From the impacts of climate change and the human costs of air
pollution to the benefits of electricity market deregulation, some of
the most crucial topics in energy this year can best be illustrated
through data presented in easy-to-digest charts. So, we’ve put together
ten of our favorites from 2017.
#1 – You Could Live Longer If Your Country Reduced Pollution To Meet National Or Global Standards
It’s a chart…but a whole lot more! That—along with the fact that air pollution
kills more people than AIDS, malaria and tuberculosis combined—landed the
Air Quality-Life Index (AQLI)TM as the top EPIC chart of 2017.
The AQLI translates particulate pollution, the deadliest form of air
pollution, into its impact on lifespans. So, users can find their
country on the map and see how much longer they could live if their
government met either national or World Health Organization air quality
standards. It complements the frequently used Air Quality Index (AQI), a
metric that describes how polluted the air is, but draws no connection
to the impact of that pollution on our health.
With an estimated 4.5 billion people around the world exposed to
levels of particulates air pollution that are at least twice what the
World Health Organization considers safe, the AQLI is a powerful tool to
help people understand the consequences of pollution on their lives. In
November, when India’s pollution reached record levels, the AQLI was
widely used by
the news media to put the pollution in relatable terms—demonstrating
how, in just a few months, the AQLI has already become a part of the
mainstream dialogue on pollution.
What’s next for the AQLI? Introduced in its beta form, EPIC looks
forward to expanding the usability, value and public reach of the tool
over the coming year. So, look for a significantly expanded version of
the AQLI on a more robust and dynamic website to come in 2018. From
there, who knows? Maybe someday the AQLI will replace the AQI
altogether.
#2 – Climate Change Will Damage The U.S. Economy And Increase Inequality
2017 brought record rainfall and unprecedented flooding to Texas, the
worst wildfire season in California’s history, and a line of
catastrophic storms from which millions of Americans are still
recovering. Indicative of the types of changes we’re expected to see
more of under climate change,
some are calling 2017 a “wake-up call” for what’s in store for our future.
If the world continues on its current path, EPIC’s Amir Jina, an
assistant professor at the Harris School of Public Policy, and his
colleagues at the
Climate Impact Lab find climate change
could bring costs to
the United States on par with the Great Recession. Worse, these impacts
will not dissipate over time and damages for poor regions will be many
times larger. This could result in an unequal distribution of damages
that surpasses the largest wealth transfer from the poor to the rich in
the country’s history, with the poorest third of U.S. counties projected
to sustain economic damages costing as much as 20 percent of their
income. The researchers’ work finds that states in the South and lower
Midwest, which tend to be poor and hot already, are projected to lose
the most, with economic opportunity traveling northward and westward.
Increasingly extreme heat will drive up violent crime, slow down
workers, amp up air conditioning costs, and threaten people’s lives. In
the Midwest, climate change could cause agricultural losses similar to
the Dustbowl of the 1930s.
Through this work, the team was also able to create a new metric that
can help the country manage climate change as it does other systematic
economic risks: For each one degree Fahrenheit increase in global
temperatures, the U.S. economy loses about 0.7 percent of Gross Domestic
Product, with each degree of warming costing more than the last. This
metric could be used in the same way the Federal Reserve uses interest
rates to manage the risk of recession.
By Amir Jina, Solomon Hsiang (UC Berkeley), Robert Kopp (Rutgers), James Rising (University of Chicago) and their co-authors
#3 – Hydraulic Fracturing Leads To Poorer Health For Babies Born Near Fracking Sites
Hydraulic fracturing, or fracking, is perhaps the most important
discovery to the energy system in the last half century. As a result of
its discovery, U.S. production of oil and natural gas has increased
dramatically. This has led to abruptly lower energy prices, stronger
energy security and even lower carbon dioxide and air pollution
emissions by displacing coal in electricity generation. That is
certainly good news for our climate, and our health—with large
reductions in air pollution dispersed around the country. Plus, natural
gas’s cheap price tag has meant more money in the pockets of American
families and businesses. But, our continued access to these benefits
depends on local communities allowing fracking. Communities have reached
very different conclusions about local benefits and costs with many
places banning it and others embracing it.
A primary concern has been whether hydraulic fracturing causes local
health problems. EPIC Director Michael Greenstone and his colleagues
Janet Currie (Princeton University) and Katherine Meckel (UCLA) dug
into data from more than 1.1 million births in Pennsylvania and found
that infants born to mothers living up to about 2 miles from a hydraulic
fracturing site suffer from poorer health. The largest impacts were to
babies born within about a half mile of a site, with those babies being
25 percent more likely to be born at a low birth weight (i.e., less than
5.5 lbs)—leaving them with a greater risk of infant mortality, ADHD,
asthma, lower test scores, lower schooling attainment, and lower
earnings.
The risk of giving birth to an infant classified as low birth weight
decreases the further the mother lives from a site, the study finds.
Infants born to mothers living about a half to 2 miles from a site also
experienced increases in the probability of low birth weight but the
effect is smaller—about a half to a third of the effect within about a
half mile. The results also open the door for future research to
examine whether fracking is associated with health consequences at other
ages.
In contrast, the study found no evidence of impacts on infant health
among babies born to mothers living further than about 2 miles from a
fracking site. These results suggest that hydraulic fracturing does have
an impact on infant health, but only at a highly localized level. Out
of the nearly 4 million babies born in the United States each year, back
of the envelope calculations suggest that there are about 30,000 births
within about a half mile of a fracking site and another 70,000 births
about a half to 2 miles away.
Fears of the health consequences of fracking have already stoked bans
in many places across the United States. In April, Maryland became the
third state to ban fracking, following New York and Vermont. Several
countries have also banned the practice, including France and Germany.
As local and state policymakers decide whether to allow hydraulic
fracturing in their communities, this study provides critical
information to help them weigh the costs with the benefits—last year,
another study by
Greenstone and co-authors Janet Currie, Chris Knittel (MIT) and Alex
Bartik (University of Illinois) found local economic benefits, with the
average household in communities that allow fracking gaining about
$1,900 per year.
By Michael Greenstone, Janet Currie (Princeton) and Katherine Meckel (UCLA)
#4 – Air Pollution Cuts 3 Years Off Lifespans In Northern China
While India experienced record air pollution this November, China
shut down tens of thousands of its factories and mandated the use of
natural gas instead of coal in an unprecedented move to crack down on
pollution. And, for good reason. A study by EPIC Director Michael
Greenstone and his colleagues
found that
people who live just to the north of China’s Huai River live 3 years
less than people who live just to the south of it. This loss in life
expectancy appears to be due to particulates air pollution, which is 46
percent higher just to the north of the river. The differences in life
expectancy and air pollution are due to a policy that provided free coal
for winter heating to the north of the river. The elevated mortality is
entirely due to an increase in cardiorespiratory deaths, further
suggesting that air pollution is the cause of reduced life expectancies.
Using an innovative natural experiment formed from the Chinese
policy, the researchers isolated the impact of sustained exposure to
particulates air pollution from other factors that affect health. This
allowed the study’s results to be generalized to quantify the number of
years that air pollution reduces lifespans around the globe—not just in
China. Specifically, Greenstone and colleagues at EPIC used the findings
to develop a new pollution index, the
Air Quality-Life Index (AQLI)TM.
The index allows users to better understand the impact of air pollution
on their lives by calculating how much longer they would live if
pollution were brought into compliance with their national or global
standards.
Meanwhile, the Chinese government pledged in August to cut northern
air pollution by 15 percent in the winter months. As part of its
efforts, China is switching its primary source of heating from
coal-fired boilers to gas-fired or electric units, along with shutting
down polluting plants.
By Michael Greenstone, Avraham Ebenstein (Hebrew University of
Jerusalem), Maoyong Fan (Ball State), Guojun He (Hong Kong University of
Science and Technology), and Maigeng Zhou (Chinese Center for Disease
Control and Prevention)
#5 – Energy Efficiency Programs Are A Climate-Policy Cornerstone. But Will They Deliver?
Energy efficiency is often considered low-hanging fruit for climate
policy. Thought to reduce carbon emissions and save money at the same
time—who could argue against it? And to date, market forces have
identified plenty of attractive opportunities to reduce the amount of
energy consumed per unit of GDP. That’s a big part of why energy demand
growth has slowed in many developed markets. Yet major forecasters like
the International Energy Agency (IEA) are counting on efficiency
programs to play an even larger role in the future, accounting for a
third or more of the needed reductions in global carbon emissions by
2040.
But will government and utility-backed programs deliver? A number of
recent studies suggest that programs will need to be far more robustly
designed, or they will likely fall short of their ambitious goals. In
the latest such study, EPIC’s Fiona Burlig and colleagues at MIT, UC
Berkeley, UC Davis and Northwestern
analyzed a
government program to increase building efficiency in K-12 schools in
California. They found that while the energy efficiency upgrades lowered
energy consumption at the average school by 3 percent, the schools
saved only 24 percent of what was originally projected. According to the
researchers, a school that invested $400,000 in upgrades, expecting
that it would recoup its investment in the form of lower energy bills in
4 years, might never see the investment pay off.
This isn’t the only study that came out this year that showed actual
savings from energy efficiency investments are far less than projected.
Another study, by EPIC’s Michael Greenstone and his colleague Hunt
Allcott from NYU, looked at more than 100,000 households that
participated in a large, federally-funded stimulus program in Wisconsin.
They found the investments there saved only about 58 percent of what
was promised, but that a handful of program reforms could lead to far
better outcomes.
By Fiona Burlig, Christopher Knittel (MIT), David Rapson (UC
Davis), Mar Reguant (Northwestern), and Catherine Wolfram (UC Berkeley)
#6 – Incentives Can Backfire: A Cautionary Tale For Smart-Grid Enrollment Programs
Real-time electricity pricing is widely viewed as an increasingly
critical tool for grid operators, especially if grids around the world
are to shift to more variable sources of generation like wind and solar
power. A key advantage of charging customers based on supply and demand
is that it encourages them to use power in ways that minimize system
costs. Prices rise during peak times, incentivizing households to use
less power, thereby easing pressure on the grid. Low prices overnight or
during peak solar generating hours tell customers it might be a good
time to run the dishwasher.
Despite these benefits, the number of households choosing to take up
time-based pricing models has historically been quite low, and mandating
this pricing can be politically difficult. To bridge this gap,
governments and utilities often turn to incentives that prompt consumers
to join time-based programs. But do these programs work? To answer this
question, EPIC’s Koichiro Ito, an assistant professor at the Harris
School of Public Policy,
studied more
than 2,000 households in Japan who could join a new time-based program
that offered a low electricity rate during the morning and night, and a
higher rate in the afternoon when electricity use was at its peak.
The good news? He discovered that those who were given information
about the program and a $60 bonus for switching were 50 percent more
likely to join the program (30 percent more likely if they were only
given the information).
But, after joining the program, the customers who were the most
likely to change their behaviors and conserve energy were those who were
originally not given any information or incentives to join. These
customers reduced their electricity use by 20 percent. Those who
switched plans after being prodded with information were half as likely
to adjust their behaviors in the end, and those given the $60 bonus were
also less likely. Why? In prodding them to join, customers who would
not have otherwise made the switch did so, filling the program with
customers who were not fully motivated to change their behavior.
Instead, those customers who switched based solely on interest were more
naturally motivated to conserve energy.
By Koichiro Ito
#7 – Electricity Markets Decrease The Cost Of Generating Power By $3 Billion A Year
This year, the U.S. Department of Energy proposed a rule that would
subsidize the ailing coal and nuclear industries, arguing that these
sources of electricity are needed to ensure grid reliability as
renewable fuels gain market share. Critics of the proposed rule say it
is an unnecessary bailout of uncompetitive and dirty energy sources, and
that renewables pose no threat to grid reliability. Critics also say it
could “
blow up the market” by depressing costs.
The possible threat to U.S. electricity markets comes as EPIC’s Steve
Cicala, an assistant professor at the Harris School of Public Policy,
finds the
enormous cost-saving potential of these markets. After constructing a
virtually complete hourly characterization of U.S. electric grid supply
and demand and comparing the data in wholesale electricity markets to
regulated command-and-control areas before and after markets were
introduced, Cicala finds that using a market approach to buy and trade
electricity saves about $3 billion a year. That’s due to the increased
efficiencies and coordination the markets bring.
The study finds that power plant generators operating within markets
are more likely to ensure their power plants are available to run when
it is most economical. This means the lowest-cost plants are used 10
percent more often in market regions. This reduces “out of merit”
costs—the costs incurred when the lowest-cost plant isn’t used—by nearly
20 percent. Further, power suppliers operating within markets are able
to better identify low-cost generators across areas and better
coordinate the dispatch of power, increasing trade by 10 percent. The
savings from these transactions increases by 20 percent a year.
Utilities could be looking for the gains a market would bring to the western United States, as
more and
more talk crept in this year of a possible new regional transmission organization.
http://www.theenergycollective.com/epicuchicago/2418930/10-charts-tell-story-energy-2017
