Sustainable Policies (2) Flashcards
Climate-energy policy
Subsides (includes offsets)
Financial rewards for adopting a particular technology, fuel or material. Includes grants, tax credits, rebates, gifts.
Subsides (Examples)
Electric vehicles subsidy
Renewables power production incentive
Insulation and home energy efficiency retofit subsidies
Carbon capture and storage subsidies
Subsidies major challenge
Subsidies may be captured by firms and households for doinf what they were going to do anyway (sometimes referred to as “free-riders”; economist call this “adverse selection”)
Free ridership estimates
Definition of offset
a s”subsidy”, usually form one private entuty to another, to help fund an action that reduces emissions from what they otherwise would be (buiness as usual)
Voluntary offset (Definition)
individual and corporations can voluntarily acquier offsets in order to reduce their net emissions
Regulate entity offset (Definition)
A cap and tradesystem could allow a regulated entity to meet some or all of ots emissions reductions by acquiering offsets
Crabon offsets : another fomr of subisdy
Goverments requier, and offsetter companies promises, that offsets are “ verified to be additional and permanent”. But proving this is dificult
Options for crabon offsets
1-Improving energy efficiency so that less fossil fuels are combusted and less GHG emitted
2-Changing agricultural prcatices, such as tillage, manure handiling and livestock feed
3-PLanting or perserving trees to oncrese carbon in biomass on the earth surface “ Nature based solutions”.
4-Capture or prevent a GHG emission (land fill gases, pipeline methane leaks, carbon capture and storage)
Evaluating sustainability public policy options: climate-energy focus(6)
-Command and control regulations on buildings, technologies, energy forms
-Emission pricing- carbon taxes, cap-and -trade
-Government direct action with assets or emplyees it manages inudce voluntary action by forms and households
-Subsides (including offsets)
-Flexible regulations- tradable quotas for desired techs, energy
-Community GHG-energy polices- land-use planning, development premitting, infrastructure
Carbon pricing terminology
-c-tax / cap&trade : are “explicit emission pricing
-Flex-regs could be called “implicit” emissions pricing
Zero-Emissison Vehicles (ZEV)
-Vehicle sellers must meet future min % sales of ZEV or pay large fine per vehicle sold in excess of target
-Can trade credits among themselves to achieve aggregate target
-Will cross-subsidize between vehicles types to achieve target
Community Energy Management (CEM) (Definition)
Integration of urban planning with energy system planning and management to reduce energy use and waste
Difference between CEM and Energy-climate policy
Energy climate policy often focuses in tech-fuel choices of firms and households.
CEM (Comunity Energy Management) focuses on choices of municipal gov’ts, utilities and corporations for infrastructure, buildings, urban form.
Spatial scale and time-frame
Spatial scale is large (whole cities) and the time-frame for change is long (decades).
Community GHG-energy management :Key elements (Policy objective)
Policy objective: Design cities that are efficient, compact and environmentally friendly, reducing greenhouse gases and energy used.
(Compact cities, improve economic for public transit and active mobility, lower infrastructure cost, reduce energy used for heating spaces, switch to cleaner fuels)
Community GHG-energy management :Key elements (Policy tools)
Policy tools
-Proper taxes
-Infrastructure investments
-Road pricing
-Building codes
-Utility efficiency rules
-parking restrictinos and feest
-Retrofit subsidies
-Local heat and power
Flex-Regs (Definition)
Performance-based regulations that require all firms in a sector to meet a certain environmental or operational standard.
Flex Regs (Firms Options)
-Comply with the regulation directly.
-Pay others (offset) to achieve the same enviromental goals, creating a market-oriented regulation
Flex Regs (Key idea)
It provides flexibility in how compliance is achieved, allowing forms to either innovate internally or leverage the efforts of others to meet regulatory goals.
Why are Flex-Regs Cost Effective
Flex-Regs are design to mimic the benefits of emission pricing systems like : Carbon taxes and Cap-and-trade
The flexibility allows firms to choose the most cost-effective way to comply with regulations
Flex-Regs Cost Effective (Key Features)
-No technology favoritism (Exp. renewables vs improved efficiency).
The market decided on the best approach.
-Trading among participants: Firms can trade compliance credits or allowances, lowering overall cost by allowing firms with cheaper reduction options to do more.
Objective of Low Carbon Fuel Standards (LCFS)
Reduce the full-cycle carbon intensity of fuels used in transportation
How LCFS (Low Crabon Fuel Standard Works
-Weighted Average Decline
-Flexibility for Compliance
-Eligible Fuels
Weighted Average Decline
Regulation mandates that the weighted average carbon intensity of fuels sold in a region must decrease over time.
Flexibility for Compliance(Sellers of fuels must either:)
-Meet the carbon intensity targets by blending or selling low-carbon fuels(Exp. biofuels, electricity, hydrogen, natural gas)
-Buy credits from other suppliers who exceed their targets, creating a trading mechanism
-
Eligible Fuels
Includes cleaner alternatives such as electricity (Hydrogen, naturals gas and biofuels)
Subsidy for Low-Emission Energy
-Sellers of traditional fuels (gasoline and diesel) are required to raise prices.
-The increased revenue is udes to subsidize providers of low-crabon fuels by purchasing credits (supports transition of clean energy sources)
What are the Mechanism of Flex-Regs in LCFS?
Market-Oriented: It allows trading of credits, giving participants flexibility to either improve their fuel mix or financially support others doing so.
Incentive-Based: Encourage innovation and adoption of low-carbon technologies without dictating specific technologies
Two flex regs
-Meeting Carbon Intensity Target
-Purchasing Credits
Compliance (Definition)
Act of following rules, regulations, laws or policies set by government, organizations or authorities. “playing by the rules”
Allowances (Definition)
Allowances are permits issued by regulators’ authority that grants entities the right to perform specific activities, such as emitting a set amount of greenhouse gases or extracting resources.
Rebates (definition)
Rebates are partial refunds or reductions in the amount paid for a product or service, offered as an incentive to encourage purchase or action
