New Berkeley Law Study: California Climate Policies Bringing Over $13 Billion To San Joaquin Valley

SJV Impacts Cover_Page_01Climate policies are under political attack, both in California and nationally.  The common argument is that these policies hurt the economy and destroy jobs, particularly in disadvantaged communities.

To assess those claims, the Center for Law, Energy and the Environment (CLEE) at UC Berkeley Law and UC Berkeley’s Donald Vial Center on Employment in the Green Economy, working with the nonpartisan nonprofit Next 10, released today the first comprehensive cost/benefit study of climate policies in the San Joaquin Valley, one of California and the nation’s most economically and environmentally vulnerable regions.

The Economic Impacts of California’s Major Climate Programs On The San Joaquin Valley specifically looked at the impact of cap-and-trade, renewable energy, and energy efficiency programs in the eight-county region.

Why the Valley? Simply put, if climate policies can work in this region, they can work anywhere.  In addition, the region’s elected leaders have asked questions about the impact of climate policies on their constituents, raising their concerns both in the state legislature and now nationally in the congress.

After examining the data and using advanced modeling software, we found that these three programs (among the most important in California’s suite of climate policies) brought over $13 billion in economic benefits to the Valley, mostly in renewable energy, and created over 31,000 jobs just in the renewable energy sector alone.

With the relatively new cap-and-trade program, we found that despite the compliance costs in the heavily industrial Valley, the benefits from state spending of the allowance auction proceeds outweighed those costs, particularly due to construction of high speed rail, which is funded in part with these funds.  Furthermore, once the state disburses proceeds already collected from the auction, those benefits will increase greatly.

The overall benefits to the Valley are likely to continue and grow through 2030, as the state strives to meet its newly legislated climate goals for that year, via last year’s SB 32 (Pavley) and SB 350 (De Leon, 2015).  Those efforts will require at least 50% renewables by 2030, a doubling of energy efficiency in existing buildings, and a more robust cap-and-trade program.

However, the benefits of cap-and-trade may cease if litigation over the auction mechanism (described by Ann Carlson at UCLA Law) is successful, as that mechanism allows the state to spend the proceeds that provide the benefits.  Furthermore, federal action to undercut renewables and energy efficiency could also slow the gains.

Ultimately though, California is committed to its path and these programs through bipartisan legislation and regulations.  Given the economic data we see in this study, its a path that the state should continue — and it can hopefully now inform federal debates about environmental policy and the need for job-producing programs.

You can access the full report via CLEE or Next 10′s websites, and check out partial media coverage in the Los Angeles Times, Central Valley Business Times, and Capitol Public Radio.

Measure S: L.A.’s Horrible Ballot Measure To Worsen The Housing Crunch
Super scary "overdevelopment" strikes L.A.

Super scary “overdevelopment” strikes L.A.

After just passing a landmark sales tax measure in November to boost transit investments, Los Angeles now risks throwing all that progress out the window this March.

Local NIMBYs have placed Measure S (as in “Sucky”) on the ballot then, in order to effectively stick the city in formaldehyde to benefit current property owners.  They claim it will save the city from an “overdevelopment” housing boom and corruption of City Hall leaders by developers.

Shane Phillips, policy director of Abundant Housing LA, takes on these charges in an op-ed in yesterday’s Los Angeles Times:

Far from experiencing a housing boom, Los Angeles is almost 30 years into a prolonged housing slump.

Data from the American Community Survey shows that between 1940 and 1990, L.A. built between 150,000 and 250,000 homes each decade. In the decades since, we’ve averaged fewer than 100,000. The 2010-2019 decade isn’t looking any better. As of 2015, only 13% of the city’s housing stock was built after 1990.

Data source: American Community Survey

He notes property owners have an incentive to clamp down on supply through this initiative:

A 2015 report by the state Legislative Analyst’s Office claims that L.A. County built 1 million fewer homes than were needed to keep housing prices in line with average U.S. growth rates over the past 30 years. The latest data from the Census Bureau puts L.A.’s rental vacancy rates at historic lows of less than 3%, which has empowered landlords to raise rents on existing homes and has driven up the cost of new development. Of the most crowded 1% of census tracts in the U.S., about half are in L.A. County. These are the symptoms of a housing shortage, not an oversupply.

Some might argue that the problem isn’t too little construction, it’s just that L.A. is full up. We’ve run up against the mountains, the ocean and neighboring jurisdictions. But in reality, a city is only full when it chooses to be, and bad luck to anyone who doesn’t already own property when that choice is made.

Meanwhile, he cites Seattle as a city that is building smart around transit.  As a result, it’s largely been able to stabilize rents through targeted density.

It will be a shame if this measure passes and dooms future generations in the region to stifling housing costs or long commutes, all while turning Los Angeles into a third world-style bastion of inequality, as only the wealthy can afford homes.  I hope that reality never comes to pass, but it will take defeating this measure in March to prevent it.

Is Climate Science Communication With The Masses Pointless?

ten-tall-tales-climate-change-skeptics-29-Jun-11A month ago, I blogged about a study that showed that conservatives might be open to climate science if the information is phrased in terms of what has been lost.  The study was based on the following logic:

Their idea is that conservatives tend to take a brighter view of the past than other groups; thus, they might be receptive to arguments regarding global warming couched in more pro-past oriented ways, e.g., “Times were better when you could count on snow for Christmas in northern towns,” or “We planted bulbs in the garden on the same spring day every year.”

But David Roberts at Vox throws cold water on the study — and the larger idea that climate scientists can make inroads among grassroots conservatives.  Instead, he argues that phrasing makes no difference when only “tribal” affiliations really determine our political beliefs:

The vast bulk of our knowledge, we take on faith. Or to put it more charitably, we take on trust. We absorb what we know from trusted peers and authorities. Our trust in them is a kind of heuristic that allows us to navigate a wildly complex and uncertain reality, of which we will directly experience only a tiny fraction.

Having an understanding of the world and your place in it — an understanding shared by your tribe — feels like safety. It feels like control. Questions that unsettle that understanding are instinctively treated with skepticism or outright hostility.

This is the great insight of the work done on “motivated reasoning” by Dan Kahan and his colleagues at Yale. (I’ve written about that work before, here, and Ezra Klein has written about it here.) For most people, most of the time, social bonds matter far more than any particular bit of knowledge, any fact or belief.

Roberts observes that only institutions can supersede this “tribal” dynamic.  Yet conservatives and their business allies have been systematically undermining the legitimacy of scientific institutions for years, arguing that they are corrupted, ideologically biased, and often wrong.  The efforts seem to have paid off among the conservative masses.

Instead of focusing on grassroots communication, Roberts thinks that only conservative elites have the power to change popular opinion among their tribal followers:

Conservatives will accept the scientific facts of climate change when conservative elites signal that that’s what conservatives do — when they demonstrate trust in the institutions of climate science. When that happens, there will be no particular grassroots resistance, because there’s no particular commitment to climate denialism outside its role in the culture war. Once it is not constitutive of conservative identity, it will be easily shed.

And that change, Roberts suggests, will only happen when the profit motive to combat climate change increases.

It’s a bit of a depressing take on the future of climate science mass communications, but one that does seem based on some solid research.  It’s worth contemplating as advocates try to improve the messaging.  It also points to the need to improve the business case for many of the industries we’ll need to tackle the problem, from renewables to electric vehicles to energy efficiency.

Because if Roberts is right, the profit motive will be much more powerful than the actual data in reaching climate deniers.

Used EV Batteries — Better To Recycle Than Reuse?

modulesUsed EV batteries — when they’re no longer able to store enough energy for driving but still have a lot of capacity left — seem like a great energy storage solution.  After all, it’s cheap storage that could be used for all sorts of purposes, from backup power to bulk grid storage when multiple batteries are stacked.

Reuse and Repower CoverI’m personally bullish on the opportunities and have blogged about all the investments going on in demonstration projects.  I also authored a report for UC Berkeley and UCLA Law schools on the potential: Reuse and Repower: How to Save Money and Clean the Grid with Second-Life Electric Vehicle Batteries.

But Charged EVs now reports on a new Lux Research study that thinks recycling will make more sense than repurposing:

In “Reuse or Recycle: The Billion-Dollar Battery Question,” Lux says that reusing batteries from EVs “will deliver questionable returns due to reduced performance, limiting them to applications with less frequent and shallower depth of discharge cycles.”

Lux forecasts that, in 2035, 65 GWh worth of used EV batteries will come on the market each year. An oversized 11.2 kWh residential storage system made from second-life batteries will cost about $4,600, compared with $6,000 for a new 7 kWh system. However, reduced round-trip efficiency and cycle life make a second-life system a poor fit for residential units and other daily cycling applications.

It’s an open question to some extent.  But the bottom line is we really don’t know how the batteries will perform.  They may maintain their diminished second-life capacity for a long time.  Or they might be easily repaired to boost cycle life and durability.

Furthermore, we don’t know all the different uses for these batteries.  Even if the batteries aren’t great for deep discharge and regular use, there could be many applications involving less usage, from backup power to bulk aggregations that put less strain on any one battery in the chain.  Ultimately we’ll need to see how the market responds and innovates.

Studies like these will therefore be more meaningful once we get data on some of these ongoing demonstration projects.  Otherwise, it’s premature to make an assessment either way.

The Real Problem With Driverless Cars — Lost Jobs?

indexSelf-driving cars and trucks are already here.  It’s mostly the laws and regulations that now need to catch up to make them ubiquitous.

While it’s easy to celebrate the potential benefits (greatly reduced accidents, saved time, and possible emissions savings from more efficient vehicles and driving patterns, including reduced ownership), I’m concerned about the impacts to the environment.  I described some solutions in a previous blog post that would reduce the risk that the technology just leads to more sprawl and traffic.

But maybe the environmental concerns are not the real story here.  Instead, it may be the potential for mass disruption in employment from full adoption of complete automation technologies.

Take truck driving, which is the most common job in most states.  As Joel Lee described in in 2015:

According to the Bureau of Labor Statistics, there were approximately 1.6 million American truck drivers in 2014 earning a mean income of $42,000. That’s more than half a percent of the country, and $67 billion dollars in income – about 0.3% of the US GDP.

These new trucks aren’t completely autonomous yet, but the technology is going to get there sooner rather than later. And when that day arrives, those truck drivers will need to find something else to do. When you include delivery truck operators, which numbered around 800,000 in 2014, we end up with 2.4 million people who may be out of a job in the next decade or two.

And then when you factor in delivery trucks, school buses, taxis, and other driving industries, plus auto body repair shops and parking meter attendants that may not be needed anymore, we could be looking at 4 million American jobs lost, or more than 1% of the country.

For his part, Lee argues that the benefits to the economy could more than make up for those lost jobs, such as from reduced auto repair costs and pollution.  But he recognizes that direct jobs created are unlikely to make up for the lost jobs.

In many ways, the arguments are similar to free trade: while we may lose some jobs, the overall benefits to the economy outweigh those impacts.  Of course, that’s easy to say if it’s not your job that’s lost.

Perhaps more importantly, we just saw the political effects of voters displaced by automation, as Trump capitalized in part on voter frustration with the decrease in manufacturing jobs lost to machines (that he incorrectly blamed solely on trade policies).

Ross Mayfield puts this growing automation trend in context (it will also affect white collar workers who can be replaced by software) and warns that it could lead to a huge backlash if the tech industry doesn’t take action now to head it off:

In 4–8 years there will be a populist politician that will point the finger at the Tech Industry as enemy number one. In a way, Trump already has. This person will yield a backlash against Tech that will stunt progress and make it an instrument of her or his control far worse. This is more than stones hurled at Google Busses. When people start to feel their unhappiness is because of Tech, the post-truth era of Trump and post-ethics of the GOP elite will pale in comparison to the real movements someone could control.

He suggests the industry refocus on technology that leads to job creation, and that the industry re-focus to support worker training program for jobs in the new technology world.

But in the meantime, we may be facing massive economic and environmental disruption on a scale not quite seen before.

Free “Railtown” Talk At UCLA On January 25th, Plus My Response To Recent Book Review

RailtownFor those in Los Angeles, I’ll be giving an evening talk on Wednesday, January 25th on the past and future of Metro Rail, based on my book Railtown.  The event is hosted by UCLA’s Lewis Center for Regional Policy Studies and will take place from 5:00 – 6:30pm in Room 5391 of the Public Affairs Building.  It’s co-sponsored by the UCLA Luskin School of Public Affairs, Department of History, and Institute of Transportation Studies. More information and registration is available on UCLA’s event page. I’ll have book copies available for sale and to sign.  Hope you can attend!

And speaking of Railtown and UCLA, I’m belatedly sharing this 2016 review of the book by UCLA assistant professor of urban planning Michael Manville in the Journal of Planning Education and Research.  Manville starts with some compliments:

This is a good book. Anyone who thinks they might like it probably will. Elkind is a talented writer and synthesizer of information, and the story itself is one that (for transportation nerds, at least) has long begged to be told. Elkind has scoured the archives and interviewed many of the participants in his story. I have lived in LA for more than ten years, studied transportation there, and rode many of its trains, and I still learned a lot reading Railtown.

However, he also offers some pointed critiques:

The book’s great weakness, to me, is that it takes rail’s necessity as a given. In doing so, Railtown assumes away the great unanswered question of modern rail: Why do we want it? What problem does it solve? There are times in Railtown…where rail seems almost an end in itself. Any proper city has rail, so rail is successful when we successfully build it. But in a city with scarce resources and vast needs, that is no way to justify enormous public expenditures.

It’s ironic to read this complaint because it is the exact mindset that I criticized early rail leaders for having in promoting rail.  For me, rail is a necessity for Los Angeles because it provides the best transportation infrastructure around which to channel future growth in the city (with the big unanswered question as to whether or not local leaders will allow that growth to happen).  Otherwise, future growth will either be disorganized and stuck in urban gridlock or pushed out as car-dependent sprawl.  And at the densities that Los Angeles would need to build new housing to meet market demand and accommodate existing and future residents, only rail can efficiently move those large numbers of people (again, assuming the density comes to fruition).

It’s also worth mentioning that a corridor like along Wilshire Boulevard already has the density needed to support rail and is a prime candidate for such a project as-is, just given the existing conditions there.

Manville then continues with the critique that rail won’t address the region’s underlying transportation challenges:

More train riding is not the same as less driving. Why should LA (or any city) descend into debt to subsidize rail when it could just stop subsidizing cars? Angelinos drive as much as they do because their government routinely widens roads, requires parking with every new development, and most of all lets drivers use the city’s freeways and arterials—some of the most valuable land in the United States—for free. The projects described in Railtown are distractions from, not solutions to, these problems.

I wholeheartedly agree with Manville on this point.  If the goal is to reduce traffic congestion, rail is not the answer, and I never make that claim in the book.  The preferred solutions for addressing the traffic problem in Los Angeles would involve congestion pricing and ending subsidies for driving, as Manville describes.

But there’s no reason why the region can’t do both: build alternatives to driving like rail transit and also stop subsidizing auto driving. In fact, both are needed simultaneously, and I don’t see any evidence that rail distracted the public from these other solutions. The reality is that rail is the politically easier thing to do, so it gets done first. But subsidies for autos will be easier to remove once there is a viable alternative in place, so rail could provide the conditions necessary to earn public support for the steps Manville envisions.  After all, San Francisco was able to stop subsidizing cars and become a “transit-first” city only after it developed a robust transit system, which included BART.

Overall, I agree with much of the book review and appreciate Manville’s comments.  You can read the whole thing and come to the talk on the 25th to discuss and hear more!

You Do Need A Weatherman To Know Which Way The Climate Science Goes

ten-tall-tales-climate-change-skeptics-29-Jun-11I’d like to think that most human brains can accept data and facts that may not comport with their individual, subjective experience.  But that would probably require denying reality, in its own ironic way.

And so it is with climate science, according to a new study in the Proceedings of the National Academy of Sciences journal, as reported by E&E News [paywall]:

People who live in areas where high temperature records are broken are more likely to believe in global warming than those who do not. In areas that experienced record lows, people were less inclined to believe in the mainstream climate science that shows human activity is warming the Earth.

And hence we have a U.S. Senator throwing a snowball on the senate floor as evidence that global warming is a hoax.

What Will Happen To Renewable Energy Incentives Under Trump?

RowofWindTurbines2It’s the big guessing game, given that the federal investment and production tax credits have been a major stimulant for renewables deployment in the U.S.  President-elect Trump is famously pro-fossil fuels, but some renewables advocates hope that the industry’s bipartisan support, declining costs, and record of domestic jobs production will help it weather the Trump storm.

Two big titans of the field, Bill Gates and Elon Musk, have differing views of what will happen, based on their conversations with the president-elect.  First per PV Tech, Gates is pessimistic:

After a call on clean energy with Donald Trump, Microsoft co-founder Bill Gates fears for federal support of renewables under the new US president.   [...]

Gates announced the formation of the Breakthrough Energy Coalition, the group that is launching the fund, at COP21 last year. In addition to the private investments, Gates said he and other investors convinced 20 governments to double their energy research and development budgets over the next five years.

In light of the call with Trump, however, Gates doubts how involved the US government will be in that commitment.

Gates acknowledged that the US “will probably see at the federal level less incentives for renewable deployment” during the Trump administration. “That is unfortunate,” he said.

But Musk is sounding more optimistic after meeting with Trump, per Eletrek:

During an event with investors at the Gigafactory in Nevada this week, Musk described his takeaway from the meeting and it looks somewhat encouraging for the clean tech industry.

photoInvestors attending the event told Electrek that Musk said the following when his meeting with Trump came up:

“The President-elect has a strong emphasis on US manufacturing and so do we. We are building the biggest factory in the world right here, creating US jobs… I think we may see some surprising things from the next administration. We don’t think they will be negative on fossil fuels… but they may also be positive on renewables.”

For my part, I could envision two possible futures for renewable incentives, both of which are not great. First, Congress could eliminate the tax incentives in a larger budget deal that cuts taxes significantly, since they’ll need to find offsetting revenue any way they can.  The tax credits could therefore be among the first to give.

Alternatively, Congress might keep the tax incentives as is but cut corporate tax rates so much that they become ineffective. Boomberg described how this would work back in November:

Wind and solar companies depend heavily on financing from large banks, insurers and other backers that take advantage of federal credits through tax-equity financing — they’re expected to provide developers with about $14.8 billion this year, according to Bloomberg New Energy Finance.

If corporate rates fall, as Trump has pledged if he is elected Tuesday, investors will have less need for write-offs through tax-equity investments. With wind and solar projects expected to need $56.2 billion in capital during the next president’s first term, a slump in the tax-equity market may leave developers short.

If corporations owe less to the government, “there will be less tax capacity to be taken up with tax equity,” said Keith Martin, a Washington-based attorney for law firm Chadbourne & Parke LLP who specializes in tax and project finance.

I hope I’m proven wrong and that the incentives stay strong, but it’s probably worth gearing up for at least some degree of rollback.  And that means strong advocacy in Congress to keep the incentives effective, and also coordinated state action among pro-renewable states to provide financing backstops in case of federal retrenchment.

Inside The Koch Brothers War On Climate Science — New Documentary

Right before the November election, the Real News Network released a 30-minute documentary called “The Doubt Machine: Inside the Koch Brothers’ War on Climate Science.” You can watch it above. It describes how Big Oil, and in particular the billionaire oil tycoons Charles and David Koch, have used their vast wealth and clout to undermine efforts to combat climate change.

The documentary is narrated by Oscar-winning actress Emma Thompson and directed by investigative journalist Bruce Livesey. It includes interviews with Jane Mayer, reporter with The New Yorker magazine and author of the book Dark Money; Naomi Oreskes, Harvard University science historian and co-author of the book Merchants of Doubt, Michael Mann, a climatologist at Penn State University; and Kert Davies of the Climate Investigations Center, among others.

You can learn more about the document and The Real News Global Climate Change Bureau at this site.  If you have time, it’s well worth watching the film.

Rooftop Solar Wars Update: Nevada Improves, Arizona Falters, & Tesla Batteries May Benefit

Most electric utilities hate rooftop solar.  When a customer installs solar on their roof, it means fewer sales (and therefore revenue) for the utility.  It also means more unpredictable and dispersed sources of power from rooftops everywhere.  As a result, many utilities across the country have been trying to kill state rooftop solar incentives for years.

commercial-solar-panels1I’ve covered the battles in states like California, Hawaii and Nevada on this blog.  The short of it is that California has slightly decreased their incentives for rooftop solar, in the face of declining prices and concern about utility costs; Hawaii has retrenched significantly but in turn created a new market for home batteries + solar; and Nevada brutally ended their incentives a year ago, leaving even existing solar customers without incentives that they had relied on when they bought their panels.

But the end of 2016 brought some significant updates for Nevada and now a new state, Arizona.  First, as Greentech Media reported, Nevada regulators have restored the incentives for customers in the northern utility service territory (after having previously given into public pressure and restored the incentives for existing customers to “grandfather” them in).

But Arizona regulators have decided to jump off the rooftop solar cliff, killing existing incentives (which involve a full retail credit for every surplus kilowatt of electricity generated by the panels and not used on-site).  Instead, solar customers in Arizona will be eligible for a vastly reduced and unpredictable “export rate” for any surplus electricity generated.  As the Arizona Daily Star described:

The export rates will be determined in each utility rate case and will initially be based on a “resource comparison proxy” based on a weighted, five-year average cost of power from utility-scale solar farms.

The new export rates will vary by utility and be stepped down annually, in increments limited to 10 percent each year.

Solar industry advocates are already predicting that their industry will die in Arizona, as they correctly predicted would happen in Nevada after incentives were killed there, too.

Once those jobs disappear and Arizonans realize what they’ve lost, especially given that the state was otherwise one of the best-selling markets for solar with its abundant sunshine and high air conditioning bills, expect major political pushback. I wouldn’t be surprised if we see a Nevada-like reversal in the coming year or so.

The Tesla Gigafactory when it was under construction.

The Tesla Gigafactory when it was under construction.

In the meantime, the big winner could be battery companies like Tesla. Per Bloomberg, as the company “flipped the switch” yesterday on its gigafactory in Nevada, it will potentially have a new market to sell its product.

Why?  Because if solar customers in Arizona aren’t going to get paid much for their surplus energy anymore, they’ll be interested in a cheap battery that can store that surplus and help them use all of it on-site.  The battery therefore allows them to effectively recreate that full retail credit they used to get under the old system: any electricity they would have had to purchase from the utility when the panels weren’t producing or producing enough, they can now get from their battery.

So while states lurch around on their rooftop solar policies, the long-term trend seems clear: the incentives are decreasing, and cheaper batteries will be filling that void.

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