Document

Report
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Climate Policy Outlook
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American Clean Energy and
Security (ACES) Act
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Waxman-Markey
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Heather Holsinger
Senior Policy Fellow
Pew Center on Global Climate Change
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America’s Energy Coast Leadership Forum
July 30, 2009
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Pew Center on Global Climate Change
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• Founded in May 1998
• Independent, non-profit, non-partisan
+ • Divided into five major program areas:
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– Scientific Studies/Analyses
– Domestic and International Strategies
– Outreach Activities
• Business
• States
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– Technology Solutions
– Communications
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Pew Business Environmental Leadership Council (BELC)
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Presentation Overview
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• Overview of Waxman-Markey
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• Climate Policy Outlook
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Overview of Waxman-Markey
H.R. 2454 – The American Clean Energy and Security (ACES) Act of 2009
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Overview of Waxman-Markey
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• Reductions in GHG Emissions
• Complementary Policies
• Other Measures
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Reducing GHG Emissions
• Coverage: approximately 85% of U.S. emissions covered through capand-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)
Waxman-Markey Allowance Distribution
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Distribution of Allowances
American Clean Energy and Security Act of 2009
(H.R. 2454 - Waxman-Markey as Passed by U.S. House of Representatives)
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Available Allowances
(tCo2e)
Supplemental Agriculture and Renewable Energy (Sec.782(u))
Compensation for Early Actors (Sec.782(t))
Climate Change Consumer Dividend (Sec. 782(r))
6,000,000,000
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))
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Climate Change Health Promotion and Protection (Sec. 782(l)(2))
Domestic Adaptation (Sec. 782(l)(1))
5,000,000,000
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)
4,000,000,000
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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))
3,000,000,000
Home Heating Oil and Propane Consumers (Sec. 782(c))
Natural Gas Consumers (Sec. 782(b))
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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)
2,000,000,000
Allowances Placed in Strategic Reserve (Sec. 726)
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1,000,000,000
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0
Year
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Complementary Policies – Clean Energy & Coal
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• Combined Efficiency and Renewable Electricity Standard
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• 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
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• 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
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• Promotes energy efficiency in new and
retrofitted buildings
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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-inClass” appliances
• Smart grid and transmission provisions
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Other - Competitiveness
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• Output-based allowance distribution approach
is primary mechanism to deal with
competitiveness
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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.
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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
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• 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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USCAP Recommendations - January 2009
• Consensus product of diverse
companies and NGOs on climate
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legislation framework
+ • Working to urge the Administration and
Congress to take immediate action
+ • Well-crafted federal legislation can:
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– 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
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Policy Outlook
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U.S. Congress
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60-40
D
Senate
majority
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• Majority Leader Reid
• EPW Chairman Boxer
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• Need 60 votes for a bill
• Need 67 votes for treaty
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• 256-179 D House
+ majority
• Speaker Pelosi
+ • E&C Chairman Waxman
• Need 218 votes for a bill
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Recent Debate
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+ • Waxman-Markey passed House
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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
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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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A two-tiered climate policy
“Avoiding the unmanageable and
managing 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 on
Climate Change and Sustainable Development
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For More Information
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www.pewclimate.org
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Heather Holsinger
[email protected]
America’s Energy Coast Leadership Forum III
SUMMARY & STATUS –
FEDERAL ENERGY & CLIMATE LEGISLATION
Climate Assessment Update
-Dr. Denise Reed, University of New Orleans
-Dr. Robert Twilley, Louisiana State University
Denise J. Reed
University of New Orleans
Robert R. Twilley
Louisiana State University
CLIMATE CHANGE
Storms Waves Sea Level Temperature CO2 conc. Run-off
External
Marine
Influences
Human
Natural
Sub-system Sub-system
Coastal System
External
Terrestrial
Influences
IPCC 2007
Thanks to Brendan Yuill, University of
Current climate varies across the area –
especially in terms of precipitation
Global increase in
temperatures in the
future - range
associated with
variations among
models and
uncertainty
regarding 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
Gulf Coast
Average
Dec, Jan, Feb
June, July, Aug
Annual
Precipitation
(in)
2000
11.7
11.5
48.2
Nueces
Dec, Jan, Feb
June, July, Aug
Annual
4.4
6.7
26.7
-0.5
13.6
0.8
-15.3
11.3
-3.8
Trinity
Dec, Jan, Feb
June, July, Aug
Annual
11.9
9.2
47.3
0.3
16.5
-3.1
-5.4
13.1
-3.5
Mobile
Dec, Jan, Feb
June, July, Aug
Annual
16.8
13.0
57.2
-2.5
3.9
-0.6
-4.6
11.7
3.0
Location
Period
% Change (from 2000)
2050
-2.2
9.9
-1.6
2099
-8.3
10.4
-2.1
Runoff (in)
Gulf Coast Avg.
Nueces River,
TX
Trinity River,
TX
Mobile River,
AL
% Change
(from 2000)
2000
2050
2099
-
-20
-29
1.0
0
-3
6.4
-27
-37
20.2
-11
-14
River runoff likely decreases in the future due
change in precipitation and increased temperatures
that increase evapotranspiration
SLR
Length 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
Station Name
Relative sea level rise is already a problem based on 20th
century data
Historical rates
Historical with eustatic increased to 0.12 in/yr (3mm/yr)
Historical with eustatic increased to 0.20 in/yr (5mm/yr) by 2099
Historical with eustatic increased to 0.43 in/yr (11mm/yr) by 2099
(estimated max. rate from last deglaciation)
Summary
 Regional mean annual temperatures will increase by over 1° C
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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, 2009
Biloxi, MS
America’s Energy Coast
Leadership 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
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• What is Make an Impact?
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• 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
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individuals/households (employees , communities, citizens)
• Focused on personal energy efficiency, environmental
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awareness, and individual cost savings
• Partnership between Alcoa Foundation and Pew Center on
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Global Climate Change.
• Adopted by Entergy in 2009, the program launches today
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and throughout Entergy communities over the next year
• Customizable website and carbon calculator with resources
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and tools vetted by the Pew Center on Global Climate
Change and supported by community outreach
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Overarching Goals of Program
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• Build awareness and commitment on the issue
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• Empower individuals to take meaningful, individual
action and realize dollar savings
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• Leverage and amplify existing local energy efficiency
tools and programs
• Government
• Business
• Non-profits
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What is Make an Impact: Website
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Customizable interactive website with tips, tools and resources
on how to reduce energy bills and live more sustainably
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What
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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?
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• Heightened awareness of
environmental issues driving
positive behavioral change
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• 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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Reduced local environmental impact
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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
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* 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
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* 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
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engage
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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
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Make an Impact program for
AEC outreach
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• Identify point-of-contact for
any member interested in
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follow-up
+ • Schedule future call to learn
more and further explore
opportunity
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Gary Serio, Entergy [email protected]
504-576-4585
Jenny Denney, Pew [email protected] 703-516-4146

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