# Energy Policy ## Energy Policy ## Energy and the Human Development Index Energy use is correlated with quality of life in many countries. However, improvements in this quality of life (HDI) level off at higher levels of energy consumption. ![](/files/-Lrs2n9NEtq9QdA1zxGj) ## Definitions * Gross Domestic Product (GDP) * Monetary value of all goods and services created by an economy. * Per capita GDP (GDP per person) * The GDP of an economy divided by the number of persons in that economy. * Per capita energy use (Joules per person) * Energy intensity of GDP (Joules per GDP) ## Energy and GDP There is a correlation between energy use and the gross domestic product in countries. [Energy vs GDP by country](http://www.withouthotair.com/c30/figure242.png) ![](/files/-LmGGSU9xe-WJhP8yCxy) ### US GDP * 2006 * GDP 14 trillion USD $$14 \cdot 10^12$$ * Population 300 million * Energy use 100 Quads ### Energy per unit of GDP We can think of energy intensity as a form of efficiency. How much energy does it take a country to create economic value? ![Source: The Economist](/files/-LmGGSUFr19wYOBHEm_9) ### Energy per capita ![](/files/-LmGGSUBmFY9mdoJOC5P) ### California Electricity Consumption ![](/files/-LmGGSUD-WodbOSm8pPr) ## Tools to affect energy use How do we make changes to our energy system? Laws, institutions, and markets set the rules for energy usage. * Cap and Trade * Carbon Tax * Mandates * Renewable Portfolio Standards * Subsidy You will use your quantitative skills to assess the impact of these different policy instruments. ## The Resource Curse Experts have observed that discovering petroleum wealth in a country often doesn't lead to better economies or health for the country. This idea is called the resource curse. Several countries that have oil as a significant fraction of their economics have low ratings for the HDI and democracy. ## California ### California * Global Warming Solutions Act of 2006 (AB 32) * Reduce GHG emissions to 1990 levels by 2020 * 1990 was 427 million metric tonnes of CO2 equivalent ### How are we doing? ![California Air Resources Board](/files/-LmGGSUXpMI3xz-g9AXg) ### California 2050 goal * 80% reduction below 1990 levels ### How do we achieve this goals? * What can we do on a county or state level? ## Sonoma County ### Sonoma County * Sonoma County Energy Independence Program (SCEIP) * Property Assessed Clean Energy (PACE) ### Sonoma County * Recently announced PACE Financing Marketplace * Allows multiple choices of funding for consumers ### Property Assessed Clean Energy (PACE) * Allows loans to be paid back on the property tax bill * Funded through municipal bonds * Loan is attached to the property * Has funded over $68 million dollars in projects ### United States * Clean Air Act 1963 * Clean Water Act 1972 * Energy Independence and Security Act of 2007 ### Sonoma County Action Plan * [GHG Plan Highlights](http://www.coolplan.org/ccap-report/Action_Plan_HighlightsPRINT6.pdf) * [2005 Action Plan](http://www.sonoma-county.org/gs/pdf/GHG_Action_Plan.pdf) * [2008 Action Plan](http://www.coolplan.org/ccap-report/CCAP_Final_11-05-08.pdf) ### Sonoma County Climate Plan ![Climate Protection Campaign](/files/-LmGGSUZzgqn3GazDqPT) ### Sonoma County Climate Plan ![Climate Protection Campaign](/files/-LmGGSUaOJF3qo_qtYl6) ### Sonoma State * What policies could you imagine here at Sonoma State ### CSU Policies * [CSU Sustainability Policy](http://www.calstate.edu/cpdc/sustainability/policies-reports/documents/JointMeeting-CPBG-ED.pdf) * [2014 CSU Sustainability Report](http://www.calstate.edu/cpdc/sustainability/policies-reports/documents/CSUSustainabilityReport2014.pdf) * [STARS Report Campuses](http://www.calstate.edu/cpdc/sustainability/climate-change/) ## Global Negotiations ### Rio Earth Summit, 1992 * Negotiated the United Nations Framework Convention on Climate Change (UNFCCC) ### Kyoto Protocol, 1997 * Adopted at the 3rd Conference of the Parties (COP 3) * China and India not required to cut * US did not ratify the treaty * Burden of emissions reductions placed on developed countries ### Copenhagen Climate Change Conference, 2009 * 15th Conference of the Parties (COP 15) * Viewed as a disappointment by many ### Paris, 2015 * 21st Conference of the Parties (COP 21) * Goal of limiting average temperature increase to 2 degrees Celsius above preindustrial levels ### Montreal Protocol, 1987 * International agreement to reduce Chlorofluorocarbons (CFCs) and other ozone damaging chemicals * Provides an example of a world wide emissions reduction treaty ### China US Climate Agreement * Last week, the US and China announced a historic agreement to reduce GHG emissions ### Discussion * Read the [article](http://www.vox.com/2014/11/11/7200909/US-china-climate-deal-cutting-emissions) * We will then discuss some questions ### What are the basic terms of the agreement? * For the US? * For China? ### Are these terms meaningful? * How do these compare to existing targets like California AB32? ### What difficulties do you anticipate? * Why would China want to reach this deal * Why doesn't China want to peak now? * Why would US want this deal * Why not? ## Direct and Indirect Subsidies Subsidies are financial benefits to consumers of a product. In the case of energy they can be costs that didn't have to be paid or a direct payment from the government. ### Fossil Fuels * Intangible Drilling Costs Deduction. We provide tax deductions for oil exploration costs. * Social cost of carbon. These are costs we estimate are borne by the public but are not paid for by fossil fuel companies or consumers. ### Solar * Federal tax credit for solar panel installation * Renewable electricity production credit ### Finance Some financing or bonds are provided by the government for investment. The lower cost of capital means a lower repayment cost and is a subsidy for the energy project that receives it. ## Examples We want to reduce GHG emissions about 85% by 2050. Sonoma county has a 2015 GHG emission of 3.5 units and a 2050 target of 0.5 units. This reduction will happen over 35 years. $$\delta t = 2050 - 2015 = 35$$ $$0.5 = 3.5(1-r)^{35}$$ $$(0.5/3.5)^{1/35} = 1-r$$ This works out to about a five percent per year reduction. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://daniel-soto.gitbook.io/ets/energy-and-society/energy-policy.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.