Sunday, January 31, 2016

How Do We Define Climate Pollution's Cost to Society?

Every year, the government recalculates how much money a metric ton of carbon costs us.

Revised Social Cost of CO2, 2010-2050 (Credit: IWG) Click to Enlarge.
“These models are guesses at best; there’s an enormous amount of uncertainty,” says David Weisbach, a University of Chicago economist.  Not only are the estimates uncertain, but they evolve over time.  In 2013, the government revised its estimates to reflect updates in climate science, and in 2015, made additional tweaks.  ...

Weisbach is an author of one of a handful of recent academic articles that argue that the government’s numbers are far too low because the models the government uses assume that the global economy will continue to grow over the next 200 to 300 years, even in the face of extreme climate change.  One of these articles, published in 2015 by the journal Nature Climate Change, found that social costs of carbon should be several times higher to reflect the impact severe climate change likely would have on economic growth.

Given these and other criticisms, the interagency working group asked advice from the National Academy of Sciences, Engineering and Medicine, which appointed a group of engineers, climate scientists, and economists to review the government’s estimates and consider ways to update the methodology.  Its first report, in January 2016, did not recommend any major short-term changes but suggested ways to better communicate uncertainties.  A more comprehensive and final report is expected in 2017.

While the government’s approach to assessing the social cost of carbon is imperfect, it represents a huge improvement from 2007 when Judge Fletcher called out the government for failing to assess the cost of climate change impacts.  “This is 100 percent better than zero,” Cullenward says.

The University of Chicago’s Greenstone argues that the government would do well to start using its social cost of carbon to set rates for royalties and leasing federal fossil fuels.  His calculations suggest such a policy would have little impact on oil and gas, but huge implications for coal because its market value is a fraction of the cost of the climate damages from extracting and burning it. 

Read original article at How Do We Define Climate Pollution's Cost to Society?

  Sunday, Jan 31

Are Current Policies Enough to Hit US Climate Goals?  Wonks Say:  No. - by David Roberts

Under President Obama, especially in his second term, there's been a flurry of action on climate and energy.  All sorts of new programs, rules, and regulations have rolled out, deals have been struck, and new commitments have been made on the international stage.

So it's a good time to pause for a moment, step back, and take stock.

How is the US doing on keeping its climate promises?

A new analysis from the Rhodium Group offers a nice high-level view.  Let's walk through it.

America's current climate goals
In 2009, in the run-up to the Copenhagen climate talks, Obama committed the US to reducing its greenhouse emissions 17 percent below 2005 levels by 2020.  (At the time, the White House also noted that he was "working closely with Congress to pass energy and climate legislation as soon as possible." Sigh.)

Then in 2014, as part of a bilateral climate agreement with China, Obama announced a new target:  The US will cut its greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025. Last year that target was submitted to the United Nations Framework Convention on Climate Change as America's official plan for emission reductions.

So those are the two targets on the books:  17 percent below 2005 by 2020, 26 to 28 percent below 2005 by 2025.
US emissions are already well below projections
What the Rhodium Group analysis sets out to do is make updated projections of US greenhouse gas emissions — projections that take into account the finalizing of the Clean Power Plan (CPP), the extension of the wind and solar tax credits, and other recent policy developments that aren't yet captured in the official forecasts from the Energy Information Administration (EIA).

U.S. emission, 1990-2015 (Credit: Rhodium Group) Click to Enlarge.But first, how's Obama doing so far?

Here's US emissions from 1990 to present:

Current US climate policies will not achieve current US climate goals
... The CPP and the tax extenders together begin pushing emissions on a downward trajectory, but not enough to hit either US target.

But no scenario gets to the 2025 target with current policies.  The authors conclude:
... current policies are not sufficient to meet US climate targets except under the most optimistic assumptions.  Even then only the 2020 target may be achievable.  In 2025 a considerable gap remains.

Policies currently in the pipeline brighten the picture somewhat:
 Several policies developed under Obama are still being finalized or only partially implemented.  The analysts have a go at including those in a projection as well.
Given everything Obama has done and is currently working on doing, if everything goes right, the US will barely hit its 2020 target.

But it will take more to hit the 2025 target pledged in Paris.

Policies that could get the US further, if and only if...
The authors suggest a few avenues for further action.
New policies that might have a real effect on US greenhouse gas emissions in 2025 are likely to come almost exclusively from the executive branch.

That will make it extremely difficult to hit the target Obama promised in Paris.  There are, in the end, limits to what the president can do.

And even that chance only exists if a Democrat is elected president in 2016, and probably 2020 as well.  All the current Republican candidates have pledged to roll back Obama's climate rules and ramp up support for fossil fuels; they will find eager partners in a Republican Congress.

Read more at Are Current Policies Enough to Hit US Climate Goals?  Wonks Say:  No.

Toon of the Week - You Don't Have to Be Right ... Just Create Doubt

Toon of the Week - You Don't Have to Be Right ... Just Create Doubt

Toon of the Week - You Don't Have to Be Right ... Just Create Doubt / 50 Years Since Tobaco Report

Read original article at 2016 SkS Weekly Digest #5 

Quote of the Week - “If you screw with the climate enough, you have huge extinctions.”

Quote of the Week - Scientists who take the long view on climate change see parallels between global warming today and mass extinctions in Earth’s past:  “Apart from the stupid space rock hitting the Earth, most mass extinctions were CO2-driven global warming things,” says Professor Andy Ridgwell of Bristol University in the UK.

It has been a consistent pattern throughout geological time:  “If you screw with the climate enough, you have huge extinctions,” says Ridgwell.

If the world ends in 2100, we’re probably OK' by Howard Lee, Climate Consensus - the 97%, The Guardian, Jan 27, 2016

Read original article at 2016 SkS Weekly Digest #5

Poster of the Week - "Bushfires Are Ravaging Tasmania's Ancient Forests"

Poster of the Week - "Bushfires Are Ravaging Tasmania's Ancient Forests" (Credit: Climate Council)

Poster of the Week - "Bushfires Are Ravaging Tasmania's Ancient Forests"

Read original article at 2016 SkS Weekly Digest #5

'If the World Ends in 2100, We’re Probably OK' - by Howard Lee

This file photo taken on December 12, 2015 shows French Ecology Minister Segolene Royal (L), French President Francois Hollande (2ndL), French Foreign Minister Laurent Fabius (C) and United Nations Secretary General Ban Ki-moon (2ndR) applauding after a statement at the COP21 Climate Conference in Le Bourget, north of Paris. Some scientists worry that the agreement focused on short-term climate change. (Photograph Credit: Miguel Medina/AFP/Getty Images) Click to Enlarge.
There’s a myopia in the climate discourse today.

“Everyone is focused on what happens by 2100.  But that’s only 2 generations from today.  It’s like:  If the world ends in 2100 we’re probably OK!” says Professor Richard Zeebe of the University of Hawai’i.  “But It’s very clear that over a longer timescale there will be much bigger changes.”

If the next century seems impossibly far off, bear in mind that if you have a young child now, we’re talking about the world her or his grandchildren will be trying to raise their kids in.

Scientists who take the long view on climate change see parallels between global warming today and mass extinctions in Earth’s past:  “Apart from the stupid space rock hitting the Earth, most mass extinctions were CO2-driven global warming things,” says Professor Andy Ridgwell of Bristol University in the UK.

It has been a consistent pattern throughout geological time:  “If you screw with the climate enough, you have huge extinctions,” says Ridgwell.

So much of what you read and hear about climate change is heavily based on instrument records that only go back 160 years or so.  But Richard Zeebe and Andy Ridgwell are among a few scientists who look millions of years into Earth’s past to learn how the Earth responded to big additions of CO2 into the atmosphere before.  I had the opportunity to chat with each of them about their work during the American Geophysical Union conference in San Francisco at the end of last year.

Beyond the ice ages
... So both Ridgwell and Zeebe have been studying the best equivalent to modern climate change they have found so far, a relatively rapid global warming event that occurred 56 million years ago, called the “Paleocene-Eocene Thermal Maximum,” mercifully shortened to “PETM.”  For Ridgwell, it’s a better analog for the future: 
This is why I like the PETM, at least it’s a warming event.  It had a peak global warming of about 5º or 6ºC, which is a little bit beyond the end-of-the-century worst case scenario.
The change already baked in
Ridgwell is skeptical about ambitions to limit warming to 1.5°C: 
We have 1.5°C already programmed in, so even if we bring emissions right, right down, immediately, now, we already have 1.5 degrees!  So how we’re keeping to a 1.5-degree threshold isn’t clear.
So a fun thing we’re doing now with our very fast warming is the ocean surface warms up and the deep ocean is still cold, which is partly why we have this programmed-in warming that we haven’t seen yet.  The deep ocean hasn’t yet noticed that the planet at the surface is rather warmer.  If we just sit here at current CO2 levels and let the system equilibrate, it’s 1.5°C anyway.  Which comes back to COP21 - what is this 1.5°C target?  We’ve emitted the CO2 to reach 1.5°C already, so I don’t know what they’re thinking of!

It seems as if everyone is assuming, without thinking about it, that there is massive carbon geoengineering going on.
Read more at 'If the World Ends in 2100, We’re Probably OK'

The Problem with Biofuels

The U.S. Navy is touting its “Great Green Fleet,” but why haven’t biofuels made a bigger splash despite a decade of hype and investment?

Biofuels (Credit: Photo by Sweeter Alternative | Flickr) Click to Enlarge.
Today biofuels production and consumption stand at a fraction of the levels foreseen under the Renewable Fuel Standard, a federal mandate signed by President George W. Bush that requires fuels made from corn, sugarcane, and other biological sources to be mixed into the nation’s gasoline supply.

That’s just the beginning of the issues with biofuels, though.  When President Bush’s Renewable Fuel Standard was just getting off the ground, we wrote about the steep cost of biofuels.  The mandates outlined in the legislation created an industry whose size wouldn’t make sense unless oil went north of $120 a barrel (it’s hovering around $30 a barrel today).

Worse, corn ethanol, the most common form of biofuel, is actually at least as carbon-intensive as gasoline from oil.

Robert Bryce, a fellow at the Manhattan Institute and a longtime critic of government-backed efforts to make biofuels a key part of a clean transportation future, calls the biofuels program a “scam” that has cost taxpayers millions of dollars and is unlikely to ever make a significant dent in the consumption of conventional oil.

He’s got a point—but politicians on both sides of the aisle are mostly keeping their mouths shut on the issue.  Of the presidential candidates currently on the 2016 campaign trail, only Republican Senator Ted Cruz has come out against biofuels.  This makes sense given that the first big nomination contest takes place next week in Iowa, the source of much of the ethanol grown in the U.S.

Despite the growing awareness of the shortcomings of biofuel as a clean energy source, the government’s support for biofuels, coming from the departments of energy and agriculture and the Pentagon, continues, with hundreds of millions in additional funding.  And last October, DuPont opened a big new plant for cellulosic biofuels (which don’t compete with food crops, but have their own problems).

Read more at The Problem with Biofuels

  Saturday, Jan 30

The relentless rise of carbon dioxide (Credit: Click to Enlarge.

Saturday, January 30, 2016

How Congress and the Supreme Court Blew Up the Natural Gas ‘Bridge’ to Renewables - by Joe Romm

Thanks to recent decisions by the GOP-controlled Congress and the Roberts Supreme Court, renewable energy (and energy efficiency) have been given a major boost.  A new analysis suggests that this boost, particularly the extension of the solar and wind energy tax credits in the end-of-year budget deal, is large enough to wipe out the natural gas renaissance that had been recently brought on by cheap shale gas.

For decades, natural gas advocates have been advancing their fossil fuel as a necessary bridge to a renewable energy future.  The argument has been that natural gas is a low-carbon fuel able to power our modern economy more cheaply and dependably than “intermittent” solar and wind. Indeed, the boom in low-cost fracked gas seemed to be proving the advocates right.

I myself was a (relatively) early booster of shale gas as a potential game changer for greenhouse gas mitigation seven years ago during the debate over the cost of the Waxman-Markey climate bill.

Yet in the past seven years, every one of those arguments has fallen apart — even as natural gas generation expanded (along with renewables), squeezing out coal power, as the Energy Information Administration chart right shows:

Note that U.S. generation has essentially been flat since 2007 and is forecast to remain flat.  Bloomberg New Energy Finance’s 2015 Sustainable Energy in America Fact Book points out “There has been an outright decoupling between electricity growth and economic growth.”

This decoupling is an unprecedented achievement in modern U.S. history, and one that deserves a post of his own.  But it’s worth noting now that the recent Supreme Court decision in favor of so-called “demand response” — rewarding people for adjusting their power usage — puts energy efficiency and demand reduction on a level playing field with electricity generation.  That means we are going to see a lot more efficiency and demand reduction in the future, since they are invariably the biggest and cheapest “new” sources of electricity by far.

So U.S. electricity demand growth is likely to continue to be minimal if not non-existent for the foreseeable future.  And that means all new generation, such as renewables and natural gas, will simply replace existing power plants, particularly coal.  That replacement is especially likely given the Clean Power Plan (CPP), which is a set of carbon pollution standards for power plants issued by the EPA in consultation with the public, industry, and states — standards the Supreme Court decided in 2007 the EPA is legally obligated to put in place once carbon pollution is found to be endangering public health, which it obviously is.

By law, states have to come up with implementation plans to meet the EPA standards. Fortunately, as former EPA chief Christine Todd Whitman told me last year, the CPP is “the most flexible thing” the EPA has ever done.  It gives more options to states and industry to meet the new standards than any previous regulation, enabling them to use a wide variety of strategies to advance a wide variety of low carbon technologies, including renewables, natural gas, and energy efficiency.

A new analysis from the Rhodium Group comes to this stunning conclusion about the impact of Congress’s recent decision to extend tax credits for wind and solar power:
Without the tax extenders, the least-cost CPP compliance pathway would be a shift from coal generation to Natural Gas Combined Cycle (NGCC) generation.  The tax extenders fundamentally change the game.  We expect wind and solar to cut off the surge of NGCC generation and become the technology of choice for the entire CPP compliance period.
The key point is that the tax extenders “change the compliance game by shifting the economics in renewables’ favor nearly a decade earlier than they would under the CPP alone.”  And so rather than natural gas being a bridge fuel to a renewable future, “The renewables industry now has a bridge to the CPP,” thanks to the budget deal.

Read more at How Congress and the Supreme Court Blew Up the Natural Gas ‘Bridge’ to Renewables

Drop in Oil Prices Complicates Effort to Combat Climate Change

Replacing fossil fuels with renewable energy to combat climate change will require trillions of dollars in investment.  Cheap prices for fossil fuels are making that transition a bit more complicated.

Oil Prices Take a Plunge (Credit: Click to Enlarge.

Let's hear why all the pledges in Paris last month at a gathering of many nations to curb carbon emissions will be hard to make good on.  Moving to an economy built on clean energy will be expensive.  And, as NPR's John Ydstie reports, cheap prices for fossil fuels are making that transition a bit more complicated.

JOHN YDSTIE, BYLINE: Yesterday at the United Nations in New York, more than 500 big investors, from huge pension funds to giant banks and insurers, gathered at a post-Paris conference.  They were urged to use some of their trillions of dollars in assets to fund investments in clean energy.  Mindy Lubber of the research and advocacy group Ceres, an organizer of the conference, welcomed them.


MINDY LUBBER:  It is an honor to have you here.  It is this audience that can make a difference in the future of history.

YDSTIE: But being remembered as the people who saved the world from climate change will be expensive.  It's estimated it will require investments totaling in the tens of trillions of dollars over the next 15 years, most of that from private investors.  Again, Mindy Lubber.


LUBBER: And I think what we're seeing investors say, and certainly what we're trying to articulate here at our investor summit at the U.N, is that the risks of being invested in coal companies and in high fossil fuel companies are risks that may no longer make sense.

YDSTIE: Indeed, the stocks of big coal companies have collapsed in the U.S. as government emissions regulations have made coal plants untenable.  Here's one of the big investors at yesterday's conference, Brian Moynihan, the CEO of Bank of America.

BRIAN MOYNIHAN: If you go back five or so years ago, our coal financing has dropped in half, and our alternative/new energy source financing has gone up six times.  We're not alone in this in our industry, but down by half and up by six times is a pretty good move.

YDSTIE: BofA has committed a $125 billion dollars to clean energy investments over the next several years.  Coal, which is cheap and plentiful, has been sidelined by government regulation in many developed countries, but another cheap, plentiful fossil fuel has emerged to replace it, natural gas.  It is surpassing coal as the main fuel for electrical generation in the U.S.  Dan Yergin, a leading energy expert at IHS says even with a dramatic decline in the cost of solar generation, gas is still very competitive.  But again, government policy has given renewables an edge.  Many states require utilities to produce a certain percentage of their electricity from clean energy.  And, Yergin points out, the federal government recently renewed tax credits for wind and solar.

DANIEL YERGIN: Because of the tax credits, the amount of wind and solar that's built will be more than twice what it would have been otherwise, so government policy is a very important part of this picture.

Read more at Drop in Oil Prices Complicates Effort to Combat Climate Change

From Fad to Fixture:  How Investors Are Waking Up to Climate Risk

Historically, investors haven't worried about how climate change or greenhouse gas-cutting laws might affect their ledgers.  But as a growing number of money managers, Wall Street traders, and regulators agonize over climate change costs, that stance has shifted from apathetic to alert.

"Environmental and social scandals are showing up in stock price crashes," said Verity Chegar, an analyst at BlackRock Inc., which manages $4.6 trillion.

Climate risks, the new financial hazards

Pollution and man-made disasters, like oil spills or toxic leaks, are often low-level corporate issues. For decades, banks and financiers have asked about environmental hazards but framed them in a financial context, Chegar explained.

Still, she said, environmental damage "becomes material to the company after the oil spill."

After the Deepwater Horizon rig exploded April 20, 2010, triggering the worst oil spill in U.S. history, BP PLC swiftly lost half its market value: In two months, the share price plunged from more than £600 to just above £300.

In October BlackRock said "sustainable investing is not a passing fad."  It deemed climate change an inevitable "regulatory risk" and is undergoing a global effort to incorporate environmental risk assessments into its investment strategy.

Read more at From Fad to Fixture:  How Investors Are Waking Up to Climate Risk

El Niño Is Here, So Why Is California Still in Drought?

Lake Oroville up more than 20 ft. in the last week! It is at 34% of capacity! (Credit: / CA-DWR) Click to Enlarge.
A parade of El Niño-fueled storms has marched over California in the last few weeks, bringing bouts of much needed rain and snow to the parched state.  But maps of drought conditions there have barely budged, with nearly two-thirds of the state still in the worst two categories of drought.

So what gives?

The short answer, experts say, is that the drought built up over several years (with help from hotter temperatures fueled in part by global warming) and it will take many more storms and almost assuredly more than a single winter — even one with a strong El Niño — to erase it.

The issue for California comes down to this:  there are short-term drought impacts and long-term ones.

With the former, the signs are encouraging:  Soil moisture is increasing and some areas are greening up thanks to repeated rains.  Temperatures have also been cold enough that snow is building up in the mountains.  The snowpack in the Sierra Nevada, a major water resource come spring and summer, is up to an average of 113 percent of normal for this time of year, according to California’s Department of Water Resources (DWR).  Compare that to the record low 6 percent of normal at the end of winter last year.

“The good news is we are seeing the benefits of El Niño, but they are trying to climb out of a 4-year drought,” Mark Svoboda, a climatologist with the National Drought Mitigation Center at the University of Nebraska-Lincoln, said in an email.

Long-term impacts like depleted groundwater, low reservoir levels and pitiful stream flows, “they’re not responding much at all yet,” Brian Fuchs, another NDMC climatologist, said.  “The reservoir levels have hardly moved.”

Read more at El Niño Is Here, So Why Is California Still in Drought?

The Chevy Bolt Won't Make a Dime for GM

Chevy Bolt (Photo Credit: GM) Click to Enlarge.
Toyota produces diverse vehicles for all economic and cultural seasons, creating space for the sort of incremental, hedged technological experimentation we see in the Prius, GM’s business model has been a paradoxical blend of conservatism and risk-taking.  It is not news that GM has long based its fortunes on big, gasoline-thirsty, profitable vehicles, essentially a single lineup that thrives in times of cheap fuel and in contexts where environmental regulation is not a factor.  What is not well understood is that when these conditions change, GM is typically wrenched from stasis and responds with ad hoc engineering virtuosity.  So it was with the EV-1, a technological marvel that was never introduced for sale and never intended to make money.

Alarmed by the sales success of the Prius in the mid-2000s, GM vice chair Bob Lutz hatched the Volt as a kind of technological leapfrog.  It was designed as the ultimate hybrid, a dual-mode plug-in equipped with a battery packing 15 kilowatt hours, more than 16 times as much as its counterpart in the baseline Prius.  That made possible a very long battery-only range (38 miles).

But although the engineering of the Volt was impressive, the car did not leapfrog the Prius in economic terms.  Arriving 15 years after the Toyota pioneered the hybrid market, only some 100,000 Volts have been sold to date versus the eight million hybrids of all types that Toyota alone has sold since 1997.

Reason:  The Volt provides much more battery than the user needs, adding cost and risk for consumers as well as the producer.  Much the same is likely to be the case with the Bolt.  Far from being a rational development of the Volt, as Davies claims, Chevy’s 200-mile EV is as much an impromptu response to existing BEVs, primarily Nissan’s Leaf and Tesla’s Model S, as the Volt was to the Prius. 

Indeed, the level of risk is far higher for the Bolt than it was for the Volt because no pure electric vehicle has yielded a profit to date.  The Leaf really is what Davies claims the Bolt will be—the first mass-marked BEV.  Some 200,000 have been sold, and yet it is still a loss leader.  The increasing popularity of the Leaf lease option shows that Nissan (with the help of US state and federal subsidies) is willing to shoulder the risks of large EV battery ownership for the time being as it searches for a way to cut costs, including a possible shift to cheaper battery cells made by LG Chem.

Read more at The Chevy Bolt Won't Make a Dime for GM

  Friday, Jan 29

The relentless rise of carbon dioxide (Credit: Click to Enlarge.

Friday, January 29, 2016

New Report:  $12.1 Trillion Must Be Invested in New Renewable Power Generation over Next 25 Years to Limit Climate Change

BNEF forecast of total investment in lower-carbon power generation (US$ billion, real). (Credit: From the report Mapping the Gap: The Road From Paris, courtesy of BNEF)  Click to Enlarge.
To reach the level of investment in new renewable power generation needed to avert dangerous climate change, $12.1 trillion of investment will be needed over the next 25 years, which is $5.2 trillion above business-as-usual projections, a new report by Ceres and Bloomberg New Energy Finance concludes.

“Clean energy investment is poised for rapid growth,” wrote the report authors, citing the cost competitiveness of renewables such as solar and wind and escalating investor interest in financing climate solutions.  “While the scale of this new investment opportunity is massive, it is dwarfed by the capacity of global financial markets to unleash the needed investment.”

The report, Mapping the Gap: Road from Paris, was announced at the UN Investor Summit on Climate Risk, a gathering of 500 global investors this week organized by Ceres, the United Nations Foundation and the United Nations Office of Partnerships held in the wake of the historic climate agreement last month in Paris.

Among the report’s key highlights:
  • Achieving the Paris climate agreement’s goal to limit global temperature rise to below 2 degrees Celsius will require $12.1 trillion investment in new renewable power globally over the next 25 years.  This includes an additional $5.2 trillion of investment in wind, solar, geothermal and other zero-emission power sources, or an extra $208 billion a year, above and beyond the $6.9 trillion under business-as-usual projections.
  • A majority of this $12.1 trillion in new renewable power generation is expected to go to emerging markets in developing countries.
  • The investment surge will require a greatly expanded use of investment vehicles supporting clean energy, including bonds, asset-backed securities, and others that commercial financiers, institutional investors and other capital market players can take advantage of.
  • To put the renewable energy financing challenge in perspective, the average new annual global investment opportunity for new renewable energy is about the same amount as US customers borrow annually for car loans.
"The clean energy industry could make a very significant contribution to achieving the lofty ambitions expressed by the Paris Agreement,” BNEF Chairman Michael Liebreich said, citing the seven-fold growth in renewable energy installations in the past decade alone.  “To do so, however, investment volume is going to need to more than double, and do so in the next three to five years.  That sort of increase will not be delivered by business as usual; closing the gap is both a challenge and an opportunity for investors.  That is what this report is about.”

The report highlights the critical role of supportive government policies that will enable more renewables investments, including the Paris climate accord’s “ratchet” mechanism, which will help ensure that every country’s commitments to reduce carbon pollution become more ambitious over time.

Read more at New Report:  $12.1 Trillion Must Be Invested in New Renewable Power Generation over Next 25 Years to Limit Climate Change

California Votes to Retain System that Pays Solar Users Retail Rate for Excess Power

California in a sea of solar panels (Credit: Click to Enlarge.
Regulators in California, home to more residential solar customers than any other state, agreed on Thursday to retain a system that compensates users of rooftop solar panels for their excess electricity.

The decision was closely watched by energy officials and executives across the country, who are grappling with huge shifts in the power industry stemming from the spread of renewable energy.

“States pay close attention to leading markets, and they pay close attention to how changes to policy impacts markets,” jobs, consumer satisfaction and investment, said Sara Baldwin Auck, regulatory director at the Interstate Renewable Energy Council, a nonprofit policy group that supports clean energy.

Ms. Auck added, “This decision creates certainty for consumers, it creates certainty for clean energy providers, it creates certainty for investors and it upholds California’s strong tradition of clean energy leadership.”

At least 20 states are re-examining their policies, she said.  At issue in all of them is how to value electricity when it flows from customers to utilities, rather than the other way around.

Under so-called net metering, customers receive credits on their bills for the unused energy their panels produce.  Most states have such policies, but the amounts vary, with some offering credits near wholesale energy prices and others, like California, offering the retail rate.

Solar advocates and installers say customers should receive the retail rate because the power they generate helps the electrical infrastructure, by lowering strain on the grid or helping reduce the need to buy power at expensive prices in times of high demand.

But some ratepayer advocates and the utilities, which lose out on electricity sales and some of the infrastructure costs that are bundled into retail rates, say that solar customers put an undue burden on nonsolar customers, who must make up that shortfall.

In California regulators sided mainly with the solar industry and its proponents and generally rejected proposals to reduce the net-metering credit and add a slate of new charges, though it added some new rates and fees.

The net-metering program, narrowly approved by a vote of 3-2 by the California Public Utilities Commission, will require that new solar customers pay a one-time interconnection fee, estimated between $75 and $150, and begin paying fees of a few cents a kilowatt-hour that most other customers already pay.  Those charges fund low-income and energy efficiency programs.

Solar customers will also be compensated at different rates depending on when they send their excess power to the grid, a change that will alter the economics of the system but not undo its appeal, experts said.
Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association, said the decision was an important statement that California would continue to develop microgrids and decentralize energy production.

Read more at California Votes to Retain System that Pays Solar Users Retail Rate for Excess Power

California:  Insurance Debate Flares as Climate Change Boosts Wildfire Risk

Damage from two California fires last year topped $1 billion in insured losses, according to state estimates. The Valley Fire, shown here, was the third most destructive wildfire in California history. (Photo Credit: Flickr) Click to Enlarge.
Two deadly wildfires that ravaged Northern California last fall caused an estimated $1 billion in damages, state insurance regulators said this week.

The announcement comes days after California Insurance Commissioner Dave Jones signed an order making it easier for Californians to qualify for the state's "plan of last resort."

The California Fair Access to Insurance Requirements Plan, known as the FAIR Plan, provides basic property coverage for consumers who are unable to find coverage in the private insurance market, which often includes homeowners living in high-risk fire areas.

"The changes to the FAIR Plan included in this order will improve consumer access and the coverages available under the FAIR Plan," Jones said in a statement.

But some analysts fear that opening up the state-sanctioned insurance program undercuts the private market's ability to address mounting climate threats that are fueling damaging wildfires. Moreover, they argue, it does nothing to discourage development in fire-prone areas.

Wildfire insurance is not a legal requirement for Californian homeowners, although some banks may require it in order to get a mortgage.  Homeowners who do wish to protect their property must first try to get coverage from traditional insurers.  In recent years, some underwriters have scaled back where they will insure homes.  In 2007, for example, Allstate Corp. stopped issuing new policies in California.

For the nearly 2 million households in California considered at high risk of fire, the next stop for trying to procure insurance is from surplus line insurers, who write specialty policies at premium prices.  Between 2010 and 2014, the Surplus Line Association of California reports the number of policies filed jumped 30 percent.

Increased wildfire risk isn't the only driver, but it's playing a role, experts said.

Writing plans 'no one else will'
The last stop for coverage is the FAIR Plan.  The program was created by the state Legislature in 1968 but is privately operated and not subsidized by taxpayers.

Considered a bare-bones plan, the new order steps up the level of coverage offered by the FAIR Plan to include optional coverage for the replacement of the contents of a building, as well as coverage for debris removal.  The order also removes the requirement that consumers prove they were rejected three times for standard insurance before applying for coverage.

"That's a huge deal," said Ian Adams, senior fellow and Western region director of the conservative R Street Institute.  "By making the coverage in the FAIR Plan better and by making it the case that you don't have to be denied by others, it's effectively making it very, very difficult for private insurance companies to compete."
Climate-driven insurance risks
But some see changes to the FAIR Plan as a bandage trying to fix a bullet hole of a problem.

As risk increases, the traditional insurance market either increases its prices or pulls out, leaving consumers to pay more or join the FAIR Plan.

"We're seeing people having to increasingly rely on it because private insurance market is judging the risk to be too high.  That's not a good sign -- it's a wake-up call," said Rachel Cleetus, lead economist and climate policy manager with the climate and energy program at the Union of Concerned Scientists.

"This is not a problem that is going to go away because the underlying risk will get worse in a hotter, drier climate," she said.

Read more at California:  Insurance Debate Flares as Climate Change Boosts Wildfire Risk

Europe Probes Wood Energy Market, Climate Impacts

Drax Power Station in northern England is burning wood pellets in three of its six boilers. (Credit: Rajan Zaveri) Click to Enlarge.
U.K. efforts to meet climate targets by subsidizing wood burning at power plants instead of relying on lower-carbon energy sources are being probed by European officials for their impacts on American manufacturers and on the environment.

The U.K. is planning to use billions of dollars in climate fees imposed on electricity customers to help two large coal power plants switch to wood fuel, millions of tons of which is already being produced every year using trees from southern U.S. states.  It’s also supporting construction of a third power plant that will use similar fuel.

The expanding use of large-scale wood energy by Britain and other European Union countries is releasing more climate-changing carbon dioxide than burning coal.  Because wood is renewable, a loophole allows energy from it to count as clean under energy laws designed to help Europe satisfy its international climate commitments.

Concerns about the climate and environmental impacts of the U.K.’s support for large-scale wood energy will be looked into as part of the new investigation by European officials, but it will focus primarily on the business and economic impacts of the subsidies.

Companies that produce paper, packaging and some types of wood compete for raw materials with wood pellet mills, and they complained to European regulators about the effects of the U.K. subsidies, triggering the investigation.

While the American Forest and Paper Association “doesn’t oppose the export of wood pellets to Europe,” spokeswoman Jessica McFaul said in an email, “we do oppose subsidies that distort the wood fiber market in the U.S. South.”

At the center of the European Union’s investigation is the Drax Power Station and the U.K.’s plans to provide £1.3 billion ($1.9 billion) to help meet fuel costs and finance the conversion of one of the six boilers to burn wood pellets.  Two of the power plant’s other boilers are already running entirely on wood pellets, also financed by the U.K. government.

The three units are collectively projected to burn wood pellets made from about 15 million tons of trees every year, with more than 60 percent coming from the U.S. South.  That’s expected to produce more than 3 percent of the U.K.’s total electricity needs.

The investigation is being undertaken by the European Commission, which is similar to administrative branch of the U.S. government.  In an 18-page memo to the U.K. released this week, the commission said it “has doubts” about whether the cumulative demand for wood pellets by the U.K. conversion projects could be satisfied “without undue market and trade distortions.”

The final findings from its investigation could shape the future of a fast-growing industry that’s funded by European utility customers on the basis of an unscientifically rosy view of wood energy’s potential impacts.

Read more at Europe Probes Wood Energy Market, Climate Impacts

New Mexico's Biggest Power Plant Sticks with Coal.  Partly.  For Now.

New Mexico regulators have agreed to a partial shutdown of the San Juan Generating Station. (Credit: Wild Earth Guardians via Flickr) Click to Enlarge.
When New Mexico utility regulators decided to partially close the state's largest coal-fired power plant in December, they punted the controversial discussion of how long the state should rely on coal.

The San Juan Generating Station provides about a third of the state's power.  During more than two years of caustic debate, the plant became a battleground over the state's long-term energy future.  Coal formed the center of the controversy.

"This is probably the landmark case for New Mexico," Commissioner Karen Montoya of the New Mexico Public Regulatory Commission told InsideClimate News last spring.  "It could determine generation in New Mexico for years to come."  Montoya was part of the majority of commissioners who voted 4-1 for the deal on Dec. 16.

But even with a deal in hand, that future remains far from resolved—and New Mexicans remain divided over how long the state should rely on coal.  After an extraordinarily long review, state regulators essentially punted the major question: whether to shut down the plant for good and bring far more renewables online.  The issue will not be taken up again until 2018.  When New Mexico utility regulators decided to partially close the state's largest coal-fired power plant in December, they punted the controversial discussion of how long the state should rely on coal.

Read  more at New Mexico's Biggest Power Plant Sticks with Coal.  Partly.  For Now.

Thursday, January 28, 2016

  Thursday, Jan 28

The relentless rise of carbon dioxide (Credit: Click to Enlarge.

Canada Just Announced a Major Pipeline Reform

Canadian Prime Minister Justin Trudeau at Davos (Credit: AP Photo/Michel Euler) Click to Enlarge.
Oil and gas pipelines now have a new hurdle to clear before they’re approved in Canada.

Pipelines and natural gas export terminals proposed in the country will now be subject to a climate test, which will seek to determine how the project will impact greenhouse gas emissions, Canadian officials announced Wednesday. That test will take into account the “upstream” impacts of a project — meaning the emissions from the extraction of the oil or gas that the pipeline would carry or the gas the terminal would store — as well as the emissions created from building and maintaining the project.

“The federal role is to put into place a process by which TransCanada and any other companies could demonstrate that their projects are in the public interest and could have public support,” Trudeau said Tuesday, ahead of the government’s official announcement.  “What we are going to roll out very soon, as we promised in our election campaign, is to establish a clear process which will consider all the greenhouse gas emissions tied to a project, which will build on the work already done.”

The announcement, which covers projects already proposed in Canada, is good news for environmentalists and others who are concerned about increased fossil fuel production

“We were very, very excited to see this announcement,” said Lena Moffitt director of the Sierra Club’s Beyond Dirty Fuels campaign.  “It’s exactly the kind of analysis that should be conducted in reviewing any major energy project, and it’s exactly the kind of thing we’d like to see the Obama administration institute.”

In the United States, the Council of Environmental Quality (CEQ) has guidance on when agencies should consider climate change impacts in environmental reviews of energy projects.  For major projects like Keystone XL, this guidance was followed:  though its draft Environmental Impact Statements were criticized as being too conservative, the State Department did look into the climate impacts of Keystone — and ultimately decided it wasn’t in the country’s best interest.

It’s exactly the kind of analysis that should be conducted in reviewing any major energy project

But not all pipeline and export terminal projects in the United States are treated that way, Moffitt said.  CEQ’s guidance, she said, “has been very inconsistently applied.”  In many cases agencies haven’t included upstream emissions in their analysis of a project’s climate impacts.

“We don’t have instances where FERC has ever adequately reviewed upstream impacts of gas pipeline,” she said.

If Obama — or the country’s next president — implemented a climate test for these projects, those problems would be solved, Moffitt said.  At least one candidate has expressed openness to such an idea:  in an October campaign event in New Hampshire, Democratic candidate Hillary Clinton said that FERC should be working in sync with the country’s climate goals.

“If we’re going to have a national commitment to do something about climate change, FERC needs to be part of that national commitment,” she said.

Read more at Canada Just Announced a Major Pipeline Reform

Climate Scientists' Open Letter to the Wall Street Journal on Its Snow Job

The Wall Street Journal cover - Click to Enlarge.
An opinion piece by Patrick Michaels in the Wall Street Journal (“The Climate Snow Job,” Jan. 24, 2016) is riddled with inaccuracies, according to an evaluation by ten scientists with relevant expertise.

The article makes false or misleading statements on several aspects of climate science, including the global temperature record, the methodology for measuring global temperature, the effect of El Niño on global temperature, and the economic impact of climate change.  The mention of so many distinct aspects of climate science is intended to allow the author to pass himself off as an authority on climate science, while at the same time bamboozling readers into accepting three startlingly spurious claims.

Claim 1: “It is therefore probably prudent to cut by 50% the modelled temperature forecasts for the rest of this /century.”
This is the opinion of the author with no basis in science.  Climate models have successfully projected changes in climate observed in recent years.  These models are not perfect representations of our climate system, but they are our best tool for forecasting future climate change.

Claim 2: “The notion that world-wide weather is becoming more extreme is just that: a notion, or a testable hypothesis.”
The scientific consensus is that some extreme weather events are becoming more severe and occurring with greater frequency in relation with climate change and more importantly these are expected to increasingly affect societies in the future.  The author attempts to cast doubt on the science by claiming that the economic cost of extreme weather has remained stable over the past quarter-century.  The author misleads the reader into concluding that because the economic cost of extreme weather has not increased, then extreme weather cannot have increased.  But this fallacious reasoning is only the tip of the iceberg.  Dr Laurens Bouwer, a senior risk analysis advisor at Deltares, told Climate Feedback that the claim that losses caused by severe weather have remained stable over the past 25 years is “not accurate”.  It also belies the extent to which insurance agencies recognize the risks that climate change poses.  The article cites data from Munich Re, whose head of Geo Risks Research and its Corporate Climate Centre, Professor Peter Höppe, has publicly stated that “climate change is one of the greatest risks facing humankind this century.  Through a part of its core business, the insurance industry is directly affected and therefore assumes a leading role in devising solutions for climate protection and adaptation to the inevitable changes.”

Claim 3: “Without El Niño, temperatures in 2015 would have been typical of the post-1998 regime.”
This is false.  Scientists estimate that the current El Niño event contributed only a few tenths of a degree to the record global temperature observed in 2015.  The year would have gone down as the hottest on record even without the El Niño event, as explained in this article by The Carbon Brief.

Patrick J. Michaels would have his readers believe that the observed increase in global temperature, underlined by the news of the hottest year on record, is “business as usual”.  His readers should instead draw the conclusion that no matter how conclusive the evidence, climate contrarians like Michaels intend to go about their “business as usual”, casting doubt on the science.

The Wall Street Journal promises potential subscribers to help them “make better-informed decisions” by providing them with “expert commentary and insight”.  This op-ed piece is objectively at odds with that ambition.

Many more claims made by Patrick Michaels have been debunked by scientists, read their detailed analysis.

Read more at Climate Scientists' Open Letter to the Wall Street Journal on Its Snow Job

California Solar Braces for Uncertain Future

California has more rooftop solar than any state in the country. Advocates want to keep it that way. (Credit: AP Photo/Matt York) Click to Enlarge.
Solar advocates in California — including from church groups, social justice organizations, farms, schools, and city councils, as well as the usual industry figures — are on the edge of their seats, awaiting a decision from the utility regulator that will shape how rooftop solar is billed in the future.

Industry insiders say they are most worried that utilities are lobbying behind the scenes for fees and charges that will effectively destroy net metering, a billing system that pays solar customers back for excess electricity that goes back on the grid.

“Utilities are taking a multi-pronged approach to undermine net metering in any way they can,” said Susan Glick, senior manager for public policy for Sunrun, a California-based solar company.

But as the number of people with solar approaches the current cap on net metering, the California Public Utilities Commission has to consider what the program will look like going forward.  The PUC will vote Thursday on a proposed decision — but they have the option to adjust the proposal or even replace it entirely.
An average system owner could see fees go from between $8.80 and $10.07 to between $18.30 and $21.85 — not including the actual cost of electricity

The proposed decision for net metered rates is an acceptable compromise, Glick said.  As currently written, new net metered customers will pay a one-time interconnection fee, a “non-bypassable charge” that goes to support low-income and other common good programs, and time-of-use rates, which scale the cost of electricity to the amount of demand throughout the day. (California is in the process of transitioning all customers to time-of-use rates, in an effort to incentivize conservation during peak demand times.  The PUC doesn’t want people to be charging their electric cars or running their driers at noon, while every office building is running air conditioners at full blast.)

Generally speaking, in addition to paying for the actual electricity, customers pay additional fees per kilowatt hour.  California residents pay a negligible amount towards a bond in preparation for an energy crisis.  They also pay for nuclear decommissioning and a Public Purpose Program charge.  The new rate structure will ensure that solar customers pay more towards the Public Purpose Program and other shared costs than they do now by setting that as a non-bypassable charge.

But the biggest concern for Thursday’s decision is that the PUC will tack on more fees — ones that aren’t in the proposal so far.  Her company estimates that including transmission and other charges could double the cost to solar customers.  An average system owner could see fees go from between $8.80 and $10.07 to between $18.30 and $21.85 — not including the actual cost of electricity.  Glick says the PUC needs to clarify that only funding for the Public Purpose Program, nuclear decomissioning, competition transition, and a California bond would be included.

Read more at California Solar Braces for Uncertain Future