4 Energy and Environmental Policy Challenges

Several converging factors are impacting the current energy and environmental policy landscape. Here are a few of the big ones:

• The public’s interest in renewable energy is continuing to increase, while at the same time critics are voicing concerns about potential impacts on grid reliability and electricity prices.
• Climate change headlines are becoming more alarming yet policies aimed at mitigating the effect remain controversial.
• The surge in domestic oil and natural gas supply is threatened by controversy around extraction methods.
• Energy efficiency continues to have bipartisan support but agreement on policy specifics remain elusive.

To confront these challenges—or, as some would say, opportunities—lawmakers, energy consultants and regulators at the federal and state level are sharpening their policy-making pencils, formulating a series of energy and environmental regulations that both state energy and environmental agencies (that are working on ways to comply with these policies) and non-governmental organizations (that must make informed decisions on which policies to get behind) must understand and respond to.

In our new white paper, “Top Environmental and Energy Policy Challenges,” we offer our take on four of what we believe are the most pressing policies currently facing state energy offices and non-governmental organizations. Here is a preview of the policies we discuss:

1. The EPA Clean Power Plan (CPP)

This policy will have a significant impact in every state starting in 2022, but planning is already in the works. It’s a new set of rules that sets state-by-state emission rate goals for existing fossil fuel power plants. Every state will be responsible for coming up with its own implementation plan, which can draw on strategies like investing in power plant heat rate improvements, fuel switching to cleaner natural gas, expanding renewable energy capacity, and working with other states to develop regional plans. Right now, every state is beginning to grapple with the best mix of strategies for its unique economy, energy consumers, and energy resources.

2. The Renewable Fuel Standard (RFS)

The Renewable Fuel Standard is a federal mandate requiring a certain amount of renewable fuel be blended into all transportation fuel sold in the United States each year as a way to reduce greenhouse gas emissions and petroleum consumption. The original Renewable Fuel Standard called for 7.5 billion gallons of renewable fuel blended into gasoline by 2012. In 2007, the goal was increased to 36 billion gallons by 2022 with individual targets established for four different biofuels: conventional, biomass-based diesel, cellulosic biofuel, and other advanced biofuels. Some of these technologies have not advanced as quickly as expected and EPA has issued waivers lowering annual requirements several times, leaving policy-makers to ask whether the Renewable Fuel Standard should be changed or scrapped entirely.

3. State Renewable Portfolio Standards (RPS)

Renewable portfolio standards vary from state to state. In general, states with renewable portfolio standards require or encourage electricity producers to supply a certain minimum share of their electricity from designated renewable sources like wind, solar, or geothermal power, and in some cases energy efficiency. According to the U.S. Department of Energy, almost every U.S. state has adopted renewable portfolio standard policies in one form or another. Some states are weighing the costs and benefits of their standards to determine whether they should be changed to meet more stringent goals or if they are too costly to continue.

 4. Energy Efficiency (EE)

Energy efficiency continues to be a popular bipartisan element of proposed Congressional legislation, as well as an important tool for compliance with many of the other policies identified above. For example, EPA is encouraging states to consider including EE programs in their implementation plans for the Clean Power Plan.  For many, energy efficiency programs are a very attractive and low-cost solution because they can reduce both energy consumption and environmental emissions, but getting a program’s incentives right and measuring its success is a significant challenge.