Energy Transition

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.

Distributional Impacts of Low-Carbon Policies in USA and Spain: Does One Size Fit All?

Abstract: Distributional impacts of environmental policies have become an increasingly important consideration in policymaking, but current studies have focused on just a few countries individually. To evaluate the country-specific impacts of carbon pricing with different revenue recycling schemes, we integrate national economic models for the USA and Spain with household microdata that provides consumption patterns and other socio-economic characteristics for thousands of households in each country. Using these combined models, we explore the applicability of results from one country to other countries by focusing on different revenue recycling schemes.

We find that, with some exceptions, the USA and Spain overall show similar patterns of distributional impacts for the two revenue recycling schemes, despite their differences in size, existing tax structure, energy sources and prices, level of income inequality, consumption patterns, etc. We find that in both countries an equal household rebate has progressive welfare impacts that are positive for the majority of income ventiles while the payroll tax reduction tends to be proportional or slightly regressive. We also explore welfare impacts for different household classifications, the impact of the policy design on overall inequality, and the role of inequality aversion on the social welfare implications of the policy design.

The Covid-19 effect on the Paris Agreement

Abstract: The pandemic and efforts to control it are causing sharp reductions in global economic activity and associated fossil energy use, with unknown influence on longer-term efforts to limit greenhouse gas emissions under the Paris Climate Agreement. To explore this effect, estimates of economic recession and recovery in near-term months are extended to cover a return to full employment in future years, to be compared with an estimate of growth had COVID-19 not occurred.

On the assumption that the Paris emissions pledges for 2020 will be met in any case, projection of global emissions with and without the pandemic show that, through its growth impact alone, it will yield only a small effect on emissions in 2030 and beyond. Other COVID legacies may include residual influences in patterns of consumption and travel, and the direction of recovery funds to low carbon investments.

Most important, however, will be the effect of the economic shocks on the willingness of nations to meet (or augment) their existing Paris emissions pledges. The main effect of the pandemic on the threat of climate change, therefore, will be not its growth impact but its influence on national commitments to action. 

Utility-scale portable energy storage systems

Abstract: Battery storage is expected to play a crucial role in the low-carbon transformation of energy systems. The deployment of battery storage in the power grid, however, is currently limited by its low economic viability, which results from not only high capital costs but also the lack of flexible and efficient utilization schemes and business models.

Making utility-scale battery storage portable through trucking unlocks its capability to provide various on-demand services. We introduce the potential applications of utility-scale portable energy storage and investigate its economics in California using a spatiotemporal decision model that determines the optimal operation and transportation schedules of portable storage.

We show that mobilizing energy storage can increase its life-cycle revenues by 70% in some areas and improve renewable energy integration by relieving local transmission congestion. The life-cycle revenue of spatiotemporal arbitrage can fully compensate for the costs of a portable energy storage system in several regions in California.

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