2015 Society for Benefit-Cost Analysis Conference and Meeting: Advancing the Policy Frontier - March 19-20, 2015

http://benefitcostanalysis.org/events/2015-conference
 The Society for Benefit-Cost Analysis (SBCA) is an international group of practitioners, academics and others who are working to improve the theory and application of the tools of benefit-cost analysis. Their Seventh Annual Conference and Meeting will be held at .The Marvin Center at the George Washington University 800 21st St. NW, Washington, D.C. 20052.



View and download the preliminary conference program schedule (subject to change): Preliminary Program

W. Kip Viscusi of Vanderbilt University will be speaking on "Pricing Lives for Government and Corporate Risk Decisions." in the keynote luncheon

SBCA is pleased to offer six professional development workshops on March 18, 2015, prior to the conference. The workshops include:

1. Benefit-Cost Analysis in the States: Status, Results First, and Options to Increase Usage Among Policymakers
2. Use of Expert Elicitation to Inform Decision-Making
3. An Overview of Climate Change, Its Impacts and the Social Cost of Carbon
4. Estimating the Benefits of Improved Air Quality with the Open Source BenMAP-CE Tool
5. QALYs in Cost-Effectiveness and Benefit-Cost Analysis
6. Retrospective Benefit-Cost Analysis

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Science and Strategies to Curb Methane Emissions from the Oil and Natural Gas Sector

http://policyintegrity.org/publications/detail/capturing-value/

According to a December 2014 policy brief from the Institute for Policy Integrity http://policyintegrity.org/
...
The oil and natural gas sector is the nation’s largest industrial emitter of methane: this primary component of natural gas is a potent climate pollutant up to 86 times more powerful than carbon dioxide on a 20-year timeframe.

Currently the United States loses at least 1 to 3 percent of its total natural gas production each year when methane is leaked or vented to the atmosphere during the production, processing, transmission, storage, and distribution of natural gas and oil. This is a waste of a valuable resource, as well as a source of greenhouse gas pollution. Curbing methane pollution is critical to meeting the nation’s climate protection targets, as well as the Administration’s new agreement with China, which commits the United States to reducing its total greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025.

The U.S. Environmental Protection Agency’s (EPA) proposed Clean Power Plan is expected to result in increased use of natural gas, as combined cycle gas power plants will likely replace coal-fired power plants in some states. Reducing methane emissions from the oil and natural gas sector would further increase the climate benefits of switching from coal to natural gas.

Recent studies show that EPA can reduce methane pollution from the oil and gas industry by nearly 50 percent, using available, low-cost measures. Because of the commercial value of the natural gas that can be conserved, many of these measures pay for themselves by redirecting natural gas back to productive use as a fuel source for electricity and heating. And even without the resale value of natural gas, these measures can still be cost-benefit justified due to the social cost of methane emissions,4 as well as the health benefits of reduced smog and hazardous air pollutants, which are co-emitted with methane during oil and natural gas production.

This policy brief provides an overview of the science of methane, oil and gas sector methane emissions, the history of federal action, available methane emission reduction opportunities, and potential regulatory pathways to secure methane reductions under the Clean Air Act. Because methane is so potent in the near-term, federal regulation to curb its release can reduce imminent climate effects and lower the overall cost of climate mitigation.
... 
Available Methane Reduction Opportunities

Available, low-cost technologies and practices can be deployed throughout the oil and natural gas lifecycle to capture methane currently lost due to leaks, venting, and flaring. Because methane is the primary component of natural gas, it can be sold for end use—capturing value while reducing climate-forcing pollution.

Recent studies show that substantial reductions in methane and volatile organic compounds (VOCs) are achievable at low or zero cost (assuming the captured gas is sold), using available technology:

• A 2014 report by ICF International found that a 40 percent reduction in fugitive methane releases and 44 percent reductions in VOCs and hazardous air pollutants could be attained at a cost of one cent per thousand cubic feet (mcf) of natural gas. Ninety percent of the reductions achievable were described in EPA’s five technical papers released this spring;
• A 2014 report issued by Clean Air Taskforce, Natural Resources Defense Council, and Sierra Club found that fugitive methane can be reduced by 42 to 48 percent using available methods at an annual cost equal to 1.5 percent of the industry’s annual revenue;
• A 2013 report by the World Resources Institute found that three methane capture and avoidance technologies (plunger lifts, low-bleed pneumatic devices, and leak detection and repair systems) could cut methane emissions across the natural gas system by 30 percent; and
• A 2012 report by the Natural Resources Defense Council identified ten commercially available, low-cost ways for operators to capture methane that would otherwise be leaked or vented from oil and gas production, processing, and transportation systems. Many of these technologies pay for themselves or turn a profit in one to two years, due to the resale value of the captured gas.
...

The voluntary participants in EPA’s Natural Gas STAR program have also shared information on methane emission reduction technologies and practices, and their revenue-generating potential at different natural gas prices and timelines. Available control measures include:

Leak detection and repair (“LDAR”)
• Process: Infrared cameras and other advanced equipment is used to detect and repair methane leaks from well-pads, processing plants, compressor stations, and distribution facilities.
• Reduction capacity: Approximately 1.70-1.80 million metric tons of methane per year.
• Economics: Using a gas price of $4/mcf, these measures are usually profitable, due to the value of the gas conserved by finding and fixing leaks.

Green completions for oil wells
• Process: Closed-loop systems capture liquids and gases coming out of the well during the initial “completion” stage of production, then route fluids and gases to a tank for separation to enable the sale or reuse of gas.
• Reduction capacity: Approximately 0.26-0.50 million metric tons of methane per year.
• Economics: Green completions cost between $8,700 and $33,000 per well, and can generate between $28,000 and $90,000 per year, per well, in captured natural gas revenue.

Solar Energy Prices See Double-digit Declines in 2013; PV pricing to drop another 3 – 12 percent in 2014

http://www.nrel.gov/news/press/2014/15405.html

Distributed solar photovoltaic (PV) system prices dropped by 12 - 19 percent nationwide in 2013, according to the third edition of a jointly written report on PV pricing trends from the Energy Department's (DOE) National Renewable Energy Laboratory (NREL) and Lawrence Berkeley National Laboratory (LBNL). In addition, 2014 prices are expected to drop another 3 - 12 percent, depending on system location and market segment. Industry analysts expect this trend to continue over the next couple of years, keeping the nation on track to meet the DOE SunShot Initiative's 2020 targets.

"These price drops are consistent with previous annual reductions achieved since 2010, when the Energy Department's SunShot Initiative was established," NREL's David Feldman, a lead author of the report said. "However, the report also indicates that there are significant variations in reported pricing both geographically and across market segments due to a variety of factors, including value-based pricing based on local competition within the marketplace and prevailing electric retail rates. Other factors include differences in specific system configurations such as panel efficiency, mounting structure, and geographic location; and the time lags between commitments and commercial operation for utility-scale systems." 

The report, Photovoltaic (PV) Pricing Trends: Historical, Recent, and Near-Term Projections (2014 Edition), provides a high-level overview of historical, recent, and projected near-term PV system pricing trends in the United States and examines progress in PV price reductions to help the Energy Department and other stakeholders manage the transition to a market-driven PV industry.  The report shows that the general downward trend in PV system pricing continued in 2013, and is expected to continue through 2016. Other key findings include:

• Modeled utility-scale PV system prices fell below $2 a watt in 2013, and have continued to decline in 2014, to roughly $1.80 a watt, which is 59 percent below what modeled pricing showed in 2010.
• There is a difference of roughly $2 a watt between the median reported price of the lowest- and highest-priced states for residential and commercial systems (less than 10 kW in size); a similar price range also exists within individual states.
• There is a wide-range in analysts' PV pricing estimates, however a number of analysts are now projecting long-term pricing in line with the targets set by the SunShot Initiative for 2020. At these pricing levels, PV is expected to reach widespread grid parity in the U.S. without federal or state subsidies. 

"There is still considerable uncertainty as to how low PV system prices will drop in the next five to 10 years," Feldman said. "However, there appears to be an emerging consensus that the SunShot's price reduction targets are within reach and more and more likely to be realized. We see this reflected in the fact that many of the current projections are far lower than projections made in the recent past by the same sources." 

The report was produced as part of an ongoing collaborative research effort between the two labs focused on solar technology system-level cost analysis and modeling. This briefing draws on several ongoing research activities at LBNL and NREL, including LBNL's annual Tracking the Sun report series, NREL's bottom-up PV cost modeling, and NREL's synthesis of PV market data and projections.

The research was supported by funding from the Office of Energy Efficiency and Renewable Energy, in support of its SunShot Initiative. The SunShot Initiative is a collaborative national effort that aggressively drives innovation to make solar energy fully cost-competitive with traditional energy sources before the end of the decade. Through SunShot, DOE supports efforts by private companies, universities, and national laboratories to drive down the cost of solar electricity to $0.06 per kilowatt-hour. Learn more at energy.gov/sunshot  NREL is the U.S. Department of Energy's primary national laboratory for renewable energy and energy efficiency research and development. NREL is operated for the Energy Department by The Alliance for Sustainable Energy, LLC.

U.S. Department of Energy (DOE) www.DOE.gov National Renewable Energy Laboratory (NREL) www.nrel.gov

Press Release dated October 20, 2014

New Report Makes Strong Business Case for Using Safer Chemicals in Products and Supply Chains

http://www.unep.org/newscentre/Default.aspx?DocumentID=2814&ArticleID=11109&l=en
Product Recalls Cost Companies Millions; While Companies Responding to Market Demand for Safer Products Are Seeing Growth in Sales

... A new report, The Business Case for Knowing Chemicals in Products and Supply Chains, highlights the benefits to companies when they invest in an "Active Strategy" for chemicals management, one in which they proactively manage the chemicals in their products and supply chains to stay ahead of regulatory and market demands.

The United Nations Environment Programme (UNEP) report, prepared in collaboration with the environmental NGO Clean Production Action, was released [on December 15, 2014] at the Strategic Approach to International Chemicals Management (SAICM) Open-ended Working Group's meeting in Geneva, Switzerland.

The report speaks directly to the emerging chemicals policy issue of Chemicals in Products, which will be discussed in-depth at the SAICM meeting, along with five other emerging policy issues of high priority to the international chemicals policy community.

...

The report compares companies with differing chemicals management strategies, concluding that those with Active Strategies reduce their risk to damaging chemicals "surprises" and generate long-term value through increased sales, enhanced brand reputation, and well-managed supply chains.

The report demonstrates how companies with "Passive Strategies" can face big fines, loss of market share and value, and tarnished reputations if an unknown "hidden liability" of hazardous chemicals in their products comes to public light. The report notes that over a three-year period Walmart, Target, Walgreen Co., CVS Pharmacy and Costco Warehouse paid a total of US $138 million in fines because of chemicals of concern found in their products.

Product recall costs can also be significant: Sony's recall of its PlayStation in 2011 due to illegally high cadmium levels cost the company more than US $150 million in lost sales and product reformulation costs; Mattel's recall of more than nine million toys in 2007 due to lead in their paint cost the company US $110 million in recall expenses and its stock price tumbled 18 per cent; and RC2 Corporations 2007 recall of toy trains, also due to lead paint, cost US $48 million and halved its stock price.

The marketplace is also swift to punish: in China in 2009, tens of thousands of consumers stopped buying, and thousands of stores stopped selling, Johnson & Johnson's baby products after formaldehyde and 1,4-dioxane were found in some of these products in the United States. Johnson & Johnson saw its market share in China for baby products decline by almost 10 per cent.

Conversely, the report says, proactive businesses that adopt an Active Strategy reap the rewards of their efforts: they avoid fines and product recalls, are well-prepared for new government regulations and respond quickly to ever-growing market demands to know and control the chemicals in their products.

The examples are striking:

Coastwide Laboratories, a division of Staples, designed and invested in a new product line - The Sustainable Earth brand - based on safer chemicals. This became a primary driver of Coastwide Laboratories' sales and market share growth in the early 2000s. "We seek to offer our customer's products that are inherently safer for human and environmental health and that address environmental impacts throughout their lifecycle. Listening and responding to our customers has clearly paid off over the years," said Roger McFadden, Vice President and Senior Scientist at Staples. "With increasing regulatory changes and a growing awareness about how chemicals impact health, avoiding harmful chemicals in consumer products is no longer an ideological nice-to-have, but a must-have moving forward. This new report reveals information and evidence that can be valuable to any business."

The Value of Brownfield Remediation

The U.S. Environmental Protection Agency Brownfields Program awards grants to redevelop contaminated lands known as brownfields. This paper estimates cleanup benefits based on a nationally representative sample of brownfields using a variety of quasi-experimental techniques. To our knowledge, this is the first paper that combines non-public EPA administrative records with high-resolution, high-frequency housing data to estimate the effects of brownfield cleanup across the entire federal Brownfields Program. We find increases in property values accompanying cleanup, ranging from 4.9% to 11.1%; for a welfare interpretation that does not rely on the intertemporal stability of the hedonic price function, a double- difference matching estimator finds even larger effects of up to 32.2%. Our various specifications lead to the common conclusion that Brownfields Program cleanups yield a positive, statistically significant, but highly-localized effect on housing prices. 

 by Kevin Haninger, Lala Ma, Christopher Timmins
National Bureau of Economic Research (NBER)
NBER Working Paper No. 20296; Issued in July 2014