If there’s one area where Trump is likely to have legislative success, it’s probably the budget and taxes. A partisan majority of Republicans in Congress will go along with any tax and spending cuts, leaving Trump in a good position to get his way. And his current budget proposal is nothing less than a full-scale assault on environmental protections and public health.
It’s a bad combination of Trump’s seemingly genuine antipathy to government regulations and his party being captured by big polluters in the oil and gas industry.
My UC Berkeley Law colleague Dan Farber runs through the numbers on Legal Planet, but they basically include massive cuts to environmental enforcement, restoration and monitoring, including on climate data, as well as eliminating research in clean energy.
The last part on clean energy cuts is particularly frustrating. I’ve blogged before about the success of ARPA-E, the most important governmental agency you’ve never heard of. It’s the “moonshot” agency that is funding breakthrough technologies in batteries, solar power and other vital technology. Since 2009, it has provided $1.3 billion in funding to more than 475 projects, of which 45 have then raised $1.25 billion in private sector funds.
So of course Trump and his allies want to eliminate the agency completely.
But all is not yet lost. The budget will go through a lot of sausage-making in Congress, and even many Republicans are invested in some of these programs, given the benefits they provide their districts.
But environmental and public health advocates will be starting from a tough position, and this is one area where Trump is likely to get a lot of what he wants.
Elizabeth Mukwimba is a 62-year-old Tanzanian woman who now has solar lighting and electricity in her home at the flick of a switch, thanks to an off-grid project. Photo from Off-Grid Electric.
Tanzania exemplifies so much of the future of energy infrastructure in developing world countries, as Greenbiz describes:
The East African country of Tanzania faces a serious electrification challenge. Only 2 percent (PDF) of rural households have access to electricity, and most of the rural population relies on expensive, hazardous and low-quality fuels such as kerosene for lighting and charcoal for cooking.
Access to electricity and other modern energy services is fundamental to human well-being and to a country’s social and economic development. In many countries, electrification through off-grid applications has become a cost-effective alternative to conventional grid expansion in remote areas — and this could become a model that propels Tanzania’s next phase of economic growth. Already in the country, energy systems based on wind, small hydropower, biomass and solar resources are being used successfully to meet energy demand in isolated villages. By integrating these renewable-powered off-grid systems, rural communities are increasing their access to affordable energy supplies while contributing meaningfully to climate change mitigation.
Much like the leap to cell phones over landlines, many countries like Tanzania are better served going directly to decentralized, renewable technologies rather than building expensive and dirty traditional power grids with central-station power plants and far-flung transmission lines.
The upside is a cleaner, more resilient energy system with potentially few impacts on the land. It also means more immediate electrification for rural residents, rather than making them wait for government and utilities to build a centralized grid to reach them.
I note that in this article, batteries do not seem to be on the table for Tanzania’s rural areas, while biomass may make up a crucial portion of the electricity mix. I have nothing against biomass in concept, but depending on the technologies and incentives involved, it can sometimes lead to increases in emissions.
These opportunities in many ways come from the developed world’s investment in renewable technologies, which has brought prices down to the point where they are now viable options for poorer countries like Tanzania.
Donald Trump and his Republican backers have long railed against environmental laws and regulations that disfavor coal. Trump won in part by promising to bring back coal mining jobs.
But like so many of his claims, the truth is more complicated. Coal mines and plants are shutting down around the country mostly due to cheap competition from natural gas, not from environmental protections.
The big case in point, and coming at a bad time for Trump, is the announced closure of the Navajo Generating Station, one of the country’s largest coal-fired power plants.
The plant is located in Page, Arizona, near the Utah border, and is such a big polluter that it is responsible for much of the haze in the Grand Canyon, as well as a major source of greenhouse gas emissions. It provides 90 percent of the energy for the Central Arizona Project to pump water uphill from the Colorado River through a 336-mile canal to deliver water to Central Arizona farms, cities, and tribes.
For that reason, Central Arizona Project leaders were opposed to environmental regulations back in 2009 that would add costs to the station to make it run more cleanly. But now those leaders are changing their tune. In a blog post to his stakeholders, executive director Warren Tenney explained his change of heart about closing the plant:
Pure economics is driving the decision. The utilities that own [Navajo Generating Station] now are dealing with a power plant that is significantly more expensive than other energy options. Natural gas prices have dropped to record lows to become a viable long-term and economical alternative to coal power. This means pursuing the regulatory upgrades that were part of the compromise with EPA are even less cost-effective today. However, even if EPA loosened its coal regulations, the energy industry is headed towards having natural gas generation as the fuel of choice for many years to come.
In fact, the coal power is now so expensive compared to alternatives, Central Arizona Project leaders estimated they could have saved $38.5 million in 2016 had they bought power on the open market instead.
It’s a big test for the Trump Administration. Do they intervene to prop up this economically inefficient plant in order to make good on campaign promises? E&E [pay-walled] explored the options for them:
Washington is uniquely positioned to help. The government owns a 24.3 stake in NGS [the Navajo Generating Station] through the Bureau of Reclamation. When utilities announced the closure, Reclamation officials said the bureau would help identify options to keep it running.
But direct federal intervention to keep NGS running would amount to a stark reversal of previous policy, which largely focused on the idea of slowly transitioning the coal-reliant tribes toward renewables. Now, federal and tribal facilities face a ticking clock and an administration with a new set of priorities.
Complicating matters is that the plant is the economic lifeblood for the Navajo and Hopi Tribes, which receive significant income from the plant and coal mining operations on their lands. The Arizona Republic ran an in-depth piece exploring the impact of the coal mine on these tribal nations:
Hopi Chairman Herman Honanie has worked for tribal government since 1977. He said tribal members are split nearly evenly between support for the mine and closing it because of environmental concerns.
Hopi Tribe Chairman Herman Honanie
He sides with keeping the mine open.“The practicality is we have a growing population and we have growing needs,” Honanie said. “We have one foot in our culture and the other foot on the other side of dominant society and we are trying to mesh that together.”
Approximately 350 people who work for the tribe rely on the royalties from the mine for a significant portion of their paychecks. Those workers provide services from tribal courts to hospice care for the elderly.
The tribe anticipates $18.4 million in revenue this year, and more than $12 million of that will come from mining activities and from SRP for payments based on how well the power plant performs. Less than $2 million trickles in from court fees, business taxes, and investments in the KoKopeli Inn in Sedona, Three Canyon Ranch near Winslow and Moenkopi Legacy Inn near Tuba City.
I’ve worked with members of the Hopi Tribe since 2005 and have seen first-hand the impact of the coal-mining operation on the tribe’s finances. There are no easy answers once the operations cease, as renewables can only partially offset the employment and revenue losses.
But it will be incumbent on Arizona and tribal leaders, as well as the federal government, to blunt the impact of the closure on these communities. Rather than intervening to save the plant at tremendous environmental and taxpayer cost, they should develop an honest employment strategy — not just for Arizona but for the whole country — about how to replace these imperiled coal jobs and incomes with something sustainable and competitive.
As the price of solar panels and batteries decreases, our electricity system is starting to look a lot cleaner and more decentralized. While some people think the rise of community-based electricity technologies will undermine utilities, utilities are in fact embracing one version of decentralized power: microgrids.
Utilities are finding microgrids to be a great resilience strategy for avoiding outages, particularly in rural areas or crucial population or job centers. Greentech Media reports on the trend:
San Diego Gas & Electric delivers power to the town of Borrego Springs via a single radial transmission line running through the desert. Lightning strikes and desert flash floods threaten that line, resulting in historically poor reliability, Chief Engineer Thomas Bialek explained at the DistribuTech panel.
The utility needed to maintain or improve reliability for the nearly 2,800 Borrego Springs customers, but the traditional fix — building out a parallel transmission line — was pricey. A microgrid would be three or four times cheaper, Bialek said. So that’s what they did.The system, paid for by SDG&E, the Department of Energy and other partners, combines diesel generators, large and small batteries, and rooftop solar PV.
The microgrid has already proven itself in the face of adversity. When a flash flood in September 2013 downed transmission poles and lines leading to the town, the microgrid fired up and restored power to 1,056 customers while the grid repairs unfolded. That covered the core city center, so that those residents who didn’t have power yet could move to central facilities for shelter from the heat.
The Microgrid that saved Borrego Springs
The future portends even more investment in microgrids, as Utility Dive notes:
Last year, GTM Research estimated there were 156 operational microgrids in the country, making up 1.54 GW of capacity, and that number is expected to rise to 3.71 GW by 2020. Globally, Transparency Market Research believes the microgrid market will be worth about $35 billion by 2020 — up from $10 billion in 2013.
But as microgrids — and the technologies that underpin them — become cheaper, utilities may be sowing the seeds of their own destruction. With a few additional breakthroughs, these technologies could eventually allow entire communities to defect from the grid, leaving utilities and their remaining ratepayers stuck with stranded assets.
But for now, these installations will provide an environmental and energy win, while furthering investment in the technologies needed to clean and decentralize the electricity sector.
No clean technology is more important than the battery (or energy storage more broadly, given that batteries are just one — albeit critical — version of storage). Batteries will soon help power almost all of our vehicles with cleaner electricity instead of fossil fuels. And they’ll help store our surplus renewable power to clean our electricity grids.
The PBS show NOVA just ran a fascinating episode on the subject, called The Search for the Super Battery. It features interviews with UC Berkeley colleagues Dan Kammen and Venkat Srinivasan, as well as car company representatives and other industry leaders. As far as shows on batteries go, this one is pretty fascinating and accessible and well worth the watch:
Happy Friday viewing!
The Trump presidency could have one significant silver lining in the fight against climate change. With most federal action likely to be negative on climate, it will motivate states and cities to take the aggressive action needed to curb emissions through innovation. Gone now is the fiction that the federal government will take the steps necessary to address the full scale of the challenge.
Of course, the Obama administration helped in critical ways, such as through stringent fuel economy standards and boosting investment in solar panels and electric vehicles, among other needed technologies. The Clean Power Plan, likely to be killed soon by Trump’s EPA, was a decent start but not nearly sufficient for what scientists say is needed to avert the worst impacts of climate change. But given federal politics, none of these steps were likely to be sufficient on their own.
So now is a good time for the “coalition of the willing” of states and cities to see what they can do on their own, without the political drag facing federal action. The California-led Under 2 Coalition is a good example of this collaboration at the international level among subnational jurisdictions willing to take strong action.
Here in the U.S., states could do a lot together, such as creating a common carbon market through cap-and-trade, jointly investing in clean technology research, and sharing grid resources to encourage more renewable development at a cheaper cost and with fewer emissions.
But there are constitutional limits to multi-state action. My Berkeley Law colleague Dan Farber describes these limits on Legal Planet, and he remains mostly optimistic about what states can do together while passing constitutional muster:
There are some legalities that have to be observed in designing regional efforts. The biggest issue is whether Congressional consent to a regional agreement is required under the compact clause, which provides that “No State shall, without the Consent of Congress . . . enter into any Agreement or Compact with another State, or with a foreign Power.” This language might seem to require congressional consent to all forms of cooperation between states. Fortunately, the Supreme Court has interpreted the compact clause quite narrowly.
Basically, states want to avoid having to get congressional approval for their multi-state actions, given the negative politics at the federal level. But, as Dan summarizes, as long as states create multi-state programs that aren’t binding on individual states, create superseding regulatory power, or negatively impact federal actions, they can proceed without congressional approval.
It actually gives states lots of leeway, which they should start using as soon as possible.
The New York Times offers a good rundown of the various environmental laws and regulations that Trump’s administration will likely attempt to roll back. The upside: many of these agency actions could take years to unwind, likely leaving the final call for efforts like the Clean Power Plan in the hands of the 2020 presidential election winner.
The downside: a number of executive orders, such as preventing coal mining on public lands, can be undone right away. Other rules, like the methane limits on oil extraction, can also be undone by Congress through the Congressional Review Act. And perhaps most significantly, the Trump administration can try to weaken fuel economy standards for automakers, although that too will take time and litigation.
Of course, if Congress can act to weaken the Clean Air Act and other environmental laws, all bets are off. But as long as the filibuster remains in the Senate, that may be hard to do.
We still have had Paris, at least for the first week of Trump
Meanwhile, there may be some glimmer of hope on clean technology with the new administration. Trump’s nominee for Treasury secretary backed the production tax credit for wind power (the solar tax credit’s fate may be less certain, and both tax credits could be undermined by broader corporate tax reductions, but still). Tesla/SolarCity CEO Elon Musk also apparently has the ear of Trump on EV manufacturing, which can’t hurt. And while it’s been only a week since the inauguration, Trump hasn’t yet withdrawn the U.S. from the landmark Paris agreement on climate change, while Exxon, incoming Secretary of State Tillerson’s former company, just praised the agreement.
There is still little reason for environmentalists to get their hopes up, and the idea of actually proactively tackling our environmental challenges at the federal level is all but dead for the next four years. But the current legal environment on the environment may be a bit more stable than we might otherwise assume.
A number of prominent leaders in California’s San Joaquin Valley have opposed policies to combat climate change, in part due to the assumed economic costs on the region. But as our UC Berkeley/Next 10 study released last week shows, those policies are benefiting the regional economy to the tune of over $13 billion.
Over the weekend, the Sacramento Bee published an op-ed co-authored by me, Betony Jones and Noel Perry. Here’s a highlight passage on the benefits of renewables and cap-and-trade:
Renewable energy projects have brought $11.6 billion in economic activity to the valley. From 2002 to 2015, renewable programs created about 31,000 direct jobs here, as people were hired to build, operate and maintain generating facilities. Another 57,000 jobs were created indirectly, as suppliers and supporting businesses expanded. That’s 88,000 jobs in a part of the state that really needs them.
We also looked at California’s carbon cap-and-trade program, which affects the valley disproportionately because regulated industries are concentrated here. Cap-and-trade auction proceeds have been spent on high-speed rail, affordable housing, irrigation modernization, electric vehicle incentives and other emissions-reducing projects.
After subtracting compliance and other costs of cap and trade, we found direct economic benefits of $119 million and $200 million with indirect benefits included. Once auction proceeds that have been approved but not yet dispersed are spent, the region can expect $1 billion in direct benefits, plus $500,000,000 in indirect benefits. Cap and trade has netted the valley more than 700 direct and 1,600 indirect jobs from 2013 through 2015.
Meanwhile, the report garnered coverage in the Fresno Bee, Turlock Journal, and Valley Public Radio.
I’m glad to see these Valley outlets cover the findings, as residents of the region should be the first to learn of the data we found. The report dispels the common assumption that these environmental policies hurt the local economy. While certain Valley industries incur compliance costs, the deployment of clean technologies and other carbon-fighting programs are providing a much greater offsetting boost.
Climate 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.
It’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.
Investors 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.
