On the Issues: Hydrogen Tax Credits, IPCC Report, and More

Matt Fleck, Maquelle Drummond, 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 trade-offs may be involved as governments accelerate the deployment of hydrogen in energy systems and the industrial sector?

Government investment in hydrogen continues. Germany has doubled its production goals for clean hydrogen, and the Netherlands plans to use wind energy to power a hydrogen production facility. The US Department of Energy has announced $750 million in funding to reduce the costs of producing low-carbon hydrogen; this effort includes improvements to electrolyzer technology, which converts water into usable hydrogen. Another US policy that aims to accelerate hydrogen deployment—a tax incentive for firms that produce clean hydrogen—may involve a trade-off, says Aaron Bergman, a fellow at Resources for the Future (RFF): faster deployment of hydrogen in the economy may help reduce the costs of implementation but entail a short-term bump in emissions. Bergman examines this trade-off in a new Common Resources article: “Arguably, the longer-term reductions from faster and cheaper electrolyzer penetration [in the market] could more than offset any near-term increases in emissions from the current electricity grid,” says Bergman.

How can policymakers incorporate information about climate change and emissions in the legislative process?

The International Panel on Climate Change (IPCC), a group of scientists that is convened by the United Nations, has released a new report about the effects of climate change. The IPCC expects these effects to be more widespread and disruptive than previous IPCC reports have indicated and recommends that national governments accelerate their transitions to net-zero economies. Knowing how new legislation could affect national emissions can help governments chart a quicker course to net-zero emissions. A team of RFF scholars recently launched the Carbon Scoring Project, which aims to ensure that US policymakers have the information they need to incorporate climate change in legislation by giving bills a “carbon score.” RFF Fellows Kevin Rennert and Aaron Bergman discuss the project in a recent Common Resources article. “If Congress wants to keep the US economy on track with its long-term climate goals, it will need information about the effects of its policies on the carbon budget that is similar to information it receives for effects on the federal budget,” they say.

How are states in the Intermountain West region planning for a clean energy economy?

A recent poll of voters in the western United States returned results that reflect general support for clean energy technologies. Two-thirds of the survey respondents support a transition to 100 percent clean energy within 10–15 years; even larger percentages in many states support water and ecosystem conservation. The Intermountain West Energy Sustainability and Transitions initiative (I-WEST), which covers six of the states included in the poll, is developing a road map for states in the region to achieve carbon neutrality while transitioning to clean energy. In a new article on Common Resources, RFF researchers Alan Krupnick, Daniel Raimi, Wesley Look, and Jhih-Shyang Shih review the existing energy policies in the region, an overview that RFF scholars published as part of a report by I-WEST in the initiative’s first phase of work. “The Inflation Reduction Act makes the transition to clean energy more attractive for I-WEST states, but the road to carbon neutrality remains a long one,” they say.

Resources Roundup

Sowing the Seeds of an Energy Transition

How might energy markets evolve in the coming years, and how will policies such as the Inflation Reduction Act shape the global energy system? In an RFF Live event on Tuesday next week, March 28, scholars and industry experts will discuss RFF’s Global Energy Outlook 2023, our latest installment of the annual report with accompanying interactive web tool that synthesizes global projections for energy markets and analysis from leading energy organizations, academics, and corporations. RSVP here to attend the virtual event.

Energy Transition in Canada’s Oil Sands

University of Alberta Professor Andrew Leach provides insights about Canada’s oil sands in the most recent episode of Resources Radio. He discusses how oil and gas are extracted in the region, related environmental liabilities, tensions between provincial and national leaders over environmental policies, how First Nations participate in the decisionmaking related to energy development, the energy transition, and more. “[The oil and gas industry is] still a significant source of emissions and is not expected to drop, even under the stringent policies that we already have in place nationally,” says Leach.

How Do Wildfires Affect Local Economies?

Few studies to date have examined the economic impact of wildfires on local economies; for example, we don’t have much information about how wildfires affect rates of employment growth. In a recent article on Common Resources, RFF scholars Margaret Walls and Matthew Wibbenmeyer examine the effects of wildfires on job growth in the short and long term. “Wildfires can cause both short-term negative impacts to employment growth within and in the immediate vicinity of burned areas and small positive effects within the broader region around these wildfires,” say Walls and Wibbenmeyer.

What Is an Urban Heat Island?

Increasingly dense populations in urban areas and the associated development of city infrastructure have led to the creation of urban heat islands, where temperatures are higher due to the built environment. In a new explainer, RFF Fellow Hannah Druckenmiller details the effect of urban heat islands on acute local temperatures, the effects of higher temperatures for urban communities, and potential solutions for reducing the negative impacts of heat islands—all relevant concerns with the onset of spring and warming temperatures.

Why Put a Number on the Social Cost of Carbon?

The social cost of carbon is an estimate of the cost to society from each additional ton of carbon that’s emitted into the atmosphere. On April 3, RFF Fellow Brian C. Prest will participate in a panel discussion at the Brookings Institution about the importance of the social cost of carbon. Learn more about the Brookings event.

🎨 Climate in the Culture 🎵

The Kennedy Center in Washington, DC, is hosting a festival to celebrate the earth’s rivers. The RiverRun festival, which lasts from World Water Day on March 22 until Earth Day on April 22, features concerts, plays, and other performances from international artists. Highlights of the festival include “Our Blue Planet” on April 5, an orchestral concert that will be accompanied by video and images of rivers that were contributed by NASA and National Geographic, and the Terje Isungset Ice Quartet on April 14 and 15, which will incorporate instruments made of ice. The festival could offer fitting evenings of entertainment if you’re in town to catch the city’s cherry blossoms in bloom.

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