I had already selected my topic for this week (most climate policies don’t work) when I had the good fortune to cross paths with a Wall Street Journal article, 7 Years, $700 Million Wasted: The Stunning Collapse of New York’s Traffic Moonshot. The policy attempted to penalize drivers for entering congested zones of Manhattan. The $15 per incident congestion charge would sum to over a billion dollars per year that would fund biking and mass transit improvements.
New York City has the most snarled traffic in the world. The Journal reports, “The average travel speed in Midtown fell to 4.5 miles an hour in May, the lowest ever recorded for the month.” The Journal’s climate reporter Ed Ballard wrote, “The idea that voters were willing to fight for the right to drive 4½ miles per hour in the city’s snarled traffic shows how hard it is to get people to change their behavior.”
In a “blockbuster announcement,” Governor Kathy Hochul nixed the plan because it’s an election year. “The epic collapse in New York shows how a fear of dramatic change can give the status quo stubborn power over those trying to solve some of America’s most intractable challenges.”
Traffic vs Climate Change
This is a perfect parallel to addressing climate change – a side dish to New York’s collapsed congestion pricing scheme, with parallels to the billions directed through the “bipartisan infrastructure law.” A recent analysis by Transportation for America found a preponderance of BIL dollars is going to highway expansions rather than bus and rail projects. So much for the BIL fighting climate change.
That brings us to the feature article from The Wall Street Journal, Most Climate Policies Don’t Work. Here’s What Science Says Does Reduce Emissions, and the basis of the article from the Journal Science, Climate policies that achieved major emission reductions: Global evidence from two decades. The research covers 1500 climate policy measures implemented over two decades across 41 countries on six continents.
Of the 1500 deployed policy measures, 63 were determined to be successful. Four point two percent.
I boiled the paper’s findings down to something readers can quickly understand. First, a look at the four policy types examined:
- Pricing: fossil fuel subsidy reform or taxing.
- Subsidy: adoption subsidy (i.e., rebate), financing, renewable subsidy, public spending on rail or bike trails
- Regulation: bans, codes, standards, including renewable portfolio standards
- Information: labeling (e.g., ENERGY STAR)
They also analyzed these policy types across four sectors: buildings, electricity (utilities), industry, and transportation.
Boiling off the academic claptrap, my summaries are as follows.
Pricing
First, adopted alone or combined with other policies, pricing (money) is the most effective means of changing behavior. For example, people in California, where gasoline costs two times the Wisconsin price and 2.5 times the Louisiana price, are more likely to buy EVs and small cars with 2.0 liter or smaller engines. A few years ago, I chuckled at all the big 4x4s on the road in California. I didn’t see as many a few weeks ago when I attended ACEEE Summer Camp.
This also confirms the dozens of blog posts I’ve written describing how we need electric tariff reform so customers can control their electricity bills with time-of-use pricing and reasonable demand windows. Here are some samples begging for rate (tariff) reform: Innovations in Grid Flex, Decarbonize and Reduce Costs with Dynamic Pricing, and my favorite, Modern Electric Rates from the Slide Rule Era.
Although pricing mechanisms like carbon taxes and Hochul’s congestion pricing are the most effective, they are the first to be scuttled for political reasons – which brings us to the next section – politically less painful but ineffective subsidies and regulations.
Subsidies and Regulation
The Science paper notes that subsidies and regulations alone have minimal impact on climate change. Not surprisingly, subsidies and regulations are popular with lawmakers.
Permanent Subsidies
There is no such thing as a temporary subsidy in Washington, DC. Renewable subsidies, including those for wind, solar, and liquid fuels (ethanol), are eternal. Do they work? They certainly get businesses to thrive for a time. As chronicled two weeks ago, solar companies are now taking a beating. How about driving down electricity costs and improving reliability? Reliability and prices are at the top of regulators’ minds across the board, as described here, here, and here.
Temporary Subsidies
Subsidies in demand-side management (efficiency) programs for utilities work but are not permanent. See Code Zombies and Boom Years of Energy Efficiency for the evolution of technology and programs over several decades.
Bans
There are direct bans and indirect bans. Direct bans include California’s requirement that all new trucks of the 18-wheel, five-axle type must be powered by electricity or hydrogen starting January 1, 2024. That failed and was pulled as of January 3, 2024. The idea of electric trucks is absurd. Think of rockets launching into orbit. Most of the fuel and energy required to get the vehicle into orbit is the fuel itself. Electric trucks face a similar conundrum. “[Trucking company] IMC uses electric trucks to carry products such as toilet paper and electronics. Using an electric truck to carry heavier goods, such as almonds or fresh produce, means fewer pallets and smaller loads.” Inflationary? Yes.
Indirect bans include impossible corporate average fuel economy for automakers, requiring adoption of electric vehicles, and impossible emission requirements resulting in coal plant closures.
Information
Per the Science paper, information including appliance (ENERGY STAR, presumably) and car labeling (EPA estimated mileage, presumably) alone were not found to move the needle. That surprised me. ENERGY STAR claims every dollar spent on incremental efficiency improvements results in a lifetime savings of $350.
Not mentioned is the information delivered by demand side management programs. As widget efficiencies suffer the 1/x paradox, energy efficiency portfolios must pivot to information-based programs like strategic energy management and retro-commissioning.
Conclusion
Successful decarbonization requires a needle-eye shot of decreasing costs and adding benefits like resilience, comfort, and improved performance. Forces of policy and bans do not work.
