Climate Policy

The role of cross-border electricity trade in transition to a low-carbon economy in the Northeastern U.S.

Canadian hydropower resources offer a potentially attractive option for meeting decarbonization targets in the US Northeast region, where there are ambitious climate goals and nearby hydro resources in Quebec. Existing transmission capacity is, however, a limiting factor in expanding hydropower imports to the region.

To examine the value of expanding transmission capacity from Quebec to the Northeast,  we employ an integrated top-down bottom-up modeling framework (USREP-EleMod). This research was part of an Energy Modeling Forum effort, EMF34, with a goal of better characterizing linkages in energy markets across North America. The scenarios we examine exogenously expand transmission capacity by 10, 30, and 50% above existing capacity into the US Northeast (New York/New England), finding the value to the economy of these expansions ranging from $.38-$.49 per kWh imported into New York, and $.30-$.33 per kWh imported into New England by 2050. 

The scenarios include economy-wide emissions goals these states have set for themselves. The carbon limits we impose raise fuel prices more than electricity prices, and as a result, we find greater electrification in the US Northeast region from 2030 onward--a result that one would not see using just an electricity sector model, This demonstrates a main hypothesis of EMF34, that models that looked at more integration across energy markets would give deeper insight than more narrowly focused models.

HIghlights:

    Canadian hydropower imports benefit the US Northeast region in transition to a low-carbon economy
    Transmission capacity expansion is evaluated based on a top-down bottom-up model
    The value to the economy of the expansion is significantly larger than the cost of the electricity itself

The MIT Industrial Liaison Program (ILP) defines sustainability as “the capacity to endure – to consume, grow, and thrive—but not to be consumed and perish in the process.” On March 9, 2021, The ILP held a webinar on sustainability research at MIT, an Institute-wide endeavor that spans materials science, energy, recycling, economic policy, urban planning and other fields.

Assessing and managing risks amid global and regional change
Meeting potential new U.S. climate goals

Abstract: We explore the performance of an addition to U.S. climate policy using authority under Section 115 of the Clean Air Act, with special attention to distributional effects among the states. This portion of the Act concerns trans-boundary air pollution, and under its provisions a national greenhouse target could be allocated among the states, with the details of state implementation optionally guided by a model rule as under other provisions of the Act. With trading allowed among the states, such a measure could lead to a national price on the covered gases. While we adopt features of a possible Section 115 implementation, the analysis is applicable to similar cap-and-trade programs that might be adopted under other authorities.

We investigate the implications of such a policy using MIT’s U.S. Regional Energy Policy (USREP) model, with its electric sector replaced by the Renewable Energy Development System (ReEDS) model developed by the U.S. National Renewable Energy Laboratory. Existing federal and state climate policies are assumed to remain in place, and a national constraint on CO2 emissions is applied to achieve 45% or 50% reductions below the 2005 level by 2030. We apply the policies in a Baseline and a Low-Cost Baseline, the latter with more aggressive assumptions of technology cost improvements. The U.S. is aggregated to 18 individual states and 12 multi-state regions, and the effects of the national emissions restriction are investigated under three alternative methods by which the EPA might allocate these targets among the states.

We find the cost of achieving either target to be modest - allowing for nearly identical economic growth, even without taking account of air quality and climate benefits. The alternative allocation methods generate varying per capita revenue outcomes among states and regions and drive most of the welfare impact through a direct income effect. It is assumed that states distribute permit revenue to their residents in equal lump-sum payments, which leads to net benefits to lower income households. Under the Low-Cost Baseline, carbon prices in 2030 are about ⅓ those in the Baseline, and the welfare effects are negligible. Considering climate benefits evaluated using the social cost of carbon and particulate matter air pollution health benefits, less the mitigation costs, we find net benefits to the U.S. in all cases, with slightly larger net benefits with the 50% reduction below 2005 emissions.

Business closures. Travel restrictions. Working and learning from home. These and other dramatic responses to Covid-19 have caused sharp reductions in economic activity—and associated fossil fuel consumption—around the world. As a result, many nations are reporting significant reductions in greenhouse gas emissions for the year 2020, edging them a bit closer to meeting the initial emissions targets to which they committed under the Paris Agreement on climate change.

How will Covid-19 ultimately impact climate change?

As the United States transitions from one administration bent on rolling back climate regulations to another that aims to accelerate climate action, it seems as good a time as any to take stock. What do scientists understand about today’s climate; how much worse are hurricanes, wildfires, heat waves and other climate impacts going to get in coming decades, and what does the country and world need to do to reduce the likelihood and severity of those impacts?

Climate change: Where we are, where we’re headed, what we can do
Switching on auxiliary devices in vehicular fuel efficiency tests can help cut CO2 emissions by millions of tons

Abstract: Enhancing automobile fuel efficiency is crucial to decarbonizing the transport sector. Recent studies have revealed a gap between real-world fuel efficiency and results from laboratory tests, where “off-cycle” auxiliary devices, like air conditioning (AC) systems, are not turned on. AC consumes the most energy among all off-cycle devices; however, the exact contribution of AC to fuel consumption remains unclear.

Here, by analyzing 1 million trip-level fuel efficiency records from China, we show that AC use when the temperature exceeds 25°C increases gasoline consumption annually by 1.3%. The amount differs across car models, with those produced by Chinese manufacturers showing relatively lower AC efficiency. Improving AC efficiency could cost-effectively reduce CO2 emissions by 1.6–2.4 million tons in China every year.

Therefore, we suggest integrating off-cycle devices into future fuel efficiency regulations, which will reveal the fuel efficiency gap, incentivize car manufacturers to develop high-efficiency devices, and further tap this emissions reduction potential.

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