N.C. Senators Dan Clodfelter and Charlie Albertson and Representatives Lucy Allen, Pryor Gibson and Cullie Tarleton have introduced the Water Resources Policy Act in the 2009 General Assembly. Based on a report led by Bill Holman of the Nicholas Institute and Richard Whisnant of the University of North Carolina at Chapel Hill, the legislation would require the state to develop science-based hydrologic models for all 17 of its major river basins, to assure adequate water supplies are available to meet existing and projected needs. If a model determines that a river basin will be over-allocated, either the state or a regional river basin planning organization would be required to develop and adopt measures that reduce demand and increase supply. Large water users would also be required to obtain permits from the state. Holman, Whisnant and Amy Pickle, the Nicholas Institute's senior attorney for state policy, have worked with legislative staff to address stakeholder concerns and recommendations, and they continue to assist the General Assembly in the development of the policy. Holman and Pickle also have assisted N.C. Senator Josh Stein in the development of legislation to protect water quality in the Falls Lake/Upper Neuse River Basin, which provides drinking water to Raleigh and eastern Wake County. Falls Lake is listed by both the state and the U.S. EPA as impaired or polluted with nitrogen, phosphorus and sediment. Stein has introduced State Bill 1020, which would provide incentives to encourage local governments, developers and landowners who act early to reduce pollution in the river basin before the N.C. Environmental Management Commission adopts statewide measures. 

Tropical forests are disappearing rapidly - a process that accounts for 17 percent of global greenhouse gas emissions. Saving these forests represents a significant, timely and cost-effective opportunity for the international community to curb GHG emissions and combat climate change. But achieving consensus on how best to promote participation by developing nations in these efforts has been challenging, in part because of the scientific and economic intricacies of forest carbon allowance auctions, compliance obligations and other policy considerations. Two policy briefs from the Nicholas Institute, to be presented at United Nations climate meetings in Bonn, Germany, in early June, aim to correct this problem. Written in easy-to-understand language, the briefs provide a concise overview of the forest carbon policy proposals, and the economics of international forest carbon incentives, in straightforward, non-technical terms that policymakers, forest managers, investors and other stakeholders can readily comprehend. They examine multiple economic and environmental benefits of saving tropical forests, and review options the United States can take to engage in the effort. Executive summaries are now online; the full reports will be loaded concurrent to the Bonn meetings.

A new commentary by economists at Duke and Texas A&M universities concludes that a widely cited 2008 Doane Advisory Services report may give a skewed view of carbon prices' economic effects on U.S. agriculture. The Doane report predicted that a cap-and-trade program, or any federal policy that puts a price on greenhouse gases, would negatively affect farmers through higher energy costs. But Brian C. Murray of the Nicholas Institute, Bruce A. McCarl of Texas A&M, and Justin Baker of Duke's Center on Global Change, argue that "simply calculating the per-acre cost effects of higher energy costs only tells part of the story." A more accurate assessment must also include the impact of substitution of lower-cost inputs for higher-cost inputs, changes in crop production patterns, shifts in product supply and demand, and the resulting change in market prices. When these factors, along with the increase in demand for biofuels that would accompany a carbon-price policy, are taken into account, "the net effect on agricultural producers ranges from small net effect to large positive returns," the three economists explain. Their full commentary is posted on the Institute Web site.