Virginia’s Political Class Isn’t Doing Much to Reduce CO2 Emissions — And It’s Working Out Just Fine

Source: “California, Greenhouse Gas Regulation, and Climate Change”

As faithful readers know well, I remain unpersuaded that the world is facing global-warming Armageddon or that we need to force a restructuring of the global energy economy to avert it. But as long as there’s even a remote chance that the emission of greenhouse gases (primarily CO2) might be driving cataclysmic climate change, I suppose, it’s good to see CO2 emissions heading down.

Unlike some holier-than-thou nations I could name, the United States actually is making progress in reducing its CO2 emissions. And Virginia looks pretty good by comparison to other states, which suggests that Virginia is looking pretty good by global standards. Arguably, the most useful measure of carbon intensity is the number of metric tons of CO2 emitted per million dollars of Gross Domestic Product. The lower the number, the more carbon-efficient the economy. As can be seen in the chart above, Virginia is the 13th most carbon-efficient state in the country. Somehow, despite all the caterwauling, we must be doing something right.

Source: Environmental Protection Agency

The debate over Virginia’s energy policy over the past few years has focused almost entirely upon the electric power sector. But electricity accounts for only 28% of the nation’s greenhouse gas emissions, according to the Environmental Protection Agency. An equal proportion comes from the transportation sector, which receives scant attention in the Old Dominion these days. Major contributions come also from industry, commercial & residential, and agriculture, which also goes largely ignored.

Market forces are driving the push to renewable energy in the electricity sector, and we would be seeing more solar power regardless of what the activists and politicians were doing. The reason: Solar’s time has come. Solar is an economically competitive power source, and an increasing number of major corporations are demanding it. As a consequence, Virginia’s largest electric utility, Dominion Energy Virginia, has done a remarkable about-face over the past two years, as can be seen by comparing the narratives of successive Integrated Resource Plans. As Dominion plots its energy future, it foresees a continued shift away from CO2-intensive coal to zero-carbon solar, using natural gas combustion-turbine engines to counter the inevitable variability in solar production.

By contrast, public policy is central to shaping the carbon intensity of the transportation sector — not by setting miles-per-gallon standards for vehicles as much as by shaping land use patterns that determine how frequently people drive their cars and how far they drive. Once upon a time, Virginia environmental groups kept these issues in the spotlight. For whatever reason, they have faded from view. But look what’s going on:

This graph, based on Virginia Department of Transportation data, shows how the average daily vehicle miles traveled dipped after the 2008 recession, leveled off for five years, and then began climbing again in recent years. (2010 numbers were not available from the data source I consulted.) Increased VMT translates directly into increased CO2 emissions. Curiously, the recent increase seems not to have set off any alarm bells. Needless to say, staff-shriveled Virginia news outlets aren’t writing about it. Even environmental groups, absorbed by the dramas of Mountain Valley Pipeline and Atlantic Coast Pipeline construction, seem to be ignoring it.

One long-term solution to rising VMT is building more Walkable Urbanism — compact, pedestrian-friendly, mixed-use development — that enables people to conduct their daily business with fewer and shorter car trips. Another long-term solution is figuring how out to harness the fast-approaching transportation revolutions of self-driving cars and Transportation as a Service. Public policy discussions are occurring behind the scenes — I understand that the Northam administration wants to make its mark in transportation policy by emphasizing innovation — but so far the rubber has yet to meet the road.

Then there’s the other 44% of CO2 emissions from the manufacturing, agriculture, commercial and residential sectors. I have seen next-to-zero attention paid to these economic sectors. One way to reduce the carbon intensity of Virginia’s economy would be to encourage the conversion of grassland and cropland to forest, thus sequestering carbon in trees — the reverse of the clear-cutting of Amazonian rain forest. This is happening on its own, without state government prodding. Perhaps it’s best to leave a good thing alone. But I’m surprised that we’re not hearing more about ways to accelerate the process.

There is tremendous potential, too, in building automation to conserve energy for heating, cooling, and lighting. While individual property owners are investing in energy efficiency, the next frontier is in collaborative projects across office parks and downtown business districts. Virginia state and local government have been totally AWOL.

In sum, If Virginia is one of the more carbon-efficient states in the U.S., it is hard to give any credit to the political class. The General Assembly has ratified a large-scale commitment to solar energy and grid modernization that likely would have occurred if left to normal market and regulatory processes. Meanwhile, nothing substantive is being done about CO2 emissions in transportation, manufacturing and the built environment. Perhaps that’s just as well. All things considered, Virginia is doing just fine. There’s a good chance that the politicians would just screw it up.

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25 responses to “Virginia’s Political Class Isn’t Doing Much to Reduce CO2 Emissions — And It’s Working Out Just Fine”

  1. Steve Haner Avatar
    Steve Haner

    A series of federal regulations have dealt with the manufacturing/industrial sector pushing companies toward maximum achievable control technologies (think of Boiler MACT). Any entity with a license for air emissions has dealt with changing requirements. Any facility still burning oil or coal is making the move. Plenty being done on the commercial/industrial/manufacturing side.

    On the electricity side, keep in mind the role of nuclear which may or may not be a huge source of power ten years from now depending on the license extensions.

  2. Jane Twitmyer Avatar
    Jane Twitmyer

    You are right about how little attention is being paid anywhere in VA to the residential and commercial sectors. That is because of what Tom has so aptly described as how the old monopoly regulation assigns profit to building assets and not to reducing demand levels.

    Virginia is the bottom of the states for how far we have gone with efficient buildings both residential and commercial. I forget the amount, but Tom has given us a huge potential demand reduction if we put some money into making our buildings efficient. I continue to hope that a take of the PACE loan program designed in Arlington will spread to other tax jurisdictions.

    Your analysis, gives me the perfect opportunity to introduce something I think the enviros and Dominion could agree on … changing the rules to allow Dominion to use automobile charging station to build assets. There are lots of reasons all could agree.
    The trade off compromise would be some on-bill financing for residential and small business efficient buildings.

    • In the US EVs will account for 12% of the demand for electricity by 2040. Utilities like that EV are a demand builder and enviros like that they are a large oil use reducer and eventually GHG reducer too
    • NRDC is looking for the expansion of charging stations to “deliver widespread adoption”
    • In CA Pacific Gas & Electric planning to provide infrastructure to support 300 DC fast-charging stations and infrastructure for heavy-duty EVs.
    • But almost every major auto manufacturer has public plans for an EV model by 2020, according to PlugInCars. And a 2016 Bloomberg New Energy Finance report shows EVs reaching cost parity with conventional vehicles between 2022 and 2026.
    • Rocky Mountain Institute (RMI). “2017 monthly sales data suggest… under some reasonable assumptions, there could be 2.9 million EVs on the road in the U.S. within five years.”

    I have just finished reading the well done history of VA regulation by Green Hurlocker and there is room to do this in the current law. Don’t see the immediate possibility of bigger change yet and as long as we run our nukes and Bath hydro we look a whole lot better than we actually are in terms of progress.

    1. Good idea. As Tom H. often observes, the investor-owned utilities can be a force for good if given incentives to do the right thing. Why not reward them for building EV recharging infrastructure? You don’t want the utilities to get too far out in front of demand, however. Someone has to pay for this infrastructure, and that’s the electric customer. Insofar as subsidizing EVs benefits disproportionately benefits the well-to-do who can afford to buy them, such a plan would be economically regressive.

  3. vaconsumeradvocate Avatar

    How would you feed cattle (and horses, goats, etc.) if pastures were converted to forests?

    1. The conversion is already happening, driven by market forces. Massive acreage of Virginia farmland is being abandoned and going fallow.

      1. TBill Avatar

        I recall some years ago, former Senator Jim Webb had the vision of converting the farmland to switchgrass for biofuels. I disagreed with him on some of the mandated alternate fuels regulations he supported in Congress, and he wrote back to me to say switchgrass was why I was wrong about that.

  4. Steve Haner Avatar
    Steve Haner

    The only people who should pay for the electric vehicle charging stations are the people using the electric vehicles being charged. The price should include some proxy for the fuel tax so the buyer is also helping to pay road maintenance, etc. (Or they could pay a fee per mile driven.) There is absolutely no reason the utility should own them. That’s the same kind of flawed thinking that has utilities holding near monopolies on solar and wind. The idea of “rewarding” the utility by charging the general ratepayer for this “infrastructure” – well, we’ve seen that thinking in action earlier this year and we oysters are now somebody else’s dinner! (But you can’t seem to smell the butter and cocktail sauce, Jim – trust me, you are soaked in it!)

  5. Grassland properly utilized is a massive opportunity for carbon sequestration while producing an economically valuable product far faster and in much greater quantities than letting it go to monoculture timber or poorly designed and managed woodlots. A mixture of dispersed timber and grassland (the Savannah) is one of the most productive biomes in the world.

    Management intensive rotational grazing has been shown in numerous studies to rapidly sequester carbon and build topsoil and water retention in the soil (drought resistance). This is a art that can be learned with training and could add hundreds of millions of dollars to Virginia’s economy if we fed and finished our beef cattle on grass rather than sending them out of state to be finished in feedlots. This would also require more abatoirs (local slaughterhouses) which would enhance our rural economies.

    Carbon gets the biggest headlines because it is easiest to measure and control. But methane is 86 times more potent as a greenhouse gas over the first 20 years of its release. The next 20 years are the most crucial, as considered by those who are concerned with the human induced contributions to climate change are concerned.

    Much of the methane releases that occur can be greatly reduced or halted for very little investment with available technology. This sector has been ignored for too long by policymakers.

    Many cities are considering adding electric buses to their fleets for their lower cost of ownership. The batteries can be used to store peak solar output during the day to lower transportation costs and to make solar more valuable to the grid. Many major corporations are converting a significant portion of their delivery fleets to EVs in various forms (box trucks, UPS trucks, vans, etc.). Many manufacturers are planning many different car models in the sub-$35,000 range. This major transition in our transportation sector will not be limited to wealthy folks with high-end cars. Current estimates are that EVs will be cost competitive (initial purchase price) with ICE vehicles with similar features by the mid-2020s. As is often the case with technology-based products, it looks like it might happen faster than expected.

    Third-parties, as well as utilities, can deploy charging stations if state regulations allow it. Often the utilities try and get a monopoly on this too for revenues purposes.

    1. TooManyTaxes Avatar

      Tom – I agree. Why the devil would we want Dominion to run the EV charging stations? It’s simply extending their monopoly on electric distribution. And given its recent attempt to play on my non-existent guilt to purchase green power at 12% premium, generation too. Keep Dominion out!

      Let the market decided who offers EV charging just like it has for gasoline stations. But electric vehicles users do need to pay the costs for power as well as some reasonable contribution to VDOT. The longer one builds and maintains subsidies, the harder it is to get rid of them. Witness the huge subsidy from taxpayers and low-skilled American workers to many employers of illegal immigrants. If these employers had to pay these costs illegal immigration would drop rapidly. Let’s start reducing subsidies to electric vehicles and soon.

      1. The tax credits on EVs expire after a manufacturer has sold a certain number of vehicles. Tesla is reaching their limit.

        There is no subsidy on purchasing the electricity for EVs. Although Dominion has been marketing its lower time-of-day rate at night-time to entice EV owners to recharge at night to increase utilization of the nukes.

        EVs have value to the grid if they provide low-cost storage during peak solar output during the day.

        I thought Virginia hit EVs pretty hard with an extra property tax adder to make up for what they do not pay in road taxes at the gas pump. Not all states do that though.

        Most current subsidies related to solar and wind are due to decline in 2020 with only a 10% solar tax credit remaining for utilities. The much higher subsidies for fossil and nuclear will remain in force.

      2. Acbar Avatar

        If we are serious about allowing competing electricity suppliers to offer charging stations, then bring back retail access! That is precisely what you’re talking about: requiring the local electric distribution company (here, Dominion) to deliver someone else’s electricity over the distribution company’s wires to the vehicle. In this case the retail customer would be the car owner and would elect which supplier of electricity to patronize by choosing which charging station to go to — exactly analogous to choosing which gas station to pull into. We already have this law on the books in Virginia but it was “suspended” in 2007 after intense lobbying by Dominion.

      3. Jane Twitmyer Avatar
        Jane Twitmyer

        TMT… You are so right to say … “The longer one builds and maintains subsidies, the harder it is to get rid of them.” Considering that $20billion goes to the fossil industries and one of that tax supports in over 100 years old … any idea on how to get rid of them? That particular 100 yr old tax expenditure was written to develop the oil industry!

        1. TooManyTaxes Avatar

          Jane – I have no love or support for fossil fuel subsidies. They need to be reduced and eliminated as well. My key point is let’s not see similar 100 year subsidies for electric vehicles.

          Tom – thanks for the additional information. It’s my recollection, however, that the GA repealed or reduced the added personal property tax paid by hybrids and EVs. All types of vehicles need to support VDOT.

  6. LarrytheG Avatar

    yepper… on board with those who question Dominion doing that…. Jim is gaga over “disruptive” technology and companies like AirBnb and Uber to knock off the existing “monopolies”.. Dominion has done precious little to lead the charge to utilize technology to reduce electrical demand … they just want to
    sell more electricity – which is the problem.

    As far as “walkable” and Uber.. let me say – a couple of days in Sin City ought to convince the most ardent believer that Uber will not cure auto-centric love. This place has to be the armpit of the free world in terms of heat, automobiles and gaudy extremes. I cannot for the life of me, understand why ANY sane human being would want to spend more than a couple of hours here just to get a taste of it before they run screaming in the opposite direction.

    But you gotta do it if you want to run the Grand Canyon… I suppose.

    So I’ve “tasted”, Nashville, St. Louis, Kansas City, Reno, and a few more and the story is the same.. only the locale changes.. people LOVE their cars and just totally jam their beltways and interstates…

    “walkable” Las Vegas ? Surely you jest. They have to build walkways OVER the streets… and trying to cross the actual streets… is a lot like those moving targets at the county fair.. or that old electronic game named “Frogger !!!

    The crowds do “take over” some of the streets at times but let me tell you – the
    “for hire” guys are not to be trusted. We DID walk 2 miles from the strip to our
    motel.. so I do have a good feel for the “walk” and it sorta sucks…

  7. TBill Avatar

    Jim- the chart is misleading.
    Don’t forget Virginia’s “true” carbon footprint includes all the coal-based electricity imported by Virginia from West Virginia etc. Virginia actually has relatively high electricity use compared to other states, but we import a lot of it – so we get good marks for carbon, but only if we look at carbon released within state boundary lines.

    I do not see electric vehicles as better for the environment, but the premise that utility execs and environmentalists can agree with the need for gov’t regulations to mandate electric vehicles is certainly true.

  8. LarrytheG Avatar

    electric vehicles powered by fossil-fuel-generated electricity may not be any “cleaner” than if they burned fossil-fuels.. not sure – since generating large amounts of electricity at central sites may be more efficient than millions of individual engines burning fossil fuels but electric vehicles that use electricity generated from solar or wind will be much cleaner than anything large or small that burns fossil fuels for electricity.

  9. Acbar Avatar

    Jim, I share TBill’s reaction that your headline — indeed the premise of the posting — is misleading. Virginia is 13th in carbon impact per fiscal GDP mainly for historical reasons and for the way that carbon impact is allocated (here, is it by State of manufacture, State of wholesale consumption, State of retail consumption, State in which the air/water impacts are measured, etc.?). Statistics can lie! What matters is the trend line in VA relative to other regions for consumer-driven activities like energy for auto transportation and levels of trash recycling and per household consumption of energy for heat/hot water/appliances. Crediting VA for its relatively low amount of fossil fueled electric generation physically located in VA is highly misleading: electricity comes from the regional “Grid,” not just local power plants.

    1. Yes, Virginia is a major importer of electricity, which may understate the extent to which it understates the carbon intensity of the electricity portion of the economy. But look at the chart — electricity accounts for only 28% of CO2 emissions nationally (which is roughly comparable to the percentage in Virginia). Even factoring in the electricity imports, Virginia is a relatively low carbon-intensity state.

      The larger point of my post is that if we’re genuinely concerned about CO2 emissions here in Virginia, we need to cast a wider net than just the electric grid. As it happens, I’m not in a panic about CO2 emissions. But for those who are, they need to pay attention to the other 72% of the economy.

    2. Acbar Avatar

      Completely agree about “cast a wider net than just the electric grid.” Especially transportation, and energy efficient building codes.

  10. Jane Twitmyer Avatar
    Jane Twitmyer

    One more general point about the idea that only users should pay for charging stations. Certainly the charging stations have electric use meters, but those that drive electric vehicles are serving a community good. That ‘good’ has to do with the air pollution that fossil fuel cars pump into the air. China knows how important that is and we should also start paying attention to the health costs of air pollution from fossil fuels, and other sources as well.

    A Harvard health study calculated that coal should cost +29 cents if the health and environmental costs are included in the price of coal produced electricity.

    It’s good for all of us when we find ways to stop polluting the air and water we all need. Putting costs where they belong it a bit like user fees… making producers pay for what they do in the costs of their products.

    1. Frankly, I have no firm opinion on the virtue of incentivizing utilities to install charging stations. I appreciate the point that users should pay — a fundamental principle in governance, as far as I’m concerned. But playing devil’s advocate…

      Large-scale deployment of EVs can make play a tremendous role in load shifting. If we get to the point where we have massive solar output during mid-day, we might want EVs to be plugged into the grid so they can absorb a lot of that electricity…. If EV load shifting saves Dominion and Apco the expense of building batteries or installing nother electric storage capacity, it could well save rate payers a ton of money. Of course, there would have to be careful analysis before committing to such a policy, but it’s worth considering.

  11. Utilities are already incentivized to install charging stations. For every $1 that a utility invests the ratepayers must pay them back $4, $2 of that is profit. Currently, in Virginia that is how they make more money, by investing more.

    However, third-parties can provide many of the same services (EV charging, solar generation, energy efficiency, demand response, battery storage, etc.) at a much lower cost than the utility. This is the fundamental issue for utilities (and regulators) in the 21st century. If you want to keep costs low for the customers you must open up at least a portion of the monopoly system. If we do that – then we need to provide utilities with new ways of making money without building unnecessary projects.

    Third-parties such as hotels, private corporations, parking lots, Whole Foods, etc. are providing charging stations. Most large tech firms in California have large banks of chargers in their corporate parking lots. In most cases the electricity is provided by the utility, unless they have an onsite solar facility. They are developing on-the-fly charging systems for buses.

    PJM is developing a new market for storage (as a grid service). It will be open for third-party participation in states that allow it. Sophisticated charge/discharge facilities and billing/payment systems are under development. Detroit is encouraging the widespread development of charging stations so that range will not be an issue for the vehicles they plan to release in the early 2020s.

    Charging at Tesla’s nationwide charging system is free for owners of Model S and Model X vehicles.

    1. Acbar Avatar

      TH, what have you heard about how PJM is planning to structure its storage service? Is it just for LSEs or also end-user storage devices? The latter is one of the really tough legal conundrums: how to achieve a fair end result given the federal versus State, wholesale versus retail, jurisdictional aspects of using power from the grid to charge customer-owned storage media (this is a retail sale since the customer is an end user), in contrast to the customer’s release of that stored power back to the grid (this is a wholesale sale since the customer’s battery discharge is like any other generator on the grid). The problem is, there is no easy way to differentiate storage-charging and customer end-use, yet without doing so, the charging of the storage medium will always be a higher price (retail) than what the customer can sell it for (wholesale). In California there’s the added complication of net energy metering, which as you know I object to. Even in PJM, battery storage and release (in homes or in vehicles) is going to be difficult to sort out.

      1. I don’t know much about it. I saw an article a while ago that said they were beginning to consider how they might make a market for it. I believe it would be just grid based storage initially, but it could include resources under the control of an aggregator. This might include devices installed at customer locations, but it sounded like the transaction would be between PJM and the aggregator, so there would have to be some payment back to the homeowner or a credit on a lease payment for the device. This would circumvent the wholesale/retail issue maybe, but there would have to be some sort of “net metering” to register the flow out of storage I would think. This is still in the early stages, but needs to be addressed as storage prices continue to decline.

        I don’t know how this might be handled if we moved to the more market-based value-of-solar tariffs rather than net-metering.

  12. Jane Twitmyer Avatar
    Jane Twitmyer

    Interesting … from Bloomberg New Energy Finance …

    “A red-hot electric vehicle market has triggered a face-off between Big Oil and utilities.”

    “Oil majors, who’ve sold fossil fuels to cars for a century, are now moving into an electricity sector that’s preparing for exponential growth. The problem is that utilities, the primary power suppliers for a century, have the same idea.”

    “BP Plc predicts electric vehicle sales will surge by an eye-watering 8,800 percent between 2017 and 2040, making it an attractive business for oil companies as demand for gasoline and diesel are forecast to slow. Big Oil will have to battle the traditional utilities for charging at people’s homes, on the road and even offices of green-car owners.”

    Looks like some in Big Oil are seeing a new future.

    “It’s the banging together of industries “in a way that’s never happened before,” said Erik Fairbairn, the founder and CEO of Pod Point Ltd., one of the U.K.’s largest electric-vehicle charging companies. Power providers are, for the first time, meaningfully interacting with car companies and the oil industry “is realizing if they get this wrong then the requirement for them in the future is significantly diminished,” he said.

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