Why Do Governments Tax or Subsidize Fossil Fuels?

Why Do Governments Tax or Subsidize Fossil Fuels? Center for Global Development. Paasha Mahdavi , Cesar B. Martinez-Alvarez and Michael Ross. August 18, 2020

Governments have long faced pressure to address the climate crisis by increasing taxes on fossil fuels, which are the source of more than three-quarters of the world’s anthropogenic carbon pollution. Since fossil fuel taxes and subsidies are hard to measure, it is unclear how much government policies have changed. Using original high-frequency data on gasoline taxes and subsidies in 157 countries, we establish three findings: despite rising alarm about climate change, from 2003 to 2015 there was little net change in fuel taxes and subsidies at a global level; fuel taxes and subsidies appear to be driven by slow-moving economic factors, primarily income and fossil fuel wealth; and reforms, when they occur, are overwhelmingly associated with country-level political conditions that follow no readily-discernible patterns. These patterns are consistent with a model in which fossil fuel taxes are determined by a country’s income and revenue needs, not its environmental commitments. [Note: contains copyrighted material].

[PDF format, 72 pages].

Race to the Top: The Case for a New U.S. International Energy Policy

Race to the Top: The Case for a New U.S. International Energy Policy. Center for Strategic & International Studies. Sarah Ladislaw, Nikos Tsafos. July 6, 2020

U.S. foreign policy has always thought about energy and, more recently, climate. In the last decade, however, the energy landscape has changed dramatically. These changes are occurring within broader geopolitical shifts, which redefine the context for U.S. foreign energy and climate policy.
In January 2021, a new administration, and maybe a new president, will be sworn in and the continued search for an international energy and climate strategy will go through another iteration.
To prepare for that moment, we spent much of that last year thinking about what that strategy should be; this document summarizes our results. There is an enormous opportunity to advance a domestic and international energy strategy that provides tangible economic, security, and environmental benefits for the United States while encouraging and supporting a framework of constructive international competition based on shared interests.
Such a strategy should be based on three key principles:

• Old strategies will not work—too much has changed.
• Reinvesting in domestic energy competitiveness is an essential first step.
• Encourage an international race to the top. [Note: contains copyrighted material].

[PDF format, 66 pages].

Nuclear Energy: Overview of Congressional Issues

Nuclear Energy: Overview of Congressional Issues. Congressional Research Service. Mark Holt. Updated July 16, 2020.

The policy debate over the role of nuclear power in the nation’s energy mix is rooted in the technology’s fundamental characteristics. Nuclear reactors can produce potentially vast amounts of useful energy with relatively low consumption of natural resources and emissions of greenhouse gases and other pollutants. However, facilities that produce nuclear fuel for civilian power reactors can also produce materials for nuclear weapons. In addition, the process of nuclear fission (splitting of atomic nuclei) to generate power produces radioactive material that can remain hazardous for thousands of years and must be contained. How to manage the weapons proliferation and safety risks of nuclear power, or whether the benefits of nuclear power are worth those risks, are issues that have long been debated in Congress.

[PDF format, 29 pages].

New Nature Economy Report Series

New Nature Economy Report Series. World Economic Forum. July 14, 2020.

A series of reports showing the relevance of nature loss to boardroom discussions on risks, opportunities and financing. These insights provide pathways for business to be part of the transition to a nature-positive economy. [Note: contains copyrighted material].

[PDF format, 111 pages].

Environmental Effects of Battery Electric and Internal Combustion Engine Vehicles

Environmental Effects of Battery Electric and Internal Combustion Engine Vehicles. Congressional Research Service. Richard K. Lattanzio, Corrie E. Clark. June 16, 2020

Increased deployment of battery electric vehicles (BEVs) and other alternative-fueled vehicles in the United States could have a variety of effects on energy security, the economy, and the environment. In an effort to address certain environmental concerns, including climate change, some Members of Congress and some stakeholder interest groups have expressed interest in the promotion of these technologies—specifically BEV technologies. This interest may include an analysis of the environmental effects of BEVs from a systems perspective, commonly referred to as “life cycle assessment” (LCA).
Practitioners of LCAs strive to be comprehensive in their analyses, and the environmental effects modeled by many rely on a set of boundaries referred to as “cradle-to-grave.” Cradle-to-grave assessments in the transportation sector model the environmental effects associated with the “complete” life cycle of a vehicle and its fuel. This consists of the vehicle’s raw material acquisition and processing, production, use, and end-of-life options, and the fuel’s acquisition, processing, transmission, and use. LCA practitioners focus on a variety of potential environmental effects, including global warming potential, air pollution potential, human health and ecosystem effects, and resource consumption.

[PDF format, 41 pages].

Energy Transition: Coal as the Canary

Energy Transition: Coal as the Canary. YaleGlobal. Joshua Busby, Morgan D. Bazilian and Dustin Mulvaney. April 23, 2020

New challenges and innovations put economies in constant transition, but Covid-19 has applied an abrupt halt to economic activity for most of the world. Huge shifts were already underway in global energy markets with the rise of shale gas and renewables before the pandemic. Societies must prepare to mitigate the consequences for workers and local economies as pressure grows to phase out fossil fuels and cut emissions and pollution, explain Joshua Busby, with the LBJ School of Public Affairs, University of Texas-Austin; Morgan D. Bazilian, director of the Payne Institute, Colorado School of Mines; and Dustin Mulvaney, with San Jose State University. Transitions to new energies must consider workers and communities that depend upon fossil fuels as well as the communities that lack energy access or suffer from pollution. Nations with industrial strategies focused on new technologies such as electric vehicles may be more competitive, providing clarity for investors while providing resources in funding inevitable energy transitions. The writers conclude, “Countries that remain overwhelmingly reliant on legacy energy technologies risk exposing workers and communities to large losses in sectors that become obsolete.” Energy innovation and transitions could contribute to post-pandemic economic revitalization. [Note: contains copyrighted material].

[HTML format, various paging].

Covid-19 Demands Innovative Ideas for Financing the SDGs

Covid-19 Demands Innovative Ideas for Financing the SDGs. Center for Strategic & International Studies. Daniel F. Runde, Christopher Metzger, Hareem F. Abdullah. May 7, 2020

THE ISSUE

The Covid-19 pandemic exacerbates the challenges to achieving the 17 Sustainable Development Goals (SDGs) and highlights the need for a shared framework for tackling global challenges. No country in the world is on track to meet all the goals by 2030, and collective action is needed to make real progress.
Even before the current global pandemic, the financing gap to achieve the SDGs by 2030 was estimated to be $2.5 trillion per year. The bulk of this financing is expected to come from developing countries’ government revenue and savings, which can be increased through concerted domestic resource mobilization (DRM) efforts.
New sources of private capital could be used to fill the SDG financing gap but will require innovative and scalable approaches. Developing countries would benefit from mobilizing local pools of capital as well as from increased foreign direct investment (FDI), remittances, and investments from pension funds. Financial tools and approaches such as guarantees, green and infrastructure bonds, and advanced purchase agreements can be used to encourage participation from untapped private sources. [Note: contains copyrighted material].

[PDF format, 11 pages].

Decarbonizing the Electric Power Sector

Decarbonizing the Electric Power Sector. Center for Strategic & International Studies. CSIS Briefs. Stephen Naimoli and Sarah Ladislaw. May 12, 2020.

In 2018, the power sector emitted 13.6 billion tons of carbon dioxide (CO2) into the atmosphere, 41 percent of total global emissions. To have a chance of holding global temperature rise below 1.5 degrees Celsius relative to its preindustrial level, global emissions from all economic sectors, including the power sector, must be reduced to net-zero around 2050.
One of the challenges of decarbonizing the power sector is sufficiently reducing greenhouse gas (GHG) emissions while guaranteeing reliability, security, and affordability. Solar and wind power are zero-carbon technologies, but their variability could challenge grid stability if they are not properly balanced by sufficient storage and firm power. Jesse Jenkins, a Princeton professor and one of the speakers at CSIS’s March 30 event on power sector decarbonization, likens the power system to a balanced diet: directly comparing the costs of variable renewable energy to those of firm power sources is like comparing the cost of a banana to the cost of a hamburger. Both can be evaluated on cost alone, but doing so misses the different roles they play in a balanced electric power system. [Note: contains copyrighted material].

[PDF format, 7 pages].

Mapping Public Water Management: Proof of Concept

Mapping Public Water Management: Proof of Concept. World Resources Institute. Cristina Logg et al. April 2020

What cannot be measured cannot be managed. Poor water management poses major risks to agriculture, industry and local communities. However, there is a critical lack of information available about local water conditions — making better management difficult. WRI’s Water Program studies local water data and governance and shares best practices in order to advance context-driven, meaningful water management.
WRI and the Pacific Institute are currently working to map public water risk by harmonizing and sharing water risk information among industrial water users on the following criteria:
• Access to information on water quantity and quality
• State of infrastructure
• Existence and enforcement of allocations and caps
• Local pricing systems
This Technical Note documents the results of a pilot with 6 companies and 41 facilities, and creates an updated question set to better understand conditions of public water management. [Note: contains copyrighted material].

[PDF format, 28 pages].

The Renewable Fuel Standard (RFS): An Overview

The Renewable Fuel Standard (RFS): An Overview. Congressional Research Service. Kelsi Bracmort. Updated April 14, 2020

The Renewable Fuel Standard (RFS) requires U.S. transportation fuel to contain a minimum volume of renewable fuel. The RFS—established by the Energy Policy Act of 2005 (P.L. 109-58; EPAct05) and expanded in 2007 by the Energy Independence and Security Act (P.L. 110-140; EISA)—began with 4 billion gallons of renewable fuel in 2006 and is scheduled to ascend to 36 billion gallons in 2022. The Environmental Protection Agency (EPA) has statutory authority to determine the volume amounts fter 2022.
The total renewable fuel statutory target consists of both conventional biofuel and advanced biofuel. Since 2014, the total renewable fuel statutory target has not been met, with the advanced biofuel portion falling below the statutory target by a relatively large margin since 2015. Going forward, it appears unlikely that the United States will meet the total renewable fuel target as outlined in statute.

[PDF format, 17 pages].