“Exercising my ‘reasoned judgment,’ I have no doubt that the right to a climate system capable of sustaining human life is fundamental to a free and ordered society.”
–U.S. District Judge Ann Aiken
Last year, 21 youth filed a lawsuit against the federal government for violating the youngest generations’ constitutional right to life, liberty, and property through its part in causing climate change.
The U.S. government and fossil fuel industry moved to dismiss the lawsuit, but on November 10th, 2016 federal judge Ann Aiken denied this motion, affirming that the rights of the youth are at stake and allowing the case to go to trial.
The Dakota Access Pipeline has been the heart of several controversial issues, including tribal sovereignty and risks to drinking water. This IEEFA article explains that the project may also be a very high-risk economic investment.
The article concludes that:
“If oil prices remain low, as currently projected, Bakken oil production will continue to decline, and existing pipeline and refinery capacity in the Bakken will be more than adequate to handle the region’s oil production. And if production continues to fall, the Dakota Access Pipeline will become a stranded asset—one rushed to completion largely to protect the favorable contract terms its developers negotiated in 2014.”
“The evidence is clear: a lasting solution to poverty requires the world’s wealthiest economies to renounce coal, and we can and must end extreme poverty without the precipitous expansion of new coal power in developing ones.”
EIA projections missed unprecedented growth in solar PV installations and a sharp downturn in coal production over the last decade.
For a more detailed analysis of inaccuracy in the EIA’s projections, see CEA’s white paper on the topic here.
Policymakers, utility commissions, investors, and energy companies rely on the U.S. Energy Information Administration’s (EIA’s) data for a wide range of energy analyses and while the historical data provided by the EIA has been extremely useful in many arenas, the EIA’s projections of future trends are often far from accurate. Our research summarizes a few examples of previously reported inaccuracies in EIA projections (for example, here, here, and here), but also provides what we believe to be the first look at the EIA’s inaccurate projections of U.S. coal production in almost a decade.
The projections published in the EIA’s Annual Energy Outlook (AEO) have invariably overestimated the cost of renewable electricity generation and fallen sadly short of predicting new additions of wind and solar capacity. For example, Figure 1 shows that the projections published in the EIA’s Annual Energy Outlook repeatedly underestimated U.S. utility-scale solar photovoltaic (PV) capacity from 2011 to 2015 and continue to predict that solar installations will largely stall through about 2025.
In reality, however, solar PV capacity is growing at an unprecedented rate. The Solar Energy Industries Association reported that by the third quarter of 2016, the cumulative U.S. utility-scale solar PV capacity (including capacity which was under contract but not yet operating) exceeded the AEO2015 projection for capacity in 2039. Accounting for planned capacity which had been announced but was not yet under contract by Q3 2016 indicates that utility-scale solar PV capacity will soon far surpass all AEO projections for 2040.
In addition to missing the sharp rise in solar photovoltaic installations, EIA projections also missed a dramatic downturn in coal production over the last decade. They failed to pick up on the trend year after year and still predict flat or rising coal production through 2040, as shown in Figure 2.
Disruptive innovations tend to precipitate new market trends that are notoriously difficult to predict. Just as the invention of the personal computer led to an abrupt decline in the typewriter industry in the late 1900’s, a massive transition toward renewable resources is transforming U.S. energy markets and so far EIA projections have failed to keep up with this transition. Every year, EIA forecasts predict a return to the trends of the 90’s, but the technological and political landscapes surrounding the U.S. energy industry are changing rapidly and historical precedent suggests that energy markets may never return to those of past decades.
For more details, readers are encouraged to download the full CEA White Paper here.
This event is free and open to the public. You must be registered to attend. More information and registration available here.
Electricity generation accounts for about 30% of U.S. greenhouse gas emissions. While emissions have declined by about 20% in the last ten years, much of this reduction is due to the fortuitous availability of cheap natural gas which
has provided incentives to substitute less CO2 intensive natural gas for coal as a generation fuel. The sector faces many challenges to meet long run 2050 goals of reducing emissions by as much as 80% from 2005 levels. These challenges include the diversity of federal, state and municipal regulation, the diverse and balkanized structure of the industry from state to state and region to region, the failure to enact policies to place a price on all carbon emissions,
the extensive reliance on subsidies and command and control regulation to promote renewables and energy efficiencies, uncertainties about aggressive assumptions about improvements in energy efficiency beyond long-term trends, pre-mature closure of carbon free nuclear generating technologies, integrating renewables efficiently into large regional grids, methane leaks, and transmission constraints. The lecture will discuss these challenges and suggest policies to reduce the costs and smooth the transition to a low carbon electricity sector.
Paul L. Joskow became President of the Alfred P. Sloan Foundation on January 1, 2008. He is also the Elizabeth and James Killian Professor of Economics, Emeritus at MIT. He received a BA from Cornell University in 1968 and a PhD in Economics from Yale University in 1972. See full biography here.
Accelerating the transition from fossil fuels to a clean energy economy