January 25, 2022

Our Rapidly Transforming Energy Industry: How Economic Modeling Evaluates Environmental and Energy-related Policy Variables

Energy and environmental policies continue to make headlines in 2022, emphasizing our rapidly changing renewable energy productions and the anticipated impacts of the Infrastructure Investment and Jobs Act, bipartisan legislation passed by the Biden administration in 2021. Now, economic examinations of wind farms, greenhouse gas emissions analyses, and overall energy-related policy estimations are vital studies needed to determine the future of our economic vitality.

The global push for cleaner energy and improved air quality comes with new initiatives and the rearrangement of assets and funding. It also implies that the former and current energy sources are either about to enter or are in the midst of a flux period dictated by impending legislation and technology. For instance, by adopting the Global Warming Solutions Act in 2008, Connecticut set a goal of reducing greenhouse gas (GHG) emissions by 80 percent below 2001 levels by 2050. Implemented strategies included building envelope improvements, creating energy management systems improvements including high-efficiency thermal systems, and decarbonizing the electric grid with zero-carbon resources such as solar photovoltaics (PV), wind, hydro, biomass, and nuclear generation. Stanley McMillen, Ph.D., Visiting Assistant Professor of Economics and Consultant at the University of Connecticut, analyzed the effects of these strategies on the transportation, buildings, and electricity sectors in Connecticut. Dr. McMillen will be presenting this study via REMI webinar on Tuesday, February 1, from 2:00 – 3:00 pm (ET). If you would like to attend, please register by clicking here. To view Dr. McMillen’s full slide summary, please click here.

These growing national energy and environmental issues have solidified the importance of factoring in their policy impacts when considering the overall vitality of our economy for years to come. Thomas D. Peterson, President & CEO of the Center for Climate Strategies (CCS), conducted an analysis that underscores the strategic benefits of comprehensive approaches to managing greenhouse gas emissions. Mr. Peterson explores the economic effects of reducing household energy prices and greenhouses gases as referenced in the CCS study, “Economic Impacts of Comprehensive Climate and Energy Policy: National Climate Change Stakeholder Recommendations and U.S. Senate Proposals Would Advance Economy and Employment.” The study also explored the need for a national framework to support a balanced portfolio of actions and the importance of stakeholder involvement in policy development and management of the economy. You can access the complete study by clicking here. If you are interested in hearing Mr. Peterson discuss this study in detail, please register for our upcoming guest webinar by clicking here.

The utility industry’s transformation has also presented significant implications for regional development. Policy leaders are attempting to fully understand how communities will be affected as innovation and evolution occur in energy markets, given the potential for nationwide impacts. Patrick Kelly, Director of Economic Development at FirstEnergy, and Jim Robey, Ph.D., Principal at Robey Analytics, LLC., are seeking to explain how economic impact analysis models equip the utility industry. FirstEnergy’s strategic initiatives to build resilient utility systems, creating 21st-century jobs, and develop clean energy sources, and Robey Analytics’ compilation of studies emphasizing how larger utility companies are approaching analytics using impact models are the focus of an upcoming discussion on Wednesday, February 16. This discussion will answer questions such as “How can economic modeling and similar produced analyses support and inform this rapidly changing industry?” For more information on speakers and registration, please visit our website here.

Changes in energy, the environment, and our knowledge of these topics are rapidly impacting the landscape of our planet and our ability to build resilient industries. As entire states try to gain control of their environmental footprint, a shift in industries occurs. It is now vital that we stay ahead of the curve with effective policies and practices informed by economic modeling.