Browsing by Author "Monast, Jonas"

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Open Access
A Closer Look at RGGI and Grid Reliability
(2021-11-24) Hill, Sophia; Konschnik, Kate; Monast, Jonas; Ross, Martin
Open Access
Allowance Allocation Options under the Clean Power Plan Proposed Mass-Based Model Rule
(2016-04-28) Thompson, Dacia
The Clean Power Plan is a major element of the United States’ strategy to combat climate change. The Clean Power Plan addresses carbon emissions from existing power plants by setting emissions limits for each state. Under the Clean Power Plan, states are supposed to develop their own plans to meet the goal that Environmental Protection Agency (EPA) has set. When EPA published the final version of the Clean Power Plan, the Agency also proposed model rules for the states. These model rules establish a trading-ready scheme that states can adapt to their individual policy priorities. The EPA published a mass- and rate-based model rule, and this paper focuses on the mass-based rule because it raises the question of allowance allocation while a rate-based rule would not. This paper explores the policy priorities that states may want to pursue through their Clean Power Plan compliance efforts. It also reviews the allowance allocation choices that states with mass-based trading plans will have to make and how the states may incorporate their policy goals into those decisions.
Open Access
Carrots, Sticks, and the Evolution of U.S. Climate Policy
(Texas A&M Law Review, 2024-05) Murray, Brian; Monast, Jonas
The Inflation Reduction Act (IRA), enacted by Congress in 2022, is the most significant federal investment in decarbonization in U.S. history. The law makes hundreds of billions of dollars available for clean energy tax credits, grants to state and local governments, and other financial incentives for public and private investments. The IRA’s focus on incentives, or “carrots,” marks a significant departure from the emphasis on prescriptive regulations and penalties, or “sticks,” that are prominent in federal and state climate policies that predate the IRA. This Article situates the IRA within the existing climate policy framework and explores the long-term impacts of the new law. The Article begins with an overview of regulations and tax incentives to reduce greenhouse gas emissions leading up to 2007. The Article then discusses the emphasis on pricing carbon through federal Cap-and-Trade legislation from 2003 to 2011, and the return to prescriptive regulation under the Clean Air Act when those federal bills failed. The Article contrasts these efforts with the positive financial incentives included in the IRA, tracking the evolution of the bill and the political and economic circumstances that created the policy window for Congress to pass such an impactful law. The Article concludes with a discussion of the lasting impacts of the IRA and the interplay between the existing policy instruments.
Open Access
Connecting Clean Air Act Compliance with Ratepayer Funded Energy Efficiency
(2013-04-25) Lovett, Alan
Over the past decade, state electricity policy has evolved to encourage end-use efficiency as part of utilities’ efforts to serve their customers’ needs. Programs implemented in response to these policies have grown rapidly across the United States and are expected to save approximately 20 billion kWh per year over the coming decade. These energy savings translate to roughly 15,000 tons of avoided NOx emissions, 45,000 tons of avoided SO2, and 16 million tons of avoided CO2 each year. At the same time, many states are still struggling to meet existing ambient air quality standards under the Clean Air Act, and states and utilities both are planning for a raft of new regulations that are expected to add another $100 billion to air compliance costs. Despite the clear environmental benefit of existing end-use efficiency programs, very few states have incorporated them into air quality compliance plans. This paper explores the barriers that have led to this under-utilization of end-use efficiency as a Clean Air Act compliance tool, explains EPA’s efforts to provide pathways towards compliance credit, and identifies opportunities for states to capitalize on the overlap between EPA’s requirements and the pre-existing state energy regulatory framework.
Open Access
Emerging Solar Lending Opportunities for Community Development Financial Institutions
(2015-04-24) Williams, Jennifer
Financing and investment structures in solar development are maturing. Community development financial institutions (CDFIs) and other mission-focused lenders have opportunities to fund solar photovoltaic (PV) projects with debt, but this lending can be challenging. A National Renewable Energy Laboratory (NREL) review found renewable energy lending to be limited due complexity. Loans are typically large, with unusual collateral valuation requirements, negotiation of intercreditor agreements, and new standard-setting required for assessing default risk. Despite these obstacles, in 2013 and 2014, Self-Help Credit Union in Durham, North Carolina provided $76 million in debt financing for solar electricity development. These installations occurred as the solar industry soared; with growth over five years from 1.2 gigawatts (GW) to 18.3 GW of operational solar, the U.S. solar market value will exceed $15 billion in 2015. Continued annual growth averaging 7.5% through 2040 is projected, setting the technology on track to become a primary generation source with 48 GW of capacity. State and federal incentives shape both utility-scale solar growth and financing models, which often include developer project equity, tax equity, and debt. In North Carolina, a corporate state tax credit for renewable generation expires at the end of 2015. A decrease in the federal solar Investment Tax Credit (ITC) from 30% to 10% also looms at the end of 2016. As the industry matures and subsidies decline, companies are exploring new financing solutions with different parallels to more familiar asset classes such as real estate, infrastructure, stocks, and esoteric asset-backed securities, prompting a wider range of investors to enter the field. Self-Help and other CDFIs are well-poised for impact due to familiarity with tax-credit incentivized deals with project-level finance; solar incentives are structurally similar to community development real estate transactions that utilize New Markets Tax Credits (NMTCs) and Low-Income Housing Tax Credits (LIHTCs). Nationally, banks, CDFIs, and other mission-focused lenders are now beginning to provide both construction and term debt to solar developers as part of a project finance model for utility-scale projects large enough to warrant the complexity of these transactions or portfolios of smaller installations. Participation is growing in both scale and scope. In 2014, 94 banks engaged in some type of energy project finance, a 20% increase from 2013. Half of contributing banks were small players similar to Self-Help, with overall levels of activity less than $200 million each. Some of the largest recent examples of project finance for solar development are Seminole Financial Services, Hannon Armstrong, National Cooperative Bank, and a variety of European and Japanese commercial banks. More providers are needed as the U.S. solar industry gears up to grow from 10 GW 2015 to more than 16 GW by 2017. Other community financial institutions and lenders may use Self-Help’s experience as a springboard for action and make real impact in the industry, as including debt in the financial structure for development can reduce levelized costs of solar electricity by 20% or more. In its first section, this report reviews CDFI missions and how partnership between these groups and the solar industry creates mutual benefit, including environmental health, economic growth, social good, CDFI returns, and sustainable investment influence. In its second section, the experience of both environmental justice and clean energy leadership in Warren County, North Carolina is noted as a case study of these current and potential impacts. In its third section, this report provides a solar finance primer for use by both community lenders and the solar industry, including project-level finance background, structures, sources, budget components, and projections. In its fourth section, the report describes the project-level risks a CDFI must mitigate in order to lend successfully. The accomplishments of Boston Community Capital, a Boston-based CDFI, are highlighted as a case study in the report’s fifth section. Next, the report describes collateral review for solar lending, including valuation, appraisals, intercreditor agreements, and other risk mitigation. In the seventh section, the report outlines the potential for solar development to benefit minority farm owners. Then, despite CDFI solar lending promise, barriers are reviewed in the report’s next section, including the current complexity of deal structure requiring industry-specific knowledge and human capital at CDFIs, collateral limitations, scale, and intercreditor agreements. The report concludes with information on the potential for future CDFI leadership with next steps including unconventional repayment terms, community solar models, loans with non-rated private off-takers, and other opportunities.
Open Access
Enhancing Compliance Flexibility under the Clean Power Plan: A Common Elements Approach to Capturing Low-Cost Emissions Reductions
(2015-03-16) Monast, Jonas; Profeta, Timothy; Tarr, Jeremy; Murray, Brian
As states and stakeholders evaluate compliance options under the U.S. Environmental Protection Agency’s proposed Clean Power Plan, many recognize the potential economic benefits of market-based strategies. In some states, however, market approaches trigger administrative and political hurdles. A new policy brief by the Nicholas Institute for Environmental Policy Solutions offers a compliance pathway that allows states to realize the advantages of multistate and market-based solutions without mandating either strategy. With the common elements approach, states develop individual-state plans to achieve their unique emissions targets and give power plant owners the option to participate in cross-state emissions markets. Power plant owners can transfer low-cost emissions reductions between states whose compliance plans share common elements--credits defined the same way and mechanisms to protect against double counting. The common elements approach offers the following benefits: (1) allows cross-state credit transfers without states negotiating a formal regional trading scheme, (2) leaves compliance choices to power companies, (3) builds on existing state and federal trading programs, and (4) maintains the traditional roles of state energy and environmental regulators.
Open Access
Heat Rate Reductions and Carbon Emissions: A Policy Mechanism for Regulating Coal Plants under 111(d) of the Clean Air Act
(2014-04-24) Hansel, Peter
The Clean Air Act requires the EPA to regulate carbon dioxide and greenhouse gases to protect public health and welfare. Currently the agency is in the process of developing standards for existing coal power plants under section 111(d) of the CAA and are expected to issue the proposed rule this summer. These regulations have the potential to drastically reduce emissions in the United States. Of the policy proposals and recommendations that have been submitted to the EPA, most advocate for including flexibility mechanisms, such as emissions trading, crediting and offsets, in the guidance policy. However, such broad mechanisms have limited precedence under 111(d) and their legality is untested. This paper explores a more conservative approach by regulating coal units within-the-fence-line. Specifically, the proposed policy would require uniform mandatory heat rate reductions for all coal units, regardless of initial heat rate. All coal units would be required to lower heat rates by 740-810 Btu/kWh, resulting in an 8% fleet-wide average. Inefficient units would be allowed to continue to operate alongside more efficient ones as long as each reduces their heat rate by the given amount. The policy was modeled and this analysis finds that despite costs associated with installing heat-rate reducing technology, costs to plant operators and consumers are reduced. This is mainly due to the decreases in fuel costs that accompany the efficiency improvements. As a result, it is more economical for many coal plants to operate. US generation from coal increases 4% relative to a reference and electricity prices per kWh decrease. Costs associated with the policy do force some coal units into retirement. An additional 4.3 GW of coal capacity and 50 coal units are retired compared to the 4.4 GW that are expected to retire absent any policy. However, the units that close operate at low or zero capacity and specific regions are not disproportionally affected over others. Carbon emissions are reduced by 68 megatons the first year that the policy goes into effect relative to the reference scenario and avoids 1,284 Mt of cumulative carbon emission over the lifetime of the analysis (2016-2030). However, overall, the policy does not force any changes in electrical generation. No new low-carbon resources are built as a result of the policy. Therefore, total emissions continue to rise through the end of the analysis as the economy grows. Despite starting below 2005 levels, emissions increase to 4.3% above 2005 levels by 2030. Overall, the policy represents a less ambitious course of action to reduce carbon emissions from coal power plants but still allows reductions to take place at low economic costs and would likely stand up to challenges in court. While it is unlikely that the EPA will chose such a limited approach to regulating coal plants under 111(d), the proposed policy could serve as a sound option if other alternatives fail.
Open Access
Heat Reductions and Carbon Emissions: A Policy Mechanism for Regulating Coal Plants under 111(d) of the Clean Air Act
(2014-04-24) Hansel, Peter
The Clean Air Act requires the EPA to regulate carbon dioxide and greenhouse gases to protect public health and welfare. Currently the agency is in the process of developing standards for existing coal power plants under section 111(d) of the CAA and are expected to issue the proposed rule this summer. These regulations have the potential to drastically reduce emissions in the United States. Of the policy proposals and recommendations that have been submitted to the EPA, most advocate for including flexibility mechanisms, such as emissions trading, crediting and offsets, in the guidance policy. However, such broad mechanisms have limited precedence under 111(d) and their legality is untested. This paper explores a more conservative approach by regulating coal units within-the-fence-line. Specifically, the proposed policy would require uniform mandatory heat rate reductions for all coal units, regardless of initial heat rate. All coal units would be required to lower heat rates by 740-810 Btu/kWh, resulting in an 8% fleet-wide average. Inefficient units would be allowed to continue to operate alongside more efficient ones as long as each reduces their heat rate by the given amount. The policy was modeled and this analysis finds that despite costs associated with installing heat-rate reducing technology, costs to plant operators and consumers are reduced. This is mainly due to the decreases in fuel costs that accompany the efficiency improvements. As a result, it is more economical for many coal plants to operate. US generation from coal increases 4% relative to a reference and electricity prices per kWh decrease. Costs associated with the policy do force some coal units into retirement. An additional 4.3 GW of coal capacity and 50 coal units are retired compared to the 4.4 GW that are expected to retire absent any policy. However, the units that close operate at low or zero capacity and specific regions are not disproportionally affected over others. Carbon emissions are reduced by 68 megatons the first year that the policy goes into effect relative to the reference scenario and avoids 1,284 Mt of cumulative carbon emission over the lifetime of the analysis (2016-2030). However, overall, the policy does not force any changes in electrical generation. No new low-carbon resources are built as a result of the policy. Therefore, total emissions continue to rise through the end of the analysis as the economy grows. Despite starting below 2005 levels, emissions increase to 4.3% above 2005 levels by 2030. Overall, the policy represents a less ambitious course of action to reduce carbon emissions from coal power plants but still allows reductions to take place at low economic costs and would likely stand up to challenges in court. While it is unlikely that the EPA will chose such a limited approach to regulating coal plants under 111(d), the proposed policy could serve as a sound option if other alternatives fail.
Open Access
Influence of Operator Size on Regulatory Compliance in the Unconventional Oil and Gas Industry
(2015-04-24) McHenry, Graham
The hydraulic fracturing boom in the United States has opened vast areas of the country to oil and gas development. While beneficial to the energy sector, unconventional oil and gas operations are not without risk. This study analyzes the compliance risks of oil and gas operators of differing sizes from two states actively involved in the unconventional industry. Historic oil and gas inspection and violation data was analyzed to evaluate the regulatory compliance risk of operators of different sizes. This data was then used to test an industry assumption that larger companies are less likely to commit regulatory violations when compared to smaller operators. The data analysis in this study confirmed this assumption, suggesting a general trend that larger companies engaged in unconventional oil and gas development are less likely to commit regulatory violations when inspected than smaller companies.
Open Access
Interstate Leakage of Carbon Pollution Abatement
(2015-04-21) Hile, Sam
The U.S. Environmental Protection Agency (EPA) proposed state-specific limits on carbon pollution from existing sources in its recent “Clean Power Plan” proposal. These goals reflect the potential of states to reduce carbon emissions by, among other things, reducing demand for electricity generated from fossil fuels via end-use energy efficiency. The interconnected nature of the electricity grid, however, frequently causes the fossil generation reductions associated with these policies to transpire outside the state responsible for their implementation. This report shall refer to these phenomena as “interstate effects.” States implementing the Clean Power Plan (CPP) may only be interested in pursuing energy efficiency programs for compliance purposes if the associated carbon savings can be counted regardless of where they physically occur. However, the proposed rule would require states implementing such policies to ensure that the associated reductions are not double-counted by the state whose generation and emissions levels are affected. Interstate effects could thus influence the development of state compliance strategy. This Master’s Project seeks to develop a deeper understanding of the mechanisms and range of magnitude of interstate effects between power pools, under various levels of energy efficiency. It will demonstrate that up to nearly 40% of total carbon pollution abatement may occur outside the pool implementing the energy efficiency program, and that in such instances, regional cooperation among states may be needed to ensure sufficient signals for them to invest in energy efficiency as a compliance measure.
Unknown
New Ideas for Bermuda’s Energy Model
(2015-04-22) Landsberg, Judith
The world energy industry is in the throes of significant technological and policy change, providing Bermuda with an unprecedented opportunity to move toward a sustainable energy model. Presently, electricity on the island is supplied almost entirely by a diesel fuel oil utility, Belco, which is expecting to retire almost 50% of their generators in the next six years. At the same time, Bermuda’s Department of Energy is developing a new Energy Policy and establishing an independent Regulatory Authority. This study asks what Bermuda can learn from other island states which have committed to a sustainable energy portfolio. Bermuda has the opportunity to invest in alternative energy infrastructure at a lower price than was possible a few years ago, allowing for the displacement of a meaningful portion of Belco’s diesel oil capacity with renewable energy. The first section of the report describes the current energy model in Bermuda and two published plans for the future. The second section of the report develops case studies for the islands of Kaua’i and Aruba, which expect to supply more than 50% and 100%, respectively, of their electricity using renewable energy sources by 2020. Kaua’i and Aruba demonstrate similar policy and regulatory approaches, which contrast with Bermuda in the following ways: • Policy commitment to renewable energy • Aggressive pursuit of energy efficiency, both in generation and end-use • Aligning utility incentives with energy efficiency • Including environmental and social externalities in energy decisions • Embrace of innovation • Stable indirect incentives, such a power-purchase agreements for renewable energy The third section of the report reviews statutory approaches to energy efficiency in Vermont and California, two states particularly successful at reducing electricity demand, and recommends policy and regulatory changes for Bermuda, based on the two island, and Vermont/California case studies. The report concludes by estimating the potential impact of these approaches on Bermuda’s energy production. The results suggest that it may be possible to defer, possibly indefinitely, investment in new oil–based generating infrastructure and reduce fossil fuel electricity generation from the current 97% to below 50%.
Open Access
Power Sector Carbon Reduction: An Evaluation of Policies for North Carolina
(2021-03-09) Konschnik, Kate; Ross, Martin; Monast, Jonas; Weiss, Jennifer; Wilson, Gennelle
Well-designed clean energy policies can accelerate pollution reduction, make change more affordable for state residents and business, and stimulate job growth. For this reason, the North Carolina Clean Energy Plan—developed pursuant to Governor Cooper’s Executive Order No. 80—recommended the year-long study of carbon reduction policies for the power sector (Recommendation A1). The Duke University Nicholas Institute for Environmental Policy Solutions and the University of North Carolina’s Center for Climate, Energy, Environment, and Economics jointly conducted the study. This report reflects extensive modeling, policy and economic analysis, and stakeholder engagement. It does not make specific recommendations but evaluates different policies and offers options for decarbonizing the grid.
Open Access
Revisiting the NAAQS Program for Regulating Greenhouse Gas Emissions under the Clean Air Act
(2017-01-05) Reichert, Christina; Litz, Franz; Monast, Jonas; Profeta, Timothy; Adair, Sarah
The future is uncertain for the regulation of greenhouse gases from power plants, including the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan, which covers existing plants. The rule is under review in the D.C. Circuit Court of Appeals, and the Supreme Court has indicated its interest in hearing the case. Moreover, during his presidential campaign, president-elect Donald Trump promised to “scrap” the Clean Power Plan. If the rule is overturned or is severely weakened, whether through litigation or executive action, stakeholders are likely to litigate to seek to force the EPA to use other authorities under the Clean Air Act to regulate greenhouse gas emissions. This working paper examines the opportunities and challenges associated with regulation of greenhouse gases under the National Ambient Air Quality Standards (NAAQS) program, drawing a comparison with the Clean Power Plan’s approach under a different section of the Clean Air Act. The paper offers no opinion on the Clean Power Plan litigation, nor does it advocate for the Clean Power Plan or the NAAQS approach. Its focus is on understanding how the NAAQS program might incorporate greenhouse gases in in the event that the EPA pursues that approach.
Open Access
Wildlife Crime: U.S. Policy Recommendations for Improved Domestic Enforcement
(2017-04-27) Cantey V, S. Benton
Wildlife trafficking is the fifth most profitable illicit trade in the world. While it’s impossible to ascertain the true extent and value of the illegal trade, UNEP estimates range from US $7.6 to $23 billion globally per year. Wildlife trafficking occurs within and across U.S. borders. Not only is the United States among the world’s major markets for wildlife and wildlife products -- both legal and illegal – but it also serves as a transit point for trafficked wildlife moving from “source” (or “range”) countries to destination markets around the globe, as well as a source for illegally taken wildlife. The U.S. Government recognizes wildlife trafficking is a serious crime and it appears to be committed to ensuring domestic enforcement efforts adequately protect wildlife resources. Effective enforcement depends on robust legal authorities to disrupt wildlife trafficking networks, apprehend and prosecute traffickers, seize and forfeit proceeds of crimes and apply penalties that deter and prevent others from committing such crimes. As wildlife crimes are often similar to drug trafficking and other smuggling schemes, investigators employ techniques similar to those used in narcotics enforcement such as controlled deliveries of contraband wildlife and anticipatory warrants.

Browsing by Author "Monast, Jonas"

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