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1. Nuclear Waste Policy Actions for the 117th Congress and Biden Administration

Author:
Matt Bowen
Publication Date:
01-2022
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In the 117th Congress, the United States Senate is evenly divided, 50-50, between the two major political parties, and the margin for control of the US House is small. One nonpartisan—and overdue—policy issue that Congress and the executive branch could focus on is the US nuclear waste management program. The US is currently paying billions to utilities to house spent nuclear fuel (SNF) at operating and shutdown facilities, and high-level waste (HLW) remains at former nuclear weapons complex sites around the country. Add to this the potential for greater future reliance on nuclear power in a decarbonizing economy, and the need to finally get a handle on managing radioactive waste is clear. An earlier report from the Center on Global Energy Policy on the US nuclear waste management program examined larger structural changes that the federal government could pursue to help the program make progress, such as fixing the funding mechanism and updating regulatory standards.[1] This commentary discusses the US program as it stands in the 117th Congress and proposes a series of comparatively smaller actions that could be considered and perhaps pursued on a bipartisan basis in the next few years.
Topic:
Energy Policy, Governance, Leadership, and Nuclear Waste
Political Geography:
North America and United States of America

2. Greenhouse Gas Emissions from State-Owned Enterprises: A Preliminary Inventory

Author:
Alex Clark and Philippe Benoit
Publication Date:
02-2022
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
State-owned enterprises (SOEs) play a major role in the production of goods and services across many of the world’s largest economies, particularly in electricity generation, oil and gas, and heavy industry. SOEs (defined in this report as companies for which 50 percent or more of voting shares are held by a government) are also major sources of greenhouse gas emissions. The governments that control these SOEs are also signatories to the Paris Agreement on climate change. State ownership provides these governments with a major direct point of control over the climate and energy outcomes of these companies, both in terms of reducing emissions and directing future investment into low-carbon technologies and infrastructure. Improving the measurement of SOEs’ contribution to both national and global-level emissions provides important information to help understand to what extent SOEs should be targeted and to design strategies to maximize their potential role in the broader energy transition. This report provides an accounting of direct emissions associated with SOEs globally. It is challenging to comprehensively identify every SOE, as the total is estimated at well over 100,000. In addition, most identified SOEs do not disclose their emissions nor are estimates of these emissions available in the public domain. Despite these limitations, data compiled for this report covering almost 300 major SOEs suggest that SOEs globally are responsible for at least 7.49 gigatons of carbon dioxide equivalent (GtCO2e) annually in direct (Scope 1) emissions. While the true scale of SOE-related emissions is likely to be substantially higher, particularly when accounting for national oil companies and iron and steel manufacturers that do not currently report their emissions, this figure is over 1 GtCO2e greater than various previous estimates, and larger than the total annual emissions of any country except China.
Topic:
Climate Change, Energy Policy, Environment, and Green Technology
Political Geography:
China, Asia, and Global Focus

3. US-China Roundtable on Carbon Capture, Utilization and Storage

Author:
David B. Sandalow, Sally Qiu, and Zhiyuan Fan
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On November 17, 2021, New York time/November 18, 2021, Beijing time, the Center on Global Energy Policy at Columbia University and Energy Foundation-China convened an online roundtable on carbon capture, utilization and storage (CCUS) in the United States and China. Scholars, industry officials and policy makers exchanged information and ideas concerning CCUS development in each country. Participants discussed the role of CCUS in achieving net zero emissions, focusing on three topics in particular: CCUS costs, strategies for utilization of carbon dioxide (CO2) and CCUS policies. This report summarizes key points made by participants at the roundtable, which was held under the Chatham House Rule.
Topic:
Diplomacy, Energy Policy, International Cooperation, Bilateral Relations, and Carbon Emissions
Political Geography:
China, Asia, North America, and United States of America

4. Carbon Pricing During an Energy Crisis

Author:
Harrison Fell and Pierre Noel
Publication Date:
03-2022
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The European energy crisis, aggravated by the Russian invasion of Ukraine, amplifies the tension between climate mitigation action and energy affordability. Introducing a more effective safety valve to the EU carbon market could reduce affordability concerns and the political pressure associated with extreme price spikes, making the system more resilient. It could be accompanied by a more effective price floor too.
Topic:
Energy Policy, International Trade and Finance, Conflict, Carbon Emissions, and Energy Crisis
Political Geography:
Europe

5. Venezuela Oil Sanctions: Not an Easy Fix

Author:
Luisa Palacios and Francisco J. Monaldi
Publication Date:
03-2022
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Russia’s invasion of Ukraine has upended global energy markets and brought energy security issues back to the forefront of global attention. The unexpected visit of a US government delegation to Caracas for talks with Nicolas Maduro on March 5th may be considered an example of official recognition of this imperative.[1] The visit led to speculation that sanctions on the Maduro regime could be lifted and that a rapid ramp up of Venezuelan oil production and export could result.[2] This commentary makes three arguments concerning these recent developments. First, rather than potentially leading to the lifting of US sanctions on the Maduro regime, the visit could result in – provided certain conditions are met – an easing or softening of existing oil sanctions via licenses for some of the international oil companies (IOCs) that still operate in Venezuela.[3] Second, in the short term, it is unlikely that this scenario, should it come to pass, would offer any meaningful relief to global oil markets, as substantial increments in oil production from Venezuela would require overcoming many obstacles and risks, even with a potential softening of oil sanctions. However, the latter would likely lead to the redirection of Venezuela’s existing oil exports to the US market. Third, Venezuela has already seen a recovery of oil production, albeit from historically low levels. In a context of no sanctions relief, continued recovery is not guaranteed and might depend on how geopolitical events impact Russian oil exports and the outcome of the Iranian nuclear negotiations.
Topic:
Energy Policy, Oil, Natural Resources, and Sanctions
Political Geography:
South America and Venezuela

6. Energy Markets and the Design of Sanctions on Russia

Author:
Christof Ruhl
Publication Date:
03-2022
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Sanctions against the citizens, institutions, and products of the Russian Federation are evolving rapidly. Energy sanctions started late, but the number of countries embargoing oil, gas, or coal imports from Russia is expanding. These sanctions are likely to increase global fuel prices while depressing the price of the sanctioned fuel. The experience to date suggests that the current, gradual approach of reducing oil and gas imports from Russia one country at a time may have room to go further. Before the invasion of Ukraine, the sweeping and unprecedented sanctions promised in the event of a Russian invasion were often conceived as a two-pronged pincer movement. The idea was to isolate Russia from the global financial system while limiting its commodity and energy exports. Both moves were aimed at the source of the financial strength of “fortress Russia,” namely, its persistent balance of payment surplus.
Topic:
Energy Policy, International Trade and Finance, Sanctions, Financial Markets, and Conflict
Political Geography:
Russia and Europe

7. Sanctions and the Economic Consequences of Higher Oil Prices

Author:
Christof Ruhl
Publication Date:
04-2022
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Sanctions against the Russian Federation are developing so fast that it is hard to keep track of them and even harder to see a consistent narrative as events unfold. But there is one. Russia is the world’s largest exporter of energy and commodities. A persistent balance of payment surplus is the source of its financial strength, in terms of both current income and the financial assets previously accumulated by “fortress Russia.” Oil, gas, and coal exports constitute the most valuable revenue streams and are therefore prime targets of sanctions policy.[1] The problem is that energy sanctions will backfire badly if they lead to price increases large enough to derail the economic performance of sanctioning countries.
Topic:
Economics, Energy Policy, Oil, Natural Resources, and Sanctions
Political Geography:
Global Focus

8. Hydrogen: A Hot Commodity Lacking Sufficient Statistics

Author:
Anne-Sophie Corbeau
Publication Date:
04-2022
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Hydrogen has become one of the most debated topics in the energy industry. As an energy vector,[1] hydrogen has been touted as a possible path to decarbonize energy sectors that are considered difficult to electrify, such as heavy-duty transport. While hydrogen expansion faces challenges associated with introducing it into new sectors and decreasing the cost of green (or low-emission) hydrogen, major economies such as China, the EU, and the United States have been looking to integrate its use into their decarbonization strategies.[2] Demand for hydrogen could more than quintuple in a global net-zero-carbon-emissions scenario.[3] Given that hydrogen’s role is expected to increase significantly over the coming decade and expand into new sections of the energy system, it is essential to have more clarity on its current and future demand profile. The energy community is used to relying on statistics for more traditional fuels such as oil or natural gas; they enable analysts and investors to follow market developments, identify trends, and anticipate investment needs and opportunities. For policy makers, they can help to measure progress toward decarbonization objectives or against targets set within their hydrogen strategies as well as help them compare their activity with other countries’ developments. Understanding demand, production, and trade through data transparency is also a key element in energy security.
Topic:
Energy Policy, Science and Technology, Decarbonization, and Hydrogen
Political Geography:
Global Focus

9. To Bring Emissions-Slashing Technologies to Market, the United States Needs Targeted Demand-Pull Innovation Policies

Author:
Varun Sivaram, Matt Bowen, Noah Kaufman, and Doug Rand
Publication Date:
01-2021
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
President-elect Joe Biden has called climate change one of the four most important crises facing the country and pledged ambitious climate action.[1] At the heart of his strategy to slash US and global emissions is a focus on developing new and improved technologies to make clean energy transitions more affordable. During the campaign, Biden pledged a “historic investment in clean energy innovation.”[2] Indeed, boosting funding for energy research, development, and demonstration (RD&D) is widely popular among both Republicans and Democrats and represents a rare legislative opportunity for advancing climate policy under a razor-thin Democratic majority in Congress.[3] In December 2020, Congress passed the most sweeping energy legislation in a decade, attached to the $900 billion COVID-19 stimulus package, and authorized boosting clean energy RD&D funding.[4] Yet such investments alone may not be sufficient to successfully commercialize critical clean energy technologies. Today’s energy industry presents daunting barriers that impede the swift adoption of newer, cleaner technologies. As a result, the private sector underinvests in scaling up promising technologies and building out clean energy infrastructure.[5] Therefore, in addition to funding energy RD&D (“technology-push” policies), government policies should bolster market demand for clean energy to encourage private investors and firms to scale up and commercialize new technologies (“demand-pull” policies). Still, there are steep political obstacles in the way of many ambitious demand-pull policies. For example, President-elect Biden has called for economywide measures such as a clean electricity standard and $400 billion of public procurement of clean products such as electric vehicles.[6] These policies would create large markets for mass deployment of clean energy and speed a clean energy transition. But enacting them requires substantial new regulations and appropriations from Congress, a challenging feat even given the new Democratic control of both chambers of Congress. Fortunately, there is a set of targeted demand-pull measures that the Biden administration can immediately use—with existing statutory authority and without requiring massive new appropriations—to create early markets for promising clean energy technologies. These measures, which we call “demand-pull innovation policies,” fill a niche between RD&D investments that create new technology options and policies that support the large-scale deployment of clean energy. Demand-pull innovation policies focus narrowly on creating and shaping early markets for emerging technologies. For example, targeted government procurement, prize competitions, or milestone payments can provide early markets for clean energy technologies that have been developed with the aid of public RD&D funding. The government can also coordinate private procurement or otherwise catalyze private market adoption through certification and standard-setting processes. Such demand-pull innovation policies have extremely high leverage and have transformed limited public investment into flourishing private commercial markets across the space, medical, and energy fields.[7] Coherently pursuing demand-pull innovation policies will require coordination across the federal government. To this end, the incoming Biden administration should consider creating a new government office, the Energy Technology Markets Office (ETMO), to spearhead the scale-up and commercialization of promising clean energy technologies. The ETMO could be housed within the Department of Energy (DOE) to take advantage of the DOE’s deep expertise in energy technologies and markets. Indeed, in the recently passed Energy Act of 2020 (Division Z of the Consolidated Appropriations Act of 2021), Congress directed the DOE to build its capabilities to pursue demand-pull innovation policies.[8] In the same legislation, Congress also authorized the DOE’s Office of Technology Transitions, which could alternatively lead the demand-pull innovation agenda. Regardless of whether the administration creates a new office or augments an existing one, in order to maximize their potential impact, demand-pull innovation policies should not be the domain of only the DOE. Rather, the DOE should collaborate with a range of federal agencies—many of which, such as the Department of Defense, have sizable resources to invest in emerging technology procurement—to enact policies and pursue public-private partnerships to build market demand for the innovations critical to decarbonization. In concert with new RD&D investments in clean energy innovation, demand-pull innovation policies could be a powerful tool to speed the adoption of new technologies and cultivate advanced energy industries that can manufacture and export US innovations.
Topic:
Climate Change, Energy Policy, Environment, Science and Technology, Green Technology, and Carbon Emissions
Political Geography:
North America and United States of America

10. Forging a Path Forward on US Nuclear Waste Management: Options for Policy Makers

Author:
Matt Bowen
Publication Date:
01-2021
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Nuclear power is considered in many countries a critical facet to maintaining reliable access to electricity during a global transition to low-carbon energy sources. One challenge to its potential in the United States, however, is the current standstill regarding a disposal pathway for spent nuclear fuel (SNF) from commercial reactors. This impasse has a negative bearing on nuclear energy’s ability to supply more zero-carbon electricity and may cost US taxpayers tens of billions of dollars in government liability for failing to meet contractual obligations to take possession of the waste from utilities. Despite the scientific community assessing that commercial SNF and other high-level radioactive waste (HLW), such as from defense activities, can be safely isolated in deep underground repositories, US efforts to license and operate one have flatlined. The original plan for siting at least two repositories for such waste was abandoned first by DOE and then by Congress. Yucca Mountain in Nevada was designated in law as the nation’s sole potential disposal site by Congress in 1987, fomenting the state’s opposition to the project. As a result of that opposition, Congress has not funded the project since 2010. Still, progress has been made over the last few decades in nuclear waste disposal programs in countries such as Finland, Sweden, and Canada. And the United States has seen the successful opening and operation of the Waste Isolation Pilot Plant in New Mexico to dispose of generally less radioactive but long-lived transuranic nuclear waste from defense activities. Such programs offer insights for how the United States can try to resolve the challenges with commercial nuclear waste disposal and potentially alleviate one obstacle to wider adoption of nuclear energy to decarbonize the US economy. This report, part of wider work on nuclear energy at Columbia University’s Center on Global Energy Policy, explains how the United States reached its current stalemate over nuclear waste disposal. It then examines productive approaches in other countries and a few domestic ones that could guide US policy makers through options for improving the prospects of SNF and HLW disposal going forward
Topic:
Energy Policy, Nuclear Power, and Nuclear Waste
Political Geography:
North America and United States of America

11. Energy Transition Fact Sheet: Pathways to 100% Clean Electricity

Author:
Center on Global Energy Policy
Publication Date:
02-2021
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In order to decarbonize the US economy at a reasonable cost and on an accelerated timeline, the country needs to both grow and rapidly decarbonize the power sector. This process will require many new technologies that support an affordable, equitable, and achievable transition. Expanding the clean-electricity focus beyond variable renewable technologies to include other types of zero-carbon power—as well as investing in the transmission and distribution grid that delivers this power to communities around the country—will allow the US to build a reliable, secure, and sustainable zero-carbon power system.
Topic:
Energy Policy, Renewable Energy, and Carbon Emissions
Political Geography:
Global Focus

12. The Role of Corporate Renewable Power Purchase Agreements in Supporting US Wind and Solar Deployment

Author:
James Kobus, Ali Narshallah, and Jim Guidera
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In recent years, many of the world’s biggest corporations, including Google, Facebook, Microsoft, and Apple, have pledged to power their businesses with increasing amounts of renewable energy in order to reduce their carbon footprints and contribute to efforts to address climate change. Such efforts have had an encouraging impact on US power sector decarbonization, with a material and increasing share of US wind and solar deployments now driven by the procurement preferences of corporate customers. The vast majority of corporate procurement of renewable energy has been secured via power purchase agreements (PPAs). Going forward, a wider universe of companies is expected to look to such PPA agreements as a means of contributing to a low-carbon future, raising the question of how substantial these initiatives might be in supporting the overall transition to zero-carbon electricity. Indeed, a number of positive underlying trends are likely to facilitate continued growth in the corporate renewables PPA market. For example, electricity demand in the technology sector continues to grow rapidly, while renewables PPA penetration in the commercial and industrial sectors more broadly remains low, with room to grow. Additionally, expectations of continued declines in the costs of solar and wind technologies are likely to facilitate more procurement. Lastly, US companies are facing increased pressure from customers, employees, and institutional investors to improve their greenhouse gas emissions profiles. At the same time, certain factors may constrain the size of the PPA market, such as market regulations that limit the feasibility of PPAs in certain regions and the need for renewable PPA prices to be competitive relative to wholesale power prices. Scale and creditworthiness requirements can also limit the universe of potential corporate buyers, and the financial risks brought about when signing long-term contracts may further deter some market participants. Finally, companies increasingly have alternative emission reduction mechanisms at their disposal, such as renewables energy credits (RECs), carbon offsets, and green tariff programs. This student-led paper, from the Power Sector and Renewables Research Initiative at Columbia University’s Center on Global Energy Policy, explores the drivers influencing the renewables PPA market and assesses whether these procurement initiatives by nonutility corporations are likely to continue growing in the United States at a rapid enough pace to support power sector deep decarbonization goals. The analysis finds that while robust private sector participation in recent years has been encouraging, the potential market size going forward may be smaller than previously projected, highlighting the need for comprehensive policy frameworks to support power sector decarbonization.
Topic:
Energy Policy, Renewable Energy, Wind Power, and Solar Power
Political Geography:
Global Focus

13. The Role of Corporate Renewable Power Purchase Agreements in Supporting US Wind and Solar Deployment

Author:
James Kobus and Ali Nasrallah
Publication Date:
03-2021
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In recent years, many of the world’s biggest corporations, including Google, Facebook, Microsoft, and Apple, have pledged to power their businesses with increasing amounts of renewable energy in order to reduce their carbon footprints and contribute to efforts to address climate change. Such efforts have had an encouraging impact on US power sector decarbonization, with a material and increasing share of US wind and solar deployments now driven by the procurement preferences of corporate customers. The vast majority of corporate procurement of renewable energy has been secured via power purchase agreements (PPAs). Going forward, a wider universe of companies is expected to look to such PPA agreements as a means of contributing to a low-carbon future, raising the question of how substantial these initiatives might be in supporting the overall transition to zero-carbon electricity. Indeed, a number of positive underlying trends are likely to facilitate continued growth in the corporate renewables PPA market. For example, electricity demand in the technology sector continues to grow rapidly, while renewables PPA penetration in the commercial and industrial sectors more broadly remains low, with room to grow. Additionally, expectations of continued declines in the costs of solar and wind technologies are likely to facilitate more procurement. Lastly, US companies are facing increased pressure from customers, employees, and institutional investors to improve their greenhouse gas emissions profiles. At the same time, certain factors may constrain the size of the PPA market, such as market regulations that limit the feasibility of PPAs in certain regions and the need for renewable PPA prices to be competitive relative to wholesale power prices. Scale and creditworthiness requirements can also limit the universe of potential corporate buyers, and the financial risks brought about when signing long-term contracts may further deter some market participants. Finally, companies increasingly have alternative emission reduction mechanisms at their disposal, such as renewables energy credits (RECs), carbon offsets, and green tariff programs. This student-led paper, from the Power Sector and Renewables Research Initiative at Columbia University’s Center on Global Energy Policy, explores the drivers influencing the renewables PPA market and assesses whether these procurement initiatives by nonutility corporations are likely to continue growing in the United States at a rapid enough pace to support power sector deep decarbonization goals. The analysis finds that while robust private sector participation in recent years has been encouraging, the potential market size going forward may be smaller than previously projected, highlighting the need for comprehensive policy frameworks to support power sector decarbonization.
Topic:
Energy Policy, Renewable Energy, Wind Power, and Solar Power
Political Geography:
North America and United States of America

14. Investing in the US Natural Gas Pipeline System to Support Net-Zero Targets

Author:
Erin Blanton, Melissa Lott, and Kristin Smith
Publication Date:
04-2021
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The Biden administration’s move to bring the United States back into the Paris Agreement and lower greenhouse gas emissions to address climate change will, if carried through, lead to a reduction in fossil fuel consumption. Cutting back on the burning of coal, oil, and natural gas will be critical to transitioning the country to the lower-carbon energy system it needs to achieve decarbonization targets. But while it may seem counterintuitive, investing more in the domestic natural gas pipeline network could help the US reach net-zero emission goals more quickly and cheaply. Fortifying and upgrading the system could prepare the existing infrastructure to transport zero-carbon fuels as they become available and, in the meantime, reduce harmful methane leaks from natural gas. Studies by energy agencies, universities, and the industry that model future US natural gas consumption consistently show continued use of natural gas for at least the next 30 years, even in scenarios where the country achieves net-zero targets by midcentury. There is no quick replacement for gas in the US energy mix. And for many of the needs natural gas currently meets, the eventual replacement may be zero-carbon gaseous fuels (e.g., hydrogen, biogas). These fuels may play a significant role in supporting reliability and making the energy transition more affordable—but they, too, will require a pipeline network for efficient delivery to markets and end users. Building new pipelines is a time-consuming and costly process, especially when added to all the other infrastructure needs associated with the energy transition. When possible, adjusting existing infrastructure—already permitted and built—can help minimize the costs and accelerate the speed of the transition. The US has 2.5 million miles of natural gas pipeline infrastructure across the country, which, with investment, could be upgraded to cut emissions and be retrofitted for future transport of cleaner fuels. However, investments in pipeline infrastructure have drawn concern that they would lock fossil fuels into the US energy mix for a longer period of time and work against the energy transition. Such concerns are understandable given the contribution of fossil fuels to the global climate crisis. But retrofitting and otherwise improving the existing pipeline system are not a choice between natural gas and electrification or between fossil fuels and zero-carbon fuels. Rather, these investments in existing infrastructure can support a pathway toward wider storage and delivery of cleaner and increasingly low-carbon gases while lowering the overall cost of the transition and ensuring reliability across the energy system. In the same way that the electric grid allows for increasingly low-carbon electrons to be transported, the natural gas grid should be viewed as a way to enable increasingly low-carbon molecules to be transported. This paper, part of the work by Columbia University’s Center on Global Energy Policy on natural gas and the energy transition, examines projections of continued natural gas use and the zero-carbon fuels that are poised to become a bigger part of the energy mix. It details the state of the existing US natural gas pipeline network and trends within this segment of the market, as well as technical considerations for moving new, zero-carbon fuels through the system. The findings, combined with potential net-zero goals, lead to recommendations for curbing greenhouse gas emissions caused by leakage in the existing network, as well as opportunities to refurbish sections to carry increasing levels of cleaner fuels. It focuses on policy options that will minimize environmental impacts and maximize economic benefits. These options fall into two main categories: changing regulations on methane leak detection and repair to make the existing pipeline network as low emissions as possible while it still transports natural gas, and expanding on existing regulatory authority to allow for retrofitting the system for more hydrogen usage, along with increased R&D funding to test the integrity of the pipeline system with greater levels of hydrogen and other zero-carbon fuels.
Topic:
Energy Policy, Natural Resources, Gas, and Energy Dependence
Political Geography:
North America and United States of America

15. Opportunities and Limits of CO2 Recycling in a Circular Carbon Economy: Techno-economics, Critical Infrastructure Needs, and Policy Priorities

Author:
Amar Bhardwaj, Colin McCormick, and Julio Friedmann
Publication Date:
05-2021
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Despite growing efforts to drastically cut carbon dioxide (CO2) emissions and address climate change, energy outlooks project that the world will continue to rely on certain products that are currently carbon-intensive to produce but have limited alternatives, such as aviation fuels and concrete. Recycling CO2 into valuable chemicals, fuels, and materials has emerged as an opportunity to reduce the emissions of these products. In this way, CO2 recycling is a potential cornerstone of a circular carbon economy that can support a net-zero future. However, CO2 recycling processes have largely remained costly and difficult to deploy, underscoring the need for supportive policies informed by analysis of the current state and future challenges of CO2 recycling. This report, part of the Carbon Management Research Initiative at Columbia University’s Center on Global Policy, examines 19 CO2 recycling pathways to understand the opportunities and the technical and economic limits of CO2 recycling products gaining market entry and reaching global scale. The pathways studied consume renewable (low-carbon) electricity and use chemical feedstocks derived from electrochemical pathways powered by renewable energy. Across these CO2 recycling pathways, the authors evaluated current globally representative production costs, sensitivities to cost drivers, carbon abatement potential, critical infrastructure and feedstock needs, and the effect of subsidies. Based on this analysis, the paper concludes with targeted policy recommendations to support CO2 recycling innovation and deployment.
Topic:
Economics, Energy Policy, Infrastructure, Carbon Emissions, and Decarbonization
Political Geography:
Global Focus

16. Building an Energy and Climate Coalition with Latin America and the Caribbean: An Agenda for the Biden Administration

Author:
Mauricio Cardenas and Laurie Fitzmaurice
Publication Date:
06-2021
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The initial months of the Biden administration’s foreign policy have underscored the importance of defining the type of relations with China (cooperative in some areas, adversarial in others) and revamping relations with Europe on areas of common interest. However, the United States should look closer to home, where it can find some major opportunities for international policy advancement. The Biden administration has a window of opportunity to rethink its relations with and policy toward Latin America and the Caribbean (LAC). In particular, there are very good reasons—political and economic—for putting the energy and climate change agenda at the center of the hemispheric partnership. On the political front, building a hemispheric bloc will increase the influence of its members in global negotiations. On the economic front, the countries in the region offer significant opportunities for trade and investment for the United States. Canada, which earlier in the year pledged to work with the United States on addressing climate change,[1] could also have an interest in promoting and potentially participating in this initiative. Prior to the arrival of the pandemic, the economies of LAC had already been confronting a complex series of economic growth challenges after the end of the commodities supercycle. Many countries in the region faced high levels of public indebtedness, currency depreciation, credit rating risk, insufficient tax revenue bases, and low investment rates.[2] The appearance of the COVID-19 crisis only served to exacerbate these conditions. The LAC region contains 8.4 percent of the world’s population but represents 30 percent of COVID-19 fatalities to date.[3] Forecasts now predict that per capita GDP will remain below the 2019 level at least until 2023.[4] The continuing surge of undocumented immigration into the southern border of the United States, the social and economic impacts of COVID-19, and the growing influence of China in the region could increase political pressure on the United States to develop a coherent policy toward LAC. These urgent and competing dynamics represent an opportunity for the United States to recast its policy toward the region as one of engagement. The United States could utilize the tools of technology and financing focused on energy and climate to put the region on a path toward sustained economic growth and social progress. LAC needs technology and financing to build clean infrastructure, develop alternative energies, and reduce energy poverty.
Topic:
Climate Change, Energy Policy, Environment, Regional Cooperation, and Regionalism
Political Geography:
Latin America, Caribbean, North America, and United States of America

17. Will COVID Drive an Early Peak in Transportation Activity and Oil Demand?

Author:
Marianne Kah, Lew Fulton, Amy Myers Jaffe, Mark Schwartz, and Mark Finley
Publication Date:
06-2021
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
A critical question to emerge from the oil demand crash in 2020 caused by the global pandemic is whether it marked the beginning of an inexorable decline in consumption of the fossil fuel that could significantly speed up government efforts to meet net zero carbon targets. The changes in government policy, technology, consumer behavior, and shipping during COVID-19 have been profound. Electric vehicle sales increased in a number of countries, while overall automobile sales declined. The use of digital technology accelerated with a sharp rise in telecommuting, teleshopping, and teleconferencing, cutting into transportation oil use primarily in passenger and air travel. However, some aspects of the COVID experience increased oil use. There was significant substitution away from mass transit to greater use of personal vehicles and there is some evidence that people left large cities in the United States for the suburbs and smaller cities where there is less mass transit available and people drive more for non-commuting activities. There was also a large increase in e-commerce deliveries in the US and other nations that buoyed short-haul truck vehicle miles traveled. While unrelated to transportation, there was also an increase during COVID in petrochemicals used for personal protection equipment and packaging for take-out food and e-commerce deliveries. Because of fossil fuels’ greenhouse gas emissions, understanding how oil demand might return and when it could peak will be factors in governments’ strategies for addressing climate change. In the summer and fall of 2020, Columbia University’s Center on Global Energy Policy and the University of California, Davis Institute for Transportation Studies (ITS-Davis) conducted an oil demand scenario study out to 2030. The goal was to understand how COVID, in combination with other political, economic, social, and technological drivers, may impact long-term transportation activity and global oil demand and to try to determine whether oil demand has already peaked. Forty-four leading energy and transportation experts developed four scenarios that varied by the pace of economic recovery, the level of government intervention in energy markets, and the stickiness in the mobility trends that were set in motion during the 2020 pandemic lockdowns. ITS-Davis then modeled the impacts of these scenarios on transportation energy and oil use. Other sectors less impacted by COVID were modeled with lesser detail. Global oil demand grows through 2030 in three out of the report’s four scenarios, which is generally in line with forecasts by agencies such as the International Energy Agency and others for that period. The one scenario that bucks the trend, named Forced Revitalization, is characterized by strong government intervention in green stimulus, acceleration of digital mobility technologies, and a slower economic recovery—the result being oil demand falling after 2025. The greater competitiveness of alternative fuels and the weaker economy in that scenario contribute to lower oil use overall. The study finds that while great uncertainty remains about the speed and strength of the world’s recovery from COVID, the current state of government climate policies and technology innovation are unlikely to reduce global oil demand fast enough to help the world keep within a 1.5°C temperature rise along the net zero carbon trajectory. Both government climate policies and technology innovation would need to move well beyond what was contemplated in this study’s scenarios.
Topic:
Energy Policy, Oil, Natural Resources, Infrastructure, Transportation, Pandemic, and COVID-19
Political Geography:
North America and United States of America

18. Evaluating Net-Zero Industrial Hubs in the United States: A Case Study of Houston

Author:
Julio Friedman, Mahak Agrawal, and Amar Bhardwaj
Publication Date:
06-2021
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
New legislation, corporate action, and public interest have created both an imperative and opportunities associated with rapid and profound CO2 reduction and removal. Net-zero industrial hubs present a pathway to focus investment, innovation, and public policy to create industries and infrastructure toward achieving that goal. Such a hub would require building facilities, plants, and linked infrastructure that would reduce and eventually eliminate greenhouse gas emissions through the application of advanced clean energy, emissions control technology, and possibly CO2 removal technology. This concept, while relatively new, has already gained interest from some nations and companies, most notably in the United Kingdom around net-zero hubs like the Teesside collective. This paper, part of the work from the Carbon Management Research Initiative of Columbia University’s Center on Global Energy Policy, examines Houston as a potential net-zero hub location. Houston, a major US refining and petrochemical center, possesses a high concentration of industrial sites and fossil-fueled power plants. Regional CO2 storage capacity, low-cost energy, infrastructure like the Port of Houston, and a large skilled labor pool also suggest a possible opportunity for investment, trade, and greenhouse gas reduction in this area. The paper also makes recommendations for policy makers should they seek to pursue a net-zero hub in the Houston area.
Topic:
Energy Policy, Industry, Carbon Emissions, and Energy Dependence
Political Geography:
North America and United States of America

19. The Carbon-Neutral LNG Market: Creating a Framework for Real Emissions Reductions

Author:
Erin Blanton and Samer Mosis
Publication Date:
07-2021
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
As governments and companies consider options to decarbonize their energy systems, addressing greenhouse gas emissions from natural gas and liquified natural gas (LNG) will inevitably become a greater concern. Natural gas is viewed by some as potentially providing a bridge in a broad energy transition from dependence on fossil fuels to lower-emission sources. Even with advancements in renewable energy, many forecasts show natural gas will remain core to meeting global energy demand for some time, including as a backup fuel source for renewables.[1] But as the emissions profile of the natural gas value chain has become clearer, estimates of its footprint have increased, raising questions about natural gas’s transitory function. While gas will continue to have a prominent role in the energy mix,[2] without action to better account for, reduce, and offset natural gas and LNG emissions, the breadth and length of its use will increasingly come into question—including by countries with growing energy demand who see diminishing incentive to favor natural gas over high-emitting but fiscally cheap fuel sources, such as coal. Amid these considerations, discussions of value chain carbon intensity and greenhouse gas (GHG) accounting are becoming an important component of LNG trade, giving rise to the concept of “carbon-neutral LNG.” In the trade of carbon-neutral LNG, GHG emissions from supply and/or consumption are accounted for and offset by procuring and retiring carbon credits generated through GHG abatement projects, such as afforestation, farm/soil management, and methane collection.[3] Currently, carbon-neutral LNG makes up a slim portion of global LNG trade, with just 14 cargoes traded transparently since the first was sold in 2019, compared to over 5,000 cargoes of LNG being delivered globally in 2020 alone.[4] By examining the efficacy of the market at this early stage, as this commentary does, areas for improvement in the carbon-neutral LNG trade are highlighted. Procurement of carbon credits does not negate the emissions from natural gas and LNG, and accordingly, adoption of offsets should be paired with a broader and deeper reduction in the emissions intensity of these fossil fuels to ensure they remain conducive to meeting growing energy demand without needlessly jeopardizing global, national, and corporate efforts to reduce emissions. When considering this alongside the important role LNG and natural gas are likely to continue to play in meeting energy demand in key parts of the world during the transition period, it becomes clear that efforts must be made to scale GHG emissions mitigation throughout the value chain, such as through leakage reduction and employment of less carbon-intensive liquefaction technology, as well as to offset remaining emissions through the procurement and retirement of high-quality carbon credits. Serious questions remain about scaling the carbon-neutral LNG trade, including which emissions are accounted for, what methodology is employed in the emissions measurement and verification, and how the emissions are priced—either through a carbon credit or a carbon tax. If these questions are sufficiently addressed, natural gas and LNG may align better with global policy direction and emissions requirements. That is to say, GHG verification and mitigation will be critical to the sustainability of LNG in the decarbonizing global energy stack in the coming decade, with knock-on impacts on long-term LNG contract structure, trade flows, and market pricing. While this commentary does not prescribe policy to meet carbon neutrality or Paris Agreement goals specifically, it does examine an existing and growing market trade behavior that has the potential to assist countries dependent on natural gas in meeting their climate targets during this transitory period for the global energy system. Section 1 outlines the current state of the carbon-neutral LNG trade, while section 2 suggests a structure for LNG GHG accounting based on existing accounting methodologies. Section 3 discusses the different forms through which emissions mitigation can be integrated into the LNG trade, including a discussion on the risks of greenwashing. Section 4 highlights the implications of the growing carbon-neutral LNG market and provides recommendations to market participants and policy makers.
Topic:
Energy Policy, International Trade and Finance, Natural Resources, Carbon Emissions, and Decarbonization
Political Geography:
Global Focus

20. The New US-EU Energy Security Agenda: Roundtable Report

Author:
Jonathan Elkind
Publication Date:
07-2021
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On June 3, 2021, Columbia University’s Center on Global Energy Policy (CGEP) and the Stiftung Wissenschaft und Politik (SWP, the German Institute for International and Security Affairs), in cooperation with the European Climate Foundation (ECF) and the European Union (EU) Delegation to the US, cohosted a private virtual roundtable focusing on energy security issues during a period of heightened action on climate goals. This document summarizes the June 3 roundtable, which was conducted on a not-for-attribution basis. Participants in the roundtable included just over 50 senior corporate executives, civil society representatives, academic and think tank experts, energy analysts, and government officials from the European Union and United States. In June 2021, President Joe Biden traveled to Europe, his first overseas trip since his inauguration as president, and he met with European heads of state and government in the context of a British-hosted G7 meeting, a North Atlantic Treaty Organization (NATO) Summit, and a US-EU Summit.[1] The journey signaled a concerted effort by the United States and the European Union to rebuild bilateral relations, which were battered during the Trump administration. Protecting the global climate and accelerating the transition to clean energy are objectives that unify top leaders on both sides of the Atlantic today. The European Union has a legislated mandate of climate neutrality by the year 2050 and is implementing its comprehensive European Green Deal and elaborating a corresponding legal and regulatory framework for an enhanced 2030 target. In the United States, the Biden administration reentered the Paris climate agreement and announced plans to reach net-zero emissions by midcentury, though climate protection still faces significant political challenges in the US Congress and in certain states. If the European Union and the United States proceed as these plans indicate, their energy systems face a period of accelerating, unprecedented, and sustained change—new technologies, new supply chains, new business models, and new interdependencies between economic sectors.
Topic:
Security, Climate Change, Energy Policy, Environment, International Cooperation, and European Union
Political Geography:
Europe, North America, and United States of America

21. National Oil Companies and the Energy Transition: Ecopetrol's Acquisition of an Electric Transmission Company

Author:
Mauricio Cardenas and Luisa Palacios
Publication Date:
08-2021
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The energy transition strategies of international oil companies have come under increased scrutiny from investors and the media as countries across the globe grapple with targets to reduce greenhouse gas emissions.[1] It is unclear if national oil companies (NOCs) are going to feel the same pressure given their government-majority ownership and, if so, how they will adjust their business models. This commentary explores recent moves by Colombian national oil company Ecopetrol to adapt to the energy transition, especially its bid to acquire a majority stake in Interconexión Eléctrica SA (ISA), an electricity transmission company, for 14.2 trillion Colombian pesos (equal to about $3.6 billion).[2] The proposed acquisition was met with mixed reactions, with some critics suggesting it was an opportunistic move on the part of the Colombian government (which has a majority interest in both companies) to book some revenues and reduce the ballooning fiscal deficit. But rather than analyzing its fiscal merits, this piece analyzes the potential transaction from the viewpoint of Ecopetrol and whether there are lessons from the deal for other NOCs navigating the energy transition. This commentary begins with a brief background on both companies and the potential benefits for Ecopetrol in pursuing a path that is different relative to what some other oil companies are doing in order to adjust their business models. Ecopetrol faces specific as well as regional challenges that make transition strategies used by the European oil companies less attractive. The piece then discusses how, if part of the goal of the acquisition is to accelerate Ecopetrol’s energy transition and to add shareholder value, a number of complementary actions should be taken to help with the governance aspect of this acquisition while at the same time strengthening Ecopetrol’s pledge to become net zero by 2050. For example, in arranging financing, Ecopetrol could explore issuing an environmental, social, and governance (ESG) bond where the proceeds are earmarked for the purchase of ISA, which is already a net-zero company. In addition, the coupon rate could be linked to specific emissions reductions on Ecopetrol’s oil and gas activities. Tying these targets to the coupon rate could be seen as a credible mechanism to ensure that the company will comply with its ambitious climate goals. In addition, we propose that Ecopetrol maintain ISA’s current governance structure unmodified and preserve its operational independence. This would allow ISA to benefit from its investment grade status (which Ecopetrol does not enjoy) and continue to deploy its capital expenditures (CapEx) plan geared toward investing in Latin America’s electricity sector without interference. To conclude, this transaction by itself does not guarantee a successful energy transition for Ecopetrol’s core business. If Ecopetrol’s goal is to diversify its portfolio of activities and reduce its carbon footprint, then it should ensure the sum of the two companies results in synergies that reduce emissions beyond what each one of them can achieve individually. This is not a guaranteed outcome but one that will depend on how ISA performs under Ecopetrol’s ownership, the extent to which this transaction brings new opportunities in the renewable energy space, and how the revenues derived from this acquisition help to finance the decarbonization of Ecopetrol.
Topic:
Energy Policy, Oil, Regional Cooperation, Natural Resources, and Renewable Energy
Political Geography:
Colombia, South America, and Latin America

22. Getting to 30-60: How China’s Biggest Coal Power, Cement, and Steel Corporations Are Responding to National Decarbonization Pledges

Author:
Edmund Downie
Publication Date:
08-2021
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In September 2020, China announced its intentions to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. The neutrality goal in particular was a breakthrough for global climate ambitions: a net-zero target from the world’s largest emitter, responsible for around one-quarter of global greenhouse gas (GHG) emissions. The two new goals—referred to in Chinese policy discourse as the “30-60” goals—are not China’s first public targets on GHG reduction. They are, however, the centerpieces of a new Chinese climate policy in which GHG cuts are a standalone goal rather than an ancillary benefit of more immediate priorities like energy efficiency and industrial upgrading. Prior approaches had required little engagement from firms in carbon management. Indeed, none of the largest Chinese firms in the coal power, cement, and steel sectors had publicized quantitative targets for reducing or controlling carbon emissions before the government announced the 30-60 goals. They faced little pressure to do so; authorities pressed firms in climate-adjacent areas like reducing air pollution rather than carbon management. The 30-60 announcement appears to mark a break from this era, forcing firms to adjust accordingly. This report, part of the China Energy and Climate Program at Columbia University’s Center on Global Energy Policy, assesses how China’s high-emitting industries have responded to the 30-60 targets and the accompanying elevation of climate within national policy priorities. It focuses on corporate and sectoral emissions reduction targets through June 2021 among 30 major firms in three of China’s largest sources of direct emissions: coal power generation, cement, and steel.
Topic:
Energy Policy, Natural Resources, Infrastructure, Coal, Industry, and Decarbonization
Political Geography:
China and Asia

23. Green Hydrogen in a Circular Carbon Economy: Opportunities and Limits

Author:
Zhiyuan Fan, Emeka Richard Ochu, Sarah Braverman, Yushan Lou, Griffin Smith, Amar Bhardwaj, Jack Brouwder, Colin McCormick, and Julio Friedmann
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
As global warming mitigation and carbon dioxide (CO2) emissions reduction become increasingly urgent to counter climate change, many nations have announced net-zero emission targets as a commitment to rapidly reduce greenhouse gas emissions. Low-carbon hydrogen has received renewed attention under these decarbonization frameworks as a potential low-carbon fuel and feedstock, especially for hard-to-abate sectors such as heavy-duty transportation (trucks, shipping) and heavy industries (e.g., steel, chemicals). Green hydrogen in particular, defined as hydrogen produced from water electrolysis with zero-carbon electricity, could have significant potential in helping countries transition their economies to meet climate goals. Today, green hydrogen production faces enormous challenges, including its cost and economics, infrastructure limitations, and potential increases in CO2 emissions (e.g., if produced with uncontrolled fossil power generation, which would be hydrogen but would not be green). This report, part of the Carbon Management Research Initiative at Columbia University’s Center on Global Energy Policy, examines green hydrogen production and applications to understand the core challenges to its expansion at scale and the near-term opportunity to enable deployment. An analysis using Monte Carlo simulations with a varying range of assumptions, including both temporal (i.e., today versus the future) and geographical (e.g., the US, the EU, China, India, Japan) factors, anticipates emissions intensity and costs of producing green hydrogen. The authors evaluate these production costs for different scenarios as well as associated infrastructure requirements and highlight near-term market opportunities and policies to motivate development of the green hydrogen industry.
Topic:
Climate Change, Energy Policy, Green Technology, and Carbon Emissions
Political Geography:
Global Focus

24. Stronger International Safeguards as a Condition of Supply to Nuclear Energy Programs: Coming to Consensus in the Nuclear Suppliers Group

Author:
Matt Bowen
Publication Date:
08-2021
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Nations that are party to the Treaty on the Non-Proliferation of Nuclear Weapons but are not allowed nuclear weapons under the treaty (“non-nuclear-weapon states”) must have international safeguards applied to civil nuclear energy facilities if they pursue such programs. The International Atomic Energy Agency (IAEA) applies these safeguards and conducts inspections on nuclear energy programs, and determined in the 1990s that it needed additional capabilities to verify states were not engaging in secret (i.e., undeclared) nuclear activities. Subsequently, the IAEA developed a set of stronger safeguards measures, known as the Model Additional Protocol (“Additional Protocol”), which was approved in 1997. Today, most nations have an Additional Protocol in force, but a few dozen do not. The nations that do not may pose a concern if they pursue nuclear energy as a means of addressing energy and environmental challenges, such as decarbonization to meet climate goals. The greater reporting requirements and inspection measures in the Additional Protocol give the international community assurance that a nation’s declarations about its civil nuclear program are both correct and complete. The enhanced inspections in turn provide greater deterrence against states pursuing illicit nuclear activities. The Nuclear Suppliers Group (NSG)—which comprises 48 governments, including those representing the major reactor vendor countries—maintains guidelines governing the export of nuclear materials, equipment, and technology. The NSG has been considering modifying those guidelines for many years to support more universal adoption of the Additional Protocol. But adoption has been hard to come by, in part because of potential disruptions to existing supply relationships given that not all countries participating in the NSG have Additional Protocols in force and some client states of countries participating in the NSG also do not have these upgraded inspections in place. There may be room for consensus building among NSG states, however, since most support requiring an Additional Protocol as a condition of supply to further the nonproliferation regime. The remaining governments may agree if measures are proffered to address challenges that have blocked acceptance to date. This commentary discusses a history of related policy developments in the NSG, examines some of the group’s roadblocks to consensus, and suggests options for making progress on adding stronger international safeguards as a condition of supply to nuclear energy programs.
Topic:
Arms Control and Proliferation, Energy Policy, International Cooperation, and Nuclear Energy
Political Geography:
Global Focus

25. Oil Intensity: The Curiously Steady Decline of Oil in GDP

Author:
Christof Ruhl and Titus Erker
Publication Date:
09-2021
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Oil is the largest primary fuel, and the trajectory of oil consumption is of great concern and consequence for economic, political, and, not least, for climate change reasons. Anticipating oil prices and production from year to year is not easy; identifying even basic ingredients of aggregate demand and supply schedules, such as price or income elasticities, is notoriously difficult. It’s an additional challenge to model the structure of a market that sometimes appears to be highly cartelized, and at other times populated by a large flock of peaceful price takers. But a remarkably steady metric—and possible tool for projecting consumption into the future—has been identified in this paper: oil intensity. Oil intensity is the volume of oil consumed per unit of gross domestic product (GDP). Measured simply in barrels per dollar, it is often viewed as a broad measure of oil efficiency; it certainly demonstrates the importance of oil in a society. The efficiency of oil use has improved, in other words oil intensity has declined, over the years and decades. In 1973, for example, when oil intensity was at its zenith, the world used a little less than one barrel of oil to produce $1,000 worth of GDP (2015 prices). By 2019 (the last data set before Covid) global oil intensity was 0.43 barrel per $1,000 of global GDP—a 56% decline. Oil has become a lot less important and humanity has become more efficient in making use of it. What is worth a closer look, and is the focus of this paper reporting on oil and gas related research at Columbia University’s Center on Global Energy Policy, is the pattern by which this progress has been achieved. Since 1984, oil intensity has fallen every year in an almost perfectly linear fashion: the amount of oil used per dollar of global GDP has dropped by roughly the same amount each year. Wars and revolutions, booms and busts, OPEC successes and failures, and every other monumental event in the last 35 years left their imprint on oil markets but didn’t alter oil intensity’s steady, downward crawl. This kind of regularity is very rare in any long-time trend, in economics or in energy. Although oil intensity isn’t a new topic, an attempt to explain its curiously consistent downward progress—or even any discussion about it—is hard to find in the literature. For this paper, the authors explain the trend and cross-validate its predictive potential before delving into possible reasons behind the linear decline in oil intensity. It finally extrapolates what such a continuing trend might mean for oil consumption and policies around it going forward.
Topic:
Economics, Energy Policy, Oil, Natural Resources, and GDP
Political Geography:
Global Focus

26. Green Giants? China’s National Oil Companies Prepare for the Energy Transition

Author:
Erica Downs
Publication Date:
09-2021
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On September 22, 2020, China’s leader, Xi Jinping, made a surprise announcement about China’s climate ambitions during remarks to the United Nations General Assembly. He stated that China, the world’s largest emitter of greenhouse gases (GHGs), aims to achieve carbon neutrality before 2060. Xi also said that China’s GHG emissions would peak before 2030, a slight revision to China’s pledge under the Paris Climate Agreement to peak emissions around 2030. China’s new climate targets spurred the country’s three major national oil companies (NOCs)—China National Petroleum Corporation (CNPC), China Petrochemical Corporation (Sinopec Group), and China National Offshore Oil Corporation (CNOOC)—to strengthen their climate ambitions. PetroChina (the flagship subsidiary of CNPC), which had already set a goal of achieving near-zero emissions by 2050, intends to peak its carbon emissions by 2025. Sinopec Corp. (the flagship subsidiary of Sinopec Group) also aims to peak its carbon emissions by 2025 and to achieve carbon neutrality by 2050. CNOOC Ltd. (the flagship subsidiary of CNOOC) plans to reduce its GHG emissions by 16 percent between 2020 and 2025 and aims to peak its carbon emissions before 2030 and achieve carbon neutrality before 2060. This report, part of the China Energy and Climate Program at Columbia University’s Center on Global Energy Policy, provides a baseline for understanding how China’s NOCs are responding to climate change. It examines the activities the three companies identified as part of their emerging energy transition strategies before Xi unveiled the carbon peaking and carbon neutrality targets, and why they didn’t do more. The report then assesses the implications of China’s new climate ambitions for its NOCs and lays out their preparations to date for supporting Xi’s 2030 and 2060 pledges.
Topic:
Energy Policy, Oil, Natural Resources, Infrastructure, and Green Technology
Political Geography:
China and Asia

27. Methane Emission Controls: Redesigning EPA Regulations for Greater Efficacy

Author:
Robert Kleinberg
Publication Date:
10-2021
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Natural gas holds a critical role in the US energy economy, providing 32 percent of primary energy evenly distributed among electric power generation, industrial use, and residential and commercial consumption (LLNL 2020). As countries set targets to minimize climate change, however, widespread reliance on fossil fuels, with their attendant greenhouse gas emissions, is being scrutinized. Methane, the main constituent of natural gas, is second only to carbon dioxide in its contribution to greenhouse gas warming (Kleinberg 2020). It holds the potential to be a primary driver of global average temperature change between now and 2050—no matter what progress is made in controlling increases of atmospheric carbon dioxide over the next thirty years (Shindell et al. 2012). Half of global methane emissions come from natural sources, such as swamps and seeps, and half from anthropogenic sources, such as agriculture and fossil fuels. Regulations curbing methane emissions from the oil and gas industry are essential to mitigating global climate change over the next three decades. In the United States, current regulations were devised at a time when the technology for the measurement of natural gas emissions was relatively immature. Comprehensive performance-based regulations were not an option, and because of this, many regulations put in place were highly prescriptive. Data show these regulations have been largely ineffective. This commentary examines the potential to reduce emissions of methane from oil and natural gas infrastructure. It begins with a brief history of natural gas regulations and the effectiveness of rulemaking, before exploring unregulated and underregulated sources of methane. This is followed by a discussion about improvements in measurement capabilities and how regulations could be used to more effectively address methane emissions. This work shows the complexities of oil and gas production do not lend themselves to prescriptive regulation. Performance-based regulation, including quantitative compliance monitoring, would engage the talents of thousands of engineers, encouraging them to solve problems using locally appropriate solutions rather than relying on a prescriptive checklist approach that cannot anticipate every eventuality. The key to performance-based regulation is accurate measurement, and this capability has improved rapidly in recent years. Aircraft-based, facility-scale measurements encompassing tens of thousands of facilities spread over tens of thousands of square kilometers are economically viable and increasingly common. Permanently installed continuously monitoring sensors show promise in detecting intermittent sources; oil field pilot studies are underway. However, aircraft- and ground-based facility-scale measurements are not compliant with the current regulatory regime, which focuses on individual components. Therefore, the current regulatory regime must be completely rethought. (A comprehensive exposition of this topic, with evidentiary support, has been submitted to the Environmental Protection Agency [Kleinberg 2021b].)
Topic:
Economics, Energy Policy, Natural Resources, Gas, and Methane
Political Geography:
North America and United States of America

28. The Global Energy Crisis: Implications of Record High Natural Gas Prices

Author:
Anne-Sophie Corbeau
Publication Date:
10-2021
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The recent spike in energy prices across the globe has led to talks of an energy crisis with far reaching repercussions as the Northern Hemisphere braces for winter. While a significant focus has been on natural gas as gas spot prices in Asia and Europe hit levels unthinkable before ($56/million British thermal unit [mmBtu], or over $320/barrel [bbl] in oil-equivalent terms), the crisis has extended well beyond gas: oil prices are rising, China and Europe are facing record coal prices, and carbon prices in Europe have reached historic levels. As gas-fired plants (or coal in some regions) are at the margin, this is also leading to record power prices in different parts of the world. These circumstances lead to immediate concerns, but also flag important potential lessons for the future. In the short term, immediate concerns include a potential gas supply and power crunch over the coming winter, the impact of record-high gas and electricity prices on end-users’ energy bills, and power shortages. For natural gas, however, the crisis may extend beyond the weather. The role of natural gas in a world looking to slash carbon emissions has been an ongoing topic of discussion, and the potential for a sustained crisis that batters consumers may have critical repercussions for the fuel longer term. Already, at least two schools of thought are emerging from the current situation that reflect the ongoing debate about natural gas: one that views this episode as further proof that the world needs to rapidly get rid of fossil fuels, including natural gas, and one that views it as proof that more gas is needed in the immediate future to satisfy growing global energy demand. Questions of security of supply and affordability are also part of the discussion, especially in a future world with a higher share of renewables but where fossil fuels are still necessary to provide flexibility and are likely to continue to set power prices at the margin until new flexibility tools such as batteries or demand-side management are developed at scale. In addition, there are concerns about another widespread gilets jaunes[1] protest movement triggered by price spikes as governments push their agenda for decarbonization. For the gas industry, it could prove to be a moment of truth. The IEA stated earlier this year that “no new oil and natural gas fields are needed in the net-zero pathway.”[2] Indeed, producers are facing increased scrutiny about future investments, including in upstream activities and liquefied natural gas (LNG), but at the same time are asked to make gas readily available when needed.[3] Meanwhile, developing countries that had been looking favorably at natural gas as a way to complement renewables and decommission coal could be deterred by these high and volatile gas prices from supporting LNG imports. The recent increase in gas prices could impact these decisions in different ways, especially if they remain high for the next few years. This commentary provides a brief overview of the current gas market and examines the potential near- and longer-term impacts for natural gas.
Topic:
Economics, Energy Policy, Natural Resources, Gas, and Energy Crisis
Political Geography:
Global Focus

29. Promoting Energy for Development in a World Accelerating to Net-Zero: Roundtable Report

Author:
Hon Xing Wong, Jonathan Elkind, Philippe Benoit, and Aashna Aggarwal
Publication Date:
10-2021
Content Type:
Policy Brief
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On September 14, 2021, Sustainable Energy for All (SEforALL) and Columbia University’s Center on Global Energy Policy (CGEP) co-hosted a high-level virtual roundtable on energy for development and climate objectives, the first of a series of discussions focusing on the intersection between these two policy priorities. Among the roundtable participants were senior leaders representing major international organizations, development finance institutions, civil society, philanthropic foundations, academia, youth activists, and energy and finance industries. Convened a week before the United Nations (UN) High-Level Dialogue on Energy—the first in 40 years—the virtual roundtable occurred at a time when the focus of many decision makers around the globe was on accelerating climate change mitigation to fulfill the goals of the Paris Agreement. Amid this sense of urgency to accelerate decarbonization, the roundtable served as a timely reminder of energy’s role in alleviating poverty and promoting growth. With 2.6 billion people (more than a third of the world’s population) lacking access to clean cooking and almost 760 million people (roughly 10 percent of the world’s population) lacking access to electricity, bridging the energy gap by 2030 should remain at the top of the global agenda.[1] Energy access is essential for economic development, especially for the 9.1–9.4 percent of the world that still lives in extreme poverty (defined as living on less than $1.90 per day).[2] Moreover, the role of energy extends beyond basic access: it is critical to generating broad-based economic growth to lift people out of poverty and enable quality healthcare, education, gender equity, food security, and other benefits enjoyed by middle-class populations worldwide. Roundtable participants discussed options to promote energy for development and climate change mitigation, considering matters of policy, finance, and technology. This report summarizes the roundtable discussion and presents participants’ key questions. The discussion occurred on a not-for-attribution basis under the Chatham House rule.
Topic:
Climate Change, Development, Energy Policy, and Green Technology
Political Geography:
Global Focus

30. The Impact of ESG on National Oil Companies

Author:
Luisa Palacios
Publication Date:
11-2021
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The rise of ESG investing—investment focused on environmental stewardship, social responsibility, and corporate governance—in the 21st century has created significant pressures on oil companies. Some shareholders of international oil companies (IOCs) have pressed them to pay closer attention to ESG goals and diversify their business models away from hydrocarbons and into other sources of energy amid efforts to address greenhouse gas emissions.[1] National oil companies (NOCs)—which currently control about 50 percent of the world’s oil production—have different corporate mandates than their IOC peers that might imply a more complicated relationship with ESG goals. NOCs are mainly owned by governments in the developing world, and thus face vastly different demands than IOCs answering to private sector shareholders.[2] But different does not mean NOCs do not or will not feel pressure to address ESG issues. Given NOCs’ significant share of global oil production—and the fact that this share may increase as IOCs diversify—the pressures they face and changes they make could have a significant impact on the future of the oil and gas industry as well as countries’ abilities to meet climate goals. During the November 2021 COP 26 meetings in Glasgow, Saudi Arabia and India became the latest countries with strong NOCs to pledge to reach net-zero greenhouse gas emissions in the next decades.[3] This commentary examines how the ESG agenda is impacting NOCs through the ecosystem of organizations and principles that have emerged from the UN’s Sustainable Development Goals and the Paris Agreement as well as from investors and regulators in global financial markets. The piece then describes the three components of the ESG framework in relation to NOCs and the challenges of accurately measuring adherence to them due to insufficient standardization of metrics and the variety of reporting frameworks. Also, because environmental, social, and governance competence are not strictly related to one another, companies may be strong in some areas and weak in others, making it difficult to evaluate their ESG performance as a whole.[4] Finally, while ESG pressures are coming alongside discussions about the energy transition and climate change, ESG assessments do not evaluate companies’ energy transition plans, even if some aspects of ESG scores might provide insights about them. The commentary pays special attention to the importance of corporate governance for national oil companies in achieving overall ESG goals, given the key differences between their ownership structure and that of private sector companies working in the oil industry.
Topic:
Climate Change, Energy Policy, Oil, Natural Resources, and Green Technology
Political Geography:
Global Focus

31. Market, Policy, and Political Implications of the Global Natural Gas Crisis: Forum Report

Author:
Hon Xing Wong, Erin Blanton, and Samantha Lang
Publication Date:
11-2021
Content Type:
Policy Brief
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On October 18, 2021, Columbia University’s Center on Global Energy Policy (CGEP) hosted a special session of the Natural Gas Forum on the global nature of the current unexpected gas crisis, which has sparked chaos in many parts of the world. A number of factors have been put forward to explain the crisis, including a faster-than-expected pandemic recovery in economic demand that has precipitated global supply chain issues, extreme weather conditions around the world, and liquified natural gas (LNG) facility outages. The forum was an opportunity for participants to discuss the underlying causes of the global gas crisis and its long-term market, policy, and political implications. The discussion started with outlooks for the winter across the European Union, Russia, the United States, and East Asia before turning to a debate over any longer-term implications of the natural gas crisis on the energy transition. The forum’s participants included policy makers and senior leaders from major international agencies, energy companies, financial institutions, civil society organizations, academia, and nongovernmental organizations. This summary of the proceeding begins with the broad takeaways of the discussion, which occurred on a non-attribution basis under the Chatham House Rule, and then delves into regional issues and the future of natural gas.
Topic:
Energy Policy, Natural Resources, Global Markets, Gas, Renewable Energy, and Energy Crisis
Political Geography:
Global Focus

32. Advancing Corporate Procurement of Zero-Carbon Electricity in the United States: Moving from RE100 to ZC100

Author:
Melissa Lott and Bruce Phillips
Publication Date:
12-2021
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Corporate pledges to purchase renewable electricity have led to significant new solar and wind capacity investments and driven down the carbon intensity of the power sector in the United States. Participating companies have increasingly procured this power, many with a goal of procuring quantities that are equal or proportional to the amount of electricity that they consume at their facilities on an annual basis.[1] Corporate buyers can reap many benefits from renewables procurement, including hedging against power price fluctuations and enjoying positive brand association, helping them meet shareholder demands around climate or other environmental, social, and governance (ESG) goals. However, the reality is that commitments to buy 100 percent renewable electricity may not equate to a company actually reducing its power carbon footprint to zero. This report from Columbia University’s Center on Global Energy Policy quantifies the mismatch between companies’ contracted variable renewable electricity (VRE) and their actual use of electricity to highlight the degree to which these companies still rely on a partially fossil-fueled power grid to bridge the gap. A modeling exercise and analysis done in collaboration with The NorthBridge Group reveals a significant shortfall between electricity demand and VRE supply, leaving companies that contract for 100 percent renewables to in fact draw between 20 percent and 50 percent[2] of their annual electricity from the regional electric grid, depending on their location, demand profile, and mix of contracted renewable supplies. This disparity presents a number of challenges to corporations that wish to achieve deep decarbonization and are unable to curtail operations to match renewable energy supplies. There are several approaches to get closer to a true zero-carbon power footprint. Installing storage capacity either on-site or at the power plant to provide stored electricity when renewables are not sufficient, such as with a battery,[3] is one option. However, this only reduces the minimum shortfall by half, requiring a customer to continue to rely on electricity from the regional electric grid for 10 percent to 28 percent of its annual load.[4] Resolving the shortfall by procuring extra renewable power (e.g., to 150 percent of annual electricity demand with renewables) can drive costs up substantially without closing the gap.
Topic:
Climate Change, Energy Policy, Environment, Green Technology, Carbon Emissions, and Decarbonization
Political Geography:
North America and United States of America

33. How the ESG Investing Framework Applies to National Oil Companies: Workshop Report

Author:
Luisa Palacios and Hon Xing Wong
Publication Date:
12-2021
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On November 16, the Center on Global Energy Policy (CGEP) at Columbia University SIPA convened a private workshop to discuss the applicability of the current ESG (environmental, social, and corporate governance) investing framework on national oil companies (NOCs). The workshop brought together representatives from NOCs, international oil companies (IOCs), international organizations, multilateral banks, private banks, institutional investment firms, ESG rating agencies, think tanks, and non-governmental organizations, as well as academics. The group discussed the types of ESG pressures that NOCs face, how NOCs are responding to these challenges, whether all the components of ESG are equally relevant when it comes to NOCs, the challenges associated with ESG reporting and ratings, how investors are integrating ESG considerations into their investment process in relation to NOCs, and the risks of future access to financing
Topic:
Energy Policy, Oil, Privatization, Natural Resources, and Private Sector
Political Geography:
North America and United States of America

34. Reconsidering US Nuclear Cooperation Agreements

Author:
Richard Nephew
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Despite having played a central role in the creation of the international nuclear commercial sector, today the United States is increasingly on the outside looking in when it comes to civil nuclear projects. The United States now accounts for a relatively small number of new reactor builds, both at home and abroad. There are a few rays of sunshine for the US nuclear industry, especially when it comes to new technology. In fact, many of the new reactor builds that are underway do involve US technology and intellectual property, even if others are performing the construction. To take advantage of a similar dynamic, US innovators are looking to both new and forgotten designs as a way of managing the challenges of nuclear fuel manufacture, safety, waste management, security cost, and proliferation. But these new technologies face an uncertain future (and so consequently does the US role), even notwithstanding the advantages nuclear energy would bring to managing climate change and the edge the United States may have in their development. Various factors account for the challenges facing the US nuclear industry, including the complex political, economic, scientific, and popular environment around nuclear technology and civil nuclear energy. Of the various problems potentially plaguing US nuclear energy policy, one remains both difficult to address and controversial: US requirements for nuclear cooperation, and in particular, the demand from many in Congress and the nonproliferation community that the United States insist on binding commitments from its cooperating partners to forswear developing enrichment and reprocessing technology. While this policy is not responsible for the decline of the US nuclear industry, it adds additional hindrance to US nuclear commerce abroad and may even be to the long-term detriment of US nonproliferation policy interests. If so, then the questions that arise are whether this is in the US interest and, if not, how the US ought to respond. If the government believes that having a role in international nuclear commerce is advisable on both economic and strategic grounds, then it needs to decide whether to commit resources to incentivize foreign partners to overlook the problems its nonproliferation policies may cause these partners or seek modifications to those policies. From a pure nonproliferation perspective, it would be preferable for the United States to invest in its nuclear industry to ensure it is competitive globally. But, this does not seem to be a likely course of action for the United States given the myriad political, legal, and budgetary complexities that would be involved. Consequently, this paper recommends several changes to how US nuclear cooperation agreements are negotiated as well as enhancements to overall US nuclear nonproliferation policies. In aggregate, they seek to rebalance and reformulate some aspects of US nuclear nonproliferation policy to make it more effective and efficient, particularly regarding engagement in civil nuclear commerce, but without compromising the core nonproliferation interests the current US diplomatic approach seeks to advance. With respect to nuclear cooperation agreements, the paper recommends the following: Relaxing the current US preference for a legally binding commitment to forswear all enrichment and reprocessing capabilities indefinitely for these agreements, while continuing traditional US policy to discourage these technologies development through various means. Relying on enhanced inspector access and improved verification tools, technology, and practices to provide confidence on the nondiversion of civil nuclear cooperation rather than assurances regarding enrichment and reprocessing that, in any event, are potentially revocable. Adopting a favorable view of “black box” transfers of nuclear power reactors and building this into policy as new, advanced reactor concepts are being explored, developed, and marketed. Creating a new sanctions regime to cover countries that pursue enrichment and reprocessing capabilities after concluding a 123 agreement. With respect to nuclear nonproliferation policy more generally, the paper recommends the following: Developing an annual nonproliferation indicators publication to identify trends in proliferation, including the kinds of goods that proliferators are potentially seeking. This document would also include a list of countries where there are presently enhanced concerns regarding national nuclear programs or concerns about transshipment and export control risk. Its objective would not be to serve as a proxy for future sanctions designations decisions but rather to give a broad perspective of the challenges that exist with particular jurisdictions even—and perhaps especially—if there is no need or justification for sanctions at present. Developing a warning system for sought-after goods. The United States should work with industry to develop a restricted database that identifies sensitive goods that are being sought. This database would be accessible to corporate compliance officers, who would be vetted for access to the information. Within it, the database could also include additional information about the sorts of tactics being employed by proliferators. Making greater use of end use verification as a means of facilitating monitoring of the nonproliferation commitments of countries, particularly regarding dual use technology. This could also be built out to include greater collaboration with partner countries and companies. Amending Executive Order 13382, which provides for sanctions against proliferators of weapons of mass destruction, to add a prong of “willful negligence.”
Topic:
Energy Policy, International Cooperation, United Nations, Infrastructure, Nuclear Power, and Nonproliferation
Political Geography:
United States

35. Saudi-Russia oil war is a game theory masterstroke

Author:
Antoine Halff
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On the face of it, the idea of Saudi Arabia and Russia starting an oil price war in the middle of a global pandemic is as dumb as it gets. From a game theory perspective, it is a masterstroke. Analysts have called the breakdown of Opec+ and the lifting of the supply cuts that kept the oil market balanced in the last two years anything from a spectacular blunder to collective suicide. A new model of the oil market led by the inventors of mean-field game theory, Fields Medal laureate Pierre-Louis Lions and Jean Michel Lasry, suggests otherwise.
Topic:
Energy Policy, Oil, Natural Resources, and Strategic Competition
Political Geography:
Russia, Europe, Middle East, and Saudi Arabia

36. Reconsidering US Sanctions Policy Amid the Coronavirus Crisis and the Oil Market Crash

Author:
Richard Nephew
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
For energy markets, the profound economic disruptions caused by the coronavirus have broken the arrangements of the OPEC+ oil exporters to limit production, as Russia and Saudi Arabia failed to agree on production caps. Oil prices plunged as producers ramped up output, made worse by the demand shock created by the spread of Covid-19 and resulting plunging global economic activity as countries have sought to cope with the widespread infection and mortality. The global economic shocks and humanitarian crises have left US sanctions policy in a deeply uncomfortable spot. The United States has prioritized using sanctions as a means of creating leverage for resolving myriad foreign policy crises, arguing in part that using sanctions is a more humane option than the alternatives. The United States has long argued that without sanctions, some problems would either get far worse, with their own unpleasant consequences (such as human rights violations, regional aggression, and acts of terrorism), or would be met by US military force instead. Though some would disagree with the notion that sanctions are ever moral or just, it is on this basis—taken in combination with the presence of humanitarian exceptions to sanctions—that US policymakers across the political spectrum have asserted that their approach is appropriate and consistent with humanitarian values.
Topic:
Energy Policy, Oil, Natural Resources, Sanctions, and COVID-19
Political Geography:
North America and United States of America

37. A Saudi-U.S.-Russia Oil Deal Is Not a Good Idea

Author:
Christof Ruhl
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Oil markets are sending confusing signals at a time when more confusion is the last thing anyone needs. When Russia walked out on OPEC+ rather than contribute to more output cuts, Saudi Arabia turned on the crude taps. Whatever Riyadh’s intention, this “price war” was quickly made meaningless by the impact of the new coronavirus on global oil demand. The price collapse has been beyond anything anyone could have imagined. Now, storage room for crude is becoming scarce. Analysts warn darkly that plunging prices may threaten global economic stability. Equities follow the oil price news. Everyone seems to agree that prices should stop falling; and yet no one seems to argue that a very low oil price is exactly what the world’s economy needs to recover. The combination of price war and pandemic is also creating strange bedfellows. Some American shale producers are advocating that their country blocks Saudi oil imports, others want to talk to OPEC. President Donald Trump’s government has expressed an interest in cooperating on global oil supplies with Saudi Arabia and Russia; it’s nudging OPEC+ to reconvene, or an even wider group of producers to meet. Could we be witnessing the emergence of an unholy alliance of Saudi Arabia, Russia and the U.S., to “manage volatility,” and incidentally shore up the price of oil?
Topic:
Energy Policy, International Trade and Finance, Oil, and Natural Resources
Political Geography:
Russia, Europe, Middle East, Saudi Arabia, North America, and United States of America

38. 5 Reasons Why a Global Agreement to Prop Up Oil Prices Won’t Work

Author:
Jason Bordoff
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In April 1986, U.S. Vice President George H.W. Bush traveled to Saudi Arabia with a request for King Fahd, the country’s ruler at the time: Please raise the price of oil. After falling around 60 percent over the course of a few months, cheap oil was becoming a “two-edged sword for America,” Bush explained. Consumers might enjoy low prices at the gas pump, but evaporating revenues for U.S. oil producers undermined America’s own oil supply, and thus its national security. That was the last time the White House publicly sought more expensive oil—until now. U.S. President Donald Trump has been pushing Saudi Arabia and Russia to cut output in the hopes that less crude on the market will raise oil prices, which have fallen by two-thirds since the start of the year. A low oil price threatens an already teetering U.S. shale oil sector with a wave of bankruptcies and job losses. All eyes are therefore on OPEC and its allies, which will meet by videoconference on Thursday to discuss the way forward—followed by an emergency meeting of G-20 energy ministers on Friday, where the United States will be represented as well. It was at the last meeting of OPEC and key non-OPEC producers in Vienna on March 6 that Russia refused to go along with a Saudi proposal for deeper production cuts. The subsequent surge in Saudi supply set off a vicious price war that has seen the price of oil briefly fall below $20 a barrel.
Topic:
Energy Policy, Oil, Regional Cooperation, Natural Resources, and OPEC
Political Geography:
Middle East and Persian Gulf

39. Boosting ESG Finance for the Post-Covid-19 World

Author:
Mauricio Cardenas and Juan Jose Guzman
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
he novel coronavirus crisis has increased awareness about the need for sustainable and responsible investment. Once the spread of the virus is effectively contained, through testing and isolation, the world will focus on the recovery phase. But it should not be a return to business as usual. A successful recovery strategy should combine the need to restore income and economic activity while at the same time preventing another catastrophe resulting from the buildup of economic and financial vulnerabilities and policy mistakes (commonly known as white swans). As we enter what could likely be the worst recession since the Great Depression, the level of awareness about the costs of ignoring the physical limits to economic growth will likely increase. This crisis is revealing how unprepared and vulnerable our socio-economic system is to physical shocks. As opposed to financial shocks, like the ones that caused the global financial crisis over a decade ago, physical shocks originate from ecological and social constraints that, when violated, generate an economic collapse. Thanks to advancements in the natural and social sciences, we are now in a better position to understand their underlying causes, and in some cases assess their likelihood. Mitigating this class of tail-risks is not just possible, it has never been more relevant and urgent. One effective way to do that is to allocate capital intelligently. Although insufficient alone, the use of environmental, social, and governance (ESG) finance is one way to ensure that the post-Covid-19 period does not breed another such experience. Greater focus on sustainable investing, once some normalcy is restored, can reduce the chances that a new physical shock develops into another global crisis.
Topic:
Energy Policy, Public Health, Pandemic, and COVID-19
Political Geography:
Global Focus

40. Under a Cloud: The Future of Middle East Gas Demand

Author:
Robin Mills
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
During the early years of the 21st century, the Middle East emerged as a fast-growing center not just of natural gas production and exports but also of demand. Including Egypt, total growth in annual demand from 2000 to 2017 was greater than any region except Asia, a feat more surprising when considering the region’s relatively small population and economy. That’s about to change, however. After two decades of rapid expansion of natural gas consumption in the Middle East, growth should drop through 2035 due to four factors: improved efficiency, higher gas prices, slower economic growth, and alternative generation. Demand growth was driven by low, subsidized gas prices intended to spur economic growth, encourage energy-intensive industrialization, and share some benefits with the local population. But budget deficits and unsustainably rising domestic energy consumption have encouraged regional governments to cut subsidies and introduce efficiency policies, particularly since the fall in oil prices in late 2014. Industrial demand growth is also poised to fall as the Middle East’s key competitive advantage was its low energy and feedstock cost. The analysis undertaken in this paper to project future gas demand in the Middle East yields significantly lower estimates than forecasts by a number of international bodies (IEA, GECF, BP, ExxonMobil), especially post-2030.
Topic:
Energy Policy, Natural Resources, Gas, and Trade
Political Geography:
Middle East

41. Columbia Global Energy Dialogue: Natural Gas Flaring Workshop Summary

Author:
Marianne Kah
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The rapid expansion in tight oil production with its associated natural gas has made the United States the fourth largest source of flared gas in the world. The waste, emissions, and pollution caused by this flaring threatens not only the environment and human health but, ultimately, the license to operate for oil and natural gas companies. Responding effectively to the challenge of flaring requires technically and economically sound solutions that also enjoy political credibility and support. To be most credible, solutions for flaring need to be developed through open and transparent processes that provide for candid and constructive engagement by a diverse group of stakeholders. In January 2020, Columbia University’s Center on Global Energy Policy and the Energy Institute of the University of Texas at Austin gathered senior executives from the US oil and natural gas industry; current and former state government regulators; technical, market, and academic experts; and non-governmental organization (NGO) representatives with expertise in this topic for a workshop under the Chatham House Rule to discuss challenges and potential solutions to gas flaring, primarily in the Permian Basin. The gas flaring workshop focused on trends in gas flaring and greenhouse gas emissions in the United States, flaring and public policy, the disconnect between production growth and midstream infrastructure capacity, best practices and technological solutions for minimizing flaring, and regulatory and other solutions. Participants identified challenges to tackling flaring in the Permian, including poor data quality, the disconnect between the start of associated gas production and the availability of pipelines and other takeaway capacity, and the competition gas faces in the important Texas and California markets from lower-emission energy sources, and from coal in Texas. Participants also discussed potential solutions to these and other Permian flaring challenges.
Topic:
Energy Policy, International Trade and Finance, Oil, Natural Resources, and Gas
Political Geography:
North America and United States of America

42. The 2020 Oil Crash’s Unlikely Winner: Saudi Arabia

Author:
Jason Bordoff
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
With 4 billion people around the world under lockdown as the coronavirus pandemic grows, demand for gasoline, jet fuel, and other petroleum products is in freefall, as are oil prices. The price of a barrel of crude has been so low in the United States that sellers recently had to pay people to take it off their hands. As a result, oil-dependent economies are reeling. In the United States, the largest oil producer in the world, the number of rigs drilling for oil has plummeted 50 percent in just two months, almost 40 percent of oil and gas producers could be insolvent within the year, and 220,000 oil workers are projected to lose their jobs. Around the world, petrostates from Nigeria to Iraq to Kazakhstan are struggling and their currencies tanking. Some, like Venezuela, face an economic and social abyss. While 2020 will be remembered as a year of carnage for oil nations, however, at least one will most likely emerge from the pandemic stronger, both economically and geopolitically: Saudi Arabia.
Topic:
Energy Policy, Oil, Natural Resources, and Gas
Political Geography:
Middle East, Saudi Arabia, and Gulf Nations

43. COVID-19 Pandemic’s Impacts on China’s Energy Sector: A Preliminary Analysis

Author:
Kevin Tu
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The novel coronavirus (COVID-19) pandemic is inflicting high human costs in China and around the world. The stringent quarantine measures imposed by the Chinese government have severely affected the country’s economic activity, with profound energy and climate implications
Topic:
Climate Change, Energy Policy, Environment, Public Health, Pandemic, and COVID-19
Political Geography:
China and Asia

44. The Greenest Stimulus Is One that Delivers Rapid Economic Recovery

Author:
Noah Kaufman
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
As governments plot their responses to the COVID crisis, it’s difficult to find an influential voice who is not calling for economic stimulus legislation that simultaneously aims to achieve climate change goals.[1] As International Monetary Fund chief Kristalina Georgieva put it: “We are about to deploy enormous, gigantic fiscal stimulus and we can do it in a way that we tackle both crises at the same time.”[2] After all, governments will spend trillions of dollars to put people back to work. This could be a once-in-a-generation opportunity to shape massive government expenditures in a lower-carbon direction. Europe appears poised to take this advice, with the European Commission crafting a “Green Deal” at the center of a recovery package.[3] Many European countries have strong climate policy frameworks in place, including emissions regulations and net zero targets. In these countries, clean energy investments within economic stimulus packages can combine with these existing policy frameworks to enable even faster and cheaper decarbonization.[4] Here in the United States, the situation is starkly different. Expectations for climate progress from economic stimulus should be low, for two (related) reasons. First, the United States has no national climate plan in place, and the ability of clean energy spending to deliver emissions reductions without accompanying emissions regulations is very limited. Second, political opposition can prevent or severely weaken climate measures in economic stimulus for the foreseeable future. The climate measures with a plausible chance of inclusion in economic stimulus will, at best, enable the United States to continue muddling along on an incremental decarbonization pathway while temperatures rise to increasingly dangerous levels.
Topic:
Energy Policy, Green Technology, Recovery, Pandemic, and COVID-19
Political Geography:
North America and United States of America

45. Is China Still a Developing Country? And Why It Matters for Energy and Climate

Author:
Philippe Benoit and Kevin Tu
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
China’s dramatic economic growth in the 21st century has made it not only the second largest economy in the world but also a powerhouse in the global energy system. Now, as the top energy consumer and the biggest emitter of greenhouse gases, China is being closely watched and judged as its impact on energy markets and climate grows more profound. Looking forward, many issues are expected to shape the evolution of China’s energy sector, not least of which is its development status. While China’s economic might makes it a superpower alongside the United States, it still faces many of the major challenges of a typical developing country, such as widespread energy poverty, including 400 million people without access to clean cooking, significant air pollution, and dependence on increasing energy use to fuel future economic growth. Its modest income per capita qualifies it as a middle-income developing country. Evaluating China’s development status is not just an academic exercise. How China views itself and its challenges and how the international community classifies it carry real-world consequences that can significantly impact how the country manages its energy needs going forward, what fuels it uses, how it interacts with energy and other partners, and the level of its contributions and commitment to climate change mitigation and adaptation efforts worldwide. Understanding the nature and implications of China’s development situation can help in designing energy policies and fostering an international framework that better promote sustainable growth both within the country and globally. This paper examines how the usual criteria employed by international organizations to determine a country’s development standing have become increasingly difficult to apply to China, given the dramatic changes it has undergone over the past several decades, notably from an energy perspective. The paper finds that China combines significant characteristics of both developing and developed countries and examines the energy and environmental implications of this hybrid status.
Topic:
Climate Change, Development, Energy Policy, and Environment
Political Geography:
China and Asia

46. Strengthening Nuclear Energy Cooperation between the United States and Its Allies

Author:
Matt Bowen
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Nuclear energy cooperation between the United States and its allies has been important for over a half century. Bilateral cooperation agreements with key countries date back to the 1950s, and the United States played a principal role in the development of several allied nuclear energy programs. Today, the international nuclear energy marketplace has changed, and the supply chain is globalized—the US program, for example, depends on working with allies for major safety-related components. However, limitations imposed by legacy US statutes and other obstacles are hampering greater collaboration in areas that would enhance the country’s nuclear program today. Developing advanced reactors to produce dispatchable zero-carbon electricity and heat as part of global efforts to address climate change would be aided by greater cooperation and utilization of resources and financing across countries. Deeper cooperation with like-minded allies would also allow the United States to better compete against other supplier countries that have different commercial and geopolitical objectives. If the challenges facing the US nuclear program are not overcome, the country risks further ceding its role as a leading nuclear technology exporter to China and Russia. Already China and Russia are growing their domestic nuclear energy programs and offering attractive financing to prospective customers of this technology around the world. These nuclear competitors may place differing priorities on areas such as nonproliferation, and therefore maintaining a US role in the nuclear supplier regime is connected with national security considerations. This paper, part of the Center on Global Energy Policy at Columbia University’s nuclear power program, examines part of what may be required for the United States to regain momentum in the nuclear power industry after an erosion of domestic capabilities stemming from a long hiatus in new reactor orders. The paper discusses the historical importance of nuclear cooperation between the United States and allies, some of the challenges that the US and some allied nuclear energy programs are facing, and how cooperation could be reinvigorated to the benefit of the United States and its allies.
Topic:
Diplomacy, Energy Policy, International Cooperation, and Nuclear Energy
Political Geography:
Europe, North America, and United States of America

47. It’s Time to Put Climate Action at the Center of U.S. Foreign Policy

Author:
Jason Bordoff
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In the U.S. Democratic Party, perhaps no issue has risen more in prominence during this election year compared with prior ones than climate change. The number of self-identified Democrats who consider it a “major threat” is up from 6 in 10 in 2013 to almost 9 in 10 today. A slew of proposals—from the Green New Deal embraced by many progressive environmental groups to a new 538-page climate plan released by Democratic members of a special committee on the climate crisis in the U.S. House of Representatives—lay out various policies. Yet while these plans offer much to celebrate, all of them fall short by focusing on domestic actions while paying scant attention to the global nature of the crisis. Every ton of carbon dioxide contributes to climate change no matter where it is emitted, so an ambitious climate strategy cannot only be domestic—it must put the issue squarely at the center of U.S. foreign policy. Past U.S. efforts to advance global action, such as Washington’s leadership to help secure the 2015 Paris climate agreement, have been key to progress. Yet given both the urgency and global nature of climate change, the issue cannot be siloed into U.S. State Department or Energy Department offices and spheres of diplomacy. Many aspects of U.S. foreign policy will impact, and be impacted by, climate change. An effective foreign policy requires taking climate change directly into consideration—not just as a problem to resolve, but as an issue that can affect the success and failure of strategies in areas as varied as counterterrorism, migration, international economics, and maritime security. Human rights offers some important lessons. In the wake of the Vietnam War and the United States’ secret bombings of Cambodia, public concern for human rights was on the rise. Upon taking office in 1977, President Jimmy Carter declared human rights to be a “central concern” of U.S. foreign policy. In contrast to the realpolitik promoted by outgoing Secretary of State Henry Kissinger, Carter argued that protecting human rights would advance U.S. interests and was too important to be divorced from other aspects of U.S. foreign policy. Rather, human rights must be “woven into the fabric of our foreign policy,” as then Deputy Secretary of State Warren Christopher testified before a Senate subcommittee. Despite Carter’s mixed foreign-policy success, climate change demands a similar centrality. As the defining challenge of our time, climate change must be elevated to a foreign-policy priority and cannot be addressed with a compartmentalized approach. It is necessary, of course, to rejoin the Paris agreement, contribute to international finance efforts such as the Green Climate Fund, curb multilateral coal financing, and collaborate with other countries on clean-energy innovation. Yet all these efforts add up to an international climate strategy, not a climate-centered foreign policy. Truly making climate change a pillar of a foreign-policy strategy would have five key elements.
Topic:
Climate Change, Energy Policy, Environment, International Cooperation, and Paris Agreement
Political Geography:
North America and United States of America

48. Warsaw, Brussels, and Europe’s Green Deal: Challenges and Opportunities in 2020

Author:
Jonathan Elkind and Damian Bednarz
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Prospects for the proposed European Green Deal—a top European Union (EU) priority despite the headwinds from the global pandemic—require accommodating both the “climate ambitious” policy makers in Brussels, Berlin, and several other EU capitals and the “climate cautious” leaders in Warsaw and other Eastern European capitals. With the European Council’s announcement of an agreed package on July 21, 2020, a tricky step remains: ratification by the European Parliament and national legislatures. If lawmakers support the Council’s package, this impressive feat of deal-making will yield important outcomes
Topic:
Climate Change, Energy Policy, Environment, Regional Cooperation, Science and Technology, European Union, Green Technology, and Green New Deal
Political Geography:
Europe

49. Green Stimulus Proposals in the United States and China

Author:
David B. Sandalow and Xu Qinhua
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On June 14, 2020 New York time and June 15, 2020 Beijing time, the Center on Global Energy Policy at Columbia University and Center for International Energy and Environment Strategy Studies at Renmin University convened a joint Zoom workshop on green stimulus programs in the US and China. The workshop offered a chance for scholars from the two universities to explore the recent economic downturn due to the COVID-19 pandemic, stimulus measures adopted to date and green stimulus proposals in both countries. Participants also discussed other measures to promote clean energy and low-carbon development in the US and China.
Topic:
Climate Change, Energy Policy, Environment, Green Technology, and Paris Agreement
Political Geography:
China, Asia, North America, and United States of America

50. Nuclear Decision-Making in Iran: Implications for US Nonproliferation Efforts

Author:
Ariane Tabatabai
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Assessments of foreign policy tend to fall into one of two major camps: either they ascribe to a state’s actions all of the characteristics of a unitary actor, in which there is a decision made and executed as designed; or they fixate on the minutiae of the internal politics and deal making that went into the decision, underscoring the complexity of decision-making but often losing the thread of what results. This is particularly pernicious when involving the actions of a state with opaque decision-making and where attribution of responsibility is often itself the subject of intense internal political debate and controversy, as is the case with Iran. In this paper, Ariane Tabatabai seeks to pierce the veil of Iranian nuclear decision-making to both explain how decisions are reached and identify the effects of those decisions as a matter of Iranian state policy. This is, in many ways, an essential matter for those interested in understanding how Iran will decide—and what Iran may decide—to do in response to the continued stresses being imposed upon it by US-led international sanctions, especially when previous analysis has proven to be both overly optimistic (that Iran would meekly absorb the costs of US sanctions) and, at times, overly pessimistic (that Iran would withdraw from the nuclear agreement known as the Joint Comprehensive Plan of Action without delay). It is necessary to understand better how Iran reaches its decisions, particularly in the nuclear sphere, to be able to more accurately predict what it may choose to do next. This has utility in a variety of lines of work and study, but perhaps no more so than in the energy industry, which is both affected by—and has the power to affect in turn—Iranian decision-making. For this reason, we commissioned this paper and commend it to you as an important source of knowledge on how Iran’s decision-making process works, especially as relates to its nuclear weapons–relevant capabilities. Though the weapons program remains dormant, the way in which Iranian officials—and Iran as that unitary actor—think about these capabilities is an essential element of the story to come.
Topic:
Foreign Policy, Energy Policy, Military Strategy, and Nuclear Energy
Political Geography:
Iran and Middle East

51. A Near-Term to Net Zero Alternative to the Social Cost of Carbon for Setting Carbon Prices

Author:
Noah Kaufman, Peter Marsters, Alexander R. Barron, Wojciech Krawczyk, and Haewon McJeon
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The social cost of carbon (SCC) is commonly described and used as the optimal CO2 price. However, the wide range of SCC estimates provides limited practical assistance to policymakers setting specific CO2 prices. Here we describe an alternate near-term to net zero (NT2NZ) approach, estimating CO2 prices needed in the near term for consistency with a net-zero CO2 emissions target. This approach dovetails with the emissions-target-focused approach that frames climate policy discussions around the world, avoids uncertainties in estimates of climate damages and long-term decarbonization costs, offers transparency about sensitivities and enables the consideration of CO2 prices alongside a portfolio of policies. We estimate illustrative NT2NZ CO2 prices for the United States; for a 2050 net-zero CO2 emission target, prices are US$34 to US$64 per metric ton in 2025 and US$77 to US$124 in 2030. These results are most influenced by assumptions about complementary policies and oil prices.
Topic:
Climate Change, Energy Policy, Environment, Natural Resources, and Carbon Emissions
Political Geography:
Global Focus

52. Trends and Contradictions in China’s Renewable Energy Policy

Author:
Anders Hove
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
China is the world’s leader in wind and solar power, although new capacity is being added more slowly than several years ago. Meanwhile, a wave of coal power plant approvals and fewer public mentions of urban air pollution and climate change have raised questions about the future of China’s renewable power sector in the wake of Covid-19. In this commentary, Anders Hove examines China’s recent energy policy announcements and their implications for the 14th Five-Year Plan, which will set energy policy for the period from 2021–2025. He argues that the future of renewable energy deployment in China will be shaped by an ongoing contradiction within the power sector between long-term market-oriented reforms on the one hand and short-term administrative planning on the other. This contradiction is well represented in two draft laws issued in April and June 2020: the draft Energy Law and the draft Guiding Opinion on Establishing a Clean Energy Consumption Long-Term Mechanism. The former states that the country should prioritize development of renewable energy by opening the market to more players, while the latter puts grid companies, provincial officials, and incumbent generation companies in charge of all aspects of planning and target-setting. The ways in which this contradiction will be resolved are unclear. China’s central government remains focused on promoting markets in the longer term, in part based on market models that have worked in Europe and the US, so international lessons and experiences could play a role. China’s power reform could benefit from a greater focus on including consumers and other market players, and greater emphasis of long-term over short-term planning. Such a shift would help ameliorate the current trend of over-investment in unneeded and uneconomic coal capacity at the expense of renewables.
Topic:
Energy Policy, Renewable Energy, Wind Power, and Solar Power
Political Geography:
China and Asia

53. Leveraging State Funds for Clean Energy: Lessons from New York State

Author:
Richard L. Kaufman and David B. Sandalow
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The COVID-19 pandemic is creating extraordinary financial challenges for state governments. Tax revenues are plummeting and social service expenses increasing, leaving budget shortfalls projected to exceed $750 billion over the next three years.[1] For state governments to continue playing important roles in promoting clean energy, they will need to adopt strategies that leverage their limited funds. This commentary proposes four principles to guide state governments in spending limited funds to promote clean energy and discusses recent programs that applied those principles in New York State. One of the authors, Richard Kauffman, played a central role in the development of those programs as New York State “Energy Czar” from 2013 to 2019 and continues to serve as Chair of the New York State Energy Research and Development Authority (NYSERDA).
Topic:
Energy Policy, Renewable Energy, COVID-19, and Safe Energy
Political Geography:
New York, North America, and United States of America

54. Energizing America

Author:
Varun Sivaram, Colin Cunliff, David Hart, Julio Friendmann, and David B. Sandalow
Publication Date:
09-2020
Content Type:
Book
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Clean energy innovation is central to the fight against climate change. The dramatic success in lowering the costs of solar panels and wind turbines in the past decade must be replicated across a wide range of other energy technologies. Doing so will open extraordinary economic opportunities. To rise to this challenge, the United States should launch a National Energy Innovation Mission. Led by the president and authorized by Congress, this mission should harness the nation’s unmatched innovative capabilities—at research universities, federal laboratories, and private firms (both large and small), in all regions of the country—to speed the progress of clean energy technologies. To jumpstart this mission and unlock a virtuous cycle of public and private investment, the US federal government should triple its funding for energy research, development, and demonstration (RD&D) over the next five years.
Topic:
Energy Policy, Green Technology, Renewable Energy, Wind Power, Solar Power, and Safe Energy
Political Geography:
North America and United States of America

55. Reform Is in the Pipelines: PipeChina and the Restructuring of China’s Natural Gas Market

Author:
Erica Downs and Sheng Yan
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Beijing launched the most ambitious reform of China’s oil and natural gas industry in more than two decades with the establishment of the China Oil & Gas Piping Network Corporation (PipeChina) last December. The company is being developed from midstream assets—pipelines, liquified natural gas (LNG) import terminals, and storage facilities—and personnel transferred from China’s national oil companies (NOCs). Beijing expects that its goals of increasing China’s domestic and imported natural gas supplies and consumption will be more effectively advanced by having China’s midstream infrastructure owned and operated by a single company that provides fair and open access to its pipelines, LNG import terminals, and storage facilities instead of by three NOCs reluctant to grant third-party access to infrastructure.
Topic:
Energy Policy, Natural Resources, Gas, and LNG
Political Geography:
China and Asia

56. Why the United States Should Remain Engaged on Nuclear Power: Geopolitical and National Security Considerations

Author:
Matt Bowen
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Nuclear energy has shown much promise and faced considerable challenges since its origins in the mid-20th century. While the United States drove the early charge for safe nuclear power around the globe, its leadership has waned in recent decades. US reactors now under construction—following no orders for such plants in the United States for several decades—have gone well over planned budgets and schedules. And while the United States was once the leading international supplier of reactors, other countries have since stepped forward to fill that role. Columbia University’s Center on Global Energy Policy, as part of its wider work on nuclear energy, is examining the impact of potential American disengagement from nuclear power’s development and where opportunities exist to step back in and shape its future. The program also will assess the US nuclear waste management program and efforts to collaborate with other countries on advanced reactor development as well as options for improvement on both fronts. This effort includes a two-part commentary on some of the benefits the United States might derive from increasing its engagement on nuclear power. The first in the series explored the important role nuclear energy can play in lowering air pollution and greenhouse gas emissions to avoid the worst potential outcomes of climate change. The second part of the series, this piece, examines the geopolitical and national security implications of the United States and its traditional allies effectively ceding the international nuclear energy marketplace to the Chinese and Russians. The nuclear program’s ultimate goal is to inform readers—policy makers, industry leaders, academics, and others—with objective, research-based analysis. It will strive in the months and years ahead to contribute constructively to a necessary dialogue on the future of nuclear power.
Topic:
Security, Energy Policy, National Security, and Nuclear Power
Political Geography:
North America and United States of America

57. Carbon Pricing in Organized Wholesale Electricity Markets

Author:
David R. Hill
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Speaking at the Federal Energy Regulatory Commission Technical Conference regarding Carbon Pricing in Organized Wholesale Electricity Markets, adjunct senior research scholar David R. Hill delivered a statement on issues surrounding carbon pricing in the FERC-jurisdictional markets. The purpose of this conference was to discuss considerations related to state-adoption of mechanisms to price carbon dioxide emissions, commonly referred to as carbon pricing, in regions with Commission-jurisdictional organized wholesale electricity markets (i.e., regions with regional transmission organizations/independent system operators, or RTOs/ISOs). The conference focused on carbon pricing approaches where a state (or group of states) sets an explicit carbon price, whether through a price-based or quantity-based approach, and how that carbon price intersects with RTO/ISO-administered markets, addressing both legal and technical issues.
Topic:
Energy Policy, Environment, International Cooperation, and Carbon Emissions
Political Geography:
Global Focus

58. New York City’s Building Emissions Law Shows the Importance of Economywide Climate Policy

Author:
Noah Kaufman and Yu Ann Tan
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Regulations of greenhouse gas emissions, which are global pollutants, should ideally be coordinated across broad geographic and economic scopes. That way, climate policies can capture important interactions across sectors and borders. However, the United States has repeatedly failed to implement national and economywide climate legislation. That failure has led to an increasing focus on climate actions that are much narrower in scope: sector-specific regulations from subnational governments. A prominent recent example is New York City’s Local Law 97, which limits carbon dioxide (CO2) emissions from a large segment of the city’s residential and commercial buildings. This law is among the most ambitious building emissions regulations in the world, but this commentary focuses on a concern with the design of Local Law 97. The law does not account for the planned decarbonization of the local electricity grid over the next decade, and thus fails to sufficiently encourage a shift from fossil fuels to electricity (or “electrification”), a critically important strategy for achieving a low-carbon building sector. Such a narrow focus is common for sector-specific climate regulations. The following sections explain the importance of electrification to deep decarbonization and the failure of building regulations to encourage it, focusing on New York City’s Local Law 97. Fortunately, solutions to the overly narrow focus of the New York City buildings law are readily available, including via New York State’s comprehensive climate strategy, which can align climate action across economic sectors within the state.
Topic:
Climate Change, Energy Policy, Environment, Law, Green Technology, and Carbon Emissions
Political Geography:
New York, North America, and United States of America

59. Nowhere to Hide: Implications for Policy, Industry, and Finance of Satellite-Based Methane Detection

Author:
Jonathan Elkind, Erin Blanton, Robert Kleinberg, and Anton Leemhuis
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In August 2020, the Trump Administration finalized plans to roll back regulations on oil and gas industry emissions of methane from new and modified infrastructure. In the same month, the European Commission gathered stakeholder comments as part of its process to introduce the first EU-wide methane regulations. Though contradictory in direction, these regulatory processes on opposite sides of the Atlantic highlighted a critical climate protection challenge: How can the oil and gas industry—and the regulators who oversee it—best detect and address methane emissions to protect the environment and the climate in particular? The answer to this question will drive planning and operational approaches in the oil and gas industry. It could also significantly affect the future role of natural gas. Five years ago, many energy analysts expected natural gas to serve as a bridge fuel that would result in only half as much climate warming as coal, and fewer local air pollutants. Among other roles, gas was seen as a natural complement for variable wind or solar power—a way to provide firm, dispatchable, low-emissions power. Now that it is apparent that our understanding of methane emissions is poor, the climate implications of gas are far less clear. This poor grasp of methane emissions appears likely to become a thing of the past, however. In roughly the next five years, new satellite detection systems—used in concert with existing systems, aerial monitoring platforms, and ground-based monitors—can increase markedly the transparency surrounding methane leakage. The new wave of satellite monitoring capability has major implications for industry and governments. Our world is rapidly becoming a place in which methane emissions will have nowhere to hide. This commentary, co-authored by the Center on Global Energy Policy and TNO, focuses on detection and response to oil- and gas-related methane emissions, which have been the subject of increasing focus on the part of industry and the public policy community. It addresses the significance of methane emissions for the climate, and the challenges of detecting and accurately quantifying methane emissions. It then explores the evolving capabilities of satellite-based methane detection and monitoring systems, which are expected to advance rapidly in the coming years, and which can be especially powerful when used in concert with aerial and ground-based monitoring systems. It concludes with a discussion of the implications of the changing satellite detection landscape for the oil and gas industry, the finance and investment community, and the realm of public policy.
Topic:
Climate Change, Energy Policy, Environment, Gas, Finance, and Methane
Political Geography:
Global Focus

60. Expanding the Reach of a Carbon Tax: Emissions Impacts of Pricing Combined with Additional Climate Actions

Author:
John Larsen
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Putting a price on carbon dioxide (CO2) emissions can help governments reduce them rapidly and in a cost-effective manner. While 10 carbon tax bills have been proposed in the 116th US Congress, carbon prices alone are not enough to reach net-zero emissions by midcentury. Additional policies are needed to complement an economy-wide carbon tax and further cut CO2 from the US energy system. This study aims to provide a better understanding of such policy combinations. It projects the energy CO2 emissions impacts of two carbon taxes, starting in 2021, that span the rates in the carbon tax bills in Congress. The “low” tax scenario starts at $30 per ton in 2021 and rises at 5 percent plus inflation per year, reaching $44 by 2030, while the “high” carbon tax starts at $15 per ton and rises $15 per year, reaching $150 by 2030. The paper then describes the barriers inhibiting emissions reductions beyond those achieved by the carbon taxes alone for each major sector: electricity, transportation, buildings, and industry. Finally, it explores the energy system changes needed to overcome those barriers and the policy interventions that could deliver those changes. For certain key energy system changes, it provides quantitative estimates of emissions reductions incremental to the two carbon taxes. This paper is part of a joint effort by Columbia University’s Center on Global Energy Policy (CGEP) and Rhodium Group to help policy makers and other stakeholders understand the important decisions associated with the design of carbon pricing policies and the implications of these decisions. The paper finds the emissions impacts of the low and high carbon taxes alone lead to economy-wide energy CO2 emissions reductions by 2030 of 33 percent and 41 percent, respectively, below 2005 levels. A carbon tax combined with policy actions that support comprehensive, ambitious energy system changes could lead to emissions reductions in the range of 40 to 45 percent, arguably consistent with US midcentury deep decarbonization goals for the energy system. In the 2020s, the bulk of these emissions reductions are likely to occur in the power sector, even under a broad decarbonization strategy, due to the significant barriers to large near-term emissions reductions in the transportation, buildings, and industrial sectors.
Topic:
Climate Change, Energy Policy, Environment, Carbon Tax, and Carbon Emissions
Political Geography:
Global Focus

61. Roundtable on Climate-Oriented Economic Recovery

Author:
Center on Global Energy Policy
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On July 2, 2020, Columbia University’s Center on Global Energy Policy (CGEP) and Harvard University jointly hosted a virtual roundtable on climate-oriented economic recovery and stimulus packages. Stakeholders included senior experts from universities and policy institutes as well as former high-level government officials. Key questions discussed at the roundtable, held under the Chatham House Rule, included the following: What are the appropriate objectives of economic stimulus and recovery packages? What clean energy lessons from the 2009 American Reinvestment and Recovery Act are most relevant to the design of economic stimulus legislation today? What climate and energy policies are best suited to deliver on both economic stimulus and climate objectives? How does near-term climate-oriented stimulus complement medium-term climate policy and yield progress on long-term climate goals? The following is an overview of the discussion.
Topic:
Climate Change, Energy Policy, Environment, and Economic Recovery
Political Geography:
North America and United States of America

62. Levelized Cost of Carbon Abatement: An Improved Cost-Assessment Methodology for a Net-Zero Emissions World

Author:
Julio Friedmann
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
New policies are needed to achieve the net-zero emissions required to address climate change. To succeed, these policies must lead directly to swift and profound abatement of greenhouse gas (GHG) emissions. Policies that appear effective on the surface too often have little real impact or are costly compared to alternatives. Governments, investors, and decision makers require better tools focused on understanding the real emissions impacts and costs of policies and other measures in order to design the most effective policies required to create a net-zero world. This paper, from the Carbon Management Research Initiative at Columbia University’s Center on Global Energy Policy, puts forward a levelized cost of carbon abatement, LCCA, an improved methodology for comparing technologies and policies based on the cost of carbon abatement. LCCA measures how much CO2 can be reduced by a specific investment or policy, taking into account relevant factors related to geography and specific asset. It calculates how much an investment or policy costs on the basis of dollars per ton of emissions reduced. Previous marginal or levelized cost methodologies that assess carbon reduction options often failed to consider the specific contexts that determine the real, all-in costs of a policy and the real, all-in impacts on emissions. These costs and impacts can vary depending on the contexts and details of geography, existing infrastructure, timing, and other factors. LCCA attempts to improve understanding of the real climate costs and benefits by including specific and local CO2 reductions in all estimations and consistently applying standard financial metrics that more accurately represent and compare costs. Investors and policy makers interested in climate, energy, and decarbonization must balance many competing options. The scenarios and analyses presented in this report can provide a foundation for wider analytical applications, and can help focus investments in innovation for hard-to-abate sectors, determine essential infrastructure required to facilitate market uptake, and estimate the value of grants in deployment. If the LCCA is not estimated, decision makers will not know the value of their policies and investments in terms of achieving greenhouse gas reductions and their carbon goals or the opportunity costs of taking one path over another. Finally, although carbon abatement costs are only one consideration of many in crafting climate policy (e.g., jobs, trade, domestic security), LCCA analysis will deploy efficient and effective approaches of GHG reduction and help avoid waste. This paper uses four scenarios to illustrate the discipline and value of LCCA analysis: first, the $/ton cost of using new solar power (utility or rooftop) to displace power-sector emissions in one market (California); second, the $/ton costs of new rooftop solar generation in several states with different solar resources, grid mixes, and policy environments; third, the $/ton cost of various technology options to decarbonize a range of primary iron and steel production methods; and fourth, the $/ton cost associated with sustainable aviation fuels and direct air capture and storage of CO2. The analysis provides insight into (a) the highest value for carbon reduction, (b) the relative discrete costs and benefits for decarbonization options, and (c) the potential shortfalls in policy or portfolio goals. In this context, the LCCA estimates for even simple cases can prove complicated depending on how emissions reductions are achieved. For example, our first scenario finds the costs of reducing emissions by replacing existing power generation in California with solar PV range from $60/ton (utility solar PV displacing natural gas power generation) to $300/ton (rooftop solar replacing a grid-average mix of generation) to more than $10,000/ton (any solar replacement of nuclear or hydropower). These large ranges are contingent on policy, investment, and/or technical decisions.
Topic:
Energy Policy, Natural Resources, Green Technology, and Carbon Emissions
Political Geography:
Global Focus

63. Potential Implications of the COVID-19 Crisis on Long-Term Electricity Demand in the United States

Author:
A.J. Goulding, Mugwe Kiragu, and David Nour Berro
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The ongoing COVID-19 pandemic has caused unprecedented changes in the ways people interact and approach economic activities. Electricity demand has declined and usage patterns have been altered, changes that could remain even after the pandemic ends. Failure to properly account for these declines in demand could lead to excess capacity in the electric power sector, added costs for consumers, and losses for investors. This paper, from the power sector program at Columbia University’s Center on Global Energy Policy, presents a methodology to quantify potential permanent reductions in demand triggered by the pandemic. The authors first identify how electricity demand changed in the United States following the 2008–2009 global financial crisis, or “Great Recession,” the last event to cause a major reduction in consumption. They then analyze the unique ways in which demand patterns may change over the next three to five years as a result of the coronavirus, followed by some illustrative calculations of the potential impact. Finally, the authors discuss the implications for policy makers with regard to electricity sector evolution. The paper finds that the COVID-19 crisis is likely to result in a long-term decline in annual electricity consumption, though less than that observed after the global financial crisis. It is also likely to accelerate changes in the structure of electricity demand that were already underway.
Topic:
Energy Policy, Electricity, Public Health, Pandemic, and COVID-19
Political Geography:
North America and United States of America

64. Engaging State-Owned Enterprises in Climate Action: Workshop Report

Author:
Philippe Benoit and Alex Clark
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On February 27, 2020, the Columbia University Center on Global Energy Policy (CGEP) convened a workshop at the university’s Faculty House in New York City. The workshop brought together a combination of practitioners, researchers, executives, and public sector officials to discuss the role of state-owned enterprises (SOEs) in realizing collective climate action goals. Under the Chatham House Rule, the discussion focused around sectors (power generation, oil and gas) and relationships (government-SOE relations, and the role of public financial institutions), before concluding with a roundtable discussion drawing together the day’s proceedings and outlining the next steps. The following is a summary of that workshop.
Topic:
Climate Change, Energy Policy, Natural Resources, and Governance
Political Geography:
Global Focus

65. Electricity Oversupply: Maximizing Zero-Carbon Power to Accelerate the Transition from Fossil Fuels

Author:
Melissa Lott and Julio Friedmann
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Decarbonizing and growing the power sector are critical steps to reducing greenhouse gas emissions in a cost-efficient and timely manner. As more renewable energy enters the market, the higher penetration of solar and wind sources means periods of temporary overgeneration are likely to increase. There are signs that renewable electricity oversupply is now actively being sought in order to create opportunities to decarbonize other sectors or build export markets for products derived from that additional energy. This commentary discusses the role of electricity in deep decarbonization efforts, and how zero-carbon oversupplies might be deployed. Policy makers must assess what public benefits to prioritize under this recent phenomenon. This commentary examines four countries—Germany, New Zealand, Saudi Arabia, and the United States—where excess generation is providing novel opportunities. The case of New Zealand is particularly illustrative of the choices countries and policy makers are facing. There, extra zero-carbon supply has suddenly appeared due to the closure of an aluminum smelter. The reduced load means this new abundance could be used to: expand the transmission infrastructure to feed electric loads elsewhere in the nation, decarbonize non-power sector applications (e.g., transportation or industry), produce and sell new products with near-zero carbon footprints (e.g., hydrogen, ammonia, chemicals, fuels), or operate machines that remove CO2 from the air and oceans.
Topic:
Energy Policy, Natural Resources, Electricity, Fossil Fuels, and Carbon Emissions
Political Geography:
Global Focus

66. ESG Investing and the Oil and Gas Industry: Moving Toward a Holistic Approach to Risk, Governance; Performance Measurement, Disclosure, and Results

Author:
Hon Xing Wong, Marianne Kah, and Erin Blanton
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On September 17, 2020, Columbia University’s Center on Global Energy Policy (CGEP) held a virtual workshop about environmental performance in the oil and gas industry. Investors, senior oil and gas industry executives, NGOs, and other stakeholders participated in this candid discussion about how environmental risks should be measured, disclosed, and incorporated into investment decisions.
Topic:
Energy Policy, Oil, Natural Resources, Gas, and NGOs
Political Geography:
Global Focus

67. Output-Based Rebates: An Alternative to Border Carbon Adjustments for Preserving US Competitiveness

Author:
Noah Kaufman, John Larsen, Ben King, and Peter Marsters
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Two linked and frequently raised concerns about putting a price on carbon dioxide emissions in the United States are whether such a tax would unintentionally advantage foreign competitors and, as a result, lead to increased emissions outside American borders. The tax could make American products more expensive than those made by companies in countries not imposing comparable climate regulations, which could lead to shifts in production overseas. Because a central aim of climate policy is to reduce global emissions, the “leakage” of production overseas would run counter to this goal. To avoid this outcome, carbon tax proposals commonly include a border carbon adjustment (BCA), which would impose the carbon tax on imported energy-intensive and trade-exposed products and provide a tax refund for exports of the same products. This commentary, part of a series of joint research on carbon tax policies by Columbia University’s Center on Global Energy Policy and Rhodium Group, highlights an alternative way to ensure that US firms remain on a level playing field with foreign competitors: output-based rebates (OBRs). While a BCA would focus on imports and exports, an OBR would instead compensate vulnerable US firms based on their production—a simpler process. Both BCAs and OBRs have their benefits and drawbacks, but nearly all carbon tax bills recently proposed in Congress included a BCA, and none included OBRs. This commentary reintroduces output-based rebates as an alternative to BCAs, analyzes US industries that could be compensated with OBRs, and estimates the costs of doing so. A border carbon adjustment is an appealing concept: simply apply the same carbon tax to foreign firms that is applied to domestic firms. The key advantage of OBRs is avoiding the most significant administrative hurdles of BCAs, including the complexities of determining the carbon content of foreign goods and providing foreign firms credit for climate regulations in their home countries. The proposed (but not passed) American Clean Energy and Security Act of 2009, commonly called the Waxman-Markey climate bill, included compensation for energy-intensive and trade-exposed (EITE) US firms with OBRs. This commentary uses the Waxman-Markey proposal as a guidepost to analyze the potential scope and costs of OBRs today.
Topic:
Energy Policy, Natural Resources, Carbon Tax, and Carbon Emissions
Political Geography:
North America and United States of America

68. Building a New Grid without New Legislation: A Path to Revitalizing Federal Transmission Authorities

Author:
Avi Zevin, Sam Walsh, Justin Gundlach, and Isabel Carey
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Zero-carbon electricity will be the backbone of a net-zero economy, not only keeping the lights on in our homes and offices but also powering our transportation systems and industrial processes. Indeed, research indicates that in order to decarbonize the economy at a reasonable cost and within a reasonable time frame, we must rapidly decarbonize and grow the power sector. Electricity—how it is generated, moved along the transmission and distribution grids, and used—is already undergoing a rapid transformation in the United States. This transition has been supported over the last decade by steep cost declines for wind, solar, and battery technologies as well as cheap natural gas produced via hydraulic fracturing. But the transition to a net-zero power sector needs to accelerate to mitigate climate change, which is already impacting the health of people around the country and world. New long-distance, high-voltage transmission lines will be vital if the United States is to deploy enough renewable generation capacity to decarbonize the power sector and to integrate it cost-effectively, as well as electrify our economy in time to meet the targets established in the Paris Agreement. Because Congress may not take timely action to remove barriers to these power lines, policy makers and the incoming Biden administration should explore how the federal government could use existing authorities to foster new long-distance transmission line development. This paper seeks to explain steps that the federal government—particularly from within the US Department of Energy and Federal Energy Regulatory Commission—could take to facilitate development of a future grid that is capable of supporting a reliable, affordable, and increasingly zero-carbon power sector. Consistent with the mission of the Center on Global Energy Policy at Columbia University SIPA to advance smart, actionable, and evidence-based energy and climate solutions through research, education, and dialogue, the goal in publishing this paper in partnership with NYU School of Law’s Institute for Policy Integrity is to provide insights that are useful to policy makers in the format and time frame needed. We hope that this report contributes to supporting informed dialogue on potential tools for building a sustainable power sector in the United States.
Topic:
Energy Policy, Natural Resources, Electricity, and Carbon Emissions
Political Geography:
North America and United States of America

69. How the US and China Could Renew Cooperation on Climate Change

Author:
Aimee Barnes, Fan Dai, and Angela Luh
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Averting global climate catastrophe depends in large part on progress by the world’s two greatest powers and emitters: the United States and China. However, relations between these two countries—particularly on climate action—have deteriorated over the past four years. With a new presidential administration set to enter the White House in January 2021, there is an opportunity for the US and China to build trust and cooperation on climate change in a way that supports a cooperative and dynamic bilateral relationship more broadly. This commentary takes a close look at the Biden-Harris presidential platform with respect to climate action and China, and assesses China’s domestic and international climate efforts, particularly with respect to the status of its 14th Five-Year Plan. Importantly, what emerges from this examination is a starting point for China and the US to improve their relationship through climate action and collaboration. China’s announcement that it would seek to achieve carbon neutrality by 2060 is an important step towards such cooperation.[1] The most promising potential areas for US-China cooperation fall into three broad categories: renewing a shared commitment to global climate governance under the Paris Agreement; building trust to enable renewed bilateral cooperation, such as on technology innovation and investments; and supporting subnational leaders' progress in both countries through platforms where they can productively convene. Recognizing that a climate-safe future is bound up in our mutuality, these two world powers can promote a new era of climate action and resiliency.
Topic:
Climate Change, Diplomacy, Energy Policy, Environment, and International Cooperation
Political Geography:
China, Asia, North America, and United States of America

70. The Risk of Fiscal Collapse in Coal-Reliant Communities

Author:
Adele Morris, Noah Kaufman, and Siddhi Doshi
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
If the United States undertakes actions to address the risks of climate change, the use of coal in the power sector will decline rapidly. This presents major risks to the 53,000 US workers employed by the industry and their communities. 26 US counties are classified as “coal-mining dependent,” meaning the coal industry is a major employer. In these areas, the industry is also an important contributor to local government finances through a complex system of property, severance, sales, and income taxes; royalties and lease bonuses for production on state and federal lands; and intergovernmental transfers. While climate-related risks to corporations have received scrutiny in recent years, local governments—including coal-reliant counties—have yet to grapple with the implications of climate policies for their financial conditions. Importantly, the risks from the financial decline of coal-reliant counties extend beyond their borders, as these counties also have significant outstanding debts to the US municipal bond market that they may struggle to repay. To be sure, national climate policy in the United States is uncertain. Experts have long recommended strong policy action to reduce emissions, and for years, policy makers have largely ignored their advice. Nevertheless, with growing support by the public and policy makers, meaningful climate policy in the United States may be on the horizon, and those dependent on coal should be looking ahead to manage their risks. This paper examines the implications of a carbon-constrained future on coal-dependent local governments in the United States. It considers the outlook for US coal production over the next decade under such conditions and explores the risk this will pose for county finances. The paper also considers the responsibilities of jurisdictions to disclose these risks, particularly when they issue bonds, and the actions leaders can take to mitigate the risks. In short, the paper finds the following: ● Coal production in the United States fell by one-third between 2007 and 2017. Projections of the US energy system show this decline continuing gradually under current policies. However, even a moderately stringent climate policy could create existential risks for the coal industry, with potential declines in production of around 75 percent in the 2020s. ● A careful look at three illustrative counties shows that coal-related revenue may fund a third or more of their budgets. The exposure is compounded because school districts and other special districts within the counties also receive coal-dependent revenue. The complex system of local revenue instruments and intergovernmental transfers plus a lack of sufficiently detailed budget data makes it difficult to parse out just how reliant jurisdictions are on the coal industry. ● Estimates of the direct linkages between the coal industry and county budgets will almost certainly understate the risks because lost economic activity and jobs will have ripple effects across the economy. Case studies show that the rapid decline of a dominant industry has led to downward spirals and eventual collapses of local governments’ fiscal conditions, including the inability to raise revenue, repay debt, and/ or provide basic public services. ● Coal-dependent communities have a variety of outstanding bonds, and the risk of collapse of the coal industry threatens their ability to repay them. Despite regulations requiring disclosures to reflect risks to the financial health of municipalities, our review of the outstanding bonds indicates that municipalities are at best uneven and at worst misleading (by omission) in their characterizations of climate-related risks. Ratings reports are not much better than official statements in describing the risks associated with the exposure of some local governments to the coal industry. ● Climate policies can be combined with investments in coal-dependent communities to support their financial health. A logical source of funding for such investments would be the revenues from a price on carbon dioxide emissions, a necessary element of any cost-effective strategy for addressing the risks of climate change. A small fraction of revenue from a federal carbon price in the United States could fund billions of dollars in annual investments in the economic development of coal-dependent communities and direct assistance to coal industry workers. ● In considering reforms, several questions emerge for stakeholders. These include whether regulators should develop additional requirements for the disclosure of risks from future climate policies; whether ratings agencies should increase attention to the risks to local governments of climate policies; and whether stakeholders in the municipal bond market, such as borrowers, insurers, and underwriters, are appropriately accounting for risks to the coal industry.
Topic:
Climate Change, Energy Policy, Coal, and Domestic Policy
Political Geography:
United States

71. Engaging State-Owned Enterprises in Climate Action

Author:
Philippe Benoit
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Policy makers, academics, and others have devoted significant effort over the past three decades to considering how best to incentivize households and private companies to reduce their greenhouse gas (GHG) emissions. There has been much less discussion about how best to incentivize state-owned enterprises (SOEs) -- companies that are either wholly or majority owned by a government -- to cut emissions. Yet when it comes to energy sector GHGs, these state companies are among the world’s leading emitters. They are major emitters at both the country and global levels, notably from electricity generation. In the aggregate, they emit over 6.2 gigatonnes of carbon dioxide equivalent per year in energy sector GHGs, which is more than every country except China. Public sector companies are also major providers of low-carbon alternatives, such as renewables and nuclear power, and importantly, they often operate under incentives that are quite different from those facing their private sector counterparts. Given the emissions profile of SOEs, the nature of their corporate mandates, and their ownership structure, Columbia University’s Center on Global Energy Policy undertook research to examine how best to engage these companies in efforts to lower greenhouse gas emissions as part of its ongoing work on climate change. The paper explores the role of these public sector companies in climate change, examines the effectiveness of market-oriented solutions such as carbon taxes in changing SOE behavior, and evaluates some other potential strategies for reducing their emissions. In short, the paper finds the following: The state-ownership structure of SOEs allows governments to exercise shareholder power to press for the implementation of their climate policy preferences. Providing public sector financing and making associated infrastructure improvements are other ways that a government can encourage its SOEs to invest in low-carbon alternatives. In contrast, many SOEs operate with nonfinancial mandates, market protections, and other conditions that limit their responsiveness to carbon pricing mechanisms that are effective in changing private sector behavior. There are other ways to alter public sector companies so that they embrace a greener pathway without being directed, especially if a firm’s management determines the pathway will serve its corporate interests. This can be especially important for state-owned companies that have the political weight to resist government climate policy pressures. In emerging economies with large SOE emissions and with governments willingly direct their SOEs, using these companies to reduce emissions is a policy tactic that can present implementation and other advantages because it requires the government to target a limited number of companies that the state already owns and controls. How much a government prioritizes climate change relative to other goals is the most critical factor that will determine the extent to which its SOEs prioritize low-carbon investments. Successfully merging climate goals into growth objectives, at both the broader economic and the SOE-company levels, increases the likelihood that a state company will engage in the low-carbon transition in a sustained manner.
Topic:
Climate Change, Energy Policy, Science and Technology, and Green Technology
Political Geography:
Global Focus

72. 2019 Guide to Chinese Climate Policy

Author:
David Sandlow
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In 2018, China was the world’s leading emitter of heat-trapping gases by a wide margin. Its policies for limiting emissions will have a significant impact on the global climate for decades to come. From a historical perspective, China’s status as the world’s leading emitter is relatively recent. During most of the 19th and 20th centuries, Chinese emissions were modest. Then, in the early part of this century, as the Chinese economy boomed, Chinese emissions began to skyrocket, overtaking those from the United States around 2006. China’s cumulative emissions of carbon dioxide since the beginning of the Industrial Revolution are roughly half those from the United States. (Carbon dioxide, the leading heat-trapping gas, stays in the atmosphere for many years once emitted.) China’s leaders have declared that the impacts of climate change “pose a huge challenge to the survival and development of the human race” and that China is “one of the most vulnerable countries to the adverse impacts of climate change.”[11] The Chinese government has adopted short- and medium-term goals for limiting emissions of heat-trapping gases and a wide-ranging set of policies that contribute to meeting those goals. Those policies are shaped in part by other objectives, including promoting economic growth, cutting local air pollution and developing strategic industries. This Guide examines Chinese climate change policies. It starts with a review of Chinese emissions. It then explores the impacts of climate change in China and provides a short history of the country’s climate policies. The bulk of the Guide discusses China’s principal climate policies, explaining the policy tools the Chinese government uses to address climate change and related topics. Appendices provide background on institutions that shape climate policy in China. What are “climate policies”? Monetary and fiscal policies affect emissions and could therefore qualify, as could policies on many other topics. This Guide does not catalog all policies that could affect emissions or the climate, but instead focuses on policies most directly related to climate change, including those on energy, transportation, urbanization, forestry, climate adaptation and climate diplomacy. In choosing policies to focus on, I am guided in part by international convention and in part by governments’ extensive reporting on this topic. The Intended Nationally Determined Contributions submitted by more than 160 nations to the UN Framework Convention on Climate Change show a broad international consensus that policies on energy, transportation, urbanization and forestry, among others, are considered “climate policies.” The Chinese government’s official documents on climate change show the same.[12] Several official documents are important resources for anyone interested in China’s climate policies. Every year the National Development and Reform Commission (NDRC) publishes a report on China’s Policies and Actions for Addressing Climate Change.[13] These reports provide detailed information on a range of topics. Other key sources for understanding China’s climate policies include: China’s Intended Nationally Determined Contributions, submitted to the UN Framework Convention on Climate Change in June 2015;[14] Work Plan for Controlling Greenhouse Gas Emissions in the 13th Five-Year Plan, issued by the State Council in October 2016;[15] China’s First Biennial Update Report on Climate Change, submitted to the UN Framework Convention on Climate Change in December 2016;[16] China’s Second Biennial Update Report on Climate Change, submitted to the UN Framework Convention on Climate Change in December 2018;[17] and China’s Third National Communication on Climate Change, submitted to the UN Framework Convention on Climate Change in December 2018[18] Several themes run through these documents, including strong commitments to low-carbon development, cutting coal use, scaling up clean energy sources, promoting sustainable urbanization and participating actively in climate diplomacy. Implementation is fundamental to any policy. This is especially true in China, where policy implementation can be a considerable challenge. Key ministries may fail to coordinate. Resources for enforcement may be lacking. Policies designed to achieve different objectives may conflict. The priorities of provincial leaders may not align with policies from Beijing. For these reasons and more, stated policies—while important—are just part of the picture when it comes to understanding the Chinese response to climate change. The organization of this Guide reflects that. Most chapters start with a section of background facts. This background provides context and can help in forming judgments on the impacts of policies to date and potential impacts of policies in the years ahead. Where implementation has been especially challenging or successful, that is highlighted. This Guide can be read in parts or as a whole. Individual chapters are designed to stand alone and provide readers with information on discrete topics. The Guide as a whole is designed to provide an understanding of China’s response to climate change and the implications of that response for China and the world. The Guide can be accessed in three ways: by purchasing it as a book on Amazon.com by visiting the Guide to Chinese Climate Policy website at https://chineseclimatepolicy.energypolicy.columbia.edu/, and by downloading it for free from the website above or the website of Columbia University’s Center on Global Energy Policy—http://energypolicy.columbia.edu/ This is a “living document.” Many of the facts and policies it describes will change in the months and years ahead. As that happens, this Guide will be updated. New editions of the Guide will be released regularly.
Topic:
Climate Change, Energy Policy, Science and Technology, and Green Technology
Political Geography:
China and Asia

73. China-Pakistan Economic Corridor Power Projects: Insights into Environmental and Debt Sustainability

Author:
Erica Downs
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Pakistan is increasing its use of coal to generate electricity at a time when many other countries are reducing coal use in order to cut greenhouse gas emissions or pollution. China is helping Pakistan expand its coal-fired generation capacity through the financing and construction of coal power plants as part of the China-Pakistan Economic Corridor (CPEC). CPEC is a component of Chinese president Xi Jinping’s Belt and Road Initiative (BRI), which aims to forge greater global connectivity in part through infrastructure development. Nearly 75 percent of the generation capacity of CPEC power plants is coal-fired. Pakistan’s National Electric Power Regulatory Authority (NEPRA) expects that CPEC coal power plants will be largely responsible for the projected increase in the country’s coal-fired generation capacity from 3 percent as of June 30, 2017 (fewer than six months after the first CPEC coal plant began commercial operation), to 20 percent in 2025. As part of its series on the Belt and Road Initiative, Columbia University’s Center on Global Energy Policy initiated research into the CPEC power sector projects, which account for the majority of the cost of CPEC projects. This paper examines two of the key concerns critics have about the BRI: environmental sustainability and debt sustainability. Concerns about environmental sustainability center on the ways in which an expansion of the amount of electricity generated globally by fossil fuels, especially coal, will increase greenhouse gas emissions, making it more difficult if not impossible to meet the emissions targets in the Paris Agreement. Concerns about debt sustainability focus on whether China’s lending in support of infrastructure projects will lead to problematic increases in debt, with some analysts maintaining that Beijing is intentionally seeking to push countries into debt distress in an attempt to gain control over strategic assets or decision-making in borrowing countries. The main findings of this study are threefold. First, the heavy focus on coal in the new generation capacity added by the CPEC power projects stems from both “pull” factors from Pakistan and “push” factors from China: The CPEC coal power projects reflect Pakistan’s long-standing goal of diversifying its generation mix away from fuel oil toward domestic coal in an attempt to decrease generation costs and conserve foreign exchange. They also reflect the perception of the administration of former prime minister Nawaz Sharif, whose pledge to end power outages helped his party win the 2013 election, that coal was the best option to bring on a large amount of new capacity in the short term. Although Pakistan has vast renewable energy potential, solar and wind power were considered too expensive and difficult to integrate into electric grids. Meanwhile, Chinese companies had several reasons to sell coal power plants to Pakistan, including exporting rather than warehousing excess power generation equipment, financial incentives provided by Beijing and Islamabad, and the ability to execute projects fast enough to help Sharif eradicate the blackouts hurting Pakistan’s economy before he stood for reelection in 2018. Second, there is a mismatch between the dominance of coal in the CPEC power generation mix and Beijing’s recent emphasis on green development as an important feature of the BRI. This gap between Beijing’s rhetoric and the reality on the ground can be explained in large part by Pakistan’s preference for building coal-fired generation capacity. Ultimately, it is up to the host country to decide the composition of its electricity mix. The Chinese government has a long-standing reluctance to interfere in decisions of this type. Moreover, China regards some of the CPEC coal power plants as environmentally friendly because they use relatively modern technologies and are expected to emit fewer greenhouse gas emissions than the fuel oil plants Pakistan is replacing. Third, there is a risk that the CPEC power projects will add to Pakistan’s sovereign debt burden, but multiple factors indicate that any increase in sovereign debt from these projects is unlikely to be the result of a deliberate strategy on the part of China. Although the debt financing arrangements for CPEC power sector projects primarily involve loans from Chinese banks to project companies wholly or partly owned by Chinese firms, these projects may increase Pakistan’s debt because of sovereign guarantees issued by Islamabad to support CPEC power projects and the liquidity crisis in Pakistan’s power sector known as circular debt. That said, several aspects of the China-Pakistan relationship and the large stake that China’s government and companies have in the success of CPEC indicate that Chinese interests are better served by sustainable CPEC projects than unsustainable ones.
Topic:
Energy Policy, Regional Cooperation, Green Technology, and Electricity
Political Geography:
Pakistan, China, and Asia

74. Low-Carbon Heat Solutions for Heavy Industry: Sources, Options, and Costs Today

Author:
Julio Friedman
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Recent studies indicate there is an urgent need to dramatically reduce the greenhouse gas emissions from heavy industrial applications (including cement, steel, petrochemicals, glass and ceramics, and refining). Heavy industry produces roughly 22 percent of global CO₂ emissions. Of these, roughly 40 percent (about 10 percent of total emissions) is the direct consequence of combustion to produce high-quality heat, almost entirely from the combustion of fossil fuels. This is chiefly because these fuels are relatively cheap, are widely available in large volumes, and produce high-temperature heat in great amounts. Many industrial processes require very large amounts of thermal energy at very high temperatures (more than 300°C and often more than 800°C). For example, conventional steel blast furnaces operate at about 1,100°C, and conventional cement kilns operate at about 1,400°C. In addition, many commercial industrial facilities require continuous operation or operation on demand. The nature of industrial markets creates challenges to the decarbonization of industrial heat. In some cases (e.g., steel, petrochemicals), global commodity markets govern product trade and price. Individual national action on the decarbonization of heavy industry can lead to trade disadvantage, which can be made acute for foundational domestic industries (in some cases, with national security implications). This can also lead to offshoring of production and assets, leading to carbon “leakage” as well as local job and revenue loss (with political consequences). In many cases, lack of options could lead to dramatic price increases for essential products (e.g., cement for concrete, an essential building material). Risk of carbon leakage, price escalation, and trade complexity limits the range of policy applications available to address this decarbonization need. To explore the topic of industrial heat decarbonization, the authors undertook an initial review of all options to supply high temperature, high flux, and high volume heat for a subset of major industrial applications: cement manufacturing, primary iron and steel production, methanol and ammonia synthesis, and glassmaking. From the initial comprehensive set of potential heat supply options, the authors selected a subset of high relevance and common consideration: Biomass and biofuel combustion Hydrogen combustion (including hydrogen produced from natural gas with 89 percent carbon capture (blue hydrogen) and hydrogen produced from electrolysis of water using renewable power (green hydrogen) Electrical heating (including electrical resistance heating and radiative heating (e.g., microwaves) Nuclear heat production (including conventional and advanced systems) The application of post-combustion carbon capture, use, and storage (CCUS) to industrial heat supply and to the entire facility, as a basis for comparison The authors focus on substitutions and retrofits to existing facilities and on four primary concerns: cost, availability, viability of retrofit/substitution, and life-cycle footprint. In short, the paper finds: All approaches have substantial limitations or challenges to commercial deployment. Some processes (e.g., steelmaking) will likely have difficulty accepting options for substitution. All options would substantially increase the production cost and wholesale price of industrial products. For many options (e.g., biomass or electrification), the life-cycle carbon footprint or efficiency of heat deposition are highly uncertain and cannot be resolved simply. This complicates crafting sound policy and assessing technical options and viability. Most substitute supply options for low-carbon heat appear more technically challenging and expensive than retrofits for CCUS. Even given the uncertainties around costs and documented complexities in applying CO₂ capture to industrial systems, it may prove simpler and cheaper to capture and store CO₂. CCUS would have the added benefit of capturing emissions from by-product industrial chemistry, which can represent 20–50 percent of facility emissions and would not be captured through heat substitution alone. Critically, CCUS is actionable today, providing additional GHG mitigation to industrial heat and process emissions as other options mature and become economically viable. Hydrogen combustion provided the readiest source of heat of all the options assessed, was the simplest to apply (including retrofit), and was the most tractable life-cycle basis. Today, hydrogen produced from reforming natural gas and decarbonized with CCUS (blue hydrogen) has the best cost profile for most applications and the most mature supply chain, and it would commonly add 10–50 percent to wholesale production costs. It also could provide a pathway to increase substitution with hydrogen produced by electrolysis of water from carbon-free electricity (green hydrogen), which today would increase costs 200–800 percent but would drop as low-carbon power supplies grow and electrolyzer costs drop. Hydrogen-based industrial heat provides an actionable pathway to start industrial decarbonization at once, particularly in the petrochemical, refining, and glass sectors, while over time reducing cost and contribution of fossil sources. However, substitution of hydrogen will prove more difficult or infeasible for steel and cement, which might require more comprehensive redesign and investment. Most of the other options appear to add substantially to final production costs—commonly twice that of blue hydrogen substitution or CCUS—and are more difficult to implement. However, all options show the potential for substantial cost reductions. An innovation agenda remains a central important undertaking and likely would yield near-term benefits in cost reduction, ease of implementation, and a lower life-cycle carbon footprint. Prior lack of focus on industrial heat supplies as a topic leave open many possibilities for improvement, and dedicated research, development, and demonstration (RD&D) programs could make substantial near-term progress. To avoid commercial and technical failure, government innovation programs should work closely with industry leaders at all levels of investigation. New policies specific to heavy industry heat and decarbonization are required to stimulate market adoption. Policies must address concerns about leakage and global commodity trade effects as well as the environmental consequences. These policies could include sets of incentives (e.g., government procurement mandates, tax credits, feed-in tariffs) large enough to overcome the trade and cost concerns. Alternatively, policies like border adjustment tariffs would help protect against leakage or trade impacts. Because all options suffer from multiple challenges or deficiencies, innovation policy (including programs that both create additional options and improve existing options) is essential to deliver rapid progress in industrial heat decarbonization and requires new programs and funding. As a complement to innovation policy and governance, more work is needed to gather and share fundamental technical and economic data around industrial heat sources, efficiency, use, and footprint.
Topic:
Climate Change, Energy Policy, Infrastructure, and Green Technology
Political Geography:
Global Focus

75. Economic Volatility in Oil Producing Regions: Impacts and Federal Policy Options

Author:
Daniel Raimi, Ron Minsk, and Alan Krupnick
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Growth in US oil production has created substantial economic and energy security benefits for the nation. Over the course of a decade, new oil production has virtually eliminated the US trade deficit in petroleum and, in 2020, the Congressional Budget Office projects that US GDP will be 0.7% higher than it would have been without shale development. However, the rise in oil output has also expanded the number of communities closely tied to swings in crude prices—the boom and bust cycles that have confounded producers since the first commercial wells were spudded in the mid-19th century. US oil producing regions enjoy significant economic growth during boom times, boosting state and local investment, employment, and household income. This growth often comes with its own challenges—such as strains on local housing, school, and infrastructure—which are amplified by uncertainty over when, and to what extent, prices and production will fall. When oil prices drop, local and state economies can face sharp declines, and decisions or investments made during the boom period may become obsolete. This volatility creates planning challenges for both the public and private sectors, along with substantial risks for residents of oil producing regions. In this report for Columbia University’s Center on Global Energy Policy, the authors address whether the federal government can and should intervene to reduce the challenges associated with this volatility. In their research, the authors convened two expert workshops, reviewed the existing evidence, and analyzed a range of potential policy options. The report recommends a modest intervention: establishing a federal interagency Oil Volatility Advisory Board. The board would synthesize data on local economic, fiscal, and social conditions in producing communities. With this information, the board would play a coordinating role by connecting public and private institutions in producing regions with existing federal programs designed to manage near-term challenges and diversify local economies over the longer term. While this proposal is unlikely to eliminate all of the local challenges associated with oil price volatility, it could help smooth fluctuations, providing the basis for a higher quality of life along with more stable economic growth in producing regions. The paper finds that: The experience of booms and busts in oil producing regions is distinct from other regional economic challenges, as local businesses, governments, and residents must prepare for—and respond to—large, rapid, and unpredictable changes in local economic conditions. While the federal government has established programs to assist with long-term economic decline in some coal, military, and trade-impacted communities, no analogous program exists for supporting oil-producing communities experiencing economic volatility. State governments in Texas, North Dakota, Colorado, and elsewhere have shown varying levels of interest in assisting localities manage the challenges of volatility. Where they exist, these efforts have mostly focused on managing infrastructure demand during “boom” periods. However, some states have done little to address local impacts during booms, and no states have taken major steps to support economic diversification or other efforts that could soften the local impacts of “busts.” In some states—particularly Texas—existing tax policy exacerbates, rather than smooths out, revenue volatility for local governments. Several existing federal offices and programs can provide a base of knowledge to support oil-producing communities. These include the U.S. Economic Development Administration (EDA), the Department of Defense’s Office of Economic Adjustment, and federal Trade Adjustment Assistance. We believe that EDA offers the clearest model to support long-term economic diversification in oil producing communities. If Congress were to fund EDA to support oil producing communities, clear guidelines would need to be established to determine eligibility criteria. In the absence of new, devoted federal funding, a federal Oil Volatility Advisory Board may provide the best option to mobilize and align federal resources to meet the needs of oil producing communities. This interagency body would synthesize data to identify communities most in need of support, conduct outreach efforts to these communities, and assist them in accessing available federal resources.
Topic:
Energy Policy, Oil, and Federalism
Political Geography:
United States

76. An Assessment of the Energy Innovation and Carbon Dividend Act

Author:
Noah Kaufman, John Larsen, Peter Marsters, Hannah Kolus, and Shashank Mohan
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Growing public concern about the social, economic, and environmental impacts of climate change, along with pressure for lawmakers to introduce policy proposals that reduce emissions, have brought carbon taxes to the center of policy discussions on Capitol Hill. Thus far in 2019, seven different carbon tax legislative proposals have been introduced in Congress. The proposal with the most cosponsors, totaling 64 Democrats and 1 Republican as of the end of September 2019, is the Energy Innovation and Carbon Dividend Act (EICDA), introduced in February 2019 by lead sponsor Ted Deutch (D-FL). This study assesses the potential impacts of EICDA on the US energy system, environment, and economy. EICDA establishes a fee on each ton of greenhouse gas (GHG) emissions. It covers over 80 percent of gross national emissions. The fee starts at $15 per metric ton and increases by $10 or $15 each year, depending on future emissions levels. Revenue raised by the carbon fee is used for “carbon dividends,” a rebate to every eligible US citizen or lawful resident. The bill also includes measures to protect US competitiveness and to reduce the risk that companies will relocate their operations to a different country with laxer climate laws. Through the carbon fee and additional regulations if necessary, EICDA targets 90 percent emissions reductions by 2050 compared to 2016 levels. This study is part of a joint effort by Columbia University’s Center on Global Energy Policy (CGEP) and Rhodium Group to help policymakers, journalists, and other stakeholders understand the important decisions associated with the design of carbon tax policies and the implications of these decisions. This analysis uses a version of the National Energy Modeling System maintained by the Rhodium Group (RHG-NEMS) to quantify the energy and environmental implications of EICDA, focusing on outcomes through 2030. Supplemental analyses provide insights on how EICDA would affect households, the economy, and government budgets. The following are key results: GHG emissions decline substantially. Compared to 2005 levels, implementing EICDA as a stand-alone policy leads to economy-wide net GHG emissions reductions of 32–33 percent by 2025 and 36–38 percent by 2030. These emissions reductions exceed the targets in the EICDA proposal through 2030 and exceed the US commitments to the Paris Agreement over this period. Most of the near-term emission reductions occur in the power sector, where emissions fall 82–84 percent by 2030. Air pollution also declines. EICDA reduces local air pollution from power plants. Sulfur dioxide (SO2) and mercury emissions from the power sector decline by more than 95 percent and emissions of oxides of nitrogen (NOx) decline by about 75 percent by 2030 relative to a current policy scenario. Electricity generation shifts to cleaner sources. The price on carbon causes the US economy to shift from carbon-intensive energy sources to low- and zero-carbon energy sources. Coal is nearly eliminated from the power sector by 2030, with solar, wind, nuclear, and natural gas with carbon capture and storage all providing significantly larger generation shares compared to a current policy scenario. Energy prices rise but do not skyrocket. The price on carbon causes energy prices to increase for all carbon-emitting fuels, which leads to significantly higher overall energy expenditures, though within the range of recent historical variation. Taking two prominent examples, results show EICDA causing national average gasoline prices to increase by about 12 cents per gallon in 2020 and 90 cents per gallon in 2030 and causing national average electricity prices to increase by about 1 and 3 cents per kilowatt hour in 2020 and 2030, respectively. EICDA causes per capita energy expenditures to increase by $200-$210 in 2020 and $1,160-$1,170 in 2030 compared to a current policy scenario. In all years, annual per capita energy expenditures remain below the recent historical peak during the commodities crisis in 2008. The carbon dividend cushions energy price impacts. EICDA generates substantial revenue that is distributed in the form of equal dividend payments. EICDA generates $72–$75 billion in carbon tax revenues in 2020 and $403–$422 billion in 2030. This translates into an annual dividend for eligible adults of $250-$260 in 2020 and $1,410-$1,470 in 2030, with half those amounts also paid to eligible children. On average, the carbon dividend payments are comparable to the changes in energy expenditures caused by EICDA. Because higher-income households purchase far more carbon-intensive goods and services, distributing dividends equally implies that average low- and middle-income households receive more in dividends than they pay in increased economy-wide prices for goods and services resulting from the carbon tax. Net government revenue declines slightly, at least initially. Carbon tax-and-dividend policies are often described as “revenue neutral,” but the impacts of EICDA on government revenue are uncertain and likely negative in the near term. We estimate that the net government revenues under EICDA decline by roughly 10 percent of the annual carbon tax revenue in the early years of the policy. This estimate considers government revenue gains from taxing emissions and dividends, dividend payouts, and government revenue losses from reduced income and payroll taxes from those who pay the carbon tax. However, the proposal will also affect government revenue in other ways that are beyond the scope of our analysis, so the overall impacts on net government revenue is uncertain.
Topic:
Climate Change, Energy Policy, Green Technology, and Carbon Tax
Political Geography:
United States

77. In Dire Straits? Implications of US-Iran Tensions for the Global Oil Market

Author:
Ilan Goldenberg, Jessica Schwed, and Kaleigh Thomas
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In recent months, Iran has responded to rising tensions with the United States—particularly the US launch of the “maximum pressure” campaign against Iran—by attacking oil tankers and infrastructure in the Persian Gulf region around the Strait of Hormuz (the Strait). These actions have been designed to signal to the United States, the Gulf states, and the international community that the American strategy of strangling Iran economically will not be cost-free, and to Saudi Arabia in particular that it is highly vulnerable to Iranian retaliation. As the Strait of Hormuz is one of the world’s most critical energy chokepoints, the implications of Iran’s efforts merit close scrutiny and analysis. This study was designed to examine three scenarios for military conflict between Iran and the United States and assess the potential impacts on global oil prices—as one specific representation of the immediate economic impact of conflict—as well as broader strategic implications. The three scenarios are: Increasing US-Iran tensions that ultimately lead to a new “Tanker War” scenario similar to the conflict of the 1980s, in which Iran attacks potentially hundreds of ships in the Persian Gulf and Gulf of Oman over a prolonged period while also launching missiles at Gulf oil infrastructure. An escalation of tensions between Iran and the United States in which Iran significantly increases the scope and severity of missile attacks directed at major oil and energy infrastructure in Saudi Arabia and the UAE. A major conflict between Iran and the United States that includes damage to Gulf oil infrastructure and a temporary closure of the Strait of Hormuz. Its main conclusions are: The risk of a major military confrontation between the United States and Iran has increased in recent months but still remains relatively low, as neither the United States nor Iran wants war. That said, the September 14, 2019, attack on the Abqaiq and Khurais facilities was a strategic game changer and shows that the biggest risk is a prolonged, low-intensity military conflict. The fact that Iran was willing to conduct such an attack was a surprise to most analysts and to the US government and its Gulf partners. The level of accuracy it showed in the strike demonstrated a technical proficiency the US government and outside analysts did not believe Iran had. In the more moderate and likely conflict scenarios, increasing tensions between the United States and Iran are unlikely to dramatically affect global oil prices. The most profound costs in the more likely scenarios are not energy-related but security-related. Even in the less escalatory scenarios, the United States would be forced into long-term deployments of a large number of air and naval assets that would need to remain in the Middle East for years at a cost of billions of dollars. Such deployments would take away resources that would otherwise be dedicated to managing great power competition with China and Russia. In the more extreme conflict scenarios, major loss of life and an even bigger and longer-term American military deployment would be expected. In the lower likelihood scenario of a major military confrontation between the United States and Iran, global oil prices would be dramatically affected, though price impacts would not be prolonged. All assumptions about the potential impacts on oil prices are based on the supposition that the United States protects global shipping lanes, but that theory deserves further scrutiny. For more than a generation, the United States has viewed securing global shipping lanes that are critical for commerce and energy as a core vital interest. But given the isolationist tendencies in the United States and President Donald Trump’s attitude that America should stop underwriting the defense of its allies, it is conceivable he may choose not to respond in the types of scenarios described in this paper or demand that countries most dependent on oil trade from the Gulf—most notably China—step up instead. Another wild card for oil prices in a major crisis scenario would be President Trump’s unpredictable policies regarding the Strategic Petroleum Reserve. Typically, an administration would be expected to coordinate an international response with the International Energy Agency (IEA) to release the SPR of a number of countries, but this cannot be assumed in the current administration. Though these conclusions are to some extent comforting, the authors acknowledge that a key issue with any analysis of this situation is the unpredictability of the United States. In the present moment, neither US adversaries nor partners know quite what to expect—and, for that matter, neither does the US government or its observers.
Topic:
Foreign Policy, Energy Policy, Oil, and Global Political Economy
Political Geography:
United States, China, Iran, Middle East, and Asia

78. Electric Vehicle Penetration and Its Impact On Global Oil Demand: A Survey of 2019 Forecast Trends

Author:
Marianne Kah
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Columbia University’s Center for Global Energy Policy is undertaking a multiyear study on the prospects for and timing of peak oil demand. An essential piece of the puzzle is understanding what happens to global oil demand in the passenger vehicle sector, since it is the sector with the largest oil demand use today. Policy makers in a growing number of countries are supporting passenger vehicle electrification or a phaseout of fossil fuel passenger vehicles to reduce greenhouse gas emissions and improve urban air quality. To understand the trajectory of oil demand in this sector, it is important to comprehend the magnitude and timing of electric vehicle (EV) penetration. The pace of demand growth matters. If the world doesn’t move off oil at a rapid rate, it is important that policy makers recognize the need for investment in new oil supplies to prevent supply shortages and accompanying oil price spikes. Numerous studies analyzing the impact of EVs on oil demand have been published. It is difficult to compare these studies because they do not define the passenger vehicle sector the same way or provide underlying assumptions on a comparable basis. Last year, the author conducted a survey of all available global electric passenger vehicle penetration forecasts to compare underlying assumptions and the impact on oil demand. The author conducted a similar survey in 2019 to understand how views on EV penetration are changing. This report describes the results from the 2019 survey and indicates how views have changed since last year. Rationale for Studying the Passenger Vehicle Sector As shown in figure 1, the passenger vehicle sector is the largest sector of oil use, representing about one-quarter of the oil demand barrel. The passenger vehicle sector is a target for policy makers because full penetration of EVs could ultimately take nearly 25 million barrels per day of oil use out of the market. However, it is important to understand the other 75 percent of the oil demand barrel before assessing the prospects of peak oil demand. It should be noted that the passenger vehicle sector gets a disproportionate amount of attention from policy makers and the media because of the current focus on electrification and the greater ease of electrifying passenger cars versus other modes of transportation. For example, it is easier to electrify a passenger car than a heavy-duty truck, where the large and costly batteries required will reduce cargo carrying capacity due to weight limits on roads. It is also more challenging to electrify airplanes than passenger cars.
Topic:
Energy Policy, Oil, Science and Technology, Infrastructure, and Green Technology
Political Geography:
Global Focus

79. Decarbonizing Space Heating with Air Source Heat Pumps

Author:
Noah Kaufman, David Sandlow, and Clotilde Rossi de Schino
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In the United States, commercial and residential buildings produce roughly 12 percent of greenhouse gas emissions. Most of these emissions come from burning fossil fuels for space heating. These emissions must be significantly reduced or eliminated for the US to achieve deep decarbonization goals, including net zero emissions by midcentury. Air source heat pumps (ASHPs) are powered by electricity, using well-established technology to move heat from outdoor air to indoor air. When powered by zero-carbon electricity, ASHPs provide space heating with almost no greenhouse gas emissions. ASHPs are especially effective for space heating in mild climates. In 2015, roughly 10 percent of US households (mostly in the Southeast) used air source heat pumps as their primary heating source.[1] ASHPs account for roughly one-third of residential space heating in Japan. The world’s largest ASHP market is in China, where sales are growing rapidly. Prominent studies on decarbonization of the US energy system focus on deployment of air source heat pumps as the primary strategy for reducing emissions from space heating. Some studies show near-universal electrification of space heating, suggesting that ASHPs (with some backup from electric resistance heaters) can be almost a silver bullet solution for decarbonizing space heating. These studies start with the assumption that fossil fuel furnaces and boilers will be gradually phased out. Other studies assume that electric heating technologies such as ASHPs will continue to compete against fossil fuel burning furnaces and boilers in the decades ahead. These studies conclude that furnaces and boilers will retain a significant share in space heating markets, even with technological progress and strong policy support for ASHPs, but often fail to explain why. Do high costs or inferior performance limit market penetration in these studies? Or do other barriers limit ASHP deployment? The answer has important implications for policy makers shaping decarbonization strategies. To help answer these questions, we built a simple model of ASHP adoption that estimates the lifetime costs of space heating and cooling configurations in three US cities with markedly different climates and energy costs: Atlanta, Georgia; San Diego, California; and Fargo, North Dakota. The model analyzes the choices facing hypothetical consumers installing new heating and cooling equipment in residential buildings. The consumers have the option to purchase an ASHP for heating and cooling (with backup if needed) or a natural gas furnace and air conditioner. Based on the model results and related research, we conclude: Air source heat pumps are cost competitive today in places where electricity is cheap and the climate is mild. With climate policies consistent with rapid decarbonization and reasonably foreseeable technological progress, air source heat pumps are the low-cost option for typical residential buildings across much of the US by the mid-2030s. Even in the very cold climate of Fargo, North Dakota, the combination of a price on carbon emissions and steady innovation in ASHPs causes ASHPs (with an electric resistance heater as a backup) to be cost competitive with new natural gas furnaces and air conditioners by the 2030s. If the United States commits to the rapid decarbonization of space heating by midcentury, the costs and performance of ASHPs are unlikely to be major barriers to deployment. However, other important barriers may persist, including contractors’ and homeowners’ greater familiarity with incumbent fossil fuel technologies and the slow turnover of the building stock. As a result of these additional barriers, emissions pricing and technological progress alone may not lead to deployment of air source heat pumps in the United States sufficient to achieve deep decarbonization by midcentury. That would likely require additional policy instruments such as technology standards, emissions caps, or mandates. Other technologies can also contribute to decarbonizing space heating, including renewable natural gas, hydrogen produced with carbon capture and storage (CCS) or electrolysis, and centralized or district heating. Each of these options comes with challenges that will require policy support to overcome. This study does not point to a proper balance between ASHPs and other space heating decarbonization technologies. More research is needed to compare different approaches and strategies. In the meantime, our analysis suggests little if any downside to pursuing ambitious policies to promote deployment of ASHPs, prioritizing regions where heat pumps are currently most cost effective. A large-scale increase in ASHP deployments is likely to be an important part of any space heating decarbonization scenario.
Topic:
Climate Change, Energy Policy, Green Technology, Renewable Energy, and Fossil Fuels
Political Geography:
United States

80. Energy Access and Affordability Voluntary Action Plan for Latin America and the Caribbean

Author:
Philippe Benoit
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Argentina, President of the G20, recently released the “Energy Access and Affordability Voluntary Action Plan for Latin America and the Caribbean”, prepared by the Inter-American Development Bank (IDB) & Latin American Energy Organization (OLADE). CGEP Scholar Philippe Benoit served as the lead author of the report (on assignment from the IDB). The report builds on the previous G20 reports prepared for Africa and Asia-Pacific. The LAC Region enjoys access levels that are relatively high compared to other developing zones, but it faces important challenges in connecting the “last mile”. The Region also faces repeated extreme weather events which present the special challenge of access recovery (a major issue for Central America and the Caribbean, as well as Puerto Rico). One of the report’s innovations is that it extends the access effort beyond electricity and clean cooking to residential heat. The report also focuses on the importance of improving affordability of energy for the poor, as well as for other households and businesses.
Topic:
Climate Change, Energy Policy, Recovery, and Electricity
Political Geography:
Africa, Asia, Latin America, Central America, Caribbean, and Puerto Rico

81. Could Trump Deliver Iran an Oil Windfall?

Author:
Richard Nephew
Publication Date:
07-2018
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The president’s recent statement that OPEC should reduce their prices may merely be an attempt to assign blame for rising gasoline prices in the midst of the US driving season or an even more cynical attempt to rally his political base in opposition to globalism. Or, it may have something to do with the president’s own decision to create a crisis with Iran. While attention is duly paid to how much Americans have to pay at the pump, a more subtle and complicated story will soon play out with respect to Iran and the reapplication of US sanctions ordered by Trump on May 8, 2018. In fact, unless oil prices are contained, the primary result of the president’s action may be to ensure that Iran profits from the oil market risks that sanctions have created.
Topic:
Energy Policy, Geopolitics, and Global Political Economy
Political Geography:
America, Iran, and Global Focus

82. The Role of Natural Gas in Europe's Electricity Sector Through 2030

Author:
Tim Boersma and Tatiana Mitrova
Publication Date:
08-2018
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The developments underway in Europe’s natural gas sector are some of the most influential and closely watched in the global gas market. In the past decade, Europe has seen significant demand swings, falling domestic production, growing concerns about dependence on Russian gas, and the advent of US liquefied natural gas exports to the world. Just as important has been the emerging competition from renewable fuels. Indeed, questions are now arising about whether Europe needs new investments in natural gas infrastructure or if those investments would become stranded assets. However, suggesting that the EU does not need new investments risks underestimating the role—or the potential role—natural gas plays in various sectors of Europe’s energy economy, including industry, transportation, and commercial and residential usage.
Topic:
Energy Policy and International Political Economy
Political Geography:
America

83. Emissions, Energy, and Economic Implications of the Curbelo Carbon Tax Proposal

Author:
Noah Kaufman
Publication Date:
07-2018
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In July 2018 Representative Carlos Curbelo proposed legislation that would put a price on US carbon dioxide emissions (“Curbelo proposal”). A carbon price is widely viewed as a necessary part of a cost-effective national strategy to address the risks of climate change. This proposal is especially notable because Republicans, who currently control the US Senate, House of Representatives, and presidency, have not proposed national carbon pricing legislation in nearly a decade.
Topic:
Energy Policy, International Political Economy, and International Affairs
Political Geography:
Global Focus

84. Guide to Chinese Climate Policy

Author:
David B. Sandalow
Publication Date:
06-2018
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In 2017, China was the world’s leading emitter of heat-trapping gases by a wide margin. Its policies for limiting emissions will have a significant impact on the global climate for decades to come. From a historical perspective, China’s status as the world’s leading emitter is relatively recent. During most of the 19th and 20th centuries, Chinese emissions were modest. Then, in the early part of this century, as the Chinese economy boomed, Chinese emissions began to skyrocket, overtaking those from the United States around 2006. China’s cumulative emissions of carbon dioxide since the beginning of the Industrial Revolution are less than half those from the United States or Europe. (Carbon dioxide, the leading heat-trapping gas, stays in the atmosphere for many years once emitted.)
Topic:
Climate Change and Energy Policy
Political Geography:
Global Focus

85. The Energy, Economic, and Emissions Impacts of a Federal US Carbon Tax

Author:
Noah Kaufman and Kate Gordon
Publication Date:
07-2018
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Climate change is a serious threat to global progress and stability. Actions to reduce greenhouse gas (GHG) emissions and stabilize global temperatures can avoid impacts of climate change on human health, the economy, national security, and the environment. But without a strong federal-level climate policy response from the United States, chances of serious global climate action are slim.
Topic:
Energy Policy and International Political Economy
Political Geography:
America

86. Energy and Environmental Implications of a Carbon Tax in the United States

Author:
Shashank Mohan, Peter Marsters, Whitney Herndon, and John Larsen
Publication Date:
07-2018
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
A price on carbon dioxide (CO2) and other greenhouse gas (GHG) emissions has long been a preferred instrument among economists and other academics for addressing the threat of climate change.[1] The idea is simple: putting a price on carbon internalizes the societal costs caused by consumption of fossil fuels and other activities that emit GHGs. The concept sits firmly in the tradition of Pigouvian taxation, which has been applied to address other “externalities”—from the health system costs of tobacco and alcohol use to the environmental cost of substances that deplete Earth’s ozone layer. The concept of pricing carbon by way of a tax has been gaining traction among economists as an efficient, market-based strategy for reducing GHG emissions in the United States. More recently, the idea has garnered the attention of prominent Republicans and Democrats within and outside of Congress as well as advocates on the left and right poles of the national political spectrum.
Topic:
Energy Policy and International Affairs
Political Geography:
Global Focus

87. Distributional Implications of a Carbon Tax

Author:
Joseph Rosenberg, Eric Toder, and Chenxi Lu
Publication Date:
07-2018
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
A federal carbon tax in the United States would reduce greenhouse gas emissions and generate significant new revenue for the federal government. In this study, part of the Carbon Tax Research Initiative led by Columbia University’s SIPA Center on Global Energy Policy (CGEP), the Urban-Brookings Tax Policy Center (TPC) estimates the effects of various potential carbon taxes on the tax burdens of US households across the income distribution.
Topic:
Energy Policy and International Affairs
Political Geography:
Global Focus

88. The Effects of Carbon Tax Policies on the US Economy and the Welfare of Households

Author:
John Diamond and George Zodrow
Publication Date:
07-2018
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The potential for utilizing a federal carbon tax to address the risks of climate change has been discussed in U.S. policy debates on both sides of the aisle. Under a carbon tax, consumers and producers would account for the costs of climate change in their decision making. The policy would reduce greenhouse gas emissions without sacrificing the efficiency of private markets.
Topic:
Energy Policy, International Affairs, and Domestic Politics
Political Geography:
America

89. New Realities, New Risks: Rethinking the Strategic Petroleum Reserve

Author:
Jason Bordoff, Antoine Halff, and Akos Losz
Publication Date:
07-2018
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The last few years have offered a reminder, if any was needed, that oil markets are no stranger to volatility. From OPEC’s reported demise to OPEC’s resurgence, the rapid fall and rise again of US shale, and the ebb and flow of geopolitical risk, oil has been on a rocky ride. After industry leaders and experts declared that the days of cheap oil were over—“$100 per barrel is becoming the new $20,” explained one top oil CEO in 2014[1]—consensus shifted to a view that oil prices would remain “lower for longer”[2] before sharply rising again in the last few months. Each day brings yet another reminder of risks to oil prices, with oil markets tight, OPEC nations signaling they intend to continue supporting prices beyond $80 per barrel, President Trump canceling the Iran nuclear deal, Venezuelan production in freefall, and geopolitical risks rife from Syria to Libya and beyond.
Topic:
Energy Policy, Oil, and International Affairs
Political Geography:
Global Focus

90. Making Sense of the Trump Administration's Fuel Economy Standard Rollback

Author:
Jason Bordoff, Akos Losz, and Aaron Linn
Publication Date:
06-2018
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On April 2, 2018, the EPA announced that planned fuel economy increases for cars and light trucks in model years 2022–2025 are too stringent and should be revised.[2] The EPA thus initiated a process to set new standards for 2022–2025, in partnership with the NHTSA. The standards were a central part of the Obama administration’s efforts to reduce US greenhouse gas emissions. The move to weaken the standards has been sharply criticized by many environmental groups, policymakers, and others. Supporters of the current standards argue that the standards would substantially reduce emissions at a modest cost. But the standards have been highly controversial, and the move has also received a great deal of praise from other groups. Supporters of weakening the standards—including those in the Trump administration—argue that the current standards would be excessively costly to consumers and automakers, while providing little or no benefit to the public. Many analyses have proclaimed that this announcement would have profound effects on consumers, oil consumption, oil imports, and greenhouse gas emissions. One think tank, for example, told the Financial Times that US oil consumption, which was nearly 20 million barrels per day (bpd) in 2017, would be 1.5 million bpd higher in 2025 if the 2022–2025 fuel economy standards were rolled back
Topic:
Energy Policy, International Political Economy, and International Affairs
Political Geography:
Global Focus

91. U.S. Energy Diplomacy

Author:
Tim Boersma and Casey Johnson
Publication Date:
03-2018
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Over the preceding decade until November 2016, energy came to occupy a more central position in the United States’ foreign policy apparatus, and the term “energy diplomacy” became frequently used in policy circles and the media. The reasons for this are numerous, but a 2014 headline from the New York Times captures the essence: “Oil’s Comeback Gives U.S. Global Leverage.”[1] Indeed, the unleashing of massive amounts of US unconventional oil and gas transformed the country from a political and economic superpower that was relatively energy poor in relation to its consumption habits into an energy superpower in its own right. The US energy narrative shifted quickly from talk of scarcity and ever-increasing import dependence to one of abundance, in which the nation became a major global exporter. For US diplomats, this occasioned the rethinking of what role energy could play in advancing strategic interests abroad. In October 2012, then secretary of state Hillary Clinton gave a major address at Georgetown University on energy diplomacy in the 21st century, proposing that energy could be used to help solve territorial and maritime disputes, promote competition in Europe, get the Republic of Iraq back on its feet, bring peace in the South Sudan and Sudan conflict, and tackle energy poverty and climate change.[2] Secretary Clinton’s State Department stood up a Bureau of Energy Resources with dozens of diplomats devoted to these topics. At meetings abroad and in Washington, energy was literally on the agenda, assuming a more prominent role than at any time since the Carter administration.
Topic:
Diplomacy, Energy Policy, International Affairs, and Geopolitics
Political Geography:
Global Focus

92. Reforming the Renewable Fuel Standard

Author:
James Stock
Publication Date:
03-2018
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The US Renewable Fuel Standard (RFS) was introduced in the Energy Policy Act of 2005 and expanded in both scope and duration in the Energy Independence and Security Act (EISA) of 2007. The policy goals of the RFS program are threefold: - enhance energy security through additional domestic production of biofuels, - support rural economies by expanding the demand for agricultural products, and - expand the development and production of second-generation low–greenhouse gas transportation fuels. The RFS requires the blending of increasing quantities of biofuels into the US surface vehicle transportation fuel supply. These quantities are specified in the EISA but are subject to modification by the US EPA under certain conditions (“waiver authorities”). The EPA issues annual rules specifying the overall fractions of renewable fuels in the fuel supply. The fractional requirements are specified by fuel category: cellulosic, advanced biomass-based biodiesel, other advanced fuels, and total renewable fuels. Compliance with the blending standards is demonstrated by obligated parties (petroleum refiners and importers) retiring electronic certificates, called renewable identification numbers (RINs), when they sell petroleum fuel into the surface transportation fuel supply. RINs, which become available when a renewable fuel is blended into the fuel supply, are tradable and bankable (with limitations). Thus obligated parties have the choice of either producing RINs themselves through blending operations or purchasing RINs on the open market.
Topic:
Energy Policy, International Affairs, and Climate Finance
Political Geography:
Global Focus

93. US Carbon Tax Design: Options and Implications

Author:
Jason Bordoff and John Larsen
Publication Date:
01-2018
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
While there seem to be no immediate prospects for a national carbon tax in the United States, there is growing interest among some policymakers and thought leaders across the political spectrum. If and when a legislative opening emerges in the coming years, policymakers will need to grapple with a range of important design issues that will determine the effectiveness of a carbon tax in reducing carbon emissions.
Topic:
Energy Policy, International Affairs, and Climate Finance
Political Geography:
Global Focus