What Happens to Consumption when we Decarbonize?

A commonly expressed concern about climate models used in policy making is that they place too much emphasis on achieving economic growth, even kinds of growth that interfere with greenhouse gas emissions reduction targets. For example, a report by the European Investment Bank warns against letting economies grow too fast, suggesting that higher growth—say from a massive climate investment program—might increase emissions if the investment unintentionally drives fossil fuel investment as well. In the EIB’s view, climate investment and a healthy economy are benefits to be traded off against one another: We can only have one or the other.

But this argument is unnecessarily bleak. Investment in new renewable generation, energy efficiency improvements, zero-carbon manufacturing, and clean transportation makes green goods and services for workers to purchase, and gives workers and income with which to make these purchases. Even though climate investment increases the size of the economy, emissions continue to fall because the new investment is replacing money spent on dirtier technologies, not adding to it.

Instead of facing a tradeoff between climate investment and economic well-being, rich nations can make climate investment succeed by facilitating the rapidly increasing market in cleaner goods and services. For businesses to invest in zero emissions products they need to see a track record of success: customers buying those products. That increased certainty will lead businesses to spend more on improving green products, making them cheaper, and disseminating them widely.

Effective government policy can accelerate this process. In the United States, the government could use an aggressive clean energy standard. Direct federal purchases of cleaner technologies, such as by electrifying the government’s entire fleet of vehicles or transitioning all government properties off fossil fuel energy sources, would kickstart an enormous market for greener production. Any effort to tax goods that result in greenhouse gas emissions should be paired with dividends to consumers, giving them funds to spend on cleaner alternatives. All of these policies to boost green consumption are necessary complements to policies that focus specifically on green technological innovation, commercialization of new technologies, or policies that help businesses overcome capacity or supply chain problems. These actions can also cement the political viability of decarbonization by ensuring that workers and communities reap the rewards of clean investment.

Chirag Lala Researcher

This is a part of the AEC Blog series

Give States the Room to Decarbonize

In a previous blog post, I wrote about steps the U.S. federal government can take to invest sufficiently in decarbonization despite the self-imposed limitations on congressional appropriation. Similar steps are needed for states and municipalities. They are the first governments to feel the impact of natural disasters and increased pressure on public services. And they play an outsized role in the financing of American infrastructure.

Unlike the federal government, most state governments are constitutionally required to balance their budgets. This restrictive practice can result in undesirable outcomes during recessions when additional government spending is badly needed to turn the economy around, but states and municipalities are experiencing dramatic declines in tax revenues. A bad enough economic crisis could force states to cut allocations to renewable energy and efficiency investments. The bond market for state and local governments is not much better. According to Yakov Feygin at the Berggruen Institute, the smaller size of municipal bonds, sheer variety and lack of standardization, and number of municipal governments limit the bond market’s ability to effectively finance infrastructure. The lack of a permanent emergency lender also means interest rates sharply increase in financial crises—making borrowing more expensive.

Three specific reforms should be enacted to give states and local governments more room to respond to the climate crisis. First, Congress should institutionalize a permanent system of grants to state and local governments that rise automatically when unemployment increases. Second, the Federal Reserve should revive an improved version of the Municipal Liquidity Facility that it used to stabilize interest rates in the municipal bond market during the early months of the Covid-19 pandemic. This time, it should lend at more generous rates instead of at a penalty, accept bonds of longer maturity, and expand the eligibility of borrowers. The Federal Reserve should also specify that it will specially seek out bonds for purchase that fund climate investment (so-called “green bonds”). Finally, Congress should create mechanisms by which the Federal government can borrow money on states’ behalf, provided they use it for specific purposes like decarbonization. This would effectively bypass the straitjacket on state-level fiscal policy imposed by balanced budget amendments or local laws that limit tax increases.

State and local governments have a lot of agency to address the climate crisis. The Political Economy Research Institute (PERI) publishes climate plans for specific states with tailored policies for pursuing ambitious climate targets. Carrying out those plans will be expensive. California climate plan’s would enable it to become a zero emission economy by 2045 by spending 3.8 percent of its GDP ($138 billion) per year on average between 2021 and 2030. West Virginia would need to spend 2.4 percent of its GDP ($2.1 billion) per year between 2021 and 2030 to reduce emissions to one-half of 2018 levels by 2030. While the PERI reports meticulously detail ways to raise the money, the additional steps proposed in this post would greatly increase the capacity of states to painlessly raise funds without making harsh cuts to other vital programs or pursuing unpopular tax increases. These actions would also ensure municipal interest rates remain low—which the reports argue would keep overall costs down—or fall even lower. Best of all, states on course to meet their climate targets could cheaply and profitably invest in more capacity to help lagging states.

Chirag Lala Researcher

This is a part of the AEC Blog series

Massachusetts' Electrification Progress is Falling Short

About one-third of Massachusetts’ emissions come from the buildings sector. In 2019, over 75 percent of households in Massachusetts used fossil fuels to heat their homes; only 17 percent used electricity (much of which is old-fashioned and inefficient “electric resistance” heating). Electrification—or switching from fossil fuels (like gas and oil) to heat our buildings, to using modern electric heat pumps—has been identified as the best least-cost strategy to reduce emissions from buildings in the Commonwealth.

A recent article from the Boston Globe calls out Massachusetts’ slow progress on electrifying homes. In order to meet the Commonwealth’s decarbonization goals, an average of 100,000 homes per year over the next 30 years must be switched over to electric heating. However, just 461 homes made the switch in 2020. More broadly, according to data from the U.S. Census American Community Survey, the share of homes in Massachusetts using electricity for heating has only gone up by about 1 percent from 2015 to 2019.

Despite the declining costs of high-efficiency electric heating equipment like air-and ground-source heat pumps, widespread adoption of heat pumps is held back by physical barriers such as incompatible infrastructure and informational barriers like inadequate information and status quo bias. Moreover, for low- and moderate-income households, access to credit and the high upfront cost of heat pumps can be a challenge.

To meet the Commonwealth’s 2050 climate goals, policymakers need to establish large incentives for heat pumps, provide subsidies for low-income and rental housing upgrades, and increase education and outreach to increase information availability and access. Without action, households will likely install new gas systems, with an average lifespan of 15 to 30 years, that will not only slow progress on meeting Massachusetts’ climate targets but will cost these families more over time.

Tanya Stasio Researcher

This is a part of the AEC Blog series

IPCC AR6 Climate Change 2021: What’s New

On August 6, the Intergovernmental Panel on Climate Change (IPCC) released the first part of its Sixth Assessment Report (AR6), focusing on the scientific basis underpinning change-related policies by the international community. More than 14,000 citations were referenced in the AR6 and a total of 78,007 expert and government review comments were included.

The IPCC’s critical findings from this report include:

The global surface temperature is 1.09°C (1.96°F) warmer than it was in 1900.
It is unequivocal: Human activity is responsible for global warming.
If current emission levels are maintained, it is highly likely that global warming will exceed 1.5℃ above preindustrial levels and continue to accelerate during the 21st century.
Extreme weather, heatwaves, floods have become more frequent and intense.

Six days after this first section of AR6 was released, the third section of the report (not planned for publication until next year) was leaked by a group of scientists concerned that governments could water down the publication since they have the authority to revise the ‘Summary for Policy Makers’. The leaked report states that the rich are more responsible for global warming than the poor. According to the Guardian, the report concludes “The top 10% of emitters globally, who are the wealthiest 10%, contribute between 36 and 45% of emissions, which is 10 times as much as the poorest 10%, who are responsible for only about three to 5%.”

Under the Paris Agreement, 191 countries agreed to meet every five years to review implementation progress and prepare updated Nationally Determined Contributions to emission reductions. The first meeting, ‘Global Stocktake’ will be held in 2023 and the complete version of the AR6 will be published just before the meeting. Findings from AR6 and the leaked third report should serve as a wake-up call to nations taking part in the Paris Agreement, whose main objective is to keep global temperature rise below 2°C.

Without deep reductions in greenhouse gas emissions, particularly from wealthier nations, global temperature rise will exceed that threshold. Carbon in the atmosphere has been rising steadily and is currently at an all-time high. It’s time for governments and large corporations to innovate and take-action to drastically reduce emissions to avoid the devasting consequences of further warming.

Jimin Kim Communications Assistant

This is a part of the AEC Blog series

No Idling Allowed: Electric Vehicle Policies and Development

Filmmaker and environmentalist Chris Paine’s Who Killed the Electric Car?—a retrospective documentary released in 2006 on the rise and, at the time, fall of the electric vehicle (EV) industry in the early 2000s—raised some controversial points that are still relevant to today’s EV market. Paine makes the claim that General Motors, one of the largest car manufacturers in the country, intentionally sabotaged its original EV model, the EV1, out of fear of market repercussions. General Motor’s main argument for discontinuing the EV1 was a common myth in the automobile industry: Low customer demand for all-electric vehicles make EVs a “worthless” niche to pursue as a company. But what if producers had an incentive to expand manufacturing to include EVs?

Soon after President Biden took office, he signed an executive order to replace all government vehicles (include USPS) with electric vehicles. Since then, President Biden has made efforts to increase electric vehicle charging infrastructure with large funding opportunities from the Department of Energy, among other government agencies. In the last month, President Biden pitched his $174 billion EV proposal in the heart of the car manufacturing industry in the United States—Michigan. In addition, Senate passed a $3.5 trillion budget framework on August 11, 2021, that includes funding to make EVs more affordable for consumers, including a public charging network and financial incentives.

Lowering greenhouse gas emissions relies not only on making EV charging infrastructure available but also on getting more EVs on the road. Consumer Reports analyzed EV production plans by vehicle producer, including big names like Ford Motor Company, Volvo, Honda, and General Motors. Among its findings: Jaguar plans to be all-electric by 2025, the United Kingdom will ban diesel- and gas-powered cars affective 2030, and General Motors will become completely carbon neutral by 2040. Individual companies setting targets, however, will not be enough for a timely fleet turnover—the International Energy Agency determined that governments will need to accelerate decarbonization policies to meet their climate goals, which will involve extensive upgrades to the transportation sector.

While EVs make up 4.6 percent of car sales around the world, and more than 20 countries have electrification targets or planned bans on internal combustion engines, in the United States there are no federal targets for EV sales. Instead, states have taken the lead and incentivize businesses and consumers to make the switch from conventional internal combustion engines to hybrid and battery-operated EVs. As consumer demand for EVs increases over time, auto manufacturers must abandon the idea of EVs being a “small niche market” to promote turnover of combustion engines, facilitate meeting climate goals, and to achieve the target of half of all new domestic vehicle sales being electric by the end of this decade.

Sagal
Alisalad
Assistant Researcher

Myisha Majumder
Research Assistant

This is a part of the AEC Blog series

Gas Utilities Explore Hydrogen as a Decarbonization Strategy

To meet state and local climate goals, gas utilities across the United States are looking towards alternative fuel sources such as hydrogen and biogas—also referred to as renewable natural gas (RNG)—to decarbonize their future gas supply. Along with maximizing energy efficiency and making further investments in gas infrastructure, recent planning documents from gas utilities like National Grid and Washington Gas highlight a shift towards low and zero-carbon fuels such as RNG and hydrogen.

Hydrogen is not an energy source itself; it is an energy carrier. There are several types, or “colors”, of hydrogen that are distinguished by the energy source and process used to produce it. “Green” hydrogen—which is produced through electrolysis of water using electricity from renewable sources such as wind or solar—releases zero greenhouse gas emissions when burned for energy. Green hydrogen itself is not a zero-emission fuel source: If leaked directly into the atmosphere green hydrogen is an indirect greenhouse gas and its combustion has been found to emit nitrogen oxides (NOx), which is a criteria air pollutant. Since it can be mixed with fossil-sourced gas, green hydrogen is attractive to gas utilities who want to continue to use their existing gas pipelines while attempting to comply with climate mandates.

Several economic, technical, and infrastructure barriers stand in the way of using green hydrogen in decarbonization:

Green hydrogen is more expensive than its dirtier counterparts (e.g., hydrogen made using fossil fuels), fossil fuels themselves, and grid electricity.
Hydrogen production is inefficient. The International Renewable Energy Agency estimates that 30 to 35 percent of its energy is lost during electrolysis.
Hydrogen poses a risk to public safety. Hydrogen molecules are more likely to leak through pipeline imperfections and escape existing gas pipelines; hydrogen can also degrade the materials used for pipelines.
Due to insufficient infrastructure, and regardless of demand, hydrogen could only be injected into existing gas pipelines to make up 5 to 15 percent of total gas volume.

Even if these barriers could be overcome, an important question remains: Is the production of green hydrogen the best use of renewable resources?

Electrification, or the replacement of fossil-fuel dependent technologies (like gas and oil heating systems or gasoline-powered motor vehicles) with those that rely on electricity, is an alternative decarbonization method gaining traction across the United States. When sourced from renewables, heating our homes with electricity rather than gas or gas mixed with hydrogen, can significantly reduce emissions without the safety concerns of piped gas and costly infrastructure upgrades needed to make hydrogen work.

As the United States works towards electrifying sectors throughout the economy, the demand for electricity, and subsequently the demand for renewables, will rise. The use of green hydrogen as energy storage in time periods when the supply of renewables exceeds electric demand may be a viable option worth comparing to other storage technologies, but maintaining and improving costly gas delivery infrastructure is far less likely to make sense economically or socially.

Tanya Stasio Researcher

Joshua Castigliego Researcher

This is a part of the AEC Blog series

A Better Way to Finance Decarbonization

Congress is currently debating the fate of President Biden’s twin infrastructure packages. One proposal—the fate of which remains to be determined—is the $300 billion in so-called “Clean Energy Tax Credits” over ten years. That provision alone would be the one of the largest single green appropriations in U.S. history. However, it is not nearly enough to meet the challenge of decarbonization. A relatively conservative estimate by University of Massachusetts-Amherst economist Robert Pollin suggests the United States would need to invest 2 percent of economic output per year in decarbonization efforts from both private and public sources between now and 2050 in order to limit temperature increases to 1.5° Celsius above pre-industrial levels. That is over $400 billion in 2021 alone. And that pace would have to continue every year regardless of who the President is or which party controls Congress.

Raising this money through congressional appropriation is not promising. In the 2010s, multiple government shutdowns occurred because a divided Congress could not pass budget bills. Climate policy in the United States is uniquely vulnerable to rapid swings between administrations that deny and recognize climate change. And a combination of harsh budget rules and an insistence that investment packages be paid dollar-for-dollar in tax increases or spending cuts disadvantages large increases in public spending. Finally, the Senate in particular can only pass a limited number of spending bills with a simple majority of 51 senators; all other legislation require a supermajority of 60 Senators to agree before a bill can move forward.

The situation is not, however, hopeless. The federal government has tools to ensure significant on decarbonization even if Congress does not act every year. In a previous post, I argued for green banks which could raise private funds with a small amount of public capital. Congress could also make green spending “mandatory,” which would automatically authorize the federal government to spend money on designated climate programs. This tool is successfully used for other critical programs like Social Security and Medicare and protects the spending Congress does authorize from future volatility in the budget process. Finally, the Federal Reserve could extend a permanent credit line to states, municipalities, and regional agencies that issue “green bonds.” The Federal Reserve would agree to purchase any bonds that private investors do not at prices that would ensure low interest rates to issuers. If the terms are not generous, local governments will not take up the offer, as we saw with the Fed’s Municipal Liquidity Facility during the pandemic. In addition, such a scheme would require a “green ratings” agency or process to protect against greenwashing.

If done strategically, these tools could ensure hundreds of billions—even trillions—of dollars are reliably spent on decarbonization each year. The United States could exceed its own green spending targets and invest in additional capacity to help other countries decarbonize faster. But to do that, policymakers and activists have to think strategically about green finance. Too many excellent climate programs rely too much on congressional appropriation—a process that gives fossil fuel interests an annual opportunity to scuttle progress, too easily results in vetoes of ambitious spending plans, or unnecessarily conditions them on tax increases. These proposals also fail to consider how rare it is for the Presidency and both houses of Congress to be controlled by the same party. When progress does become possible in Congress, it happens in sudden waves like the Obama-era Recovery Act or the Biden-era American Jobs Plan. Despite the size of these spending bills, their green provisions are too small relative to what is necessary to meet climate targets. Decarbonization is too important for that. Institutions that sustain high levels of green investment independently of Congress are the solution.

Chirag Lala Researcher

This is a part of the AEC Blog series

Atmospheric Carbon Continues to Climb

Sixty-three years ago, scientists began measuring the concentration of carbon dioxide in the atmosphere at a weather station perched atop the approximately 13,700-foot Mauna Loa volcano in Hawaii—daily measurements that have continued ever since. The Mauna Loa Observatory record of carbon dioxide measurements are called the “Keeling Curve” (see chart below), which is named after Charles David Keeling, the scientist who began tracking carbon dioxide levels at Mauna Loa in 1958. The Keeling Curve serves as a global benchmark for atmospheric carbon levels steady march upward.

The adoption of the Paris Climate Agreement, emission reduction pledges by governments and private companies, the COVID-19 pandemic: none of these recent impacts on global emissions is yet visible in the Keeling Curve, and emission reductions on this relatively small scale may not be enough to slow down rising atmosphere concentrations. Atmospheric carbon levels in 2021 are approaching 420 parts per million, the highest since measurements began more than 60 years ago. The last time concentrations were this high was between 4.1 and 4.5 million years ago, when sea level was about 78 feet higher than it is today and the average global temperature was about 7°Fahrenheit (F) warmer than pre-industrial temperatures (for reference, observed global warming to-date is about 1°Celsius (C) or 1.8° F above pre-industrial temperatures).

Despite decades of climate negotiations, despite climate commitments from the public and private sectors, despite an unprecedented global pandemic, despite the increased occurrence of, and increasingly extreme, weather events around the world (see image below from Verviers, Belgium after heavy rains and floods across western Europe in July 2021)—growth in atmospheric carbon concentrations has not slowed, stopped or reversed.

The scale of action needed is daunting: to limit global warming to no more than 1.5°C (the threshold required by the Paris Climate Agreement), global carbon emissions need to fall off a cliff (see chart below, reproduced from Carbon Brief).

As of 2019, global emissions would need to fall by about 15 percent per year through 2040 to reach the 1.5°C target. Every year that passes without a decline in global carbon emissions serves to increase the rate at which emissions must decline to have any hope of achieve the 1.5°C target. There is no time to waste—immediate drastic action must be taken to reduce global emissions. Fortunately, we already have many of the tools and technologies needed to do so, like renewable wind and solar.

Dr. Bryndis Woods Senior Researcher

This is a part of the AEC Blog series

The Urban Heat Island Effect and Equity

A recent study published in Nature Communications found that Black, Indigenous, and People of Color (BIPOC) are disproportionately in census tracts with higher heat island intensity. Heat islands are defined as areas that experience higher temperatures than the surrounding areas. This is often in urbanized areas with large infrastructure, like buildings and roads, that lead to an increased sunlight intensity. In contrast, areas that are more suburban or rural have more green space, which helps with cooling temperatures.

Bloomberg’s CityLab reported that access to green space in cities is directly related to income and higher education, both of which are, in turn, associated with an increase in green space. The Nature Communications study found that in 169 of the 175 urban areas analyzed disparities in heat island effects were dependent on race. A higher exposure to heat leads to drastic health outcome, which already disproportionately impact marginalized communities. Heat impacts pre-existing conditions, like heart and lung disease, diabetes, and asthma.

In the hottest parts of Boston and its adjacent cities (Chelsea, Everett, and Somerville), daily temperatures can be 20 to 50 degrees hotter than nearby suburban areas that have more tree and vegetation coverage—like Melrose, Arlington, Newton, and Brookline. Building colors and types of infrastructure also play a major role in the heat island effect: dense urban areas with an aging housing stock and multi-story buildings, often made of brick and stone, retain heat collected throughout the day. While replacing asphalt with rubberized surfaces on children’s playgrounds is beneficial in preventing injury, black or dark blue playground surfaces can heat up to about 96 degrees on a sunny day in the mid-70s. While some cities are investing in long-term cooling plans, there are some setbacks. For instance, the City of Chelsea planted 2,000 trees between 2013 and 2017, but roughly 30 percent of the trees died within a year of planting. This is partially due to methane gas distribution system leaks nearby the affected trees.

Urban heat islands are often a result of racist systemic practices, such as redlining (where neighborhoods and communities are denied services as a result of racially discriminatory practices) and underfunding of marginalized communities. A study in the journal Climate found that 94 percent of the cities studied had higher land-surface temperatures in formerly redlined areas compared to non-redlined areas. To this day, Boston is still quite segregated, and like other cities in the United States, urban heat islands are strongly correlated with public disinvestment and systemic racism.

Sagal
Alisalad
Research Assistant

Myisha Majumder
Research Assistant

This is a part of the AEC Blog series

Repeating History: 'Climate Injustice’ in United States

In 1995, a heatwave in Chicago in July killed more than 700 people in five days—the most devastating climate disaster in Illinois history. State authorities explained that the high fatality rate was due to an inadequate local heat warning system, lack of ambulance services, and an aging population in urban areas. Analysis by Eric Klinenberg, author of Heat Wave: A Social Autopsy of Disaster in Chicago, however, points to causes more closely related to social equity. Klinenberg’s map of heat-related deaths in Chicago matches the distribution of poverty and urban abandonment. The 2018 documentary film, Cooked: Survival by Zip Code highlights a surprisingly close correlation between heat wave deaths and areas that are food deserts and have a high incidence of gun-related crimes, diabetes, breast cancer, unemployment, and heart disease, and low high school completion rates.

Chicago’s social disaster of 25 years ago is still repeating itself today. According to a recent study published in the journal Nature Communications, heat stress—a significant risk to public health—is unequally distributed across income groups in major U.S. cities. More people of color live in places with little green space and lots of driveways, buildings, and blacktop.

Due to the urban heat islands effect, cities with more than a million people are about 1.8-5.4°F (1-3°C) warmer than average and in the evening, cities can be 22°F(12°C) warmer than the surrounding areas. Humid regions and cities with denser populations experience the most significant temperature differences. Urban heat islands form as a result of several factors: 1) Hard, dry surfaces like sidewalks and roofs in urban areas provide less shade and moisture than natural landscapes; 2) heat is generated from human activities such as vehicles, A/C, and industrial facilities; and 3) the spacing of buildings influences wind flow and release solar energy. The urban heat island effect is not just about temperature but more about human health, well-being and quality of life. Dense residential areas and industrial zones paved with asphalt absorb and radiate solar energy while large parks and green spaces cool down the surrounding areas.

According to the joint research by NPR and University of Maryland’s Howard Center, three-quarters of the 97 most populous U.S. cities show that areas with higher temperatures were more impoverished. In other words, low-income households in large cities are more exposed to heatwaves than wealthier households as global warming accelerates. The heat mapping project at Portland State University also shows that the temperature can vary as much as 20°F across different parts of the same city. For example, in Baltimore, rowhouse areas where many low-income families live are hotter, and the residential regions around parks are relatively cool, resulting in a temperature difference of more than 10°F (see Figure 1).

Measures to reduce climate injustices associated with urban heat islands are a growing area of urban policy and planning. Baltimore’ ‘B’more Cool’ project, launched in 2014, works to improve our understanding of urban heat islands and identify ways to reduce their impacts. With the collaboration of scientists, urban designers, city officials and local community groups, Baltimore has installed cool roofs, replaced vacant lot spaces with community green spaces, and opened more cooling centers to improve community resilience. Washington D.C. has a goal to cover 40 percent of the city with the tree canopy and the Portland city council has proposed new requirements to limit the amount of pavement and asphalt-covered area. Although programs like these will take some time to reduce urban heat island impacts, their existence is a positive step towards addressing critical social equity concerns.

Jimin Kim Communications Assistant

This is a part of the AEC Blog series

The Inequality of FEMA Aid

As the world’s temperatures rise, extreme climate events like severe heat, wildfires, and flooding, are occurring more frequently. These events can have a devastating and costly impact on the communities affected.

The purpose of the Federal Emergency Management Agency (FEMA) is to help communities hard hit by disaster by providing aid to rebuild and prevent future damages. Unfortunately, a 2019 NPR investigation revealed that the federal disaster aid disbursed by FEMA disproportionately favors the white and wealthy, regardless of need.

The investigation found that after a disaster Black households’ wealth declined on average while white residents grew wealthier. Part of the reason behind this disparity lies in FEMA’s cost-benefit calculations, which are designed to minimize taxpayer risk. Residents that own their own homes receive more aid, residents that have high incomes can claim substantial tax refunds from the IRS (while the lowest incomes families can claim nothing at all), and residents that have good credit are more likely to secure loans to rebuild. What happens next is a faster recovery for affluent neighborhoods and a sluggish recovery for communities in need.

In addition, programs like the FEMA buyout program, provide opportunities specifically for homeowners. The buyout program allows homeowners to volunteer to sell their homes to FEMA: providing them with funds to relocate. FEMA then converts the land for use in reducing future disaster risk (e.g., creating a green space to reduce flood risk). These buyouts are awarded in predominately white neighborhoods where more families own their homes.

Low-income and communities of color face a disproportionate burden when it comes to the impacts of climate change. Aid from organizations and agencies like FEMA should be designed to help the communities that need it most. Federal policy can exacerbate existing wealth and race disparities in the United States, or it can help to right historical wrongs. Including equity considerations in aid calculations will balance the scales and ensure that the communities that are hardest hit by extreme climate events receive their fair share of aid, regardless of their income, credit background, or property-ownership status.

Tanya Stasio Research Assistant

This is a part of the AEC Blog series

Energy efficiency is not a “dwindling” resource

A 2018 paper by Amory Lovins at the Rocky Mountain Institute argues that economic models wrongly identify “energy efficiency”—using less energy to power the same activities—as a limited and dwindling resource. Current models assume that once a certain amount of energy saving is achieved, the potential for further savings diminishes. It is a common misconception that remaining energy savings can only be achieved at ever high costs when in fact there remain ample opportunities for energy efficiency and peak reduction in homes and offices, through both passive and active measures.

Lovins argues that the premise of dwindling energy efficiency is mistaken on two counts. First, additional savings from energy efficiency do not have to come just from new products like better air conditioners. Additional savings can come from “artfully choosing, combining, sequencing, and timing fewer and simpler widgets to achieve bigger savings and more co-benefits.” This approach—which Lovins dubs “integrative design”—is also cheaper.

Lovins offers numerous examples of the integrative approach in action for buildings:

Timing deep retrofits to coincide with planned renovations of HVAC systems and glazing can achieve larger savings with smaller capital expenditures.
Buildings can achieve greater energy savings without additional technologies being purchased if they optimize daylighting, airflow, heat transfer, and other similar factors.
A 2013 paper by L.D. Danny Harvey at the University of Toronto found that meeting the Passive House Standard—which sets temperature, load, and comfort standards on buildings—achieves a reduction in heating load by a factor of 5 to 10 for an additional cost that ranges from 0 to16 percent of the construction costs of a reference building.

Apart from Lovins’ examples of more passive measures, there is substantial untapped savings from more aggressive building retrofits. The American Council for an Energy-Efficient Economy (ACEEE) argues for mandatory building performance standards as a powerful policy tool for energy and emission reductions. ACEEE states that given the current pace of energy efficiency upgrades, it will take more than 500 years to retrofit all U.S. housing and more than 60 years to retrofit commercial buildings. It offers several examples of building performance standards that have been successfully implemented—including in Tokyo, Japan and Boulder, Colorado.

A recent study released by the U.S. Department of Energy (DOE) lays out a policy framework for buildings to actively interact with the electric grid through smart technology, and thus reduce energy usage and shift demand away from peak hours. The study incorporates passive and active measures. One example is shifting demand by having grid-connected water heaters pre-heat during off-peak hours. DOE also recommends that building codes should be adapted to incorporate such demand-shifting measures and facilitate these types of communication between buildings and the grid.

In addition to updating regulations and building codes, policymakers can alter fiscal rules to institutionalize regular active and passive efficiency upgrades as a key goal of public investment and procurement. One possibility is to allow public spending on efficiency upgrades to proceed without offsetting increases in tax rates since the benefit of that spending is a reduction in future

Chirag Lala Research Assistant

Tyler Comings
Senior Researcher

This is a part of the AEC Blog series

Energy efficiency: The Key to Growth and Climate Stabilization

Can economic output (called “gross domestic product” or GDP) and population continue to increase while greenhouse gas emissions fall? This phenomenon is known as “absolute decoupling”—economic growth is “decoupled” or operating separately from emissions growth—and is a difficult goal. Most countries have achieved the more modest goal of “relative decoupling,” in which GHG emissions grow more slowly than GDP or population growth. Global emissions likely peaked in 2019, but will need to fall by a consistent 6 percent per year (or more) until 2050 to successfully limit warming to just 2° Celsius. (Limiting warming to 1.5°C would require 10 percent emission reductions per year.) The United States’ emissions peaked in 2007; since then, annual emissions have been lower even as GDP grew (absolute decoupling). But the United States still sees occasional increases in emissions from one year to the next even if total emissions has stayed below 2007 levels.

To offset the nation’s own historical contribution to atmospheric greenhouse gas levels, the United States needs to accelerate the annual pace of emissions reductions and to make time for lower and middle-income countries to invest in steep reductions of their own.

Investments in reducing global energy use are a critical part of making both global and U.S. emissions reductions happen. Energy efficiency improvements reduce the amount of energy required to do the same activity (energy efficiency is not the same as energy conservation, which involves cutting back on activities or consumption). Energy efficiency improvements permit economic growth to continue while energy use and emissions decline. Between 1980 and 2014, U.S. GDP grew by 149 percent, while energy usage only grew by 26 percent. Data from the U.S. Energy Information Administration show that U.S. energy consumed per dollar of GDP fell consistently over the past two decades and projections suggest that it will likely continue to fall.

Globally, GDP rose 84% from 2000 – 2017, while energy usage only rose 38 percent; 40 percent of the energy saved came from using less fossil fuels for power generation while the rest came from reductions in energy requirements for final uses. The energy savings from reduced coal and gas use both equaled 10 percent of 2017 global demand for coal and gas respectively.

Further energy efficiency improvements could build on this global relative decoupling of energy use and GDP. As shown in this figure from a paper in the Journal of Energy and Environmental Science, energy efficiency (top left in light grey) reduces energy demand, meaning less new renewable generation is needed to produce 100 percent of electric demand. As energy consumption declines, fossil fuel generation will retire.

A joint-study by the Center for American Progress and the Political Economy Research Institute argued that it is possible to lower U.S. energy consumption to 30 percent of 2010 levels in 20 years, all while continuing economic and population growth. Similarly, the American Council for an Energy Efficiency Economy estimated in 2015 that large and cost effective energy efficiency improvements could reduce energy usage by 40-60 percent relative to current forecasts. The United States also has a higher energy use per dollar of GDP than most European countries, which suggests additional room for improvement using existing technologies. Policies to implement these reductions are an important part of any serious climate strategy.

Chirag Lala Research Assistant

This is a part of the AEC Blog series

The "Colors" of Hydrogen

The appropriate role of hydrogen in achieving global climate goals—especially in hard to decarbonize sectors—is an important area for consideration in today’s climate plans. Although hydrogen itself is a zero-emission fuel, it can result in substantial upstream greenhouse gas emissions depending on the method used to produce it.

Hydrogen is an energy carrier, not an energy source. Hydrogen is produced from an energy source through various processes such as electrolysis, steam methane reformation, or gasification using either fossil fuels directly or electricity produced from renewables, fossil fuels or nuclear. Not all methods of hydrogen production are equal when it comes to climate impacts. Several categorization systems exist to distinguish between hydrogens made from different fuel and electric sources. For example, the North American Council for Freight Efficiency (NACFE) categorizes hydrogen into different “colors” based on initial energy source and production process.

A 2018 policy briefing from the Royal Society reports that about 95 percent of global hydrogen production is sourced from fossil fuels including:

Grey hydrogen extracted from gas using steam methane reformation,
Brown/black hydrogen extracted from coal using gasification.

Other types of hydrogen are starting to gain traction as various industries work to decarbonize, such as:

Green hydrogen produced by electrolysis of water, using electricity from renewable sources such as wind or solar resulting in zero carbon emissions, and
Blue hydrogen produced from fossil fuels (i.e., grey, black, or brown hydrogen) where carbon dioxide is captured and either stored or repurposed.

The industry group that promotes hydrogen use produced a study suggests that a combination of green and blue hydrogen can meet the world’s hydrogen demand and be cost competitive compared to grey hydrogen (fossil gas derived hydrogen) by 2035.

Utilities across the United States (and around the world) claim that green hydrogen has an important role in decarbonizing their future gas supply and meet local and state climate goals. In theory, hydrogen could be injected into existing gas pipelines to make up a small percentage—5 to 15 percent—of the total gas volume.

The U.S. Congressional Research Service has found that major infrastructure upgrades will be needed before we see a higher share of hydrogen blended with conventional gas. Hydrogen molecules are smaller than methane and therefore more likely to leak through pipe imperfections and even permeate gas pipelines; hydrogen can also eat away at common materials used for gas pipelines.

Hydrogen may have a role in a decarbonized future, but there are substantial technological and infrastructure challenges to its use in heating and providing electricity. Hard to decarbonize processes or sectors (e.g., transportation, high-heat industrial equipment, etc.) may benefit the most from utilizing hydrogen to achieve greenhouse gas reductions.

Joshua Castigliego Researcher

Tanya Stasio Research Assistant

This is a part of the AEC Blog series

What role does “renewable natural gas” have in a clean energy future?

“Renewable natural gas” (also known as RNG, methane gas, or biogas) is used as a strategy by gas utilities to avoid closure due to the state and local carbon neutrality goals. While landfill RNG collection projects are becoming more common across the United States, RNG is, at best, a temporary solution to achieving emission reductions, and at worst results in environmental harms that could offset the benefits of reduced fossil fuel use. The focus for emission reduction plans should be placed squarely on electrification paired with renewable electric generation.

RNG is a gaseous byproduct of decomposing organic matter and can be used to fuel vehicles or generate electricity and heat. For years RNG, primarily from landfills, livestock operations and wastewater treatment, has been used to produce small amounts of electricity. More recently, large-scale landfill RNG projects used to supplement conventional gas have become more prevalent.

Although RNG extracted from landfills has the potential to lower greenhouse gas emissions, landfill RNG potential isn’t sufficient to produce enough biofuels to substitute for fossil fuels. The technical potential for U.S. landfill gas is 1 Bcf per day (two-thirds of the total RNG potential in the United States), which is insignificant compared to the current U.S. gas consumption of 82.9 Bcf per day. Landfill RNG would need to be supplemented with RNG extracted from dedicated farmland. A paper published by Yale Economics concluded that the large-scale and destructive agricultural expansion needed to produce farmland RNG could negate its environmental benefits by endangering the forests it replaces. Farmland RNG production also requires a large amount of freshwater use, and a study published in Ecological Economics found that farmland RNG expansion would require freshwater needed for food production. These negative environmental impacts have the potential to offset the benefits of landfill and livestock RNG (preventing manure runoff into water supplies, reducing methane emissions). Despite these drawbacks, RNG is promoted by gas utilities as a viable alternative to electrification because of its purported ability to reduce emissions while keeping gas utilities’ business model alive.

The electric grid must transition to zero-emission sources like wind, solar, and hydro to reach 2050 emission targets without the negative land-use impacts that come with farmland RNG production expansion. A study from UC Davis found the total RNG potential in California could only provide 4.1 percent of the state’s conventional gas demand, meaning RNG cannot replace gas without importing substantial materials from out of state. A report from the Union of Concerned Scientists came to a similar conclusion for both California and the United States with regard to RNG transportation fuel..

Renewables like wind and solar are among the cheapest energy sources, making them the focal point of renewable energy infrastructure planning. There is little potential for RNG to reduce emissions at the same cost and scale as electrification resources.

Eliandro Tavares Assistant Researcher

This is a part of the AEC Blog series

Juneteenth – Continued Support for Racial Justice

Last year, during the height of a pandemic that disproportionately impacted marginalized populations, a wave of calls and actions against racial inequity was renewed. AEC stood in solidarity with demands for racial justice then and continues to do so now. Though the movement has sustained momentum, it is imperative that we recognize not only the continued injustices committed in the last year, but that these injustices have deep systemic roots.

Juneteenth, a holiday marking the official emancipation of slaves on June 19, 1865, was declared a state holiday in Massachusetts last year, after widespread calls for concrete recognition. Other states had done the same prior to 2020, including Hawaii, North Dakota, and South Dakota. Beyond this, many private corporations have incorporated Juneteenth into their calendar, either through giving a day off or taking a moment of pause to recognize the painful racial history of the United States.

Environmental justice and racial justice go hand in hand. Black communities disproportionately suffer from several environmental harms including proximity to industrial facilities, power plants, and hazardous sites, exposure to emissions, and the effects of natural disasters. Due to these disparities, the Environmental Justice Movement is rooted in black history.

This Juneteenth, we at AEC want to recognize the Black Americans that are fighting for environmental justice across the United States. A recent web article by the global environmental organizing campaign Greenpeace calls out eight Black activists and their organizations for their work fighting environmental injustices:

· Savonala “Savi” Horne: Executive Director of the Land Loss Prevention Project, an organization that provides legal assistance to Black farmers and landowners in North Carolina in danger of losing their land.

· Chantel Johnson: Founder of Off Grid in Color (OGIC), an organization that fosters self-sufficiency in communities of color.

· Tanya Fields: Founder of the Black Feminist Project which centers on food justice, and economic development for underserved woman and youth of color.

· Rue Mapp: Founder of Outdoor Afro, Rue works to provide Black communities with opportunities to connect with nature and the black history tied to natural areas in the United States.

· Christopher Bradshaw: Founder of Dreaming Out Loud, an organization that strives to improve economic opportunity and access to education and a healthy environment for marginalized communities.

· Peggy Shepard: Co-Founder of WE ACT for Environmental Justice which addresses environmental protection and environmental health policy, particularly for low-income communities and communities of color.

· Jeaninne Kayembe: Co-Founder of The Urban Creators, an organization that utilizes food, art, and education to nurture resilience in the local community.

· Omar Freilla: Founder of Green Worker Cooperatives, Omar works with worker-owned green businesses to support the local economy while prioritizing democracy and environmental justice.

Our thanks to these activists and to BIPOC-led organizations for driving campaigns to depend environmental resources and the human communities that live in and rely on them. For more resources on the intersection of equity, race, the BLM Movement, and the environment, visit our resources page.

Tanya Stasio Research Assistant

Myisha Majumder
Research Assistant

This is a part of the AEC Blog series

Climate Models and Full Employment

As climate change increasingly becomes part of the public consciousness, so too do debates about the cost of reducing greenhouse gas emissions. Economists run models to determine the social cost of carbon, which represents the economic damage caused by an additional ton of carbon dioxide emissions. For example, if the social cost of carbon is $30 per ton of carbon dioxide emissions, society should be willing to spend that much money to not emit an additional ton and avoid those damages

But this type of analysis has a major limitation. Climate economic models typically use an assumption called “full employment”: every dollar spent on investments to combat climate change takes a dollar away from spending on other priorities, like consumption. This is made explicit in the climate models that inform the U.S. government’s estimates of the social cost of carbon, including the DICE model by William Nordhaus.

The assumption of a hard tradeoff between investment and present-day consumption is a long-standing feature of many macroeconomic models. ”Full employment” assumes that all workers are employed, and all factories are running at full capacity. But we know from recent experience that full employment of the labor force, factories, and other workplaces is not a given in the United States and around the world. Following the Great Recession of 2007-2009, U.S. unemployment exploded and stayed at elevated levels for nearly a decade. During the COVID-19 pandemic, unemployment skyrocketed to unprecedented levels. Workers who were ready and able to work—remotely or in-person—could not find jobs and many dropped out of the labor force entirely. Women’s labor force participation plummeted during the pandemic. The prime-age employment to population ratio, a measure of labor market health, has never returned to the high (i.e. healthy) levels last seen in 2000. the economy can go and has gone for decades without ever hitting full employment.

To make matters worse, under conditions of high unemployment businesses will forgo crucial investments when they lose confidence that consumers will be able to buy their products. When this happens, additional public investment spending on renewable generation Isn’t the tradeoff imagined in climate economics models: either green investment or consumer spending. Instead, the green investment gives jobs to workers that might otherwise lack them (and these workers have money to spend at other businesses), brings idle capacity online, and incents the private sector to increase its own investments in renewables, energy storage, and efficiency measures.

The climate models calculating the U.S. government’s social cost of carbon understand climate investment to be a bad thing, a sacrifice that hurts people’s standard of living. In an economy like ours that has plenty of room to grow, climate investment is a promising source of jobs, technological change, and revitalized communities. Governments should incorporate that understanding when they calculate the SCC and recognize that failing to act means depriving the economy of economic growth. That is a cost of climate inaction too.

Chirag Lala Research Assistant

This is a part of the AEC Blog series

The Dirty Truth: Green Washing

Earlier this year, Sierra Club released ‘The Dirty Truth About Utility Climate Pledge’, describing many utility climate pledges as ‘greenwashing’ after analyzing 50 companies’ plans to retire coal, stop constructing new gas plants, and build new clean energy. According to the Sierra Club, most of these climate plans were designed to mollify the public instead of reducing carbon emissions.

Greenwashing’s aim is to make people believe that the company is doing more to protect the environment than it really is. The term ‘greenwashing’ was initially coined in 1986 by environmentalist Jay Westervel who argued that the hotel industry promoted reusing towels as an eco-friendly strategy when, in fact, it was a cost-saving measure. As more consumers become environmentally conscious, greenwashing is becoming a widespread phenomenon across many industries.

Image Source: Sierra Club, The Dirty Truth About Utility Climate Pledges — Image Source: Sierra Club, *The Dirty Truth About Utility Climate Pledges*

In the financial sector, green bonds and green funds are issued by companies claiming to be eco-friendly. For example, ESG (Environmental, Social, and Governance) funds are portfolios investing in companies that aim to have eco-friendly, sustainable, and social impacts in the world. However, six of the 20 largest ESG funds have invested in ExxonMobil, the largest U.S. oil firm. Two of these funds own stakes in Aramco (a Saudi Arabian oil company) and one holds shares in a Chinese coal-mining company. ESG funds, marketed as investing in sustainability and the environment, have substantial investments in fossil fuels and other business interests with negative environmental impacts.

In April, New York City filed a lawsuit against Exxon, BP, Shell, and the American Petroleum Institute for attempting to influence customers to think their companies’ actions are not harmful to the environment when they have actually worsened the climate crisis. The lawsuit states that one Shell online campaign describing the company as using cleaner energy solutions is defrauding because it doesn’t mention the company’s main business, fossil fuel extraction, and development.

Greenwashing is also a prevalent practice in the food and farming industry. PETA helped consumers to file a lawsuit in federal court against Vital Farms, a leading seller of pasture-raised eggs and poultry. Consumers suing the farm state that, “Vital Farms is no different from factory poultry except that the chickens are fed grass instead of feed. Male chicks are slaughtered and hens are debeaked for egg production.” According to PETA, Vital Farms is deceiving consumers and investors while selling its products at a much higher price than regular eggs.

Sierra Club’s “Dirty Truth” report suggests three ways to reach meaningful climate goals: (1) be legally binding; (2) apply to all subsidiary companies; and (3) include a short-term target by 2030. Last year the EU prepared a draft taxonomy that defines and distinguishes environmentally sustainable economic activities. The taxonomy, so-called ‘Delegated Act’ can help to prevent greenwashing by classifying and labeling environmentally sustainable economic activities by industry. These definitions are expected to apply to EU companies starting in 2022.

In the United States, federal regulation of greenwashing is currently achieved in two ways: Regulating deceptive advertising through Section 5 of the FTCA (Federal Trade Commission Act); and private lawsuits enforcing the Lanham Act. The Biden administration is working on new measures to reduce and control greenwashing, such as creating new climate change units at Treasury Department, Federal Reserve, and the Securities and Exchange Commission.

Despite these legislative efforts to stop greenwashing, businesses’ desire for shortcuts and loopholes will persist. Companies that turn away from the truth and choose greenwashing, however, risk negative publicity and potential lawsuits when their actions are discovered.

Jimin Kim Communications Assistant

This is a part of the AEC Blog series

The New Hybrid Office: AEC’s Experience

With COVID restriction for offices largely lifted in Massachusetts, very low local and state-wide transmission rates, and very high vaccination rates, AEC is back in the office this week! The topic of how and why to operate a hybrid (work-from-home/work-in-the-office) workplace is a little far afield from AEC’s usual blog topics but is on our minds as members of our larger non-profit/consulting/energy/environment/EJ/equity community figure out how to transition back to something like normalcy after more than a year of working at home. So here are our thoughts and we’d love to hear yours:

Please chime in on Twitter, Facebook, and/or LinkedIn.

What we’ve been doing since March 2020: AEC’s office in Arlington MA closed on March 13, 2020. Since then, everyone has been working from home. A few people have been using the office (separately) a few days a week, just to get out of the house. During this time, we gained some new team practices and systems:

A Slack communication system for texting among staff members. We use this all the time, including to: check in when starting work in the morning, make quick requests and ask questions, chat with someone one-on-one, and chat with a specific project team.
Holding a morning Zoom call every weekday at 10 am. Everyone who is working that day (and can join) joins. There’s a little chit chat about who’s left the house recently, top news stories, etc., and then we check in about who needs tasks to do and who has tasks that need doing.
Including the entire staff (instead of just the more senior “professional” staff) in our weekly planning meetings. The research assistants have been a great addition to the meeting!
And, of course, we’ve been doing video conference calls with clients and colleagues. Lots and lots of video calls!

What’s our new plan starting this week: AEC’s offices reopened today on a hybrid plan. We're working to create a hybrid workplace to both (1) support staff’s need for flexibility to get quiet, focused time and also take care of family responsibilities and (2) recognize the value of face-to-face communication in our collaboration, teaching, and mentoring. Here's our plan as it currently stands:

Staff needs to be fully vaccinated to work in the office.
Anyone who is feeling sick, feels like they might get sick, or has a household member who’s feeling sick needs to work from home. No exceptions! We’re prioritizing keeping one another healthy and have added a hand-sanitizing station at the front door and re-fillable bottles on every desk. Staff are not required to wear masks, but visitors (who are very infrequent) are.
Each week will have: one “Office Day” where everyone comes into the office for staff meetings and trainings; one “Remote Day” where everyone works from home and inter-staff communications is kept at a lower level; and three “Choice Days” where staff can either come to the office or stay home (but everyone is asked to try to come in a least two days when possible).
We’re keeping our Slack channels, our morning meeting (including at home and in office participants, inviting the full staff to weekly staff meetings, and the practice of video conferencing with clients and colleagues often.

What’s your organization’s plan? We’d love to hear about it and share ideas about what works and what doesn’t. Send us a note! And good luck with the post-COVID transition!

Dr. Liz Stanton Director and Senior Economist

This is a part of the AEC Blog series

Royal Dutch Shell Ordered to Cut Emissions

Royal Dutch Shell, a global oil company based in Europe, is one of the most profitable and largest companies in the world. In early February 2021, Royal Dutch Shell announced an update to its net-zero emissions strategy, breaking down key goals and facts about the company, including that the Company’s total carbon emissions had peaked in 2018, along with oil production peaking in 2019. The net-zero emissions goal was announced in 2020, with a goal of achieving a 45 percent reduction by 2035 and carbon neutrality by 2050. The February update provided incremental targets to 2050, using 2016 as a base year. Other components to the update included increasing carbon, capture, and storage capacity and increasing carbon offsets, a measure our blog series has covered before.

In 2018, thousands of Dutch citizens, along with seven environmental and human rights organizations filed a case asking the Hague District Court to order Royal Dutch Shell to cut emissions in line the Paris Climate Agreement; Shell is responsible for about 1 percent of annual global emissions and invests heavily in oil and gas. Last week, the Court ordered that Royal Dutch Shell cut its net carbon emissions by 45 percent by 2030, compared to 2019 levels. The decision followed after the Court determined that Royal Dutch Shell’s current emission reduction plans were not sufficient; the ruling greatly speeds up Royal Dutch Shell’s public goals and makes them more concrete and actionable.

Not only did the ruling speed up the timeline for the company’s emissions reduction goal by 5 years, but it also changed the baseline year to 2019, likely requiring larger reductions than the original 2016 baseline.

The Court did not order any explicit steps towards achieve this goal, allowing Royal Dutch Shell freedom in planning its shifted pathway. Without rules to guide the Company in reaching the new goal, it is possible Royal Dutch Shell may exploit loopholes in the ruling. Despite this flexibility, Royal Dutch Shell noted its disappointment and intent to appeal the decision in a media announcement on the day of the ruling.

All in all, this unprecedented ruling sets the stage for future legal action against major polluters.

Tanya Stasio Research Assistant

Myisha Majumder
Research Assistant

This is a part of the AEC Blog series