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EMISSIONS CUTS AREN’T A SILVER LINING: Dramatic carbon emissions reductions haven’t been a silver lining during the coronavirus pandemic. Instead, they’ve come at an extremely high cost and likely set the U.S. back in accelerating the pace of greenhouse gas reductions, researchers say.
U.S. emissions have fallen 18% between March 15 and June 15, but at an enormous economic cost of $3,200 to $5,400 per ton of carbon dioxide, according to the Rhodium Group, an independent research firm. That’s because the emissions cuts were due almost entirely to reduced economic activity, the firm said in a report released Thursday.
That’s bad news for U.S. emissions in the longer term: “Even if this recession in the near term puts us closer” to reaching the Paris climate agreement goals, “it sets us back because it actually increases the carbon intensity of our economy,” said Kate Larsen, lead author of the report who heads up Rhodium’s international energy and climate research.
According to Rhodium’s research, the U.S. economy will emit as much as 8 tons more carbon dioxide per million dollars of GDP by 2030, compared to pre-pandemic levels.
Larsen said the high cost per ton of emissions reductions during the pandemic has just been an economic cost to society. “It wasn’t a carbon price signal that changes the way that electric power producers make decisions about coal versus gas versus renewables,” she told Abby.
That ultimately means the U.S. could easily bounce back to close to pre-pandemic emissions levels as the economy recovers.
Rhodium does find some lingering effects of the pandemic-induced recession on emissions over the next decade, depending on the shape of the recovery. In a V-shaped recovery, for example, the firm projects U.S. emissions would be 2% lower than pre-COVID projections in 2030. In an L-shaped recovery, where the economy doesn’t begin to recover until 2022, emissions would be 12% below pre-COVID projections in 2030.
Policy is a much cheaper way to cut emissions: Even relatively expensive renewable fuel subsidies cost just $100 per ton, as opposed to the thousands of dollars pandemic-induced reductions have cost, Rhodium says. Renewable energy technologies are even cheaper, with onshore wind cutting carbon at $24 per ton and utility-scale solar at $27 per ton, the firm notes.
For emissions cuts to be long-lasting, the U.S. must invest in cleaner technologies and send policy signals to energy markets and to society that the country is making structural changes, Larsen said.
“The worst-case scenario is building back our economy the way it used to be. We know that wasn’t working,” she added. “A large investment in building back our economy in a carbon intensive way would make us worse off than not investing in recovery in my opinion.”
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
BROUILLETTE WARNS AGAINST ‘TOP-DOWN’ CLIMATE RECOVERY PLANS: Such approaches risk shutting out certain technologies and innovation, Energy Secretary Dan Brouillette said Thursday during remarks at a clean energy transitions summit hosted by the International Energy Agency.
“The top-down approach lets governments do the choosing, which can end up with more taxes, more regulation, perhaps imposing climate risk assessments on companies, so that the government can steer people away from certain energy sources and into the direction of others,” he added.
His remarks appeared to caution against efforts to link aggressive climate policies with coronavirus recovery, as the European Union has announced. The European Union has proposed massive investments in renewable energy and low-carbon technologies, including zero-emissions vehicles, carbon removal, and hydrogen, as part of its virus recovery plan.
MEANWHILE, BIDEN WANTS TO BUY LOTS OF AMERICAN CLEAN ENERGY TECHNOLOGY: Democratic presidential nominee Joe Biden pledged Thursday to make a $400 billion procurement of “made in America” products, materials, and services, including electric vehicles, in order to revive U.S. manufacturing.
Biden will tout the new plan during a speech at a metal works facility in Dunmore, Pennsylvania later today.
As part of the $400 billion procurement, Biden promises to have the federal government purchase “tens of billions of dollars” of EVs and products such as batteries produced by U.S. companies.
He commits to investing $300 billion over four years in R&D for “competitive and critical” new industries, including in clean energy.
Biden also calls for imposing a carbon border adjustment for nations that are failing to meet their Paris climate commitments, meaning he would tax imports of carbon-intensive goods in order to keep U.S. products competitive, assuming he implements aggressive carbon mitigation policy.
BIDEN-SANDERS TASK FORCE CALLS FOR ZERO EMISSIONS FROM POWER BY 2035: A climate change task force convened by Biden in a partnership with his former rival Bernie Sanders recommended Wednesday that Biden commit to eliminating carbon emissions from power plants by 2035.
Biden has not committed to the goal (yet), but it’s a serious specific demand from progressives who have pressured the Democratic nominee to strengthen his $1.7 trillion plan to reach net-zero emissions by 2050 to include setting new goals for the next decade to wean off fossil fuels.
Rep. Alexandria Ocasio-Cortez, one of the creators of the Green New Deal, credited her leadership on the Biden-Sanders task force with putting Biden on a path to bolstering his positions. The task force, which was co-chaired by former Secretary of State John Kerry, also urged Biden to set a goal of achieving net-zero greenhouse gas emissions for all new buildings by 2030, and to begin retrofitting existing homes and buildings.
“Of course, like in any collaborative effort, there are areas of negotiation and compromise,” Ocasio-Cortez tweeted. “But I do believe that the Climate Task Force effort meaningfully & substantively improved Biden’s positions.”
No fracking or nuclear bans: The task force recommendations, however, avoided controversial landmines that could expose Biden in oil and gas states like Pennsylvania, a recognition that Biden is in a solid position against President Trump and doesn’t need to rock the boat.
The 2035 target to eliminate carbon from power allows for the use of nuclear power and fossil fuel plants equipped with carbon capture technology.
Some activists have called for strictly renewable power, which most experts believe is unachievable with current technology. Sanders explicitly opposed nuclear power during the campaign.
The task force also seeks R&D investments in advanced nuclear and CCS, including a “presidential net-negative emissions moonshot” in direct air capture.
BIG OIL’S THIRD STRIKE IN CLIMATE NUISANCE LAWSUITS: Attempts by ExxonMobil and other oil majors to move climate lawsuits brought by cities and counties to federal court have backfired a third time, and environmentalist attorneys say the industry should be worried.
It’s “increasingly likely that these cases are going to get to trial somewhere,” said Richard Wiles, executive director of the Center for Climate Integrity. “At that point, the truth about industries’ lying would come out. Their absolute worst nightmare is to go to trial.”
The latest setback for the oil companies came Tuesday, when a panel of 10th Circuit judges rejected a request from Exxon and Suncor Energy to move a climate case brought by the city and county of Boulder and San Miguel County to federal court.
But the venue fight isn’t quite over: Oil companies have asked the Supreme Court to weigh in on which court a similar case brought by Baltimore should be heard, after the 4th Circuit in March rejected their attempts to move the case to federal court.
Phil Goldberg, special counsel for the National Association of Manufacturers’s Accountability Project, said attempts by the cities, counties, and states to “forum shop” for the courts and judges where they think they could be successful “should be of concern to the Supreme Court.”
More on what to watch for in Abby’s story posted this morning.
MEASURING EMISSIONS BENEFITS OF US LNG EXPORTS VS. COAL: U.S. exports of LNG to major consuming countries Germany, China, and India result in lifecycle greenhouse gas emissions reductions of 48% to 54% compared to if those nations used coal to produce electricity, according to a study released Thursday by the American Petroleum Institute.
“As global gas demand growth resumes, we remain incredibly optimistic in the role U.S. natural gas can play in a lower emission future,” said Dustin Meyer, API’s director of market development, on a press call.
LNG exports from the U.S. had boomed in recent years, making the country the third largest exporter of the fuel in the world, behind only Qatar and Australia.
But U.S. LNG exports have declined by more than half in 2020, the Energy Information Administration said last month, with low prices and sluggish demand.
The nitty gritty: The emissions reductions of switching from coal to LNG projected in the API study, which was completed by the researchers at ICF on behalf of the oil lobby group, are higher than previous estimates.
For example, the API study projects 6% larger emissions reductions from U.S. LNG than a similar study conducted in 2014 by the Energy Department’s National Energy Technology Laboratory (NETL).
Harry Vitas, the ICF researcher who completed the API study, said he assumed methane emissions from exporting gas would be lower than what NETL expected, based on expected technological advancements in detecting and plugging methane leaks.
The API study also found imported U.S. LNG generally results in lower emissions than if Germany, China, and India were to import gas by pipeline from Russia, due to suspicions that Russian companies leak methane at a higher rate than publicly disclosed.
RELATED…INDUSTRY TELLS FERC LNG DEMAND WILL COME BACK: Officials from oil and gas producers and midstream companies expressed optimism Thursday that demand for their products would recover after the pandemic, in testimony before FERC at a special virtual technical hearing convened by the commission.
“We are extremely bullish and optimistic in the long term on bringing LNG to the world,” said David Bryson, senior vice president and chief commercial officer of gas transmission and midstream at Enbridge.
Anatol Feygin, executive vice president and chief commercial officer of Cheniere Energy, which operates two U.S. LNG export facilities, said he expects the global LNG market to nearly double in the 2020s.
But Robert Brooks, founder and president of RBAC Inc., an industry research firm, said the “overall trend of natural gas is not favorable” in Europe, where countries look to meet aggressive climate goals.
Brooks and Bryson projected a better future for U.S. LNG exports to countries in Asia, such as China, South Korea, India, Vietnam, Myanmar, and more, which are looking to switch from coal to gas for local environmental and climate reasons.
ENVIRONMENTALISTS LOSE CHALLENGE TO EPA VIRUS ENFORCEMENT POLICY: A federal district court judge on Wednesday threw out a challenge from a coalition of environmental groups seeking greater transparency from the EPA on its coronavirus enforcement policy.
The environmental groups, including the Natural Resources Defense Council and Public Citizen, had urged the EPA to issue an emergency rule requiring the agency to make public written notices from any company forgoing routine pollution monitoring and reporting during the pandemic. The groups sued the EPA for “unreasonable delay” just 15 days after filing their petition for the rule, a time period the district court opinion said was “perfectly obvious” wasn’t an unreasonable delay.
The real fight is still to come: Environmentalists’ lawsuit didn’t challenge the merits of the enforcement policy, but a group of state attorneys general did in a separate lawsuit currently being briefed in the court.
The Rundown
Bloomberg Energy Transfer vows to keep pipeline open after court order
Reuters Rooftop revolution: Coronavirus chill upends solar power industry
Wall Street Journal COVID-19’s environmental benefits evaporate as world reopens
Associated Press UN: World could hit 1.5-degree warming threshold by 2024
Greentech Media Microchip giant TSMC signs ‘world’s largest’ corporate renewables deal — for offshore wind
Calendar
FRIDAY | JULY 10
The House and Senate are out.
