Climate and Energy最新文献

Can we spend too much on transportation and occupational safety, pollution abatement and climate change mitigation? The answer for many, including climate activists, regulators, politicians, and policymakers, is “of course we can't.” How can one doubt that these activities are socially desirable, especially when they could help to avoid cataclysmic outcomes? For an economist, however, it is not so farfetched to think that we can spend too much. The simple Econ 101 explanation is that, at the margin, the additional benefits fall short of the additional costs.

In my August 2023 column, I outlined the climate risk disclosure and related environmental, social, and governance (ESG) requirements proposed by the Securities and Exchange Commission (SEC).¹ It closed with an outlook for 2023. What I did not envision was the degree to which states would take action regarding greenhouse gas (GHG) disclosures to facilitate compliance with their state GHG targets. This column summarizes these actions, with emphasis on the most recent legislation passed by California, together with ESG-related legislation to define the fiduciary responsibilities of state pension funds.

Generative Artificial Intelligence (Gen AI) is still in its infancy, yet it has started to transform the way people live, work, and play. The cutting-edge technological innovation of Gen AI has unbounded potential and its contributions to the economy and society are still mostly hypothetical. In the short run we might overestimate its transformative impact and in the long run we might underestimate its impact. In either case, unprecedented change is upon us. Think of the changes to the ways in which we live, work, and play as technology evolved from wall-mounted landline telephones to car phones to satellite phones to mobile cell phones to hand-held smart devices, and the explosion of applications and services available on the device platform.

The importance and challenge of utility distribution system strategy and planning cannot be overstated in light of climate change and the increasing frequency of extreme storms. Independent power producers, distributed energy resource (DER) providers, and retail energy providers similarly face the same challenges. The United States witnessed a record-breaking hurricane season in 2020, resulting in staggering damages of approximately $95 billion. The most recent report from the Intergovernmental Panel on Climate Change (IPCC) highlights the urgency of reducing greenhouse gas (GHG) emissions to limit global warming to mitigate the disastrous and costly effects of climate change. The report indicated that these events are likely to become the norm and will worsen if mitigation and adaptation measures aren't established. These events are becoming more frequent and severe, making it imperative to establish effective mitigation and adaptation measures.

“Addressing the climate crisis requires immediate and sustained investment to eliminate net global greenhouse gas emissions by mid-century—and this presents a transformational opportunity for the United States and the world.” This statement from The Long-Term Strategy of the United States: Pathways to Net-Zero Greenhouse Gas Emissions by 2050 summarizes both the challenge and the opportunity presented as the energy infrastructure is transformed. The United States has established ambitious goals of net-zero greenhouse gas (GHG) emissions no later than 2050. A core strategy by the United States to achieve this goal is the decarbonization of the electric grid. In fact, the United States has set a goal to reach 100 percent carbon-free electricity by 2035. These goals will result in nothing less than a transformation of the energy marketplace, requiring the rapid expansion of existing clean energy solutions of solar and energy efficiency as well as the drive to electrify everything, including buildings and transportation.

The ocean-going trade in liquefied natural gas (LNG) is more than half a century old. The first US LNG project began commercial operation in 1971. World trade in LNG arose as countries and regions with warm climates, small populations, and no ready application for such a fuel as natural gas, like Algeria, Qatar, and Western Australia, sought to monetize their local natural resources by building large export facilities (usually at state expense) targeting industrial countries with cold winters and without indigenous fossil fuels, like Japan, Korea, parts of Europe, and New England. But great costs, complexities, paradoxes, and business failures have always accompanied the international LNG trade. Age-old rules of thumb for other commodities in world trade do not apply to LNG.

Years ago, during the 2009–2014 time period, as hydraulic fracturing—the unfortunately named “fracking”—was the red-hot target of critics of the natural gas industry, it became very clear that it was critical to satisfy public concerns surrounding the safety and environmental impact of the fracking process. Variations in the behavior of the nation's huge population of natural gas producers rendered the industry vulnerable to its weakest members. In the best-run companies, usually major and large independent companies, there was an intense focus on clean and safe development, dealing with contaminated waste water as well as the sourcing of fracturing water, and in particular ensuring the absolute integrity of underground facilities to prevent the process from ever interacting with drinking water aquifers. Best practices also involved the overall management of the impact of site preparation, the operations themselves, including noise pollution and long-term site management. I argued frequently for the equivalent of a “Good Housekeeping Seal of Approval” for the most responsible producers to have a leg up in permitting, and a market (and price) advantage over others who could not show the same level of responsibility.

Over the last decade, the use of advanced data analytics has evolved from an idea to a reality and has become pivotal in supporting the proliferation of electric utilities. Utilities are making data-driven decisions based on electric vehicle (EV) charging needs and patterns to maintain and/or improve reliability, safety, operational efficiency, and customer satisfaction. Data analytics also supports distribution utility planning for meeting future needs. This article presents several utility use cases that demonstrate the use and effectiveness of data-driven decisions and how advanced analytics is reshaping decision-making.

Throughout the United States, utilities frequently offer incentives and rebates to customers to upgrade equipment and install improved building measures on homes and businesses to reduce energy consumption. For utilities to offer such programs, per regulatory and legal requirements, they often must follow guidelines to be cost-effective running through cost-benefit tests. The costs to operate such programs are straightforward and most often entail just a one-time expenditure. In contrast, the benefits can vary widely depending on discount rate, projected fuel costs, societal impacts from less consumption, and the life-cycle of the program.

A May 4, 2023 Editorial in the New York Times conveyed very well a strong message that industry leaders have been talking about and stressing for years. “The United States needs to dramatically expand the electric grid between places with abundant wind and sunshine and places where people live and work. And it needs to happen fast.” While many mainstream news publications have shared this same view, and industry trade publications have talked about this need for decades, only now have federal and state policymakers found a path forward to take new transmission project siting and permitting reform. Retail energy providers, electric distribution utilities and their unregulated subsidiaries, and renewable energy developers have done all they could to highlight the need and costs to consumers of a congested electric grid that cannot easily move power among and between electricity markets and states, or from remote renewable generation sources to load centers.