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Climate Policy Outlook
American Clean Energy and Security (ACES) Act
Waxman-Markey
Heather HolsingerSenior Policy Fellow
Pew Center on Global Climate Change
America’s Energy Coast Leadership Forum
July 30, 2009
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Pew Center on Global Climate Change
• Founded in May 1998• Independent, non-profit, non-partisan• Divided into five major program areas:
– Scientific Studies/Analyses
– Domestic and International Strategies
– Outreach Activities• Business
• States
– Technology Solutions
– Communications
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Pew Business Environmental Leadership Council (BELC)
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Presentation Overview
• Overview of Waxman-Markey
• Climate Policy Outlook
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Overview of Waxman-MarkeyH.R. 2454 – The American Clean Energy and Security (ACES) Act
of 2009
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Overview of Waxman-Markey
• Reductions in GHG Emissions• Complementary Policies• Other Measures
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Reducing GHG Emissions
• Coverage: approximately 85% of U.S. emissions covered through cap-and-trade provisions
• Cap: 17% below 2005 levels by 2020; 83% below by 2050
• Threshold: Cover entities >25K tons CO2e; EPA may lower to 10K after 2020
• Offsets: 2 billion tons domestic & int’l• Cost containment: Strategic reserve of 2.5 billion allowances
available if allowances prices rise above trigger price, unlimited banking of allowances and limited borrowing
• Clean Air Act limitation: GHGs not regulated as criteria pollutants or hazardous air pollutants under CAA
• State role: GHG cap-and-trade programs on hold for 5 years; other state programs unaffected
• Allowance distribution: Used for consumer protection, industry and worker transition assistance, technology innovation, and adaptation (initially mostly free allocation; shift to mostly auction over time)
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Waxman-Markey Allowance Distribution
0
1,000,000,000
2,000,000,000
3,000,000,000
4,000,000,000
5,000,000,000
6,000,000,000
Year
Distribution of AllowancesAmerican Clean Energy and Security Act of 2009
(H.R. 2454 - Waxman-Markey as Passed by U.S. House of Representatives)
Supplemental Agriculture and Renewable Energy (Sec.782(u))
Compensation for Early Actors (Sec.782(t))
Climate Change Consumer Dividend (Sec. 782(r))
Deficit Reduction (Sec. 782(q))
International Clean Technology Deployment (Sec. 782(o))
International Adaptation (Sec. 782(n))
State Domestic Wildlife and Natural Resource Adaptation (Sec. 782(m)(1))
Domestic Wildlife and Natural Resource Adaptation (Sec. 782(m)(2))
Climate Change Health Promotion and Protection (Sec. 782(l)(2))
Domestic Adaptation (Sec. 782(l)(1))
Energy Efficiency and Renewable Energy Worker Training (Sec.782(k)(2)
Worker Assistance and Job Training (Sec. 782(k))
Small Business Refiners (Sec.782(j)(2))
Domestic Fuel Production (Sec. 782(j)(1))
Advanced Automobile Technology (Sec. 782(i))
Advanced Resesarch Project Agency-Energy (Sec.782(h)(2)
Energy Innovation Hubs (Sec. 782(h)(1))
States for Building Retrofits (Sec.782(g)(3)
Energy Efficiency in Building Codes (Sec. 782(g)(2))
Renewable Energy and Energy Efficiency (Sec. 782(g)(1))
Carbon Capture and Sequestration (Sec. 782(f))
Energy-Intensive, Trade-Vulnerable Industries (Sec. 782(e))
Low Income Consumers (Sec. 782 (d))
Home Heating Oil and Propane Consumers (Sec. 782(c))
Natural Gas Consumers (Sec. 782(b))
Merchant Coal Generators and Long-term Power Contracts [Reflects 14.3% of electricity allocation]
Electricity Consumers (Sec. 782(a)(1))
States for Cogeneration at Industrial Parks (Sec.782(a)(3)
Prevention of Tropical Deforestation (Sec. 781)
Allowances Placed in Strategic Reserve (Sec. 726)
Available Allowances (tCo2e)
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Complementary Policies – Clean Energy & Coal
• Combined Efficiency and Renewable Electricity Standard• Standard starts at 6% of sales in 2012 and rises to 20% in
2020• Up to one quarter of the requirement can be automatically
met with electricity savings. Upon petition by a state’s governor, FERC can allow a state’s utilities to use electricity savings to meet up to two fifths of the standard
• Carbon Capture and Sequestration:– National strategy for CCS deployment and regulations for
geologic sequestration sites– CCS trust fund to finance first ~5 commercial-scale
demonstration projects– Support for early large scale CCS deployment (first 6 GW at
coal power plants and industrial facilities)
• Performance standards for new coal-fueled power plants
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Complementary Policies - Transportation
• Support (allowance value) for automobile R&D
• Provides financial assistance to manufacturers to produce electric vehicles and consumers to purchase plug-in hybrid electric vehicles
• EPA, states, and metropolitan planning organizations to develop transportation GHG reduction targets and plans
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Complementary Policies – Energy Efficiency
• Promotes energy efficiency in new and retrofitted buildings• Establishes national building energy efficiency codes• Establishes a building retrofits program• Establishes a program to upgrade inefficient manufactured
homes• Establishes a model building energy performance labeling
program
• New efficiency standards for lighting and other appliances, including financial incentives to retailers who sell high volumes of “Best-in-Class” appliances
• Smart grid and transmission provisions
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Other - Competitiveness
• Output-based allowance distribution approach is primary mechanism to deal with competitiveness
• Emission allowances to energy-intensive, trade-exposed industries• Sets criteria for which sectors are presumptively eligible, allows EPA to
designate more• Allowances compensate for direct and indirect carbon costs• Distribution begins phasing out in 2026 (pending Presidential review)
• International Reserve Allowance program—requiring allowances for imported goods’ embodied GHG emissions – as a backstop.
• Triggered in 2020 unless the President finds that a treaty meeting U.S.
negotiating objectives is in force, or Congress grants a waiver.
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Other - Adaptation
• Establishes a National Climate Services within NOAA to provide climate-related data and support
• States and federal agencies to develop natural resource adaptation plans.
• Establishes Natural Resources Climate Change Adaptation Fund in the Treasury – states can apply for funds if have natural resources adaptation plan
• Provides 2% of allowance value increasing over time for domestic adaptation (much of that goes to states)
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USCAP Partnership
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• Consensus product of diverse companies and NGOs on climate legislation framework
• Working to urge the Administration and Congress to take immediate action
• Well-crafted federal legislation can:– Create meaningful action to slow, stop
and reverse greenhouse gas emissions
– Spur innovations in new technologies
– Enhance energy security
– Increase investment and provide the foundation for a low-carbon economy
– Eliminate the economic cost of uncertainty
1515
USCAP Recommendations - January 2009
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Policy Outlook
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U.S. Congress• 60-40 D Senate majority• Majority Leader Reid• EPW Chairman Boxer• Need 60 votes for a bill• Need 67 votes for treaty
• 256-179 D House majority
• Speaker Pelosi• E&C Chairman Waxman• Need 218 votes for a bill
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Recent Debate
• Waxman-Markey passed House Energy & Commerce committee on May 21st, passed the full House by vote of 219-212 on June 26th
• Senate committee action expected in September
• Full Senate vote possible in 2009
• House-Senate Conference possibly 2009 or 2010
• President’s signature possibly 2009 or 2010
• Stars in alignment rapid progress or overreaching?
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EPA Action?• Supreme Court in Mass. V. EPA essentially
ordered EPA to regulate GHGs• EPA has a number of options for moving
forward• Key questions:
– How fast will EPA act?– Which parts of the Clean Air Act will it use?
• EPA has clear authority to do GHG standards; may be able to do cap and trade, but would be constrained
• Threat of EPA action may drive legislation
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+2020
A two-tiered climate policy
“Avoiding the unmanageable andmanaging the unavoidable”*
• Avoiding the unmanageable → mitigation
– Emissions reduction policies at state, regional, federal, and international levels
• Managing the unavoidable → adaptation
– Preparedness, resilience, ecosystem management, protecting vulnerable populations
*Title of the UN Foundation Scientific Expert Group Report onClimate Change and Sustainable Development
America’s Energy Coast Leadership Forum III
Climate Assessment Update
-Dr. Denise Reed, University of New Orleans -Dr. Robert Twilley, Louisiana State University
SUMMARY & STATUS – FEDERAL ENERGY & CLIMATE LEGISLATION
Denise J. ReedUniversity of New Orleans
Robert R. TwilleyLouisiana State University
IPCC 2007
Thanks to Brendan Yuill, University of New Orleans
Current climate varies across the area – especially in terms of precipitation
Global increase in temperatures in the future - range associated withvariations among models and uncertaintyregarding future development
Effects of inland changes are felt at the coast through change in runoff
Variation across the Gulf Coast and throughout the year
Precipitation is more variable globally
Precipitation predictions show increase and decrease
Location PeriodPrecipitation
(in)% Change (from 2000)
2000 2050 2099
Gulf Coast Average
Dec, Jan, Feb 11.7 -2.2 -8.3
June, July, Aug 11.5 9.9 10.4
Annual 48.2 -1.6 -2.1
Nueces
Dec, Jan, Feb 4.4 -0.5 -15.3
June, July, Aug 6.7 13.6 11.3
Annual 26.7 0.8 -3.8
Trinity
Dec, Jan, Feb 11.9 0.3 -5.4
June, July, Aug 9.2 16.5 13.1
Annual 47.3 -3.1 -3.5
Mobile
Dec, Jan, Feb 16.8 -2.5 -4.6
June, July, Aug 13.0 3.9 11.7
Annual 57.2 -0.6 3.0
River runoff likely decreases in the future due change in precipitation and increased temperatures that increase evapotranspiration
Runoff (in)% Change (from 2000)
2000 2050 2099
Gulf Coast Avg. - -20 -29
Nueces River, TX 1.0 0 -3
Trinity River, TX 6.4 -27 -37
Mobile River, AL 20.2 -11 -14
Relative sea level rise is already a problem based on 20th century data
Station Name SLRLength of
Record
in/yr yrs
Dauphin Island, AL 0.12 32
Grand Isle, LA 0.39 53
Eugene Island, LA 0.38 36
Sabine Pass, TX 0.26 42
Galveston I, TX 0.26 92
Galveston II, TX 0.29 43
Freeport, TX 0.23 46
Rockport, TX 0.18 52
Port Mansfield, TX 0.08 35
Padre Island, TX 0.14 37
Port Isabel, TX 0.13 56
Historical ratesHistorical with eustatic increased to 0.12 in/yr (3mm/yr)Historical with eustatic increased to 0.20 in/yr (5mm/yr) by 2099Historical with eustatic increased to 0.43 in/yr (11mm/yr) by 2099 (estimated max. rate from last deglaciation)
SummaryRegional mean annual temperatures will increase by
over 1° C by 2050 and near a 3° C increase by 2099 - increase only varying spatially by approximately 0.1° C.
Precipitation will likely become more seasonal - summer months will receive a higher % of the rainfall, winter months will receive less.
The effect of climate change on runoff is uncertain, suggestion that the total amount of runoff will be significantly altered.
Sea-level rise will vary spatially - rates higher than the global mean due to the active subsidence processes. Range ~8 in to ~5 ft by 2099.
Climate change will likely cause an increase in the % of storms that develop into large hurricanes and an increase in overall storm intensity => increase the threat of flooding and storm related damage to coastal communities and infrastructure.
America’s Energy Coast Leadership Forum III
July 30, 2009Biloxi, MS
America’s Energy CoastLeadership Forum III
Climate Stewardship Task Force
July 30, 2009
Climate Stewardship Task Force
• Gary Serio – Co-chair, Entergy Corp.
• Anna Motschenbacher – Co-chair,Pew Center on Global Climate Change
• Fiona Hanrahan, Chevron
• Karla Raettig, National Wildlife Federation
• Jim Mutch, Entergy
• Jenny Denney, Pew Center, Make an Impact
Task Force Activities
1. Future: Climate Change Best Practices Forum• Purpose – discussion & sharing of
state/local policies & programs to address climate change e.g. – energy efficiency, building codes,
renewable energy, urban/infrastructure planning, disaster preparedness, etc.
• Participants – government policymakers & decisionmakers in AL, MS, LA and TX
• Timing – Spring 2010
2. Near Term: “Make an Impact” Program
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America’s Energy Coast July 2009
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Presentation overview
• What is Make an Impact?
• What is the opportunity for America’s Energy Coast?
• What are the next steps?
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What is Make an Impact?• Environmental footprint reduction program for
individuals/households (employees , communities, citizens)
• Focused on personal energy efficiency, environmental awareness, and individual cost savings
• Partnership between Alcoa Foundation and Pew Center on Global Climate Change.
• Adopted by Entergy in 2009, the program launches today and throughout Entergy communities over the next year
• Customizable website and carbon calculator with resources and tools vetted by the Pew Center on Global Climate Change and supported by community outreach
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• Build awareness and commitment on the issue
• Empower individuals to take meaningful, individual action and realize dollar savings
• Leverage and amplify existing local energy efficiency tools and programs• Government• Business • Non-profits
Overarching Goals of Program
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What is Make an Impact: Website
Customizable interactive website with tips, tools and resources on how to reduce energy bills and live more sustainably
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What is Make an Impact: Carbon Calculator
Individual ‘carbon footprint’ analysis and personal action plan
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What is Make an Impact: Outreach & Workshops
Educational workshops and hands-on activities to educate and encourage local action
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What benefits can it bring?
• Heightened awareness of environmental issues driving positive behavioral change
• Real energy savings and cost savings in the local community
• ‘Green’ community network that includes business, non profits, municipalities and individuals
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Make an Impact -Alcoa greenhouse gas reductions (at June 09):– Committed to save = 200,000 lbs of GHGs– Potential to save = 1,500,000 lbs of GHGs
Reduced local environmental impact
* Potential savings refer to total $ saved if users implemented all recommendations on their Action Plan
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Quantifiable Cost Benefits
Make an Impact - Alcoa financial savings (at June 09):– Committed to save =$200,000 per annum– Potential to save* = $800,000 per annum
* Potential savings refer to total $ saved if users implemented all recommendations on their Action Plan
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What is the opportunity for AEC?• All AEC participating
businesses, organizations and governments can engage
Website adopted by companies, non-profits, and states for employee, customer, member and citizen use
• Community outreach and engagement
• State and regionally specific resources and information
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What are next steps?• Gauge interest in
exploring Make an Impact program for AEC outreach
• Identify point-of-contact for any member interested in follow-up
• Schedule future call to learn more and further explore opportunity
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Gary Serio, Entergy [email protected] 504-576-4585Jenny Denney, Pew [email protected] 703-516-4146
