Energy Policy Now

A financier discusses the challenge of managing clean energy investment risk.---The transition to a clean U.S. energy system, including carbon-free electricity by the middle of the next decade, will be fueled by massive investment from government and industry and through the provision of green finance from banks and investors. Brian Lehman, the Head of Green Economy Banking at JP Morgan Chase, discusses the challenge of defining clean and sustainable investment in an age where uniform sustainability standards don’t yet exist. He also looks at how government policy might accelerate clean energy finance, and at the types of energy projects and technologies that are attracting attention from green financiers.  The Carbon Shock: Investor Response to the British Columbia Carbon Taxhttps://kleinmanenergy.upenn.edu/research/publications/the-carbon-shock-investor-response-to-the-british-columbia-carbon-tax/ Related ContentBeyond Prices and Quantities: Greening Policies Under Sectoral Reforms in Argentina https://kleinmanenergy.upenn.edu/research/publications/beyond-prices-and-quantities-greening-policies-under-sectoral-reforms-in-argentina/Climate Tech for Real Estate: The Elephant in the Room. https://kleinmanenergy.upenn.edu/research/publications/climate-tech-for-real-estate-the-elephant-in-the-room/ See omnystudio.com/listener for privacy information.

A climate economist discusses why efforts to cool earth’s climate through solar geoengineering appear all but inevitable, and considers the policy questions and political battles to come.---There is no overarching, national debate into the merits of solar geoengineering, which is process to artificially cool the Earth by reflecting sunlight back into space. The technology sounds fanciful, the stuff of science fiction. Yet earlier this year the National Academies of Sciences issued an urgent request to Washington to begin a federal research program into geoengineering. That request has, so far, largely fallen on deaf ears.Climate economist Gernot Wagner believes solar geoengineering is inevitable despite the relative lack of attention the technology has attracted to date. In a recently published book he makes the case for this inevitability, and also presents a compelling argument for why much more research into geoengineering’s risks must be completed if is to be put into practice. In the podcast, he explores why solar geoengineering is fundamentally different from other strategies that address climate change, and why research programs into the technology must be tightly governed. He also discusses concern that solar geoengineering’s implementation, if inevitable, is likely to stoke fierce policy debate and, quite possibly, geopolitical tensions.Gernot Wagner is a climate economist at New York University and author of the recently published book Geoengineering: the Gamble. He is also co-author of Climate Shock, which was chosen by the Financial Times as a best book in economics in 2015.Related Content Can We Measure Successful Climate Adaptation? https://kleinmanenergy.upenn.edu/news-insights/can-we-measure-successful-climate-adaptation/ Guidelines for Successful, Sustainable, Nature-Based Solutionshttps://kleinmanenergy.upenn.edu/research/publications/guidelines-for-successful-sustainable-nature-based-solutions/ Harvesting the Sun: On-Farm Opportunities and Challenges for Solar Development https://kleinmanenergy.upenn.edu/research/publications/harvesting-the-sun-on-farm-opportunities-and-challenges-for-solar-development/ See omnystudio.com/listener for privacy information.

Who will pay for the electric grid of the future? The Federal Energy Regulatory Commission explores options to incentivize and finance a vast transmission network to support clean energy.---Much of the fossil fuel generation fleet in the United States will be replaced by renewable energy resources as the country’s electricity system is decarbonized. Yet it remains unclear how the vast network of high-voltage transmission lines needed to connect clean energy resources will be planned and paid for. Marc Montalvo, president and CEO of Daymark Energy Advisors and former director of risk management and market development at ISO New England, looks at why existing means of planning electric transmission are not up to the task of delivering a low-carbon grid. He also discusses recent action by the Federal Energy Regulatory Commission, the nation’s electric grid regulator, to explore ways to incentivize the construction of new transmission and support the expansion of renewable energy. Marc Montalvo is president and CEO of Daymark Energy Advisors. Marc has 25 years of market and regulatory experience in the electricity industry, including in senior roles at ISO New England. Related ContentMassive Shift toward Solar Power Begins in Largest U.S. Electricity Market https://kleinmanenergy.upenn.edu/podcast/massive-shift-toward-solar-power-begins-in-largest-u-s-electricity-market/The Opportunities and Limitations of Seasonal Energy Storage https://kleinmanenergy.upenn.edu/research/publications/the-opportunities-and-limitations-of-seasonal-energy-storage/Why Is It So Hard to Build the Electric Grid of the Future? https://kleinmanenergy.upenn.edu/podcast/why-is-it-so-hard-to-build-the-electric-grid-of-the-future/See omnystudio.com/listener for privacy information.

China’s leadership must navigate conflicting agendas, and threats to domestic political stability, as it seeks to rein in global warming emissions.---China has adopted a relatively low profile of late when it comes to addressing climate change. At the COP 26 climate conference in Glasgow, Scotland, the most notable headline concerning China may in fact have been the failure of its President, Chi Jinping, to attend or address the conference directly. The Chinese leader’s absence was remarkable given the country’s position as the top global emitter of greenhouse gasses, and also in light of the leadership role that China has taken at other global climate conferences over the past few years.Scott Moore, Director of China Programs and Strategic Initiatives at the University of Pennsylvania, looks at factors that have contributed to China’s recent avoidance of the climate spotlight, including an ongoing energy crisis that threatens the nation’s economic growth. More broadly, he discusses the political vulnerabilities that the pursuit of a low carbon energy system presents for China’s governing powers, and how these considerations may shape the country’s future climate action, and the pace of its energy transition.Scott Moore is a political scientist and Director of China Programs and Strategic Initiatives at the University of Pennsylvania.Related ContentLeveraging Clean Energy to Alleviate Regional Water Stress  https://kleinmanenergy.upenn.edu/research/publications/leveraging-clean-energy-to-alleviate-regional-water-stress/ The Not-So-Rare Earth Elements: A Question of Supply and Demand https://kleinmanenergy.upenn.edu/research/publications/the-not-so-rare-earth-elements-a-question-of-supply-and-demand/ The Essential Role of Negative Emissions in Getting to Carbon Neutral https://kleinmanenergy.upenn.edu/research/publications/the-essential-role-of-negative-emissions-in-getting-to-carbon-neutral/ See omnystudio.com/listener for privacy information.

An unprecedented backlog of clean energy projects is in line to join PJM Interconnection, an electricity market serving one in five Americans. ---PJM Interconnection, the largest wholesale electricity market in the U.S., is on the verge of going solar in a big way. The market, which encompasses 13 states from the mid-Atlantic shore, through fossil fuel-rich Pennsylvania and Ohio and as far West as Illinois, has a massive backlog of clean energy projects of all types that are waiting to be built, with solar foremost among them. In fact, the amount of clean energy in line to join PJM totals more than all of the generation capacity that exists in the market today.Mike Borgatti, Vice President of RTO Services and Regulatory Affairs at Gabel Associates, discusses the unprecedented number of new clean energy projects that are lined up in PJM’s interconnection queue, and the policy and economic factors that are driving the shift to solar, wind and storage. He also takes a look at the decline in the number of natural gas projects waiting to enter the market, and what all of these developments may mean for the future power mix.Mike Borgatti is Vice President of RTO Services and Regulatory Affairs at Gabel Associates, an energy, environmental and public utility consulting company.Related Content The Opportunities and Limitations of Seasonal Energy Storage. https://kleinmanenergy.upenn.edu/research/publications/the-opportunities-and-limitations-of-seasonal-energy-storage/ Electricity Storage and Renewables: How Investments Change as Technology Improves. https://kleinmanenergy.upenn.edu/research/publications/electricity-storage-and-renewables-how-investments-change-as-technology-improves/As Climate Concerns Rise, What Role Will Natural Gas Play? https://kleinmanenergy.upenn.edu/podcast/as-climate-concerns-rise-what-role-will-natural-gas-play/See omnystudio.com/listener for privacy information.

A climate economist looks at the impact that the stranding of fossil fuel assets may have on communities, and at policies that might mitigate economic hardship. ---As pressure builds to decarbonize the global energy system, much of today’s energy infrastructure is becoming obsolete. Over the past decade more than half of the coal fired power plants in the United States have closed as coal generation has been replaced by natural gas and renewables, while coal plants elsewhere, such as in China, increasingly operate at a financial loss.  The value of certain fossil energy reserves has fallen too. The stock market decline of major energy companies such as ExxonMobil, once the most valuable company in the world, has come as expectations for future oil demand have fallen, making these companies’ vast underground oil reserves look less valuable today. And the natural gas industry faces an uncertain future as the role that gas can, and should play in tomorrow’s clean system is debated.  What all of this means is that some portion of fossil fuel companies’ investments in reserves and infrastructure will lose its value, and become what economists call stranded assets. The prospect of stranded energy assets raises concern among investors, and policymakers who must juggle near term economic interests with essential climate goals. University of Southern California economist Matthew Kahn discusses the growing concern over stranded energy assets, and looks at some of the people and places that may suffer when the value of assets drops. He also explores policy solutions to address the problem of stranded assets while taking vulnerable communities into account.Matthew Kahn is the Provost Professor of Economics and Spatial Sciences at the University of Southern California. Related ContentThe Carbon Shock: Investor Response to the British Columbia Carbon Tax https://kleinmanenergy.upenn.edu/research/publications/the-carbon-shock-investor-response-to-the-british-columbia-carbon-tax/Balancing Act: Can Petrochemicals Be Both Emissions Free and Zero-Waste? https://kleinmanenergy.upenn.edu/research/publications/balancing-act-can-petrochemicals-be-both-emissions-free-and-zero-waste/Electricity Storage and Renewables: How Investments Change as Technology Improves https://kleinmanenergy.upenn.edu/research/publications/electricity-storage-and-renewables-how-investments-change-as-technology-improves/ See omnystudio.com/listener for privacy information.

Hurricane Ida was the most recent storm to wreak havoc on Louisiana’s electric grid.  A legal expert discusses the struggle to provide resilient power in the state as weather and climate risks grow.---The year 2021 has seen an unprecedented number of large-scale electric grid failures driven by extreme weather. Over the winter, severe cold led to the collapse of Texas’ electricity system, while in California an aging electric grid has sparked wildfires in a state that has endured two decades of drought. Most recently, Hurricanes Ida and Nicholas knocked out electric lines along the Gulf Coast, leaving tens of thousands of residents without power, many for weeks.What all of these electricity system failures have in common, apart from the lives that they have cost, is that they are likely to be repeated unless the electric grid can be made more resilient.Robert Verchick, a professor of environmental law at Loyola University in New Orleans, discusses the challenge of making the electric grid resilient in Louisiana, a state that arguably has the longest record of combating climate-related natural disasters and the electric grid destruction they cause.Verchick explores why Louisiana has so far failed to adequately address the threat to its electric grid, and discusses recent initiatives in the state to develop a more robust, and greener grid even as resistance to such efforts continues.Robert Verchick is the Gauthier-St. Martin Chair in Environmental Law at Loyola University New Orleans and president of the Center for Progressive Reform. He is also a member of Louisiana Governor John Bel Edward’s Climate Initiatives Task Force. Related ContentThe Carbon Shock: Investor Response to the British Columbia Carbon Tax  https://kleinmanenergy.upenn.edu/research/publications/the-carbon-shock-investor-response-to-the-british-columbia-carbon-tax/ Electricity Storage and Renewables: How Investments Change as Technology Improves  https://kleinmanenergy.upenn.edu/research/publications/electricity-storage-and-renewables-how-investments-change-as-technology-improves/  Balancing Act: Can Petrochemicals Be Both Emissions Free and Zero-Waste? https://kleinmanenergy.upenn.edu/research/publications/balancing-act-can-petrochemicals-be-both-emissions-free-and-zero-waste/ See omnystudio.com/listener for privacy information.

A leading energy economist explores the cost of electrifying home heating, the top source of energy demand and carbon emissions in American homes.---Residential homes account for one fifth of America’s energy consumption, with the largest part of that consumption going toward home heating. In the U.S., more homes are heated with natural gas than any other fuel, a fact that has drawn the attention of policymakers as momentum builds to reduce fossil fuel consumption.  Recently, a number of cities have sought to curtail residential gas use by introducing policies to promote home electrification and, more controversially, through bans that prohibit gas hookups in new homes. While it’s still too early to tell how politically viable, and ultimately effective these efforts will be, what is clear is that the urgency to electrify everything will only intensify as more municipalities, states, and the federal government set ambitious decarbonization goals for the years to come.Lucas Davis, an economist at the University of California at Berkeley’s Haas School of Business, offers a look at the drive to electrify home heating. His recent research examines what motivates households to choose to electrify, how much Americans may be willing to pay in the process, and how this understanding could be used to focus policies that drive rapid and equitable electrification of American homes.   Lucas Davis is an economist at the University of California, Berkeley’s Haas School of Business and a visiting scholar at the Kleinman Center for Energy Policy. His research focuses on energy and environmental markets.   Related ContentElectricity Storage and Renewables: How Investments Change as Technology Improves https://kleinmanenergy.upenn.edu/research/publications/electricity-storage-and-renewables-how-investments-change-as-technology-improves/ Climate Tech for Real Estate: The Elephant in the Room  https://kleinmanenergy.upenn.edu/research/publications/climate-tech-for-real-estate-the-elephant-in-the-room/See omnystudio.com/listener for privacy information.

Rare earth elements are essential to many clean energy technologies, yet their production can bring severe environmental impacts. A new report grapples with rare earths' environmental negatives and efforts to diversify supply beyond China. —- In 2010 China withheld shipment of rare earth elements to Japan during a territorial dispute between the two countries. Rare earths, a grouping of 17 difficult to mine elements, are essential in the manufacture of goods such as cell phones and computer hard drives. They’re also a critical element in wind turbines and electric vehicle motors.   Today, China is the source of 85% of the world’s supply of refined rare earths, a fact that has raised concern in the United States given the growth of Chinese-American diplomatic tensions and rising demand for clean energy technologies. Any future disruption in the supply of the metals, similar to that experienced by Japan a decade ago, could have a crippling effect on clean energy development in the U.S. and elsewhere.   In the podcast, authors of the recent Kleinman Center report, Rare Earth Elements: A Resource Constraint of the Energy Transition, discuss the market for rare earths, explain why they are so important to clean energy, and examine growing calls to diversify global supply.  The authors, Amy Chu of Mills College, and Oscar Serpell of the Kleinman Center, also talk about the high environmental impact of rare earths production, a reality that is at odds with the environmental promise of clean energy.   Amy Chu is an assistant professor of chemistry at Mills College.  Oscar Serpell is Associate Director of Academic Programming here at the Kleinman Center. Their report, Rare Earth Elements: A Resource Constraint of the Energy Transition, was funded by the Kleinman Center for Energy Policy.  Related ContentRare Earth Elements: A Resource Constraint of the Energy Transition  https://kleinmanenergy.upenn.edu/research/publications/rare-earth-elements-a-resource-constraint-of-the-energy-transition/    Electricity Storage and Renewables: How Investments Change as Technology Improves. https://kleinmanenergy.upenn.edu/research/publications/electricity-storage-and-renewables-how-investments-change-as-technology-improves/   Electric Vehicles in the City  https://kleinmanenergy.upenn.edu/research/publications/electric-vehicles-in-the-city-the-relationship-of-ev-infrastructure-and-spatial-development-in-beijing/ See omnystudio.com/listener for privacy information.

The head of the International Energy Agency’s gas division discusses the outlook for natural gas as global efforts to address carbon emissions intensify.---Natural gas may be the most controversial of all fossil fuels. It has been heralded as a lower carbon alternative to coal as a fuel for electricity generation. At the same time, natural gas-fired generators have proven themselves to be a reliable backup for intermittent wind and solar power, and gas is viewed as an enabler of an increasingly renewables-based electric grid.   Yet natural gas is nonetheless a fossil fuel whose global consumption is on the rise even as a growing number of countries have set out to zero out carbon emissions from their energy systems within the coming two decades.  Peter Fraser, head of the Gas, Coal and Power Markets Division at the International Energy Agency, examines present and future demand for natural gas, and the growing perception of risk that accompanies investment in major natural gas infrastructure projects should demand for gas soften. He also discusses the technologies that must be developed to ensure the cleanest possible gas supply, and to enable a shift to non-gas alternatives.  Peter Fraser heads the Gas, Coal and Power Markets Division at the International Energy Agency. His work includes the IEA Outlooks used by governments and industry to understand the direction of the global energy sector.Related ContentThe Opportunities and Limitations of Seasonal Energy Storagehttps://kleinmanenergy.upenn.edu/research/publications/the-opportunities-and-limitations-of-seasonal-energy-storage/Have We Reached Peak Carbon Emissions? https://kleinmanenergy.upenn.edu/research/publications/have-we-reached-peak-carbon-emissions/The Essential Role of Negative Emissions in Getting to Carbon Neutral https://kleinmanenergy.upenn.edu/research/publications/the-essential-role-of-negative-emissions-in-getting-to-carbon-neutral/See omnystudio.com/listener for privacy information.