On the Issues: US Debt Limit, Climate Hits Home, 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:

How does the Inflation Reduction Act incentivize reductions in greenhouse gas emissions?

Negotiations over the federal debt limit are intensifying. If lawmakers cannot agree to raise the debt limit, which is the amount of money that the federal government legally can borrow, the US government could default on its debt as soon as next month—for the first time in history. One proposal for a new debt limit would repeal many of the provisions in the Inflation Reduction Act, the 2022 law that allocates about $370 billion for climate and environmental programs and is projected to accelerate US emissions reductions. The Inflation Reduction Act also is the cover story for the spring issue of Resources magazine. This issue of Resources highlights timely analysis from Resources for the Future (RFF) scholars, who unpack several of the law’s major provisions for clean energy projects, hydrogen fuel, and electric vehicles; describe state strategies for decarbonization in the wake of the Inflation Reduction Act; discuss the effect of the law on nuclear energy deployment; explore the economic value of biodiversity and satellite data; and more. Check out the online edition here.

What types of projects and policies are coastal cities using to adapt to the effects of climate change?

The city council in Norfolk, Virginia, has voted to approve a $2.6-billion infrastructure plan that aims to protect the port city from storms. Planned projects include floodwalls and levees. These projects are part of Norfolk’s larger strategy to improve the city’s resilience against the effects of climate change. Skip Stiles, executive director of the Norfolk-based nonprofit Wetlands Watch, joined the first episode of the Climate Hits Home series on the Resources Radio podcast to discuss how the city is using both artificial infrastructure and nature-based solutions, like wetlands conservation, to adapt to the changing climate. “We’ve made great progress,” says Stiles. “Can we keep up with the tide? That’s what we’re facing now.” Stay tuned for upcoming episodes in the Climate Hits Home series that will cover urban heat islands in New Mexico, wildfires in the American West, and flooding in Appalachia.

How can data on weather variability, and empirical data more broadly, help facilitate solutions for climate change and its negative effects?

The Pacific Northwest and western Canada are experiencing a record-breaking heat wave. Officials in Oregon and Washington State have advised over 12 million people to take caution against the heat, which has risen to between 15°F and 30°F above average for the region during this time of year. Data on heat waves and other extreme weather events will become increasingly important as the effects of climate change intensify, say RFF Fellows Hannah Druckenmiller and Matthew Wibbenmeyer. In a new blog post, they introduce RFF Data Commons, a new partnership between RFF and Google that provides information related to climate change through an accessible web tool. The first data sets focus on extreme weather events, such as heat waves. “RFF Data Commons offers a unique venue through which we can help other researchers, policymakers, and the general public engage with information that is critical to solving the climate challenge,” the authors say.

How and what can we learn from the outcomes of past environmental regulations?

The US Environmental Protection Agency has proposed a regulation that would limit how much carbon dioxide power plants can emit. If the rule is implemented, most power plants would need to sharply reduce their emissions. The legal basis for the regulation is a provision in the Clean Air Act, which was one of the first major environmental laws in the United States. The law also is the subject of a study in a recent RFF project on the effects of past environmental regulations. In a recent blog post, RFF scholars Arthur G. Fraas and Richard D. Morgenstern discuss how such studies on prior regulations, known as retrospective analyses, can help federal agencies understand the net benefits of regulations and use that information to design effective policies moving forward. “Retrospective analysis … can support innovation in regulatory design and help guide the reform of poorly performing regulations,” they say.

Expert Perspectives

US Environmental Protection Agency Leans on Emerging Technologies in New Rule Proposal

The new regulation that the US Environmental Protection Agency (EPA) has proposed would affect power plants that run on coal and natural gas. Beginning in 2030, most coal-fired power plants would be required to reduce their emissions levels by 90 percent. By 2035, so would the largest, most frequently operating natural gas–fired power plants.

“EPA leans heavily on incentives, technologies, and other programs under the Inflation Reduction Act and Infrastructure Investment and Jobs Act to make the case that these emissions reductions are economically feasible,” says Kevin Rennert, a fellow at RFF and director of RFF’s Federal Climate Policy Initiative. “The agency is arguing that carbon capture and storage, along with hydrogen fuel that power plants can use to blend with or replace natural gas, are proven and cost-effective technologies—or will be by the time the new regulation would come into effect. That EPA has based the proposed standards on these technologies, however, does not mean that the technologies would be the only—nor even primary—ways to comply with the regulation. The proposal offers states considerable flexibility in designing their plans to achieve the standards in a manner that is tailored to their own specific contexts.”

In Focus: The Challenges of Electrifying Trucks and Buses

Heavy-duty electric vehicles not only require large investments from fleet owners and automakers, but they also may pose challenges for a local grid infrastructure that’s unprepared for the boom in electricity demand that comes with charging fleets of heavy-duty electric vehicles. In the latest installment of In Focus, RFF Fellow and Transportation Program Director Beia Spiller discusses how coordination among stakeholders and complementary transportation policies can help mitigate the challenges of high costs and insufficient local electric grids.

Resources Roundup

Sharing Best Practices for Water Management

Water management policies in the drought-stricken Colorado River Basin remain under scrutiny despite California’s wet winter. But some western jurisdictions have long been planning proactively for the uncertain availability of water. Kathryn Sorensen, a professor at Arizona State University, joined the latest episode of the Resources Radio podcast to discuss how water managers in Phoenix, Arizona, have encouraged smart water use in the desert. “Pricing water to reflect its scarcity in the desert Southwest is an incredibly important management strategy,” says Sorensen.

Do Humans Have a Finite Amount of Worry?

A hypothesis that references a “finite pool of worry” proposes that human concern is a zero-sum game: if we worry more about one threat, we’ll worry less about another. In a new study, scholars at the RFF-CMCC European Institute on Economics and the Environment examine the evidence for this hypothesis using the example of COVID-19 and climate change. “We find that as attention to and worry about COVID-19 increases, attention to climate change decreases, but worry does not,” say the study’s authors.

Pennsylvania’s Potential Entry into a Regional Emissions-Reduction Program

In 2022, Pennsylvania joined the Regional Greenhouse Gas Initiative, a cooperative emissions-reduction program that comprises mostly northeastern states. But Pennsylvania’s participation in the program has been stalled by litigation and is pending. A new report coauthored by RFF scholars Dallas Burtraw and Maya Domeshek, alongside a colleague from the Kleinman Center for Energy Policy, analyzes the potential effects of Pennsylvania’s membership in the program, should the state’s membership go into effect. “Our modeling exercise indicates that joining [the Regional Greenhouse Gas Initiative] will lead to a decrease in coal and gas generation and an increase in renewable generation in Pennsylvania,” say the report’s authors.

#ChartOfTheWeek

Data source: International Energy Agency. Chart design by Axios Visuals.

Sales of light-duty electric vehicles have more than doubled since 2020. Markets in Europe and China account for much of the growth in sales—in 2022, more than half of the world’s light-duty electric vehicles in use were in China. In the United States, sales of light-duty electric vehicles grew 55 percent in 2022 compared to 2021, despite an 8 percent decrease in overall light-duty vehicle sales. The International Energy Agency estimates a 35 percent increase in global light-duty electric vehicle sales in 2023 compared to 2022. Vroom vroom—or rather, buzz buzz.

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