Sunday, February 28, 2016

Climate and health impacts of US emissions reductions consistent with 2 °C

An emissions trajectory for the US consistent with 2 °C warming would require marked societal changes, making it crucial to understand the associated benefits. Previous studies have examined technological potentials and implementation costs1, 2 and public health benefits have been quantified for less-aggressive potential emissions-reduction policies (for example, refs 3,4), but researchers have not yet fully explored the multiple benefits of reductions consistent with 2 °C. We examine the impacts of such highly ambitious scenarios for clean energy and vehicles. US transportation emissions reductions avoid ~0.03 °C global warming in 2030 (0.15 °C in 2100), whereas energy emissions reductions avoid ~0.05–0.07 °C 2030 warming (~0.25 °C in 2100). Nationally, however, clean energy policies produce climate disbenefits including warmer summers (although these would be eliminated by the remote effects of similar policies if they were undertaken elsewhere). The policies also greatly reduce damaging ambient particulate matter and ozone. By 2030, clean energy policies could prevent ~175,000 premature deaths, with ~22,000 (11,000–96,000; 95% confidence) fewer annually thereafter, whereas clean transportation could prevent ~120,000 premature deaths and ~14,000 (9,000–52,000) annually thereafter. Near-term national benefits are valued at ~US$250 billion (140 billion to 1,050 billion) per year, which is likely to exceed implementation costs. Including longer-term, worldwide climate impacts, benefits roughly quintuple, becoming ~5–10 times larger than estimated implementation costs. Achieving the benefits, however, would require both larger and broader emissions reductions than those in current legislation or regulations.
Radiative forcing due to clean energy and clean transportation.
by Drew T. Shindell 1, Yunha Lee 1 & Greg Faluvegi  2
1. Nicholas School of the Environment, Duke University, Durham, North Carolina 27708, USA
2. Greg Faluvegi
Nature Climate Change
Published online 22 February 2016

Transmission upgrades delivering substantial value for Southwest Power Pool members

Construction of electric transmission upgrades in the Southwest Power Pool (SPP) from 2012 to 2014 resulted in more than $240 million in fuel cost savings for utilities during the first year of operation of the company’s wholesale energy market, according to a new study from the regional power grid operator.

The study analyzed the value provided by 348 transmission upgrades that involved almost $3.4 billion of capital investment.

Previous studies by SPP projected the expected future value of transmission construction based on latest available forecast data. This study used actual historical operating data obtained during the first year of operation of SPP’s Integrated Marketplace to document transmission value already realized.

In addition to fuel cost savings, the study quantified other benefits associated with the transmission expansion upgrades, including reliability and resource adequacy benefits, generation capacity cost savings, reduced transmission losses, increased wheeling revenues and public policy benefits associated with more optimal wind development facilitated by the transmission upgrades. The net present value of all quantified benefits is expected to exceed $16.6 billion over a 40-year period, resulting in a benefit-cost ratio of at least 3.5. This means the investments are expected to produce more than $3.50 in overall benefits for every $1 in transmission-related costs.

“Transmission does more than just keep the lights on. It’s an enabling resource that paves the way for numerous benefits to our stakeholders and their customers,” said Nick Brown, president and CEO of SPP. “A modernized transmission system increases reliability, reduces costs by providing access to a wholesale energy market and effectively integrates wind and other renewable energy to the grid.”

“The SPP Value of Transmission study is a path-breaking effort,” noted Johannes Pfeifenberger, Judy Chang and Onur Aydin of the Brattle Group in a letter accompanying the study. Compared to transmission planning studies, “it provides a more accurate estimate of the total benefits that a more robust and flexible transmission infrastructure provides to power marketers, market participants and, ultimately, retail electric customers.”

The Brattle Group letter also added: “the estimated present value of the production cost savings in the SPP study likely is understated” due to several factors, including the fact that many of the major transmission projects evaluated were not yet in service during most of the period analyzed.

Read the study and the Brattle Group review at

Southwest Power Pool, Inc. manages the electric grid and wholesale energy market for the central United States. As a regional transmission organization, the nonprofit corporation is mandated by the Federal Energy Regulatory Commission to ensure reliable supplies of power, adequate transmission infrastructure and competitive wholesale electricity prices. Southwest Power Pool and its diverse group of member companies coordinate the flow of electricity across 56,000 miles of high-voltage transmission lines spanning 14 states.
Press Release dated January 26, 2016

Saturday, February 27, 2016

Is Energy Efficiency Capitalized into Home Prices? Evidence from Three US Cities

Energy efficiency and other “green” certification programs provide an information signal to the marketplace and can be a valuable way for homebuyers to learn about the related attributes of homes.

Key Findings:
  • Our results show that Energy Star certification is associated with an increase in the sales prices of single-family homes in the Research Triangle and Portland markets of approximately 2 percent, but we find no statistically significant effect in Austin
  • The local certifications in Austin and Portland, which encompass other environmental attributes beyond energy, appear to have larger effects on sales prices than Energy Star—3 percent in Portland and 7 to 8 percent in Austin.
  • Under the assumption of a 5 percent discount rate, the implied savings from these home price premiums are 21 to 23 percent of the estimated average annual energy costs of a home in Portland, and 16 to 19 percent in the Research Triangle housing market
  • These implied savings roughly match the Energy Star requirement that homes be 15 to 30 percent more energy efficient than noncertified homes, suggesting that these certification schemes provide appropriate and valuable information to the marketplace.
We test for evidence that energy efficiency features are capitalized in home prices in three US metropolitan areas. Using a careful matching procedure and hedonic regressions, we find that Energy Star certification is associated with higher sales prices in two of the markets: the Research Triangle region of North Carolina and Portland, Oregon. We find that local “green” certifications in Portland and in Austin, Texas, are also associated with higher prices and the estimated impacts are larger than Energy Star. Matching on observables proves to be important—estimated impacts are reduced by roughly half compared with models without matching. We calculate the implied energy savings from the estimated premiums and find that, in the Triangle and Portland markets, the Energy Star premiums roughly match the savings that program is designed to achieve. In contrast, the local certifications appear to capitalize more than just energy savings. 
The whole-house systems approach used to design this ultra-efficient home at Lone Star Ranch in Frisco, Texas, resulted in a home that consumes no more energy that its renewable energy systems produce. Photo from Building Science Corporation.
The whole-house systems approach used to design this ultra-efficient home at Lone Star Ranch in Frisco, Texas, resulted in a home that consumes no more energy that its renewable energy systems produce. Photo from Building Science Corporation.

by Margaret A. Walls, Karen L. Palmer, Todd Gerarden and Xian Bak
Resources For the Future
Discussion Paper 13-18; February 25, 2016

How Much Are Floridians Willing to Pay for Protecting Sea Turtles from Sea Level Rise?

Sea level rise (SLR) is posing a great inundation risk to coastal areas. Some coastal nesting species, including sea turtle species, have experienced diminished habitat from SLR. Contingent valuation method (CVM) was used in an effort to assess the economic loss impacts of SLR on sea turtle nesting habitats for Florida coasts; and to elicit values of willingness to pay (WTP) of Central Florida residents to implement certain mitigation strategies, which would protect Florida’s east coast sea turtle nesting areas. Using the open-ended and dichotomous choice CVM, we sampled residents of two Florida communities: Cocoa Beach and Oviedo. We estimated the WTP of households from these two cities to protect sea turtle habitat to be between $42 and $57 per year for 5 years. Additionally, we attempted to assess the impact of the both the respondents’ demographics and their perception toward various situations on their WTP value. Findings include a negative correlation between the age of a respondent and the probability of an individual willing to pay the hypothetical WTP amount. We found that WTP of an individual was not dependent on prior knowledge of the effects of SLR on sea turtle habitat. The greatest indicators of whether or not an individual was willing to pay to protect sea turtle habitat were the respondents’ perception regarding the trustworthiness and efficiency of the party which will implement the conservation measures and their confidence in the conservation methods used. Respondents who perceive sea turtles having an effect on their life were also more likely to pay.
by Ahmed Hamed, Kaveh Madani , Betsy Von Holle, James Wright, J. Walter Milon and Matthew Bossick
Environmental Management via Springer
Volume 57, Issue 1; January 2016; pages 176-188; First online: 30 August 2015
Keywords: Sea level rise Sea turtle Ecosystem service valuation Contingent valuation Florida

Paying for Forest Ecosystem Services: Voluntary Versus Mandatory Payments

The emergence of new markets for forest ecosystem services can be a compelling opportunity for market diversification for private forest landowners, while increasing the provision of public goods from private lands. However, there is limited information available on the willingness-to-pay (WTP) for specific forest ecosystem services, particularly across different ecosystem market mechanisms. We utilize survey data from Oregon and Washington households to compare marginal WTP for forest ecosystem services and the total WTP for cost-effective bundles of forest ecosystem services obtained from a typical Pacific Northwest forest across two value elicitation formats representing two different ecosystem market mechanisms: an incentive-compatible choice experiment involving mandatory tax payments and a hypothetical private provision scenario modeled as eliciting contributions to the preferred forest management alternative via a provision point mechanism with a refund. A representative household’s total WTP for the average forest management program was estimated at $217.59 per household/year under a mandatory tax mechanism and $160.44 per household/per year under a voluntary, crowdfunding-style, contribution mechanism; however, these estimates are not statistically different. Marginal WTP estimates were assessed for particular forest ecosystem service attributes including water quality, carbon storage, mature forest habitat, and public recreational access. This study finds that survey respondents place significant economic value on forest ecosystem services in both elicitation formats and that the distributions of the marginal WTP are not statistically significantly different.
by Gabrielle E. Roesch-McNally and Sergey S. Rabotyagov
Environmental Management via Springer
Volume 57, Issue 3; March 2016 pages 585-600; First online: 11 December 2015
Keywords: Forest ecosystem service Provision point mechanism Preference elicitation Stated choice Payment mechanism Crowdfunding

Climate Amenities, Climate Change, and American Quality of Life

We present a hedonic framework to estimate US households’ preferences over local climates, using detailed weather and 2000 Census data. We find that Americans favor a daily average temperature of 65 degrees Fahrenheit, that they will pay more on the margin to avoid excess heat than cold, and that damages increase less than linearly over extreme cold. These preferences vary by location due to sorting or adaptation. Changes in climate amenities under business-as-usual predictions imply annual are losses of 1%–4% of income by 2100, holding technology and preferences constant.
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by David Albouy, Walter Graf, Ryan Kellogg and Hendrik Wolff
Journal of the Association of Environmental and Resource Economics
Online: Jan 22, 2016
Keywords: Amenity valuation, Climate change, Hedonic model, Household sorting, Impact assessment, Quality of life.

Friday, February 26, 2016

Benefits of Regulating Hazardous Air Pollutants from Coal and Oil-Fired Utilities in the United States

On June 29, 2015, the U.S. Supreme Court ruled that the Environmental Protection Agency (EPA) acted unreasonably when it determined that cost was irrelevant to deciding whether it was “appropriate” to regulate emissions of Hazardous Air Pollutants (HAPs) from coal and oil-fired utilities (EGUs) (U.S. Supreme Court, Michigan v. EPA, 2015). Under the Clean Air Act, EPA must make a preliminary determination, known as the “appropriate and necessary” finding, before regulating HAP emissions from EGUs. The Court ruled that EPA made a mistake at this preliminary stage and sent the regulation, known as the Mercury and Air Toxics Standards (MATS), back to the agency and ordered EPA to consider costs. The public comment period for this proposal closed on January 15, 2016 and EPA aims to issue a final cost consideration and renewed “appropriate and necessary” finding by April 15, 2016.

In its 2011 regulatory assessment,(1) EPA concluded that the monetized benefits for all air pollutants (both direct benefits and cobenefits) associated with MATS range between $37 and $90 billion and far exceed the costs of regulation. However, most of these quantified benefits come from reductions in particulate emissions. Monetized benefits associated with reducing HAP emissions in EPA’s regulatory assessment ranged between $4 and $6 million, leading some critics to argue that the rule was unreasonable. However, both the scientific community and EPA have repeatedly emphasized the many additional, significant, unquantified benefits of this regulation that further outweigh the costs. Even preliminary efforts to monetize these benefits suggest they are substantially greater than the costs of the proposed regulation.

Although EGUs release a variety of HAPs, we will focus specifically on the benefits associated with reducing emissions of mercury and exposures to its organic form, methylmercury, which is formed in aquatic ecosystems and bioaccumulates in food webs. On the basis of recent peer-reviewed scientific literature, we find the monetized benefits for EGU mercury emissions reductions identified by EPA in the regulatory impact analysis supporting MATS vastly understate the benefits associated with reductions of those emissions.
Specifically we elaborate upon three key points: (1) Recent research demonstrates that quantified societal benefits associated with declines in mercury deposition attributable to implementation of MATS are much larger than the amount estimated by EPA in 2011. (2) As-yet-unquantified benefits to human health and wildlife from reductions in EGU mercury emissions are substantial. (3) Contributions of EGUs to locally deposited mercury have been underestimated by EPA’s regulatory assessment.
1. Quantified Societal Benefits Associated with Declines in Mercury Deposition Attributable to Implementation of MATS Are Much Larger than the Amount Estimated by the EPA in 2011
Because of data limitations and gaps in the available research, EPA’s regulatory assessment only considered a small subset of the public health and environmental risks associated with mercury emissions from EGUs. Specifically, EPA monetized the value of IQ losses for children born to a limited population of recreational fishers who consume freshwater fish during pregnancy from watersheds where EPA had fish tissue data. The monetized value of benefits for this small subpopulation was estimated between $4 and $6 million annually.

If one considers instead all of the benefits of reducing EGU mercury emissions, recent research confirms that the benefits are orders of magnitude greater than those quantified by EPA in 2011. One study found that the cumulative U.S. economy-wide benefits associated with implementation of MATS exceeded $43 billion. This value is far greater than EPA’s estimate of the costs associated with the regulation. Other work has estimated an annual benefit of $860 million associated with a 10% reduction in methylmercury exposure in the U.S. population.
2. As-Yet Unquantified Benefits to Human Health and Wildlife Are SubstantialIn part, these estimates are so much greater than the quantified benefits identified in EPA’s regulatory assessment because they consider additional types of benefits from reducing EGU mercury emissions. For example, many of these benefits are associated with adverse impacts of methylmercury on cardiovascular health. EPA did not quantify cardiovascular effects in the regulatory assessment. At that time, there was a split in the scientific evidence regarding the significance of those impacts. On one side, an independent expert panel in 2011 asserted there is sufficient scientific evidence to incorporate these outcomes in regulatory assessments. On the other, a high-profile study of risks of cardiovascular disease associated with methylmercury exposures in two U.S. cohorts found no evidence of adverse effects.

New York Power Authority Begins Energy Savings Light Upgrades at State Museum to Cut Costs an Protect Environment

The New York Power Authority has begun a lighting upgrade project at the New York State Museum in Albany that is expected to save more than $160,000 in annual energy costs and reduce greenhouse gas emissions by 900 tons a year, the equivalent of taking 190 cars off the road.

The project, which is being financed and implemented by the New York Power Authority, is part of Governor Andrew M. Cuomo’s BuildSmart NY program, a comprehensive statewide initiative to increase energy efficiency in public buildings. BuildSmart NY is a key program underpinning the Governor’s Reforming the Energy Vision strategy to build a cleaner, more affordable and resilient energy system for all New Yorkers, and supports the state’s goal of reducing greenhouse gas emissions 40 percent by 2030.

“Energy-saving measures like the State Museum project are what will help define the success of REV,” said Richard Kauffman, chairman, Energy and Finance, Office of the Governor. “This project will lower the bottom-line costs of operating the museum and work toward the larger goal of achieving a clean energy economy in New York State.”

BuildSmart NY, which was launched in 2012, will save millions of taxpayer dollars while significantly reducing greenhouse gas emissions. State-owned buildings currently consume approximately five percent of the energy used by all buildings in New York.

NYPA is partnering with the New York State Education Department, which runs the museum. The Power Authority is providing more than $1.7 million in financing for the energy efficiency upgrades.
All of the existing, inefficient incandescent lighting throughout the museum’s exhibit areas will be replaced with high-performance LED track lighting. About 2,000 fixtures will be installed, along with a lighting-control system that will enable staff to illuminate specific areas and pathways to meet the particular needs of an exhibit.
The project is expected to complete this summer.

Museum Exterior

New York Power Authority
Press Release dated February 18, 2016

The Hidden Battery - Opportunities in Electric Water Heating

The nation’s 50 million residential electric water heaters collectively represent a significant – and vastly underutilized – energy storage resource capable of leveraging substantial environmental and cost benefits according to new research commissioned by the National Rural Electric Cooperative Association (NRECA), the Natural Resources Defense Council (NRDC), the Peak Load Management Alliance (PLMA) and Great River Energy (GRE).

This finding from the global economic consulting firm The Brattle Group was announced today (Feb. 10, 2016) at the launch of an initiative designed to promote growth in a novel, community-based approach to energy storage, dubbed “community storage.” By aggregating distributed energy technologies and home appliances, electric cooperatives are developing community storage to increase energy efficiency, better integrate renewable energy resources onto the grid, and reduce customers’ monthly electric bill.
One such community storage program managed by Minnesota-based generation and transmission cooperative Great River Energy has been able to store a gigawatt of energy each night by controlling the electric resistance water heaters of 65,000 end-use members.

“At Great River Energy, we believe there’s a battery hidden in basements all across our service territory,” said Gary Connett, director of member services at Great River Energy. “When the wind is blowing or the sun is shining, large capacity water heaters can be enabled to make immediate use of that energy to heat water to high temperatures. The water heaters can be shut down when renewables are scarce and wholesale costs are high.”

Even in regions heavily reliant on coal and natural gas to generate electricity, the Brattle research shows that consumers have options for saving money on their electric bills and reducing carbon dioxide (CO2) emissions associated with their water heating. Consumers can reduce CO2 emissions by up to 30 percent using their water heater as a thermal battery. Consumers can reduce their CO2 emissions by more than 50 percent using heat pump water heaters.

These same consumers will be enabling integration of clean, renewable resources. Further, the emission reductions of community storage will compound as more consumers participate and the electricity sector transitions to cleaner fuels and generation technologies.

“Co-ops have been controlling large water heaters for decades in order to reduce demand at peak times, which also reduces members’ electric bills. A community storage program using advanced water heaters allows us to do even more: we can store energy, we can optimize the power grid by shaping demand and we can integrate more renewable resources,” said Keith Dennis, NRECA’s senior principal for end-use solutions and standards.

“Smart, grid-connected electric water heaters represent a promising possibility for a more efficient, more economic, and ultimately lower-emissions electricity system,” said Robin Roy, director of building energy efficiency and clean energy strategy at the NRDC. “Given that water heating represents more than 15 percent of household energy use, this is a great opportunity to cut energy waste and also the emissions from electricity generation.”...

[Using data from the PJM and Midcontinent ISO markets, and relying on detailed simulations of water heater operations, the authors evaluate several different approaches for controlling the load of the water heaters. They find that the net benefits of these approaches could reach around $200 per participant per year under certain market conditions. This would effectively pay for the entire cost of the water heater and associated control equipment (including installation) in five years.

Electric water heaters are essentially pre-installed thermal batteries that are sitting idle in more than 50 million homes across the U.S....Electric water heaters account for 9% of all electricity consumed by households nationally. This represents the third single largest source of residential electricity consumption, behind only space cooling (13%) and lighting (11%). More than 40 percent of U.S. households have electric water heating.

Figure ES-1 shows the estimated incremental annualized net benefits of each of the water heating strategies analyzed in this study, based on market prices observed in PJM in 2014.5 These net benefits are incremental relative to maintaining an uncontrolled 50-gal ERWH (the baseline assumption).

The environmental impacts of ERWHs depend heavily on the water heating control strategy being  considered and the composition of the generation supply mix of the power system. Generally, HPWHs provide the most consistent environmental benefit on a per-water heater basis through overall reductions in energy consumption, reducing CO2 emissions by approximately 50% relative to an uncontrolled ERWH in our analysis.


The system peak load reductions provided by the Peak Shave strategy make it particularly economic in markets where there is a need for new generating capacity. Net benefits per water heater in the PJM 2014 and MISO 2028 scenarios are $13 and $29 per customer per year, respectively. At very low capacity prices such as those in the MISO 2014 scenario, however, the avoided costs do not overcome the incremental cost of the equipment needed to control the water heater, with a net benefit of -$15 per customer per year....