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Can Renewable Portfolio Standards make RE Work?
Can Renewable Portfolio Standards make RE Work?
Guest post by Geo who is a geologist working in Alaska
People want energy to be cleaner (i.e. emit less carbon dioxide). One way to do this is to use regulations to force either greater efficiency, or a switch to cleaner fuels.
A good example would be Corporate Average Fuel Economy (CAFE) standards in the United States. They were first enacted by the United States Congress in 1975, after the 1973–74 Arab Oil Embargo, to improve the average fuel economy of cars and light trucks (trucks, vans and sport utility vehicles) produced for sale in the United States. The idea was that slowly, across the board, the mileage of all cars and trucks produced in the U.S. would gradually increase. Over time this would result in cleaner air, and reduced oil usage. And perhaps save consumers money…
And it more or less worked as advertised. Standards were raised, and efficiency increased, largely without additional cost. U.S. cars are twice as fuel-efficient today as they were 40 years ago, saving car owners millions of dollars, and reducing air pollution. Arguably a win-win.
Figure 1: EPA “Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends: 1975 through 2017,” EPA-420-S-18-001, January 2018.
A slight nuance was added in some markets. Certificates for high mileage vehicles could be traded, so that some manufacturers could continue producing low mileage vehicles. For example, under California’s Zero-Emission Vehicle (ZEV) Regulation and those of states that have adopted California’s standard, vehicle manufacturers are required to earn or purchase credits for compliance with their annual regulatory requirements. This means that a certain number of electric cars must be sold to balance any low mileage vehicles.
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On Fuel Economy Efforts, U.S. Faces an Elusive Target
On Fuel Economy Efforts, U.S. Faces an Elusive Target
One of President Obama’s signature achievements on climate has been strict new standards aimed at improving fuel efficiency to nearly 55 miles per gallon by 2025. But credits and loopholes, coupled with low gas prices, may mean the U.S. will fall well short of this ambitious goal.
Five years ago, flanked by auto industry executives at a Washington, D.C. auto show, President Obama announced a historic agreement to increase fuel economy and reduce greenhouse gas emissions for cars and light-duty trucks. “By 2025,” the President said, “the average fuel economy of their vehicles will nearly double to almost 55 miles per gallon.” The White House predicted the new rules would save car buyers about $1.7 trillion at the pump and eliminate about 6 billion metric tons of greenhouse gas emissions over the life of the program. That’s more than a year’s worth of U.S. emissions of carbon dioxide.
If only it were so simple. But nothing is simple about the government’s sweeping attempt to curb climate emissions and oil imports by requiring auto companies to sell cars that are cleaner and more efficient.
Start with that frequently quoted 54.5 mile-per-gallon projection, which is not even close to the miles-per-gallon estimates pasted on the windows of new cars in dealer showrooms today, let alone the fuel economy that drivers would experience on the road in 2025. The government’s calculations take into account a dizzying array of adjustments and credits, for everything from electric cars, flex-fuel vehicles, energy-efficient air conditioning, and rooftop solar panels. Automakers also get credits for outperforming the standards in the years before they took effect in 2012.
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“Everyone Is Doing It”: How Carmakers Manipulate Emissions Test Results
“Everyone Is Doing It”: How Carmakers Manipulate Emissions Test Results
With Germany’s largest company by revenue, Volkswagen, deep in damage recovery mode, and the market still unable to decide just how systemic and profound the fallout will be from the emissions scandal which has already cost the job of VW’s CEO and which according to some will impact the GDP of Hungary and the Czech republic as much as -1.5%, many are still trying to determine not if but how many other companies – whether “clean diesel” focused or otherwise – will be impacted by the crackdown on emissions fraud.
We don’t know the answer suffice to speculate that it will be “many” for one simpler reason: there are dozens of ways to manipulate emissions tests in both the lab and on the road, and with the temptation to “reduce” emissions all too great for management teams laser-focused on boosting profit margins, one can be certain that in this particular case not only is there more than one cockroach, there are dozens.
The chart below from Transport and Environment shows some of the traditional ways in which carmakers manipulate CO2 emissions tests to make their cars appear more efficient:
Worse, according to a follow-up report, it is only a matter of time before far more widespread crackdowns take place within the auto industry where emissions fraud now appears as systemic as that of the global banking sector.
As reported earlier this week, the gap between official test results for CO2 emissions/fuel economy and real-world performance has increased to 40% on average in 2014 from 8% in 2001, according to T&E’s 2015 Mind the Gap report, which analyses on-the-road fuel consumption by motorists and highlights the abuses by carmakers of the current tests and the failure of EU regulators to close loopholes. T&E said the gap has become a chasm and, without action, will likely grow to 50% on average by 2020.
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