Tag Archives: GHG

Per Capita: Climate needs more than just good will

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I wrote this guest column in the Davis Enterprise about the City’s Climate Action and Adaptation Plan. (Thank you John Mott-Smith for extending the privilege.)

Dear Readers, the guest column below was written by Richard McCann, a Davis resident and expert on energy and climate action plans.

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The city of Davis is considering its first update of its Climate Action and Adaptation Plan since 2010 with a 2020-2040 Plan. The city plans to update the CAAP every couple of years to reflect changing conditions, technologies, financing options, laws and regulations.

The plan does not and cannot achieve a total reduction in greenhouse gas emissions simply because we do not control all of the emission sources — almost three-quarters of our emissions are from vehicles that are largely regulated by state and federal laws. But it does lay out a means to putting a serious dent in the overall amount. 

The CAAP offers a promising future and accepts that we have to protect ourselves as the climate worsens. Among the many benefits we can look forward to are avoiding volatile gas prices while driving cleaner, quieter cars; faster and more controllable cooking while eliminating toxic indoor air; and air conditioning and heating without having to make two investments while paying less.

To better adapt, we’ll have a greener landscape, filtered air for rental homes, and community shelter hubs powered by microgrids to ride out more frequent extreme weather.

We have already seen that adding solar panels raises the value of a house by as much as $4,000 per installed kilowatt (so a 5 kilowatt system adds $20,000). We can expect similar increases in home values with these new technologies due to the future savings, safety and convenience. 

Several state and federal laws and rules foretell what is coming. By 2045 California aims to be at zero net GHG emissions. That will require retiring all of the residential and commercial gas distribution lines. PG&E has already started a program to phase out its lines. A change in state rules will remove from the market several large natural gas appliances such as furnaces by 2030.

In addition, PG&E will no longer offer subsidies to developers to install gas lines to new homes starting next year. The U.S. Environmental Protection Agency appears poised to push further the use of electric appliances in areas with poor air quality such the Sacramento Valley. (Renewable gas and hydrogen will be too expensive and there won’t be enough to go around.)

Without sales to new customers or for replaced furnaces, the cost of maintaining the gas system will rise substantially so switching to electricity for cooking and water heating will save even more money. The CAAP anticipates this transition by having residents begin switching earlier. 

In addition, the recently enacted federal Inflation Reduction Act offers between $400 and $800 billion into funding these types of changes. The California Energy Commission’s budget for this year went from $1 billion to $10 billion to finance these transitions. The CAAP lays out a process for acquiring these financial sources for Davis and its residents. 

That said, some have objected to the CAAP as being too draconian and infringing on personal choices. The fact is that we are now in the midst of a climate emergency — the City Council endorsed this concern with a declaration in 2019. We’re already behind schedule to head off the worst of the threatening impacts. 

We won’t be able to rely solely on voluntary actions to achieve the reductions we need. That the CAAP has to include these actions proves that people have not been acting on their own despite a decade of cajoling since the last CAAP. While we’ve been successful at encouraging voluntary compliance with easy tasks like recycling, we’ve used mandatory permitting requirements to gain compliance with various building standards including energy efficiency measures. (These are usually enforced at point-of-sale of a house.)

We have a choice of mandatory ordinances, incentives through taxes or fees, and subsidies from grants and funds — voluntary just won’t deliver what’s needed. We might be able to financially help those least able to afford changing stoves, heaters or cars, but those funds will be limited. The ability to raise taxes or fees is restricted due to various provisions in the state’s constitution. So we are left with mandatory measures, applied at the most opportune moments. 

Switching to electricity for cooking and water heating may involve some costs, some or most of which will be offset by lower energy costs (especially as gas rates go up.) If you have an air conditioner, you’re likely already set up for a heat pump to replace your furnace — it’s a simple swap. Even so, you can avoid some costs by using a 120-volt induction cooktop instead of 240 volts, and installing a circuit-sharing plug or breaker for large loads to avoid panel upgrades. 

The CAAP will be fleshed out and evolve for at least the next decade. Change is coming and will be inevitable given the dire situation. But this change gives us opportunities to clean our environment and make our city more livable.  

California could buy back GHG allowances cost-effectively

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California is concerned that entities that emit greenhouse gases (GHG) have accrued a too-large bank of allowances through the Air Resources Board (CARB) cap-and-trade program (CATP.) The excess is estimated at 321 million allowances (one allowance equals one metric tonne of carbon dioxide equivalent (CO2e) emissions). This is more an a year’s worth of allowances. About half of these were issued for free to eligible energy utilities and energy-intensive trade-exposed (EITE) companies.

The state could consider purchasing back a certain portion to reduce the backlog and increase the market price so as to further encourage reductions in GHG emissions by retiring those allowances. Prices in the last allowance auction ranged from $28 to $34 per allowance/tonne. If California bought back half or 160 million allowances at those prices, it would cost $4.5 to $5.5 billion. That would create effectively a reduction of 160 million tonnes in future GHG emissions.

That should be compared to the various benchmarks for the benefits and costs of reducing GHG emissions. The currently accepted social cost of GHG emissions developed by the U.S. Environmental Protection Agency (US EPA) is ranges from $50 to $150 per tonne in 2030 (and recent studies have estimated that this is too low.) That would create a net social benefit from $2.5 to $19.6 billion.

CARB’s AB 32 Scoping Plan update estimates the average cost of reductions without the CATP to be $70 per tonne in 2030. The incremental avoided costs of the CATP are estimated at $220 per tonne. The net avoided costs on this basis would range from $5.7 to $30.4 billion.

Deciding if solar installation is suboptimal requires that the initial premises be specified correctly

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A recent article “Heterogeneous Solar Capacity Benefits, Appropriability, and the Costs of Suboptimal Siting” in the Journal of the Association of Environmental and Resource Economists finds that distributed solar (e.g., rooftop solar) is not being installed a manner that “optimally” mitigates air pollution damages from electricity generation across the U.S. Unfortunately the paper is built on two premises that do not reflect the reality of available options and appropriate pricing signals.

First, the authors appear to be relying on the premise that sufficient solar, grid-scale or distributed, can be installed cost-effectively across the U.S. While the paper includes geographic variations in generation per installed kilowatt of capacity, it says nothing about the similarly widely varying costs per kilowatt-hour. They do not acknowledge that panels in the Pacific Northwest will cost twice that of those in the Desert Southwest. This importance of this disparity is compounded by the underestimate of the social cost of carbon and the possible conflation of sulfur dioxide and particulate matter damages. The currently accepted social cost of GHG emissions developed by the U.S. Environmental Protection Agency (US EPA) is ranges from $50 to $150 per tonne in 2030 (and recent studies have estimated that this is too low), compared to the outdated $41 per tonne in the article. Most of the SO2 damages arise from creating PM so there is likely double counting for these criteria pollutants. (The study also ignore the strong correlation between GHG and SO2 emissions as coal is the biggest source of both.) The study also fails to account for the enormous transmission costs that would be incurred moving solar output from the Desert Southwest to the Northeast to mitigate the purported damages.

Second, the authors try to claim that rooftop solar has not relieved transmission congestion by looking at grid congestion prices. The problem is that this method is like looking at an empty barn and saying a horse never lived there. Congestion pricing is based on the current transmission capacity situation. It says nothing about the history of transmission congestion or the ability and efforts to look forward to mitigate congestion. The study found that congestion prices were often negative or small in areas with substantial rooftop solar capacity. That doesn’t show that the solar capacity has little value–instead it shows that it actually relieved the congestion effectively–a completely opposite conclusion.

In contrast, the California Independent System Operator (CAISO) calculated in 2017 (contemporaneously with the article’s baseline) that at least $2.6 billion in transmission projects had been deferred. And given the utilities’ poor records on load forecasting, these savings have likely grown substantially. CAISO had anticipated and already relieved the congestion that the authors’ purported metric was searching for.

This disparity in economic results highlights the nature of investing in long-lived infrastructure that requires multiple years to build–one cannot wait for a shortfall to emerge to respond because that’s too late. Instead, one must anticipate those events and act even when its uncertain. This study is yet another example of how relying on the premise that short-run electricity market prices are reflective of long-run marginal costs is mistaken and should be set aside for policy analysis.

Should CCAs accept a slice of Diablo Canyon power?

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The northern California community choice aggregators (CCAs) are considering a offer from PG&E to allocate to each CCA a proportionate share of parts of its portfolio, including the Diablo Canyon nuclear generation station. Many CCA boards are hearing from anti-nuclear activists to deny this offer, both for moral reasons and the belief that such a rejection will somehow pressure PG&E financially. The first set of concern is beyond my professional expertise, but their reasoning on the economic and regulatory issues is incorrect.

  • CCAs buy a substantial portion of their generation (the majority for many of them) from the California Independent System Operator (CAISO) energy markets. PG&E schedules Diablo Canyon into those CAISO markets and under the current CAISO tariffs, nuclear generation is a “must take” resource that the CAISO can’t turn back. So the entire output of Diablo Canyon is scheduled into the CAISO market (without any bidding process), PG&E is paid the market clearing price (MCP) for that Diablo power, and the CCAs buy that mix of nuclear power at the MCP. There is no discretion for either the CAISO or the CCAs in taking excess power from Diablo. There is no “lifeline” for Diablo that the CCAs have any control over under current legal and regulatory parameters.
  • CCAs already pay for a proportionate share of Diablo Canyon equal to the CCAs share of overall load. That payment is broken into two parts (and maybe a third): 1) the purchase of energy from the CAISO at the MCP and 2) the stranded capital and operating costs above the MCP in the PCIA. (CCAs also may be paying for a share of the resource adequacy, but I haven’t thought through that one.) Thus, if the CCAs receive credit for the energy that they are already paying for, the energy portion essentially comes as “free”. In addition, because CCAs currently pay for the remaining share of Diablo costs, but get no energy credit for that in the PCIA calculation, then that credit is in the PCIA is also “free”. In addition, the CCAs gain credit for Diablo’s GHG-free generation (as recognized in the Air Resources Board GHG allowance program) as LSE’s for no extra cost, or for “free.” The bottom line is when the CCAs gain credit for products that they are already paying for, receipt of those products is for “free.”
  • Accepting this deal will not solve ALL of the CCAs problems, but that’s a false goal. That was never the intent. It does however give the CCAs a respite to get through the period until Diablo retires. One needs to recognize that this provides some of the needed relief.
  • Finally, there’s never any certainty over any large deal. Uncertainty should not freeze decision making. The uncertainty about the PCIA going forward is equally large and perhaps offsetting. The risks should be identified, discussed, considered and addressed to the extent possible. But that’s different than simply nixing the deal without addressing the other large risk. Naively believing that Diablo can be closed in short order (especially with the COVID crisis) is not a true risk management strategy.

From these points, we can come to these conclusions:

  1. Whether the CCAs accept or reject the nuclear offer has NO impact on PG&E’s revenue stream. The decisions that the CCAs face are entirely about whether the CCAs can lower their costs and gain some additional GHG reduction credits that they are already paying for (in other words, reduce their subsidies of bundled customers.) Nothing that the CCAs decide will affect the closure date of Diablo. If the CCAs reject the allocations, it will simply be business as usual to the full closures in 2025. Any other interpretation doesn’t reflect the current regulatory environment at the CPUC which are unlikely to change (and even that is unknown) until enough commissioners’ five-year terms roll over.
  2. The system can only be changed by legislative and regulatory action. That means that the CCAs must make the most prudent financial decisions within the current context rather than making a purely symbolic gesture that is financially adverse and will do nothing to change the BAU practice. A wise decision would consider what is the true impact of the action on
  3. Finally, early closure of Diablo will NOT remove the invested capital cost from PG&E’s ratebase, which is what drives the PCIA. After the plant is closed, activists will ALSO have to show that the INVESTMENT in the plant was imprudent and should not have been allowed. Given the long history on decisions and settlements in Diablo investment costs and the inclusion of recovery of Diablo costs in both AB1890 and AB1X at the beginning and end of the energy crisis, that is an impossible task. Only a constitutional amendment through the initiative process could possibly lead to such an action, and even that would have to survive a court challenge that probably would push past 2024.

I want to finish with what I think is a very important point that has been overlooked by the activists: The effort to close Diablo Canyon has won. Activists might not like the timeline of that victory, but it is a victory nevertheless that looked unachievable prior to 2016. It’s worthwhile considering whether the added effort for what will be for a variety of reasons little gain is an important question to answer.

Note that Diablo Canyon is already scheduled for closure in 2024 and 2025. A proceeding to either reopen A.16-08-006 or to open a new rulemaking or application would probably take close to a year, so the proceeding probably wouldn’t open until almost 2021. The actual proceeding would take up to a year, so now we’re to 2022 before an actual decision. PG&E would have to take up to a year to plan the closure at that point, which then takes us to 2023. So at best the plant closes a year earlier than currently scheduled. In addition, PG&E still receives the full payments for its investments and there’s likely no capital additions avoided by the early closure, so the cost savings would be minimal.

Calculating the risk reduction benefits of closing Germany’s nuclear plants

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Max Aufhammer at the Energy Institute at Haas posted a discussion of this recent paper reviewing the benefits and costs of the closure of much of the German nuclear fleet after the Fukushima accident in 2011.

Quickly reading the paper, I don’t see how the risk of a nuclear accident is computed, but it looks like the value per MWH was taken from a different paper. So I did a quick back of the envelope calculation for the benefit of the avoided consequences of an accident. This paper estimates a risk of an accident once every 3,704 reactor-operating years (which is very close to a calculation I made a few years ago). (There are other estimates showing significant risk as well.) For 10 German reactors, this translates to 0.27% per year.

However, this is not a one-off risk, but rather a cumulative risk over time, as noted in the referenced study. This is akin to the seismic risk on the Hayward Fault that threatens the Delta levees, and is estimated at 62% over the next 30 years. For the the German plants, this cumulative probability over 30 years is 8.4%. Using the Fukushima damages noted in the paper, this represents $25 to $63 billion. Assuming an average annual output of 7,884 GWH, the benefit from risk reduction ranges from $11 to $27 per MWH.

The paper appears to make a further error in using only the short-run nuclear fuel costs of $10 per MWH as representing the avoided costs created by closing the plants. Additional avoided costs include avoided capital additions that accrue with refueling and plant labor and O&M costs. For Diablo Canyon, I calculated in PG&E’s 2019 ERRA proceeding that these costs were close to an additional $20 per MWH. I don’t know the values for the German plants, but clearly they should be significant.

CCAs don’t undermine their mission by taking a share of Diablo Canyon

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Northern California community choice aggregators (CCAs) are considering whether to accept an offer from PG&E to allocate a proportionate share of its “large carbon-free” generation as a credit against the power charge indifference adjustment (PCIA) exit fee.  The allocation would include a share of Diablo Canyon power. The allocation for 2019 and 2020; an extension of this allocation is being discussed on the PCIA rulemaking.

The proposal faces opposition from anti-nuclear and local community activists who point to the policy adopted by many CCAs not to accept any nuclear power in their portfolios. However, this opposition is misguided for several reasons, some of which are discussed in this East Bay Community Energy staff report.

  • The CCAs already receive and pay for nuclear generation as part of the mix of “unspecified” power that the CCAs buy through the California Independent System Operator (CAISO). The entire cost of Diablo Canyon is included in the Total Portfolio Cost used to calculate the PCIA. The CCAs receive a “market value” credit against this generation, but the excess cost of recovering the investment in Diablo Canyon (for which PG&E is receiving double payment based on calculations I made in 1996) is recovered through the PCIA. The CCAs can either continue to pay for Diablo through the PCIA without receiving any direct benefits, or they can at least gain some benefits and potentially lower their overall costs. (CCAs need to be looking at their TOTAL generation costs, not just their individual portfolio, when resource planning.)
  • Diablo Canyon is already scheduled to close Unit 1 in 2024 and Unit 2 in 2025 after a contentious proceeding. This allocation is unlikely to change this decision as PG&E has said that the relicensed plant would cost in excess of $100 per megawatt-hour, well in excess of its going market value. I have written extensively here about how costly nuclear power has been and has yet to show that it can reduce those costs. Unless the situation changes significantly, Diablo Canyon will close then.
  • Given that Diablo is already scheduled for closure, the California Public Utilities Commission (CPUC) is unlikely to revisit this decision. But even so, a decision to either reopen A.16-08-006 or to open a new rulemaking or application would probably take close to a year, so the proceeding probably would not open until almost 2021. The actual proceeding would take up to a year, so now we are to 2022 before an actual decision. PG&E would have to take up to a year to plan the closure at that point, which then takes us to 2023. So at best the plant closes a year earlier than currently scheduled. In addition, PG&E still receives the full payments for its investments and there is likely no capital additions avoided by the early closure, so the cost savings would be minimal.

“Making the perfect the enemy of the better” for a carbon tax

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In an opinion article published on Utility Dive, Kenneth Costello argues that adopting a carbon tax would be a mistake. As he says, “(i)nstead of a carbon tax, why not give more consideration to adaptive strategies, which can evolve over time in response to new information?” His arguments make several key errors and underestimate the political will required to deliver his preferred option.

We need not rely on the social cost of carbon (SCC) to set a tax. Instead of using a benefit-cost approach implied by the SCC, we can use a cost-effectiveness approach by setting the tax to achieve an expected amount of greenhouse gases reduction. This is really no different than how we conduct most of our private transactions–we don’t directly weigh the monetary benefits of buying a new car against its costs–we decide what type of car that we want and then spend the money to buy that car. We may not achieve the mythical “positive net benefits” using such a strategy, but the the truth is that benefit-cost analysis is problematic in the context of climate change, as Martin Weitzmann among others pointed out.

We have a good idea of how increased prices that would result from a carbon tax impact demand, contrary to Costello’s assertion. We have seen that over and over with changes in gasoline and electricity prices in the last half century. (One paper found that the early CAFE standards did not affect automobile fleet fuel economy until gas prices fell in 1984.) We can adaptively manage a carbon tax (which also can be implemented as a global trade tariff framework) to steer toward our emissions reduction target.

Costello instead proposes that we focus solely on climate adaptation by hardening our infrastructure and other measures. This illustrates a lack of understanding of the breadth of the expected impacts and the inability of a large segment of the world’s population to undertake such mitigation without a large wealth transfer. Further, such adaptation focuses largely on the direct impacts to humans and ignores the farther ranging ones on our global environment. Those latter effects, such as ocean acidification and melting of the tundra, can lead to catastrophic outcomes that cannot be readily adapted to, no matter what is spent. And there other effects that that we may not even know about. Focusing so narrowly on what might be adaptive strategies will lead to a gross underestimation of the costs to adapt.

Finally, Costello overestimates the political barriers to implementing and managing a carbon tax and overestimates the political will to implement adaptation strategies. Contrary to his assertion, environmental groups such as EDF and NRDC have been at the forefront of using prices and taxes to regulate environmental pollutants. (I have worked for several of them on such proposals.) Yes, politicians want to avoid taxes, but that reflects the more general problem of wanting to avoid any hard choices. And we only need to look at the state of the U.S. infrastructure to see how difficult it is to persuade the political system to make the investments that Costello recommends. This will be a tough road either way, but the carbon tax option cannot be simply dismissed based on Costello’s analysis.

 

Our responsibility to our children

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UN-CLIMATE-ENVIRONMENT-GRETA THUNBERG

Greta Thunberg’s speech at the UN has sparked a discussion about our deeper responsibilities to our future generations. When we made the huge effort to fight World War II, did we ask “how much will this cost?” We face the same existential threat and should make the same commitment. We can do this cost effectively, and avoid making most stupid decisions, but asking whether this effort is worth it is now beyond question. We will have to consider how to compensate those who have invested their money or their livelihoods in activities that we now recognize as damaging to the climate, and that will be an added cost to the rest of us. (And we may see this as unfair.) But we really have no choice.

J. Frank Bullit posted on “Fox and Hounds” a sentiment that reflects the core of opposition to such actions:

What if the alarmists are wrong, yet there is no counter to the demands of enacting economic and energy policies we might regret?”

So our energy costs might be a bit more than it would have otherwise, but we get a cleaner environment in exchange. And even now, renewable energy sources are competing well on a dollar to dollar basis.

On the other hand, if the “alarmists” are correct, the consequences have a significant probability of being catastrophic to our civilization, as well as our environment. We all have insurance on our houses for events that we see as highly unlikely. We pay that extra cost on our house to gain assurance that we will recover our investments if such unlikely events occur. These are costs that we are willing to accept because we know that the “alarmists” have a point about the risks of house fires. We should be taking the same attitude towards climate change assessments. It’s not possible to prove that there is no risk, or even that the risk is tiny. And the data trends are sufficiently consistent with the forecasts to date that the probabilities weigh more towards a likelihood than not.

Unless opponents can show that the consequences of the alarmists being wrong are worse than the climate change threat, we have to act to mitigate that risk in much the same way as we do when we buy house insurance. (And by the way, we don’t have another “house” to move to…)

U. of Chicago misses mark on evaluating RPS costs

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The U. of Chicago just released a working paper “Do Renewable Portfolio Standards Deliver?” that purports to assess the added costs of renewable portfolio standards adopted by states. The paper has two obvious problems that make the results largely useless for policy development purposes.

First, it’s entirely retrospective and then tries to make conclusions about future actions. The paper ignores that the high initial costs for renewables was driven down by a combination of RPS and other policies (e.g. net energy metering or NEM), and on a going forward basis, the renewables are now cost competitive with conventional resources. As a result, the going forward cost of GHG reductions is much smaller than the historic costs. In fact, the much more interesting question is “what would be the average cost of GHG reductions by moving from the current low penetration rate of renewables to substantially higher levels across the entire U.S., e.g., 50%, 60% etc. to 100%?” The high initial investment costs are then highly diluted by the now cost effective renewables.

Second, the abstract makes this bizarre statement “(t)hese cost estimates significantly exceed the marginal operational costs of renewables and likely reflect costs that renewables impose on the generation system…” Um, the marginal “operational” costs of renewables generally is pretty damn close to zero! Are the authors trying to make the bizarre claim (that I’ve addressed previously) that renewables should be priced at their “marginal operational costs”? This seems to reflect an remarkable naivete on the part of the authors. Based on this incorrect attribution, the authors cannot make any assumptions about what might be causing the rate difference.

Further, the authors appear to attribute the entire difference in rates to imposing an RPS standard. The fact is that these 29 states generally have also been much more active in other efforts to promote renewables, including for customers through NEM and DER rates, and to reduce demand. All of these efforts reduce load, which means that fixed costs are spread over a fewer amount of kilowatt-hours, which then causes rates to rise. The real comparison should be the differences in annual customer bills after accounting for changes in annual demand.

The authors also try to assign stranded cost recovery as a cost of GHG recovery. This is a questionable assignment since these are sunk costs which economists typically ignore. If we are to account for lost investment due to obsolescence of an older technology, economists are going to have go back and redo a whole lot of benefit-cost analyses! The authors would have to explain the special treatment of these costs.

Why do economists keep producing these papers in which they assume the world is static and that the future will be just like the past, even when the evidence of a rapidly changing scene is embedded in the data they are using?

Moving beyond the easy stuff: Mandates or pricing carbon?

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Meredith Fowlie at the Energy Institute at Haas posted a thought provoking (for economists) blog on whether economists should continue promoting pricing carbon emissions.

I see, however, that this question should be answered in the context of an evolving regulatory and technological process.

Originally, I argued for a broader role for cap & trade in the 2008 CARB AB32 Scoping Plan on behalf of EDF. Since then, I’ve come to believe that a carbon tax is probably preferable over cap & trade when we turn to economy wide strategies for administrative reasons. (California’s CATP is burdensome and loophole ridden.) That said, one of my prime objections at the time to the Scoping Plan was the high expense of mandated measures, and that it left the most expensive tasks to be solved by “the market” without giving the market the opportunity to gain the more efficient reductions.

Fast forward to today, and we face an interesting situation because the cost of renewables and supporting technologies have plummeted. It is possible that within the next five years solar, wind and storage will be less expensive than new fossil generation. (The rest of the nation is benefiting from California initial, if mismanaged, investment.) That makes the effective carbon price negative in the electricity sector. In this situation, I view RPS mandates as correcting a market failure where short term and long term prices do not and cannot converge due to a combination of capital investment requirements and regulatory interventions. The mandates will accelerate the retirement of fossil generation that is not being retired currently due to mispricing in the market. As it is, many areas of the country are on their way to nearly 100% renewable (or GHG-free) by 2040 or earlier.

But this and other mandates to date have not been consumer-facing. Renewables are filtered through the electric utility. Building and vehicle efficiency standards are imposed only on new products and the price changes get lost in all of the other features. Other measures are focused on industry-specific technologies and practices. The direct costs are all well hidden and consumers generally haven’t yet been asked to change their behavior or substantially change what they buy.

But that all would seem to change if we are to take the next step of gaining the much deeper GHG reductions that are required to achieve the more ambitious goals. Consumers will be asked to get out of their gas-fueled cars and choose either EVs or other transportation alternatives. And even more importantly, the heating, cooling, water heating and cooking in the existing building stock will have to be changed out and electrified. (Even the most optimistic forecasts for biogas supplies are only 40% of current fossil gas use.) Consumers will be presented more directly with the costs for those measures. Will they prefer to be told to take specific actions, to receive subsidies in return for higher taxes, or to be given more choice in return for higher direct energy use prices?