No longer a problem for the distant future, the costs of climate change—wildfires, storm and flood damages, disruptions to agriculture, and more—are adding up and taking a toll on the lives and livelihoods of ordinary Americans. These costs disproportionately fall on communities of color and America’s economically vulnerable, who are already contending with higher exposure to local pollutants. America’s energy and climate challenge demand a response from government. Yet, as policymakers seek to chart a path forward, they must not only create the market incentives needed to transform our energy system from one based largely on fossil fuels to one powered by clean energy, they must also ensure that energy remains affordable and reliable, able to fuel economic growth.

In order to help guide public policy, EPIC recently published a compilation of evidence-based proposals informed by the latest insights from its faculty’s research. The U.S. Energy & Climate Roadmap is designed to help policymakers implement practical policies to address the greatest challenge the country now faces. Each chapter is grounded in empirical research that has been galvanized by robust academic debate and channeled into practical policy applications through discussion with EPIC’s policy experts. The result is a constructive energy and climate agenda for U.S. policymakers.

 

 

Impact

The U.S. Energy & Climate Roadmap quickly made an impact, generating a range of discussions with key government officials. The Roadmap and its approach also received praise from a prominent group of leaders in energy and environmental policy including industry experts, advocates, and senior officials who served the past five presidents.

Those who have endorsed the book and its approach include former cabinet and congressional members such as:

  • EPA Administrator Carol Browner
  • Republican Congressman Carlos Curbelo
  • CIA Director and Undersecretary of Energy John Deutch
  • White House Council of Economic Advisors Chair Glenn Hubbard
  • Energy Secretary Ernest Moniz
  • Treasury Secretary Hank Paulson
  • White House Chief of Staff John Podesta
  • White House National Economic Council Director Laura Tyson

Additionally, a diverse range of industry and advocacy leaders have endorsed the book, including:

  • Exelon CEO Chris Crane
  • bp Chief Economist Spencer Dale
  • EDF President Fred Krupp
  • The Breakthrough Institute Founder Ted Nordhaus
  • Senior Michael Bloomberg Advisor Carl Pope
  • Niskanen Center President Jerry Taylor.

What They’re Saying à

In the months after its release, the Roadmap was shared widely across traditional and social media. The book’s policy recommendations were covered in more than 100 articles, including reports by The Washington Post, NPR, Axios, AP, Bloomberg, Politico and The Atlantic. Additionally, EPIC scholars and Roadmap authors wrote about their proposals in the Denver Post, The Hill and Forbes.

To further dig into the issues from the book, The Atlantic‘s Rob Meyer hosted a five-part podcast miniseries with EPIC scholars. In addition to the EPIC-sponsored miniseries, EPIC Director Michael Greenstone spoke about the Roadmap’s suite of policy proposals on the Center for Strategic and International Studies podcast Energy 360°, as well as the Aspen Institute’s Aspen Ideas on the Go podcast. Greenstone also participated in an event with the conservative group ConservAmerica on the rationale and politics surrounding carbon pricing, where he talked about recommendations from the Roadmap.

Following the attention and discussions generated by the Roadmap, several of the recommendations from the book were considered and continue to be considered by Congress and the Biden administration. Other recommendations are reflected in government actions. Below is a summary of some of the recommendations featured in policy dialogue in the months after the Roadmap’s release.

Updating the Social Cost of Carbon: EPIC Director Michael Greenstone and co-author Tamma Carleton outlined a two-step approach for updating the social cost of carbon (SCC), the total cost to society from each additional ton of CO2 emissions. First, they recommended that the Biden administration set an interim SCC that incorporates global damages, not just damages to the United States, and reduces the standard discount rate from 3 percent to 2 percent to account for profound changes in capital markets in recent decades. This would increase the SCC to $125 per ton – up from the Trump administration’s $1-$7 and even the $52 rate in the Obama administration. Second, they recommended that the White House form an interagency working group to carry out a comprehensive update to the SCC to bring it back to the frontier of climate science and economics.  Senator Sheldon Whitehouse of Rhode Island tweeted a story about the SCC recommendations, calling the metric “a techie thing but it’s a BFD.” Days after their recommendations were released, President Biden signed an executive order calling for an interim SCC and the formation of an interagency working group. The interim SCC was later set at the Obama administration’s number (incorporating global damages but not changing the discount rate), while the more comprehensive review continues.

Reforming the Federal Oil and Gas Leasing Program: The Booth School of Business’s Thom Covert and Harris Public Policy’s Ryan Kellogg laid out ways to ensure that the Interior Department secures fair value for taxpayers from U.S. oil and gas resources while protecting the environment. The proposals follow practices that private landowners and major oil and gas producing states have pursued for years: higher royalty rates, shorter lease lengths, higher minimum bids and stronger bonding requirements. Their suggested changes to federal oil and gas leasing were particularly timely, as the Biden administration was in the process of considering these practices amidst a pause on new leases. Some of their recommendations were echoed in the days after their release by experts at a forum hosted by the Department of Interior as part of a public review of the program. In conjunction with the forum, Axios highlighted their recommendations. Covert and Kellogg also wrote about their recommendations in an opinion piece published by the Denver Post, an ideal placement given that at the time the Interior Department’s Bureau of Land Management was headquartered in Colorado.  Later in the year, Kellogg joined a conversation with Interior Deputy Secretary Tommy Beaudreau and The Washington Post’s Juliet Eilperin where they discussed the recommendations.

“I really enjoyed reading your paper. It’s truly a roadmap and maybe from now on, like I said, when I get pestered about where the report is, I can say well basically you can get a sneak peek by looking at Ryan’s paper.” – Interior Deputy Secretary Tommy Beaudreau (EPIC Event, 11/15/21)

About a week later, the Interior Department released a long-awaited report that reflected many of the key recommendations by Covert and Kellogg including the need to raise the royalty rate and strengthen bonding requirements. Kellogg spoke with The Washington Post‘s Sarah Kaplan about the report.

Expanding the Electricity Grid to Facilitate Clean Energy Growth: EPIC non-resident scholar Steve Cicala proposed using two complementary approaches to facilitate building a nationwide grid. First, the Department of Energy can designate National Interest Electric Transmission Corridors between wind and solar resources and population centers. States would then have one year to consider permit requests before the Federal Energy Regulatory Commission (FERC) would be empowered to take over permitting—a role it already has for interstate oil and gas pipelines. Second, the government can provide conditional or supplementary funding to encourage the building of transmission lines along existing rights-of-way such as waterways, railroads and highways. Cicala talked about his recommendations with FERC Chair Richard Glick in a public event hosted by EPIC. In the months after making these recommendations, the Biden administration included Cicala’s second proposal in its American Jobs Plan and funding to support the building of transmission lines—maximizing existing rights-of-ways—was provided under the Infrastructure Investment and Jobs Act signed into law later in the year.

Creating a National Clean Electricity Standard: Michael Greenstone and his co-author Ishan Nath provided a set of guiding principles for building an efficient national Clean Electricity Standard. It encouraged policymakers to allow a broad suite of technologies to participate, including nuclear and carbon capture and sequestration technologies. Greenstone talked with several reporters from The Washington Post, NPR, and other outlets about the recommendations during the Senate’s debate over including such a program in the Build Back Better spending plan. It was ultimately passed by the House but removed by the Senate.

“Greenstone has examined state renewable energy requirements and developed recommendations for a clean electricity standard, most of which appear to be reflected in what Democratic policymakers are discussing now.” — NPR (7/15/21)

Smoothing the Coal Transition: UChicago Law’s Mark Templeton laid out several recommendations that would help communities affected by the transition away from coal. His recommendations included addressing legacy issues at abandoned mines by ending self-bonding, requiring industry to post bonds at the time a mine is built, and changing the bankruptcy code to prioritize reclamation and clean up. He recommended that coal miners and power plant workers be given first priority for reclamation jobs through tax credits to companies that hire and retrain coal workers. The House of Representatives is considering the CLEAN Future Act, which would end the practice of self-bonding and force companies to confront these clean-ups on their own moving forward through up-front bonds, as Templeton recommended. While the Infrastructure Investment and Jobs Act invests significantly in the clean up of abandoned mines, and the White House has suggested that displaced energy workers be given first priority for these clean ups, it does not provide tax credits to companies to hire these workers. Templeton laid out his argument for these changes in The Hill.

Better Targeting Energy Efficiency Investments: Harris Public Policy’s Fiona Burlig laid out recommendations for how funding could be allocated to energy efficiency programs that are most cost-effective based on independent and rigorous real-world evaluations. She wrote in Forbes about how the Biden administration can improve energy efficiency programs as part of the Build Back Better plan. Her proposals include requiring federally funded energy efficiency programs to incorporate rigorous real-world evaluation, before and after investments are made, to determine which energy efficiency measures to invest in and uncover potential flaws in program design. The Infrastructure Investment and Jobs Act establishes a revolving loan fund capitalization grant program, by which grant money can go towards commercial and residential energy audits and to carry out upgrades/retrofits. Within a year after the upgrades are made, a final audit is required to assess the total energy savings from the upgrades, reflecting Burlig’s recommendation.

A Better Approach to Border Adjustments: Border adjustments can help prevent energy-intensive industries from moving offshore, from countries with carbon restrictions to countries with few or no restrictions. Traditional border adjustments, however, are difficult to administer and are not clearly permissible under international trade law. UChicago Law’s David Weisbach laid out an alternative approach that would reduce more emissions at a lower price and be easier to implement. His approach was released just prior to the European Union’s announcement that it is planning to implement border adjustments, pushing their trading partners into doing more to cut carbon. Both the Biden administration and members of Congress have said that implementing border tax adjustments is something they are considering. Weisbach briefed senior government officials on his approach.

Areas of Focus: Ensuring Americans Receive Fair Value for U.S. Oil and Gas Resources
Definition
Ensuring Americans Receive Fair Value for U.S. Oil and Gas Resources
Federal mineral leasing could deliver higher returns for taxpayers and better protect the environment if policymakers increased royalty rates and minimum bids, eliminated deductions, shortened primary terms, and strengthen bonding...
Accelerating and Smoothing the Transition Away from Coal
Definition
Accelerating and Smoothing the Transition Away from Coal
Regulators should consider coal’s full social costs when deciding whether to approve new mines and power plant emissions limits and address legacy environmental issues at sites while giving coal workers...
Four Proposals to Improve Fuel Economy Standards
Definition
Four Proposals to Improve Fuel Economy Standards
To make fuel economy standards more efficient and effective, policymakers could eliminate both size and type distinctions, establish a transparent trading market, and bring emissions testing under the direct supervision...
Making Energy Efficiency Work
Definition
Making Energy Efficiency Work
Funding should be allocated to the energy efficiency programs that are most cost-effective based on independent and rigorous real-world evaluations.
Restoring the Future of Nuclear Energy
Definition
Restoring the Future of Nuclear Energy
Nuclear power could be important to decarbonizing the power sector, but first nuclear plant design, manufacturing and construction processes should be improved and efforts should be made to confront market...
Fueling Technology Deployment with a Clean Electricity Standard
Definition
Fueling Technology Deployment with a Clean Electricity Standard
A national Clean Electricity Standard that is flexible, technology neutral, and linked to carbon reduction policies in other sectors could go a long way in decarbonizing the power sector. Policymakers...
Decarbonizing the U.S. Economy with a National Grid
Definition
Decarbonizing the U.S. Economy with a National Grid
To facilitate building a nationwide high voltage direct current grid, the federal government could simultaneously assert FERC’s primary role in transmission permitting and encourage the upgrading and re-use of existing...
A Solution to the Leakage Problem
Definition
A Solution to the Leakage Problem
A simple, clearly legal, and more effective alternative to border tax adjustments could be to tax domestic extraction along with border adjustments on imports and exports of energy.
Put a Price on It: The How and Why of Pricing Carbon
Definition
Put a Price on It: The How and Why of Pricing Carbon
Enacting a national, market-based framework to put a price on carbon can achieve ambitious climate change goals while minimizing the cost to the American economy. The most effective climate policy...
Updating the United States Government’s Social Cost of Carbon
Definition
Updating the United States Government’s Social Cost of Carbon
As the Biden administration updates the social cost of carbon, their thorough review should include using the latest climate modeling, applying new climate damage estimates, employing lower discount rates, and...