On the Issues: Surging US Energy Demand, Cap-and-Trade Vote, 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:

How will the United States meet growing demand for electricity in the coming decades?

Demand for electricity in the United States is surging after years of low and steady growth. Recent energy forecasts indicate that data centers, charging stations for electric vehicles, and new manufacturing facilities are contributing to the surge. Some electric utilities plan to build new natural gas–fired power plants to meet increasing demand, even though US climate goals aim to achieve net-zero emissions by midcentury. In a new episode of the Resources Radio podcast, Susan F. Tierney, a senior advisor at Analysis Group and chair of the RFF Board of Directors, discusses the future of fossil fuels in a decarbonizing United States. “It is clearly not the case that we will be zeroing out fossil fuels during the next decade in the United States. There’s a lot of uncertainty about what happens after that,” says Tierney.

How are markets for emissions allowances and political outcomes affecting the cap-and-trade program in Washington State—and affecting each other?

The price that businesses paid to emit a metric ton of carbon dioxide in Washington State fell to $26 in February, compared to $63 in August. Under a state law implemented in 2023, businesses must obtain allowances to emit carbon dioxide, either through an auction (like the sale in February) or by trading in a market with other businesses in the state. The relatively low auction price in February may be due to uncertainty about demand in the market for these allowances, an uncertainty that’s driven by the possibility of a referendum in November that could result in the repeal of the law. In a recent blog post, RFF scholar Brian C. Prest analyzes the relationship between the price of allowances and the likelihood that the law will be repealed. “Since allowances derive their value from the existence of the cap-and-trade program, the possibility of the referendum passing—which would render existing allowances worthless—would meaningfully affect allowance prices,” says Prest. “This shift in allowance prices in turn reduces prices at the gas pump, potentially undercutting the pitch for the referendum itself.”

Are options available to obtain critical minerals for electric vehicles while minimizing the social and environmental impacts of mining?

National and global demand for lithium, a key component in the batteries of electric vehicles, has been increasing. A mining operation in the Salton Sea asserts that it can obtain lithium from the site through a process that could improve yields and reduce local environmental impacts relative to conventional methods. But a community organization based near the Salton Sea in California has sued county officials, alleging that officials violated state law by insufficiently reviewing the environmental effects of the mining project and failing to meaningfully engage with local Native nations. In a recent blog post, RFF Fellow Beia Spiller and Sangita Kannan, a PhD candidate at the Colorado School of Mines, discuss the potential for innovations in mining to help meet increasing demand for critical minerals while limiting impacts on the environment and local communities. “Real and increasingly feasible alternatives to harmful mining practices are coming. If we continue to invest in them, we can sustainably build the electric vehicles that will advance us toward our electrification goals,” they say.

Expert Perspectives

In Focus: Developing Carbon Dioxide Removal

Carbon dioxide removal, an umbrella term for any process that takes carbon dioxide out of the atmosphere, is crucial for meeting global climate goals, according to the Intergovernmental Panel on Climate Change. At the moment, the global capacity to remove carbon dioxide from the atmosphere is limited. In this In Focus video, Emily Joiner, a research associate at Resources for the Future, discusses promising technologies and policy options that may help scale up US and global capacity to meet the challenge.

US Environmental Protection Agency Issues Regulation to Reduce Greenhouse Gas Emissions from Trucks

A new regulation issued by the US Environmental Protection Agency will require manufacturers of heavy-duty vehicles to reduce greenhouse gas emissions from new vehicle models. The regulation kicks into effect for 2027 models and becomes more stringent every year until 2032. The agency has said that this regulation for heavy-duty vehicles, along with the new regulation for light-duty vehicles, will reduce emissions significantly in the transportation sector and yield benefits for public health.

“The models that the agency uses to estimate the effect of these regulations could be improved,” says Beia Spiller, a fellow at RFF and director of RFF’s Transportation Program. “The agency assumes that a lot of electric vehicles will be adopted to comply with these regulations, but consumers and owners of heavy- and light-duty vehicle fleets aren’t going electric for many reasons. If these regulations require manufacturers to sell more electric vehicles for compliance, but customers don’t want to buy them, then vehicle and fleet owners would hold on to their gas and diesel vehicles, and manufacturers could see losses in profit. Modeling that allows customers and fleet owners to respond to changes in the prices and characteristics of new vehicles and that allows manufacturers to respond to changes in demand can help the Environmental Protection Agency avoid overestimating the environmental benefits of these new regulations and avoid underestimating the costs.”

Resources Roundup

Assessing Cumulative Impacts in Environmental Policy

Low-income communities and communities of color in the United States are disproportionately vulnerable to overlapping health stressors such as pollution, limited healthcare, and systemic racism—a threat to public health known as “cumulative impacts.” State and federal lawmakers are beginning to address cumulative impacts in environmental policy. This Wednesday, April 10, RFF will host a webinar that will dive deep into the effects of cumulative impacts on public health and explore why understanding these impacts is important for environmental justice in policymaking. RSVP to attend the webinar.

New Research Initiative Aims to Support Economic Resilience in Fossil Fuel–Dependent Communities

As the United States transitions to a clean energy economy, communities that historically have depended on the coal, oil, and gas industries for tax revenue and local jobs face an uncertain economic future. A partnership between RFF, the Center on Global Energy Policy at Columbia University, and the Bezos Earth Fund have launched the Resilient Energy Economies Initiative to fund research and develop strategies to boost economic resilience in fossil fuel–dependent regions across the United States. In their kickoff report, the scholars leading and advising the initiative highlight key research questions and examine the need for evaluation of policies that can support fossil fuel–dependent communities. The initiative will begin accepting research proposals on May 1. Visit the initiative website for more information.

Global Energy Outlook 2024: Peaks or Plateaus?

Every year, RFF releases its annual Global Energy Outlook report that synthesizes projections and analyses of the global energy market from leading energy organizations and corporations. This week, RFF hosted a related event that featured a panel discussion on the future of energy markets, US fossil fuel exports, and the clean energy transition. “The theme of the report this year is peaks or plateaus. We chose that theme because there’s going to be a lot of discussion about when fossil fuels are going to peak. But maybe the important question is not when [fossil fuels] will peak, but what will happen after,” said RFF Fellow Daniel Raimi during the event.

The Influence of Social Media on National Park Visitation

The number of people who visit national parks each year in the United States has increased from roughly 70 million to 90 million visitors since 2010. In a new journal article, RFF University Fellow Casey Wichman estimates the contribution of social media exposure on visitation to national parks across the country. He also highlights the costs and benefits of those visits on the environment and the National Park Service. “On average, parks with greater [social media] exposure exhibit 16 to 22 percent increases in recreational visits, whereas parks with weaker exposure exhibit no change, or decreases, in visitation,” says Wichman.

Estimating the Social Costs of Hydrofluorocarbons

The prevalence of a class of synthetic industrial chemicals known as hydrofluorocarbons has increased in recent decades, in part due to the application of these chemicals in air-conditioners and refrigerants. These chemicals have served as a replacement for similar chemicals that demonstrably depleted the ozone and had been banned; however, the increased use of these newer hydrofluorocarbons contributes to global climate change, as well. Lisa Rennels, a PhD candidate at the University of California, Berkeley, discusses the costs of these hydrofluorocarbons to society and the environment and global efforts to reduce emissions from the use of these chemicals in a recent episode of the Resources Radio podcast. “The social cost of [hydrofluorocarbons] … measures the monetized net present value of the damages to society caused by an incremental metric ton of gas emissions. So, these social costs are a key metric to informing climate policy, especially in the United States,” says Rennels.

#ChartOfTheWeek

Buckle up, America: For a few minutes on Monday, April 8, the moon will block out the sun. The black belt stretching from Texas to Maine in our chart this week shows where in the nation the solar eclipse will reach totality, when the entire sun will disappear completely behind the moon. Eclipse tourists and residents in cities and towns along the belt will experience dusk in the afternoon, a sudden ruckus from nocturnal animals, and a glimpse of the sun’s outer atmosphere, known as the corona. Interested viewers may want to make plans today: hotel rates in cities along the path of totality have skyrocketed. Those staying in the Washington, DC, area will be able to view a partial eclipse from 2:04 p.m. to 4:32 p.m., with the maximum eclipse (87 percent of totality) occurring at 3:20 p.m. Remember: unless you have eclipse glasses, don’t look up.

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