Emissions trading is an important regulatory tool in environmental policy making. Unfortunately the effectiveness of these regulations is difficult to measure in the field due to the unavailability of appropriate data. In contrast, experiments in the laboratory can provide guidance to regulators and legislatures about the performance of different market features in emission trading programs. This paper reports on the implementation of three different institutional designs, and presents experimental results investigating important features of emissions trading regimes: the ability to make investments in emissions abatement, ability to bank allowances and a declining emissions cap, both with and without uncertainty. These features are observed in virtually all existing air pollution emissions trading programs currently in place and will almost certainly be part of future applications. Like previous experimental studies of emissions trading, this paper shows that the efficiency gains expected from economic theory emerge observationally. We also show reduced efficiency when permits are bankable due to over-banking and when investments in emissions abatement are possible due to overinvesting. These tendencies do not worsen, however, when emissions caps decline.

The global petroleum system is undergoing an “oil transition,” shifting from conventionally produced petroleum to a suite of substitutes for conventional petroleum (SCPs). This paper describes the Regional Optimization Model for Emissions from Oil Substitutes, or ROMEO, which models this oil transition. ROMEO models the dynamics of the transition to substitutes for oil and the environmental impacts (greenhouse gas (GHG) intensity) of such a transition. It models the global liquid fuel market in an optimization framework. The ROMEO market mechanism operates differently than “perfect foresight” models: it solves each year sequentially, with each year optimized under uncertainty about future prevailing prices or resource quantities. ROMEO includes more fuel types than models designed for integrated assessments of climate change. ROMEO also includes the differing carbon intensities and costs of production of these fuel types. We use ROMEO to calculate the uncertainty of future costs, emissions, and total fuel production under a number scenarios. We first explore the effects of altering three key input parameters. We then use this flexibility to more formally explore two uncertainties simultaneously: the endowment of conventional petroleum, and future carbon taxes. Results indicate that emissions penalties from production of oil substitutes are on the order of 5-20 GtC over the next 50 years, and that these results are highly sensitive to the endowment of conventional oil and less sensitive to the values of a carbon tax.

This chapter provides a brief illustration of the political and scientific background of the California Global Warming Solutions Act (AB32) and other elements of California's climate policy. AB32 emerged due to California's characteristic institutions and polity. Climate policy is likely to influence large parts of California's public policy agenda and these impacts are mostly unavoidable. The chapter also presents how California's climate change policy formed and documents the first measures to be taken. It then concludes by explaining how AB32 came to be passed and also provides closing remarks on the lessons that can be learned from the process of AB32's enactment, and what can be expected from California's climate change policies in the future.

Plug-in hybrid electric vehicles (PHEVs) can use both grid-supplied electricity and liquid fuels. We show that under recent conditions, millions of PHEVs could have charged economically in California during both peak and off-peak hours even with modest gasoline prices and real-time electricity pricing. Special electricity rate tariffs already in place for electric vehicles could successfully render on-peak charging uneconomical and off-peak charging very attractive. However, unless battery prices fall by at least a factor of two, or gasoline prices double, the present value of fuel savings is smaller than the marginal vehicle costs, likely slowing PHEV market penetration in California. We also find that assumptions about how PHEVs are charged strongly influence the number of PHEVs that can be charged before the electric power system must be expanded. If most PHEVs are charged after the workday, and thus after the time of peak electricity demand, our forecasts suggest that several million PHEVs could be deployed in California without requiring new generation capacity, and we also find that the state's PHEV fleet is unlikely to reach into the millions within the current electricity sector planning cycle. To ensure desirable outcomes, appropriate technologies and incentives for PHEV charging will be needed if PHEV adoption becomes mainstream.

Few integrated analysis models examine significant U.S. transportation greenhouse gas emission reductions within an integrated energy system. Our analysis, using a bottom-up MARKet ALocation (MARKAL) model, found that stringent system-wide CO2 reduction targets will be required to achieve significant CO2 reductions from the transportation sector. Mitigating transportation emission reductions can result in significant changes in personal vehicle technologies, increases in vehicle fuel efficiency, and decreases in overall transportation fuel use. We analyze policy-oriented mitigation strategies and suggest that mitigation policies should be informed by the transitional nature of technology adoptions and the interactions between the mitigation strategies, and the robustness of mitigation strategies to long-term reduction goals, input assumptions, and policy and social factors. More research is needed to help identify robust policies that will achieve the best outcome in the face of uncertainties.

Ce document presente un examen des questions liees au bilan energetique classique et a l’impact sur le changement climatique des biocarburants. En ce qui concerne, d’une part, les bilans energetiques classiques et les bilans des emissions de gaz a effet de serre de la production et de l’utilisation d’une gamme de combustibles et, d’autre part, les questions importantes et de plus en plus controversees liees aux incidences autres que les gaz a effet de serre, notamment sur l’utilisation des terres, les engrais et l’eau, il est a notre avis necessaire d’ameliorer le cadre d’analyse et d’evaluation des biocarburants. Des nouvelles methodologies et de nouveaux ensembles de donnees sont en effet indispensables pour examiner les aspects tant physiques que socio-economiques du cycle de vie des biocarburants. Certains composants susceptibles d’etre utilises pour construire cette methodologie sont presentes en detail et les principaux domaines pour la recherche future sont mis en evidence. Enfin, nous examinons l’historique et les effets potentiels de la creation d’une base de ressources pour la recherche sur les biocarburants ainsi que certains impacts sur l’utilisation des terres et sur les aspects socio-economiques des differentes filieres de production de matieres de base pour les carburants.

Unilateral abatement of greenhouse gas emissions is not often explicitly considered in game-theoretic models of climate policy adoption and in reality is often justified on grounds of non-climatic benefits. We develop one non-cooperative static game and two non-cooperative dynamic games that show how allowing players to respond to commitments to unilaterally abate emissions expands the range of parameter values that support joint abatement. Importantly, joint abatement occurs only via initial unilateral abatement whenever the parameter values support joint abatement in the two dynamic games but not in the static game. The dynamic games also show that if unilateral abatement lowers costs for later abaters, then still more states of the world support joint abatement. When assessing the climatic benefits of unilateral abatement, we should consider not only the direct reductions in the abater's emissions but also the effect on other emitters' future adoption of climate policies. Unilateral abaters may want to design their climate policy instruments so as to encourage future abatement by others, which could mean focusing on the promotion of technological innovation and diffusion and on providing policy models that others could adapt to their own contexts.

Will automobiles be predominately propelled with petroleum or other fuels during the 21(st) century? This paper carries out a comparison of five automotive technologies (efficiency, fossil. biofuel, electricity and hydrogen) under four basic criteria (infrastructure, vehicles, resources, and environment).

Electric power systems can be disrupted by a variety of circumstances impacting failure and recovery rates. However, conflict-induced stress, primary fuel supply disruptions, and impediments to repair have rarely been incorporated into a systematic analysis of power planning and dispatch. In this paper, we augment the traditional Monte-Carlo reliability modeling framework to also represent primary fuel delivery and distributed generation (DG) topologies. We characterize five failure modes for the integrated system and compare the performance of centralized to DG systems under various levels of stress including conflict-induced stress. Our findings show DG to be significantly more reliable than centralized systems and when whole-economy costs are considered they are also more economical. These findings are significant in power planning for areas concerned about conflict-induced stress or where other factors may impact reliability of supply to a far greater extent than has been the norm in OECD countries.

We investigate uncertainties about conventional petroleum resources and substitutes for conventional petroleum, focusing on the impact of these uncertainties on future greenhouse gas (GHG) emissions. We use examples from the IPCC Special Report on Emissions Scenarios as a baseline for comparison. The studied uncertainties include, (1) uncertainty in emissions factors for petroleum substitutes, (2) uncertainties resulting from poor knowledge of the amount of remaining conventional petroleum, and (3) uncertainties about the amount of production of petroleum substitutes from natural gas and coal feedstocks. We find that the potential effects of a transition to petroleum substitutes on GHG emissions are significant. A transition to low-quality and synthetic petroleum resources such as tar sands or coal-to-liquids synfuels could raise upstream GHG emissions by several gigatonnes of carbon (GtC) per year by mid-century unless mitigation steps are taken.

Distributed generation (DG) offers a number of potential benefits, but questions remain about environmental performance. Air emissions from five key DG technologies; gas engines, diesel engines, gas turbines, micro-turbines, and fuel cells, were systematically compared with total energy supply systems based on centralized gas turbines (CCGT) and coal steam turbines plus distributed heating (DH) using gas-fired boilers. Based on emissions and operational factors from existing commercially marketed DG-CHP technologies, combined heat and power (CHP) applications are considered, which are remotely monitored and operated as base-load supply. Emissions results are characterized using heat-to-power ratios (HPRs), which concisely describe different types of energy demand under different applications or seasonal conditions. At an HPR of zero (i.e. the special case of electricity-only), CCGT with DH gives the lowest emissions portfolio, but at HPR values typical for buildings in the United States, efficiency advantages ensure gas-fired combustion DG-CHP technologies become broadly competitive across the range of key emissions. Fuel cell DG-CHP provides a very low emissions portfolio, but at a significant cost premium. At higher HPR values, emissions from heat supply can become a key issue, leading to the surprising finding that some combustion-based DG-CHP systems have lower total emissions than fuel cell-based systems. Based on these insights, the paper concludes with a discussion of streamlined yet rigorous regulatory approaches for DG-CHP technologies.

The energy system is in the early stages of a transition from conventionally produced oil to a variety of substitutes, bringing economic, strategic, and environmental risks. We argue that these three challenges are inherently interconnected, and that as we act to manage one we cannot avoid affecting our prospects in dealing with the others. We further argue that without appropriate policies, tradeoffs between these risks are likely to be made so as to allow increased environmental disruption in return for increased economic and energy security. Responsible solutions involve developing and deploying environmentally acceptable energy technologies (both supply and demand) rapidly enough to replace dwindling conventional oil production and meet growing demand for transportation while diversifying supply to improve energy security.

To study the potential effects of increased biofuel use, we evaluated six representative analyses of fuel ethanol. Studies that reported negative net energy incorrectly ignored coproducts and used some obsolete data. All studies indicated that current corn ethanol technologies are much less petroleum-intensive than gasoline but have greenhouse gas emissions similar to those of gasoline. However, many important environmental effects of biofuel production are poorly understood. New metrics that measure specific resource inputs are developed, but further research into environmental metrics is needed. Nonetheless, it is already clear that large-scale use of ethanol for fuel will almost certainly require cellulosic technology.

The rapid proliferation of battery-powered consumer electronics and their reliance on inefficient linear transformers has been suggested to be an important part of the rapid growth in “miscellaneous” electricity consumption in recent years, but detailed data are scarce. We conducted a survey of 34 randomly selected households (HHs) in Northern California about the number, type, and usage of consumer electronics. We also measured the energy consumption of 85 typical consumer electronic devices through various parts of the charge cycle. These primary data were supplemented by national sales information for consumer electronics. Results indicate that typical HHs own 8.4 rechargeable devices, which have a total average demand of 12–17W per HH. Statewide, this amounts to 160–220MW of demand, with the peak occurring in the late evening, and about 1600GWh per year. Only about 15% of this energy is used for battery charging, the rest is lost as waste heat during no-load and charge maintenance periods. Technical options to increase the efficiency of these devices, and the research and policy steps needed to realize these savings are discussed.

Ozone is a key trace constituent of the atmosphere that is interesting for multiple reasons, including its ability to serve both as a screen against harmful solar radiation and as an aggressor against human health. However, methods for accurately detecting and measuring ozone were required before the behavior of ozone in the atmosphere and the effect of human activity on that behavior could be understood. This paper traces out the history of technologies and practices in ozone monitoring that have made this understanding possible, from nineteenth century chemical indicators to modern, laser-based detection technologies. Key insights include the importance of interactions between theorizing and observation in the process of scientific discovery, the importance of intercomparisons between different types of instruments, the way in which public policy concerns changed the pace and direction of ozone monitoring in the 1970s, and the importance of long-term environmental monitoring data to both improving our understanding of earth systems and protecting human health and the environment.

Emission trading policies are increasingly important in environmental protection, especially in controlling air pollution in the United States. Their popularity results in part from the limitations and frustrations of centralized command and control regulation. Well-designed emission trading programs can achieve the same or better environmental and health outcomes as command and control regulations but provide regulated industries with greater flexibility. This lowers costs and improves the process of negotiating environmental policy. We present key concepts and important applications of emission trading, focusing on health impacts. These programs generally are well-designed, speeding emission abatement; improving health outcomes; and reducing compliance costs. Flaws have stopped a few poorly designed emission trading programs. A key issue in evaluating emission trading is our inability to know what the environmental outcome would have been under another approach.

Two recent articles, “Potential environmental impact of a hydrogen economy on the stratosphere” (T. K. Tromp et al. , Reports, 13 June, p. [1740][1]) and “Rethinking hydrogen cars” (D. W. Keith, A. E. Farrell, Policy Forum, 18 July, p. [315][2]), may have caused some to question the goals