Regional Analysis

Hydrogen powered cars and trucks: Is there a role for them in the electrified U.S. future?

Abstract: Climate change is a systemic risk to the world’s economy. Significant and rapid cuts in carbon emissions are needed to limit global warming. Fuel Cell Electric Vehicles (FCEV) offer an attractive alternative for decarbonizing the transportation sector for both Light Duty and Heavy Duty categories. The cost of hydrogen fuel cell-related technologies are decreasing rapidly and FCEVs may provide an alternative to electric vehicles in decarbonization.  

This thesis provides a fresh look at economics of FCEVs and competing alternatives for decarbonizing transportation and their long-term trends in the US. Based on the recent data, the total cost of ownership (TCO) models are developed for three types of drive train Internal Combustion Engine Vehicles (ICEV), Battery Electric Vehicles (BEV) and FCEV for both Light Duty Vehicle (LDV) and Heavy Duty Vehicle (HDV) categories. A hydrogen retail cost model is developed to provide a detailed understanding of the cost components. The fleet dynamics of Light Duty vehicles (LDV), including ICEV, BEV and FCEV, are modeled using MIT Economic Projection and Policy Analysis (EPPA) model to understand the characteristics of long-term trajectories for the LDV fleet growth in the US.  

The TCO for BEV and FCEV are higher than ICEV in the LDV sector in the absence of carbon abatement credits or other government support. This implies that FCEVs are about 10% more expensive than BEVs on a cost-per-mile basis. However, there are cost reduction pathways that might make FCEVs competitive in the next 10 years and n the scenarios of accelerated actions. The percentage of FCEVs in total vehicle stock in the US might grow to more than 14% by 2050. The growth is contingent upon the TCO reduction pathways. The TCO of BEV and FCEV Class 8 type trucks are 24% and 40% higher than ICEV trucks, respectively. The fuel cost for FCEV is 2.4 times of BEV’s fuel cost and the retail price of FCEV Class 8 type truck is 1.5 times that of BEV truck. A 40% reduction in hydrogen retail price or a 70% reduction in FCEV truck retail price would make FCEV trucks cheaper than BEV trucks. In all scenarios, substantial government support is needed in the forms of R&D, infrastructure development and financial incentives to realize the potential of hydrogen based transportation.  

Coastal Integrated HydroTerrestrial Modeling: A multi-agency invited workshop

From the Executive Summary: This report describes the results of the November 2020 Coastal Integrated Hydro-Terrestrial Modeling (C-IHTM) workshop series. Organized around five sessions held over five days, the workshop series focused on the challenges of modeling and evaluating coastal landscapes of co-evolving human and natural systems subject to influences and stressors, including extreme weather events, sea level rise, natural and anthropogenic disturbances, and other impacts from climate change. The effort was jointly planned and undertaken by the federal interagency C-IHTM Coordinating Group within the U.S. Global Change Research Program (USGCRP) and the MultiSector Dynamics (MSD) research community. The five-day virtual workshop included robust participation from a wide range of science and engineering research communities.

The impact of assuming perfect foresight when planning infrastructure in the water–energy–food nexus

Abstract: Perfect foresight hydroeconomic optimization models are tools to evaluate impacts of water infrastructure investments and policies considering complex system interlinkages. However, when assuming perfect foresight, optimal management decisions are found assuming perfect knowledge of climate and runoff, which might bias the economic evaluation of investments and policies.

We investigate the impacts of assuming perfect foresight by using Model Predictive Control (MPC) as an alternative. We apply MPC in WHAT-IF, a hydroeconomic optimization model, for two study cases: a synthetic setup inspired by the Nile River, and a large-scale investment problem on the Zambezi River Basin considering the water–energy–food nexus. We validate the MPC framework against Stochastic Dynamic Programming and observe more realistic modeled reservoir operation compared to perfect foresight, especially regarding anticipation of spills and droughts.

We find that the impact of perfect foresight on total system benefits remains small (<2%). However, when evaluating investments and policies using with-without analysis, perfect foresight is found to overestimate or underestimate values of investments by more than 20% in some scenarios. As the importance of different effects varies between scenarios, it is difficult to find general, case-independent guidelines predicting whether perfect foresight is a reasonable assumption. However, we find that the uncertainty linked to climate change in our study cases has more significant impacts than the assumption of perfect foresight. Hence, we recommend MPC to perform the economic evaluation of investments and policies, however, under high uncertainty of future climate, increased computational costs of MPC must be traded off against computational costs of exhaustive scenario exploration.

Toward a just energy transition: A distributional analysis of low-carbon policies in the USA

Abstract: Distributional impacts of environmental policies have become an increasingly important consideration in policymaking.

To evaluate the distributional impacts of carbon pricing with different revenue recycling schemes for the USA, we integrate a national economic model for the USA with household microdata that provides consumption patterns and other socio-economic characteristics for thousands of households. Using this combined model, we explore the distributional impacts and the possible trade-offs between equity and efficiency of different revenue recycling schemes.

We find that the choice of revenue recycling scheme has a limited effect on efficiency of the policy, but significant distributional impacts. Our analysis indicates that policymakers can mitigate negative distributional impacts with positive synergies on efficiency.

Climate change and the green transition in South Africa

Abstract: Climate change is one of the most complex challenges facing South Africa as the country designs plans and policies for future economic growth and development. Higher temperatures and more variable rainfall are already affecting the economy and are expected to continue for decades. The degree to which climate change affects different regions in South Africa is likely to vary significantly, characterized by wide ranges in the direction and magnitude of change in key climate variables, especially precipitation. These uncertainties interact with South Africa’s growth and development challenges and complicate planning and policy formation in support national development objectives.

This chapter presents key research on changes in climate experienced in South Africa in recent years, along with projected changes in years to come. It illustrates the uncertainties related to climate change and the key channels through which climate change affects the economy. The economic and developmental impacts of such changes are presented along with the lessons for adaptation policy. As energy will be a key focus area for mitigation efforts in the country, this chapter also outlines the implications of such a transition and the factors that need to be accounted for in limiting the impacts on vulnerable populations.

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