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Budget Deal Oil-for-Renewables Trade Would Substantially Reduce Carbon Emissions

by Varun Sivaram and Michael Levi
Solar panels on top of a housing complex in National City, California (Reuters/Mike Blake) Solar panels on top of a housing complex in National City, California (Reuters/Mike Blake)

This post is coauthored by Varun Sivaram and Michael Levi.

Congress is set to vote on a budget deal that would permanently end the long-standing ban on crude oil exports in exchange for temporary extensions of tax credits that support solar and wind energy. Michael wrote on Tuesday about the market, climate, and geopolitical impact of lifting the oil export ban. In this post we’re going to estimate the climate impact of the renewables tax credit extensions. We focus on 2016-2020 for three reasons: (a) it’s the period for which we have the best data; (b) beyond 2020, complex interactions with the Clean Power Plan make things much tougher to model; and (c) most important, beyond 2020, the primary effect of the ITC/PTC extension should be to make reducing emissions cheaper, and thus enable stronger policy, something that can’t be quantitatively modeled. Read more »

How India Could Actually Reach Its Audacious Solar Targets

by Varun Sivaram
Woman installs off-grid solar in Tinginaput, India (UK Department for International Development) Woman installs off-grid solar in Tinginaput, India (UK Department for International Development)

PARIS—Under Prime Minister Narendra Modi, India has set a dramatic target for solar power: 100 Gigawatts (GW) by 2022, or more than half of all solar installed to date globally by the end of 2014. Back in March, I questioned whether these targets were realistic, given that India currently has less than 5 GW installed today. But after digging into India’s progress to date, asking Modi administration officials about the sincerity of their target, and understanding the calculus of Indian and foreign solar developers who are pledging billions of dollars of solar investment, I am turning into a believer. India’s target, still aspirational, could actually materialize. Read more »

What Big Data Can Tell Us About the Oil Price Crash

by Michael Levi
Gasoline price gas tax 2015 REUTERS/Rick Wilking

The oil price collapse was supposed to boost the U.S. economy by prompting consumers to spend their savings on other goods and services. During the first half of this year, though, data seemed to suggest that they were saving the windfall instead, damaging economic growth. But new big data research from the newish JP Morgan Chase Institute appears to provide strong evidence that consumers did, indeed, spend most of their savings. It’s an intriguing energy result that also offers a glimpse into how changes in data availability and computational capacity are changing the sort of energy research that’s possible. Read more »

Which U.S. States Win and Lose Most From Falling Oil Prices?

by Michael Levi
Brent Crude Oil Price (Source: WSJ) Brent Crude Oil Price (Source: WSJ)

Oil prices are plunging. Which U.S. states will benefit most – and which are most at risk? A study that we published about a year ago looked at exactly this question. The research, by Mine Yucel of the Dallas Fed and Stephen Brown of UNLV, ranked Wisconsin, Minnesota, and Tennessee as the biggest potential winners, and Wyoming, Oklahoma, and North Dakota as those with the most to lose. Read more »

Is Solar Power Making Climate Policy Cheap?

by Michael Levi
Solar power plant clean energy REUTERS/Fabian Andres Cambero

For the second time this year, Paul Krugman has written a column explaining that serious studies consistently conclude that slashing global carbon dioxide emissions doesn’t need to be expensive. Also for the second time, he gives much of the credit to falling costs for renewable energy, particularly solar power. He’s absolutely correct on the broader point – but dead wrong in explaining why the studies come to that conclusion. Read more »

FiveThirtyEight’s Data Problem

by Michael Levi
Current_Account_Balances

Nate Silver’s new FiveThirtyEight has been catching a lot of flak since it launched last week. Perhaps the harshest has been directed at the site’s retention of the often-contrarian climate analyst Roger Pielke Jr., with everyone from Paul Krugman to the Center for American Progresspiling on. The onslaught is disturbing. I’ve disagreed with Roger often, but he is genuinely well intentioned. People who care about getting good policy should want more thoughtful voices, not fewer, proposing options – and organized campaigns to run heterodox thinkers out of town are awfully ugly. Read more »

Is the Ethanol Mandate Pumping Up Gas Prices?

by Michael Levi

An esoteric fight of the Renewable Fuels Standard (RFS2), which mandates that the United States use an increasing volume of ethanol each year, has become a bit more prominent in recent weeks, with some accusing the mandate of contributing to rising gasoline prices in new and troubling ways. I remain perplexed as to what exactly is going on – more on that a bit further down – but I do find the defense from the Renewable Fuels Association, published last week in the form of a white paper commissioned from Informa Economics, hugely unpersuasive. Read more »