On the Issues: Artificial Intelligence, US Treasury Delay, and More

Twice a month, we’re compiling the most relevant news stories from diverse sources online, connecting the latest environmental and energy economics research to global current events, real-time public discourse, and policy decisions. Keep reading, and feel free to send us your feedback.

Here are some questions we’re asking and addressing with our research chops this week:

How could artificial intelligence support US efforts toward the energy transition?

A lawsuit against Hawaiian Electric claims that the utility acted negligently during the recent fires in Maui by failing to de-energize power lines. The lawsuit fits a trend of legal troubles for electric utilities in the western United States, where electric grid infrastructure has ignited hundreds of fires in recent years. In response to these lawsuits, some utilities have begun to modernize physical grid infrastructure and digitize the systems that control electricity transmission and distribution. Emerging forms of artificial intelligence (AI) can help utilities with the latter upgrade—especially as utilities integrate new sources of renewable energy to the grid, says Priya Donti, cofounder and executive director of Climate Change AI. Donti joined a recent episode of the Resources Radio podcast to discuss potential applications of AI for the energy transition and climate policymaking. “[Climate change] is going to require the employment of all the tools and approaches we have across society, and that includes AI,” says Donti.

One year after the passage of the Inflation Reduction Act, what have we observed about implementing the law’s climate provisions, and how will the effects of the law evolve moving forward?

The US Department of the Treasury has delayed the release of rules for the 45V tax credit, a provision in the Inflation Reduction Act (IRA) that subsidizes the production of low-carbon hydrogen. The agency, which now is expected to release the rules no sooner than October, has missed its deadline of August 16 for the implementation of the credit. Since the passage of the IRA one year ago, federal agencies have implemented provisions for electric vehicles and renewable energy projects, among other clean energy technologies, all with the aim of reducing US greenhouse gas emissions. In a new Common Resources blog post, nine RFF researchers weigh in on the implementation of the law to date and to come, including Treasury’s delay of the 45V rules, which “[leaves] the hydrogen industry waiting and in need of regulatory certainty to start its investments,” according to RFF Fellow Aaron Bergman. “Treasury will need to act soon.”

What are the implications for wetlands and flood resilience of this year’s US Supreme Court case Sackett v. US Environmental Protection Agency?

Tropical Storm Harold, one of several tropical storms that formed in the Atlantic Ocean this week, struck southeastern Texas on Tuesday and delivered heavy rains to cities on the Texas coast. The amount of rain that storms can store and deliver may increase as the planet warms with climate change. Natural protections, like wetlands, can help protect communities from flooding, but some US wetlands may themselves be unprotected. In Sackett v. US Environmental Protection Agency, the US Supreme Court has limited the kinds of waterways that the federal government can regulate under the Clean Water Act. In a recent Common Resources blog post, RFF University Fellow Sheila M. Olmstead discusses the implications of the court case for US waterways, including wetlands. “You’re going to see a much more active response to the removal of federal jurisdiction in a state with, for example, more pressure from the development and agricultural communities to fill in a wetland,” says Olmstead.

Resources Roundup

Informing Decisionmaking on Solar Geoengineering with Interdisciplinary Research

Solar geoengineering refers to methods of intentionally cooling the planet by reflecting sunlight away from the Earth’s surface. Though related technologies pose risks, interest and research in solar geoengineering have increased as the effects of climate change intensify, and researchers have acknowledged the importance of interdisciplinary collaboration. On September 28 and 29, RFF will host a two-day conference that features an interdisciplinary group of experts on solar geoengineering who will discuss the challenges and uncertainties of the global climate strategy. RSVP to join the conference virtually or in person.

US Department of Energy Considers Options to Boost Demand for Hydrogen Fuel

In July, the US Department of Energy announced $1 billion in funding to help facilitate the demand for hydrogen fuel that’s supplied by regional networks of hydrogen producers. The agency has yet to decide how to distribute the funding. In a recent blog post, RFF scholars Aaron Bergman and Alan Krupnick review some strategies for effectively distributing the subsidy. “A tension exists between funding the most viable projects (which risks wasting the money on projects that would have succeeded without support) and funding the projects that are most in trouble (which could risk too many failures and waste taxpayer money),” they say.

Trade-Offs in the Implementation of the 45V Tax Credit for Clean Hydrogen

Researchers have evaluated various policies that the US Department of the Treasury could use in the implementation of the 45V tax credit in the Inflation Reduction Act, which subsidizes the production of low-carbon hydrogen. The agency’s choice of policy has implications for the future of the US hydrogen industry, federal spending, and greenhouse gas emissions. RFF Fellow Aaron Bergman considers several of these policies and related research in a series of issue briefs. In the most recent issue brief in the series, Bergman reviews a study that assesses the relationship between hydrogen supply and demand and the deployment of electrolyzers, an electricity-powered technology that can split water into oxygen and hydrogen fuel.

Building Economic Resilience in Oil and Gas Communities in New Mexico

State and federal efforts to reduce US greenhouse gas emissions likely will create economic risks for communities that have relied on oil and gas production for jobs and tax revenues, such as the San Juan and Permian Basin regions in New Mexico. For a recent report, RFF scholars Daniel Raimi and Zachary Whitlock conducted interviews with local stakeholders in these regions to help improve the understanding of the federal policies and interventions that could support those regional economies in the future. “Building economic resilience in the state’s oil and gas communities will be challenging and require early, substantive, and ongoing engagement with a wide range of local stakeholders to ensure that federal resources support local priorities,” they say.

The Future of Coal-Fired Power Plants in the United States

The US Environmental Protection Agency (EPA) has proposed a regulation that would limit greenhouse gas emissions from coal-fired and natural gas–fired power plants. Facilities would be able to choose from several options to comply with the regulation; coal-fired power plants could face reduced regulation by retiring before specific dates, for example. As EPA weighs changes to the proposed regulation, RFF scholars Karen Palmer and Lucie Bioret have summarized the plans of US coal-fired power plants to retire or stay online and shared the analysis with EPA in a public comment. “Roughly 50 percent of total coal capacity online as of the end of 2022 plans to retire or repower using natural gas before 2032,” they say.

#ChartOfTheWeek

Data: Jack Conness, American Clean Power, and Canary Media. Chart: Canary Media. Note: Stars indicate projects that have not announced the related investment values.

Since the passage of the Inflation Reduction Act last August, firms have announced more than 100 new factories for clean energy technologies or expansions to existing factories for these technologies. The law offers subsidies to firms that manufacture clean energy tech in the United States. Several states have leapt at the opportunity to become manufacturing hubs by offering additional incentives to firms. Georgia leads the nation in planned investments in clean energy manufacturing facilities, and a so-called “battery belt” for electric battery production has developed between the Great Lakes region and the South. The Inflation Reduction Act “has fundamentally shifted the US economy toward the goal of net-zero emissions,” says RFF President and CEO Richard G. Newell.

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