U.S. Energy

1
U.S. Energy Climate Policyon the Road Ahead

• Presented at Hanson Bridgett
• January 15, 2008
• Holmes Hummel, PhD
• www.holmeshummel.net/ClimatePolicyDesign

2
U.S. Energy Climate Policy Outlook

• Economic Recovery Stimulus and Budget Bills
• Energy Agenda for a New Administration
• International Climate Negotiations
• Federal Climate Policy Outlook

3
How is Congress spending discretionary income?
Doesnt include the wars.
1 Trillion
Source FY2006 Federal Discretionary Budget
Business Leaders for Sensible Priorities
4
12 Appropriations Bills Update the Budget
5
12 Appropriations Bills Update the Budget
Most departments have been operating with a
Continuing Resolutions based on FY 2006.
The FY2009 Continuing Resolution expires March 6,
2009.
6
What was appropriated in 2008?
Figures drawn to scale
7
What was appropriated in 2008?
All borrowed Adding to a 9 Trillion debt And
50 Trillion liability
Figures drawn to scale
8
What is ahead in 2009?
Figures drawn to scale
9
What is ahead in 2009?
2009 Stimulus Due Mid-Feb, Spans 2 years
Must find money before spending it
Borrow more
10
U.S. Distribution of Household Net Worth
16 million
14.7 million
Next 0.5
Top 0.5
9
25
Next 4
25
15
Bottom 80
12
13
Next 5
Next 10
2 million
90
Source State of Working America, 2006 2004 data
in Tables 5.7 and 5.9 real estate included.
11
American Recovery and Reinvestment Plan

• Modernizing 3/4 of federal buildings
• Improve the energy efficiency of two million
  homes
• Low Income Weatherization Assistance Program
• Doubling production of alternative energy in the
  next 3 years
• Renewable Energy Production Tax Credits
• Energy Efficiency Tax Credits
• Green Jobs Act
• Investing in science, research, and technology

Some Senators lofting figures above 25 Billion
for energy measures.
12
Appropriation Bills Existing Unfunded
Authorizations are of Interest

• Energy Independence and Security Act
• Energy Savings in Government and Public
  Institutions
• Energy Savings in Buildings Industry
• Clean Energy Research Development
• Carbon Capture and Sequestration RD and
  Demonstration
• Smart Grid
• Energy Transportation and Infrastructure
• Small Business Energy Programs
• International Energy Program
• America COMPETES Act
• Advanced Research Projects Agency Energy
  (ARPA-E)

13
U.S. Energy Climate Policy Outlook
Economic Recovery Stimulus and Budgets Energy
Agenda for a New Administration International
Climate Negotiations Federal Climate Policy
Outlook
14
Obamas Campaign Promise

• Authorize and appropriate 15 Billion each year
  for a decade to drive a bold energy agenda

Budget Comparison of National Priority Surges
15
New Energy for America Obama

• 150 billion over 10 years to catalyze private
  efforts
• Weatherization for 1 million households each year
• Renewable Electricity Standard 10 by 2012 25
  by 2020
• Develop and deploy clean coal technology
• Prioritize construction of the Alaska Natural Gas
  Pipeline
• Raise fuel economy standards
• Low Carbon Fuel Standard
• 1 million plug-in hybrid vehicles by 2015

16
Senator Bingamans AgendaChair of Energy
Natural Resources

• Renewable Electricity Standard
• Restructuring the Clean Energy Loan Guarantee
• Resolving a Regulatory Framework for Carbon
  Sequestration
• Resolving State-Federal Jurisdiction Issues over
  the Grid
• Domestic Drilling?

Ranking Republican Lisa Murkowski (R-Alaska)
Its going to be more of the same old stuff,
but were going to try to do it better.
Greenwire 11/17/09, and EENews 1/13/09
17
Transportation

• SAFETEA-LU
• Reauthorization of the Federal Highway Trust
  Fund, which spends gas tax revenue
• Fund declines as gasoline consumption declines,
  and the tax itself (0.14/gal) is not indexed for
  inflation
• To avoid Highway Trust Fund shortfalls, two
  expert commissions have recommended a gas tax
  hike of 0.10/gal ( 10/tCO2)
• Reauthorization due by September 2009

18
U.S. Energy Climate Policy Outlook
Economic Recovery Stimulus and Budgets Energy
Agenda for a New Administration International
Climate Negotiations Federal Climate Policy
Outlook
19
Climate Diplomacy

• 1990 UN Framework Convention on Climate Change
• 1997 Kyoto Protocol
• 2007 Bali Action Plan
• 2008 Poznan
• 2009 Copenhagen Agreement?

The Bali Action Plan for the Road to
Copenhagen articulates major elements of an
agreement for Long-term Cooperative Action
after 2012.
20
Shared Vision under UNFCCC

• Stabilize GHG concentrations at a level that
  avoids dangerous anthropogenic interference with
  the climate.
• Expect countries to take action based on common
  but differentiated responsibilities and
  respective capabilities.
• Developed countries accept responsibility for
  damages from climate change and will take the
  lead in taking action.
• Developing countries will take action, supported
  with resources from developed countries.
• Eradication of poverty will remain an overriding
  priority for developing countries.

21
Shared Vision after 18 years

• Stabilize GHG concentrations at a level that
  avoids dangerous anthropogenic interference with
  the climate.
• Expect countries to take action based on common
  but differentiated responsibilities and
  respective capabilities.
• Developed countries accept responsibility for
  damages from climate change and will take the
  lead in taking action.
• Developing countries will take action, supported
  with resources from developed countries.
• Eradication of poverty will remain an overriding
  priority for developing countries.

Very modest mitigation targets proposed
stabilization goals exceed levels of danger for
small island states
The U.S. (responsible for 30 of GHG pollution)
is a hold out
Adaptation money is derived from an international
trading mechanism both are inadequate to the task
No functional and robust technology transfer
channels
Development crisis is still in full force
22
On 2C path, global emissions peak before 2020
EcoEquity, Greenhouse Development Rights, 2nd
Edition
23
Bali Action Plan

• Negotiate terms of agreement for four pillars
• 1. Mitigation
• (i) Developed country commitments (Annex I)
• (ii) Developing country commitments (Non-Annex
  I) supported and enabled by technology,
  financing and capacity building.
• 2. Adaptation
• 3. Technology Transfer
• 4. Financial resources and Investment

24
Progress in Poznan

• The legal status of an Adaptation Fund
• governing board has been resolved.
• Major developing countries signaled
• an interest in mitigation commitments.
• For more insight and explanation, see top
  response for internet search on Poznan,
  debrief.

25
Challenge to the United States

• March Install a new Assistant Secretary of
  State by the next UNFCCC meeting
• June Establish a clear negotiating platform and
  engage major parties
• Sept Negotiate with domestic interests to get a
  new Sense of the Senate resolution
• December Arrive in Copenhagen ready to commit -
  or close enough to keep everyone on board

26
Challenge to the United States

• Can an Obama-Clinton State Dept negotiate
• an international agreement that would provide
• technology, financing, and capacity-building
• to developing countries sufficient for them to
• meet their own mitigation commitments?

Will 67 Senators be ready to ratify?
27
U.S. Energy Climate Policy Outlook
Economic Recovery Stimulus and Budgets Energy
Agenda for a New Administration International
Climate Negotiations Federal Climate Policy
Outlook
28
Negotiating U.S. GHG Targets
What is the maximum possible (politically
durable) effort for the U.S.?
1990 by 2020
80 below 1990
World Resources Institute, June 2008
29
Paths to Stabilizing GHG Concentrations
Hansen
UNFCCC Aspiration
IPCC made it clear in 2007 that the Green Zone is
safer.
IPCC also said that under most equity
interpretations, Annex I countries would need
to reduce emissions 25-40 below 1990 by 2020 to
reach 450ppm CO2-eq.
30
Negotiating U.S. GHG Targets
What is the maximum possible (politically
durable) effort for the U.S.?
25 below 1990 by 2020
World Resources Institute, June 2008
31
Climate Policy Negotiations
Trade Protection
Cost Containment
Industry
Auto
Chamber Commerce
Good Jobs
Big Biz
Market Mechanism
Unions
Cap Trade
Rebates to Low-Income No trading Or free
permits Complementary Policies
Coal
Env. Justice
Carbon Sequestration
Utilities
Big Green
Big Oil
Civil Society
Declining Emissions Cap
Free Pollution Allowances
Adaptation Funds
32
Congressional Committees That Must Take Action To
Reach Stabilization
Energy Natural Resources Energy
Commerce Transportation and Infrastructure Science
and Technology Natural Resources Agriculture Fore
ign Affairs Homeland Security Oversight
Government Reform Education Labor Financial
Services Ways Means Budget Appropriations . . .
.
33
2009 Federal Climate Policy Scenario

• Senator Boxer releases a new set of basic
  principles, and defers to the EPA on key
  policy design questions
• Obamas new Energy Climate team outlines a
  100 auction cap-and-trade policy that
  reaches 1990 by 2020 and 80 below
  1990 by 2050
• Rep. Markeys Energy Environment Subcommittee
  introduces detailed legislation
• Rep. Waxmans Energy Commerce Committee strives
  to secure political support and report a bill by
  Memorial Day
• Speaker Pelosi defers a House vote until it is
  ready

Climate legislation not expected to be enacted
before Copenhagen.
34
Meanwhile

• The EPA will proceed toward a Proposed Rule to
  control GHGs using Clean Air Act authority
• 34 Governors will continue negotiating rules and
  building institutional capacity through regional
  policies
• 800 Mayors will continue developing Climate
  Action Plans
• Utility regulators will be called upon to use the
  ratebase to finance technology policies in lieu
  of distressed treasuries
• Grassroots mobilizations will support both
  technology and policy innovation people make it
  happen!

35
U.S. Energy Climate Policy Outlook

• Economic Recovery Stimulus and Budget Bills
• Energy Agenda for a New Administration
• International Climate Negotiations
• Federal Climate Policy Outlook

• Holmes Hummel
• www.holmeshummel.net/ClimatePolicyDesign