By Jeff Plungis & Mark Drajem
via Bloomberg Business

The benefits of cheap oil may come at a steep price for President Barack Obama’s climate-change initiatives.

Some of Obama’s most cherished achievements — cars on the road that burn less gasoline, reductions in greenhouse gases and a plan to cut emissions from power plants — are at risk as plummeting energy prices thwart policies meant to force the nation to think greener.

Last year’s 33 percent drop in gasoline prices already has automakers laying the groundwork to challenge more stringent fuel economy targets for new cars. The oil industry says a decline in its oil revenue means it can’t afford new climate regulations. Even solar-equipment makers are seeing share prices fall on fears inexpensive natural gas will erode demand.

“We are awash in cheap fossil fuels in a way that was unimaginable five years ago,” said Michael Greenstone, an economics professor at the University of Chicago who was once the chief economist for Obama’s Council of Economic Advisers. “That’s going to make the president’s climate plan — and anyone’s climate plan — more difficult to achieve.”

Data show consumers gravitating back to the pickup trucks, minivans and sport utility vehicles they shunned when gasoline was $3 or more a gallon. Automakers had been counting on sustained demand for fuel-efficient cars such as hybrid and electric models to meet Obama’s mandate for a nationwide average fuel economy of 54.5 miles per gallon.

Continue reading at Bloomberg Business…

Continue reading

 

Areas of Focus: Energy Markets
Definition
Energy Markets
Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.
Fossil Fuels
Definition
Fossil Fuels
Under current policies, fossil fuels will play an important role in the energy system for the foreseeable future. EPIC research is exploring the costs and benefits of these fuels as...
Transportation
Definition
Transportation
Mobility is central to economic activity. Yet, a lack of fuel diversity and continued demand growth have made the transportation industry a major contributor to global pollution and carbon emissions....
Climate Change
Definition
Climate Change
Climate change is an urgent global challenge. EPIC research is helping to assess its impacts, quantify its costs, and identify an efficient set of policies to reduce emissions and adapt...
Climate Law & Policy
Definition
Climate Law & Policy
As countries around the world implement policies to confront climate change, EPIC research is calculating which policies will have the most impact for the least cost.
Fuel Economy Standards
Definition
Fuel Economy Standards
Fuel economy standards are the United States’ cornerstone transportation policy aimed at reducing both oil consumption and greenhouse gas emissions. EPIC research is exploring whether these standards are structured optimally...