Law Commons^™

Virtual Energy, Joel B. Eisen, Felix Mormann, Heather E. Payne

Faculty Scholarship

From employment to education, many areas of our daily lives have gone virtual, including the virtual workplace and virtual classes. By comparison, the way we generate, deliver, and consume electricity is an anachronism. And the electric industry’s outdated business model and regulatory framework are failing. For the last century-and-a-half, we have relied on ever larger power plants to generate the electricity we consume, often hundreds of miles away from the point of production. But the outsized carbon footprint of these power plants and the need to transmit their output over long distances threaten the electric grid’s reliability, affordability, and long-term …

Grid Governance In The Energy-Trilemma Era: Remedying The Democracy Deficit, Daniel E. Walters, Andrew N. Kleit

Faculty Scholarship

Transforming the electric power grid is central to any viable scenario for addressing global climate change, but the process and politics of this transformation are complex. The desire to transform the grid creates an “energy trilemma” involving often conflicting desires for reliability, cost, and decarbonization; and, at least in the short run, it is difficult to avoid making tradeoffs between these different goals. It is somewhat shocking, then, that many crucial decisions about electric power service in the United States are made not by consumers or their utilities, nor by state public utilities commissions or federal regulators. Instead, for much …

Climate Choice Architecture, Felix Mormann

Faculty Scholarship

Personal choices drive global warming nearly as much as institutional decisions. Yet, policymakers overwhelmingly target large-scale industrial facilities for reductions in carbon emissions, with individual and household emissions a mere afterthought. Recent advances in behavioral economics, cognitive psychology, and related fields have produced a veritable behavior change revolution. Subtle changes to the choice environment, or nudges, have improved stake-holder decision-making in a wide range of contexts, from healthier food choices to better retirement planning. But the vast potential of choice architecture remains largely untapped for purposes of climate policy and action. This Article explores that untapped potential and makes the …

The Case Against Regional Transmission Monopolies, Kristen Van De Biezendos

Faculty Scholarship

Over the next decade, the United States will need to build significant regional transmission infrastructure to achieve the country’s goal of net-zero power by 2035. However, there is a significant barrier: the transmission system is almost entirely owned by private monopolies. As a result, the grid has grown not to serve the public interest but in accordance with the economic priorities of these monopolies, which are not incentivized to innovate, find efficiencies, or lower costs. Past attempts to encourage competitive bidding for regional transmission projects have been stymied by laws intended to protect the monopolies, including the right of first …

The Case For Corporate Climate Ratings: Nudging Financial Markets, Felix Mormann, Milica Mormann

Faculty Scholarship

Capital markets are cast as both villain and hero in the climate playbill. The trillions of dollars required to combat climate change leave ample room for heroics from the financial sector. For the time being, however, capital continues to flow readily toward fossil fuels and other carbon-intensive industries. Drawing on the results of an empirical study, this Article posits that ratings of corporate climate risk and governance can help overcome pervasive information asymmetries and nudge investors toward more climate-conscious investment choices with welfare-enhancing effects.

In the absence of a meaningful price on carbon, three private ordering initiatives are trying to …

Presidential Progress On Climate Change: Will The Courts Interfere With What Needs To Be Done To Save Our Planet?, Michael B. Gerrard

Faculty Scholarship

The Biden Administration is undertaking numerous actions to reduce greenhouse gas emissions and transition away from fossil fuels as part of the fight against climate change. Many of these actions are likely to be challenged in court. This paper describes the various legal theories that are likely to be used in these challenges, assesses their prospects of success given the current composition of the Supreme Court, and suggests ways to minimize the risks.

Clean Energy Equity, Felix Mormann

Faculty Scholarship

Solar, wind, and other clean, renewable sources of energy promise to mitigate climate change, enhance energy security, and foster economic growth. But many of the policies in place to promote clean energy today are marred by an uneven distribution of economic opportunities and associated financial burdens. Tax incentives for renewables cost American taxpayers billions of dollars every year, yet the tax code effectively precludes all but the largest banks and most profitable corporations from reaping the benefits of these tax breaks. Other policies, such as renewable portfolio standards that set minimum quota to create demand for renewable electricity require such …

Market Segmentation Vs. Subsidization: Clean Energy Credits And The Commerce Clause's Economic Wisdom, Felix Mormann

Faculty Scholarship

The dormant Commerce Clause has long been a thorn in the side of state policymakers. The latest battleground for the clash between federal courts and state legislatures is energy policy. In the absence of a decisive federal policy response to climate change, nearly thirty states have created a new type of securities—clean energy credits—to promote lowcarbon renewable and nuclear power. As more and more of these programs come under attack for alleged violations of the dormant Commerce Clause, this Article explores the constitutional constraints on clean energy credit policies. Careful analysis of recent and ongoing litigation reveals the need for …

Can Clean Energy Policy Promote Environmental, Economic, And Social Sustainability?, Felix Mormann

Faculty Scholarship

Two and a half decades of clean energy policymaking focused primarily on environmental and economic sustainability have yielded considerable environmental and economic benefits. Along the way, however, other policy considerations, such as the social sustainability of the transition to a cleaner, renewably fueled energy economy, have gone largely overlooked. As clean energy technologies continue to gain ever-greater traction in the United States and global energy economies, the social impacts of their enabling policies become more and more salient. Already, ratepayers, taxpayers, and other stakeholders who fear being left behind by the clean energy transition question the “fairness” of today’s renewable …

Voter Psychology And The Carbon Tax, Gary M. Lucas Jr

Faculty Scholarship

Economists across the political spectrum argue that a carbon tax is the most effective and economically efficient policy for addressing climate change. Voters, however, strongly oppose the carbon tax and instead favor “green” subsidies and command-and-control regulations. If carefully designed, these policies might complement a carbon tax, but by themselves, they will make global warming mitigation incredibly expensive and perhaps even infeasible. Moreover, if poorly designed, subsidies and regulations can be counterproductive.

This Article argues that the public dislikes the carbon tax because the tax possesses attributes that make it psychologically unappealing relative to other climate policy instruments. The Article …

Blood Biofuels, Nadia B. Ahmad

Faculty Scholarship

No abstract provided.

Beyond Tax Credits: Smarter Tax Policy For A Cleaner, More Democratic Energy Future, Felix Mormann

Faculty Scholarship

Solar, wind, and other renewable energy technologies have the potential to mitigate climate change, secure America’s energy independence, and create millions of green jobs. In the absence of a price on carbon emissions, however, these long-term benefits will not be realized without near-term policy support for renewables. This Article assesses the efficiency of federal tax incentives for renewables and proposes policy reform to more cost-effectively promote renewable energy through capital markets and crowdfunding.

Federal support for renewable energy projects today comes primarily in the form of tax incentives such as accelerated depreciation and, critically, tax credits. Empirical evidence reveals that …

A Step By Step Look At Uarg V. Epa: A New Layer Of Greenhouse Gas Regulation, Kevin O. Leske

Faculty Scholarship

No abstract provided.

Smarter Finance For Cleaner Energy: Open Up Master Limited Partnerships (Mlps) And Real Estate Investment Trusts (Reits) To Renewable Energy Investment, Felix Mormann, Dan Reicher

Faculty Scholarship

This policy proposal makes the case for opening Master Limited Partnerships (MLPs) and Real Estate Investment Trusts (REITs) — both well-established investment structures — to renewable energy investment. MLPs and, more recently, REITs have a proven track record for promoting oil, gas, and other traditional energy sources. When extended to renewable energy projects these tools will help promote growth, move renewables closer to subsidy independence, and vastly broaden the base of investors in America’s energy economy.

Enhancing The Investor Appeal Of Renewable Energy, Felix Mormann

Faculty Scholarship

This article introduces an investor-oriented framework for the evaluation of renewable energy policy, applies these newly developed criteria to a qualitative comparison of the primary policy instruments, and offers recommendations to enhance the investor appeal of renewable energy in the United States.

The multi-trillion dollar task of scaling renewable energy technologies to mitigate climate change, ensure energy security, and create green jobs is one of the most daunting challenges of the twenty-first century. It is, in fact, too great a challenge for either the public or private sector to shoulder alone. Rather, public policy must catalyze private investment in renewable …

Mobilizing Public Markets To Finance Renewable Energy Projects: Insights From Expert Stakeholders, Paul Schwabe, Michael Mendelsohn, Felix Mormann, Douglas J. Arent

Faculty Scholarship

Financing renewable energy projects in the United States can be a complex, time consuming, and expensive process. Currently, most equity investment in new renewable power production facilities is supported by tax credits and accelerated depreciation benefits, and is constrained by the pool of potential investors that can fully use these tax benefits and are willing to engage in complex financial structures. For debt financing, non-government lending to renewables has largely been provided by foreign banks that may be under future lending constraints due to economic and regulatory conditions.

To discuss these and other renewable energy financing challenges and to identify …

Requirements For A Renewables Revolution, Felix Mormann

Faculty Scholarship

This Article identifies and analyzes the obstacles presently barring the rise of renewables, evaluates the role of the current policy favorite emission pricing, and offers design recommendations for a comprehensive U.S. renewables policy.

Successful climate change mitigation requires a timely shift to renewable sources of energy, such as sunlight, wind or tides, to decarbonize today’s high-carbon electricity sector. But market pull alone is not strong enough. This Article discusses the most widely cited economic barriers and identifies and evaluates additional obstacles related to the electricity sector’s regulatory framework.

Emission pricing is largely considered the most efficient policy to drive the …

The End Of Energy: The Unmaking Of America's Environment, Security, And Independence – Chapters 11 And 12, Michael J. Graetz

Faculty Scholarship

With the permission of MIT Press, this document includes Chapters 11 and 12 from my 2011 book, The End of Energy: The Unmaking of America’s Environment, Security, and Independence. These two chapters discuss some of the history and merits of taxes, subsidies, and regulation (including cap and trade) as mechanisms to implement policies to curb greenhouse gases. In light of the renewed interest in and discussion of command and control regulations and carbon taxes, these chapters may be useful to readers who do not have the book. The bibliographic material relating to these chapters is contained in the book and …

Disclosure Of Hidden Energy Demands: A New Challenge For Nepa, Michael B. Gerrard

Faculty Scholarship

The specialization of the American economy obscures the identity of the ultimate users of energy, even from themselves. As a result consumers remain ignorant of the amount of energy which they use, and of the efficiency of that usage. Direct personal use of energy in the United States, such as electricity and natural gas for home heating, cooking and lighting, and gasoline for private automobiles, accounts for only about one-third of national energy use. Usage by industry and government to provide for the intermediate and final goods and services, for which we as individuals ultimately pay through our purchases and …