UPDATE (March 28, 2017): The Trump administration has signed an executive order to dismantle, halt, or slow down many climate policies that have been years in the making, including the Clean Power Plan. As part of its litany of bad justifications for doing reckless things, the administration cites a deficient fossil fuel-funded study as a reason for the CPP rollback—the same study whose flaws we pointed out in the post below.
Unlike fine wine, analysis doesn’t get better with age. In fact, many of the things the post mentions below are even more true now, and make the study an even shakier foundation on which to build responsible (or irresponsible) policy. Energy efficiency is at least as good a deal as it was then, our need for pollution reduction is just as great, and the costs of renewable energy (solar, for example) have become even more impressive.
The executive order is a poor excuse for policy, and this particular study is a pitiful leg to stand on.
Learn more about President Trump’s all-out attack on climate policies on my colleague’s post.
The American Coalition for Clean Coal Electricity (ACCCE) has funded yet another flawed analysis by NERA Economic Consulting to try to shore up the faltering campaign against the Environmental Protection Agency’s Clean Power Plan. This new study is no improvement on the previous one, and actually goes backward in terms of how straight-forward they are about the study’s inputs and assumptions.
In 2014, ACCCE and NERA rolled out a flawed analysis of the proposed Clean Power Plan (CPP). That study had problems (see here and here, for example) because it gave little information about their assumptions, because the assumptions they did present weren’t all credible, and because they totally ignore the full range of really important benefits of the CPP.
Well, it’s a whole new year now, and we have a final CPP. So it’s a whole new ballgame, right?
More of the same, and less
The first thing to notice is that this new version has even less information than last time about actual costs and performance assumptions used. While the earlier iteration was a full report, this one is just a bunch of PowerPoint slides, with no apparent detailed technical or methodology documentation elsewhere.
Their study is largely a black box, and the black box has gotten blacker.
We can’t tell if their assumptions would stand up to the light of day. And that makes it really tough to assess their results, or rely on them for policy making.
But the information that is included provides sufficient fodder to question the results. A few examples:
Energy efficiency. In its latest study, NERA once again ignores recent studies that show real world investments in energy efficiency programs generate net savings for consumers; efficiency shows up in their study as a net cost.
In its own cost-benefit analysis, the EPA found the Clean Power Plan will ultimately generate electricity bill savings for consumers. Part of that difference is that, while the EPA projects that the upfront cost of energy efficiency will decline over time, NERA admits that it “assumed the cost would remain constant…” It’s as if they think the revolution in appliances, heating systems, lighting, (cars),… never happened (and won’t again).
NERA also totally ignores the Clean Energy Incentive Program that the EPA included in the final CPP in part to ensure low-income communities share in the benefits from energy efficiency savings.
Renewable energy. NERA’s model, it says, includes 23 different coal types. One could imagine they weren’t quite so detailed in their assessment of renewable energy technologies, costs, and potential (though one can only imagine that, since the data aren’t there).
If they were “calibrating” based on EIA, as they claim, or even using EIA’s data directly, they were building their analysis on a foundation of out-of-date costs and performance assumptions for fast-moving renewables like solar and wind. The real world shows lower costs, improved efficiencies, and higher yields.
Carbon revenue. The study lists billions of dollars’ worth of “costs” from auctioning off carbon allowances, but gives little indication of what would be done with that money. They say that they imagine it being returned to households “by means other than lowering electricity rate impacts,” but proceed to focus most of their results on, yes, electricity sector impacts.
You could easily view allowance sales as revenue for reinvestment, as states in the Northeast and Mid-Atlantic have done so effectively since 2009 under the Regional Greenhouse Gas Initiative. That leads you to very different conclusions in terms of the electric sector from, say, expecting that policymakers will pile all the money together and set fire to it (analytically speaking).
When you correct for that range of errors, as Starla Yeh and colleagues at NRDC so usefully have, the right answer turns out to be a much more attractive picture.
Other benefits. NERA does deserve some credit for acknowledging that “All compliance scenarios will lead to large reductions in average CO2 emissions.” They fail, though, to quantify the other benefits of the Clean Power Plan, most notably the health and climate benefits that EPA found will far outweigh the costs.
Where it goes next
Alas, experience suggests that, as bad as NERA’s figures are, they’ll get even worse in the re-telling, as we discussed in a webinar earlier this year, as CPP opponents unintentionally (or deliberately) misinterpret NERA’s somewhat confusing way of presenting their results.
This isn’t likely to be the end of attempts to muddy the waters around the Clean Power Plan and other important moves on climate. ACCCE’s members include fossil fuel and utility interests, such as Peabody Energy (coal), with well documented histories of deception on climate change.
Truth has a habit of coming out eventually, and the time for deception—about the Clean Power Plan or anything else climate related—is past.
(In case some still don’t get that the time is past, though, watch this space, and follow my colleague Dave Anderson, who does a great job keeping track of disinformation, deception, and efforts to push back, and to whom I tip my hat for help on this post.)
Correction (11/13/15): An earlier version of this post incorrectly listed ExxonMobil as an ACCCE funder. While ExxonMobil does have a prominent part in our histories of deception on climate and energy, they are not actually a funder of ACCCE.