THE PATH TO COMPREHENSIVE CLEAN ENERGY AND CLIMATE LEGISLATION
Date: 8/11/09
Provided by: Jim Gould, VA Chapter
The U.S. urgently needs to address both global warming and our economic recovery. To meet these challenges, Congress must pass strong legislation that jump-starts a clean energy economy, creates millions of clean energy jobs and reduces global warming pollution while giving the U.S. credibility to lead during the upcoming international negotiations on global warming.
photo by Diana Parker
American Clean Energy & Security Act
On June 26th, the House of Representatives passed the American Clean Energy & Security Act (H.R. 2454) which would for the first time provide a national plan to address global warming and build the clean energy economy.
While imperfect, the legislation would require the U.S. to reduce global warming pollution by 83 percent by 2050 and establish a number of clean energy policies that will create jobs and jumpstart the economy.
Highlights of the American Clean Energy & Security Act:
- Emissions Reductions. In addition to establishing a strong requirement for reducing global warming pollution by 2050, the bill also creates a fund to prevent tropical deforestation in developing countries, which would drive an additional 10 percent reduction in emissions by 2020. It also requires EPA to set performance standards to achieve additional emissions reductions from sources like landfills and medium and heavy duty trucks.
- Energy Efficiency. According to the American Council for an Energy Efficient Economy, the energy efficiency provisions in ACES could eliminate energy waste by 5.4 quadrillion BTUs, which accounts for about 5 percent of projected U.S. energy use in 2020. The provisions include: improved building energy codes, incentives for efficiency retrofits of existing buildings, incentives for best-in-class appliances, and improvements to the standard setting process at the Department of Energy. The bill also requires that one third of the allowances allocated to natural gas utilities be used for energy efficiency improvements.
- Natural Resource Adaptation. ACES calls for using 1 percent of the revenue generated by the cap and trade system to fund programs to build resilient habitats and help wildlife and wild places adapt to the changes caused by global warming.
- International Competitiveness. While we strive to reduce global warming pollution and grow our clean energy economy, it is vital that we provide transition assistance to keep manufacturing companies from moving to countries that do not cap greenhouse gasses. ACES includes two provisions that were designed to solve this problem and as a result was supported by the Steelworkers and the AFL-CIO.
photo by Diana Parker
To fully realize the opportunity to create clean energy jobs while rebuilding our economy and reducing global warming pollution, the final legislation must be improved in order to:
- Clean Up the Dirtiest Sources of Pollution. The House ACES bill eliminates EPA’s ability to crack down on global warming pollution from the nation’s old, dirty power plants and other existing industrial sources. Specifically, the bill repeals New Source Review for greenhouse gas emissions from new and existing coal-fired power plants and New Source Performance Standards for greenhouse gas emissions from existing power plants. Only plants permitted after January 1, 2009 would be subject to performance standards meaning that if not corrected, legislation would give old, dirty coal plants a lifetime license to pollute, and even substantially increase CO2 emissions.
- Increase Renewable Energy and Energy Efficiency Standards in order to create more clean energy jobs. ACES requires utilities meet 20 percent of the electric generation needs through renewable energy and energy efficiency. Unfortunately due to numerous exemptions, the standard would not drive renewable energy development and energy efficiency improvements beyond the status quo, squandering an opportunity to create jobs and save consumers money. The requirements for renewable energy and energy efficiency must be substantially increased in order to realize their full benefit.
- Invest more in clean energy and protecting against global warming impacts. The bill should invest a larger portion of pollution allowance value to energy efficiency and renewable energy, creating green jobs and training workers to fill them, minimizing impacts on consumers, funding emissions reductions from the transportation sector and protecting natural resources and vulnerable communities here and around the world.
- Ensure that offsets and the production of biomass don’t negatively impact climate or lands. The bill should include meaningful safeguards to ensure that offsets and biomass production don’t harm key conservation areas and wildlife habitat or have unintended consequences to the climate.
The comprehensive energy and climate bill being discussed in the Senate should do more to build our clean energy economy – and not let polluters get away with their same old dirty business-as-usual ways. Millions of Americans already hold the most commonly needed job skills for global warming solutions. Strong, comprehensive energy and climate legislation will put them back to work, retaining and creating millions of good, clean energy jobs in both the revitalized manufacturing and construction sector and the new clean energy industries of tomorrow.
With these improvements, Congress has a historic opportunity to build a clean energy economy that works for everyone. We urge the Senate to strengthen, defend and pass this bill.
Impact of the American Clean Energy and Security Act (H.R. 2454) for Virginia
All across Virginia we are facing the consequences of a warming planet. From rising coastlines threatening Virginia Beach and the Eastern Shore, to the crop shortages facing farms across Southside and western Virginia; the threats from global warming are real for the commonwealth.
- According to the Virginia Institute of Marine Sciences (VIMS), Virginia’s coastal zone is the second most vulnerable region in the United States to rising coastlines. Analysts predict that the Tidewater region of Virginia will be at the epicenter of regional climate change impacts due to its low elevation.
- A recent Environment Virginia analysis of the effects of global warming on agriculture finds that climate change is projected to cost Virginia corn growers nearly, $5 million each year, considering the combined effect of increasing temperatures and increasing levels of carbon dioxide.
Now is the time to replace the dirty, polluting energy sources of the past with the clean, homegrown energy sources of today. In addition to reducing air pollution and limiting America’s contribution to global warming, creating a clean energy economy will increase our security and help put Virginians back to work in clean energy jobs.
The American Clean Energy and Security Act established a framework for transitioning the nation to clean energy and reducing global warming pollution. To deliver on the promise that clean energy holds to transform our economy, put thousands of Virginians back to work, and solve global warming, the Senate should work to strengthen energy efficiency and renewable energy requirements.
This document will outline the three core objectives of the American Clean Energy and Security Act (ACES), as well as tackle the issue of costs to consumers from the legislation.
Curb Global Warming:
ACES aims to stop the worst effects of global warming before it’s too late by putting the nation on a trajectory to substantially reduce its global warming pollution - by 17 percent below 2005 levels by 2020 and by 83 percent by 2050. By 2020, the reductions are equivalent to eliminating all of the pollution from 500 million cars and SUVs, which is about half of the vehicles projected to be on the roads worldwide by 2020.
- Requirements to Reduce Pollution: The bill would establish a market-based program to reduce global warming pollution from electric utilities, fuel refiners and importers, large industrial emitters, and natural gas suppliers, covering an estimated 87 percent of total U.S. emissions. The program would require these sources to reduce their emissions by 17 percent below 2005 levels by 2020, by 42 percent by 2030, and by 83 percent by 2050. In addition, the bill would direct the EPA to achieve additional emission reductions through agreements to prevent tropical deforestation, requiring reductions equivalent to another 10 percent of U.S. 2005 emissions by 2020. (Sec. 703, 704)
- Offsets Jeopardize Success of Program: The bill would allow polluters to purchase offsets - actions taken to reduce emissions domestically in areas of the economy not covered by the market-based program or for projects undertaken overseas - rather than reduce their own pollution, which will result in less-certain emission reductions and delay the transition to cleaner technology. The bill would allow 2 billion tons of offsets per year, split evenly between domestic and international offsets, but EPA could allow up to 1.5 billion tons of international offsets if there are insufficient domestic ones. Starting in 2017, the bill would require polluters to turn in 1.25 tons of international offset credits to cover 1 ton of domestic emissions (a one-to-one ratio is required prior to 2017 and for domestic offsets). The bill would establish an independent Offsets Integrity Advisory Board and other rules to help ensure that offsets are the highest quality possible. (Sec. 722; 731-743)
- Other Flexibility Mechanisms in Market-Based Program: In addition to offsets, the bill also would allow trading, banking, and borrowing of pollution allowances, and it would establish a pool of pollution allowances (“strategic reserve”) to address the potential for carbon price spikes. (Sec. 724, 725, 726)
- Performance Standards for Power Plants, Cars, and Other Sources: The bill would repeal EPA’s authority to set source-specific global warming emission performance standards for stationary sources that are capped under the bill. In place of that authority, the bill would establish performance standards only for new coal-fired power plants. The bill would direct the president to establish global warming emission standards for new motor vehicles and the EPA to set standards for new heavy-duty vehicles, marine vessels, locomotives, and aircraft. (Sec. 116, 811, 221, 821)
- Authority of State and Local Governments to Act: The bill would bar states from implementing cap-and-trade programs from 2012 to 2017, while the federal program is getting up and running, but ultimately the bill recognizes that state and local efforts will continue to be central to our nation’s success in moving to clean energy and solving global warming. (Sec. 861)
Improve Energy Efficiency:
The bill aims to make America smarter about how we use energy, leading to major improvements in the efficiency of our economy. The two most important energy efficiency requirements in the bill are (1) improving the energy efficiency of new and existing buildings; and (2) investing an estimated $90 billion in clean energy by 2025.
- Allowances to State and Local Governments for Energy Efficiency and Renewables: The bill initially sets aside 10.5% of the pollution allowances for state and local governments to implement energy efficiency and renewables programs. It is administered through a new program called the Energy and Environment Development (SEED) program. The money is distributed to the states on a formula (1/3 divided evenly among states, 1/3 based on population, and 1/3 based on energy consumption). At least 12.5% of the money must go to local governments. The money can be used for implementation and enforcement of codes and programs to retrofit buildings, loans, grants, tax credits for energy efficiency and renewables, including transportation efficiency.
- Allowances to Natural Gas and Electric Utilities: The bill provides for allocations to natural gas (9%) and electric (30%) utilities (local distribution companies) to lower the cost of the program. The bill requires at least one third of the money allocated to natural gas utilities be devoted to energy efficiency. There is not a similar requirement for electric utilities.
- Allowances to States for Oil Heat Customers: The bill also includes an allocation of 1.5% of the allowances to states for oil heat and bottled propane customers and requires that half of that money be spent on cost effective energy efficiency.
- Building Codes: The bill establishes minimum targets for commercial and residential building codes of 30% energy savings starting in 2010 and 50% savings starting in 2014 (for residential buildings) and 2015 (for commercial buildings) and to increase building energy efficiency by 5% every three years. The bill provides assistance to local and state governments and independent code development organizations to develop implement and enforce codes. These standards would save consumers $25 billion per year by 2030. The bill also directs local and state governments to set zero energy buildings as a goal by 2030 and provides for additional assistance to state and local governments and code setting entities who are working to exceed the minimum codes.
- Building Retrofits: The bill also includes major incentives to improve the efficiency of existing building through the Retrofit for Energy and Environmental Performance program; which would set performance standards for building retrofits and provide incentives of up to 50% of the cost of residential and commercial energy efficiency upgrades. ACEEE estimates that this program will result in annual savings of nearly $10 billion per year by 2030.
- Energy Efficiency Resource Standard: Up to 8% of the 20% RES can be met with efficiency if a Governor petitions the Department of Energy for approval. An 8% EERS could increase efficiency by as much as 3% nationwide, if you factor out states that already have substantial programs in place. This means efficiency would only happen at the expense of renewable energy. This represents a huge missed opportunity since the EERS in the original bill would have:
- Created net energy bill savings of $168.6 billion by 2020 (ACEEE)
- The energy saved through energy to power almost 48 million households in 2020 - 36 percent of the households in the United States. (ACEEE)
- The national EERS in the original bill would have reduced CO2 emissions by 262 million metric tons in 2020 - the equivalent of taking 48 million cars off the road for that year or eliminating the need to build 390 expensive new coal-fired power plants. (ACEEE)
- Energy efficiency improvements in Virginia could generate a $583 million net increase in wages and an $882 million increase in Gross State Product. (ACEEE)
Repower America with Renewable Energy:
The legislation aims to put us on a path to repower Virginia with clean, renewable energy that will protect the environment, create jobs right here at home, and put America on the cutting edge of technology. The primary way the bill does this is through investments in clean energy. Unfortunately, the renewable electricity standard in the bill will not deliver more renewable energy than we’re set to get through the state standards already in place and investments we made earlier this year in the economic recovery package.
- Standard for Utilities...Requires No New Renewables: The draft version of the bill included a relatively strong renewable electricity standard (RES), but both the targets and other requirements have been significantly weakened so that the standard could require even less renewable energy generation than projected from policies already in place. While this weakened standard would produce little to no benefits, a strong RES of 25 percent by 2025 would create 297,000 new domestic jobs and save consumers $64.3 billion in electricity and natural gas bills by 2025, according to the Union of Concerned Scientists. (Sec. 101)
- RES Structure: The bill would require large electric utilities to achieve 20 percent of their sales by 2020 from a combination of “renewable” energy generation and energy efficiency improvements. One-quarter of the total standard each year could be met using energy efficiency (i.e., 5 percent of sales in 2020), and companies could petition governors to increase the use of efficiency to cover up to 8 percent. Considering the utilities exempted from the standard, the Union of Concerned Scientists estimates that the RES could generate as little as 8.3 percent renewables by 2020. Yet, the Department of Energy projects the nation will achieve 9.9 percent renewables by 2020 under policies already in place, including state RESs and financial incentives in the economic recovery package.
- Standard Opened to Non-Renewable Sources: The bill would add coal mine methane and municipal solid waste (MSW) to the list of energy sources that could be used to meet the standard, though neither is renewable. MSW plants would be required to meet Clean Air Act standards for new plants and could only be counted if the municipality from which the waste comes “provides for recycling.” While protecting certain critical areas on public lands, the bill also would open up the rest of our national forests for providing biomass fuels. In addition, the bill would allow generation from new nuclear power plants and coal-fired power plants with carbon capture and storage to be subtracted from the baseline amount of utility power sales against which the renewable energy increases are measured. Coal and nuclear are not renewable sources of energy and should not be allowed to offset the amount of renewable energy generation required by an RES.
- Virginia Can do More: Virginia is uniquely situated to meet a substantial portion of its energy needs through renewable sources. According to a report released by Wise Energy for Virginia, we could meet more than 20 percent of our energy needs from renewable sources, however; only two percent of our energy needs are currently being met from renewable sources.
- The Virginia Coastal Energy Research Consortium (VCERC) recently completed an ocean mapping study suggesting that a single study area twelve miles off Virginia Beach could accommodate 4 GW (4,000 MW) of offshore wind capacity — even after excluding areas used for U.S. Navy and NASA activities, shipping lanes, and dredge spoil disposal. VCERC has shown that this much offshore wind capacity could generate 13,000 GW-hrs of electrical energy per year, more than 15 percent of Virginia’s present annual electric generation portfolio.
- Analysis conducted by the Southern Environmental Law Center indicates that, Virginia also has the potential to meet up to 19 percent of electricity demand each year through solar panels installed on homes and businesses.
- Virginia has tremendous potential to capitalize on the potential for biomass. The 80 megawatt Pittsylvania Power Station in Hunt, Virginia, is one of the largest biomass facilities on the East Coast. Every day, the plant powers 20,000 homes from 3,300 tons of wood waste.
Consumer Savings:
We cannot afford to delay action on global warming; the cost of inaction is too great. According to an NRDC report, doing nothing about climate change will cost us an additional $271 billion each year in hurricane damages, real estate losses, energy rates, and water costs - not in some far-off date, but by 2025, or by the time a child born today is in high school. By 2100, that cost will rise to $1.9 trillion annually.
- Fossil Fuel Dependence Could Crush Our Economy: According to Environment Virginia analysis of data from the Energy Information Administration, Virginia will spend as much as $1,193 more per person every year on energy from fossil fuels by 2030, if we stay on our current path. The commonwealth is on track to spend as much as $35,183 billion on oil by 2030, 87 percent of the state’s total spending on energy from fossil fuels.
- Energy Efficiency Will Create Savings: Recently, the Congressional Budget Office released an analysis of the bill that concluded that, in 2020, the “net economy-wide cost of the cap-and-trade program would be about $22 billion - or about $175 per household.” This analysis does not include the energy efficiency provisions, which will lower the cost of the program. According to a preliminary analysis by the ACEEE, the energy efficiency provisions included in the bill could save each household $750 by 2020 and $3900 by 2030.
While the bill is a crucial first step, there are many more steps to be taken on the path to a clean energy economy. We can and we must use dramatically less energy; all the energy we do use needs to come from clean, renewable sources; we need to cut our dependence on oil in half; and we must hold polluters truly accountable for cutting their global warming pollution.
As the bill moves to the Senate, we are working to strengthen it in four key ways:
- Ensure More Clean Energy for America - Strengthen renewable electricity provisions to achieve 20 percent of sales generated from clean renewable energy by 2020, including flexibility to achieve another 3 percent that could come from either efficiency or renewables by 2020. Increase the energy efficiency requirement so that utilities achieve 10 percent energy efficiency by 2020. Strengthening these standards will generate hundreds of thousands of new clean energy jobs.
- Clean Up the Most Polluting Sources - Preserve EPA’s ability under the Clean Air Act to require existing power plants, refineries, and other sources to meet up-to-date global warming pollution standards.
- Create More Clean Energy Jobs for America and Build Resiliency to Climate Change - Reduce allocations to polluting industries in order to supplement allowance accounts that would bolster green job development and protection of vulnerable communities that are impacted first and worst by climate change. Shave allocations from fossil fuel producers and redistribute to programs that deliver energy efficiency and renewable energy, create green jobs and train workers to fill them, and protect natural resources and vulnerable communities here and around the world.
- Ensure EPA Has Primary Role in Implementing and Enforcing Pollution Reductions - Energy Committee Chair Henry Waxman and Agriculture Committee Chair Collin Peterson have asked President Obama for recommendations on the appropriate roles for the EPA and USDA in developing and implementing the domestic offsets program. For the purposes of House action, the chairmen gave responsibility exclusively to USDA, with the intention of resolving the issue as the bill moves through the legislative process. The overall integrity of the pollution-reduction program will depend on ensuring that offsets are the highest quality possible. EPA is the agency with the mission, expertise, and track record developing and implementing pollution-reduction programs and must retain a central role in the domestic offsets program.
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