Emission Performance Standards Research Articles

Scattered and Dissonant: The Clean Air Act, Greenhouse Gases, and Implications for the Oil and Gas Industry

In the midst of a domestic oil and gas production revolution, the Environmental Protection Agency (EPA) has constructed a web of findings and regulations to control greenhouse gas (GHG) emissions from stationary sources under the auspices of the Clean Air Act. This Article explores the theoretical and practical implications for the oil and gas industry of EPA’s Clean Air Act GHG regulatory regime that, in light of congressional paralysis, will continue to expand beyond major new and modified oil and gas facilities such as refineries and natural gas processing plants. Future rulemakings directly aimed at the oil and gas industry will likely include lower regulatory thresholds for permitting and control technology requirements, performance based GHG emissions standards for refineries, and amendments to recently-adopted air emissions performance standards for oil and gas production to address GHG. Indirectly, contemplated rules for new and existing power plants may effectively eliminate coal as a substitute for natural gas in the generation of electricity, causing the domestic price of natural gas and electricity to increase amid inevitable liquefied natural gas exports to foreign nations. If a federal market-based program is ever adopted, GHG reporting requirements indicate that oil and gas companies could be assessed and forced to pass on to consumers the cost of GHG automobile emissions. All of these regulatory programs will eventually sweep in smaller independent oil and gas producers and increase the cost to produce, process, and refine oil and gas.

German car buyers’ willingness to pay to reduce CO2 emissions

Motorized individual transport strongly contributes to global CO2 emissions, due to its intensive usage of fossil fuels. Current political efforts addressing this issue (i.e. emission performance standards in the EU) are directed towards car manufacturers. This paper focuses on the demand side. It examines whether CO2 emissions per kilometer is a relevant attribute in car choices. Based on a choice experiment among potential car buyers from Germany, a mixed logit specification is estimated. In addition, distributions of willingness-to-pay measures for an abatement of CO2 emissions are obtained. The results suggest that the emissions performance of a car matters substantially, but its consideration varies heavily across the sampled population. In particular, some evidence on gender, age and education effects on climate concerns is provided.

Weighing Up the Performance: Emissions Performance Standards, House of Commons Select Committee on Energy and Climate Change, First Report of Session 2010-11, HC 523

Weighing Up the Performance: Emissions Performance Standards, House of Commons Select Committee on Energy and Climate Change, First Report of Session 2010-11, HC 523

Mitigation Portfolio and Policy Instruments When Hedging Against Climate Policy and Technology Uncertainty

In this paper, we use a stochastic integrated assessment model to evaluate the effects of uncertainty about future carbon taxes and the costs of low-carbon power technologies. We assess the implications of such ambiguity on the mitigation portfolio under a variety of assumptions and evaluate the role of emission performance standards and renewable portfolios in accompanying a market-based climate policy. Results suggest that climate policy and technology uncertainties are important with varying effects on all abatement options. The effect varies with the technology, the type of uncertainty, and the level of risk. We show that carbon price uncertainty does not substantially change the level of abatement, but it does have an influence on the mitigation portfolio, reducing in particular energy R&D investments in advanced technologies. When investment costs are uncertain, investments are discouraged, especially during the early stages, but the effect is mitigated for the technologies with technological learning prospects. Overall, these insights support some level of regulation to encourage investments in coal equipped with carbon capture and storage and clean energy R&D.

Lost in the mix: will the technologies of carbon dioxide capture and storage provide us with a breathing space as we strive to make the transition from fossil fuels to renewables?

This paper explores concepts of carbon lock-in arising from the technologies of CO2 capture and storage (CCS). We examine the argument that CCS reduces carbon lock-in and the calls for a CCS ‘mandate’ and emission performance standards. We analyse the pros- and cons- of a low-carbon fossil fuel lock-in, arguing that lock-in per se is not the problem; it is rather the depth of lock-in which creates problems because deeper lock-in reduces flexibility and increases the ‘error cost’ (i.e. the cost of a decision which turns out to be based on incorrect understanding) and should be avoided. A set of technical and institutional indicators for measuring the flexibility of different technologies is then presented and applied to three technologies: a landfill gas power generator, a conventional nuclear power plant and a CCS plant under development in California. We conclude that these indicators are a useful way forward in assessing individual projects and that public authorities and other stakeholders might wish to employ some version of these indicators in their deliberations on the role of CCS.

Policy incentives for carbon capture and storage technologies in Europe: A qualitative multi-criteria analysis

In this paper, we compare different policy incentives for overcoming investment uncertainties that are typical for low-carbon technologies prior to their commercialisation, some of which may be attributable to market failures. The paper focuses on the particular case of carbon capture and storage (CCS) technologies and conducts a qualitative multi-criteria analysis of different public policy support schemes for CCS demonstration to evaluate their suitability. The assessed schemes include mandatory CCS, emission performance standards and several different financial incentives (in addition to the European Union Emission Trading Scheme). Based on the available literature and on experience in the UK and Germany with promotion instruments for low-carbon technologies, the results of our analysis suggest that two alternative schemes, a CCS bonus incentive or a carbon dioxide (CO 2) price guarantee, perform best in comparison with the other assessed instruments. While they reduce the uncertainty of CCS investments in the face of low European Union Allowance prices, they also avoid significant adverse impacts on operational and investment decisions in electricity markets.

German Car Buyers' Willingness to Pay to Reduce Co2 Emissions

Motorised individual transport strongly contributes to global CO2 emissions, due to its intensive usage of fossil fuels. Current political efforts addressing this issue (i.e. emission performance standards in the EU) are directed towards car manufacturers. Concretely, the whole car industry has to comply with an average of 120 grams of CO2 per kilometre between 2012 and 2015, with interim targets. The long-term target for 2020 is an average of 95 grams of CO2 per kilometre (by way of comparison, passenger cars currently emit 160 grams of CO2 per kilometre on average). Manufacturers who exceed the specified standard will have to pay fines. From an economic point of view this measure has to be regarded critically. But given the present EU regulation the question arises as to what the optimal strategy for car manufacturers is. Exceeding the emission standard generates costs (through the payment of fines) { but so does complying with the emission standard (through costly abatement measures). Depending on the amount consumers are willing to pay for a specific reduction in CO2 emissions it could well be optimal for manufacturers to exceed the mandatory standard. This paper focuses on the demand side. It examines whether CO2 emissions per kilometre is a relevant attribute in car choices. Based on a stated preference experiment among potential car buyers from Germany, different mixed logit specifications are estimated. In addition, distributions of willingness to pay measures for an abatement of CO2 emissions are obtained. The results suggest that the emissions performance of a car matters substantially, but its consideration varies heavily across the sampled population. In particular, some evidence on gender, age and education effects on climate concerns is provided. So, we find that women are willing to pay more for an abatement of CO2 than men, people under 45 years more than people 45 and older, and people who possess a higher education entrance qualification more than those who do not.

Instrument Choice in Environmental Policy

We examine the extent to which various environmental policy instruments meet major evaluation criteria, including cost-effectiveness, distributional equity, minimization of risk in the presence of uncertainty, and political feasibility. Instruments considered include emissions taxes, tradable emissions allowances, subsidies for emissions reductions, performance standards, technology mandates, and research and development subsidies. Several themes emerge. First, no single instrument is clearly superior along all the criteria. Second, significant trade-offs arise in the choice of instrument; for example, assuring a reasonable degree of distributional equity often will require a sacrifice of cost-effectiveness. Third, it is possible and sometimes desirable to design hybrid instruments that combine features of various instruments in their pure form. Fourth, for many pollution problems, more than one market failure may be involved, which may justify (on efficiency grounds, at least) employing more than one instrument. Finally, potential overlaps and undesirable interactions among environmental policy instruments are sometimes a matter of concern.

Projection of hazardous air pollutant emissions to future years

Projecting a hazardous air pollutant (HAP) emission inventory to future years can provide valuable information for air quality management activities such as prediction of program successes and helping to assess future priorities. We have projected the 1999 National Emission Inventory for HAPs to numerous future years up to 2020 using the following tools and data: • the Emissions Modeling System for Hazardous Air Pollutants (EMS-HAP) • the National Mobile Inventory Model (NMIM) • emission reduction information resulting from national standards and economic growth data. This paper discusses these projection tools, the underlying data, limitations and the results. The results presented include total HAP emissions (sum of pollutants) and toxicity-weighted HAP emissions for cancer and respiratory noncancer effects. Weighting emissions by toxicity does not consider fate, transport, or location and behavior of receptor populations and can only be used to estimate relative risks of direct emissions. We show these projections, along with historical emission trends. The data show that stationary source programs under Section 112 of the Clean Air Act Amendments of 1990 and mobile source programs which reduce hydrocarbon and particulate matter emissions, as well as toxic emission performance standards for reformulated gasoline, have contributed to and are expected to continue to contribute to large declines in air toxics emissions, in spite of economic and population growth. We have also analyzed the particular HAPs that dominate the source sectors to better understand the historical and future year trends and the differences across sectors.

Are emissions permits regressive?

Grandfathered emissions permits redistribute income to wealthy households by creating firm rents that ultimately accrue to shareholders. Consequently they can be highly regressive, even if the poor do not have large budget shares for polluting goods. Using an analytical model, this paper estimates the burden of emissions permits borne by different income groups under control of power plant emissions of carbon, SO 2, and NO x . We also compare the burden borne by poor households under permits with that under emissions taxes, performance standards, technology mandates, and input taxes. And we show how the social costs of policies differ from efficiency costs when society has aversion to inequality.

Air Pollution Assessments Of New Fossil Energy Technologies

This paper presents an overview on air pollution assessments of new fossil energy technologies for baseload electric generating plants. The discussion is oriented towards those who must understand the broad issues affecting the design and performance of such power plants. It is motivated by the potential air pollution problems caused by the near doubling of coal use projected for the next 15 years. The paper first reviews the applicable emissions performance standards for these plants, as well as predictions of likely future standards needed to protect the environment. The conclusion is reached that significantly tighter emissions standards will apply in the future. Next, the cost, emissions performance, and development status of the three major technology groups for coal fired baseload plants are reviewed. It is observed that while all of the technologies can meet the current standards, only the Baseline plant with Advanced Control Technology can meet future standards, without unreasonable increases in electrical generation costs. Furthermore, since Advanced Direct Combustion Technologies and Fuel Conversion Technologies are in very early stages of development, only the Baseline plant with Advanced Control Technology will be available to the utilities in the near term. This is because it will be evolved from the current commercial Baseline Technology. Hence, it is concluded that the utilities will use mainly the Baseline coal fired plant with Advanced Control Technology to protect the environment for the next 15-20 years.