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The goals of this assistance program are to (1) support analyses, studies, evaluations, workshops, conferences, and demonstration projects that lead to reduced pollutants generated and conservation of natural resources; (2) improve economic information and analytic methods to support studies, surveys, analyses, evaluations, conferences, workshops, and demonstration projects on the benefits, costs, and impacts of environmental programs; (3) improve economic information and analytic methods to support studies, surveys, analyses, evaluations, conferences, workshops, and demonstration projects of incentive-based and voluntary environmental management strategies and mechanisms; (4) support research to explore and develop strategies and mechanisms for those in the economic, social, governmental, and environmental arenas to use in environmental management decisions; (5) provide technical assistance to help communities to learn about and implement locally led, community driven approaches that deliver environmental, economic, and quality-of-life benefits; and (6) build and strengthen the adaptive capacity of states, tribes, and local communities to anticipate, prepare for, and adapt to the impacts of extreme weather (e.g., storms and droughts) and other events (e.g., wildfires, sea level rise and storm surges) now and in the future.
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About the data page.
Most of the environmental economics research grants awarded under this CFDA have ended, and the few that remain are wrapping up in FY2016
One environmental economics research project funded under this CFDA that concluded this year sought to develop a series of complementary analyses for understanding the economic efficiency, environmental effectiveness, and distributional effects of overlapping policies, accounting for how different policy instruments interact with one another, and how they perform in the presence of induced technological change. The methods were applied to the two sectors of greatest import for GHG and conventional pollutant emissions: electricity generation and transportation. The first objective was to conduct a comprehensive review of existing policies and major proposals for reducing emissions and promoting clean technologies in these sectors. The second goal was to develop an analytical model of consumer, supplier, and overall market responses to these kinds of policy interventions, in order to develop intuition about interactions among policies. Importantly, in addition to an emissions externality, the model would incorporate two types of market imperfections that often motivate technology- specific policies: undervaluation of energy efficiency by consumers and spillovers from knowledge accumulated by producers. The third goal was to develop numerical models following the conceptual analysis, and carefully parameterize them for our two sectoral applications. The ultimate goal was to provide a comprehensive guide for policymakers on how the existing abundance of policies and policy options should be understood, coordinated, and possibly reformed.
Their work was successful, producing the following types of information and materials:
Development of a simple unifying model to analyze interactions among overlapping environmental policies, particularly those that involve tradable credit mechanisms. The model was extended to allow for both more and less mature renewable energy sources (e.g., wind versus solar), differentiating the innovation market failures among these different classes, and by incorporating demand-side market failures e.g., the undervaluation of energy efficiency improvements). It demonstrates that the value of a given policy change depends on the extent to which any and all of these market failures are internalized.
The model was further adapted to allow for the peculiarities of the transportation fuels sector. This included modeling the nested targets in the Renewable Fuels Standard, a low-carbon fuel standard, and different forms of CAFE standards, including size-based incentives. It highlights how each of these policies can be modeled as combinations of implicit taxes and subsidies and reveals how they interact.
The research led to parameterization of a new analytical model for the electricity sector. This permitted quantitative analysis about the optimal policy combinations. A significant focus was on the optimal deployment subsidies for wind and solar and their sensitivity to a variety of assumptions regarding the potential for learning-by-doing, the degree of spillovers, and the stringency of the emissions target. Central estimates for these values were in the range of 1 cent for wind (mature renewable technologies) and 5 cents/kWh for solar. While they rise somewhat as emissions reduction targets get more stringent, the carbon price in the optimal carbon policy combination is what rises most significantly.
The development and parameterization of this model proved more challenging than expected. The baseline involves a large pre-existing suite of policy incentives and mandates, for which implicit values must be calculated. Incorporating realistic fuel economy strategies required calibrating both technological and size-based opportunities for fuel economy improvements. Trying to maintain an overall calibration strategy of relying on EIA data (projections generated from the much more complex NEMS model), while being consistent with other empirical evidence on innovation and renewable fuels, required significant innovations in terms of the model and solution strategies.
The results emphasize the inefficiency of current federal renewable fuel standards and size-based fuel economy standards relative to direct taxes on carbon or gasoline. We find that the current mix of state and federal fuel taxes, fuel economy standards, and renewable fuel blending mandates leads to a 13% reduction in domestic carbon emissions from this sector relative to a no-policy baseline at an average private welfare cost of $18/tCO2. These policies induce behavioral changes that are highly cost-ineffective, however, as evidenced by a marginal cost of carbon abatement that varies widely across competing abatement options: $0/tCO2 to $736/tCO2 for options based on fuel switching (e.g., from gasoline to ethanol) and negative $45/tCO2 to positive $73/tCO2 for options based on conservation (i.e., driving fewer miles or improving fuel economy). Negative abatement costs for conservation arise in this setting due to consumer undervaluation of fuel economy and due to existing policies that implicitly subsidize ethanol well beyond the point where its marginal cost exceeds its energy value. In contrast, the optimal carbon policy — a carbon tax combined with corrective subsidies for cellulosic ethanol production and fuel economy improvements—can achieve the same 13% reduction in carbon emissions, but at an average private welfare gain of $15/tCO2 relative to no policy.
For awards related to smart growth, program accomplishments involved supporting activities of current grant recipients:
$135,000 for Smart Growth Conference held in February 2016 and attended by 1,700 people from the public and private sector.
$90,000 for Smart Growth On-line Website and Policy Clearinghouse.
$200,000 for technical assistance workshops in 14 communities addressing land use and code audits to promote more sustainable development.
$20,000 for technical assistance workshops in 9 communities addressing complete streets and sustainable design.
$160,000 for workshops focused on opportunities to enhance community sustainability through state policy.
$20,000 for technical assistance workshops in 8 communities using the LEED for Neighborhood Development Standards as a tool for evaluating options to improve community environmental performance. Most of the environmental economics research grants awarded under this CFDA have ended, and the few that remain are wrapping up in FY2016 One environmental economics research project funded under this CFDA that concluded this year sought to develop a series of complementary analyses for understanding the economic efficiency, environmental effectiveness, and distributional effects of overlapping policies, accounting for how different policy instruments interact with one another, and how they perform in the presence of induced technological change. The methods were applied to the two sectors of greatest import for GHG and conventional pollutant emissions: electricity generation and transportation. The first objective was to conduct a comprehensive review of existing policies and major proposals for reducing emissions and promoting clean technologies in these sectors. The second goal was to develop an analytical model of consumer, supplier, and overall market responses to these kinds of policy interventions, in order to develop intuition about interactions among policies. Importantly, in addition to an emissions externality, the model would incorporate two types of market imperfections that often motivate technology- specific policies: undervaluation of energy efficiency by consumers and spillovers from knowledge accumulated by producers. The third goal was to develop numerical models following the conceptual analysis, and carefully parameterize them for our two sectoral applications. The ultimate goal was to provide a comprehensive guide for policymakers on how the existing abundance of policies and policy options should be understood, coordinated, and possibly reformed. Their work was successful, producing the following types of information and materials: Development of a simple unifying model to analyze interactions among overlapping environmental policies, particularly those that involve tradable credit mechanisms. The model was extended to allow for both more and less mature renewable energy sources (e.g., wind versus solar), differentiating the innovation market failures among these different classes, and by incorporating demand-side market failures e.g., the undervaluation of energy efficiency improvements). It demonstrates that the value of a given policy change depends on the extent to which any and all of these market failures are internalized. The model was further adapted to allow for the peculiarities of the transportation fuels sector. This included modeling the nested targets in the Renewable Fuels Standard, a low-carbon fuel standard, and different forms of CAFE standards, including size-based incentives. It highlights how each of these policies can be modeled as combinations of implicit taxes and subsidies and reveals how they interact. The research led to parameterization of a new analytical model for the electricity sector. This permitted quantitative analysis about the optimal policy combinations. A significant focus was on the optimal deployment subsidies for wind and solar and their sensitivity to a variety of assumptions regarding the potential for learning-by-doing, the degree of spillovers, and the stringency of the emissions target. Central estimates for these values were in the range of 1 cent for wind (mature renewable technologies) and 5 cents/kWh for solar. While they rise somewhat as emissions reduction targets get more stringent, the carbon price in the optimal carbon policy combination is what rises most significantly. The development and parameterization of this model proved more challenging than expected. The baseline involves a large pre-existing suite of policy incentives and mandates, for which implicit values must be calculated. Incorporating realistic fuel economy strategies required calibrating both technological and size-based opportunities for fuel economy improvements. Trying to maintain an overall calibration strategy of relying on EIA data (projections generated from the much more complex NEMS model), while being consistent with other empirical evidence on innovation and renewable fuels, required significant innovations in terms of the model and solution strategies. The results emphasize the inefficiency of current federal renewable fuel standards and size-based fuel economy standards relative to direct taxes on carbon or gasoline. We find that the current mix of state and federal fuel taxes, fuel economy standards, and renewable fuel blending mandates leads to a 13% reduction in domestic carbon emissions from this sector relative to a no-policy baseline at an average private welfare cost of $18/tCO2. These policies induce behavioral changes that are highly cost-ineffective, however, as evidenced by a marginal cost of carbon abatement that varies widely across competing abatement options: $0/tCO2 to $736/tCO2 for options based on fuel switching (e.g., from gasoline to ethanol) and negative $45/tCO2 to positive $73/tCO2 for options based on conservation (i.e., driving fewer miles or improving fuel economy). Negative abatement costs for conservation arise in this setting due to consumer undervaluation of fuel economy and due to existing policies that implicitly subsidize ethanol well beyond the point where its marginal cost exceeds its energy value. In contrast, the optimal carbon policy — a carbon tax combined with corrective subsidies for cellulosic ethanol production and fuel economy improvements—can achieve the same 13% reduction in carbon emissions, but at an average private welfare gain of $15/tCO2 relative to no policy. Due to limited funds, during Fiscal Year 2016, EPA’s Office of Sustainable Communities did not fund any new cooperative agreements. For awards related to Sustainable Communities, program accomplishments involved supporting activities of current grant recipients: a Smart Growth Conference held in February 2016 and attended by 1,700 people from the public and private sector, a Smart Growth On-line Website and Policy Clearinghouse, technical assistance workshops in 14 communities addressing land use and code audits to promote more sustainable development, technical assistance workshops in 9 communities addressing complete streets and sustainable design workshops focused on opportunities to enhance community sustainability through state policy, and technical assistance workshops in 8 communities using the LEED for Neighborhood Development Standards as a tool for evaluating options to improve community environmental performance.
No new grants awarded for environmental economics, and prior funded grants closed by end of FY2016.
No new grants for Community Driven Environmental Protection were awarded in 2017.
No new grants awarded for environmental economics, and prior funded grants closed by end of FY2016.
No new grants for Community Driven Environmental Protection were awarded in 2018.
The program supported two conferences that provided forums for presenting advances in research in environmental, natural resource and energy economic and policy issues. These conferences brought together top researchers in the field of economics, as well as representatives of governmental regulatory and policy institutions. The conferences provided incentives for leading researchers to focus on policy-relevant research topics within environmental and energy economics and to communicate their findings in impactful ways. The conferences provided opportunities for academic researchers to communicate directly with members of the professional staff and researchers at government agencies and NGOs focused on environmental, natural resource and energy policy. The conferences also served to foster relationships with federal agency partners and encourage sharing research, promoting collaborations, and setting research agendas on priority issues, such as the areas of climate change and environmental justice. For additional information about this program and achievements associated with this assistance listing, please visit the following website: https://www.epa.gov/aboutepa/about-office-policy-op.
Single Audit Applies (2 CFR Part 200 Subpart F):
For additional information on single audit requirements for this program, review the current Compliance Supplement.
OMB is working with the U.S. Government Accountability Office (GAO) and agency offices of inspectors general to include links to relevant oversight reports. This section will be updated once this information is made available.
