Severin Borenstein’s post raises an important issue that economists have ignore for too long. I posted the following comment there:
We gave politicians the tool of benefit-cost analysis which they have used to justify their policy objectives, but we completely failed to drive home the requirement that those parties who are on the losing end need to be compensated as well. I looked in my edition of Ned Gramlich’s book on Benefit-Cost Analysis (who taught my course), and the word “compensation” is not even in the index! Working on environmental regulations, I regularly see agency staff derive large positive ratios for the “general public” and then completely dismiss the concerns of particular groups that will be carrying all the burdens of delivering those benefits. If we’re going to teach benefit-cost analysis, we need to emphasize the “cost” side as much as the “benefit” that politicians love to extol.
Source: Creative Pie Slicing To Address Climate Policy Opposition |
The proposal would eliminate allowance banking and offsets, and add a border adjustment mechanism. This would isolate California from global efforts to mitigate GHG emissions.
Source: Guest Blogger Dallas Burtraw: Three Revisions Not to Overlook in California’s New Cap-and-Trade Proposal, SB 775 | Legal Planet
Solar and wind power combined also hit a peak on the same day by serving 49.2% of demand.
Source: CAISO notches record, serving 56.7% of demand with renewable energy in one day | Utility Dive
It’s not environmental regulation now that is leading to the demise of the coal industry–it’s the cheaper cost of alternatives. Rather than “bring back coal mining jobs,” we should focus on how we retrain and relocate those displaced workers. And we need to look for new industries that may thrive in “coal country.”
Moody’s: Falling wind energy costs threaten Midwestern coal plants | Utility Dive
In the Midwest, the investor services firm sees 56 GW of regulated coal-fired capacity at risk.
Source: Moody’s: Falling wind energy costs threaten Midwestern coal plants | Utility Dive
Over the last year, various states have introduced subsidies and preferences for different electricity resources that have circumvented the independent system operator (ISO) markets that the Federal Energy Regulatory Commission (FERC) approved in the 1990s. FERC’s intent was that hourly markets would provide all of the price signals needed to induce appropriate investment. As we’ve found out in California, that hasn’t worked out that way. These markets have difficulty conveying the full price information for all services (in part because many utility-owned generators are subsidized through state rate of return regulation) and the environmental and technological benefits that may be difficult to monetize in an hourly price.
FERC has challenged some of these new rules, and both won and lost in the courts. Now the market monitor in the biggest market in the U.S. that covers the Northeast and Midwest is joining the fight. If the market monitor wins, this will raise the salient question of whether FERC needs to rethink its policy, or will states begin to withdraw from the ISOs to pursue their own policy goals?
PJM market monitor opposes Illinois nuclear subsidies | Utility Dive
The market monitor argues the state’s subsidies “unlawfully intruded” on FERC’s authority over wholesale interstate electricity sales.
Source: PJM market monitor opposes Illinois nuclear subsidies | Utility Dive
Five graphics that show strong growth in U.S. wind energy after a two-year slowdown
Source: How the US Wind Sector Is Building Momentum, Driving Economic Benefits | Greentech Media
William Nordhaus has long relied on traditional economic cost-benefit analysis to minimize the costs to the world economy from potential climate change impacts. This article discusses how he now views the increasing risk, the continuing uncertainty, and the likely increasing costs from delayed responses as driving the need for a more rapid effort.
Source: Why a climate economist is giving carbon’s ‘social cost’ a second look – CSMonitor.com