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Archive for the ‘Government Policy’ Category

COPping a feel

Posted by Danny Morris on December 8, 2009

Sometimes, even suckers get lucky. As a result, I’m currently stationed in Copenhagen for the next two weeks. I will be regularly blogging events as they transpire for RFF’s climate blog Weathervane, which I will also post here. In addition, I will take full advantage of the lack of stylistic restrictions Common Tragedies provides to give some insight into some of the less professional aspect of international climate meetings. As you can tell by the title, I’m already expanding my horizons (as they relate to obvious and puerile humor). Stay tuned for more throughout the week.

COPENHAGEN — The first few days of the negotiations here in Copenhagen probably will not result in any big statements or major developments. It’s mostly a time for countries to remind everyone where they stand and try to see who may be willing to give a little bit. As you might have guessed, things stared off with countries saying exactly what you would expect them to. The Least Developed Countries stressed the need for financing mechanisms for mitigation and adaptation efforts, capacity building for those efforts, and immediate financing for current impacts. The African countries made similar statements, reminding the world that it is experiencing climate change impacts already and does not have the capacity to respond effectively. The Alliance of Small Island States (AOSIS) advocated strong action now (like right now), because it quite obviously has the most to lose from inaction. The Umbrella Group, which included the United States, Australia, Japan, and other major developed economies hinted that monitoring, reporting, and verification (MRV) is going to be a important issue for moving forward.

There have been some interesting developments in the past 24 hours. Saudi Arabia, which feels that its economy will suffer major losses due to climate change, proposed an independent, international investigation into “Climategate.” When asked about the investigation proposal, IPCC Chairman Rajendra Pachuari said (with just a hint of cheekiness), “I would be worried if they didn’t ask for an investigation,” later adding “Oil and politics mix very well, I’m not sure that politics and science mix so well.”

In another development that could have broader implications for the next two weeks, Bangladesh has asked for 15 percent of any agreed-to climate fund. Bangladesh is one of the most obvious poster children to the nasty effects of climate change, and feels like it deserves justice in the form of major international funding. It’s unclear how this pronouncement will affect the dynamics among developing countries, but it will no doubt play a prominent role in the financing discussions moving forward.

Posted in Climate Change, Government Policy, International | 1 Comment »

Innovative public policy from the Mountain West: Example 2

Posted by Danny Morris on August 6, 2009

As an urban cyclist in the District of Columbia, my goals when I’m on my bike are quite simple: stay away from things that can kill you (namely cars) and maintain momentum as much as possible. They are both great ideas in theory, but not so easy to follow in practice, especially when navigating the plethora of stop lights and signs that populate our fair city. That’s why I’m a huge proponent of the Idaho Stop Law. The law, named after the clever state that instituted it in 1982, says that cyclists may treat stop signs as yield signs (they must stop for those w/ the right of way, but can proceed w/o stopping if the coast is clear) and may treat stop lights as stop signs (they must stop, but can proceed when the coast is clear, even if the light is still red). If that doesn’t make total sense, this handy-dandy video made in support of similar legislation in Oregon (which subsequently failed) will help illuminate the situation:

Like I said, i think it’s absolutely brilliant, and it’s what a lot of city cyclists do anyway. But wait, you might be asking, wouldn’t such a law result in more accidents because it would put cyclists in dangerous situations where they could be hit by oncoming traffic? Apparently not. According to the Athlete’s Lawyer (via Greater Greater Washington) reports that the year after the law’s inception, bicycle injuries dropped 14.5%. Isn’t it exciting when public policies make our lives better?

There are a lot of reasons the law makes sense (treats bikes different from cars, allows bikes to maintain momentum and reach top speeds easier, creates separation between bikes and cars going the same direction, etc), but the best reason is because it lets cyclists determine their actions based on their own assessments of their safety. Cyclists are certainly more aware of what they need to do to be safe than drivers and pedestrians, and they are in a position to determine how much time they have to cross an interaction, react to oncoming cars, etc. I don’t know why the law hasn’t been adopted in biking hubs all over the country. Sigh, if only everywhere else were as progressive as Idaho…

Posted in Cycling, Government Policy | 3 Comments »

Innovative public policy from the Mountain West: Example 1

Posted by Danny Morris on August 6, 2009

It’s rare that the state of Utah comes up with an innovative public policy, let alone gets recognized for it. Come to think of it, it’s rare that Utah gets any shoutout not related to the dominant culture or the occasional piece on the peculiar culinary delights found in the state.That’s why last week was a particularly exciting week for the Beehive State, as both Brad Plumer and Matt Yglesias called out Utah for its clever policies. Both authors highlight a Scientific American article looking at the state’s new 4 10-hr day work week (work M-Th, take Friday off) and the effects it’s had since its inception last year:

For those workplaces, there’s no longer a need to turn on the lights, elevators or computers on Fridays—nor do janitors need to clean vacant buildings. Electric bills have dropped even further during the summer, thanks to less air-conditioning: Friday’s midday hours have been replaced by cooler mornings and evenings on Monday through Thursday. As of May, the state had saved $1.8 million.

Perhaps as important, workers seem all too ready to replace “TGIF” with “TGIT”. “People just love it,” says Lori Wadsworth, a professor of public management at Brigham Young University in Provo. She helped survey those on the new Working 4 Utah schedule this May and found 82 percent would prefer to stick with it.

The environment seems to like it, too. “If employees are on the road 20 percent less, and office buildings are only powered four days a week,” Langmaid says, “the energy savings and congestion savings would be enormous.” Plus, the hour shift for the Monday through Thursday workers means fewer commuters during the traditional rush hours, speeding travel for all. It also means less time spent idling in traffic and therefore less spewing of greenhouse gases and other pollutants. The 9-to-5 crowd also gets the benefit of extended hours at the DMV and other state agencies that adopt the four-day schedule.

An interim report released by the Utah state government in February projected a drop of at least 6,000 metric tons of carbon dioxide emissions annually from Friday building shutdowns. If reductions in greenhouse gases from commuting are included, the state would check the generation of at least 12,000 metric tons of CO2—the equivalent of taking about 2,300 cars off the road for one year.

Aside from the environmental benefits, the state workers seem to like the new arrangement:

“Utah employees actually show decreased health complaints, less stress and fewer sick days,” Wadsworth says, noting previous research finding that fatigue is typically triggered by workdays over 12 hours. Early results from another multicity survey indicate that just 20 percent of respondents said they felt they ate more fast food and only 30 percent said they worked out less. In fact, 30 percent said they exercised more. Anecdotal evidence from Utah also points to an unexpected benefit: increased volunteerism.

Hopefully, Utah’s experience will spur more discussions about non-traditional 9 to 5 work schedules. People’s ability to connect to their workplace and tele-conference regularly are making the traditional work week less and less relevant. I’m a big advocate of flexible schedules and think that more organizations would be wise to consider allowing their employees to set their own work schedules and patterns. In the meantime, though, cheers to Utah for reducing its environmental impact. This will surely make up for its new governor not believing in global warming.

P.S. Full disclosure: I am a native-born Utahn. The answer to your next question is no.

Posted in Efficiency, Government Policy | 1 Comment »

From the inbox

Posted by Rich Sweeney on March 6, 2009

Don’t really have time to read this today, but it looks interesting so I figured I’d pass it along:

Climatico has released a report assessing climate change policy for the period November 2008 – March 2009.  A key theme we identified is the poor and worsening prospects for adaptation over the coming years.

I’ve attached Climatico’s press release, and you can download Climatico’s report at http://www.climaticoanalysis.org/press-releases/Climatico_National_Assessment_Report_March2009.pdf

The report includes an overview of climate policy in twelve of the biggest carbon emitters.


Posted in Climate Change, Government Policy | Leave a Comment »

Dey took er jerbs!, H-1B edition

Posted by Evan Herrnstadt on February 18, 2009

Michael Clemens at the Views from the Center blog points out that the Grassley-Sanders (!) amendment to the stimulus bill places new restrictions on hiring practices of firms receiving TARP funds; specifically, it will be more difficult for these firms to hire highly-skilled foreigners on H-1B visas.  Seems to me that restricting extremely talented MBA’s and the like from staying in the U.S. is not necessarily the best medicine for firms that are struggling to stay afloat under an anchor of poisonous assets.

In addition, Clemens relates the following:

That’s just one example of a trend we can expect to grow: Last Friday at Columbia University I publicly debated one of rising number of Americans who feel that the crisis is a reason to welcome drastically fewer people to this country, even highly skilled workers. “Buy American”, via immigration policy, is gaining credibility as a solution to the crisis.

His main economic counterpoints:

  1. Immigration and unemployment are, if anything, negatively correlated.  In fact, highly-skilled workers (such as those here on H-1B’s) seem to create jobs by improving existing companies and starting their own ventures.
  2. Developing nations benefit greatly when their citizens come the U.S. to be trained and work for a while.  They send home remittances and mantain/form networks with their home country, thus accelerating trade, investment, and technological change abroad.  Yes, we are having extremely tough times here, but Clemens urges us to consider the dark outlook for an already-impoverished nation in these global economic circumstances.

Clemens also points us to Bill Kerr of Harvard Business School.  In a recent paper, he found that when H-1B visa numbers went down, so did patent applications filed by immigrants in the U.S.  When H-1B numbers went up, patent applications followed suit.  In fact, he even found “little impact on the invention rates of native U.S. workers.  Most increases in U.S. innovation with higher H-1B admissions come through direct contributions of the immigrants themselves.”

In this case, the trend toward recession anti-immigration sentiment is concerning for all aspects of our economy,  especially as we begin sinking large amounts of money into basic research in biomedical and energy sciences.  Most estimates of highly-educated labor supply find it to be quite inelastic in the short run as one must acquire extensive training to join the science and engineering workforce.  The last thing we need to be doing at this point is restricting extremely talented, creative entrepreneurs from entering our economy and innovating.  To treat an H-1B foreign hire as simply a one-to-one crowd out of an American from his/her job is extremely fallacious.

Posted in Development, Government Policy | 1 Comment »

Twisted green stimulus logic of the day

Posted by Rich Sweeney on January 23, 2009

From RenewableEnergyWorld.com, which, by the way, is one of the best sources for renewable news on the web. Tam Hunt, who’s is apparently a lecturer at Daniel’s alma mater, thinks we can mandate our way out of recession. He wonders, “Where the local stimulus packages are?”. When I saw that title my initial reaction was “states can’t run deficits, so that pretty much takes Keynesian stimulus packages of the table.” Despite acknowledging this budgetary reality, Hunt suggests some crazy other ideas states can use to promote green growth:

One way states can provide a boost is through enacting aggressive renewable energy standards.

Local governments can also enact their own building energy efficiency standards. By doing so, they can spur local investment in energy efficiency projects, creating jobs and leading to cost savings for homeowners and businesses through energy savings.

Last, by choosing to build renewables under CCA, local governments can provide jobs and local infusions of capital that will help kick start local economies more generally.

This is pretty brilliant stuff. If we want to avoid depression, but are concerned about the deficit implications of fiscal stimulus, we can instead simply mandate people to build things. The mind boggles….

Posted in Government Policy, Green Collar Jobs, RPS | 9 Comments »

Hot off the press

Posted by Rich Sweeney on January 2, 2009

From the inbox:

SUPPORT ENERGY EFFICIENCY AND RENEWABLE ENERGY
BUT NOT NUCLEAR POWER AND FOSSIL FUELS
IN STIMULUS LEGISLATION
January 7, 2009
Senate Majority Leader Harry Reid
Senate Minority Leader Mitch McConnell
Speaker of the House Nancy Pelosi
House Majority Leader Steny Hoyer
House Minority Leader John Boehner
Dear …
We, the undersigned sustainable energy and environmental organizations, businesses, and individual advocates, are writing to urge that you support provisions in the proposed stimulus bill that will promote sustainable energy technologies and create “green jobs.”
More specifically, funding should be targeted at those energy efficiency and renewable energy projects that can be brought on line quickly, will maximize job creation, will curb greenhouse gases and energy imports, and have the least adverse social and environmental impacts.
Nuclear power and fossil fuel technologies should not be included among those supported by the stimulus bill. These technologies cannot be brought on line quickly, entail unacceptable environmental hazards, and produce far fewer jobs per dollar invested.
Rather, emphasis should be given to “shovel-ready” projects that can be deployed in the very near term (i.e., preferably within 6-24 months) either to reduce wasteful energy use or to produce renewable energy as well as create jobs. Longer-term investments in sustainable energy research and development merit federal support but should be addressed in the regular annual appropriations bills rather than in this stimulus legislation.
The most attractive investments in terms of cost-effectiveness, jobs creation, carbon-reduction, and time-frame may well be those designed to reduce energy use in residential, commercial, public and other buildings. Accordingly, a high priority should be funding aimed at the permanent weatherization of older buildings and the replacement energy-inefficient lighting, appliances, and HVAC systems. Likewise, investments in advanced meter and demand-response programs are warranted.
In the transportation sector, emphasis should be given to lower-carbon options such as expansion of bike trails and pedestrian walkways, acquisition of more energy-efficient government vehicles including municipal buses, construction or expansion of light-rail and other mass transit systems, and repair of existing roads, tunnels, and bridges. However, funding the construction of new roads would tend – in many, if not most, instances – to encourage increased fuel use and oil imports and result in greater greenhouse gas emissions. Therefore, such proposals should be closely scrutinized and probably given very low priority.
Investments in renewable energy projects should support the broad range of technologies (i.e., wind, water, solar, geothermal, biomass/biofuels) with funding directed at smaller, distributed, and off-grid systems as well as larger, grid-connected, central station projects. Investments to upgrade existing transmission systems or create new “intelligent” ones to bring renewable electricity from remote locations to urban areas may also be justified. However, priority should be given to those projects and technologies that can be brought on line most quickly, have the lowest environmental or social impacts, create the largest number of jobs, are most cost-effective, and produce the most energy.
We appreciate your consideration of these views.
Sincerely,
cc. Members, Senate Committee on Appropriations
Members, House Committee on Appropriations
Couple of quick thoughts:
1. I love how politicians attempt to subvert criticism of their decisions by including the obvious downsides as “priorities”. Money should be spent as quickly as possible, but also wisely. We should create the most jobs, but also spend funds cost effectively. Blah, blah, blah…..
2. I’m a staunch proponent of the Smart Grid, but remain skeptical of plans to get the ball rolling by installing a toothless advanced meter in everyone’s house. Reminds me of the car shell idea, and thus of 5 year plans.
3. I’m obviously happy to see transmission in there. However, even absent any siting and permitting holdups, I don’t see how this fits the 6-24 month criteria.
4. Bike trails – Werd.

Posted in Government Policy, Green Collar Jobs, Stimulus | 1 Comment »

Regarding the auto bailout

Posted by Evan Herrnstadt on January 2, 2009

youwouldntbuyour

H/T: Boing Boing.

Posted in Auto, Government Policy, Humor | 2 Comments »

Climate change legislation in the last Congress

Posted by Daniel Hall on December 18, 2008

There is a new feature up at the RFF website that sums up the activity on climate change legislation in the 110th Congress:

http://www.rff.org/climatechangelegislation

It provides an overview of some of the key issues under discussion.  It also includes a table and chart that sum up 15 or so of the major proposals for cap-and-trade (or carbon tax) programs.  The chart depicts the proposed emissions targets in the various bills; the table sums up the major provisions for key issues.

In my opinion most people who follow the climate change issue spend far to much time worrying about the chart and not enough about the table — in other words, people are much too focused on the emission target and underestimate the importance of well-designed policy.  (A very current analogy might be observers who were more focused on how big TARP should be — $400 billion?  $700 billion?  $1 trillion? — than they were on how funds would actually be spent.)

The reality is that any target we pick now — particularly for far-off times like 2030 or 2050 — is going to get revised based on evolving knowledge.  But given the intrinsic path dependency involved in setting up new political institutions such as cap-and-trade programs, I think it is important to get a well-designed and robust framework in place from the beginning.

For starters, a well-designed policy would:

1) cover as many emissions sources as possible;

2) auction all allowances;

3) give away (to politically powerful entities) as little of the auction revenue as is politically feasible;

4) use some revenues to provide per-capita lump-sum rebates;

5) use other revenues to support basic and applied energy R&D (and NOT technology deployment);

6) allow entities to bank and borrow allowances (to increase intertemporal flexibility and efficiency);

7) and use price floors and price ceilings to ensure (on one side) that there will be at least some revenues raised and emissions reduced, and (on the other side) that price increases do not become politically unsustainable.

Posted in Cap and Trade, Carbon Tax, Climate Change, Government Policy | Leave a Comment »

Ryan Avent is angry

Posted by Daniel Hall on December 11, 2008

Someone at the American Prospect blog started criticizing cap-and-trade and Ryan decided to eviscerate him:

Price volatility when demand shifts is an inevitable outcome, period. If you doubt me, please direct your attention to gasoline prices. This uncertainty is supposed to be bad for business? When does business ever have a clear picture about future energy costs? They don’t, which is why we have thriving markets in energy futures, so that firms can hedge against the risk of big price swings. At least with a cap-and-trade system, firms could potentially bank and borrow permits in order to address volatility.

Ryan is responding to the criticism that energy price volatility from a cap-and-trade system will hamper investment and hence a carbon tax is the way to go.

The post over at TAP is indeed execrable (I fully expect that any of our readers could find more errors than facts in the post) but the author’s point about volatility is actually not so far off the mark:

The major con of C&T from an economist’s perspective, said Shapiro, is the “inevitable outcome” of energy price volatility when demand shifts. If a desired outcome of any of these policies is producing revenue necessary for investment in clean energy technology, then C&T price volatility would be bad for businesses since they need a clear and steady picture of future energy costs.

I would focus more on uncertainty, where volatility (and expectations about volatility) are a component of uncertainty. Uncertainty does influence the optimal investment path. (Dixit is one prominent economist to write about this.) Higher uncertainty (around the same expected price) will increase the value of delaying investment since the next period may bring further info that will influence how you invest.  Thus cap-and-trade systems may tend to delay investment relative to a carbon tax with the same expected price path.

The next logical question is whether the costs of this uncertainty are big or small.  I tend to think the costs are small given the ready availability of hedging instruments for energy and commodity prices.  Remember, the ‘cost of uncertainty’ is not necessarily a delay in investment; it could just be the economic cost (transaction or opportunity) of any hedging strategy.

Another question is whether a cap-and-trade policy and a carbon tax policy that could actually be passed by a majority of Congress would have the same expected price.  If Congress has the political will to pass a $20 per ton CO2 tax or establish a cap-and-trade system that results in an expected permit price of $30 per ton (with some volatility around this price) then the cap-and-trade system could still have more investment.  (Remember here that the only carbon tax that I would bet on Congress passing has a price of $0 per ton of CO2.)

Maybe the most interesting question concerns political uncertainty, which is arguably much higher than market uncertainty and which is also probably harder to hedge.  Is Congress more likely to go back and change a tax system or a cap-and-trade system?  Frankly, I am really not certain. (Also remember that changing a system is not necessarily a bad thing: the decision to change a system down the road could, for example, be a response to new information and could produce large net benefits.)

All in all I don’t see that the uncertainty and investment problem is that big a deal for cap and trade.

Here is an excerpt from the latest issue of the Review of Environmental Economics and Policy.  (I cannot access the REEP site at the moment.)  Note that the third paper proposes a hybrid approach that would involve a cap-and-trade system with an expected price window that might in some ways finesse the price volatility question.  Here is a discussion paper from the same authors that I believe covers the same territory.

Posted in Cap and Trade, Government Policy | Leave a Comment »

Smart stimulus

Posted by Daniel Hall on December 9, 2008

I don’t know if Ryan Avent and Alex Tabarrok would find a lot to agree on politically if they sat down for a chat but they are singing the same tune in the blogosphere this morning.  I’d like to add my voice to the chorus.

First, Alex says some smart things this morning about infrastructure stimulus:

The first thing people think about when someone says “infrastructure” is roads and bridges.  That’s unfortunate because we already spend over $100 billion a year on transportation infrastructure and the truth is we don’t need that much more.  Peter Orzag, President-Elect Obama’s choice for OMB estimated – when Director of the CBO – that an additional $20 billion in spending, mostly to maintain current transportation infrastructure, would achieve 83% of the net benefits to be had from more transportation infrastructure spending.  Moreover, in many cases, congestion pricing would be both greener and more efficient than greater spending. …

Even more valuable than transportation infrastructure would be greater investment in  electricity infrastructure, a smart grid. … Overall, blackouts cost the U.S. on the order of $100 billion a year. [DH: Alex does not source this, but Mike Giberson suggests a source.]

The smart gird is a not one idea but many technologies such as real-time pricing (smart meters), superconductive smart cable, and plug-n-play architecture that combine to produce a grid that is decentralized, self-healing, robust, and smart for both producers and consumers.

Alex is right on here: we already spend a lot on roads but not much on the electric grid, and the marginal returns to more spending on the latter are likely higher than the former.  Further, we need smarter policies for managing both resources, particularly congestion and real-time pricing to efficiently allocate demand to high-value uses.

Meanwhile, Ryan talks about how to spend money on roads (recommended) and then adds:

let me draw your attention to the Center for American progress’ $350 billion stimulus proposal. It includes $18 billion in spending on roads and bridges, and a total of $19 billion for transit. The former is about 50% of average annual spending on highways, while the latter is about 200% of average annual spending on transit (and the money allocated for New Starts is about 300% the annual average for that line item). I think it’s safe to say that these kinds of numbers are probably getting a good look from (soon-to-be) administration officials.

Wow, $18 billion for roads, huh?  It is almost like someone out there* was listening when Peter Orszag suggested $20 billion was about the right number.

Finally, if you do actually check the details of that CAP stimulus proposal, guess what else you find?  You guessed it, stimulus money for upgrading the electric transmission grid, $10 billion in all.

All that should be music to the ears of economists — now if we could just convince folks to try out this congestion pricing plan….

*For anyone who has been totally ignoring the news recently, this is the ‘Center for American Progress’ as in the ‘heart and soul of Obama’s transition team’.

Posted in Electricity, Government Policy, Infrastructure, Transportation | Leave a Comment »

Organizing deckchairs

Posted by Danny Morris on December 3, 2008

Hey all,

It the first Wednesday of the month, which means it’s time for the First Wednesday Seminar here at RFF. This one is particularly interesting and timely, especially if you’re really into federal organization and action on climate change. Let’s be honest, who isn’t into that type of thing? I’ll eventually write more about this topic, but for now, if you’re looking for something to do from 12:45 to 2:00, check out the webcast here. The formal description goes something like this:

Organizing Federal Government to Address Climate Change

Congressional and other proposals to address climate change assign new responsibilities to existing federal agencies and in some cases, suggest governmental reorganization or wholly new agencies. Some plans would move climate-related activities of the federal government well beyond those provided under the 1990 Global Change Research Act and embodied in the current Climate Change Science Program and Climate Change Technology Program.

For example, the U.S. Environmental Protection Agency may assume a large role in managing greenhouse gas emissions. Some Congressional proposals call for the National Oceanic and Atmospheric Administration (NOAA) to establish a “National Climate Service” modeled after the National Weather Service. Recently, several former government leaders have suggested merging NOAA and the U.S. Geological Survey into a combined “Earth System Science Agency” for managing new information requirements about the physical and socioeconomic dimensions of a changing climate and to support policy-related decision making.

Our panel will discuss how best to organize federal agencies for effective governance in addressing climate change, and will also cover regulation, diplomacy and international engagement, science and information, and economic policy.

Moderator: Molly K. Macauley, Senior Fellow, Resources for the Future

Panelists include:

John H. Gibbons, former Director, White House Office of Science and Technonlogy Policy
William Hooke, Director, Policy, American Meteorological Society
Dina Kruger, Director, Climate Change Division, U.S. Environmental Protection Agency
Nigel Purvis, Visiting Scholar, Resources for the Future; and President, Climate Advisers
Michael Toman, Professorial Lecturer in International Economics at the Nitze School of International Studies, Johns Hopkins University

Posted in Climate Change, Government Policy | Leave a Comment »

Waxman in at Energy and Commerce

Posted by Daniel Hall on November 20, 2008

Hopefully some discussion of what this might mean later, but for now, just the news.  Via E&E Daily:

Waxman unseats Dingell as Energy and Commerce chairman

Darren Samuelsohn, E&E Daily senior reporter

Rep. Henry Waxman (D-Calif.) is the new chairman of the House Energy and Commerce Committee.

Waxman ousted longtime Chairman John Dingell (D-Mich.), 137-122, in a secret ballot vote of the entire House Democratic Caucus today.

With Waxman’s victory, many expect the Beverly Hills Democrat to bring a liberal voice to the podium as he crafts energy and environmental legislation for the incoming Obama administration.

Waxman has not given many details of his proposed agenda, but a clear look at his record suggests he will pursue aggressive pollution cleanup for all industrial sectors, as well as some of the most aggressive limits for U.S. business as it embarks on a first-ever mandatory program to curb heat-trapping greenhouse gas emissions.

Since 2006, Waxman has made headlines as chairman of the House Oversight and Government Reform Committee, which has given him a perch to investigate the Bush administration’s policies on everything from Iraq and climate change to the use of steroids in Major League Baseball.

Some of Waxman’s biggest legislative accomplishments on the environment stretch back to before Republicans won control of Congress in 1994. He fought Dingell and the Reagan administration in the 1980s over efforts to weaken automobile emission standards. And during the 1990 Clean Air Act amendments debate, Waxman clashed with Dingell while serving as chair of the Health and Environment Subcommittee.

Waxman’s first order of business may be to address the hurt feelings within the divided caucus.

Rep. Rick Boucher (D-Va.), whose status as chairman of the Energy and Air Quality Subcommittee is now in doubt, said he was bothered by Waxman’s challenge. “This whole challenge bothered me but I won’t be specific about anything,” he told reporters.

“I think it was highly inappropriate, there was no obvious reason for it other than the desire for another person to chair the committee,” Boucher said. “There was no real substantive reason.”

Aides to Obama and House Speaker Nancy Pelosi (D-Calif.) stressed they had not played favorites or encouraged the move, but numerous pieces of tangential evidence suggested they would prefer Waxman over Dingell. Obama last weekend named longtime Waxman staffer Phil Schiliro as his top liaison to Congress. And Pelosi has fought countless times with Dingell over environmental issues, at one point backing his opponent in a Democratic primary.

At least one Democratic leader did speak up for Dingell’s cause: House Majority Leader Steny Hoyer (D-Md.). While speaking highly of Waxman at yesterday’s Steering and Policy Committee meeting, Hoyer expressed concerns about the precedent of removing a sitting chairman who was a loyal Democrat and an able performer, a Democratic aide said.

The Steering and Policy Committee endorsed Waxman by a 25-22 vote yesterday.

For Dingell, 82, the vote marks the end of Dingell’s 28 years as the top Democrat on the Energy and Commerce Committee, although he will have the title of chairman emeritus. Supporters of the congressman from the auto industrial hub of Dearborn, Mich., stressed his long list of accomplishments in Congress, as well as a renewed commitment to take on a broad array of President-elect Barack Obama’s priorities, including global warming.

His public list of supporters included more than a dozen Blue Dog Democrats, as well as members of the Congressional Black Caucus, New Democratic coalition and Democratic committee leaders.

Members who spoke on Dingell’s behalf at the Democratic caucus meeting included Reps. John Lewis of Georgia, Diana DeGette of Colorado, Stephanie Herseth Sandlin of South Dakota and Mike Doyle of Pennsylvania, according to Boucher. Waxman spoke on his own behalf for about five minutes.

Alex Kaplun and Ben Geman contributed.

Posted in 2008 Elections, Energy, Government Policy | 1 Comment »

Is our solar pv panels learning?

Posted by Rich Sweeney on November 17, 2008

In last week’s RFF policy commentary, Stanford’s Jim Sweeney, Kenny Gillingham, and Arthur van Benthem explain that learning is key when evaluating whether the California Solar Initiative (CSI) is good policy or not. Citing results from a paper they published in the Energy Journal this year, they argue that environmental benefits alone are not sufficient to justify the CSI. However, when they add even conservative estimates of learning by doing into their model, they find that the policy becomes worthwhile and improves economic efficiency. They find:

The present value of the decreased costs of future installations due to LBD caused by one additional installed kilowatt of solar is estimated to be $1,140; the present value environmental benefit from reduced carbon dioxide (CO2), if we assume a CO2 damage of $50/ton of CO2, is only $192. This numerical estimate indicates that the primary motivation for solar policy in California should be LBD. If we do not believe that there are LBD spillovers, the environmental reasons alone are not sufficient to justify the ambitious CSI.

While the authors have a somewhat detailed discussion of the literature on learning by doing (LBD) in the paper, more empirical work needs to be done to understand the true source of these costs improvements. Home PV systems involve the panels themselves, as well as inverters and, often, battery or storage devices. Cost improvements are possible in all three of these areas, as well as in the cost if installation and maintenance. Understanding where and how learning is actually taking place will allow us to better structure and evaluate policies to promote PV in the future.

Posted in Government Policy, Solar | Leave a Comment »

Questions for the Goreacle

Posted by Rich Sweeney on November 10, 2008

I love Al Gore. No one has done more to increase political awareness about the dangers of global warming. And now, having essentially settled the debate over if we should act, Gore has shifted his focus to informing how we should act. His vision is an admirable one. Since last spring Al has been pushing for the US to commit to getting 100% of its electricity from renewable sources in the next ten year. I think everyone agrees that it would be awesome if that happened. Yet while it is the job of politicians to inspire and lead the public and to challenge us to to achieve our stated social goals, its the job of policy analysts like myself to evaluate their propositions. So I have some questions about the plan that Gore put forth in yesterday’s NYTimes and on the We Can Solve It website.

  • In the Times op-ed, Gore writes, “The cost of this modern grid — $400 billion over 10 years — pales in comparison with the annual loss to American business of $120 billion due to the cascading failures that are endemic to our current balkanized and antiquated electricity lines.” Does anyone know where that $120 billion came from? Or even what it represents? EIA lists total 2007 electricity sales at $343 billion.
  • Under the heading “Are materials or land availability a limiting factor?” on the We website, there are charts comparing annual US glass and steel production to the quantities called for under Gore’s plan. The solar thermal glass requirement looks to be about 40% of US production and the steel requirement is 8%. Now I guess the point is to show that these quantities are less that we currently produce, but that’s a pretty useless metric. The real constraint is the cost of displacing the 40% of glass currently going to other uses. Lots of great things are technologically or materialistically feasible if cost is no obstacle. Did we learn nothing from the run-up in corn prices this summer?
  • Gore takes 2020 EIA electricity demand estimates as the target level of generation for his scenarios. But then he also calls for the electrification of our transportation sector. Clearly this would increase the amount of electricity demanded (by how much is anyones guess). I like his point about PHEVs acting as batteries for renewables, but doubt that this could really impact the grid. Reliability is a huge issue when it comes to electricity.
  • Gore’s plan also meets 28% of the EIA 2020 target with energy efficiency. Where does this come from? Is it really “efficiency” or simply demand reduction as a result of the high price of eliminating fossil fuels? Again, lots of things are “feasible”, but welfare losses matter.
  • Finally, what actually happens to all the coal and natty gas plants? Much of our current capacity has another 20-30 years of capital life left. How do we eliminate them? Is it through legislative fiat or does the government buy these plants out and retire them? Either way, this would cost somebody a lot of money.

Ok I realize there isn’t a lot of insight here. I really just wanted to list the questions I had when I read Gore’s plan. Any CT readers have answers to these/ questions of their own?

Posted in Climate Change, Efficiency, Government Policy, Renewables | 4 Comments »

Guest post: Michael Livermore on cost-benefit analysis

Posted by Daniel Hall on October 27, 2008

We’ve got a special guest post today from Michael A. Livermore.  He is the Executive Director of the Institute for Policy Inegrity (IPI), and the author, along with Richard L. Revesz, of Retaking Rationality:  How Cost-Benefit Analysis Can Better Protect the Environment and Our Health.

The Perfect Storm

Our next President will face triplet crises on the economy, environment, and energy.  A fiscal crisis teetering on recession, uncontrolled greenhouse gases, and oil-rich dictators profiting from sky-high prices at the pump.  With these three major storm fronts rolling in and threatening to collide, we’d better be prepared with a good plan.  And I don’t think evacuation is an option.

Navigating the course

These problems will not be solved by piecemeal policies. To steer us out of this mess, the next administration will need to use regulation and government oversight.    One interesting by-product of the wreckage on Wall St. is that many folks are taking a second look at regulation. But if we’re going to regulate, no one is going to be interested in a 1970’s redux.  We need smart, nimble, and well-balanced rules to tackle the problems of the 21st century.

In the new policy brief, from the Institute for Policy Integrity, we prescribe a way for McCain or Obama to accomplish this.  Task Number One:  the new administration will seriously need to upgrade the way they do cost-benefit analysis.

Since the days of Ronald Reagan, cost-benefit analysis has been required for all significant regulation.  But over the past three decades, industry and antiregulatory interests have had too much freedom to shape these studies.  Many significant biases now exist in how cost-benefit analysis is used and how it is performed, resulting in lax or a lack of regulation or government oversight.

Our policy brief prescribes specifics on how the next administration can balance the scales.  For example, oftentimes, “countervailing risks” of regulation are given significant attention, while “ancillary benefits” are given short shrift.  For example, the increased risk due to smaller cars is often counted as a cost of fuel efficiency rules, but the reduction in greenhouse gases is ignored or undervalued.  Last year, the Bush Administration lost a legal challenge over its light truck fuel-efficiency rules because it did not count the benefits of climate change reduction.  Failing to account for ancillary benefits results in deflated estimates of net benefits, which ultimately reduces regulatory stringency.

The policy brief also recommends a new procedure that would allow groups that are affected by agency inaction to petition the central reviewer and use cost-benefit analysis to show that the agency should be acting.  In this way, cost-benefit analysis can serve not only as a check on regulation, but also a prod to move agencies forward that are stuck in a rut or overcome with inertia.

One of the most offensive inefficiencies of current usage of cost benefit analysis is that it is often not used in the context of deregulatory decisions.  When the Bush Administration proposed changing how power plants were treated under the Clean Air Act’s new source review program—changes that would have massive economic, public health, and environmental consequences—no cost-benefit analysis was done because the agency claimed the regulations were not “significant.”  Recently, new rules from the Department of Labor that could lead to more toxic workplaces were also not subjected to cost-benefit analysis, although they are likely to have significant consequences over the long term if they are adopted.

Finding safe harbors

With sound use of reformed, fair cost-benefit analysis, the next administration can successfully navigate this storm, leaving ideological decision-making and special interests politics in the dust bin of history.  Smart economic policy, smart energy policy, and smart environmental policy are mutually reinforcing.  And since we literally can’t afford to ignore any one of them, we will need to decide carefully how to address all three together.

Posted in Cost Benefit, Government Policy | Leave a Comment »

nonsense

Posted by Rich Sweeney on October 16, 2008

McCain last night:

We can eliminate our dependence on foreign oil by building 45 new nuclear plants, power plants, right away. We can store and we can reprocess.

Sen. Obama will tell you, in the — as the extreme environmentalists do, it has to be safe.

Look, we’ve sailed Navy ships around the world for 60 years with nuclear power plants on them. We can store and reprocess spent nuclear fuel, Sen. Obama, no problem.

Posted in Government Policy, Nuclear | 1 Comment »

From the inbox: DC recycling edition

Posted by Evan Herrnstadt on October 7, 2008

I got an email this morning from my roommate informing me that DC is expanding its municipal single-stream recycling program to include, as another roommate put it, basically everything we were recently upset to learn couldn’t be recycled.  This means milk and juice cartons, plastic containers like yogurt cups, plastic bags (sweet), and aerosol cans.

Here’s a link to the Dept. of Public Works recycling page.  I’ve pasted the announcement below, which doesn’t yet seem to be on the DPW’s website: Read the rest of this entry »

Posted in Government Policy, Waste | Leave a Comment »

This should solve the financial crisis

Posted by Rich Sweeney on October 2, 2008

From Green Car Congress:

Senate Version of Bailout Bill has PHEV Credits

2 October 2008

The revised bailout legislation passed by the US Senate on Wednesday (H.R. 1424)—which has ballooned from an original 3-page plan from Treasury Secretary Paulson to the 451-paqe bill approved by the Senate—contains among its many other new provisions a tax-credit for plug-in hybrid electric vehicles.

<!––>The credit is a base $2,500 plus $417 for each kWh of battery pack capacity in excess of 4 kWh, to a maximum of $7,500 for light-duty vehicles; $10,000 for vehicles with gross vehicle weights of more than 10,000 but less than 14,000 pounds; $12,500 for vehicles with a GVW of more than 14,000 but less than 26,000 pounds; and $15,000 for any vehicle with a GVW of more than 26,000 pounds.

Phaseout of the credit is to begin after the total number of qualified PHEVs in the US sold after 31 December 2008 is at least 250,000.

Posted in Government Policy, PHEVs | Leave a Comment »

Overheard

Posted by Daniel Hall on September 19, 2008

I have been far too distracted by global financial calamity this week to spend much time thinking or writing about environmental economics.  As way of apology I’ve rounded up some good quotes that touch on a few of the (often tenuous) links between the complete meltdown of our economic system and environmental economics:

But the gloomy investment climate suggests that clean energy needs a quick rebound in credit markets more than it needs lawmakers to renew tax credits if it is to avoid a desert of financing options for the rest of 2008 and 2009.

– Nathanial Gronewold and Michael Burnham at Greenwire

The most passable carbon pricing policy up until now was believed to be cap and trade, a system in which emission permits are bought, sold, banked, and so on. Will that begin to look undesirable in the wake of this crisis?

Free Exchange, wondering whether market skepticism will influence the course of climate policy

I think we’ll only get one shot to set things right by throwing a ton of money at the problem, so we’d better think carefully before we throw it at symptoms rather than causes. … As far as the money is concerned, throw it at infrastructure. Increase worker bargaining power by offering Federally funded retraining sabbaticals for any worker over thirty who decides they want to retool. I’d rather see a new WPA than a new RTC.

–  Steve Randy Waldman, with smart thoughts on bailout money and infrastructure spending.  I do worry a bit though about where the green collar job nuts supporters are going to run with this.

Certainly AIG though with the construction bonds that they’re holding and with the insurance that they are holding very, very impactful to Americans…

Sarah Palin, who caught a lot of flak — much of it deserved — for her responses to questions about the crisis.  However, she actually seems to be right about the construction bond point, as Tyler Cowen points out.  Credit conditions are going to make it difficult for municipalities to build infrastructure over the next couple years so in my mind this strengthens Waldman’s argument above.

It’s useful that Paulson seems to have excellent contacts and working relationships with China, which will be America’s most challenging bilateral relationship for the next decades.

Jonathan Zasloff, arguing that Paulson should be kept on as treasury secretary regardless of who the next president is.  Zasloff previously discusses climate change — Paulson is a committed environmentalist — although he doesn’t draw the obvious link: doing anything substantial about climate means getting China on board, and ASAP.  China’s relationship with the U.S. right now is the most important bilateral relationship affecting global economic health, and long-term China’s relationship with the U.S. is the most important bilateral relationship affecting global environmental health.  Speaking of which, who is bailing out whom again?

surely it would be more rational for the Chinese to own the American financial system itself

Robert Preston

In our central scenario, we estimate that the crisis could lower real GDP growth in 2008 and 2009 by an average of 1.8 percentage points per year.

Jan Hatzius.  I’ll note that substantially reducing economic growth should also slow down carbon emissions in America over the next couple years!  Unfortunately this is rather like getting killed by lightning while looking for that silver lining in the cloud.  Speaking of which:

Annoying our neighbors so much that they cut off our oil supplies would, I suppose, be one way of helping us achieve energy independence, but it doesn’t seem like a particularly good idea.

Hilzoy, wondering who exactly is the most knowledgeable person in the U.S. on energy issues these days.  (Hint: It’s not Sarah Palin.)

Posted in Economics, Government Policy, Infrastructure, International | Leave a Comment »

 
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