The Epic Battle to Move Toward a Low Carbon Future
This year’s Climate and Society class is out in the field (or lab or office) completing a summer internship or thesis. They’ll be documenting their experiences one blog post at a time. Read on to see what they’re up to.
By Karoline Hallmeyer, C+S ’15
Not all environmental policies are good. Indeed, some are worse than others including some policies aimed at reducing greenhouse gas emissions that can have undesirable side effects.
The German government aims to make insulation of residential buildings the norm under energy efficiency goals. However, several studies could not prove that the expensive insulation has an effect on electricity use. When the European Union set up its Emissions Trading Program, they did not anticipate the financial crisis and the following low energy demand. They had set a rigid gap that was too high, so the European carbon price dropped from €25 ($28) in 2008 to €5 ($5.60) in 2013. At this price emitters don’t have an incentive to mitigate their emissions.
This summer, I am working on a policy analysis of subsidies in biofuels and public transport. The aim is to get an overview on the environmental, economic and social impacts of the subsidies that the U.S. federal government has spent on biofuels and public transport since 2000.
On first glance public transport and biofuels are not fungible when it comes to meeting emission reduction goals. Biofuels are used in personal transportation, while public transit is, well, to put it frankly mass transport. Historically, Americans have not been fond of mass transport, which is generally used by the poor. Mass transportation has not necessarily been seen as compatible with the American way of life that celebrates individualism and personal freedom.
But recently, this attitude has been changing. In the past, cities such as New York were outliers in public transport use. Population density increased the utility of the subway over the car. Today’s urbanization increases the utility of public transport throughout the U.S. The cities of New York and Los Angeles have been increasing their funding for public transport due to growing demand. New York’s subway system broke its passenger miles record annually for the past few years.
Furthermore, cars could be losing their cache as a status symbol, replaced by gadgets and experiences. Young people would rather use their free time to plan a trip to Europe than to look for a parking spot.
Despite this societal movement, policymakers focus on biofuel subsidies rather than making public transport more fuel efficient, accessible and effective. One might say, “well, that is not so bad, at least biofuels are reducing greenhouse gas emissions a bit.”
Studies have shown that first generation biofuels might actually be worse for the environment than gasoline from oil. The ethanol that is used in the United States has lower fuel-cycle emissions than traditional gasoline, but it has other negative climate and environmental impacts.
First, ethanol production changes land use patterns. This land produces less oxygen. The plants that are used to produce ethanol lead to more erosion and runoff, sending polluting fertilizer into rivers and groundwater. Furthermore, crop growth is highly water intensive. Large parts of the U.S. are already drought-stricken and water intensive agriculture is intensifying the issue.
Biofuel proponents also often use the argument of “experience curve.” They argue that we need to scale up first generation biofuels to move towards second generation biofuels.
Unfortunately, first and second generation biofuels are very different. So different in their chemical composition that second generation biofuels can’t be processed in the same refining plants as first generation biofuels. Thus, reaching economies of scale with first generation fuels will do little to progress our move toward more efficient and clean biofuels.
Analyzing and evaluating the economic and environmental costs and benefits of government subsidies in both sectors is crucial to improve society’s climate finance decisions. We need to do a full systems analysis to show whether investments in an individual technology will help us meet our goal to reduce greenhouse gas emissions as well as avoid tradeoffs with other environmental and social issues.
The most difficult part of this analysis is to put a monetary value on externalities of both greenhouse gas emission reduction strategies. Big public transport infrastructure projects have the benefit of reducing traffic congestion. This reduces smog as well as reducing commutes. Putting dollar values on these factors in a comprehensible way is the major challenge of my work this summer.
Hopefully, the resulting paper will contribute to a better understanding of the impacts of government support in public transport and biofuels and will help to frame better targeted subsidies for both sectors.