Climate 411

Important Caveats to Last Week’s CRS Analysis of Climate and Energy Bills

By Britt Groosman / Published: June 23, 2010

The Congressional Research Service released a brief report last week comparing three energy and climate bills currently under discussion in the Senate. This comparison is useful to anyone looking for a fairly objective look at the three proposals. One key point to recognize though is that the analysis solely focuses on the policy mechanisms proposed in each of the three bills, it does not compare or contrast effects (economic and otherwise) of the bills.

For example, in the bill proposed by Senators Cantwell and Collins, the Carbon Limits and Energy for America’s Renewal (CLEAR) Act, the analysis does mention that the bill includes a “safety valve” as a mechanism to control the price of carbon. A safety valve works by allowing for the increase of emission allowances if the price of carbon rises above a certain level. Intended as a cost containment measure, the so-called safety valve undermines the proposal’s ability to achieve the targeted levels of CO2 emissions reductions (in 2050, 83% below 2005 levels), put forth by its authors. When the safety valve is used, the targeted carbon reductions fly out through the window. The CRS report makes no mention of this significant potential consequence of the mechanism.

Another issue to keep in mind is that the CRS analysis does not consider the long-term trajectory of allowance allocations in the American Power Act, the bill Senators Kerry and Lieberman co-authored. The Congressional Research Service includes only a snapshot view of allowance allocations for the year 2016. Since allowance allocations vary in the later years on the proposal, it is more helpful to asses the allowance allocations for the full duration of the legislative period (2013 to 2050). The chart below shows the projected allowance allocations divided by sector, for the time period 2013 to 2050, in net present value and therefore offers a more complete picture. As this graph shows, 46% of the allowance value is directed at households over the course of the bill.

When attempting to compare Senate proposals, it is important to focus attention on both the proposed policy but especially its likely effects. This CRS analysis is a helpful tool in understanding the former, but it is essential to remember to also consider the latter before drawing any substantive conclusions on which proposal will work best to create clean energy jobs, control carbon emissions and keep America safe.  The more comprehensive a climate and energy bill, and the less loopholes, the more benefits will accrue.

Also posted in Economics, Policy / Comments are closed

Leadership, Innovation and Security: Benefits We Can’t Measure

By Jackie Roberts / Published: June 23, 2010

The EPA analysis of the American Power Act released last week was reassuring in its conclusion that the economy can absorb a shift to low carbon energy, and that costs will be no more than a 40 cents a day for households. (The reason that costs phase in later is that allowances to utilities in the early years serve as rebates to consumers to allow for a transition period of no added costs.)

But, as the bill’s co-sponsor Senator John Kerry (D-Mass.) notes, while the costs are relatively easy to model, some of the benefits are not. Among those is the fact that APA is, in essence, a very cheap insurance policy against the real costs from droughts, floods, storms, oil spills and other consequences of unchecked climate change and continued reliance on foreign oil. By including a cap on carbon, APA offers a very cheap insurance policy.

And there are other significant benefits, too. A year ago today, President Obama’s Economic Recovery Advisory Board voted 15-1 in favor of submitting a memo to the president endorsing a cap on carbon, specifically:

“The single most important policy is to put a price on carbon. Businesses want the certainty that will unleash innovation and investment to create jobs now and ensure America is the worldwide leader of the next great global industry: sustainable energy. We are not on that path today.… “

The memo went on to note that we are ceding leadership in new energy technology to other nations.

“The U.S. is now home to only two of the ten largest solar photovoltaic producers in the world, two of the top ten wind turbine producers and one of the top ten advanced battery manufacturers. That is, only one-sixth of the world’s top renewable energy manufacturers are based in the United States. Last year, less than half the 8,500 gigawatts of wind turbines used in the U.S. were made in the U.S.”

A cap creates the customer demand that allows companies to build market share and move into export markets. The emerging clean energy market could be anywhere from $500 B globally by 2020 to a trillion.

Are we in? So far, not really. A home market attracts investment and helps build local manufacturing. For example, after FedEx pledged to buy low-pollution hybrid delivery trucks, vehicle manufacturers started producing them – and once cleaner trucks were on the market, other U.S. companies started buying them too. The U.S. now leads globally in manufacturing key components for hybrid trucks. In contrast, “after estimating that China would be producing two-thirds of the world’s solar panels by the end of this year,” the U.S. solar equipment supplier, Applied Materials, set up its latest solar research labs in China. Without a cap on carbon emissions, private capital sitting on the sidelines can easily go to other countries, creating jobs and export opportunities elsewhere.

America has demonstrated time and again that we are an innovative global leader when we put our minds to it. It’s time for us to commit ourselves, our minds as well as our dollars, to a clean energy future that will spur the new economy and encourage green job growth.

Also posted in Jobs, Policy / Comments are closed

The voices of a new clean energy future – June 22, 2010

By Rebecca Rasch / Published: June 22, 2010

IdahoStateman.com – “Staying competitive in the clean energy race”

By Phyllis Cuttino, director PEW Environment Group’s climate and energy programs

“Our research found that nations like China and Germany – that have adopted national renewable energy standards, carbon reduction targets and financial incentives for investment and production-tend to be leaders in the clean energy economy. Those with weaker policy frameworks, including the United States, lag behind.”

“As President Obama seeks ways to facilitate global economic growth at Toronto’s G-20 summit he also should also reflect on how to further stimulate the growth of our own clean energy economy at home. This includes finding a way to bring together leaders in Congress to develop a comprehensive climate and energy policy.”

National Journal – “Making Polluters Pay”

By Maggie L. Fox, President and CEO of Alliance for Climate Protection

“Without a cap on carbon emissions, we’ll do little to reduce pollution and create only a small fraction of the 1.9 million jobs expected under a comprehensive bill. We need to give American businesses the confidence that support for clean energy is here to stay.”

“Now is not the time for small steps. We have the technology and know-how we need to make the transition to a clean energy future. There will never be a better time for our leaders to pass comprehensive climate and clean energy legislation.”

Also posted in News, Policy / Comments are closed

The voices of a new clean energy future – June 21, 2010

By Rebecca Rasch / Published: June 21, 2010

The New York Times– “National Mission”

Editorial

“To anyone watching the oil spew into the Gulf of Mexico, the argument for curbing this country’s appetite for fossil fuels could not be clearer.”

“But Americans are rightly outraged by the spill in the gulf. This is clearly the moment for President Obama and Senate leaders to deliver a tough and ambitious energy bill capable of protecting the environment and the nation’s security.”

The Huffington Post – “Clean, Baby, Clean”

By Robert Greenwald, Filmmaker, Brave New Films

“If any good is to come out of this horrible and unprecedented disaster, it will only be through people standing up and demanding political leadership around creating a clean energy economy and finally stopping offshore drilling.”

Also posted in News, Policy / Comments are closed

The voices of a new clean energy future – June 19th, 2010

By Rebecca Rasch / Published: June 19, 2010

Seattle Post Intelligencer – “Comprehensive climate and energy bill needed now!”

By Sylvia Perek, resident of Seattle, WA

“We need Senators Cantwell and Murray to champion a strong version of comprehensive climate and energy legislation to bring certainty to our business leaders and create new clean energy jobs for America.”

Also posted in News, Policy / Read 1 Response

The voices of a new clean energy future – June, 18th 2010

By Rebecca Rasch / Published: June 18, 2010

The Huffington Post– “Our Senators, the Climate Bill, and Tying Your Shoes with One Hand”

By Heather Taylor-Miesle, Director of the NRDC Action Fund

“It is significant to note that we have 10 more votes in favor of reducing carbon emissions than we did the last time climate change was discussed on the Senate floor two years ago.”

CNN– “Break Our Oil Habit Now”

By Michael Brune, Special to CNN

“Taking these early steps is vital to the success of our ultimate goal: a clean energy future that works for America’s middle class — one that creates jobs, boosts our economy and protects our environment.”

“The BP oil disaster in the Gulf is a wake-up call. Americans are tired of letting oil companies call the shots. We are ready to stand up to the oil industry and to protect coastal communities and jobs. We’re ready to move America off of oil and into a clean energy future.”

Also posted in News / Comments are closed