The climate test: a tool to evaluate alignment of energy infrastructure decisions with climate goals

Michele L. Bustamante, Ann Alexander and Christina Swanson

Climate Policy, 2024, vol. 24, issue 5, 617-632

Abstract: Although rapid transition away from fossil fuels will be required to limit warming to any agreed upon level, long-lived fossil energy infrastructure buildout continues largely unabated. Many nations around the world have laws requiring regulators to meaningfully assess potential climate impacts when reviewing proposals for new fossil fuel infrastructure projects such as oil and gas extraction leases, major transmission pipelines, and power plants. However, reviewing agencies often report lack of appropriate tools to objectively assess the climate impacts of individual fossil fuel infrastructure projects, and to determine the significance of these impacts. Here we present a novel methodology to fill this critical gap by providing a science-based decision support tool, a ‘climate test’, for use in determining an infrastructure project’s carbon emissions significance. The climate test defines emissions significance quantitatively according to a project’s consistency with region-specific constraints and characteristics of climate mitigation pathways, considering both emissions and energy systems characteristics over the project’s lifespan. We showcase the tool here, using an example of a natural gas pipeline to explore how often and under what conditions the project would ‘pass’ the climate test with an emissions significance result of ≤1, which indicates alignment with a 1.5°C goal. For this project, less than 1.2% of 10,000 scenarios yielded significance values ≤1, suggesting a high likelihood that the project has a significant climate impact, a determination that would be robust to uncertainty for such a project. This emission-based metric represents a first step toward a broader framework to align project-level infrastructure decisions – including and beyond new fossil energy projects – with climate, as well as economic and societal, policy goals.This novel ‘climate test’ tool is suitable to support U.S. regulators in meeting their statutory requirements to assess the significance of climate impacts for fossil energy infrastructure projects on an individualized basis.While the tool was designed based on specific gaps identified in the U.S. system, it can readily be adapted for use in other non-U.S. regulatory contexts.Widespread implementation of such a climate test tool would help the US, and other nations that use it, to act consistently with their national and international climate commitments by aligning individual project-level decisions with pathways to limiting warming.By defining project significance in the context of both the emissions constraints and energy needs of a warming-limited world, this climate test tool provides decisionmakers with integrated and nuanced analytical information necessary to responsibly manage both energy and climate policy objectives.

Date: 2024
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DOI: 10.1080/14693062.2023.2239754

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