As we near the end of the summer, it is important to reflect on how truly significant these past few months have been. In the United States, a heat wave in June broke or tied 3,215 high-temperature records, July came in as the hottest month ever and a drought has torn across over 60 percent of the lower 48 states. James Hansen, one of the world’s most respected climate scientists stated that the odds that natural variability caused these temperature anomalies is the equivalent of “quitting your job and playing the lottery every morning to pay your bills”. In other words, we are experiencing climate change driven by the emissions humans are putting into the atmosphere.
In light of these current events in climate history, it is important to consider the consequence of inaction in the context of climate change, as well as the many roadblocks that stand in our way. In July’s issue of Rolling Stone, Bill McKibben, of 350.org, wrote an article entitled “Global Warming’s Terrifying New Math,” which cites three critical numbers that are essential to understanding climate change today.
The first of these numbers is two degrees Celsius, the number which scientists agree that global temperature increase should not exceed. Thus far, we have raised the earth’s temperature about 0.8 degrees Celsius. While this is still less than half of the two degree ‘cap’, this temperature increase has caused more damage than most scientists ever expected: devastating floods, heat waves that exceed our temperature records, hurricanes, significant loss of Arctic summer sea ice, and the acidification of the ocean (just to name a few). If two degrees is our goal, perhaps we should begin to consider the earth-altering consequences that accompany that increase in temperature.
The second number McKibben cites is 565 Gigatons, the amount of carbon dioxide equivalent that scientists believe we can continue to emit into the atmosphere by the middle of this century while retaining hope of staying below the two degree goal. Unfortunately, the third number is 2,795 Gigatons, which is the amount of carbon dioxide contained in the fossil fuels that we currently plan to burn. This is the carbon found in the PROVEN coal, oil, and gas reserves of fuel companies and countries, like Venezuela or Kuwait. This number is five times higher than 565 Gigatons. Although these numbers are not perfect, they do show us a huge disparity between our goals and our current actions and plans.
Without substantial changes in policy or business, we are almost destined to burn 2,230 more Gigatons of carbon dioxide than our atmosphere can handle. At least two factors place considerable inertia behind this likelihood: profits and subsidies. Fossil fuel company value is tied up in these unburned resources; returns on the resources impact large and small investors, as well as ordinary people’s retirement portfolios. Unless we can pay companies to keep carbon in the ground, they only make money if we burn it. In terms of subsidies, the U.S. government has long supported fossil fuels.
Between 2002 and 2008 renewable energy received $12.2 billion in government support, while fossil fuels received $70.2 billion, while oil companies continue to have record profits. Over the past 15 years, the federal government gave the oil and gas industry five times the support that it gave to renewables.
We have a tremendous challenge in front of us, and we cannot achieve any meaningful greenhouse gas reductions if the incentives are lined up against our goals. With political will, we can remove at least one roadblock to confronting climate change: subsidies. Eliminating federal support of the oil and gas industries will go a long way towards leveling the playing field for alternative, carbon emission free energy. We need to make it attractive for traditional fossil fuel industries to go into clean energy, or make it so clean energy companies have a fair chance to compete, in order to give renewable energy a fighting chance.
One thing is for certain, if we do not change our energy system, we are destined for more extreme variable weather patterns. As this summer has showed us, climate change can be both uncomfortable and devastating.
~by guest blogger, Audrey Neuman
I’ve never considered myself a car guy. I walk or bike to work, and only drive begrudgingly, when I have to. True, some of this motivation comes from an environmental ethic, the same ethic that brought me to work at Energy Independence Now. But the real truth is simple: I don’t like to drive. This past week, that all changed.
It changed because of the Volt. Over the course of my weeklong car loan, I fell in love. I found myself making excuses to drive. Why get a pizza delivered, when you can go and pick it up?
For those of you who are not familiar with the Volt technology, it is an “extended range electric vehicle”. After charging up by plugging into almost any outlet, the Volt provides about 35 miles of pure electric driving pleasure. Once the battery is depleted, a hardly audible gasoline generator kicks in to charge the battery, extending the car’s range another 270 plus miles.
In simple terms it’s the car that “plugs in anywhere, and goes everywhere” (as you may have heard on the radio). If you plan right, you never have to go to a gas station, saving a ton of money. A friend of mine has had his Volt since November. He still hasn’t purchased gasoline (it is now June). The beauty of the system is that should he decide to take a road trip, he can. In other words, he can take the car as far as he wants to go, as long as there is a plug or a gas station along the way.
What’s so great about the car? It’s fun to drive. It’s smart. If you like to save energy, an easy and fun to watch gauge helps you out. If you want to kick it up a notch, you can let it fly in “sport” mode with the click of a button. The thing I liked most? It is quiet. Very quiet. On the freeway, with the radio off all you hear is the gentle hum of the tires, even in range extending mode.
I have to hand it to General Motors. This isn’t just a great American car. It’s a great car, period. I sincerely hope that GM sells a ton of Volts. The only downside: there are likely to be more drivers on the road.
The Volt plugged into a standard outlet at the EIN Office.
We have all seen and felt it before; we pull into our local gas station only to find the prices have risen substantially. Our fill-up cost has just jumped from $50 to $60, or from $60 to $80 or more. Multiplied across the economy, this price spike has large implications.
Just as the individual driving the large SUV feels the pain at the pump more than someone driving a sub-compact or plug-in vehicle, an economy without smart energy policies will feel the pain of an oil price spike more than one with a plan to reduce energy demand. A recent Energy Policy journal article, co-authored by Energy Independence Now’s Policy Director, Remy Garderet, along with Chris Busch, (Center for Resource Solutions), and James Fine (Environmental Defense Fund), represents the first scholarly paper to quantify the impact of oil price spikes on the economy.
Specifically, “The upside hedge value of California’s global warming policy given uncertain future oil prices” quantifies the impact of California’s AB 32 policy, which was a 2006 Assembly Bill that established statewide regulations, programs, and market mechanisms to reduce California’s greenhouse gas emissions to 1990 levels by 2020.
This paper is the first of its kind to introduce a key concept: policies designed to reduce emissions and energy use protects consumers from exposure to price shocks. These oil price shocks severely impact California’s economy because our demand exceeds production, leaving us dependent on oil imports and exposed to price changes. At the current price of $100 a barrel for imported oil, California spends $33 billion annually, or $90 million everyday. The California Air Resources Board (CARB) estimates, however, that with growing demand and rising prices, in 2020, California will be spending $49.2 billion per year on oil imports, or $134 million each day.
Currently, one of the greatest threats to California’s economic security is our dependence on imported oil and gasoline, a fact that is unlikely to change significantly in the near term. What we pay for our oil is often completely out of our hands. Macroeconomic models of the future ignore this uncertainty as well as the likelihood of future price shocks. A price shock is any sharp, rapid increase in the price of a product.
Since 1995, Americans have experienced 10 such spikes. Although policymakers have little control over the forces that create these shocks (oil is a global commodity with many market forces controlling its price), they must start considering how to limit price shock impact. This is where AB 32’s upside hedge value—the avoided expense to Californians during a price shock—comes into play.
Since AB32 reduces the demand for oil, it also reduces our vulnerability to a price shock, creating an upside hedge value. According to Garderet, Busch, and Fine’s analysis, this upside hedge value is bounded from a low of $2.4 billion to a high of $5.2 billion in 2020. In other words, without AB 32, California’s economy would likely loose $2.4 to $5.2 billion in 2020 alone.
Calculating the upside hedge value relied on four steps:
1. Identify AB 32-induced changes in energy use
-Uses a macroeconomic model with a detailed model of energy supply and demand to predict what the economy would look like in 2020 without AB 32 implementation
2. Develop retail gasoline and diesel price spike scenarios
-Uses historical real-world shocks to create an instantaneous rise of retail gasoline and diesel prices on January 1, 2020 that remains at that level for a full year (moderate shock=25% increase; large=50% increase)
3. Develop range for price elasticity of demand
-Considering the short-term changes to avoid driving consumers would make due to a sudden price shock, including cycling, walking, and/or using public transit more and the long-term changes such as moving closer to travel destinations or buying an energy efficient vehicle
4. Calculate the upside hedge value
-Multiply the price change and the quantity change to calculate the value of energy savings
For climate change and energy reduction policies to take hold across the country, policy makers need to understand the hidden benefit that climate change policies can have on future energy costs. As this recent Energy Policy article shows, in the case of AB 32, we have a win-win-win situation: it’s reducing Californian reliance on foreign oil, reducing domestic greenhouse gas emissions, and saving us money!
On January 28th, 2012, the California Air Resources Board unanimously voted to adopt the Advanced Clean Cars Program, which represents the most comprehensive effort in the world to set society on path to end our dependence on oil. It’s a tremendous victory for California residents and consumers, with national and global benefits and implications. By 2025 in California:
- One in seven new cars sold will be zero-emission (battery electric or hydrogen fuel cell electric) or plug-in hybrid vehicles, and approximately 1.4 million of these vehicles will be on the road;
- Greenhouse gases will be reduced by 52 million tons, the equivalent of taking 10 million cars of the road;
- Tailpipe emissions of soot and smog forming emissions will be cut by 75%;
- California drivers will save $5 billion in operating costs, with average consumers seeing nearly $6,000 in fuel cost savings over the life the advanced car (compared to added upfront costs of approximately $2,000); and
- 21,000 jobs will be added in California, rising to 37,000 in 2030.
The program rightly focuses industry efforts on both incremental and transformative change. On the incremental side, the Low Emission Vehicle (LEV) regulations set targets for automakers to improve the efficiency and emissions systems associated with internal combustion engines, which are likely to be at least part of our transportation portfolio well into the future. The Zero Emissions Vehicle (ZEV) and Clean Fuels Outlet (CFO) regulations aim to spur the commercialization of ZEVs, which do not rely on petroleum and offer a clear path to clean, sustainable transportation.
Interestingly, automakers all expressed general support of these rules. This marks a tremendous sea change from the past, when automakers nearly unanimously opposed past ZEV and LEV rulings. Why the change of heart?
The times have changed. Nearly all of the regulated companies have made substantial investments in the advanced technologies the regulations will require. Nissan and GM have released the Leaf and Volt, respectively, with the aim of making money. Upstarts such as Tesla, CODA, and Fisker are challenging the traditional players with their clean technologies. And the summer 2011 fuel economy agreement between the federal government, ARB, and automakers set the table for collaboration and cooperation.
Now the oil industry is the laggard. The Clean Fuels Outlet will require major oil refiner/importers to install hydrogen fuel stations (and potentially battery electric charging stations) to fuel ZEVs that the auto companies project they will produce. In the very worst-case scenario, the CFO would cost oil companies less than a day’s worth of profits. At best, any investment the oil companies make would be recovered with profits increasing over the years. Regardless, the oil companies are threatening legal action; much like the auto companies did at the advent of ZEV.
While the CFO saga will continue to play out as the rules become finalized, Energy Independence Now will be working behind the scenes to ensure that the rules set the floor for advanced technology deployment, not the ceiling. We have our work cut out for us, but the recent ARB action represents significant milepost on the way to sustainable transportation.
Well into the second month of the New Year, Americans continue to feel that all too familiar sting at the gas pumps. Though it is very clear that citizens remain unhappy about the current cost of fuel found at gas stations nationwide, Californians coming in at about $3.71 per gallon of regular unleaded, they may find themselves frowning a little less often once they hear how much other countries are paying for that same gallon. The US national average for regular unleaded as of January 25th was $3.39 per gallon, about $0.28 higher than prices last year at this time. Canada faces an average national price of about $4.67 per gallon with Japan reaching approximately $6.98 per gallon according to a report conducted by the International Energy Agency in December of 2011. France, Germany and Italy saw unleaded premium prices (95 RON) of $7.40, $7.51, and $7.83 per gallon respectively with the United Kingdom following at about $6.42 per gallon as of January. The IEA also reported Spain reaching a price of $6.44 per gallon with Australia’s national average trailing in at $5.45 per gallon. Lastly, Mexico currently pays a very tempting $2.86 per gallon for regular unleaded as a result of federally funded gasoline subsidies – a program whose extent remains uncertain.
So with the majority of the world paying much more at the pump, why is it that our prices remain so low in comparison? Well for one thing, the governments in these countries with higher prices tax far more per gallon than our own does. For instance, Germany, the UK, and Japan pay $4.42, $4.76, and $3.10 in taxes alone respectively, while the US only pays about $0.41 for every gallon purchased as of the end of 2011. Furthermore, subsidies offered to the oil industry by the national government also work to keep US prices low through corporate income tax breaks, tax-free construction bonds, and the funding of programs that mainly benefit motorists and the oil industry.
With the US national average price of gasoline expected to be even higher in 2013, Americans may find themselves looking for even the smallest amount of relief when it comes to transportation fuel costs. Surprisingly and fortunately, it can be found in the very alternative fuels that were once believed to be more expensive than their conventional counterparts. According to a recent report conducted by the US Department of Energy in October of 2011, ethanol (E85) and compressed natural gas (CNG) averaged $3.19 per gallon and $2.09 per gasoline gallon equivalent (GGE), respectively. Similarly, propane averaged $3.06 per gallon and biodiesel (B20) averaged $3.91 per gallon – with ethanol, propane and biodiesel showing a decrease in national averages from the last fuel report. Furthermore, the costs associated with driving a plug-in hybrid electric vehicle (PHEV) are equivalent to about $0.75 per gallon of gasoline according to a study done by the Electric Power Research Institute (EPRI) in 2007. Though the years to come may not bode well for conventional fuel prices, American citizens who currently depend on gasoline have cheaper, alternative fuel options that they can migrate to with their next vehicle. These fuel advances have come a long way and are far more appealing than they once were: they can increase energy independence, decrease emissions, and save consumers money.
By Christine Jaramillo
As gas price increases continue to creep up on us in the wake of the New Year, the majority of affiliates across the main political parties surprisingly find themselves in support of a common ideal. In a statewide survey conducted in July of 2011 by the Public Policy Institute of California (PPIC) on opinions regarding the environment, it was found that an astonishing 84% of state residents favored the requirement of automakers to significantly improve the fuel efficiencies of their vehicles. More specifically, 90% of Democrats, 81% of Independents and 76% of Republicans shared this particular view. Californians also demonstrated strong support (80%) for an increase in federal funding of the development of renewable energy sources such as solar, hydrogen and wind technologies. In light of the formal address made by President Obama on July 29th announcing the newly agreed upon plans proposing more stringent fuel economy and greenhouse gas standards, this collective and majority opinion could not have come at a better time. According to the latest Kelly Blue Book consumer survey taken in May 2011, “the vast majority of car shoppers (84%) said that gas prices have influenced [their] vehicle considerations… [and] indicated that better fuel economy was their main reason for planning to purchase their next vehicle.” Automotive companies manufacturing such fuel efficient vehicles have the numbers to prove it too. As of May 2011, GM, Honda and Nissan all show increasing trends in market sales of their hybrids as well as their other fuel efficient vehicle models. Taking all of these factors into account, the transition to better transportation energy practices is very promising and becoming more feasible.
By Christine Jaramillo
Car buyers everywhere have every reason to be excited. Whether they’re browsing for luxury, power, performance, or efficiency – they can expect to find themselves frequenting the gas pumps a little less often over the next coming years. The 2011 LA Auto Show officially opened to the public on November 18th and concluded exhibit viewings on the 27th. Despite the premiere of a staggering 1,000 new vehicles, the most notable aspect about this year’s show was the significant increase in vehicle fuel efficiency across the board in all categories. In light of Obama’s new fuel efficiency standard of 54.5 mpg by 2025, car manufacturers wasted no time in working towards this goal with design innovations appearing in both their debut models as well as models already in production. The show displayed a total of 15 vehicles with 40 plus mpg, 35 hybrid and plug-in hybrid vehicles, 9 clean diesel vehicles, 7 electric vehicles, 13 alternative fuel vehicles and 2 fuel cell vehicles.
In the spirit of competition, Best of Show recognitions were made and selected based on fuel efficiency, tailpipe emissions, and incorporation of innovative technologies that allowed vehicles to meet California’s Clean Car Standards. For the Working Truck category, the blue ribbon went to the Ford F-150 with EcoBoost, followed by the Toyota Tacoma as the runner up. For the Sporting Car category, the blue ribbon went to the Honda CR-Z Hybrid Coupe followed by the Mazda3 SKYACTIV as the runner up. For the Non-Sporting (midsize) Car category, the blue ribbon was awarded to the 2013 Chevy Malibu Eco with the 2012 Toyota Prius Plug-in placed as runner up. For the Herding Car (SUV/Minivan) category, the blue ribbon was awarded to the 2013 Ford C-MAX Energi Plug-in Hybrid with the Toyota Prius V placed as runner up. And lastly, for the Compact (or subcompact) Car category the blue ribbon went to the Hyundai Elantra followed by the BMW i3 as the runner up. Vehicles and technologies recognized for Best of Show are either currently on the market or expected to be on the market within the next 2 years.
So to all those prospective buyers looking to purchase the greenest car of 2012 – look no further. The Honda Civic Natural Gas won the 2012 Green Car of the Year Award and boasts the cleanest-running internal combustion engine certified by the U.S. Environmental Protection Agency. The model gets 48 mpg on the highway and releases tailpipe emissions at levels that render it untouchable by any competing engines of its kind. Automotive manufacturing companies are making extensive improvements in vehicle fuel economy and couldn’t be doing it at a better time. With gasoline prices expected to reach record highs in 2012, the demand for more efficient and cleaner-burning cars by drivers all over the world could not be more present.
By Christine Jaramillo
In our society's quest for energy independence, its important to remember that no one solution is going solve our oil addiction problem. We consume A LOT of oil. People naturally have different driving habits and transportation needs. To truly reach a sustainable transportation system, we need to have zero emissions vehicles that can meet the driving demand of all drivers. This means zero tailpipe emissions today,and moving towards zero energy production emissions in the future. Check out this EIN video to learn more:
For a list of references for facts stated in the video, please click here.
For 45 years, the state of California has made remarkable progress towards improving air quality via the implementation of critical standards and regulations. California, the pioneer state for tailpipe emission standards, now faces another critical set of decisions later this fall that could significantly impact the health of its residents as well as the production of, and transition to, cleaner vehicles. CARB will be voting on important updates to the Clean Cars Program that aim to reduce toxic vehicle emissions, decrease greenhouse gas emissions, and improve the availability of infrastructure that properly supports clean, alternative fuel cars. As expected however, advocates for more stringent standards are not met without opposition – placing the California Air Resources Board in familiar territory: balancing health, environmental, and economic well-being.
Physicians and other health professionals are some of the major players in support of strengthening federal air quality regulations, particularly vehicle emissions, and continue to rally ever increasing numbers – with good reason. California can successfully claim all 10 of the nation’s smoggiest counties and thus, some of the worst air pollution in the country. The major cause? Over 30 million registered vehicles and the staggering amounts of traffic pollution that they produce. Support from the medical sector continues to call public attention to poor air quality and its direct relation to negative health impacts, both acute and chronic. These effects include respiratory diseases such as asthma, bronchitis, emphysema and many others – with the most serious being lung cancer and premature death. The populations most susceptible to emission-related illnesses are children, the elderly and those with preexisting respiratory conditions. According to a study done in 2010 by the RAND Corporation, “unhealthy air days caused 33,000 Emergency Room visits and hospitalizations at a cost of almost $200 million dollars from 2005-2007”. According to “The Road to Clean Air” study conducted by the American Lung Association, California could potentially reduce all major air pollution-related health problems by as much as 70% – a change that proves both economically and socially beneficial. With the overall well-being of society in mind, health professionals as well as the American Lung Association continue to push for the protection and maintenance of strict air quality regulations. However, automotive manufacturers and their employees express concern to such firm standards, particularly the steep increases in Corporate Fuel Economy Standards (CAFE) and increasingly stringent GHG emissions standards.
Though automakers’ express valid and genuine concerns, history has shown us that seemingly ‘impossible’ air quality standards have been instated and successfully practiced despite initial uncertainties. The state of California experienced that firsthand with, for example, the requirement of pollution-reducing catalytic converters in new cars and the adoption of the smog check program. The mistake is made in the assumption that it is an either/or decision. It is not a choice between the health of the public and economic prosperity, but rather how soon we hope and want to see changes for the better. Now having reached an agreement, a collective effort can be made on all parts. As demonstrated in the past but not without its challenges, meeting these new regulations still remains an accomplishable goal. Through this progress, physicians and other supporters can hope to see the clear skies and improved air quality they’ve been working toward.
At the end of June, the California Air Resources Board (CARB) hosted a Hydrogen and Fuel Showcase to educate board members on the incredible progress hydrogen and fuel cell technology has made under the Zero Emissions Vehicle program. Check out Remy Garderet (EIN’s Policy Director) at the event in this video clip:
His points are well put; CARB’s Zero Emission Vehicle Program helped drive substantial investment into fuel-cell-electric-vehicles (FCEVs), as well as battery-electric-vehicles (BEVs). As a result, consumer ready, zero-emissions products are ready to be launched. Without strong government policy, much of this progress simply would not have been made.
We need continued strong policy signals to ensure the successful deployment of these technologies and the infrastructure needed to support them. EIN is working hard to ensure that by 2025, 1 in 5 vehicles on car lots will be able to run on hydrogen or electricity. Because of these recently showcased technology advancements, this vision is attainable. We can now realistically hope that your next vehicle will be powered by hydrogen, electricity, or both.