“California’s Cap-and-Trade Revolt” – Wall Street Journal, 30 June 2014

While West Virginia and Kentucky Democrats are bucking Obama’s climate policy, California Democrats are also fighting similar policy in California, the state’s cap-and-trade program, which is directly effecting the poorest Californians.

Recently, 16 of members of California’s Democratic Assembly wrote a letter to the California Air Resources Board, encouraging the board to revise or postpone California’s cap-and-trade program. The program calls for big manufacturers and power plants to adhere to a state-ordered carbon cap by buying carbon permits or limiting emissions. Transportation fuel suppliers will also have to acquiesce to permits in 2015.

via SF Public Press

via SF Public Press

Assembly Democrats’ minds are on gas prices, which could surge anywhere from 15 to 40 cents per gallon. California has the highest gas prices in the country, in large part due to fuel blending obligations and taxes. In 2012, the Boston Consulting Group anticipated that gas prices would rise anywhere between $0.49 and $1.83 per gallon by 2020. While the program’s objectives are pure—boosting gas prices is supposed to persuade people to drive less, carpool, or purchase electric cars—California’s cap-and-trade is invariably hurting those who cannot afford it. A majority of the 16 Democratic Assembly Members represent minorities and low-income populations.

The Air Resources Board maintains that the objective of the program isn’t to finance new state governmental programs, though California’s 2014 budget does allocate $250 million from carbon permit auctions, as well as 25 percent of future yields, to fund a high-speed rail. The auctions will bring in anywhere between $12 billion to $45 billion by 2020.

Assembly Democrats are in agreement with the California Chamber of Commerce, which is suing the Air Resources Board to invalidate California’s program.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

June 30, 2014

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“Americans by 2 to 1 Would Pay More to Curb Climate Change” – Bloomberg, 10 June 2014

One of the arguments against Obama’s Climate Action Plan and the EPA‘s Clean Power Plan proposal is that the added cost of clean energy will weigh heavily on the US’s middle class. However, it seems that Americans are prepared to pay more for energy. Obama and the EPA are currently working together to pass new rules that would reduce emissions by 30 percent by 2030, with a focus on coal-fired power plants.

As reported by the Bloomberg National Poll, 62 percent of Americans are willing to pay more for curbing carbon emissions. Forty-six percent of Republicans are also ready to pay more, as well as 82 percent of Democrats and 60 percent of independents.

There remains a margin of Democrats who aren’t in favor of new carbon emission rules, particularly Democratic Senate candidates who represent coal states like West Virginia and Kentucky. But support is mainly divided on party lines: according to the same Bloomberg poll, 70 percent of Democrats and 51 percent of independents would endorse candidates who are in favor of new climate policy—only 28 percent of Republicans would advocate for such policy.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

June 16, 2014

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The “War Of Words On Coal” Continues

Yesterday, the EPA presented new rules for power plants emissions, called the Clean Power Plan proposal. These rules are a small part of Obama’s Climate Action Plan, which he is pursuing through executive action. The four building blocks of the EPA’s proposal are:

    • Cut carbon emissions from the power sector by 30 percent nationwide below 2005 levels;
    • Cut particle pollution, nitrogen oxides, and sulfur dioxide by more than 25 percent as a co-benefit;
    • Avoid up to 6,600 premature deaths, up to 150,000 asthma attacks in children, and up to 490,000 missed work or school days-providing up to $93 billion in climate and public health benefits; and
    • Shrink electricity bills roughly 8 percent by increasing energy efficiency and reducing demand in the electricity system.

(via EPA)

According to the EPA, carbon dioxide emissions from US power plants have decreased by 13 percent since 2005. While different states will be given different emissions quotas, 30 percent is the US’s nationwide goal. States have up to three years to draft plans to meet their goals. Initial compliance plans are due June 30, 2016, but some states will be allotted a one-year extension. States that form multi-state plans will be allotted a two-year extension. If a state decides not to formulate a plan, then the EPA will write one for the state.

The EPA will present a number of options that will help the states meet target goals, such as helping power plants to become more efficient and spending more on sources of renewable energy. Kansas, Kentucky, Missouri, Virginia, and West Virginia have already passed laws that permit their environmental agencies to create unique carbon-emission plans. Louisiana and Ohio are also following suit.

Conservatives have been battling Obama’s climate regulations for months. As the 2014 midterm elections loom right around the corner, conservatives and their industry allies will do anything they can to stir the political pot and anger voters. Voters in states like Kentucky and West Virginia are the determining factor in whether or not the Democrats retain the Senate majority. Many Democrats who are openly against the new rules represent coal-producing states, such as West Virginia Democratic Rep. Nick Rahall—96 percent of his state’s power comes from coal.

The coal industry contends that the new rules will have negative repercussions on the economy, including major damage to coal and manufacturing jobs, increased household electricity costs, and a rising number of brown-outs during extreme heat or cold. The US Chamber of Commerce—opponents of the new regulations—contend that the Clean Power Plan proposal will result in a loss of almost a quarter-million jobs through 2030, will force power plants across the US to shut down, and will inflict $50 billion in yearly costs.

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The US depends on coal for 40 percent of its electricity; however, 30 percent of greenhouse gas emissions originate from electricity, and within that percentage, coal-fired power plants make up 80% of those emissions. Overall, coal-fired power plants expel 25% of all greenhouse gas emissions.

While conservatives, and some liberals, see the proposed regulations as an attack on the coal industry, Obama sees it as way to not only clean up our environment, but also as a way to avert a national health crisis. Current climate law is dictated by the decades-old Clean Air Act, which regulates pollutants like soot, mercury, lead, arsenic, sulfur dioxide, and nitrogen oxides, but not carbon pollution.

The EPA will permit comment on the Clean Power Plan proposal for 120 days after it is published in the Federal Register, and will also conduct public hearings in Denver, Atlanta, Washington DC, and Pittsburgh during the week of July 28. The EPA’s proposed rules won’t be finalized until next year.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

June 2, 2014

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“Coal’s Decline Hits Hardest in the Mines of Kentucky” – Wall Street Journal, 26 November 2013

Wall Street Journal

While the US’s stores of natural gas have been boosting the economy and lowering gas prices in unprecedented ways, the influx has also been hurting many Americans, especially those working in the Central Appalachian coalfields, primarily located in Kentucky, Virginia, West Virginia and Pennsylvania.

Over the past two years, dozens of Central Appalachian mines have closed, causing massive layoffs, which are likely to be permanent for the area. The coal industry is now concentrating on two other major coal basins in Wyoming and Illinois that are cheaper to mine.

Data from the Mine Safety and Health Administration shows that 26 Kentucky counties are the hardest hit by mine closings — counties that have been mining for over a century. Before 2011, the number of mining jobs in the region never dropped below 11,400; however, after 2011, the number of mining jobs has declined to 8,000, the fewest number of jobs since the 1920s. Almost 100 mines Kentucky’s eastern coalfields have shutdown since 2011, from 256 active mines to 161.

Many of the unemployed miners blame the layoffs on Obama and the EPA for introducing new regulations that will limit emissions for coal-burning power plants, what many Republicans have deemed the “war on coal.” However, the coal industry sees the layoffs as the sum of many things: new fracking technologies have further depressed the coal market, and Obama’s regulations have only worsened the situation.

Furthermore, many of the affected Appalachian coal mines’ production costs are higher (with a cheaper selling price), more abundant and more polluting than steam coal (used for power generation). Metallurgical coal, on the other hand, requires less production and a lower selling price needed for exportable global iron and steel production.

In 2003, coal produced 51% of US electricity and natural gas produced 17%; in August 2013, coal produced 39% of US electricity and natural gas produced 27%. The EIA has calculated that, while coal will still be power plants’ biggest fuel supply, use of coal by electricity utilities will decline over the coming decades. Around 9% of coal-fired power plants will be closing between 2013-2018.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

December 12, 2013

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