On the Issues: Evolving Climate of Trade, Permitting Reform, and More

Matt Fleck, Hans Hirwa, and Elizabeth Wason

Twice a month, we’re compiling the most relevant news stories from diverse sources online, connecting the latest environmental and energy economics research to global current events, real-time public discourse, and policy decisions. Keep reading, and feel free to send us your feedback.

Here are some questions we’re asking and addressing with our research chops this week:

What climate policies could influence international trade agreements and the global trading system?

The European Free Trade Association (EFTA), a bloc comprising Iceland, Liechtenstein, Norway, and Switzerland, has inked a free trade agreement with India. Earlier this year, EFTA nations sidestepped a major development in international trade: the phase-in of an EU policy that imposes a fee on imported products based on the greenhouse gas emissions associated with those products. The policy aims to encourage emissions-reduction efforts abroad but has rankled some trade partners, including India. In a new blog post, Resources for the Future (RFF) scholars Milan Elkerbout, Katarina Nehrkorn, and Billy Pizer discuss how the global trading system can adapt to the increasing interest in policies that address both climate and trade, even if challenges may arise as policies are implemented. “These challenges are not cause for such policies to be avoided or abandoned, but policymakers may want to account for the impacts of these policies on trade partners or political partners, as well,” they say.

What options to speed up the development of clean energy production are on the table at the state and federal levels?

A bipartisan group of senators has proposed a new bill that would exempt developers of geothermal energy from undergoing environmental review for certain development activities. Environmental reviews that are mandated at the federal and state levels, along with other permitting protocols, have slowed the build-out of new clean energy projects and transmission lines. While some states are working to pass their own permitting reforms, the federal government could learn from previous attempts to streamline permitting, says RFF Visiting Fellow Arthur G. Fraas, who discusses in a recent blog post the length of federal environmental reviews and an initiative through the US Bureau of Land Management that aims to shorten timelines for the permitting of solar energy projects. “Two-thirds of the projects [that we studied] completed the formal [review process required by the National Environmental Policy Act] within 2 years,” says Fraas. “However, for more than half of the projects, a total of 7–10 years elapsed between an initial application for development and the beginning of operational status.”

How does the evolving definition of “waters of the United States” affect which US waterways are protected by the Clean Water Act?

This week, lawmakers in the US House of Representatives passed a bill that would revise the scope of several sections in the Clean Water Act. Potential revisions include a reduction of liability for firms that release contaminants which aren’t explicitly covered under existing permits. The Clean Water Act also was in the spotlight last summer, when, for the fourth time, the Supreme Court reinterpreted the definition of “waters of the United States” as referenced in the law. Past reinterpretations of waters of the United States have drastically changed what waterways and wetlands are protected under the Clean Water Act. RFF University Fellow Hannah Druckenmiller and Simon Greenhill, a PhD candidate at the University of California, Berkeley, joined the latest episode of the Resources Radio podcast to discuss a new machine learning model that can predict the extent of these changes in regulation under two interpretations that predate the Supreme Court’s most recent ruling. “We find that the rule change … deregulates about 35 million acres of wetlands,” Druckenmiller says. “That’s about the size of the state of Wisconsin.”

Evergreen Time Machine

RFF research from our archives offers historical background and possible solutions for the challenges in today’s news.

The US Securities and Exchange Commission needs to demonstrate not just factual support for a proposed rule that addresses a problem, but also its reasoning based on its understanding of the facts for preferring the course it adopts over alternatives raised in the comments, and furthermore why its choice is in the public interest.

James D. Cox, May 2022

The US Court of Appeals for the Fifth Circuit has paused a new rule issued by the US Securities and Exchange Commission (SEC) while lawsuits over the rule, in the Fifth Circuit and several other US courts, are under consideration. The new rule, which the SEC issued earlier this month, requires publicly traded firms to report certain greenhouse gas emissions and risks related to climate change that are associated with business operations. James D. Cox, a professor of law at Duke University, highlights the “sensible, conciliatory tone throughout” the final rule on a recent episode of the Resources Radio podcast. Cox and other experts discussed potential legal challenges to the rule that the SEC initially proposed in 2022 for an earlier installment of a special series on the Common Resources blog.

Expert Perspectives

Proposed Bill Would Encourage Efficiency Upgrades to Electric Transmission Lines

A group of US lawmakers have proposed a bill that would require the Federal Energy Regulatory Commission to encourage developers in bolstering the capacity of electric transmission lines. Specifically, the bill supports grid-enhancing technologies, which can help transmission lines carry more power and transfer electricity from energy sources that generate varying amounts of power, such as wind and solar.

“Grid-enhancing technologies are one of several solutions that can help support the US electric grid as we wait for new transmission lines, given that adding infrastructure can involve major obstacles in the planning and permitting stages,” says RFF Senior Research Associate Molly Robertson, who has written about the benefits of these types of solutions on the Common Resources blog. “The real-world constraints on a rapid build-out of new transmission lines prompts us to think about other kinds of innovations or creative solutions that could enable the decarbonization of the electric grid in the near term. My coauthors and I explore a range of possible investments and grid upgrades in a report that we published last year. We find that different investments can deliver unique benefits in terms of relieving congestion in the transmission system, serving demand for electricity, and increasing the reliability of electricity infrastructure.”

In Focus: New Federal Vehicle Emissions Standards

The US Environmental Protection Agency has issued a much-anticipated regulation to limit greenhouse gas emissions from cars and light-duty trucks. The rule, which likely will help increase sales of electric vehicles over the next five to seven years, may have implications for vehicle buyers and manufacturers. RFF Senior Fellow Joshua Linn shares his thoughts on who may benefit the most from these new standards in the latest In Focus video.

Resources Roundup

Global Energy Outlook 2024: Peaks or Plateaus?

Every year, RFF releases its annual Global Energy Outlook report, which synthesizes projections of global energy markets from leading organizations and corporations. On April 2, RFF will present findings from the report and host a panel discussion about the future of energy markets, climate trajectories, policy options, and US fossil fuel exports. In particular, the event will examine whether the consumption of fossil fuels will peak and then decline, or whether consumption will plateau and jeopardize global climate goals. RSVP to attend the event virtually or in person.

Cap-and-Invest Policies in New York State

New York State is in the process of implementing the Climate Leadership and Community Protection Act, a law passed in 2019 that directs the state to transition to a clean energy economy. The legislation includes a cap-and-invest program, which limits pollution from individual emitters by auctioning permits for emissions. However, some emitting facilities may acquire a high number of allowances, which can concentrate pollution in local communities. In a new report, RFF scholars, along with coauthors from the New York City Environmental Justice Alliance, analyze how certain guardrails on the cap-and-invest program can reduce both overall emissions in New York State and emissions near disadvantaged communities.

Carbon Prices and Politics in Washington State

A referendum in November in Washington State will determine whether the state’s carbon pricing system will stay intact or be repealed. In the state’s system, known as cap and trade, emitters buy and trade allowances that correspond to tons of greenhouse gas emissions, and a cap on emissions creates a market for allowances. In a new blog post, RFF Fellow Brian C. Prest identifies an interesting relationship between the referendum and the price of allowances in Washington State: as the odds increase that the cap-and-trade system will be repealed, the value decreases for emissions allowances. This decrease also could reduce gas prices, which the cap-and-trade system has driven up, “perhaps rendering the argument for repeal less salient to voters, which may in turn feed back and reduce the chance that the vote passes,” says Prest.

Addressing the Wildfire Crisis in the United States

Wildfires in the United States are becoming increasingly frequent and intense. These wildfires also are ramping up the risks for residential communities and ecosystems and challenging government capacity to mitigate wildfires across the country. In a recent blog post, RFF Senior Advisor Ann Bartuska discusses options for improving the mitigation and management of wildfires alongside coauthor Alex Beehler, the former Assistant Deputy Under Secretary of Defense for Environment, Safety, and Occupational Health. “Wildfire mitigation and management must become normalized at every level of government, especially in the current context of a changing climate and changing ecosystems,” say Bartuska and Beehler.

Comparing Investments in Clean Energy Technologies and Fossil Fuels

In recent years, prices of crude oil, natural gas, and coal in global markets have experienced large fluctuations, which has increased related risks and uncertainties for businesses and consumers. Investments in clean energy technologies often pose lower risks and uncertainties, according to a recent report by RFF Fellow Brian C. Prest and RFF Research Associate Jordan Wingenroth. While technologies like electric vehicles and renewable energy resources may cost more initially, these technologies may protect both investors and consumers from volatile fuel prices. “The projections we use feature a modest upward drift in fossil fuel prices over time with a relatively high degree of volatility, whereas wind power and electric vehicle prices are projected to gradually decline and exhibit more stability,” they say.

Addressing Overlapping Health Burdens in Communities

Non-white and low-income communities across the United States tend to be disproportionately vulnerable to overlapping sources of environmental pollution such as poor air quality and water contamination—a threat to public health known as “cumulative impacts.” Alleviating these cumulative impacts can help facilitate environmental justice. In a new journal article, RFF University Fellows Lucija Muehlenbachs and Lala Ma, along with their coauthors, compare methods of measuring these environmental burdens and illustrate how cumulative impacts are reflected in housing prices and mapping tools.

The DC Environmental Film Festival began this week in the nation’s capital. Venues across the city will screen over 40 films, including the award-winning documentary Wings of Dust (pictured above). The film follows an Indigenous Peruvian journalist who reports on mining activity that has polluted drinking water in his community. Also screening at the festival are King Coal, a documentary that explores the cultural significance of the coal industry in West Virginia and Appalachia, and First We Bombed New Mexico, which details the impacts of the first atomic bomb tests on communities in the state and the residents’ push for reparations. The festival runs through March 30.

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