The Climate Leadership and Community Protection Act (Climate Act) establishes a “Net Zero” target by 2050. The Draft Scoping Plan defines how to “achieve the State’s bold clean energy and climate agenda” and claims that there are significant direct and indirect benefits if New York’s greenhouse gas emissions (GHG) are reduced to net-zero. I maintain that any claim of benefits is illusory because in the context of global impacts New York’s contribution is miniscule. This post documents how New York GHG relate to global emission increases.
The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”. Starting in the fall of 2020 seven advisory panels developed recommended strategies to meet the targets that were presented to the Climate Action Council in the spring of 2021. Those recommendations were translated into specific policy options in an integration analysis by the New York State Energy Research and Development Authority (NYSERDA) and its consultants. The integration analysis was used to develop the Draft Scoping Plan that was released for public comment on December 30, 2021.
New York Compared to the World
Climate Act advocates frequently argue that New York needs to take action because our economy is large. I analyzed that claim recently and summarized the data here. The 2020 Gross State Product (GSP) ranks ninth if compared to the Gross Domestic Product (GDP) of countries in the world. However, when New York’s GHG 2016 emissions are compared to emissions from other countries, New York ranks 35th. More importantly, a country’s emissions divided by its GDP is a measure of GHG emission efficiency. New York ranks third in this category trailing only Switzerland and Sweden.
There is no question that New York is rich but is not a major player in global GHG emissions. In fact, New York’s share of global GHG emissions is 0.45% in 2016, the last year when state-wide emissions consistent with the methodology used elsewhere are available. In 1990 New York’s share of global GHG emissions was 0.77% so the state’s programs to reduce emissions have been working.
Despite the fact that the ostensible rationale for GHG emission reduction policies is to reduce global warming impacts, the Draft Scoping Plan continues an unbroken string of not reporting the effects of a policy proposal on global warming. The reason is simple. The change to global warming from eliminating New York GHG emissions are simply too small to be measured much less have an effect on any of the purported damages of greenhouse gas emissions. I have calculated the expected impact on global warming as only 0.01°C by the year 2100 if New York’s GHG emissions are eliminated.
The purpose of this post is to document how New York GHG relate to global emission increases. I found CO2 and GHG emissions data for the world’s countries and consolidated the data in a spreadsheet. The trend results indicate that the year-to-year trend in GHG emissions was positive 21 of 26 years and for CO2 emissions was positive 24 of 30 years. The five-year average of the GHG year-to-year trends was positive every year between 1995 and 2016, the last year GHG emissions were available. The five-year average of the CO2 year-to-year trends was positive every year between 1995 and 2020 except for the 2020 COVID year. In addition, excluding COVID year 2020, the smallest five-year average annual global GHG or CO2 emissions increase was 0.5%. New York’s share of global GHG emissions is 0.45% in 2016 so this means that global annual increases in GHG emissions have always been greater than New York’s total contribution to global emissions.
By any measure New York’s complete elimination of GHG emissions is so small that there will not be any effect on the state’s climate and global climate change impacts to New York. Although New York’s economy would be ranked ninth relative to other countries, New York’s emissions are only 0.45% of global emissions which ranks 35th. The change to global warming from eliminating New York GHG emissions is only 0.01°C by the year 2100 which is too small to be measured much less have an effect on any of the purported damages of greenhouse gas emissions. Finally, this post documents that global emissions have increased more than New York’s total share of global emissions since 1995. In other words, whatever New York does to reduce emissions will be supplanted by global emissions increases in a year.
The only possible conclusion is that the Climate Act emissions reduction program is nothing more than virtue-signaling. Given the likely significant costs, risks to reliability, and other impacts to New York society, I think that the schedule and ambition of the Climate Act targets needs to be re-assessed for such an empty gesture.
The Climate Leadership and Community Protection Act (Climate Act) establishes a “Net Zero” target by 2050. The Draft Scoping Plan defines how to “achieve the State’s bold clean energy and climate agenda” and claims that there are significant direct and indirect benefits, including improved public health. This post summarizes all the benefit claims made in the Scoping Plan.
The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”. Starting in the fall of 2020 seven advisory panels developed recommended strategies to meet the targets that were presented to the Climate Action Council in the spring of 2021. Those recommendations were translated into specific policy options in an integration analysis by the New York State Energy Research and Development Authority (NYSERDA) and its consultants. The integration analysis was used to develop the Scoping Plan that was released for public comment on December 30, 2021.
According to a Gothamist summary of the Climate Act: “Seggos, the DEC commissioner, said the draft plan is meant to generate a framework and solicit input on how the state can meet its climate goals, not provide a policy-by-policy cost estimate.” In my opinion, that is a serious shortcoming for the Scoping Plan cost and benefits assessment because a framework is not a feasibility study. Both the costs and benefits are societal estimates. There are no guesses of the direct costs to consumers or rate-payer impacts. Similarly, the benefit values are to society and do not directly offset the ultimate costs to consumers. Until such time that direct consumer costs and benefits are known New Yorkers cannot decide whether it is appropriate to proceed with the ambition and schedule of the Climate Act.
The Scoping Plan estimates societal health benefits and avoided economic damages caused by climate change as a result of GHG emission reductions. Improvements in air quality, increased active transportation, and energy efficiency interventions in low- and middle-income homes generates health benefits ranging from approximately $165 billion to $170 billion. Reduced GHG emissions avoids the economic impacts of damages caused by climate change equaling approximately $235 to $250 billion. The combined benefits range from approximately $400 billion to $420 billion.
This post summarizes all these benefits claims. I have addressed some of them before but this consolidates all the analyses. Complete documentation for this evaluation is contained in the Scoping Plan Costs and Benefits white paper.
Scoping Plan Benefits Summary
The Scoping Plan claims net benefits range from $90 billion to $120 billion. The Plan describes health benefits totaling $165 to $170 billion due to improvements in air quality, increased active transportation ($39.5 billion), and energy efficiency interventions in Low- and Middle- Income (LMI) homes ($8.7 billion). The benefit claims are not documented well enough to confirm those estimates but they appear to be biased high. The claimed benefits for the avoided cost of GHG emissions range between $235 and $250 billion. However, Climate Act guidance incorrectly calculates avoided GHG emissions benefits by applying the value of an emission reduction multiple times. When the multiple-counting error is corrected, the avoided carbon damage benefits range from negative $74.5 to negative $49.5 billion.
The Scoping Plan air quality improvement benefits range between $100 billion and $103 billion for the low values and the high values range between $165 billion and $172 billion. These benefits are due to an air quality improvement for PM2.5 of 0.35 µg/m3 that is supposed to “avoid tens of thousands of premature deaths, thousands of non-fatal heart attacks, thousands of other hospitalizations, thousands of asthma-related emergency room visits, and hundreds of thousands of lost workdays”. However, the modeled impacts rely on a linear no-threshold model. The observed reduction in New York City since 2005-2007 is 5.6 µg/m3 and that is 16 times higher than the projected decrease due to the Climate Act. Using the linear no-threshold model that means that we should be able to observe sixteen times tens of thousands of premature deaths, sixteen times thousands of non-fatal heart attacks, sixteen times thousands of other hospitalizations, sixteen times thousands of asthma-related emergency room visits, and sixteen times hundreds of thousands of lost workdays since 2007. When the Scoping Plan verifies that these reductions have been observed I will accept these benefits.
The Scoping Plan admits that the health benefits from increased active transportation “should be considered a first-order approximation of the benefits of increased active transportation”. The active transportation health theory claims that as people are forced out of their personal vehicles some will switch to walking and biking. Those activities are healthier so there is a benefit. However, the analysis was conducted at the state level, rather than modeling changes in walking and biking activity due to changes in vehicle miles traveled within counties or individual communities. Because the actual number of places where this strategy could actually encourage more walking and bicycling to work is small relative to the state level, the $39.5 billion health benefit claim is far too high.
Upon examination the majority of the health benefits from energy efficiency interventions in LMI homes are the result of “non-energy interventions”. The Climate Act intends to transform the energy sector so it is disingenuous to claim health benefits not directly related to energy efficiency programs themselves. Of the $8.7 billion in benefits claimed $3 billion is due to reduction in asthma-related incidents resulting from better ventilation not directly due to energy efficiency. The $2.4 billion in benefits from reduced trip or fall injuries and reduced carbon monoxide poisoning benefits are non-energy interventions and should not be claimed as benefits for GHG emission reduction programs.
Even with that gamesmanship the Scoping Plan benefits were too low to claim that benefits out weighed the costs. The Value of Carbon guidance incorrectly calculates benefits by applying the value of an emission reduction multiple times. It is inappropriate to claim the benefits of an annual reduction of a ton of greenhouse gas over any lifetime or to compare it with avoided emissions. Dr. Richard Tol confirmed that “The SCC should not be compared to life-time savings or life-time costs (unless the project life is one year)”. Using that trick and the other manipulations results in New York societal benefits more than 21 times higher than benefits using everybody else’s methodology. When the over-counting error is corrected, the total societal benefits range between negative $74.5 billion and negative $49.5 billion.
The Scoping Plan Costs and Benefits white paper documents the calculation results presented in this summary. The Plan describes health benefits totaling $165 to $170 billion due to improvements in air quality but observed improvements are 16 times greater than those projected for the Climate Act. If the State can show that the health benefits projected have been observed comparable to those observed then this claim holds water. The increased active transportation benefit of $39.5 billion is based on a first-order approximation based on state-wide numbers but the benefits will likely only occur in certain areas. As a result, the benefit estimate is far too high. Energy efficiency interventions benefits in LMI homes are claimed to total $8.7 billion but $2.4 billion of that is from non-energy interventions and should not be claimed as benefits for Climate Act GHG emission reduction programs. If the claims were documented better, I believe that the further reductions in the benefits would be found.
The claimed benefits for the avoided cost of GHG emissions range between $235 and $250 billion. However, Climate Act guidance incorrectly calculates avoided GHG emissions benefits by applying the value of an emission reduction multiple times. The Climate Act manipulates emissions to increase benefits and uses a lower discount rate than current Federal guidance resulting in societal benefits of GHG emission reductions that are 4.5 times higher for 1990 emissions and 5.4 times higher for 2019 emissions than other jurisdictions. The largest impact of the Climate Act for these benefits is based on an incorrect guidance for calculating benefits. In particular, the benefits of reductions are counted multiple times. If only that error is corrected the total benefits range from negative $74.5 to negative $49.5 billion instead of net benefits ranging from $90 billion to $120 billion.
Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow (www.CFACT.org) and author of books and articles on energy, environment, climate and human rights issues. My comments are indented and italicized.
Bringing Britain’s woes to America? Virginia enacted a Clean Economy Act; other states have implemented similar laws. AOC demands a national Green New Deal; President Biden is imposing one via executive decree. The United Kingdom is determined to reach Net Zero greenhouse gas emissions; the European Union is pursuing a Green Deal.
The Climate Act Draft Scoping Plan that defines how to “achieve the State’s bold clean energy and climate agenda” was recently released by New York State.
All these policies send energy prices rocketing upward, eliminating jobs and killing people. Instead of reducing emissions, they simply move them overseas, where they combine with massive air and water pollution, habitat destruction and wildlife decimation – as China and other countries burn more coal, oil and gas every year, to improve their people’s living standards … and to mine and process raw materials for the wind turbines, solar panels and battery modules they manufacture for climate-obsessed nations. The net result: Progress toward global Net Zero is zero – worse than zero – and all the lost jobs, rising poverty, reduced living standards and policy-driven deaths are for nothing.
President Biden wants hydrocarbon-free electricity generation by 2035, and elimination of all fossil fuel extraction and use by 2050. That means no gasoline or diesel vehicles; no natural gas to power factories or heat, warm water and cook in homes, hospitals and businesses; no petrochemical feedstocks for fertilizers, plastics, pharmaceuticals and thousands of other essential, everyday products.
The Climate Act target for hydrocarbon-free electricity generation is 2040 but that is no more realistic than Biden’s dream. Even though New York is further along in its planning there still is no feasibility plan to replace fossil fuels.
All US energy will be provided by wind, solar and battery power – millions of wind turbines, billions of solar panels and billions of battery modules, sprawling across continental United States and along its coasts. Petrochemicals will come from crops planted on millions of acres of former wildlife habitat.
New York has not done a cumulative environmental impact analysis for the Scoping Plan’s estimates of wind and solar deployments so residents don’t know these impacts.
To drive this extreme agenda, Team Biden has canceled pipelines, leases and permits; pressured banks to stop lending money for drilling; and issued scores of regulations that delay and drive up costs for fossil fuel projects – while making it easy for industrial-scale wind and solar installations to get permits. Prices for energy, transportation, food, services and used cars predictably shot up. Inflation and consumer prices reached 40-year highs.
New York’s policies are the same and the impacts exacerbate Federal policy effects.
Henry Hub natural gas prices doubled from $2.61 per mcf (thousand cubic feet or million BTUs) in November 2020 to $5.51 in October 2021, before falling to $4.75 in January 2022, as skyrocketing global prices spurred drilling, fracking and production on US state and private lands. Regular gasoline averaged $2.17 a gallon nationwide in 2020 – but hit $3.39/gal ($4.38 in California) in the same timeframe.
As Americans fret and fume over the needlessly high prices – and wonder what the future might hold – they can look to the UK and EU (a) to count their blessings for comparatively low prices today and (b) to ponder how continued climate-centric policies could impact American livelihoods and living standards.
Britain and continental Europe have already embraced a wind-and-solar future, closed coal and nuclear power plants, and banned fracking for the trillions of cubic feet of natural gas beneath their feet, while North Sea production keeps falling. They have reaped the whirlwind from those callously inept policies.
The Scoping Plan mentions that switching to wind and solar will ensure that New York’s resources are used in the future but neglects to point out that natural gas development has been banned in the state.
(It is illuminating and ironic that Russian organizations finance many US, UK and EU anti-fracking disinformation campaigns, funneling funds through a Bermuda law firm, a shell company and the Sea Change Foundation to the Sierra Club, Climate Action Network and other groups.)
There are many New York environmental organizations that seem to have plenty of time and money to lobby. It is not clear where their money is coming from.
Britain and Europe’s vaunted wind turbines have been generating electricity at a dismal 14% of “nameplate capacity” – providing power three hours a day, one day a week, four days a month, in short spurts, at completely unpredictable times. Their wintertime solar power has been equally sporadic and unpredictable. No modern society can function on such energy.
On January 15, 2022 New York State was very cold. Wind and other renewables provided 2% of the electric generation for the day. Over half of the generation was produced by fossil fuels. The Scoping Plan glosses over the magnitude of this problem and has not proposed a feasible plan to provide reliable power on the days when the all-electric New York energy system needs it the most.
The huge gaps have been plugged with gas- and coal-fired generation, with much of the gas coming from Russia and the USA. But Asia also wants the gas, and Russia is playing Ukraine/Nord Stream 2 pipeline politics with its gas, tightening supplies as demand soars. UK and EU home and business gas and electricity prices are in the stratosphere – five toten times the Biden Era prices Americans are paying.
Presuming that the Climate Action Council can conjure up a feasible way to provide power on the coldest days they face the problem that whatever resource they want to use will only be needed around 3% of the time. The potential resources for this requirement are all very expensive. When these resources are needed electricity prices will be very high during those periods in order to cover operating and capital costs. The Scoping Plan has not addressed this problem.
Luckily for families and businesses, Britain’s Office of Gas & Electric Markets (Ofgem) regulates how much utility companies can charge. But that often means keeping household, hospital, school and business energy prices well below the utilities’ actual costs – with predictable results. Experts say the average annual household bill of £1,277 ($1,755) could surge to £1,865 ($2,530) when the current price cap is raised in April 2022 – for homes and apartments that are much smaller than US counterparts, in a climate with much less extreme summer and winter temperatures than in much of the United States. Annual bills could exceed £2,000 ($2,715) or much more at Ofgem’s August review. National Energy Action says this could put more than 6 million UK households (nearly one-fourth of all households) in “fuel poverty” – unable to afford proper heat, and often having to choose between heating or eating, even when cold indoor temperatures put their health and lives at risk.
The Scoping Plan has not provided estimates of household costs. Moreover, I don’t think the provisions to address energy poverty in New York are adequate to protect those who can least afford the inevitable increased costs.
For families that want budgetary certainty, the average 12-month fixed deal for a typical household now costs almost £2,500 ($3,430). But the UK’s second-biggest energy supplier’s most recent fixed-rate offer is almost £4,200 ($5,750)! That’s because natural gas and electricity generation costs are expected to keep rising – and because utilities must pay wind turbine operators “constraint payments” to turn turbines off whenever they generate more power than the grid needs and can absorb!
This is another inevitable consequence of New York’s policies and is an added aspect of costs not adequately addressed in the Scoping Plan.
The month-ahead natural gas price at the Dutch TTF hub (a European benchmark for trading gas) recently hit €93.3 ($107) per megawatt-hour. That’s $31 an mcf – more than six times the January 2022 Henry Hub price. Just a month earlier, the European day-ahead gas price reached $61 per mcf! No wonder 30 UK energy suppliers went bankrupt by the end of 2021 – leaving families and businesses scrambling to find new suppliers, at skyrocketing prices for heating and cooking. When utilities cannot charge customers anywhere near operating costs, they go belly-up. No wonder two-thirds of UK renters struggle to pay their energy bills, and 400,000 more UK households were in danger of losing their gas and electricity provider before last Christmas. People are “genuinely terrified” about rising energy costs. Excess winter energy-poverty death tolls are likely to set new records.
It is not clear why anyone would think that when New York’s policies are fully implemented that the same effects won’t be seen. The Climate Act mandates that experiences in other jurisdictions should be considered but none of these issues are addressed in the Scoping Plan.
Health and living standards in Britain and Europe will likely get far worse. In addition to insane energy costs, wages and environmental regulation costs are much higher than in Asia. Ceramic, steel, aluminum, automotive and other energy-intensive companies and industries are becoming uncompetitive. Manufacturing, jobs, energy use and greenhouse gas emissions are just moving to Asia.
The Scoping Plan includes a “just transition” component that is supposed to alleviate these issues in New York. However is not clear how that can be done.
Climate and energy politics, combined with fierce global demand, make it unlikely that Europe’s energy prices will go down. And while the EU recently voted to define natural gas and nuclear power as “sustainable,” acquiring affordable gas and building new nuclear plants will take years and be battled every step of the way. Rolling blackouts could become as common as in California.
It is telling that the European Union recently voted to define natural gas and nuclear power as sustainable. The rational explanation is that they have observed problems that can be solved by those fuels. The Climate Action Council and its advisory groups continue to cling to the belief that the same issues will not occur in New York.
British politicians “rail at energy costs” and argue about trimming them at the margins, says journalist Madeline Grant, perhaps by reducing the 5% VAT on energy or the 25% green-social subsidy levies on electricity bills. But they “dare not question the green policies” that cause energy price increases, end up taking no action, and then slap hefty new “pollution taxes” on gas and diesel vehicles.
The Climate and Community Investment Act is New York’s political solution to fund the grandiose plans to go to ”net-zero”. I believe that New Yorkers will rebel when those costs become known.
Britain and Europe need to drill and frack their vast shale deposits. Having shut down their older nuclear plants, they must start building small modular reactors. The rest of the developed world needs to take similar actions – and not only because China, India and the rest of the developing world are not about to give up fossil fuels and rely on unreliable wind and solar power, but to save jobs and lives. Otherwise, Britain’s Christmas just past will be its, Europe’s and America’s Christmas future, forever. Scrooge learned from Marley. Will Boris Johnson, Joe Biden, AOC and their lot learn from reality?
New York has to recognize what is happening in Europe and change its plans. If not then the inevitable result will be extraordinarily high energy prices.
There are lessons to be learned for New York if only they consider what is happening in Great Britain. Unfortunately I have little hope that the state will come to its senses and reconsider the schedule and targets of the Climate Act.
The Climate Leadership and Community Protection Act (Climate Act) establishes a “Net Zero” target by 2050. The Draft Scoping Plan defines how to “achieve the State’s bold clean energy and climate agenda” and claims that there are significant direct and indirect benefits, including improved public health. One Scoping Plan policy is active transportation that claims that if physical activity is built into daily routines by forcing people to walk or bicycle rather than drive, then emissions will be reduced and there will be health benefits too. This post looks at the claim that there will be $39.5 billion in health co-benefits for active transportation.
The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”. Starting in the fall of 2020 seven advisory panels developed recommended strategies to meet the targets that were presented to the Climate Action Council in the spring of 2021. Those recommendations were translated into specific policy options in an integration analysis by the New York State Energy Research and Development Authority (NYSERDA) and its consultants. An overview of the results of this integration analysis were presented to the Climate Action Council at two October meetings and has since been updated. This analysis forms the basis of the draft Scoping Plan that is supposed to be released to the public at the end of the year.
The Scoping Plan estimates societal health benefits and avoided economic damages caused by climate change as a result of GHG emission reductions. Improvements in air quality, increased active transportation, and energy efficiency interventions in low- and middle-income homes generates health benefits ranging from approximately $165 billion to $170 billion. Reduced GHG emissions avoids the economic impacts of damages caused by climate change equaling approximately $235 to $250 billion. The combined benefits range from approximately $400 billion to $420 billion. This post addresses the alleged benefits from increased active transportation.
In the following sections I provide my indented and italicized comments for documentation in Scoping Plan Appendix G: Integration Analysis Technical Supplement.
Appendix G: Section II, Page 24: 1.4 Increased Active Transportation.
The public health benefits of increased active transportation were estimated using the Integrated Transport and Health Impact Model (ITHIM). The analysis drew on modeling conducted for the New York State Clean Transportation Roadmap, which estimated the increase in walking and biking trips resulting from a decrease in VMT.
The documentation consists of a Power Point presentation to the Transportation Advisory Panel. The presentation lacks important information. The scenarios in the presentation are not the scenarios in the Scoping Plan. There is no reference describing which simulated policies are included in the Scoping Plan scenarios. The presentation does not list the expected decrease in vehicle miles traveled (VMT).
ITHIM uses U.S.-level data from the Global Burden of Disease study and other published literature to estimate the change in the relative risk of premature mortality due to increased physical activity. ITHIM also calculates the potential increase in pedestrian mortality from vehicle collisions, and it presents the net change in mortality for a given change in walking and biking activity.
ITHIM calculates the health impacts of walking and bicycling short distances usually traveled by car or driving low-emission automobiles. Without any documentation it is not clear if ITHIM includes pedestrian mortality in the winter.
In this analysis, the ITHIM model was customized with NYS-specific data on population, baseline mortality rates, and VMT, from the same data sources discussed above for the ambient air quality analysis, as well as baseline walking and biking activity taken from the Federal Highway Administration’s National Household Travel Survey.
In another analysis that used ITHIM: “We utilized data from local, state, and federal sources to fulfill the 14 ITHIM calibration items, which include disease burdens, travel habits, physical activity participation, air pollution levels, and traffic injuries and fatalities.” It is not clear how Scoping Plan analysis handled all 14 calibration items.
The analysis valued the change in mortality using the value of a statistical life from COBRA to be consistent with the ambient air quality analysis.
Comprehensive documentation would explain how the numbers differ and offer more of a rationale than “consistency”.
The analysis used NYS-specific data where possible alongside the default equations within ITHIM to estimate the net change in mortality from increased walking and biking. These equations include default parameters based on national-level data to represent the change in relative risk of mortality from change in physical activity.
Again an explanation why national-level data are appropriate to use for New York is needed.
This analysis was conducted at the state level, rather than modeling changes in walking and biking activity due to changes in VMT within counties or individual communities. For this reason, the results of this analysis should be considered a first-order approximation of the benefits of increased active transportation.
This is a huge issue with this analysis. The plain reading of this is that they took the statewide change in VMT, assumed that some portion of this would be replaced by walking and biking, and then took health care credit for the change. However, smart planning changes to walking and biking is a specific community outcome. In my opinion, the actual number of places where this strategy could actually encourage more walking and bicycling to work is very small.
Appendix G: Section II, Page 37: 2.3 Health Benefits of Increased Active Transportation
The potential value of the net reduction in the number of deaths, including the decrease in deaths from increased physical activity and the increase in deaths from traffic collisions, is estimated to be a NPV of $39.5 billion (2020 to 2050). As presented in Figure 22, the values increase over the years as walking and cycling increases with the introduction of infrastructure and other measures to encourage the use of these modes. Note that the projected decrease in premature deaths from physical activity far outweighs the potential increase in deaths from traffic collisions. Active transportation benefits are the same for the Low-Carbon Fuels and Accelerated Transition scenarios.
New York Clean Transportation Roadmap Preliminary Results: GHGs and Energy
On April 9, 2021 Cadmus presented preliminary results for the New York Clean Transportation Roadmap. As noted above this represents the documentation for this policy. I have not found the final report and the Scoping Plan offers no other reference. The documentation consists of a slide presentation and lacks important information. For example, the presentation includes the following slide that describes a couple of simulated policies that could represent the mechanism to increase physical activity. For example, in the Smart Growth policy, the baseline states: “2050 Reference Case value for fraction of HH in mixed-use neighborhoods ranges from 4 to 74% across MSAs”. I don’t know what the HH acronym means. On the other hand, the Complete Streets policy appears to directly address increased walking and biking to work.
In order to evaluate the claims, I wondered how many employees are expected to start using active transportation to get to work. Demographics of the Civilian Labor Force for New York State and the New York State Labor Market Regions lists 2015 – 2019 American Community Survey (ACS) five-year estimates of employed people for ten regions. Note that the Complete Streets mitigation scenario states that the “Start value for % walking or biking to work ranges from 0.7% to 12.1% across counties”. I believe that the percentage of people walking or biking to work is highest in New York City which is one of the regions in the ACS employee estimates. This is an example of a problem with the poor documentation. Assuming that the New York City region has 12.1% employees who walk or bike to work and that all the other regions have 0.7% who do so, then we can calculate the state-wide percentage. Using those assumptions, the state-wide percentage is 5.6% which exceeds the 2050 goal for Mitigation Scenario 1. That makes no sense and without adequate documentation it is impossible to reconcile this discrepancy.
There is another issue with these estimates. There is a spreadsheet that lists the data in the health benefit figures. In the following table the benefits column are values in the Scoping Plan documentation. I interpret the Complete Streets policy to increase the percentage of workers who walk, bike or take an electronic bike or scooter to work by either 5% or 10% by 2050. In the table I divide the benefits claimed by the number of commuters. Complete documentation would show how many employees switch per year and then it would be possible to estimate the health benefits per active commuter. Even without that differentiation the numbers per commuter seem high. More importantly, are the health benefits applied for each commuter every year until 2050?
The Scoping Plan claims that “the potential value of the net reduction in the number of deaths, including the decrease in deaths from increased physical activity and the increase in deaths from traffic collisions, is estimated to be a net present value of $39.5 billion (2020 to 2050)”. My first impression of this value was that it was too high. While the lack of documentation makes it difficult to decipher exactly how the number was derived, I see nothing to disprove that impression.
The Scoping Plan admits that “the results of this analysis should be considered a first-order approximation of the benefits of increased active transportation”. In this instance “first-order approximation” means wild guess that they threw up hoping it would stick. While there are undoubtedly some benefits for active transportation, the Scoping Plan claim for $39.5 billion is unsupportable.
The Climate Leadership and Community Protection Act (Climate Act) was passed in 2019 and became effective on 1/1/2020. The Climate Action Council has been working since then to develop plans to implement the Act. Starting in the fall of 2020 seven advisory panels developed recommended policies to meet the targets that were presented to the Climate Action Council in the spring of 2021. Over the summer of 2021 the New York State Energy Research & Development Authority (NYSERDA) and its consultant Energy + Environmental Economics (E3) prepared an Integration Analysis to “estimate the economy-wide benefits, costs, and GHG emissions reductions associated with pathways that achieve the Climate Act GHG emission limits and carbon neutrality goal”. The Integration Analysis implementation strategies were incorporated into the Scoping Plan in the last half of 2021. According to the Scoping Plan: “This analysis provided data on the emission reductions and societal costs and benefits that can be expected from differing options of strategy sets that could be included in this draft Scoping Plan”. When finalized the Plan will be used to revise the New York Energy Plan and rulemaking to implement its provisions will begin.
Scoping Plan Costs
The Climate Act requires the Climate Action Council to “evaluate the total potential costs and potential economic and non-economic benefits in the Scoping Plan”. The Integration Analysis evaluated costs and benefits for several mitigation scenarios suggested by the Council. Evaluated costs include: “annualized
capital, operations, and maintenance cost for infrastructure (such as devices, equipment, generation assets, and transmission and distribution) and annual fuel expenses by sector and fuel (conventional or low-carbon fuels, depending on scenario definitions). Importantly, the analysis does not “natively produce detailed locational or customer class analysis”. In other words, there are no estimates of the explicit costs for New Yorkers. The authors claim that “More specificity is needed around individual proposals in order to determine the impact on specific customers”. After much debate the Council recommended “that as proposals are advanced with additional implementation details, a complete consumer benefit-cost impact be performed to show the impact and inform program design prior to full implementation.”
The costs presented are the net present value (NPV) of net direct costs relative to the Integration Analysis Reference Case from 2020 to 2050. According to the Scoping Plan: “The NPV of net direct costs in Scenario 2, Scenario 3, and Scenario 4 are in the same range (due to uncertainty) and are primarily driven by investments in buildings and the electricity system (Figure 13). A previous figure shows that the net direct costs range between $290 and $310 billion.
The purpose of this analysis is to report the capital cost associated with “electrification” for states and the nation. For the context of this report, electrification is converting the entire economy to use electricity as a fuel. This includes all appliances in residential and commercial buildings, as well as every transport vehicle. Electrifying the entire nation, with a goal of eliminating the direct consumption of fuel would cost between $18 trillion and $29 trillion in first costs.
Tanton’s approach is simple. Using data from the Energy Information Administration, he calculated costs to electrify each end use sector. Two assumptions were applied to all the sector analyses:
“Universal electrification is assumed implemented overnight in 2020. This simplifies calculations, avoiding forecasting future interest rates (charged during construction) and relative price escalation that occurs from now into the future.”
“Learning and mass production impacts on future costs of renewables, EVs, batteries, and efficiency technologies are subsumed within capital costs. These estimates are based on recent published data, some of which is from the Department of Energy (DOE).”
He summarizes the approach for converting the electricity grid to 100% renewable:
Electrical service is provided to Americans by a variety of public and private utilities and marketers. Nationally about 5% of all electricity currently comes from renewable sources. Other supply comes from natural gas (31%), nuclear (10%), large hydroelectric (4%), coal (18%), and other/unspecified sources of power (7%). Nationwide there are approximately 1 million megawatts (MW) of installed capacity representing over 21,000 generation units. To move from the current resource mix to 100% renewable generation will require replacing 70% of the “fleet,” and most likely, a significant amount of new transmission lines to reach distant locales. For context, approximately 30% of this electricity generated is used in residential applications, and 70% in commercial and industrial. The typical residential customer uses about 500 kilowatt-hours (kWh) per month.
In Tanton’s analysis the estimated total installed cost (overnight) is approximately $29.2 trillion. He also breaks down the costs by state. For New York the estimated overnight cost is $1.465 trillion.
Gregory Cost of Electrification
Gregory published a condensed summary of a longer description of his analysis. He argues that there were several errors in the Tanton report and revises the cost estimates accordingly. Tanton bases his analysis on annual average conditions and I agree with Gregory that hourly electricity generating data should be used instead. In both analyses it is assumed that battery storage is used to cover wind and solar energy resource droughts. Gregory finds that “wind and solar generated electricity, using 2020 electricity data, is 109 times that estimated by the Tanton report” and that the total capital cost of electrification would be $433 trillion using 2020 data. It is much more realistic to overbuild solar and wind capacity to reduce energy storage requirements. Gregory estimates that overbuilding by 21% reduces overall costs by 18% down to $363 trillion by reducing battery storage costs. Importantly he notes that “allowing fossil fuels with carbon capture and storage to provide 50% of the electricity demand dramatically reduces the total costs from US$433 trillion to US$24 trillion”.
Gregory does not provide state specific estimates. However, we can pro-rate his nation-wide numbers to New York only numbers by assuming that the costs would be proportional to the Tanton New York State costs. Gregory’s total national capital cost of electrification is $433 trillion and New York’s proportional share based on Tanton is $22.2 trillion. Overbuilding solar and wind by 21% reduces New York overall costs to $18.2 trillion. Allowing fossil fuels with carbon capture and storage to provide 50% of the electricity demand reduces New York’s estimated costs to $1.2 trillion.
Both Tanton and Gregory provide spreadsheets that document their calculations. Tanton explains:
The assumptions in this study can be justified. However, if different capital costs may be warranted, the workbook used in the calculations is available and the default capital cost for each technology can be modified by the user. Similarly, if there is disagreement with the energy or demand for a sector or state, those values can also be changed. This capability is to hopefully allow policy makers and any public opportunity to see impacts of increased energy conservation due to proposed policies or more demand due to emergencies
On the other hand, The Draft Scoping Plan does not even list the numbers in Figure 13 shown above, much less document how the values are derived so that the public can evaluate their assumptions.
Tanton notes that his estimates don’t count all the costs. He notes that “constructing and implementing an “all-electric” nation will require consideration of two other significant costs: stranded assets and deadweight losses”. He describes stranded assets as the components of the natural gas system that are discarded before their useful life is over. Deadweight losses are “losses that occur when a beneficial good or service is not fully realized because of artificial scarcity, a tax or subsidy, or other government action”. He goes on to explain that they are “costs imposed when one party transfers to another party something the second party doesn’t value or views as a negative” and gives an example is the intermittency of wind and solar, if the second party values on-demand energy.
There are significant differences in these cost estimates and the Scoping Plan costs. To the extent possible without Scoping Plan documentation, I can still make some guesses why. Because of the high costs of energy storage, I believe one of the main differences is the amount of wind and solar over-building. The Scoping Plan has more over-building than either of these studies. Note that Gregory reduces costs significantly by using fossil fuels with carbon capture. The Scoping Plan includes a zero-carbon dispatchable resource that fills that niche. There are tremendous difficulties implementing widespread carbon capture programs but the technology has at least been tried at the scale necessary. The Scoping Plan offers no alternative that has been even tested beyond the laboratory.
These two analyses provide cost estimates to New York on the order of three to over ten times higher than the Scoping Plan costs. In my opinion the Scopoing Plan costs are too low and these costs are too high. In order to provide meaningful Scoping Plan comments, it would be appropriate to do a detailed comparison of the assumptions and methodologies used in the Scoping Plan to these studies. There is insufficient information provided by the Climate Action Council to evaluate the Scoping Plan in this way.
Finally, note that the cost per ton of reduced carbon emissions was also determined in the Tanton analysis. “In no instance are the costs of universal electrification less than the benefits as “estimated” by the social cost of carbon”.
On December 30,2021 the New York State Department of Environmental Conservation (DEC) released “New York’s first-ever, statewide greenhouse gas emissions report compliant with state’s climate law”. This is an overview post of this greenhouse gas (GHG) inventory and the games played using that inventory to “prove” that there are societal benefits for the emission reduction programs needed to meet the Climate Leadership and Community Protection Act (Climate Act) targets.
New York State Department of Environmental Conservation (DEC) Commissioner and Climate Action Council Co-Chair Basil Seggos today announced the release of the State’s first-ever statewide greenhouse gas emissions report compliant with the Climate Leadership and Community Protection Act (CLCPA). The report describes statewide greenhouse gas (GHG) emissions for 1990 through 2019, and will be produced annually as required by New York’s nation-leading climate law. The release of the report is a milestone in the State’s efforts to meet the requirements of the CLCPA.
“The release of the first CLCPA-compliant, statewide report on greenhouse gas emissions advances New York’s efforts to implement our nation-leading Climate Law by providing a snapshot of greenhouse gas emissions, which will help ensure we achieve our aggressive target of net-zero emissions by 2050,” said Commissioner Seggos. “This annual report shows that while New York State has reduced emissions from several sectors over the last three decades, emissions from some sectors, including transportation, have increased, revealing that enormous challenges remain in our ongoing work to meet our emission-reduction targets. The report is a critical resource as we continue to act on climate and advance a just transition to clean energy that creates good jobs and supports a green economy for the future.”
One way to help “prove” that the Climate Act implementation programs are cost-effective is to increase the inventory as much as possible. This inventory does two things that maximize emissions: it includes upstream emissions and it changes the global warming potential time period. Obviously if upstream emissions are included then the total increases but at the same time it makes the inventory incompatible with everybody else’s inventory. Global warming potential (GWP) weighs the radiative forcing of a gas against that of carbon dioxide over a specified time frame so that it is possible to compare the effects of different gases. Almost all jurisdictions use a 100-year GWP time horizon but the Climate Act mandates the use of the 20-year GWP.
The DEC inventory report does not break out the effects of these metrics on emissions so that the New York inventory can be compared to the inventories developed by other jurisdictions. However, some insight is provided in the recently released New York State Oil and Gas Methane Emissions Inventory: 2018-2020 Update that includes a couple of tables describing emissions that are a component of the DEC inventory. One update in this report is a revision to use more recent Intergovernmental Panel on Climate Change emission factors from report AR5 rather than AR4. Table 18 in the report compares AR4 and AR5 GWP100 and GWP20 values. Using the GWP20 instead of GWP100 increases the emissions by a factor of 3.36.
Tables 11 through 13 in the methane inventory update list emissions by source category from 1990 to 2020. I summed the emissions to get totals for representative years for upstream, midstream and downstream emissions. Someday I will delve into those categories in detail but for now note that upstream emissions are roughly 10% of the total emissions for methane.
According to the DEC GHG report: “Total statewide gross emissions in 2019 were 6% below 1990 and 17% below 2005 levels, when assessed using CLCPA accounting”. Figure ES.1 in the DEC GHG inventory shows the annual statewide emissions from 1990 to 2019. It is disappointing DEC did not provide the actual numbers used to generate this graphic. The only numbers provided are the 1990 baseline value of 402.54, the maximum in 2005 of 458.55 and the 2019 value of 379.43. All these values are in million metric tons of carbon dioxide equivalent in terms of GWP20. The only reference to values comparable to other inventories states “As a point of comparison, when applying the conventional, or UNFCCC, format for governmental accounting, emissions declined 21% percent from 1990 to 2019, or from a net emission rate of 210.43mmt to 165.46 mmt CO2e GWP100”.
In order to claim that the Climate Act emission reductions provide societal benefits the Social Cost of Carbon (SCC) or Value of Carbon is used. The metric is a measure of the avoided costs from global warming impacts out to 2300 caused by reducing a ton of today’s emissions. In a recent post I discussed New York’s use of this parameter for claiming benefits. I believe that the societal benefit for NY reductions should use one and only one of the three values in Figure ES.1. Using the maximum rather than the baseline makes sense if you want to get credit for New York’s biggest impacts and using the most recent value could be argued as appropriate because it represents the actual value of the Climate Act itself.
The following table lists the societal benefits for the three different discount rates listed in New York’s Value of Carbon guidance. The state recommends using the 2% discount rate which gives societal benefits ranging between $46.7 billion and $56.4 billion using the 2021 values depending on which emission value used. However, consider that most other jurisdictions, including the Federal government are using conventional, or UNFCCC, format for governmental accounting and the 3% discount rate. That drops the social benefits to $8.6 to $10.9 billion but still includes some additional upstream emissions.
Incredibly, it gets worse because all the tricks they used to manipulate the emissions and social cost of carbon values as much as possible were still not enough to make the benefits higher than the Integration Analysis costs for three mitigation scenarios. In a recent post I explained that State guidance explicitly says that “the value of carbon is applied to each year, based on the reduction from the no action case”. The Draft Scoping Plan contains three mitigation scenarios and claims avoided GHG benefits ranging from $235 billion to $250 billion. However, the guidance methodology used is simply not correct because it applies the social cost benefit multiple times for each ton reduced. I checked my understanding of the use of lifetime savings with social cost of carbon expert Dr. Richard Tol who confirmed that “The SCC should not be compared to life-time savings or life-time costs (unless the project life is one year)”.
There are a couple of obvious implications with the GHG emissions report data. In 2030 New York State GHG emissions have to meet the Part 496 limit of 60% of the 1990 baseline. Using the Figure ES.1 emissions of 402.54 that translates to a limit of 241.52 mmt CO2e GWP20. That means that GHG emissions have to be reduced 36% in 11 years. Emission reductions from the peak year in 2005 have come down 17% in 15 years. I don’t think it is very likely that the State will be able to double the reduction rate to meet the 2030 target.
I hope readers understand the point that the State has contrived higher estimates for societal greenhouse gas emission benefits so much that their valuation is around five times higher than other jurisdictions using conventional methodology. I also showed that this manipulation was not sufficient to “prove” that societal benefits were greater than the costs for the Scoping Plan mitigation scenarios so they relied on state guidance that mistakenly over counts the benefits. That gamesmanship results in New York societal benefits more than 20 times higher than benefits using everybody else’s methodology. In June 2021 I explained that I had submitted comments on this topic to DEC and NYSERDA. They eventually responded: “We ultimately decided to stay with the recommendation of applying the Value of Carbon as described in the guidance as that is consistent with how it is applied in benefit-cost analyses at the state and federal level.” They did not say I was wrong they said they wanted to be consistent. I believe that was because they knew they needed larger societal benefits to claim this was cost-effective.
On December 30, 2021 New York State released for public comment its Draft Scoping Plan that defines how to “achieve the State’s bold clean energy and climate agenda”. This kicks off the opportunity for the public to comment on what they have planned. Given the intrusive changes to lifestyles, risks to a reliable electric system, substantial cost increases, serious environmental impacts of the necessary wind, solar and storage technologies, and the lack of any direct global warming benefits it is imperative all New Yorkers get involved with the comment process.
The Climate Leadership and Community Protection Act (Climate Act) was passed in 2019 and became effective on 1/1/2020. Climate Action Council has been working since then to develop plans to implement the Act. Starting in the fall of 2020 seven advisory panels developed recommended policies to meet the targets that were presented to the Climate Action Council in the spring of 2021. Over the summer of 2021 the New York State Energy Research & Development Authority (NYSERDA) and its consultant Energy + Environmental Economics (E3) prepared an Integration Analysis to “estimate the economy-wide benefits, costs, and GHG emissions reductions associated with pathways that achieve the Climate Act GHG emission limits and carbon neutrality goal”. The Integration Analysis implementation strategies were incorporated into the Scoping Plan over the past couple of months and at the December 20, 2021 Climate Action Council meeting they voted to release the Scoping Plan for public comment. The comment period will be at least 120 days long but there were suggestions that it should be extended. When finalized the Plan will be used to revise the New York Energy Plan and rulemaking to implement its provisions will begin.
New York Plan
In brief the plan to achieve net-zero by 2050 requires New Yorkers to electrify everything and rely on wind and solar to produce that electricity. Risky emission reduction strategies from all sectors will be required and personal choices limited. All residences will have to be completely electrified and be “grid-interactive” despite the risks to safety in the event of an ice storm. In the transportation sector electric vehicles will be required with vehicle miles traveled limits and zoning changes to discourage the use of personal vehicles.
The New York electric gird is a complex system that has evolved over many years. It is a highly reliable system using proven hardware and procedures. Reliance on unprecedented levels of wind and solar has not been proven on the scale necessary. The energy storage system technology to account for intermittent wind and solar has not been tested for the proposed use. The critical reliability resource for winter-time wind lulls does not exist. These make it an ill-conceived plan that will likely end in a reliability crisis.
The greenhouse gas emission target in the Climate Act were not determined or based on cost feasibility.The net direct societal costs range between $310 and $290 billion but no estimates of the costs to consumers have been announced. The Scoping Plan claims that societal benefits outweigh the costs; however, societal benefits do not lower the direct costs to consumers.
When the Climate Act eliminates New York’s greenhouse gas emissions the effect on global warming will not be measurable. The expected impact on global warming of eliminating New York emissions is only 0.01°C by the year 2100. More importantly, New York’s emissions will be negated in a matter of months by countries in the developing world building their energy systems with reliable and affordable fossil fuels. To deny those countries the benefits of plentiful electricity using those fuels is immoral.
The Climate Act only accounts for fossil fuel life-cycle costs and environmental impacts while ignoring the life-cycle impacts of wind, solar, and energy storage technologies. Those “zero-emissions” resources may not have emissions when generating electricity but the volume of materials needed to access dilute wind and solar energy and the rare earth elements necessary for those technologies certainly have environmental impacts when mined and processed. The large number of wind turbines and solar panels will also create massive amounts of waste when they are retired. Furthermore, the cumulative environmental impacts of thousands of wind turbines and square miles of solar panels has not been compared to the environmental impacts of current fossil fuel technology. Solar energy is being developed now without any limits on the loss of prime farmland. Finally, it is unreasonable to expect that there will be any changes to environmental impacts due to climate change because the New York effect on global warming is too small to measure.
Most New Yorkers are unaware that the Climate Act exists. Given the constant biased coverage of imminent and catastrophic climate change impacts many may agree that something needs to be done. Unfortunately, the bottom line is that we don’t have the technology today to meet the ambitions and schedule of the Climate Act and maintain current reliability standards and affordability. Given the issues outlined above I think New Yorkers will agree with me that the State should reconsider the targets and schedule of the law.
According to the press release:
“The release of the Draft Scoping Plan, available at the New York State Climate Act website (leaves DEC website), kicks off a 120-day public comment period beginning Jan. 1, 2022. New Yorkers are encouraged to submit comments via the online public comment form, via email at firstname.lastname@example.org, and via U.S. mail to Attention: Draft Scoping Plan Comments, NYSERDA, 17 Columbia Circle, Albany, NY 12203-6399. The public comment period will also include at least six public hearings across the State. Details and information about how to participate in the public hearings will be announced in early 2022.”
In order to raise awareness please alert any New Yorkers you know that the public comment process has started. The other side of the story is available at Citizens Guide to the Climate Act.
At the December 20, 2021 meeting of New York’s Climate Leadership and Community Protection Act (CLCPA) Climate Action Council the Council voted to release the Scoping Plan for public comment later this year. One of the controversial issues on the Council was the lack of any estimates of consumer cost impacts. This article compares residential cost impacts of the recently announced New York State Energy Research and Development Authority (NYSERDA) contracts with Clean Path New York LLC for its Clean Path NY (CPNY) project and H.Q. Energy Services (U.S.) Inc. (HQUS) for its Champlain Hudson Power Express (CHPE) with the energy needed as part of the Scoping Plan.
The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”. Starting in the fall of 2020 seven advisory panels developed recommended policies to meet the targets that were presented to the Climate Action Council in the spring of 2021. Over the summer of 2021 the New York State Energy Research & Development Authority (NYSERDA) and its consultant Energy + Environmental Economics (E3) prepared an integration analysis to “estimate the economy-wide benefits, costs, and GHG emissions reductions associated with pathways that achieve the Climate Act GHG emission limits and carbon neutrality goal”. The integration analysis implementation strategies have been incorporated into the draft Scoping Plan. On December 20, 2021 the Climate Action Council voted to release the Scoping Plan for public comment on December 30, 2021.
The Public Service Commission’s October 15, 2020 Order [PDF]establishes a new Tier 4 within the Clean Energy Standard (CES) in response to NYSERDA’s CES White Paper. The new Tier 4 will increase the penetration of renewable energy into New York City (NYISO Zone J), which is particularly dependent on polluting fossil fuel-fired generation. NYSERDA’s CES White Paper found that without displacing a substantial portion of the fossil fuel-fired generation that New York City currently relies upon, the statewide 70 by 30 Target would be difficult to achieve. Through Tier 4, the State will procure the unbundled environmental attributes (in the form of Tier 4 RECs) associated with renewable generation delivered into Zone J. These environmental attributes include the avoidance of GHG emissions, as well as the avoidance of local pollutants such as NOx, SOx, and fine particulate matter.
On November 30, 2021 New York Governor Kathy Hochul announced that finalized contracts for two projects to meet this solicitation had been awarded. In order to complete this process NYSERDA and the Department of Public Service (DPS) submitted “a petition for approval this Petition and two contracts for renewable energy credits (RECs) entered into under Tier 4 of the Clean Energy Standard (CES)”. These documents are available on the DPS website for this matter. For the reader’s information and because trying to access the DPS website is a challenge I have posts the petition, press release, cost analysis, and the contracts on this website. According to the petition:
Tier 4 was established by the Public Service Commission (Commission) in October 2020 to overcome the challenge of New York City’s reliance on fossil fuels and to help accelerate achievement of New York’s target of 70% renewable energy by 2030. To this end, the Commission instructed NYSERDA to proceed with a Tier 4 solicitation that will increase the penetration of renewable energy into New York City (Zone J). NYSERDA issued its solicitation in January 2021 and received a highly competitive response with seven projects submitting proposals.
Following a robust and comprehensive evaluation process, which considered bid prices, viability and economic benefits, in September of 2021, the selection of two projects was announced: (1) the Clean Path New York (CPNY) project; and (2) the Champlain Hudson Power Express (CHPE) project. Contract negotiations have now concluded, and in accordance with the Commission’s instructions, NYSERDA and Staff are submitting the signed contracts for the Commission’s consideration and approval. The selected projects are expected to deliver 18 million megawatt-hours of renewable energy per year to Zone J, more than a third of New York City’s annual electric consumption, from a diverse generation portfolio including onshore wind, solar and hydroelectric power from Upstate New York and Québec.
The bid evaluation document describes the two projects. The CPNY proposal has three main components:
New Tier 4 renewable generation to be built in New York (CPNY Resources), located largely upstate,
A new 1,300 MW HVDC controllable link from upstate to New York City, and
The use of the New York Power Authority owned Blenheim Gilboa pump storage facility to store energy produced by the CPNY resources that is generated in excess of the Tier 4 transmission capacity.
The CHPE project is an underground transmission line from Quebec to New York City that will deliver 1,250 MW of hydro generation from Hydro Quebec. Both projects terminate in New York City so that it can be considered “in-city” generation.
The intent of this article is to discuss the cost aspects but I have to comment on the CPNY shell game. The following table shows the capacity (MW), expected energy (GWh) and the capacity factors. I call your attention to the CPNY capacity factor for the new Tier 4 renewable generation. The only way that high a capacity factor for renewable generation is possible is if there is substantial energy storage and the project plan is to use the Blenheim Gilboa pump storage facility. Here’s the thing, Blenheim Gilboa was built in 1973. It has been in daily use storing energy when prices are low and producing energy when prices are high. It does not represent anything new even if the plan is to use it differently. The capacity factor of the new renewables will be much less than 74.9% however this is packaged to fulfill the contract. It shows the degree of desperation of the State that they are trying to sell this renewable resource as contracted.
Capacity Factor (%)
The petition includes the following cost estimates:
The costs of program payments for the purchase of Tier 4 RECs from the projects are projected as $5.9 – $11.6 billion, equating to an estimated increase in customer electric bills of 2.1 – 4.1% (or $2.08 – $4.08 per month for the average residential customer) on average across the State for the 25-year period of the Tier 4 contracts. The range of these projections reflects future uncertainties including energy and capacity prices and includes the benefits to ratepayers from the expected purchase of Tier 4 RECs by the City, which reduces the ratepayer impact by $0.8-$1.7 billion. Additional cost reductions could occur as a result of federal transmission tax credits, which could reduce the remaining costs of Tier 4 to ratepayers to 1.8 – 3.8%. Voluntary purchase of Tier 4 RECs by New York City organizations with interest in switching to renewable energy could reduce ratepayer impact even further.
Program costs will be borne by ratepayers based on electric load. For instance, ConEdison customers with 40% of the State’s load will contribute 40% of the cost, and National Grid customers 23%, reflecting their load. However, because upstate customers tend to have lower electricity bills to start with, the percentage bill impacts tend to be higher upstate than downstate, with National Grid customers experiencing around twice the percentage bill increase as that of ConEdison customers. This underscores the importance of voluntary Tier 4 REC purchases by the City, as described above, in order to manage these upstate impacts.
I have prepared the Expected Annual Increase in Residential Sector Annual Costs Using the Tier 4 Cost Impacts table to summarize these costs. The petition states that the projected increase in customer electric bills will be 2.1 – 4.1% (or $2.08 – $4.08 per month for the average residential customer. The Tier 4 Petition row lists the values converted to annual numbers between $24.96 to $48.96. My Tier 4 calculated numbers are slightly different. I used the September 2021 average residential electricity price as the starting point, calculated that the average residential electricity use is 6,870 kWh and estimated that the annual average residential energy bill is $1,408. The 2.1% and 4.1% increase from that baseline equates to annual increases of between $29.57 and $57.74 per year.
NYSERDA and DPS has set a precedent for future renewable energy subsidies with this petition. The purchase of Tier 4 Renewable Energy Credits (RECs) from the projects are projected to cost between $5.9 – $11.6 billion (equating to an estimated increase in customer electric bills of 2.1 – 4.1%) for 18,527 GWh of renewable electricity energy. Assuming that new hydro imports, onshore wind, wind imports, and offshore wind projects were comparable to these two projects, we can make an order of magnitude estimate of their cost if the same subsidy approach is used simply by pro-rating these Tier 4 contact costs by the total additional energy divided by the Tier 4 energy. For Scenario 2 of the Integration Analysis the annual cost range is $168 to $327, Scenario 3 is $184 to $359, and Scenario 4 is $179 to $349 additional.
Note that there are other programs that could contribute to the subsidies such that residential electricity prices would be reduced. The costs remain the same so it is just how they get paid for that change.
On October 26,2021, the AP-NORC Center and the Energy Policy Institute at the University of Chicago (EPIC) released the results of a survey that claimed that a majority of Americans regard climate change as a problem of “high importance”. It also included survey questions asking whether respondents would support, oppose, or neither support or oppose a law that imposed “a fee on carbon to combat climate change”. The survey question asked “If the law passed, it would increase the average amount your household pays each month for energy, including electricity, heating gas, and gasoline or diesel for your car by a total of X dollars per month” where respondents were randomly assigned a $1, $10, $20, $40, $75, or $100 cost increase. For a $1 per month increase, 45% would support, 30% would oppose, and 25% would neither support or oppose. For a $20 per month increase, 37% would support, 41% would oppose, and 21% would neither support or oppose. For a $100 per month increase, 20% would support, 62% would oppose, and 18% would neither support or oppose. In other words, these cost estimates are right about at the point where more people oppose the cost increase than support them.
Of course, this is just a fraction of the expected residential rate increase. New York also has to find a way to subsidize the expected solar energy, energy storage, and zero-carbon firm resource capacity needed. There are also all sorts of less obvious costs to the electric consumers. Someone also has to pay to upgrade the local distribution systems to handle all electric homes that have electric vehicles, install interactive meters, and pay for all the hidden costs that New York has foisted upon the electricity providers like public chargers for electric vehicles. Don’t forget that consumers also have to absorb the added costs for electrifying their homes and transport too.
Ratepayer cost impacts are not included in the Integration Analysis documentation provided to date. Based on a recent survey, the projected ratepayer costs for a fraction of the expected consumer cost in this analysis is just about at the level where more respondents oppose those costs than support them. It is difficult to estimate more of the costs because the documentation provided to date does not even provide the values used in the graphs for costs provided. There are some costs that could be broken out on a per household basis without a lot of work in the Integration Analysis. In my opinion, the Climate Action Council has a vested interest in not showing even that level of detail because the costs are unsupportable.
New York’s Tier 4 contracts are good examples of one of the ways that the implementation costs for the Climate Act could be paid. It is not clear why ratepayers have to subsidize renewable energy development if those resources are, in fact, cheaper than other energy resources. The transparent manipulation of the Clean Path New York contract to provide more reliable energy using existing pumped storage energy resources demonstrates the State is desperate to fund these projects by any means, fair or foul.
The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”. Starting in the fall of 2020 seven advisory panels developed recommended policies to meet the targets that were presented to the Climate Action Council in the spring of 2021. Over the summer of 2021 the New York State Energy Research & Development Authority (NYSERDA) and its consultant Energy + Environmental Economics (E3) prepared an integration analysis to “estimate the economy-wide benefits, costs, and GHG emissions reductions associated with pathways that achieve the Climate Act GHG emission limits and carbon neutrality goal”. The integration analysis implementation strategies have been incorporated into the draft Scoping Plan. On December 20, 2021 the Climate Action Council voted to release the Scoping Plan for public comment on December 30, 2021.
The presentation on December 20, 2021 revised previous projections. Those projections were not documented the same as the November 18, 2021 update of key results, drivers, and assumptions that were posted on the Climate Act resources page. In the absence of updated resource information I was forced to use information from these documents in the this article:
The costs and benefits provided in the Integration Analysis and the draft Scoping Plan are societal values. In the Inputs Summary E3 explained that their methodology “produces economy wide resource costs for the various mitigation scenarios relative to a reference scenario”. They produce output on an “annual time scale for the state of New York, with granularity by sector” including “Annualized capital, operations, and maintenance cost for infrastructure (e.g., devices, equipment, generation assets, T&D)” and “Annual fuel expenses by sector and fuel (conventional or low carbon fuels, depending on scenario definitions)”. However, it “does not natively produce detailed locational or customer class analysis”. Consequently, the information needed to determine direct consumer costs will be “developed through subsequent implementation processes”. They also note that the value of avoided GHG emissions calculated is based on guidance developed by DEC.
The following Sectoral Coverage for Cost figure describes the costs included in the Integration Analysis for each sector. The costs listed are direct costs. For example, incremental capital and operating transportation investments cover the direct cost but not the transactional costs such as the additional interest cost for a more expensive electric vehicle loan. In addition, there are analytical choices that could affect costs such as the number of each type of electric vehicle charging systems. Also note that there are cost estimates for technology that has not been deployed at the scale necessary to maintain reliability and for technology that is still under development. Without complete transparency for the calculation estimates it is not possible to evaluate the validity of these cost estimates.
The presentation for the December 20, 2021 Climate Action Council meeting updated the Benefit Cost assessment slides. All three mitigation scenarios are listed now and the values in Scenarios 2 and 3 have changed. A prime message is that the “mitigation cases show positive net benefits ($90-$120 billion) when considering the value of avoided greenhouse gas emissions and health co-benefits, in addition to cost savings from reduced fuel use”. The remainder of this article will discuss the meaning of avoided future climate damage benefits because that is the largest source of the alleged benefits.
We need to have a clear idea about what global warming will cost the world. so that we can make sure that we respond commensurately. If it’s a vast cost, it makes sense to throw everything we can at reducing it. If it’s smaller, we need to make sure that the cure isn’t worse than the disease.
Professor William Nordhaus of Yale University was the first (and so far, only) climate economist to be awarded the Nobel Prize in economics in 2018. He wrote one of the first ever papers on the costs of climate change in 1991 and has spent much of his career studying the issue. His studies have helped to inspire what is now a vast body of research.
How do economists like Professor Nordhaus go about estimating the costs of future climate change impacts? They collate all the scientific evidence from a wide range of areas, to estimate the most important and expensive impacts from climate change, including those on agriculture, energy, and forestry, as well as sea-level rises. They input this economic information into computer models; the models are then used to estimate the cost of climate change at different levels of carbon dioxide emissions, temperature, economic development, and adaptation. These models have been tested and peer reviewed over decades to hone their cost estimates.
Many of the models also include the impacts of climate change on water resources, storms, biodiversity, cardiovascular and respiratory diseases, vector-borne diseases (like malaria), diarrhea, and migration. Some even try to include potential catastrophic costs such as those resulting from the Greenland ice sheet melting rapidly. All of which is to say that while any model of the future will be imperfect, these models are very comprehensive.
When we look at the full range of studies addressing this issue, what we find is that the cost of climate change is significant but moderate, in terms of overall global GDP.
Figure 5.1 shows all the relevant climate damage estimates from the latest UN Climate Panel report, updated with the latest studies. On the horizontal axis, we can see a range of temperature increases. Down the vertical axis, we see the impact put into monetary terms: the net effect of all impacts from global warming translated into percentage of global GDP. The impact is typically negative, meaning that global warming will overall be a cost or a problem.
Right now, the planet has experienced a bit less than 2°F global temperature increase since the industrial revolution. This graph shows us that it is not yet clear whether the net global impact from a 2°F change is positive or negative; there are three studies that show a slight negative impact, and one showing a rather large benefit. As the temperature increase grows larger, the impact becomes ever more negative. The dashed line going through the data is Nordhaus’s best estimate of the reduction in global GDP for any given temperature rise.
We should focus on the temperature rise of just above 7°F, because that is likely to be what we will see at the end of the century, without any additional climate policies beyond those to which governments have already committed. At 7.2°F in 2100, climate change would cause negative impacts equivalent to a 2.9 percent loss to global GDP.
Remember, of course, that the world will be getting much richer over die course of the century. And that will still be true with climate change -we will still be much richer, but slightly less so than we would have been without global warming.
In summary, models are used to project the benefits of reducing GHG emissions on future global warming impacts including those on agriculture, energy, and forestry, as well as sea-level rises, water resources, storms, biodiversity, cardiovascular and respiratory diseases, and vector-borne diseases (like malaria), and diarrhea. Richard Tol describes the value of greenhouse gas emission reductions thusly: “In sum, the causal chain from carbon dioxide emission to social cost of carbon is long, complex and contingent on human decisions that are at least partly unrelated to climate policy. The social cost of carbon is, at least in part, also the social cost of underinvestment in infectious disease, the social cost of institutional failure in coastal countries, and so on.”
There are some important caveats in this approach. For example, Lomborg does not mention the fact that the models estimate those impacts out to the year 2300 and that the largest impacts are predicted to occur at the end of the modeling period. All of these economic models simplify the relationship between emissions and potential global warming impacts and they all presume a high sensitivity to those impacts from greenhouse gases which is entirely consistent with the Climate Act’s presumed impacts. Finally, keep in mind that there is no attempt to consider advantages of greenhouse gases much less balance them in their projected benefit costs.
New York’s Flawed Avoided Cost Methodology
There is a fundamental flaw in the claim that the Integration Analysis mitigation cases show positive net benefits when considering the value of avoided greenhouse gas emissions. Although I have described these problems with the DEC Value of Avoided Carbon Guidance previously it bears repeating. In my first post I noted that the Guidance includes a recommendation how to estimate emission reduction benefits for a plan or goal. I believe that the guidance approach is wrong because it applies the social cost multiple times for each ton reduced. I maintain that it is inappropriate to claim the benefits of an annual reduction of a ton of greenhouse gas over any lifetime or to compare it with avoided emissions. The social cost calculation that is the basis of their carbon valuation sums projects benefits for every year subsequent to the year the reductions are made out to the year 2300. The annual value of carbon for that year is based on all the damages that occur from that ton over all those years. Clearly, using cumulative values for this parameter is incorrect because it counts those values over and over. I contacted social cost of carbon expert Dr. Richard Tol about my interpretation of the use of lifetime savings and he confirmed that “The SCC should not be compared to life-time savings or life-time costs (unless the project life is one year)”.
In the second post I described how I submitted comments on this topic to DEC and NYSERDA in February and followed up in June. They eventually responded: “We ultimately decided to stay with the recommendation of applying the Value of Carbon as described in the guidance as that is consistent with how it is applied in benefit-cost analyses at the state and federal level.”
There are other problems with their approach. I asked Dr. Tol another question about using the social cost of methane and he pointed out that “the social cost of carbon is an efficiency concept” so it is inappropriate to use social costs in the way that New York is doing. He said that “If a cap is set, you should not use the social cost of carbon. A cap violates efficiency.” I am not an economist and honestly cannot claim to understand this argument but it is pretty clear that New York is pushing the envelope in its use of the social cost of carbon.
The Integration Analysis claims reducing GHG emissions will provided societal benefits of avoided economic damages of between $235 and $250 billion. The more appropriate value is much less. According to §496.4 Statewide Greenhouse Gas Emission Limits (a) “For the purposes of this Part, the estimated level of statewide greenhouse gas emissions in 1990 is 409.78 million metric tons of carbon dioxide equivalent, using a GWP20 as provided in Section 496.5 of this Part”. The DEC Value of Avoided Carbon Guidance recommends a social cost of $121 in 2020 and $172 in 2050. If New York had magically eliminated all of the 409.78 million tons of GHG in 2020, the societal benefit of those reductions would have only been $49.6 billion. If all the reductions occurred in 2050 the societal benefit would be $70.5 billion.
I used the 2050 societal benefit $70.5 billion estimate to show that Climate Act guidance incorrectly applies the metric by applying the value of an emission reduction multiple times to make the claim that the mitigation scenarios show positive net benefits. The Strategic Use of Low Carbon Fuels scenario is estimated to have $310 billion in net direct costs, avoided carbon damage benefits of $235 billion, and health co-benefits of $165 billion so that the net benefit is $90 billion. However, when the over-counting error is corrected, the avoided carbon damage benefit is only $70.5 billion so there is a negative net benefit is $74.5 billion. The Accelerated Transition Away from Combustion scenario ends up with a negative net benefit of $49.5 billion and the Beyond 85% Reductions scenario has a negative net benefit of $64.5 billion.
The State of New York has never quantified the effect on potential global warming for any of their climate change regulations. In the absence of an “official” number I have adapted the calculations in Analysis of US and State-By-State Carbon Dioxide Emissions and Potential “Savings” In Future Global Temperature and Global Sea Level Rise to estimate the potential effect. This analysis of U.S. and state by state carbon dioxide 2010 emissions relative to global emissions quantifies the relative numbers and the potential “savings” in future global temperature and global sea level rise. These estimates are based on MAGICC: Model for the Assessment of Greenhouse-gas Induced Climate Change so they represent projected changes based on the Intergovernmental Panel on Climate Change estimates. All I did in my calculation was to pro-rate the United States impacts by the ratio of different New York inventory emissions divided by United States emissions to determine the effects of a complete cessation of all New York’s emissions. My calculations showed that for the CLCPA Part 496 inventories there would be a reduction, or a “savings,” of between approximately 0.0097°C and 0.0081°C by the year 2100. This savings on global warming from the maximum possible New York emission reductions will be too small to measure. More importantly, New York’s emissions will be negated in a matter of months by greenhouse gas emission increases in countries in the developing world building their energy systems with reliable and affordable fossil fuels.
Advocates for the Climate Act often say we need to act on climate change for our children and grandchildren. However, if a generation is 25 years long, then the avoided cost of carbon societal benefit is applied to 11 generations out to 2300. One of the points that Lomborg makes in False Alarm is that the costs of global warming will only reach 2.6% of GDP by 2100 but that global GDP will be so much higher at that time that this number is insignificant.
New Yorkers also need to be aware that benefits mostly accrue to those jurisdictions outside of New York. To this point they are more vulnerable because there is under-investment in resilient agriculture, energy, and forestry; their society is not rich enough to address sea-level rises like Holland has done for centuries; adaptation for water resources, storms, and biodiversity is not a priority because of poverty; and where underfunding for cardiovascular and respiratory diseases, vector-borne diseases (like malaria), and diarrhea makes the impacts of those diseases worse than in New York.
Importantly, if total global greenhouse gas emissions continue to rise as countries improve their resiliency to weather events and health care system using fossil fuels then there will not be any actual societal benefits from New York’s emission reductions. The benefits argument devolves into claiming that the value of New York’s avoided greenhouse gas emissions reductions is that impacts would have been even worse without them. New York’s share of global GHG emissions is 0.45% in 2016, the last year when state-wide emissions consistent with the methodology used elsewhere are available, so they can only claim only less than half a percent worse because that is New York’s share of total emissions today.
When the Scoping Plan is rolled out to the public at the end of the year, one of the major talking points will be that the costs of inaction outweigh the costs of implementing the Climate Act. That claim is false because New York State policy guidance incorrectly calculates the Value of Carbon “benefits”. New York’s emission reduction impacts on global warming should only be counted once.
In addition, the cost and benefit numbers are societal values. It is not clear what the actual costs will be after transaction and implementation cost adders are included and it is impossible, at this time, to determine something as important as ratepayer cost increases. The primary purpose of this article was to describe the societal benefit of avoided emissions on global warming impacts. It is clear that the value of carbon societal benefits accrues to generations far in the future and mostly affect jurisdictions outside of New York.
The societal social benefit benefits are imaginary but the societal direct costs, however they are apportioned to New York consumers, will be real. In my opinion, it is inappropriate for the Integration Analysis to claim that the contrived societal benefits outweigh the societal costs without fully explaining who gets the benefits and when they get the benefits. The other missing explanation is that New York’s actions won’t actually affect global warming because we are such a small fraction of the total global emissions. The Climate Act boils down to a virtue signaling symbolic gesture based on contrived benefits that impose real costs on all New Yorkers, including those least able to afford them.
New York’s Climate Leadership and Community Protection Act (Climate Act) has a legal mandate for New York State greenhouse gas emissions to meet the lofty net-zero by 2050 goal. In order to meet the goal all energy sectors will have to be electrified as much as possible but that approach will adversely affect energy sector affordability. Unfortunately, most New Yorkers are unaware of the law and only a handful understand the implications. This article discusses the assumptions made for conversion costs for electrified residential heating and provides a table that can be used to estimate conversion costs.
The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”. Starting in the fall of 2020 seven advisory panels developed recommended policies to meet the targets that were presented to the Climate Action Council in the spring of 2021. Over the summer of 2021 the New York State Energy Research & Development Authority (NYSERDA) and its consultant Energy + Environmental Economics (E3) prepared an integration analysis to “estimate the economy-wide benefits, costs, and GHG emissions reductions associated with pathways that achieve the Climate Act GHG emission limits and carbon neutrality goal”. The integration analysis implementation strategies have been incorporated into the draft Scoping Plan. Next year the Scoping Plan will be released for public comment.
Unfortunately, those documents are the only documentation provided by New York State on the Climate Act webpage and it is insufficient to fully evaluate the Scoping Plan numbers. The Inputs Summary document is a set of slides that only outlines the assumptions. The Inputs Workbook and Key Drivers spreadsheets are large, complicated and do not include explanations of the contents sufficient to decipher how the direct net costs of residential home heating were derived. The Inputs Workbook spreadsheet has 49 tabs with data and the Key Drivers spreadsheet has 68 tabs with data. Many of the results listed in the presentations are documented in tables in these spreadsheets but there isn’t a summary table that totals all the component costs. Furthermore, I have been unable to find a description of the general methodology much less a detailed flow description explaining how the numbers were derived in the presentation documentation tabs.
The remainder of this article discusses assumptions necessary to derive costs of electrified residential heating. I also calculate the costs to convert existing residences to all electric heating using numbers in this documentation.
Electric Home Heating Considerations
The Integration Analysis estimates that the buildings sector is the largest source of GHG emissions. In all the future scenarios building emissions reductions are driven by rapid electrification, increased energy efficiency, and improved building shells. For home heating electrification means conversion to heat pumps and improvements to building shells to minimize the energy needed to heat homes.
How Stuff Works explains that “heat pumps use a small amount of energy to move heat from one location to another”. There are two kinds of heat pumps: air source that extract energy in the atmosphere and ground source that extract energy from underground. The advantage of ground source heat pumps is that below ground energy stays relatively constant throughout the year whereas atmospheric energy available in New York winters is so low that a backup heat source is required. Ground source heat pumps are more expensive and need space for the installation so air source is the preferred retrofit alternative. The Key Drivers spreadsheet lists the expected sales of each type of residential heating equipment over every year from 2020 to 2050 but does not provide documentation how the authors decided to apportion air source and ground source installations.
The Integration Analysis lists three types of building shell improvements (basic, deep and reference) but the description refining what they mean by those types is unavailable. Because heat pumps are the preferred heating technology, I suspect that “deep” building shell improvements are equivalent to the international standard for passive buildings. It includes the following measures:
Efficient heat generation (which in this case means heat pumps.
Note, however, that even the passive house website notes that “Not all buildings can be renovated to the Passive House Standard without great difficulty and cost”. If a house cannot be renovated to meet those standards then are they condemned to using electric resistance heat which is not energy efficient?
Heating Climate Considerations
The Integration Analysis admits that a backup heat source will be required because of the New York climate. In my opinion the more important consideration is how the climate will affect building shell implementation. As far as I can tell the Integration Analysis specifies New York’s climate zones using the International Energy Conservation Code. As shown below there are only three climate zones.
In my opinion, there is a better, more detailed climate zone map for building zone upgrades. The United States Department of Agriculture plant hardiness map has nine zones for New York. It uses the average annual extreme minimum temperature for its classification which is a pretty good indicator for building shell standards when using heat pumps. Note that the average minimum is above zero for only two of the nine zones, corresponding roughly to Integration Analysis climate zone 3. It appears that New York Climate zone 5 should correspond to NYSDA zones 6a and 6b. It appears to me that too many counties are in zone 5 and that they should be classified as New York Climate Zone 6. If the average annual extreme minimum temperature is less than equal to -10oF (USFDA zones 3b, 4a, 4b, 6a, and 6b) then I believe the deep shell upgrades are necessary for safety and comfort of residences that convert to heat pumps.
Home Heating Electrification Costs
This estimate of electrification conversion costs for an individual home is based on data in the Inputs Workbook spreadsheet, Tab: Bldg_Res Device Cost. The Electrified Home Heating Integration Analysis Device Cost Assumptions table lists device costs for three categories of residential households: large multi-family, small multi-family and single family. Costs are listed for the three types of building shell upgrades and for air source heat pumps, electric resistance backup heat, and ground source heat pumps. The Integration Analysis Inputs Assumptions Workbook Residential Home Heating Electrification Costs table looks at the resulting combination of costs per household, building shell type, and type of existing heating system. I assumed in the table that ground source heat pumps would not require backup heat but if you disagree simply add that cost. There is a lot of information on this table so I will explain how to determine potential costs for my situation below.
I live in a single-family residence heated with an efficient natural gas furnace. In my opinion one of the disadvantages of heat pump technology is that the output heat is relatively low compared to a combustion sourced furnace. The temperature at the register for a heat pump system is around 90oF whereas in my house the temperature is around 120oF. However there some cold rooms in my house even when the furnace if providing hot air despite my best attempts to adequately insulate and reduce air infiltration. My house is in plant hardiness zone 5b so I believe that in order to maintain safety and comfort throughout the entire winter my house would need improved thermal insulation, spots where there are thermal bridges would have to be fixed, airtightness improved, my double-glazed windows replaced with triple glazed windows, a heat recovery exchange system would have to be installed and that means a deep shell installation. I live in a suburb where I don’t believe that a ground source heat pump has enough yard space for installation so the Climate Act option is an air source heat pump.
According to the Integration Analysis the cost per device to replace my existing efficient gas-fired furnace is $3,085. In order to provide backup heat, the cost of electric resistance heat also has to be added to the cost of the air source heat pump. The cost differential is in the deep shell, single family, ASHP column on the efficient gas furnace row. The expected cost to replace my natural gas furnace with an air source heat pump would be $57,869. Note that for a “basic shell” upgrade the cost is “only” $19,142, $38,727 less.
For this article I am only going to list a couple of examples where the documentation has to be improved in order to provide meaningful comments on the integration analysis home heating electrification costs.
The cost estimate for an individual house conversion is relatively simple but there still are questions because of the inadequate documentation. The replacement cost for an existing efficient gas-fired furnace is $3,085 but my last replacement furnace was significantly higher than that so it is likely that does not include the cost of installation. Over the years my house has had upgraded insulation in the attic and walls, upgraded windows, and vinyl siding to replace the original cedar shake siding. It is not clear from the documentation how existing houses would be upgraded. Is the existing insulation ripped out, what level of existing window performance has to be replaced, are basements insulated, and how do you retrofit heat recovery system are all questions that spring to mind. Without documentation for those points and many other issues it is impossible to verify the example $45,136 individual single family deep shell device cost.
The cost estimates for the entire state are much more complicated. In the Key-Drivers spreadsheet there are tabs with building shell metrics. Scenarios 2-4 note that in 2020 there were a total of 8,301,996 buildings with 48,551 basic shell residences, 37,699 deep shell residences, and 8,215,747 reference shell residences. For scenario 2 (tab S2_Building Shells) in 2050, the integration analysis projects 8,684,001 residences, with 5,714,918 basic shell residences, 2,285,000 deep shell residences and only 684,080 reference shell residences. On the other hand, according to the Inputs Workbook spreadsheet, Tab: Bldg_Housing Unit Summary there are 3,384,880 housing units in zones 5 and 6 that I believe all need to have deep shell upgrades. Documentation explaining the rationale for basic and deep shell upgrade numbers is needed.
In order to calculate total state home heating electrification costs the existing building stocks for each type of heating source and type of building shell is needed. Some sort of an implementation curve for converting home furnaces and building shells must be determined. The big driver for costs is how many need a basic shell and how many need a deep shell. The spreadsheets contain some of those numbers but the justification for the choices is lacking.
Finally, there is one especially troubling data issue. There isn’t a spreadsheet table available that lists the net present value of net direct costs shown in the following slide. While the graphics in many of the presentation slides are backed up with spreadsheet tables this, arguably one of the most important sets of numbers, has no spreadsheet table for documentation.
This article provides a table with the Integration Analysis costs for heating and building shell technology that can be used to estimate the cost for an individual home heating electrification upgrade. In my circumstance the replacement of my existing natural gas-fired furnace with an upgraded building shell, air source heat pump, and backup electric resistance heater would be between $19,142 and $57,869 depending on the building shell upgrade. Using The Integration Analysis Inputs Assumptions Workbook Residential Home Heating Electrification Costs table and the Initial residential stock parameters in the Input Workbook spreadsheet and assuming that 70% of the heat pumps are air source and 70% of the building shells are basic I estimate that the total cost for residential electrification is on the order of $155 billion.
One of the controversial issues at the recent Climate Action Council meeting discussing the draft scoping document was consumer affordability and home heating costs were front and center in that discussion. The authors of the Integration Analysis claimed that they could not provide direct costs to the consumer because more information is required to apportion the costs. That does not excuse the fact that the existing documentation for the net direct societal costs described in the presentations to the Climate Action Council is incomplete. If that information were available and documented then stakeholders could start to estimate potential costs. The net present value of net direct costs for Scenario 2 is $340 billion. All of the assumptions and calculations for that number should be fully documented in the Scoping Plan. There have been hints at the Climate Action Council meeting that there would be stakeholder sessions for specific components of the Scoping Plan. Because of the importance of affordability, I strongly recommend that sessions on each of the components be considered. Sessions exclusively on the costs for buildings, electric generation, and transportation should be included and a mechanism for technical questions and answers be implemented.