Air quality co-benefits of subnational carbon policies

Air quality co-benefits can potentially reduce the costs of greenhouse gas mitigation. However, whereas many studies of the cost of greenhouse gas mitigation model the macroeconomic welfare impacts of mitigation, most studies of air quality co-benefits do not. We employ a U.S. computable general equilibrium economic model previously linked to an air quality modeling system and enhance it to represent the economy-wide welfare impacts of fine particulate matter. We present a first application of this method to explore the efficiency and distributional implications of a Clean Energy Standard (CES) and a Cap and Trade (CAT) program that both reduce CO2 emissions by 10% in 2030 relative to 2006. We find that co-benefits from fine particulate matter reduction (median $6; $2 to $10/tCO2) completely offset policy costs by 110% (40% to 190%), transforming the net welfare impact of the CAT into a gain of $1 (−$5 to $7) billion 2005$. For the CES, the corresponding co-benefit (median $8; $3 to $14/tCO2) is a smaller fraction (median 5%; 2% to 9%) of its higher policy cost. The eastern United States garners 78% and 71% of co-benefits for the CES and CAT, respectively. By representing the effects of pollution-related morbidities and mortalities as an impact to labor and the demand for health services, we find that the welfare impact per unit of reduced pollution varies by region. These interregional differences can enhance the preference of some regions, such as Texas, for a CAT over a CES, or switch the calculation of which policy yields higher co-benefits, compared with an approach that uses one valuation for all regions. This framework could be applied to quantify consistent air quality impacts of other pricing instruments, subnational trading programs, or green tax swaps.Implications: Policies that reduce CO2 emissions can also reduce PM2.5 (particulate matter with an aerodynamic diameter <2.5 μm), yielding unintended economic benefits. Using an integrated assessment model linking policies and emissions to a consistent treatment of costs and co-benefits, we find that PM2.5 co-benefits offset the costs of reducing CO2 through Cap and Trade (CAT) in the United States. An equivalent Clean Energy Standard is more costly, and its higher PM2.5 reductions offset up to a tenth of its costs. Most co-benefits accrue to eastern states, and interregional differences and indirect economic effects shift those gains further to New York and New England. Economy-wide co-benefits reduce the costs and shift the distributional impacts of U.S. carbon policies.

These comments respond specifically to a question raised in the U.S. Senate Committee on Energy and Natural Resources’ “White Paper on a Clean Energy Standard.” These comments argue that the Committee should consider lifecycle greenhouse gas analysis as one factor in determining whether an energy resource, or a specific project, is a “clean energy” resource for the purposes of a clean energy standard. Lifecycle analysis is increasingly recognized as a necessary assessment for understanding the full greenhouse gas consequences of generating electricity, or producing transportation fuels, with a particular resource. Applying a lifecycle analysis in a clean energy standard will help ensure that a clean energy mandate maximizes greenhouse gas reductions. In addition, a lifecycle analysis can help identify cost-effective opportunities for reducing emissions from new energy projects. These comments do not provide a full assessment or recommendation for how to incorporate lifecycle analysis into a clean energy standard. Nor do these comments recommend the inclusion or exclusion of any resources in a clean energy standard. Rather, these comments merely highlight the importance of including a lifecycle assessment of greenhouse gases in determining whether a resource qualifies as a “clean energy” resource.

As the transportation sector continues to decarbonize through electrification, there is growing interest in quantifying potential tradeoffs in air pollution and health impacts due to potential excess emissions from the power sector. This study investigates air pollution and health impacts of policy-driven changes in the transportation sector and the associated power generation demand in the Northeast and Mid-Atlantic United States. Five illustrative scenarios were designed to capture the effects of different policies under the first mandatory market-based program to reduce greenhouse gases in the US power sector (Regional Greenhouse Gas Initiative—RGGI) and the Transportation and Climate Initiative (TCI). Considering future power generation with new renewable energy investments to meet demands from decarbonized transportation, the scenarios were framed using: 1. 2030 reference cases for both sectors and a hybrid TCI portfolio, 2. Departure from the reference cases defined by Pennsylvania included or not in RGGI, and 3. Power grid emissions estimated under clean energy standard (CES) policy and hybrid TCI portfolio. While the cross-sectoral policy effect on domain-wide concentrations is modest (max ΔPM2.5 ∼ 0.06 μg m3, ΔNO2 ∼ 0.3 ppbv, ΔO3 ∼ 0.15 ppbv), substantial increases in Ohio and West Virginia were attributed to Pennsylvania joining RGGI. With CES enacted and Pennsylvania in RGGI, significant reductions are seen in average concentrations (max ΔPM2.5 ∼ 1.2 μg m3, ΔNO2 ∼ 1.1 ppbv, ΔO3 ∼ 1.7 ppbv) except for Louisiana and Mississippi with corresponding disbenefits. When focusing exclusively on emissions reductions from transportation, the hybrid TCI portfolio had health benefits of 530 avoided adult deaths, and 46 000 avoided asthma exacerbations. With a ‘business as usual’ power grid, these benefits remain comparable and are mainly driven by NO2, followed by PM2.5 and O3. However, if Pennsylvania joins RGGI, total health benefits and spatial distribution change substantially, with a large portion of adverse health impacts moving from TCI states to Ohio and West Virginia. The overall monetized impact of a CES scenario can substantially exceed the estimated average range of 66–69 Billion US$, depending on the interaction with transportation decarbonization strategies and other drivers of exposure.

This chapter describes highly detailed modeling of existing coal-fired units in the US power sector within the FACETS TIMES model. Such detailed modeling is necessary wherever the existing stock plays a key role in determining policy cost. The soon-to-be-implemented Mercury and Air Toxics (MATS) regulation imposes unit-level emissions rate constraints on nearly 1100 coal-fired units, forcing retrofit or retire decisions at a large portion of the existing fleet. Covered emissions and retrofit costs depend in a detailed way on unit configuration and coal quality, forcing development of new techniques to handle the enormous expansion in model size and detail. These retrofit/retire decisions are being made under uncertainty about future carbon policies for the sector. FACETS was used to compare “foresight” scenarios in which the model could “see” both the MATS requirements and a power sector clean energy standard (CES) to “myopic” scenarios in which the MATS decisions made in the Reference scenario are fixed in the model solution up through the MATS compliance window in model year 2018, after which the model is free to begin responding to the CES. The overall national costs of myopia were found to be small, except when the carbon policy ramps up very quickly after air quality compliance decisions are made, but significant regional heterogeneity exists. Stranded asset costs from retrofitted units that must be underutilized or abandoned later range from $2 to 8 billion in the myopic cases. Substantially fewer retrofits are undertaken in the foresight cases, reducing stranded asset costs in some regions by up to 100 %.

This review paper examines the greenhouse gas (GHG) emission reduction targets postulated by a range of organizations seeking to reduce the consequences of global climate change and how, or if, the global tourism sector can achieve its share of those targets. It takes both existing estimates of current tourism GHG emissions and emissions projected in a business-as-usual scenario through to 2035 and contrasts them with the “aspirational” emission reduction targets proclaimed by the sector. Analysis reveals that with current high-growth emission trends in tourism, the sector could become a major global source of GHGs in the future if other economic sectors achieve significant emission reductions. Success in achieving emission reductions in tourism is found to be largely dependent on major policy and practice changes in air travel, and stated tourism emission reduction targets do not appear feasible without volumetric changes considering the limited technical emission reduction potential currently projected for the aviation sector. The opportunities and challenges associated with a shift towards a low-carbon global economy are anticipated to transform tourism globally and in all respects. Much greater consideration and dissemination of these issues is required to inform future tourism development and travel decisions.

Substantially reducing carbon dioxide (CO2) emissions from electricity production will require a transformation of the resources used to produce power. Several different incentive-based policies have been proposed ranging from setting minimums for clean generation sources to maximum emission rate standards and caps on CO2emissions, all of which are allowed under the EPA’s Clean Power Plan. This paper analyzes the economic consequences of a suite of different flexible and comprehensive policies to reduce CO2emissions from the power sector, including a carbon tax, a tradable emissions rate performance standard, and two versions of a clean energy standard (CES). Modeling results suggest that policies that encourage emissions reductions along multiple margins can be substantially more cost-effective than less flexible policies. The margins are intra and inter fuel, and technology substitution, electricity demand, and generator fuel efficiency. Despite cost differences, all of the policies result in substantial increases in social welfare.

With the EU ETS 2 a new EU-wide emissions trading system is introduced that covers the greenhouse gas emission of the buildings and road transport sectors, i.e. sectors the decarbonization of which has so far been the responsibility of the Member States under the Effort Sharing Regulation. Since they will remain responsible for the achievement of their national greenhouse gas emission reduction targets under that regime, the question arises whether the Member States can maintain or introduce additional carbon pricing instruments alongside the new EU ETS 2. Hence, this paper examines the legality of such an approach, by assessing relevant provisions of EU secondary and primary law. Without going deep into the economic and political considerations, it concludes that from a legal perspective, the coexistence of national carbon pricing instruments and the EU ETS 2 is not prohibited.With the latest reform of the EU Emissions Trading System Directive (ETS Directive), the European Union (EU) has introduced a new EU emissions trading system for buildings and road transport (EU ETS 2)1. The decarbonization of those sectors traditionally falls within the responsibility of the EU Member States under the regime of the Effort Sharing Regulation (ESR). The ESR introduces legally binding national greenhouse gas (GHG) emission reduction targets. Hence, over the last few years, the Member States have introduced different measures in order to reach their targets. Those include carbon pricing instruments, understood as measures that put a price on the emission of GHG and thus create an incentive to reduce those emissions. Carbon pricing instruments include carbon taxes, as well as emissions trading systems2. With the introduction of the new ETS 2, the question arises whether the Member States can maintain (or introduce) such national carbon pricing instruments in parallel to the new EU ETS 2.

A Clean Energy Standard (CES) is a flexible, market-based policy instrument that could be adopted to reduce greenhouse gas emissions from the U.S. electricity system over time. This paper uses several well-known energy system and electricity models to analyze a CES that reflects broad principles outlined in President Obama's January 2011 State of the Union Address and in the Administration's subsequent Blueprint for a Secure Energy Future. 1 In particular, it examines three different design options for a CES that would each lead to approximately 80% clean electricity by 2035. These different design options provide broadly similar economic incentives for clean energy deployment and yield similar overall welfare impacts, but they exhibit different distributional outcomes. The most inclusive CES crediting approach favors producers over consumers in competitive electricity markets as well as regions with larger initial endowments of clean energy. On the other hand, the most restrictive crediting approach favors consumers over producers and reduces preferences for regions with larger initial endowments of clean energy. While specific technology outcomes vary across the four models used in this study, key insights about cost-effectiveness and economic incidence are largely robust to the underlying modeling platform. These insights may be important considerations in future CES policy design efforts.

Low- and middle-income countries have the largest health burdens associated with air pollution exposure, and are particularly vulnerable to climate change impacts. Substantial opportunities have been identified to simultaneously improve air quality and mitigate climate change due to overlapping sources of greenhouse gas and air pollutant emissions and because a subset of pollutants, short-lived climate pollutants (SLCPs), directly contribute to both impacts. However, planners in low- and middle-income countries often lack practical tools to quantify the air pollution and climate change impacts of different policies and measures. This paper presents a modelling framework implemented in the Low Emissions Analysis Platform – Integrated Benefits Calculator (LEAP-IBC) tool to develop integrated strategies to improve air quality, human health and mitigate climate change. The framework estimates emissions of greenhouse gases, SLCPs and air pollutants for historical years, and future projections for baseline and mitigation scenarios. These emissions are then used to quantify i) population-weighted annual average ambient PM2.5 concentrations across the target country, ii) household PM2.5 exposure of different population groups living in households cooking using different fuels/technologies and iii) radiative forcing from all emissions. Health impacts (premature mortality) attributable to ambient and household PM2.5 exposure and changes in global average temperature change are then estimated. This framework is applied in Bangladesh to evaluate the air quality and climate change benefits from implementation of Bangladesh’s Nationally Determined Contribution (NDC) and National Action Plan to reduce SLCPs. Results show that the measures included to reduce GHGs in Bangladesh’s NDC also have substantial benefits for air quality and human health. Full implementation of Bangladesh’s NDC, and National SLCP Plan would reduce carbon dioxide, methane, black carbon and primary PM2.5 emissions by 25%, 34%, 46% and 45%, respectively in 2030 compared to a baseline scenario. These emission reductions could reduce population-weighted ambient PM2.5 concentrations in Bangladesh by 18% in 2030, and avoid approximately 12,000 and 100,000 premature deaths attributable to ambient and household PM2.5 exposures, respectively, in 2030. As countries are simultaneously planning to achieve the climate goals in the Paris Agreement, improve air quality to reduce health impacts and achieve the Sustainable Development Goals, the LEAP-IBC tool provides a practical framework by which planners can develop integrated strategies, achieving multiple air quality and climate benefits.

Development of the Jungfraujoch UV DIAL Lidar to Observe the Vertical Ozone Distribution in the Context of Stratosphere Troposphere Exchange and Long Range Transport

Environmental impact of national and subnational carbon policies in China based on a multi-regional dynamic CGE model

The implementation of a carbon pricing policy to comply with GHG emission targets faces opposition in small economies. An integrated modeling exercise was carried out for Israel to assess the cost-effectiveness of GHG emission reduction options. Alternative policies in terms of carbon pricing and policy standards are evaluated. The results show that modest carbon pricing is effective. It achieves a 67% reduction in emissions, by 2050 relative to the reference year 2015, while having only a minor impact on economic growth. Policy standards currently proposed by the government will only reach a 40% emissions reduction in the same timeframe. Clean energy standards not coupled with carbon pricing may hinder efficiency but have a lesser impact on income distribution.

Because of the global commons nature of climate change, international cooperation among nations will likely be necessary for meaningful action at the global level. At the same time, it will inevitably be up to the actions of sovereign nations to put in place policies that bring about meaningful reductions in the emissions of greenhouse gases. Due to the ubiquity and diversity of emissions of greenhouse gases in most economies, as well as the variation in abatement costs among individual sources, conventional environmental policy approaches, such as uniform technology and performance standards, are unlikely to be sufficient to the task. Therefore, attention has increasingly turned to market-based instruments in the form of carbon-pricing mechanisms. We examine the opportunities and challenges associated with the major options for carbon pricing: carbon taxes, cap-and-trade, emission reduction credits, clean energy standards, and fossil fuel subsidy reductions.

Because of the global commons nature of climate change, international cooperation among nations will likely be necessary for meaningful action at the global level. At the same time, it will inevitably be up to the actions of sovereign nations to put in place policies that bring about meaningful reductions in the emissions of greenhouse gases. Due to the ubiquity and diversity of emissions of greenhouse gases in most economies, as well as the variation in abatement costs among individual sources, conventional environmental policy approaches, such as uniform technology and performance standards, are unlikely to be sufficient to the task. Therefore, attention has increasingly turned to market-based instruments in the form of carbon-pricing mechanisms. We examine the opportunities and challenges associated with the major options for carbon pricing—carbon taxes, cap-and-trade, emission reduction credits, clean energy standards, and fossil fuel subsidy reductions—and provide a review of the experiences, drawn primarily from developed countries, in implementing these instruments. Our summary of relevant theory and survey of experience from industrialized nations may be helpful to those who wish to examine the potential applicability of carbon pricing in the context of developing countries.

Because of the global commons nature of climate change, international cooperation among nations will likely be necessary for meaningful action at the global level. At the same time, it will inevitably be up to the actions of sovereign nations to put in place policies that bring about meaningful reductions in the emissions of greenhouse gases. Due to the ubiquity and diversity of emissions of greenhouse gases in most economies, as well as the variation in abatement costs among individual sources, conventional environmental policy approaches, such as uniform technology and performance standards, are unlikely to be sufficient to the task. Therefore, attention has increasingly turned to market-based instruments in the form of carbon-pricing mechanisms. We examine the opportunities and challenges associated with the major options for carbon pricing: carbon taxes, cap-and-trade, emission reduction credits, clean energy standards, and fossil fuel subsidy reductions.