors. In a new public comment addressed to EPA, RFF researchers Karen Palmer and Lucie Bioret examine the plans of US coal-fired power plants to retire or potentially adopt new technology to comply with the proposed standards. “Roughly 50 percent of total coal capacity online as of the end of 2022 plans to retire or repower using natural gas before 2032,” the authors say.

#ChartOfTheWeek

Data: US Department of Energy. Chart: Axios Visuals.

Freight that’s transported within the United States by truck mostly may travel relatively short distances, according to the US Department of Energy: in 2021, 44 percent of all tonnage traveled less than 100 miles, and 43 percent of tonnage traveled between 100 and 249 miles. The data could have implications for policymakers as regulations that aim to electrify large vehicles come into effect. Government investments in improving the electric grid could promote electrification of large vehicles by mitigating up-front and operating costs.

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