FirstEnergy: The Grinch Who Stole from Ratepayers

firstenergy grinch

Image courtesy of @darth, who is a freaking national treasure.

In this season of giving, FirstEnergy seems intent to give its customers the finger.

Based on Ohio law – SB221, which was passed nearly unanimously in 2008, to be exact – the state’s investor-owned utilities must provide a portion of their electricity from advanced energy sources. By 2025, when the state’s renewable portfolio standard is set to expire, the utilities are required to source at least one-quarter of their electricity from such sources; of this amount, at least half of this total must come from renewable energy sources, like solar and wind.

But recognizing the constraints of quickly ramping up green energy production in a state where it was largely nonexistent before 2009 – along with a wise desire to take advantage of economies of scale – SB221 allowed utilities to buy renewable energy from other providers or to purchase renewable energy credits (RECs) from those providers when sufficient energy is not available. These RECs are an essential component of any renewable energy program.

Unfortunately, FirstEnergy, which rejects the value of energy efficiency/renewable energy and continues to fight aggressively against the mandates, has consistently failed to meet its obligations under the law. Environment Ohio, which grades each of the state’s four major utilities based on how well they abide by the mandates, gave FirstEnergy an F in year 1 and a D- in year 2. FE has come into compliance with the mandates since this point.

But as FE continued to fight the law with one hand and tread water with the other, it decided to purchase a number of RECs to meet its renewable energy mandates. In doing so, however, it drastically manipulated the REC market, allowing it to extract millions of dollars in excessive charges from ratepayers. As Plain Dealer energy reporter John Funk writes:

In a kind of reverse Robin Hood maneuver, FirstEnergy managed to pay the highest known rates for the credits when it bought them in those early years, including some from its affiliate, FirstEnergy Solutions…

[A] management audit by Exeter Associates of Columbia, Md.,found that FES paid up to 15 times more for credits than the Illuminating Co., Ohio Edison and Toledo Edison would have spent had they just paid the fines for not buying the credits.

In fact, the cost of those renewable energy credits was higher than RECs bought anywhere in the country, before or since, the audit noted.

A consultant to the Public Utilities Commission of Ohio (PUCO) calculated that FE’s actions allowed it overcharge customers by at least $100 million. NRDC looked at the numbers and came up with $130 million in overcharges. In August, the PUCO called out FE’s malfeasance and required it to return $43.4 million to ratepayers for its manipulation of the REC market.

But rather than acknowledge its wrong doing, FE has decided it won’t go down without a fight. Instead of returning the money back to its customers, the company has filed an appeal of the PUCO’s ruling to the Ohio Supreme Court. It apparently thinks that, as long as you have the money, two wrongs make a right.

So as we approach Christmas, let’s hear it for FirstEnergy, Ohio’s largest private utility and The Grinch Who Stole $100 Million from Ratepayers.

Please pardon my awful parody of Dr. Seuss:

While all Ohioans seemed to like renewable energy a lot, FirstEnergy, who lives above downtown Akron, does not.

The company hated green energy, everything in the sector. It had no good reasons, just some straw men and specters. It could be that it was concerned about costs. It could be, perhaps, that it feared about jobs being lost. But I think that the most like reason for its tantrums and fits may have been that the policy didn’t fit its ideological interests.

Happy holidays.

Welcome to tropical Cleveland, part 3: Climate change in your backyard

If I’ve told you once, I’ve told you exactly three times that climate change is going to be a bigger deal for Cleveland than people seem to realize.

Well, thanks to the indispensable US Geological Survey, I now have even more data to back me up. With the help of NASA, the USGS has taken the data on temperature and precipitation from the various climate models used by the IPCC and broken it down to the county level. Thanks to this awesome new tool with a terrible name (NEX-DCP30), you can now find out what the mean temperature projections for April are in Charles Mix County in South Dakota from 2025-2049, if that’s your sort of thing.

NEX-DCP30 provides breakdowns for each county in the continental United States for three time periods (2025-2049, 2050-2074, and 2074-2099), compared to the averages from 1980-2004. You can even toggle between RCP (Representative Concentration Pathway; e.g. projected emissions scenario) 4.5, a mid-range scenario, or RCP 8.5, which is a worst-case scenario. Christmas came early for climate nerds like me.

Naturally I decided to check in on the projections for the state of Ohio and for Cuyahoga County. Here’s what I found.

Using the mid-range warming scenario (RCP 4.5), Ohio’s mean temperature will increase by 2.5°C (4.5°F) during the period 2050-2074. This puts it right in the middle of the pack – it’s average temperature change is tied for 16th of the contiguous 48 states, making it higher than 23 states, tied with 8, and lower than 15.

temperature increases mid-range emissions

Average temperature increases for the lower 48 states in 2050-2074, under RCP 4.5 (courtesy of USGS).

In the same scenario, Cuyahoga County warms at by 2.6°C (4.7°F), slightly more than the state as a whole. As you can see below, the state appears split along a diagonal line, that starts in Columbiana County and ends by cutting Hamilton in half. Those counties above the line warm at a higher rate than those below it. Overall, in the RCP 4.5 model, Ohio and Cuyahoga County warm at roughly the same rate as the country as a whole.

temperature increases ohio mid-range scenario

Average temperature increases for the 88 counties in Ohio in 2050-2074, under RCP 4.5 (courtesy of USGS).

These rates change under the RCP 8.5 model. Under this scenario, Ohio warms by an alarming 3.6°C (6.5°F) by 2050-2074, a rate of change above the national average. As the map below suggests, those states that are farthest North and/or are located in the interior of the country will experience the most warming. Ohio experiences warming greater than 26 states, the same as 4 states, and less than 18 states. While Alaska will likely see the greatest warming of all 50 states, Minnesota’s 4.0°C is the most among the lower 48.

temperature increases ohio worst case scenario in 2050-2074

Average temperature increases for Ohio’s counties in 2050-2074, under RCP 8.5 (courtesy of USGS).

Once again, under this scenario, Cuyahoga County outpaces the state as a whole. The county will see temperatures increase by 3.7°C (6.7°F). This number exceeds most of the state, though the greatest warming will take place in Northwest Ohio and in the counties along the Indiana border.

temperature increases worst case scenario 2050-2074

Average temperature increases for the lower 48 states in 2050-2074, under RCP 8.5 (courtesy of USGS).

Alarmingly, if you fast forward to the end of the century (2074-2099) using RCP 8.5, the picture becomes even bleaker. Ohio warms by a terrifying 5.3°C (9.5°F), while Cuyahoga County once again comes in higher at 5.4°C (9.72°F). The average July temperature in Ohio and Cuyahoga County would increase by 6.4°C, reaching 96.08°F and 93.74°F, respectively. Mid- to upper-90s would become the rule, not the exception.

change in monthly temperatures in worst case scenario

Mean monthly temperatures for the State of Ohio (left) and Cuyahoga County (right) in 2075-2099, under RCP 8.5 (courtesy of USGS)

Cleveland annual mean temperature currently stands at roughly 10°C (50°F), while the annual average maximum temperature of 15°C (59°F). Under a high-emissions scenario, Cleveland’s climate could became much closer to that of Oklahoma City than what we are used to experiencing now.

The current rate of climatic change – which The Geological Society now says is unprecedented in the history of the planet (PDF) – is far beyond what we are able to absorb. For a region that is not acclimatized to extreme heat and is highly vulnerable to heat-related mortality, climate change poses an immense public health risk to Northeast Ohio.

So, once again, I caution you that, while things may not become as bad in Cleveland as they may elsewhere, they’re still going to be crappy. To paraphrase The Lorax, unless we all start caring a whole awful lot, nothing’s going to get better. It’s not.

The resource curse is coming to town

The discovery of oil deposits has, in many ways, been a curse for Nigeria's Ogoniland province, which has been plagued by environmental degradation and civil conflict (courtesy of Reuters).

The discovery of oil deposits has, in many ways, been a curse for Nigeria’s Ogoniland region, which has been plagued by environmental degradation and civil conflict (courtesy of Reuters).

Oil and natural gas from shale will be a “game changer” for Ohio, one that “has given fresh life to energy development,” according to Jack Gerard, the president & CEO of the American Petroleum Institute. The Plain Dealer has matter-of-factly stated that the boom in hydraulic fracturing, or fracking, in states like Ohio is “expected to create thousands of jobs and add billions to the state’s economy.”

That expanded oil and gas production will generate myriad economic benefits is largely taken for granted in most circles. For the most part, opponents of fracking for oil and gas have focused almost exclusively on the potential environmental consequences, such as water and air pollution, radioactivity, and an increased risk of earthquakes.

But a new study from Headwaters Economics has thrown some cold water on this conventional wisdom. What if, instead of bringing socioeconomic development to energy-rich areas, oil and gas production could actually make these communities worse off?

The natural resource curse

This concept, the so-called “natural resource curse,” has long been studied in international relations and environmental circles. Several studies have demonstrated a strong connection between natural resource abundance and stymied economic growth on an international level, particularly in the developing world. In a 1995 paper, Sachs & Warner concluded that reliance on natural resource dependence can decrease economic growth by around 1% per year.

natural resource dependence and growth rates

This figure, from Sachs & Warner (2001), charts the relationship between natural resource dependence and economic growth rates from 1970-1989. As it suggests, those countries whose economies depend heavily on natural resource exports had lower real growth rates during this period, and vice versa.

There are several reasons (PDF) why natural resource wealth and dependence could harm socioeconomic development. I will outline three below.

First, a boom in natural resource extraction can increase price levels throughout the economy (PDF), raising a country’s exchange rate. As a result, resource wealthy states tend to have higher costs for export goods, reducing their competitiveness on global markets.

Secondly, higher real wages can create an incentive for individuals to forgo employment in other areas to pursue opportunities in the extractives industries. This reliance upon extractives can crowd out investment in manufacturing, limiting the ability of the industry to become more efficient over time. These outcomes can harm innovation and entrepreneurship (PDF), which may create long-lasting ramifications for the economy.

Thirdly, resource-dependent countries are highly susceptible to rent-seeking behavior and the pathologies that can come along with it, such as political violence, up to and including civil conflict. As de Soysa and Binningsbø (paywall) put it:

Resource rents apparently create factional political states, where rent capture allows politicians to survive by dispensing rents, rather than making hard choices about reform. Political survival dictates profligacy and waste, rather than providing public goods.

Rather than investing in important public goods, leaders of resource-rich states can simply make direct payments to important elites or buy off potential challengers. Resource revenues also tend to accrue to state, rather than staying in source communities. As a result, while some actors will benefit from extraction, the communities on the ground tend to suffer the effects without reaping the rewards.

The lure or resource rents can also drive groups to try to capture control of the state. As a result, a plethora of studies have shown that states dependent on natural resources experience higher rates of internal political violence (paywall) and a greater risk of experiencing civil war.

six western states oil and gas income levels

The study explores the effects of oil and gas development on socioeconomic development in six states from 1980-2011 (courtesy of Headwaters Economics).

The resource curse comes to the United States

But while the negative consequences of resource dependence are well-known for the developing world, the same cannot be said for the Untied States. In order to investigate the long-term impacts of using oil & gas extraction as an economic development policy, Headwaters analyzed the effects of an early 1980s oil boom in six Western states: Colorado, Montana, New Mexico, North Dakota, Utah, and Wyoming. The study explored the long-term impacts of the boom on social and economic development from 1980-2011, analyzing data from 207 counties in the states.

While many observers consider the oil and gas boom to be a positive development in the West – the curren oil boom in the Bakken shale has helped lower North Dakota’s unemployment rate to just over 3% – Headwaters’ findings challenge this perception. Rather than contributed to sustained, positive outcomes, these counties actually experienced many of the same consequences of the resource curse that I outlined earlier.

First, the authors found that the counties most dependent on oil and gas extraction actually had lower levels of per capita income during this period. These counties saw per capita income levels decrease by $7,000, on average. One reason for this outcome may be that boom towns typically see the cost of living skyrocket in the short-term, which can raise prices and offset income gains. In Fort McMurray, the heart of Alberta’s tar sands industry, for instance, the population has tripled in recent decades. The formerly rural area, which is now bursting at the seams, has the highest housing prices in Alberta, and is deficient in 70 of 72 quality-of-life indicators.

Secondly, the study suggests that the resource sector can have a crowding out effect. The lure of the extractives industries, which have lower education requirements, tends to lower the percentage of adults with a college education. Those counties that were most heavily invested in oil and gas had, on average, 2.5% fewer college-educated adults than the rest of the sample counties. And the environmental consequences of resource extraction are well known.

Thirdly, the authors note that “the longer a county has been specialized on oil and gas, the higher the county’s crime rate.” This outcome would seem to reflect the fact that natural resource dependence leads to rent-seeking behavior and increased levels of violence. Most oil and gas boom towns are chock full of young men. The flood of young men into the Bakken shale (where they outnumber women by nearly 2-1 in some areas) has driven up crime rates by as much as one-third in Montana and North Dakota. Many women have reported being sexual harassed and feeling increasingly threatened due to the changing demographics.

The study fails to examine the environmental and public health impacts of resource dependence. However, other studies have shown that coal-mining communities in Appalachia have significantly higher adult and child mortality rates (PDF) than other communities in the region.

While the authors of the Headwaters study are careful to point out its limitations – causality cannot be proven and the results are unique to the sample areas – it does provide a cautionary tale to officials who are hoping to cash in on their region’s natural resource endowments.

Oil and gas extraction can be a way to jump start a stagnant economy in the short-term, as the study suggests. But states need to ensure that they are taxing resource extraction appropriately and investing these tax revenues in public goods for the communities on the front lines. Though bending over backwards for the oil and gas industries – as Ohio’s Republican lawmakers appear all too eager to do – may benefit some well-connected individuals, many more in these communities will suffer in both the short- and long-term.

Oil and gas deposits can be important endowments, but they don’t constitute a real development strategy. States need to think twice before putting all their eggs in one basket.

Actually, cyclists do pay road taxes

cyclists on detroit superior bridge

I’ve written before about how the Cleveland area is generally pretty car crazy. I would argue that most people see driving as the status quo; any effort to challenge that by promoting alternative transportation modes is seen as an affront to the system and highly suspicious. If you don’t believe me, read the comments on any article at cleveland.com about bikes.

cyclists on detroit superior bridge

Cyclists ride across the Detroit-Superior Bridge during Cleveland Critical Mass in June 2013 (courtesy of Ivan Grieve & Cleveland Critical Mass.)

So as the city has taken some (albeit mediocre) efforts to become more bike-friendly and as cycling rates have increased – the 280% increase over the last decade was the highest for any metro area – drivers have gotten a bit testy. I have been honked at repeatedly, sworn at, buzzed by vehicles, had anti-gay slurs shouted at me, you name it. Fortunately no one has actually caused me any physical harm to this point (knock on wood). I know this is hardly unique to Cleveland – it certainly happened when I lived in DC as well – but it’s definitely par for the course here.

Enter the Northeast Ohio Sustainable Communities Consortium (NEOSCC). The organization was created in 2011 as a 12-county effort to foster a more collaborative, sustainable approach to regional development. It received a $4.25 million grant from the federal government to support the effort.

Now whenever government agencies begin talking about regionalism, sustainable development, and pedestrian-friendly infrastructure, the tin foil hat brigade that sees sprawl-based development and car-centric infrastructure as their God-given rights start to freak out. And so they start talking about socialism, Agenda 21, and how the UN’s black helicopters are just over the horizon. See Beverly Goldstein, the chairwoman of the Youth Outreach Committee of the Cuyahoga Valley Republicans:

NEOSCC intends to subject citizens of Northeast Ohio to 1) the elimination of individual rights, private property and local sovereignty through the blurring of political boundaries in order to redistribute local resources and revenues for the general use of the region as a whole…

These types of hyperbolic, patently absurd rants are nothing new and have occurred throughout the country at various times. But it’s worthwhile to note that they continue to plague the NEOSCC effort.

In August, the group released four potential scenarios of what Northeast Ohio could look like in 2040, based upon the economic growth and development models we follow. The “Trend” scenario – the status quo to which people like Ms. Goldstein so fervently cling – would ensure that the region loses 18 houses a day to abandonment, sees 3,000 miles of new roads built to support the ongoing sprawl, swallows an additional 31,000 acres of agricultural land, and has its expenditures outpace revenues by 33%. In all, a cheery proposition.

After publishing these scenarios, NEOSCC held a series of public workshops throughout the region to garner input on the way forward. Now, let me just say that workshop attendees (including me) were far from representative of the population. They were overwhelmingly white (88%), highly educated (three-quarters had at least a Bachelor’s degree), and affluent (nearly half had incomes above $75,000).

On the whole, most of the respondents seemed eager to work towards a more sustainable region. Many were concerned that, while the alternative scenarios seemed like good ideas, they would be difficult to achieve. And then there were the handful of people from the Agenda 21 set. My favorite response to the questions NEOSCC posed would have to be this answer to “What does your ideal community look like”:

1) Hands off my personal freedom, 2) Mix as the market allows, 3) Keep your bike out of my way. You don’t pay road taxes.

Ah yes, that argument against bikes. We should stay off the road because we don’t pay gas taxes or tolls. Of course, it’s completely untrue. The federal gas tax has not been increased since 1993; since this point, inflation and improved gas mileage have continued to chip away at its value. Adjusted for inflation, the current gas tax is at its lowest level since the mid-1980s and risks falling below the value when it was introduced in 1932.

nominal & inflation-adjusted gas tax

The value of the federal gas tax, in nominal and inflation-adjusted dollars, from 1932-2011. As you can see, while the nominal value has jumped, the inflation-adjusted value continues to drop (courtesy of Greater Greater Washington).

Moreover, user fees do not, in fact, cover the cost of road construction and maintenance. According to a report from the Tax Foundation, “user taxes and fees do not cover the costs of road spending in any state.”

In Ohio, which ranks 11th, user fees account for all of 58.7% of road costs. Alaska, which unsurprisingly is last, sees user fees make up just 19.9% of all road spending. The rest of this shortfall is covered by general funds, which – you guessed it – are borne by all taxpayers, including cyclists and those who don’t drive at all.

In effect, non-drivers and occasional drivers are subsidizing the cost of road maintenance for people who live in their cars. When you take into account the respective amount of space taken up by cars and bikes, along with the respective wear they put on roads, this subsidy becomes even larger.

This graphic shows the amount of space occupied by 60 people in cars, a bus, and on bikes. As you can see, cyclists and people utilizing transit occupy far less space on the roads (courtesy of the Press office of the City of Münster, Germany).

This graphic shows the amount of space occupied by 60 people in cars, a bus, and on bikes. As you can see, cyclists and people utilizing transit occupy far less space on the roads (courtesy of the Press office of the City of Münster, Germany).

Blogger Elly Blue has noted the discrepancy for people in Seattle.

The cost of road maintenance is averaged at 5.6 cents per mile per motor vehicle. Add the so-called external costs of parking (10 cents), crashes (8 cents), congestion (4 cents), and land costs and that’s another 28 cents per mile! Meanwhile, for slower, lighter, smaller bicycles, the externalities add up to one meager cent per mile.

The average driver travels 10,000 miles in town each year and contributes $324 in taxes and direct fees. The cost to the public, including direct costs and externalities, is a whopping $3,360.

On the opposite pole, someone who exclusively bikes may go 3,000 miles in a year, contribute $300 annually in taxes, and costs the public only $36, making for a profit of $264.

So the next time that you roll down your window and yell at a cyclist to get off your road, dear driver, please keep two things in mind.

  1. In many areas (e.g. downtown Cleveland), you are likely ordering that cyclist to violate the law by riding on the sidewalk, which may endanger pedestrians.
  2. You are essentially telling that cyclist that s/he cannot ride on the road that s/he is helping to pay for. In essence, you are trying to force that cyclist to continue subsidizing your driving habits, which is a form of transportation socialism. And we all know we can’t have that.

Welcome to tropical Cleveland, part 2: The social & political roots of heat-related mortality

children at water park
children at water park

Children attempt to escape from the heat during July 2012 in Louisville (courtesy of the AP).

In my last post, I explored some recent research that outlined projections of climate change in Cleveland and its potential to drive an increase in heat waves. But climate/weather is just one factor behind heat-related mortality; socioeconomic and political issues are, perhaps, just as, if not more important, determinants.

Just as Cleveland’s historic climate and the associated lack of acclimatization to heat waves will likely leave the region more vulnerable to extreme heat, so too do the region’s various socioeconomic and political pathologies leave it ripe for a public health crisis. (As I write this, it is 97° outside, and I just got an extreme heat advisory from the National Weather Service. On September 10.)

Last month, the Graham Sustainability Institute at the University of Michigan released a new mapping tool that explores the social and economic factors underlying climate change vulnerability in the Great Lakes region. This great new tool allows you to zero in on any county around the Great Lakes to the extent to which its economy, infrastructure, and vulnerable citizens are likely to suffer in a greenhouse world. Unsurprisingly, Cuyahoga County (of which Cleveland is the seat) does not fare particularly well.

The Greater Cleveland area possesses a number of characteristics which, if they do not change, may create a perfect storm for heat-related mortality in a warmer world. I will explore four of these – the built environment, poverty, changing demographics, and racial segregation.

The Built Environment

Northeast Ohio has suffered from decades of sprawl and uncoordinated development patterns, leading to waves of suburbanization followed by exurbanization. In 1948, Cuyahoga County’s population stood at 1,389,532; just 26% of land in the county was developed at the time. Yet, by 2002, although the county’s population had grown by a mere .32% to 1,393,978, sprawl ensured that roughly 95% of the county’s land area had been developed.

cuyahoga county land use in 1948 & 2002

Changes in land use within Cuyahoga County from 1948 (left) to 2002 (right). Red shading indicates developed land, while the beige indicates land that is still undeveloped. The maps clearly demonstrate the waves of suburbanization in the county over the last six decades (courtesy of the Cuyahoga County Planning Commission).

According to data from the Cuyahoga County Planning Commission, 33.6% of the county (and 56.2% of Cleveland) is covered by impervious surfaces. These surfaces (e.g. asphalt) conduct heat, contributing to the urban heat island effect. The EPA notes that urban areas can experience annual mean temperatures of 1.8–5.4°F higher than their surroundings, while this difference can reach an astonishing 22° during the evening.

Cuyahoga County’s sprawl-based development structure presents a number of other challenges, as well. As people have spread out throughout the region, we have become increasingly car-dependent. Car use has come to dominate our policy discussions – transportation commentators like to note Ohio stands for Only Highways In Ohio” – despite its myriad of side effects.

According to the Northeast Ohio Sustainable Communities Consortium (NEOSCC), 86% of commuters in Northeast Ohio report driving alone to work. This car culture contributes to the development of chronic disease, which I discuss below. Additionally, combined with Cleveland’s industrial base and Ohio’s coal dependence, it significantly reduces air quality in the region. In its 2012 “State of the Air” report, the American Lung Association gave Cuyahoga County an F for ozone pollution and a failing grade for annual particle pollution.

Climate change will likely exacerbate this issue further. Last year, largely due to the abnormally warm summer, Northeast Ohio experienced 28 ozone action days – double the number from 2011. We know that high air temperatures increase concentrations of ground-level ozone, which can cause respiratory distress for vulnerable groups. Accordingly, Bell and colleagues have projected that ozone-related deaths will increase 0.11-0.27% in the eastern US by 2050. This issue adds to the risk of heat-related mortality in Greater Cleveland.

Changing Demographics

Like much of the Rust Belt, Cleveland has been shrinking and aging. From its peak in the 1950s, Cleveland’s population has plummeted. The city had 914,808 in 1950; by the 2010 census, the number had fallen to 396,815 – a 56.6% decrease in six decades.

This precipitous decrease in population has left large swaths of Cleveland abandoned and, increasingly hollowed out. Even before the Great Recession and the housing crisis that precipitated it began in 2007-2008, Cleveland had foreclosure rates on par with those in the Great Depression. From 2005-2009, Cuyahoga County average roughly 85,000 foreclosure filings per year, and parts of Cleveland saw nearly half of their homes enter foreclosure. The destruction of neighborhoods undermines social capital, a key coping mechanism for surviving extreme events.

foreclosures in Cuyahoga County 1995-2012

The number of annual foreclosure filings in Cuyahoga County from 1995-2012. As the chart indicates, the number of filings spiked in 2005, two years before the housing crisis began (courtesy of Policy Matters Ohio).

As people have fled the region, particularly young people and people of means, those who remain are increasingly poor and disconnected. Accordingly, the region’s population has aged significantly. Nationally, approximately 13% of the total population is age 65 or older. In Ohio, the number is 14.3%, while it sits at 15.8% in Cuyahoga County.

Older persons are far more vulnerable to the deleterious effects of extreme heat, particularly those suffering from chronic illnesses, like diabetes, and those living alone. Unfortunately, 20.6% of people 65 years and over (PDF) in the county suffer from diabetes; this number climbs to over 35% in Cleveland. Additionally, more than one-third of older persons in the county live alone, adding further to their vulnerability.

Poverty

Given the region’s challenges, it’s perhaps unsurprising that Greater Cleveland struggles with high levels of poverty. Cleveland was named the poorest city in the country in 2004; it has remained at or near the top since that point. Roughly one-third (32.7%) of Cleveland’s residents live below the poverty level. Even worse, more than half of Cleveland’s children are growing up in poverty.

map of poverty rates in Northeast Ohio

Poverty rates and changes in poverty rates within Northeast Ohio from 2005-2009 (courtesy of Rust Wire)

Much of this poverty is concentrated in highly depressed portions of the inner city and, increasingly, in the inner-ring suburbs. It creates regions where public health suffers dramatically; the Plain Dealer recently reported that portions of Cleveland had infant mortality rates higher than most of the developing world, including Bangladesh, Haiti, Pakistan, and Rwanda.

As one would expect, poor people suffer disproportionately in disasters. Roughly 95% of disaster deaths occur in the developing world, and the same principle applies within the developed world (see: Hurricane Katrina).

Racial Segregation

Lastly, Cleveland suffers from high levels of racial segregation. It was the 8th most segregated city in the US in 2011, which likely does not surprise Cleveland natives. For decades, the Cuyahoga River has been seen as something akin to the Berlin Wall – African-Americans stay to the East of the river, while whites and Hispanics live on the West Side.

Recently, the Atlantic Cities posted a map that showed the location of every person in the country (color-coded by race), based on Census data. The close-up shot of Cleveland is below. It quite clearly illustrates the racial divide within the city: African-Americans (green dots) to the east, whites (blue dots) and Hispanics (red dots) to the West. If you look closely, you can even see the small cluster of red dots that makes up Cleveland’s Asia Town.

map of Cleveland showing racial divide

The map, a closeup from the Racial Dot Map, shows the racial divide in the city of Cleveland.

Now, such spatial segregation creates a host of problems, but it also has a connection to heat-related mortality. A study published in Environmental Health Perspectives suggests that persons of color are far more likely to live in areas at risk of suffering extreme heat waves than whites. The study found that a high risk of suffering from the urban heat island effect is more closely correlated with race than class. Accordingly, severe spatial segregation, as we find in Cleveland, will ensure that poor minority neighborhoods have yet another risk factor to account for in a greenhouse world.

Taken together, Cleveland’s combination of heavy, sprawl-based development; an aging, sickly population; high rates of concentrated poverty; and racial segregation may create a perfect storm for heat-related mortality in the coming decades. The fact that sea level rise isn’t going to drown us, and it snows 6 months a year doesn’t mean we can get complacent as the climate changes. Like I said in my last post, just because it won’t suck as much as Bangladesh doesn’t mean it won’t still suck here.

Now that I’ve thoroughly depressed everyone, I will use my next post to look at some of the things Cleveland can do to mitigate the threat of heat-related mortality, including some of the initiatives the region is already undertaking.

PD editorial on Obama’s climate plan is lazy, wrong & shortsighted

President Obama wipes his brow while delivering his climate speech at Georgetown University on June 25 (courtesy of The Atlantic Wire).

President Obama wipes his brow while delivering his climate speech at Georgetown University on June 25 (courtesy of The Atlantic Wire).

Last Sunday (June 30), the editorial board of The Plain Dealer published an editorial titled “Don’t bypass Congress on climate-change policy,” which criticized President Obama’s climate policy speech at Georgetown on June 25. In the piece, the board argued that the President is acting inappropriately by taking executive action to tackle the US’s greenhouse gas emissions through the Environmental Protection Agency. They note that the proposed regulations on GHG emissions from existing coal-fired power plants would “drive many of them out of business.” They continued:

Such plant closures would disproportionately hurt coal-dependent states such as Ohio. It is unfair to expect one region or small group of states to shoulder the chief economic impacts of a radical policy shift without subsidies or offsets.

An extreme U.S. policy aimed at divesting the nation from coal-fired energy should not be decided by the White House alone.

Unfortunately for the PD editorial board (and the public in Northeast Ohio it’s supposed to inform), this argument is a house of cards that one can easily dissect. So allow me to do so.

First, the board refers to the proposal as one of the “mandates that need no congressional approval” of which Americans must be “wary.” Nowhere in the piece does the board mention the fact that in Massachusetts et al. v. EPA (2007, PDF) the US Supreme Court ordered the EPA to determine if carbon dioxide constitutes a danger to public health in the country, the so-called “endangerment finding”. Justice Stevens, writing for the majority, noted that:

Because greenhouse gases fit well within the [Clean Air] Act’s capacious definition of “air pollutant,” EPA has statutory authority to regulate emission of such gases…

On December 7, 2009, the EPA issued the results of its endangerment finding, noting that

the current and projected concentrations of the six key well-mixed greenhouse gases…in the atmosphere threaten the public health and welfare of current and future generations.

Yet, despite this judicial ruling that EPA regulate GHGs, the editorial board makes no reference to the jurisprudence or the endangerment finding. It treats the President’s actions as if they were capricious and unexpected, rather than mandated by the highest court of the land.

Bipartisanship & consensus are to the PD editorial board as the ring was to Gollum (courtesy of Wikicommons).

Bipartisanship & consensus are to the PD editorial board as the ring was to Gollum (courtesy of Wikimedia Commons).

Secondly, the editorial board criticized the President for not working towards the consensus it reveres so highly. “Consensus” and “bipartisanship” are the buzzwords of the day for the Very Serious Persons who sit on editorial boards around the country. Yes, if only President Obama could reach out to Congressional Republicans and bring them to the table on climate action.

Of course, this belief completely belies reality. The modern Republican Party is the only opposition party in the world that steadfastly denies climate science. Moreover, the party remains completely obsequious to the fossil fuel industry. According to a recent study from the Investigative Reporting Workshop at American University, 411 elected officials around the country have signed a pledge to the Koch brothers-funded Americans for Prosperity promising to avoid taking action on climate change.

Furthermore, while VSPs at the PD and The Washington Post continue to write ballads about their fantasy carbon tax, recent evidence suggests that the EPA route may be the better alternative. A report from Resources for the Future suggests that, depending on the details, EPA regulation would likely be more effective at reducing GHG emissions than a carbon tax. This is particularly true, given the carbon tax that would likely come out of the current Congress – none.

Thirdly, the PD editorial board asserts, without providing any evidence, that the President’s climate plan will necessitate “sweeping economic sacrifice” and will change the “lifestyles and energy sources” of Ohioans.  Once again, the board refused to let fact get in the way of a [not so] good argument.

For decades, industry shills and their supporters have cried out against EPA regulations, claiming they would destroy the American economy. Yet, in case after case, the benefits of these regulations have far exceeded estimates, while the costs have been vastly lower than projected. The Edison Electric Institute claimed (PDF) that the 1990 Clean Air Act (CAA) amendments would carry $4-5 billion in annual compliance costs. The actual annual cost? $836 million. They were only off by 81.4%. According to a 2010 study, the benefits of the CAA and the 1990 amendments outweighed the costs by a ratio of 32.1 to 1 ($23.42 trillion in benefits to $730 billion in costs).

The monetized costs and benefits of the Clean Air Act and its 1990 amendments. As the table shows, the benefits of the CAA have vastly outweighed its costs (courtesy of Small Business Majority).

The monetized costs and benefits of the Clean Air Act and its 1990 amendments. As the table shows, the benefits of the CAA have vastly outweighed its costs (courtesy of Small Business Majority).

A recent study from the Natural Resources Defense Council suggest that EPA regulations on GHG emissions will once again provide a significant net benefit. In December, NRDC put together a proposed set of regulations for EPA to implement. This plan would set state-by-state emissions reductions standards, allowing coal-dependent states like Ohio to make a more gradual shift to more renewable energy sources. According to their assessment, the plan would reduce GHG emissions by 26% by 2020; its benefits would be roughly 6 to 15 times greater (PDF) than its associated costs.

NRDC recently had a respected firm run an economic assessment of this plan (PDF). The firm, Synapse Energy Economics, found that, contrary to the warnings of the naysayers at the PD, this plan would create 210,000 jobs and reduce electric bills by $0.90 per month through 2020.

Graph from Synapse Energy Economic's report on the NRDC policy proposal. As the graph shows, Ohio is projected to gain the second most jobs from EPA action (courtesy of Synapse Energy Economics).

Graph from Synapse Energy Economic’s report on the NRDC policy proposal. As the graph shows, Ohio is projected to gain the second most jobs from EPA action (courtesy of Synapse Energy Economics).

Ohio, one of the 14 states included in the analysis, would particularly benefit. The state would gain an additional 12,000 jobs – second only to Florida – and households would pay $1.03 less per month for electricity. Moreover, these regulations would simply speed up the transition away from coal that the state is already making. Under SB 221, Ohio is already obligated (PDF) to improve its energy efficiency by 22.2% and get 12.5% of its energy from renewable energy sources. Rather than increasing prices or killing jobs, a study from Ohio State has concluded that the policy saved ratepayers $170 million on their electric bills from 2008-2012 and created 3,200 jobs in the state.

Lastly – and unsurprisingly, given Ohio’s fealty to the coal industry – the editorial fails to mention any of the serious consequences of the state’s dependence on coal. A myriad of studies shows that coal carries significant costs for public health and well-being. According to a 2011 research article (PDF),

the life cycle effects of coal and the waste stream generated are
costing the U.S. public a third to over one-half of a trillion dollars annually.

If we were to internalize these externalities, the authors estimate that the price of coal-fired electricity would double or triple, making it noncompetitive with renewables. The Clean Air Task Force has concluded (PDF) that coal plants are responsible for 13,200 premature deaths, 20,400 heart attacks, and 217,600 asthma attacks annually in the US. Given Ohio’s dependence on this filthy fuel, the state ranked 2nd in 2010 for in coal-related mortality risk, hospital admissions, and heart attacks. The Cleveland metro area ranked 8th for mortality. All in all, evidence suggests that, for every $1 in economic benefits from coal, it carries $2 in costs to the public.

Mortality per 100,000 people from coal-fired power plants. As the map illustrates, coal-dependent states and their neighbors, including Ohio, suffer substantially from its effects (courtesy of the Clean Air Task Force).

Mortality per 100,000 people from coal-fired power plants. As the map illustrates, coal-dependent states and their neighbors, including Ohio, suffer substantially from its effects (courtesy of the Clean Air Task Force).

The Plain Dealer‘s editorial is just the latest in a series of inaccurate claims that EPA regulations will doom the American economy. They have proven wrong, time and again, and the PD will almost certainly be wrong here. The editorial is inaccurate, shortsighted, and – to be frank – an extremely lazy argument. As President Obama said in his climate speech,

[T]he problem with all these tired excuses for inaction is that it suggests a fundamental lack of faith in American business and American ingenuity. These critics seem to think that when we ask our businesses to innovate and reduce pollution and lead, they can’t or they won’t do it. They’ll just kind of give up and quit. But in America, we know that’s not true.

The next time the PD wants to write about climate policy, I suggest the editorial board actually does its homework, rather than relying on a tired set of easily disproved talking points.

Bill Seitz has sure changed his tune on Ohio’s Advanced Energy Portfolio Standard

sb 221 energy efficiency benchmarks

On May 1, 2008, then-Governor Ted Strickland signed Substitute Senate Bill 221 (SB 221), making Ohio one of 29 states (plus DC) in the country to establish energy efficiency resource standards (EERS).

The bill mandates that the state’s investor-owned utilities (IOUs) reduce their energy consumption by 22.2% by 2025. This mandate is broken down into yearly increments – each utility is supposed to meet each annual goal on the path to the overall reduction. For 2013, IOUs must reduce the annual electricity consumption of their customers by 0.9%.

Annual energy efficiency benchmarks for Ohio's investor-owned utilities, as specified by SB221 (courtesy of Mark Rabkin).

Annual energy efficiency benchmarks for Ohio’s investor-owned utilities, as specified by SB221 (courtesy of Mark Rabkin).

The bill also required IOUs to generate at least 25% of their electricity from advanced energy sources by 2026. Of these “advanced energy sources,” at least half must come from true renewable energy sources, like wind and geothermal (the bill includes a 0.5% carve out for solar energy). The other half can come from alternative sources, including “clean coal” (carbon capture and sequestration) and, as of Fall 2011, combined heat and power.

To date, the bill has largely delivered on its promises. According to Environment Ohio, the standards have saved enough energy (negawatts) to power 267,000 houses for a year. Additionally, the renewable portfolio standard (RPS) has sparked the installation of enough solar and wind generation capacity to power 95,000 houses for a year. Furthermore, the bill has contributed to the growth the renewable energy industry in Ohio, making good on the promises of job creation from its proponents. In 2011, Ohio ranked 5th in the country for green jobs, with 137,143. This industry – which had the highest growth rate of any sector in the US economy from 2010-2011 – has contributed significantly to Ohio’s economic recovery. Green jobs account for 2.8% of Ohio’s total workforce, higher the national average (2.6%).

Despite the success of this legislation, the bill has come under attack recently by a group of conservative lawmakers and industry interests. As a part of its broader effort to fight renewable energy at the state level, ALEC has placed SB 221 squarely in its sights. Two conservative state senators – Sen. Kris Jordan and Bill Seitz – are leading this charge. This effort is also the latest assault on energy efficiency and renewable energy in Ohio from FirstEnergy, the electric utility whose incompetence brought you the 2003 East Coast blackout.*

FirstEnergy's failure to properly maintain its Davis-Besse nuclear power plant in Northwest Ohio led to the development of a football-sized hole in the reactor lid. According to a review, the reactor could have been 60 days away from a meltdown (courtesy of The Plain Dealer).

FirstEnergy’s failure to properly maintain its Davis-Besse nuclear power plant in Northwest Ohio led to the development of a football-sized hole in the reactor lid. According to a review, the reactor could have been 60 days away from a meltdown (courtesy of The Plain Dealer).

Last week, Sen. Seitz told the Wall Street Journal that that mandates in SB 221 reminded him of “Joseph Stalin’s five-year plan.” Setting aside the absurdity of this statement, it represents a remarkable shift for Seitz on the bill in just 4 years (he initially proposed to scrap the EERS & RPS entirely in 2011; that bill never made it out of committee). Seitz has conveniently failed to mention that he voted for SB 221 in 2008. In fact, the bill sailed through the Ohio State Senate unanimously. And it passed through the Ohio House by a 93-1 vote. During the debate on the bill, Seitz never offered any opposition to it on the record, nor did he try to amend it in any substantial way.

This is an awfully big change from a legislator who tried to paint himself as a reasonable moderate during the contentious debate over SB 5. Yet, I guess it’s not surprising from a man who has served on the Board of Directors for ALEC and has received nearly $63,000  in campaign contributions since 2000 from industries ALEC represents, including oil and gas.

 

*FirstEnergy has been pushing to kill SB 221, even as it promotes its own rebate programs for energy efficiency made possible by the legislation. Hillariously, as I was writing this post, I received an email from the company promoting their new round of rebates for energy efficient appliances.