This paper introduces an approach for separately quantifying the contributions from renewables in decomposition analysis. So far, decomposition analyses of the drivers of national CO2 emissions have typically considered the combined energy mix as an explanatory factor without an explicit consideration or separation of renewables. As the cost of renewables continues to decrease, it becomes increasingly relevant to track their role in CO2 emission trends. Index decomposition analysis, in particular, provides a simple approach for doing so using publicly available data. We look to the U.S. as a case study, highlighting differences with the more detailed but also more complex structural decomposition analysis. Between 2007 and 2013, U.S. CO2 emissions decreased by around 10%—a decline not seen since the oil crisis of 1979. Prior analyses have identified the shale gas boom and the economic recession as the main explanatory factors. However, by decomposing the fuel mix effect, we conclude that renewables played an equally important role as natural gas in reducing CO2 emissions between 2007 and 2013: renewables decreased total emissions by 2.3–3.3%, roughly matching the 2.5–3.6% contribution from the shift to natural gas, compared with 0.6–1.5% for nuclear energy.
This paper reviews the cost of various interventions that reduce greenhouse gas emissions. As much as possible we focus on actual abatement costs (dollars per ton of carbon dioxide avoided), as measured by 50 economic studies of programs over the past decade, supplemented by our own calculations. We distinguish between static costs, which occur over the lifetime of the project, and dynamic costs, which incorporate spillovers. Interventions or policies that are expensive in a static sense can be inexpensive in a dynamic sense if they induce innovation and learning-by-doing.
Like many other states, Oregon has begun to pursue climate policies to attempt to fill the gap created by the lack of effective climate policy at the Federal level. After adopting a variety of policies to address climate change and other environmental impacts from energy use, Oregon is now contemplating the adoption of a greenhouse gas (GHG) cap-and-trade system. However, interactions between policies can have important consequences for environmental and economic outcomes. Thus, as Oregon considers taking this step, reconsidering the efficacy of its other current climate policies may better position the state to achieve long-run emission reductions at sustainable economic costs.
We raise for debate and discussion what in our opinion is a growing mis-control and mis-protection of U.S. energy research. We outline the origin of this mis-control and mis-protection, and propose two guiding principles to mitigate them and instead nurture research: (1) focus on people, not projects; and (2) culturally insulate research from development, but not science from technology.
Energy research is critical to continuing advances in human productivity and welfare. In this Commentary, we raise for debate and discussion what in our view is a growing mis-control and mis-protection of U.S. energy research. This flawed approach originates in natural human tendencies exacerbated by an historical misunderstanding of research and development, science and technology, and the relationships between them. We outline the origin of the mis-control and mis-protection, and propose two guiding principles to mitigate them and instead nurture research: (i) focus on people, not projects; and (ii) culturally insulate research from development, but not science from technology. Our hope is to introduce these principles into the discourse now, so they can help guide policy changes in U.S. energy research and development that are currently being driven by powerful geopolitical winds.
The utility business model and power generation industry are built upon a century-old legal regime. Federal and state laws are premised on power flowing from large-scale infrastructure to captive consumers paying regulated rates to a monopoly utility. Today, electric power and money can flow in the opposite directions. Services supplied through utility-owned distribution grids, including storage, energy production, and demand response, upend long-standing industry assumptions about infrastructure investments, consumer behavior, and rate setting. In doing so, distributed energy resource (DERs) threaten incumbent businesses and challenge entrenched regulatory regimes. Regulation of the electric industry is pervasive and will determine where DERs are deployed, the services they may provide, the prices they are paid, and who is allowed to own them. A threshold issue in addressing the future of DER regulation is the roles that federal and state regulators will play in making these decisions. This paper pieces together, from numerous FERC orders and federal court decisions, how the Federal Energy Regulatory Commission’s (FERC) jurisdiction over interstate wholesale energy sales and transmission service applies to DERs. It finds that FERC has disclaimed authority over DER sales that offset a ratepayer’s retail consumption but federal law applies to other sales. FERC’s current approach to these other energy transfers splits authority with state regulators based on various factors, including technology and location on the grid. This fragmented regulatory regime could doom DERs to segmented markets, preventing the creation of a coherent framework for DER development. This paper suggests that FERC should simplify the overlapping web of state and federal regulation by disclaiming jurisdiction over DER energy sales. Doing so would allow states to regulate sales by all types of DERs to local buyers, such as a utility or aggregator. States would then have clear authority to develop comprehensive DER development models. It would also free FERC from the potentially onerous task of directly regulating millions of small-scale resources, while allowing FERC to invite aggregations of DERs to sell directly into regional wholesale markets.