Climate Leadership and Community Protection Act Implementation Risk Management

In the summer of 2019 Governor Cuomo and the New York State Legislature passed the Climate Leadership and Community Protection Act (Climate Act) and this summer the implementation process is in full swing.  This post addresses risk management concerns about the implementation process.

I am a retired electric utility meteorologist with nearly 40-years experience analyzing the effects of meteorology on electric operations. I believe that gives me a relatively unique background to consider the potential effects of energy policies related to doing “something” about climate change.  I have written a series of posts on the feasibility, implications and consequences of this aspect of the Climate Act.  The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Background

The Climate Act establishes a Climate Action Council at §75-0103 that will develop a scoping plan to implement the requirements of the law.  The Citizens Budget Commission developed an overview of the CLCPA targets in Green in Perspective: 6 Facts to Help New Yorkers Understand the Climate Leadership and Community Protection Act.  The current emphasis is implementation of plans to meet the requirement to reduce GHG emissions from electricity production by 70% in 2030 and eliminate them altogether by 2040.  In my opinion, the proponents of the Climate Act believe that meeting the aspirational goal of a carbon-free electric system by 2040 is simply a matter of political will.  I am not nearly as optimistic because every time I look at any aspect of that transition I find unexpected complications, unintended consequences, and ever higher costs.

The basis of this article is work by the Risk Monger, a blog “meant to challenge simplistic solutions to hard problems on environmental-health risks”. The author of the blog, David Zaruk, is an EU risk and science communications specialist since 2000, active in EU policy events and science in society questions of the use of the Precautionary Principle. He is a professor at Odisee University College where he lectures on Communications, Marketing, EU Lobbying and PR. In my opinion, he clearly explains the complexities of risk management and I recommend his work highly.  I found his work apropos to the Climate Act implementation process.

Precautionary Principle

The Precautionary Principle is a strategy to cope with possible risks where scientific understanding is incomplete.  Unfortunately, many rely on this idea that to be safe we have to eliminate all risks as a precaution.  Zaruk explains that the problem is that policy-makers and politicians have confused this uncertainty management tool with risk management.  The conclusion of a recent series of posts on the failures of risk management of the COVID-19 response, while fascinating on its own, also provides a cautionary tale relative to New York’s energy policy and implementation of the Climate Act.

New York’s Climate Act is generally driven by the precautionary principle approach.  New York is trying to remove the risks of climate change impacts despite our lack of complete knowledge about climate variations.  For example, the Regulatory Impact Statement (RIS) for proposed revisions to the Part 242 CO2 Budget Trading Program states that “Overwhelming scientific evidence confirms that a warming climate poses a serious threat to the environmental resources and public health of New York State”.  After pointing out that anthropogenic GHG emissions have increased and that ambient levels of CO2 are “higher than at any point in the past 800,000 years”, the RIS goes on to say “The large and persuasive body of research demonstrates through unequivocal evidence that the Earth’s lower atmosphere, oceans, and land surfaces are warming; sea level is rising; and snow cover, mountain glaciers, and Greenland and Antarctic ice sheets are shrinking”.  In order to confront those risks the Climate Act focuses on greenhouse gas emission reductions but does not include a process to ensure that their cure is not worse than the alleged disease.

Risk Monger’s Risk Management Approach

Zaruk outlines seven steps of risk management:

1. 1. 1. 1. Scenario Building – all options must be mapped out;
         2. Risk Assessment – collect and refine data and evidence;
         3. Risk Analysis – weigh data against benefits and consequences;
         4. Apply Risk Reduction Measures – identify vulnerable groups and reduce exposures on them;
         5. Risk Communication (Empowerment) – inform public of risks and how to protect themselves;
         6. As Low as Reasonably Achievable (ALARA) – reduce exposures to a reasonable level vis-à-vis social well-being; and
         7. Refine ALARA: continuous exposure reductions – continually lower exposure levels so as to ensure benefits at higher safety levels

If these steps fail, apply the precautionary principle – As benefits and social goods will be lost, this is the last step and should only be temporary

These seven steps are the basis for twelve strategies he proposes as an alternative policy approach for rational discussion.  He believes that using these risk management strategies would have provided a better solution to the COVID-19 crisis and I believe that it would be appropriate to consider his alternative with respect to the Climate Act.

Zaruk argues that the docilian mindset, demanding a world with zero-risk, helped drive a solution that caused economic and social collapse in Western economies trying to reduce the effect of the virus outbreak.  Unfortunately, as he points out, there are influential forces lobbying for even more precaution.  His strategies for better risk management are entirely appropriate to consider with respect to the transition to an energy system that eliminates the use of fossil fuels because of the risks to affordability and reliability.  In the next section I address his strategies in this context.

Risk Management Strategies

The Risk-Monger’s first strategy is to place precaution properly in risk management.  The Climate Act is taking the precautionary step to ban the use of fossil fuels for electric generation by 2040.  Zaruk argues that stopping an activity can have significant consequences so it is more appropriate to implement this kind of stringent policy at the end of the process when “our capacity to prevent harm has failed or the value of the benefits could not be justified”.  The fact is that there are undeniable benefits to fossil fuels and alternative technologies are not well developed which could cause reliability problems and increase costs.  The Climate Act targets put the “cart before the horse” by not evaluating the potential consequences of the alternatives before setting the targets.

Two other strategies are related.  He argues that setting up government risk management units to provide independent oversight and foresight about emerging issues has tremendous value and proposes to have an independent risk assessment process outside of the political process that can present their findings to the public without interference.  Zaruk notes that “While Churchill’s saying: ‘Scientists should be kept on tap, but not on top’ stands as a truism of modern democracies and accountability, it does not mean that political leaders can be allowed to try to hide facts or deny evidence by pressuring their advisers”.  Unfortunately, this is directly opposite of the actions of the Cuomo Administration.  In the summer of 2019 a group of retired Department of Public Service employees submitted a letter that stated “Until the current administration, Governors have generally respected the plain language of the Public Service Law (PSL), which … safeguards the mission of the DPS to serve not political interests but the public interest.”  Based on my private discussions with staff at different agencies, the Governor’s minions micro-manage every decision based on political ramifications. This mindset permeates the state effectively eliminating any criticisms by industry in general and the utility industry in particular.

Zaruk recommends a strategy to promote scenario building in the governance process:

“Contrary to common practice in policymaking today, it is not a sign of weakness to have a Plan B or consider alternative eventualities. Examining a multitude of scenarios allows a risk manager to prepare for any situation, avoid black swans and limit unforeseen consequences. In most cases it is common sense: you better reduce your exposure to risks if you can imagine a wide range of scenarios and likelihoods and suitably prepare for them. “

The Climate Act mandates a scoping plan to implement an energy transition to meet the aspirational goals to reduce GHG emissions.  To me a scoping plan implies that there is no question about feasibility and the plan is simply a matter of picking the components to assemble the plan.  I have my doubts about the feasibility of the Climate Act targets.  There is no question in my mind that in order to prepare for any situation, avoid black swans and limit unforeseen consequences that outreach to many disciplines is necessary.  For example, as a meteorologist, I have spent some time trying to determine renewable resource availability for long duration periods of low renewable resources (most notably a period of calm winds in the winter when solar is at a minimum).  One scenario that I think is necessary is to look short-term at solar resource availability using an existing representative data set.  There has been no indication that state planners are considering the use of that resource.  My expectation is that the scoping plan will develop a narrow set of options that will allegedly meet the targets of the Climate Act but will sacrifice current reliability standards that reflect many different scenarios.

There are two recommended strategies directly at odds with the Climate Act implementation process: ensure expertise lies at the foundation of risk management and bring in different sources of expertise.  Zaruk points out that the European Union had an independent chief scientific advisor but that when there were results that were not politically correct, activist lobbying led to the abolishment of the position.  The position offered the opportunity to double-check policies to make sure that it represents science in the public interest and not just science that represents the most vocal proponents.  He explains that “Risk management needs to be based on the best evidence, not the strongest political ideology but as precaution serves as an easy, expedient, blameless solution, the battle to undo its dominance will be challenging”.  Such a function would be useful in New York but in the current Administration is clearly a non-starter.

He goes on to explain the need for different sources of expertise by noting that “limiting your advice pool is how mistakes are made”.    He states:

“I can’t count how many times in 2020 I have heard people talk about “the” science as if you simply needed to put a question into a machine and the answer would come out. Science is complex, often contested and defines itself by a method of challenging its theories and paradigms. Only consensus-loving neophytes (and a Swedish teenager) would talk about “the” science as if it meant something certain. Part of the risk management process is to plan out scenarios based on the best available scientific voices at that time.”

The Climate Action Council mandated to develop the scoping plan to implement the Climate Act ignores the importance of expertise.  The Council has 22 voting members: 12 political appointees who head various agencies and the rest non-agency experts: two appointed by the governor, three each appointed by majority leaders of the Assembly and Senate and one each appointed by the minority leaders of the Assembly and Senate.  The ten at large members shall “include at all times individuals with expertise in issues relating to climate change mitigation and/or adaptation, such as environmental justice, labor, public health and regulated industries”. In my opinion, it is lunacy that the Council that is supposed to determine how the future energy system of the state is supposed to operate does not specify energy system expertise as a criterion.  The bottom line is that none of these 22 people have relevant expertise for choosing options for a reliable energy system.

The only hope for New York’s future energy system is the requirement that the “The council shall convene advisory panels requiring special expertise and, at a minimum, shall establish advisory panels on transportation, energy intensive and trade-exposed industries, land-use and local government, energy efficiency and housing, power generation, and agriculture and forestry”. The advisory panels are charged “to provide recommendations to the council on specific topics, in its preparation of the scoping plan, and interim updates to the scoping plan, and in fulfilling the council’s ongoing duties”.  My concern is that it is not clear how any of these panels can provide recommendations that are inconsistent with the agendas of the Council that is weighed so heavily for those who believe that the meeting the goals is simply a matter of political will.  The plan for the Climate Act is directly at odds with these risk management expertise strategies.

Zaruk states that the key to risk management is that we should not be aiming for safe, but rather safer.  He defines this step: “As Low as Reasonably Achievable (ALARA)” and includes a strategy to use ALARA as a return to risk realism.  He explains:

“This zero-risk mindset, this demand for total safety, is built on a false objective. We should not be aiming for safe, but rather safer. But what level of safer is safe enough? Like any situation with uncertainty, it depends on the circumstances, needs and realities. If you are dying of thirst in a desert, what level of water purity will you accept? This is always a question of what is reasonably achievable. The principle goal for risk managers is to reduce exposure to hazards (risks) to as low as reasonably achievable”.

He explains what goes in ALARA:

“Some say it is simply a cost-benefit analysis (and then they would add that you cannot put a price on a human life). Every risk is different (to everyone) and the variables affecting our reasoning range from resources, available equivalent alternatives, time to undesired consequences, public perception of the risk, traditional practices, accountability, trust relations and the public willingness to change certain lifestyle habits.”

My primary concern with the Climate Act is the risk to electric system reliability that will occur when the system has to rely on intermittent and diffuse renewable energy.  There is a related principle particularly applicable to the Climate Act.  The Pareto principle states that, for many events, roughly 80% of the effects come from 20% of the causes. The primary worry here, in the absence of using an ALARA strategy, is that 80% of the risks to the electric system will occur as the amount of fossil fuel use goes below 20% of the total.  As noted before, I expect the primary problem will be the need for dispatchable electric power when renewable resources are low (think a calm period in the winter when solar resources are weak).  The great advantage of fossil-fired power plants is dispatchability and the risks of losing this firm capacity must be evaluated.

He concludes this strategy as follows:

 “There is no one rule guiding risk management as ALARA. Each situation looks at what is reasonable and what is achievable. Dreamers and idealists want a world that is simply unachievable; pragmatists could probably achieve more. Continuous improvement is a key element to ALARA. It is not just to lower the risk to what is reasonably achievable, but to then push that exposure reduction even lower … continuously in an iterative, reasonable process.”

Zaruk also recommends some long-term strategies that are not directly applicable to Climate Act implementation but would serve New York’s policy process well.  They all relate to public education and I think the primary target should be politicians and policy making bureaucrats.  He suggests that we all need to accept that risk management is not about assuring 100% safe and that means we have to abandon the precautionary logic.  In order to manage the expertise necessary for risk assessment we need to develop a viable means for public consultation.  With that in place then we can create a community trust/communication mechanism.  All this can promote a risk resilient population.

Conclusion

I spend a lot of time writing about the oncoming train wreck of New York’s Climate Act.  I wrote this hoping someone, somewhere with some influence might pick up on the need to step back and assess the risks of trying to meet the aspirational goals.  Zaruk has much more influence but is frustrated by the fact that the precautionary principle is driving so much current policy.  His conclusion, after writing 15 articles on the response to COVID-19, is what I expect to be the likely outcome of the Climate Act on its present trajectory:

“I do not have the millions of euros of foundation-fed interests, the guru-led tribal passion or activist-driven fear-making machinery of the privileged zealots. What that crap-cash has bought them over the past two decades (relying on a misplaced precautionary policy tool) is expedience, irresponsibility and catastrophic risk management failure. And now as these relentless fundamentalists line up again at the public trough, we are facing economic collapse, famine and their insistence on even more precaution.”