My C2ES colleague, Judi Greenwald, will be testifying on Thursday at a hearing of the Senate Energy and Natural Resources Committee on the Clean Energy Standard Act of 2012, a bill written by Sen. Jeff Bingaman (D-NM), the committee chairman. As mentioned in my previous blogs (The Bingaman Clean Energy Standard: Let the Conversation Begin and The Bingaman Clean Energy Standard: What is "Clean"?) and in our primer on the design of a clean energy standard (CES), we think a CES holds a lot of potential for maintaining a diverse energy mix, advancing clean energy technology and associated industries, and reducing the environmental footprint of the electric power sector—including the sector's greenhouse gas emissions, which account for about one third of the U.S. total.
As Judi will attest, we also think Sen. Bingaman's bill is a great start, and balances the multiple objectives we would have for such a measure. On Thursday, we get to hear what a few other people think.
Watch this space Thursday morning as I live blog from the hearing and post updates below.
Update May 17, 11:58 am: It’s a standing-room-only crowd at this morning’s hearing before the Senate Energy and Natural Resources Committee on Senator Jeff Bingaman’s proposal for a federal clean energy standard.
Senators in attendance: Committee chairman Sen. Bingaman (D-NM), top committee Republican Sen. Murkowski (R-AK), Barrasso (R-WY), Cantwell (D-WA), Coons (D-DE), Corker (R-TN), Franken (D-MN), Manchin (D-WV), Risch (R-ID), Shaheen (D-NH), Udall (D-CO), Wyden (D-OR)
Here are some highlights of the question-and-answer session during the hearing’s first panel, with witnesses David Sandalow, Assistant Secretary for Policy and International Affairs at the U.S. Department of Energy, and Dr. Howard Gruenspecht, Acting Administrator of the Energy Information Administration:
Sen. Bingaman pointed out that EIA projects that electricity rates would increase by 2035 under the CES, but then asked how would electricity bills will be affected. Mr. Sandalow answered that the modeling shows that the average household energy bill would actually decline by $5 a month by 2035, in large part because of the energy efficiency promoted by the bill. Dr. Gruenspecht agreed.
Sen. Murkowski asked whether the cost of renewable energy being used by federal agencies under the Energy Policy Act of 2007 is an indication of the costs that would be seen under Sen. Bingaman’s bill. Mr. Sandalow pointed out that a key difference between Sen. Bingaman’s bill and the 2007 law is that the CES would give credit not only for renewable energy, but for nuclear power, natural gas, and clean coal, which would lead to lower prices than renewable energy alone.
Sen. Barrasso asked whether the Obama administration would rescind greenhouse gas regulations promulgated under the Clean Air Act if Sen. Bingaman’s bill were enacted. Mr. Sandalow said the administration would not support such an amendment to the Clean Air Act. For the record, C2ES believes that if a CES, or any other measure, led to significant reductions in GHG emissions from a given economic sector, we should be open to using that measure rather than the existing provisions of the Clean Air Act that pertain to that sector.
Sen. Franken suggested that it might be worth setting aside a fraction of the bill’s requirement for clean energy specifically for renewable energy. In fact, while most states have renewable energy standards in place, four—Michigan, Ohio, Pennsylvania, and West Virginia—have alternative energy standards, similar to Sen. Bingaman’s clean energy standard proposal, and each of the four takes an approach that favors renewable energy sources over the other qualifying clean energy sources.
Update May 17, 1:55 pm: Here are some quick notes on the second panel of this morning’s hearing. The room is still full even though many of the Senators and journalists have left—thus missing a discussion on preemption that was arguably the most noteworthy exchange of the entire hearing.
After the opening statements, Senators Bingaman and Murkowski had an extended back-and-forth with the panelists about the overlap between the Bingaman bill and other regulatory programs. The panelists offered a range of views, with a couple supporting preemption of the Clean Air Act authority. C2ES’s Judi Greenwald expressed a more nuanced view:
The key issue is environmental results. If a CES is ambitious enough, and can achieve greater environmental benefits than we can get under existing Clean Air Act Authority, it might make sense to consider replacing some Clean Air Act provisions with a CES. However, we need to be very cautious. The Clean Air Act has very broad authority to address GHG emissions throughout the economy and the CES only applies to power plants. We would need to ensure that EPA maintains its authority to continue to make progress in other sectors, for example, as with the successful greenhouse gas standards for vehicles.
Perhaps the biggest obstacle to exploring this issue is the deep partisan divide over EPA and the Clean Air Act. With members of Congress calling for an evisceration of EPA and the Clean Air Act, there is a legitimate concern that opening up the Act for an ostensibly narrow revision would lead to a gutting of provisions having nothing to do with greenhouse gases.
On another topic, Sen. Franken discussed Minnesota’s energy efficiency resource standard, and asked whether incentives for energy efficiency could be incorporated into the Bingaman bill. Judi Greenwald pointed out that many of the bill’s features would indeed promote energy efficiency: crediting of combined heat and power, the use of revenues raised through the alternative compliance payment, and the very structure of the proposed standard—it would be set as a percentage of total electricity production; if electricity use goes down, the requirement is easier to meet.
One thing we wish we could've said:
During the first panel, Sen. Corker said carbon capture and storage (CCS) will be broadly deployed when donkeys fly. Sen. Manchin, who takes a decidedly more favorable view towards CCS, was nevertheless concerned that the bill does not promote CCS.
Here's what we would have said, had they raised those points during the second panel:
While EIA projects that CCS is not deployed under the bill, it could be. CCS could play a bigger role under this bill if we can bring down its costs. There are a number of options for doing that. For example, C2ES co-convenes the National Enhanced Oil Recovery Initiative, which is calling for a federal tax credit to capture and transport CO2 from power plants and industrial sources for use in enhanced oil recovery. In addition to driving a lot of domestic oil production, and reducing CO2 emissions, it would generate additional revenue to cover the cost of CCS. We would expect that as CCS costs come down, it would enable coal to have a bigger role. A CES could help in other ways as well. AEP put the Mountaineer project on hold and withdrew from its partnership with DOE on this project because regulators in several states could not justify the expense for a technology that is not required by law. The CES could make the case for projects like Mountaineer to go forward.
Statement of Eileen Claussen
President, Center for Climate and Energy Solutions
March 1, 2012
From Texas to Ohio to California, 31 states have shown that a clean energy standard for electricity benefits both the economy and the environment. It can diversify our energy supplies, build homegrown industries, sharpen our competitive edge in the global clean tech market, and curb pollution that damages health and contributes to climate change. Sen. Bingaman’s Clean Energy Standard Act of 2012 presents an opportunity to achieve these benefits nationwide. The bill builds on these state-level successes, President Obama’s call for a federal clean energy standard, and earlier proposals from both sides of the aisle.
The Center for Climate and Energy Solutions has closely studied the issues and options in designing a federal clean energy standard. Congress faces some difficult questions: Do we focus on renewable energy only, or do we try to advance nuclear power and lower-carbon uses of fossils fuels as well? Do we set a performance goal and let the market decide how best to achieve it, or do we specify particular technologies in order to guarantee diversity of energy sources? How do we reward state leadership while putting all regions of the country on an equal footing?
There are important balances that must be struck, questions that must be resolved, and we shouldn't pretend that resolving them will be easy. But we must try. Maintaining a diverse energy supply, getting the United States into the international race for clean energy, curbing pollution -- these are challenges we must meet, and ignoring them won't make them go away.
Striking the right balance will require real effort by all sides, and Sen. Bingaman’s bill is an excellent place to start. We hope it launches a vital and constructive national conversation about how best to ensure reliable and affordable electricity for our country while tackling climate change. C2ES applauds Sen. Bingaman and the bill’s cosponsors, and looks forward to working with them, their colleagues and other stakeholders to move this forward.
For more information, view our Clean Energy Standards Resource page.
Contact: Rebecca Matulka, 703-516-4146, firstname.lastname@example.org
This is the second blog post in a multi-part series on the Bingaman Clean Energy Standard. Read part 1.
One question on the eve of the debut of Sen. Jeff Bingaman’s (D-NM) Clean Energy Standard bill: What is “clean”?
Broadly speaking, a clean energy standard requires an electric utility to generate or purchase a certain percentage of its supply from “clean” sources. Judging by previous Congressional proposals for promoting renewable or other low-emitting energy sources – not to mention the electricity portfolio standards in place in 31 states and the District of Columbia – cleanliness is in the eye of the beholder.
This is the first blog post in a multi-part series on the Bingaman Clean Energy Standard. Read part 2.
When the idea of a “clean energy standard” (CES) was first proposed a couple of years ago, it was viewed as the Republican alternative to both a renewable energy standard and a greenhouse gas cap-and-trade program. Many Republicans favored this approach because it included not just renewable energy, but also traditional Republican priorities such as nuclear power, hydropower, and clean coal.
Following the defeat of cap-and-trade legislation, President Obama began to see merit in this approach too. He proposed a Clean Energy Standard in his State of the Union in 2011 and again this year.
In a few days, Sen. Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee, is expected to introduce a CES bill. If it is anything like the long line of earlier Bingaman bills, it will be a thoughtful balance of economic, energy, and environmental objectives, and – to those of us who read a lot of legislation – beautifully written.
Keynote Address By Eileen Claussen, President, Pew Center on Global Climate Change
Institute of International and European Affairs
June 14, 2011
Thank you very much. It is a pleasure to be here. I am especially pleased to be in Ireland just a couple of weeks after President Barack Obama paid a visit to his ancestral home of Moneygall. I thought you would be interested to know that some of the President’s opponents, following the recent controversy about whether or not he was truly born in America, demanded proof of Mr. Obama’s Irish ancestry … and I understand he responded by finishing his Guinness and reminding his opponents that he is the only president to host a Beer Summit at the White House.
In all seriousness, I want to thank the Institute of International and European Affairs for inviting me to this beautiful city to talk with all of you about what’s happening in the United States to address the issue of climate change.
Well, that about sums it up. It has been a pleasure speaking with you and, if you will pardon me, I will now get along with my sightseeing.
I am kidding, of course. Well, let me clarify that. I am kidding about being through with my remarks, but the notion that not a lot is happening on this issue in the United States is no joke. The renowned Irish blessing calls for the winds to be always at your back; the sun to shine warm upon your face; and rains to fall soft upon your fields. Well, for those of us who care about this issue and who want to see the United States take its rightful role in protecting the climate, it seems like the wind has not actually been at our back – but rather hitting us squarely in the face for quite some time now.
Any time you have someone winning an election to the United States Senate, as we did in November, thanks in part to a campaign ad where he uses a rifle to shoot a hole through a piece of paper representing climate change legislation, I guess you could be forgiven for feeling, well, not sufficiently blessed.
For perspective, let’s look back for a moment at what was happening on this issue in the United States just two years ago. President Obama was just months into office after an election campaign during which he had pledged to reduce U.S. emissions of greenhouse gases by 80 percent before mid-century, and during which he promised to invest tens of billions of dollars in new climate-friendly energy technologies.
As his secretary of energy, the President appointed a Nobel Prize winner who supported strong action to address climate change. And he built an all-star team of advisers on environment and energy issues who felt the same way.
Meanwhile, the U.S. House of Representatives, just two years ago this month, passed comprehensive climate change legislation that established national limits on U.S. emissions and that authorized a new trading program to help industries meet their targets as efficiently as possible.
It was indeed a heady time for those of us who have labored on this issue over the past two decades and more. We definitely felt as though we had the wind at our back. But now it all seems like a distant dream … there is no getting around the fact that 2010 was a dark time for those of us who believed that the United States was on the precipice of taking serious action.
So today, I will spend my time talking with you about why I believe things have changed so dramatically in so short a time. But I also want to point to some signs of hope. William Butler Yeats once wrote, “When one looks into the darkness there is always something there.” And I believe this is an insight we should remember, no matter how dark things may appear to be at the present time.
John McCain joked once in a different context that it’s always darkest before the light goes completely out. (Pause.) Which is very funny – but also somewhat depressing. In my remarks today, I intend to look into the present darkness and reflect on some of the reasons why things are so dark right now. But I also will point out that indeed, there is “something there.”
Let us start with a closer look at why it has grown so gloomy (for some) in Washington. In the two years since the House of Representatives voted on the so-called “cap-and-trade” legislation in June 2009, the opposition to climate action has gained the upper hand in the debate. The 2010 U.S. elections last November brought an astonishing number of new members to Congress who publicly disavowed the science of climate change. In fact, shortly after the election, a U.S. think tank conducted a comprehensive review of the policy positions and statements of more than 100 incoming Republican members of Congress. It found that more than half of them — I repeat: more than half —are skeptics of climate change. They say they are not sure it’s really happening. Remember: This is in the majority party that controls the legislative agenda in the U.S. House of Representatives.
So if anyone tells you that serious congressional action on this issue is possible in the next two years, I hope you will politely tell them they’re crazy. It’s not going to happen.
And it is not just the presence of a large number of climate skeptics that make it improbable that the current U.S. Congress will do anything. As always in Washington, there are a range of other issues and other interests at play. In the wake of President Obama’s effort to overhaul the U.S. health care system, for example, there is a pronounced distaste in our nation’s capital and throughout the United States for policies that could be branded as quote-unquote “big government” solutions.
We can do our level best to try and help people understand how a cap-and-trade approach leaves it to the market (and not government) to find the most efficient ways to reduce emissions, but opponents inevitably will turn this into an issue of government overreach. And in the current political climate in the United States, attacking things in this manner is a strategy that seems to work.
There is also of course the economy – a seemingly unending challenge with which I know all of you are familiar. You understand how unemployment rates can color every political decision. In the U.S., unemployment hovers at or near the 9 percent mark, causing members of Congress to feel their own jobs are at risk to the extent that they embrace policies that could be construed as being anti-business or, worse, “anti-jobs.” The President’s health care law regularly is referred to as a quote-unquote “job killing,” “job destroying” or “job crushing” initiative. This is how you attack your opponents in Washington today. You accuse them of wanting to take away people’s jobs. And, once again, this is a strategy that seems to work, even if it can be argued that addressing climate change in a serious way will actually create new jobs in clean energy and related industries.
Unfortunately, it gets even worse. Not content merely to block legislation that could strengthen or expand U.S. efforts to address climate change, many in the House of Representatives are pursuing a strategy of trying to eliminate or curtail existing policies and programs related to this issue, however modest they may be.
Earlier this year, the House passed a spending bill to avoid a government shutdown. Ironically, this measure could have been nicknamed the “Kill Government” bill for its drastic cutbacks. While fiscal realities demand cuts to a wide range of vital federal programs, the House plan disproportionately cut funding for the climate science and clean energy programs needed to transition to the robust clean-energy economy that many businesses and the public support.
Thankfully, the U.S. Senate had its say, and the spending bill the President eventually signed into law avoided total annihilation of federal climate initiatives. While the most aggressive efforts by Congress to strip the U.S. Environmental Protection Agency of its funding and authority to act on climate and clean energy may not have passed, many politically-contentious issues lie ahead that may present more hurdles for EPA. For instance, debates this summer over the U.S. debt ceiling and battles over the 2012 budget could again put EPA in the crosshairs. Many Republicans, especially in the House, are likely to stay vigilant in their anti-climate efforts.
But under our bicameral legislative system, the House does not have the last word in these matters. The Senate, however, presents its own challenges, starting with an arcane set of rules that allows a minority of senators to block major legislation. The Democrats are in the majority in the Senate, but they don’t have the 60 votes they need to pass anything major on climate change or other big issues. What’s more, the Democrats themselves remain divided on the climate issue, with senators from oil- and coal-producing states often siding with Republicans to block proposals that could be portrayed as trying to change the prevailing, high-carbon energy mix in the United States.
Looking ahead, things could get worse before they get better. The period after the November 2012 elections could be the next best chance for the United States to do something serious on the climate issue. But if the House remains majority Republican, or the Senate falls into Republican hands, the chance will probably be lost for another two years or more.
So, it’s a little dark in Washington at the moment and it is hard to see how anything substantive or serious can happen on the climate issue under the current Congress. Indeed, the challenge right now is to prevent Congress from endangering the mostly modest initiatives and programs that are in place right now to address this issue, and on which we can potentially build a more robust response in the future under friendlier leadership.
Which brings me to the shadows of hope we can see if we follow the advice of Mr. Yeats and look into the darkness. The first of these appears when we look at what’s happening at the U.S. Environmental Protection Agency, the federal agency that is responsible for carrying out many U.S. laws related to climate change and the environment.
With Congress unable to pass comprehensive climate legislation in 2010, attention turned to what the EPA might be able to do under the agency’s existing authority. And it turns out the EPA can do a great deal. One of the reasons why it can do a great deal is because the U.S. Supreme Court in 2007 decided that greenhouse gases meet the definition of pollutants under the Clean Air Act. This is the omnibus federal clean air law that was originally passed in the 1970s and has been amended and expanded several times since.
In its 2007 ruling, the Supreme Court left it to the EPA to decide if emissions of greenhouse gases present a risk to public health and welfare. EPA decided they did, based on the overwhelming scientific evidence about the enormous risks that climate change poses to America and the world. Interestingly, we recently learned that the previous EPA Administrator under President George W. Bush came to exactly the same conclusion … and other senior Bush administration officials agreed. So when opponents of the EPA decision on greenhouse gases inevitably painted it as a partisan attempt to expand government, well, let’s just say that their arguments seemed a tad partisan themselves.
What is the EPA doing to try and limit U.S. emissions of greenhouse gases? National standards for passenger cars and light-duty trucks that won approval from industry and environmentalists will increase fuel efficiency to 35.5 miles per gallon by 2016 and save consumers $3,000 over a vehicle’s lifetime. A new EPA proposal to be finalized next year aims to increase fuel efficiency by another 3 to 6 percent per year through 2025. In late October, the agency announced a sensible proposal to reduce emissions by 20 percent and improve fuel efficiency for medium and heavy-duty vehicles. This was followed by a November announcement that will go a long way to making sure that new industrial facilities in the United States use state-of-the-art technologies to boost efficiency and reduce their greenhouse gas emissions. And later this year, EPA is expected to propose the first-ever greenhouse gas standards for new and existing power plants and oil refineries.
Of course, opponents of these and other reasonable EPA actions will continue to raise a ruckus, and there have already been loud cries in Congress to take away the agency’s regulatory authority and cut its funding, as I already discussed. But the fact remains that, even though its efforts are relatively mild and will not come close to achieving the broader reductions in greenhouse gas emissions that President Obama promised during his election campaign, EPA is still in the fight and is still putting forward reasonable rules and regulations for reducing the U.S. contribution to climate change. And that is an encouraging thing to see as we take in an otherwise dark scene.
It is also important to take notice of action actually taking place on the ground that has climate benefits. Most notably, we expect many old coal plants to shut down. While some new coal plants will come online soon, we are far more likely to see new natural gas power plants built in the future. While not “The Answer” to our climate and energy challenges, natural gas emits half the amount of carbon dioxide as coal. So this shift to natural gas, largely driven by regulations of conventional pollutants and by discoveries of shale gas that make natural gas more cost-competitive, will certainly help keep the U.S. on the downward emissions pathway that we’ve experienced in recent years. Of course, achieving bigger, brighter changes in how we produce and consume energy will ultimately require new policies, technological innovation, and broad public support.
Another shadow of hope that we can see if we look hard into the current darkness is that President Obama continues to talk about energy issues in a way that is helpful for the climate. Yes, he recently proposed to expand drilling for oil in the United States, but he continues to frame the nation’s energy challenge (and, indeed, the world’s) as a challenge that we can meet only through an all-of-the-above energy policy that reserves a vital role for low-carbon, clean-energy sources in meeting our energy needs in the decades to come. Obama’s rhetorical commitment to climate action was again heard in his speech before the British Parliament last month, when he grouped climate change as one of the world’s principle threats to confront along with terrorism, nuclear proliferation, famine and disease.
Looking ahead to the 2012 U.S. presidential election, we can even see a faint shadow of hope (I emphasize it’s a faint one) in the histories of the leading Republican candidates for President. A number of the leading Republican candidates (including former state governors Tim Pawlenty, Jon Huntsman and Mitt Romney and former House Speaker Newt Gingrich) have in the past supported cap-and-trade policies. Of course, they wouldn’t admit it now even under enhanced interrogation techniques.
But these men who are running for President on the Republican side are not your classic climate change deniers. In fact, some of them still agree that the science of climate change is real, although they are not supporting any real action to deal with it. I know this does not sound like much … but the fact is that these candidates will find it hard to make climate change a polarizing issue in the 2012 election given their records and past statements on the issue – and that is a good thing.
Of course, if former Governor Sarah Palin of Alaska or another out-and-out climate change skeptic runs for President on the Republican side, then this might change. And I expect the well-funded, highly-influential Tea Party movement to continue to mislead the public about the science and hold up climate action as a prime example of government run amuck. But in all honesty, I am not sure that running on a climate-change-denial platform is smart politics in America today. I am convinced from a review of the polls that the majority of the American people actually support reasonable action to develop clean energy sources and take other steps to create a low-carbon economy.
According to various credible surveys, a majority of Americans (about 60 percent) believe global warming or climate change is happening. It is important to note, however, that these numbers have trended down in recent years in sync with the recession and with the increasing political battles over climate change policy and well-funded attacks on climate science.
One of the more interesting public opinion surveys on this topic is the so-called “Six Americas” study by Yale and George Mason universities. The project’s researchers identified six distinct subsets of the U.S. population based on their beliefs about climate change. The six categories are: Alarmed; Concerned; Cautious; Disengaged; Doubtful; and Dismissive. (Add the name Grumpy and you could have the climate change version of Snow White and the Seven Dwarfs.)
Interestingly, majorities in all six of these groups said they believe the United States should make it a priority to develop clean sources of energy. Regulating carbon dioxide emissions was supported by a majority of each group except the Dismissive. (Nobody asked Grumpy what he thought.) So it’s obvious that a significant portion of the U.S. population supports policies that directly or indirectly would result in reduced emissions of greenhouse gases.
Where support for these policies begins to decline is where researchers ask Americans what they are willing to pay to achieve these goals. But still, public support for clean energy (and, to a lesser extent, regulating greenhouse gas emissions) is certainly a hopeful thing we can see as we look into the darkness in the United States on this issue today. And the reason why it is so hopeful is because it suggests to me that the current stalemate on this issue cannot last, especially in the face of continuing extreme weather events such as the recent flooding of the Mississippi River and Texas wildfires that have ravaged nearly 3 million acres.
These are exactly the kinds of events that climate scientists keep warning us will become more frequent in a warming world, and these types of extreme weather events inevitably raise serious questions in people’s minds about whether warming global temperatures are already wreaking havoc with the climate.
So far, I have talked mostly about national politics in the United States, but it is important to remember that in the U.S. political system, states have an enormous degree of authority and flexibility to advance climate solutions and other policies on their own. And the good and hopeful news is that many U.S. states have banded together in recent years to launch regional initiatives aimed at reducing emissions and developing clean energy. This is in addition to individual states acting on their own on these issues.
The not-so-good news is that state actions on the climate issue suffered a bit of a setback last November. As was the case with the U.S. congressional elections, the 2010 gubernatorial elections brought to the nation’s statehouses a group of new leaders who adopted strong stands against climate action in their campaigns. This is already setting back some of the progress we were seeing at the state level on this issue in recent years. For example, New Jersey’s new governor, Chris Christie, who is a rising star in the Republican Party, announced last month that he would withdraw his state from a very promising regional climate initiative that includes 10 northeastern U.S. states. While Gov. Christie said he accepts the scientific consensus that climate change is happening and humans play a role, he follows the standard Republican position of opposing policy action, specifically cap and trade.
But there is still hope among the states. During the November election, for example, voters in California overwhelmingly rejected a measure aimed at curtailing the state’s nascent efforts to reduce its greenhouse gas emissions. Shortly after that vote, the California Air Resources Board formally approved the state’s cap-and-trade program, which is designed to reduce California emissions to 1990 levels by 2020. A lawsuit by environmental activists opposed to cap and trade challenged the regulations on procedural grounds and may prevent the state from implementing its program on time. But the good news is California is still in the fight. And there is strong public support for what the state wants to do. California Gov. Jerry Brown also has signed into law one of the nation’s most aggressive renewable electricity standards. It requires 33 percent of the state’s electricity be produced by renewable sources by 2020.
Of course, California, as a relatively progressive state,will always provide a more hospitable climate for action on this issue. But the fact that the most highly populated U.S. state will soon be implementing a cap-and-trade system and other measures to reduce emissions has to be a positive sign.
Internationally, the Cancún climate talks showed that there are opportunities for incremental, evolutionary progress in the global negotiations on key operational issues of finance; measurement, reporting and verification; adaptation; technology; and forestry. It is important to understand that progress on these issues does not require a new legal agreement. Each of them can be advanced in tangible ways by decisions of the Parties. That is exactly what was achieved in Cancún. The Cancún Agreements are a package of decisions by the Parties. And what that package does, in large measure, is to import the essential elements of the Copenhagen Accord into the UN climate system and take initial steps to implement them.
What this represents is incremental progress – evolutionary progress – the kind of progress that had eluded us for years because we were so preoccupied with legally-binding outcomes. So we were able to move forward in Cancún on operational issues. But we were able to do so – and this is an important point – only because Parties were willing to put aside their differences on the legal issues.
I encourage the talks this year in Durban, South Africa to build on the effective, incremental approach taken in Cancún. Because the reality is that the U.S. cannot make global commitments until there is stronger consensus for action at home. And even apart from the situation in the U.S., the reality is that few if any developed countries will take on new binding commitments unless China and other emerging economies do as well. For now, we must look to coalitions of the willing to make progress in key areas, such as renewable energy and forest protection. While maintaining the international process is key to working toward the ultimate, longer-term goal of a global climate agreement with legally-binding commitments, actions taking place on the ground in individual countries right now are the most important signs of progress.
The last shadow of hope – and perhaps the most important one – that I want to talk about is the fact that there remains a strong core of business support for reasonable action on the climate issue in the United States. The Pew Center’s Business Environmental Leadership Council includes 46 major corporations that support mandatory, market-based approaches to tackle climate change.
Starting with 13 companies in 1998, our Business Council is now the largest U.S.-based association of corporations focused on addressing the challenges of climate change and supporting mandatory climate policy. It includes mostly Fortune 500 companies with combined revenues of over $2.5 trillion and over 4.5 million employees. Many different sectors are represented, from high technology to diversified manufacturing; from oil and gas to transportation; from utilities to chemicals.
While individual companies hold their own views on policy specifics, they are united with the Pew Center in the belief that voluntary action alone will not be enough to address the climate challenge. The bottom line: Business support for climate solutions is surely a hopeful sign amid the present darkness … and it is yet another factor that suggests to me that the current situation can’t last for long.
I would like to end my remarks by drawing your attention to something that will happen today in the United States that, at least on the surface, appears to have very little to do with the subject of my remarks. On 42nd Street in New York City, at the Foxwoods Theater, a new rock musical based on the Spiderman comics with music and lyrics by U2’s Bono and The Edge has its official opening after several months of delays and various catastrophes along the way.
Just months ago, many people wondered if it would ever open, given that it was way over budget and that it had gone through a number of cast changes, script rewrites and more. The low point came when a stunt performer fell more than 20 feet to the stage after a cable snapped on the harness that held him aloft. Fortunately, he was released from the hospital and is OK, and despite mixed reviews, ticket sales for the production have been, well, phenomenal.
I bring up the opening of the Spiderman musical because it’s a reminder that even when things are at their darkest, there can still be hope for success. I also bring it up because of the title of the production. It is called Spiderman: Turn Off the Dark.
Yeats told us, “When one looks into the darkness there is always something there.” And right now, as I have said, we can indeed see shadows of hope in the darkness that has descended on the climate change debate in the United States. When we will be able to turn off the dark, I cannot say. But I believe it can happen in due time.
Now perhaps we can turn up the lights for some questions … Thank you very much.
For many Americans, U.S. oil dependence has become a concern for reasons ranging from climate change and environmental protection to national security and the economic impact of higher gas prices. But there are other important impacts of our oil dependence, including how foreign oil contributes to the U.S. trade deficit and how rising oil prices decrease American jobs – both particularly salient issues on the current U.S. political agenda.
A recent article from Daily Finance shines light on the 2010 trade deficit, more than half of which is from petroleum-related products. In 2010, the U.S. petroleum-related trade deficit was $256.9B, which represents a 29.6 percent jump from the 2009 petroleum trade deficit. This rise is largely due to increased prices, as the consumption of petroleum-related products in the United States grew by only 1.9 percent from 2009 to 2010 while the price per barrel of oil grew 31.1 percent to $74.66. An issue currently receiving a lot of attention in Washington, the $61B worth of cuts to the national budget sought by the U.S. House of Representatives, is equal to only one fourth of the country’s 2010 petroleum-related trade deficit.
Numbers that large can be hard to put into perspective, so let’s look at how this affects the average American. The graph below shows the U.S. petroleum-related trade deficit per capita (left axis), which is closely related to oil prices (right axis). In 2010 the petroleum-related trade deficit per capita was $832 and has ranged from $600 to $1200 in the past several years. This translates into each American household sending roughly $2,155 out of the U.S. economy in 2010 to pay for oil.
Rising oil prices not only increase the trade deficit, they decrease the number of jobs in America. As energy prices rise, businesses and consumers must spend more on energy and thus have less to spend elsewhere. In his presentation at our recent conference on state and federal roles in climate policy, Mark Doms, Chief Economist at the Department of Commerce, explained that when the price of oil goes up by just $10 per barrel, it translates into a loss of tens of thousands of jobs per month, or up to a quarter of a million U.S. jobs per year. Instead of losing jobs in order to maintain our use of oil, we should focus on creating jobs by investing in domestically produced alternative fuels and vehicles.
In June 2008, oil prices spiked to $145 per barrel, and Americans paid for it at the pump as gas prices reached $4 per gallon. We could be headed into a similar situation, as oil prices rose above $105 per barrel earlier this month and are expected to continue to rise in 2011 and 2012. Because we rely on oil, a resource that is concentrated in the Organization of the Petroleum Exporting Countries or OPEC, we face oil prices that are much higher than a competitive market would yield. This makes U.S. gasoline susceptible to price shocks, and American consumers pay more at the pump than they would in a competitive market.
Here we have highlighted two other important reasons why Americans should care about rising oil prices: they increase the U.S. trade deficit and can decrease domestic jobs. As oil prices continue to rise, these negative economic trends will also worsen. In order to mitigate the impacts of rising oil prices, we need to work towards a clean energy economy and promote the use of domestic alternative fuels and energy efficiency. This would decrease our oil dependence, making the United States less susceptible to rising oil prices while also creating more jobs here at home.
Monica Ralston is is the Innovative Solutions intern
Opening Keynote by Eileen Claussen, President of the Pew Center on Global Climate Change
State-Federal Workshop on Climate and Energy Policy: Where Do We Go From Here?
Hosted by the Pew Center and the Georgetown Climate Center
February 24, 2011
I want to welcome all of you to our 2011 workshop on state and federal climate and energy policy. The Pew Center on Global Climate Change is delighted to be working with the Georgetown Climate Center – and two of our favorite alumni in Vicki Arroyo and Kate Zyla – to present what we hope will be a very engaging and informative program over the next two days.
You know we established the Pew Center in 1998 as a nonpartisan, independent organization to provide credible information and help spur innovative solutions to climate change. For those of us who have been working on this issue for so many years now – and I am certainly not the only one in the room about whom this is true – right now could be a very discouraging time indeed. President Obama did not even utter the words “climate change” in his State of the Union address in January. In contrast, in his 2010 address he was effusive in praising the U.S. House of Representatives for passing a comprehensive energy and climate bill.
We have traveled a difficult road on this issue over the past year … a road jammed by partisan fighting over health care and the legislation on financial reform … and a road torn up by the poor state of the U.S. economy. It’s been hard to move forward in these conditions. Then in November, congressional elections brought a whole new group of climate change deniers and doubters to the halls of Congress.
Any time you have someone winning election to the Senate thanks in part to an ad where he uses a rifle to shoot a hole through cap-and-trade legislation, well … I guess you could be forgiven for feeling a little bit down and out.
But I am not here to give you a woe-is-me address. Well – not an entirely woeful address. And the reason why I won’t do that, and the reason why none of us should accept the argument that it’s impossible at the moment to move anywhere on this issue, is because the stakes are simply too high.
Before I get into the meat of my remarks though I know the Academy Awards will be broadcast in a few days and I was looking at the list of films that are nominated this year, and I noticed that a lot of these films have something in common. A lot of them tell stories about people overcoming seemingly insurmountable odds to succeed. And I thought they actually hold lessons for those of us working on climate change and energy issues.
- For example, there is The King’s Speech … the story of King George the Sixth overcoming a debilitating stammer so he can unite his people to enter World War II. The moral for the climate fight: It takes hard work and determination to communicate in ways that mobilize people. And for those of you who have seen the movie, there is also this: when you’re feeling really down, unleashing a string of profanities can be excellent therapy.
- Another Oscar contender is the film The Fighter, about boxer Mickey Ward and his half brother, Dickie … and Mickey’s unlikely road to the world boxing title with Dickie’s help. The lesson: don’t ever count yourself out. And, if you’re a parent, please think twice before giving your children rhyming names.
- Of course, there is also True Grit … about a young girl’s venture into hostile Indian Territory to find the man who killed her father. The lesson for those of us pushing for climate action: stay the course, and follow your journey to its end. And, if by any chance you’re staffing up for this work, don’t overlook the gruff, hard-drinking, one-eyed man in the cowboy hat who dropped his resume off the other day. He might be able to help you out.
So maybe there is something in the culture right now. Maybe we need these stories about people taking on big things, overcoming big challenges in their lives. And maybe those of us working on the climate change issue should take note. We may feel unlucky from time to time, but we cannot let it get in the way of our work to help shape solutions to the climate challenge facing this country and the world. The simple fact is that the evidence of climate change continues to pile up in front of us. We ignore it at our peril.
2010 tied 2005 as the warmest year on record. Nine of the 10 warmest years have happened since 2001. Last year, Russia faced the worst heat wave and droughts in its documented history. Unprecedented flooding in Pakistan left 2 million people homeless and millions more requiring emergency aid. There was also unprecedented seasonal flooding in Australia. And nearly all of the Northern Hemisphere was dealing with a massive heat wave last summer.
Each of these events, every one of them, is consistent with what scientists say we should expect in a warming world.
Even the record cold and snowfalls that much of the United States has been dealing with this winter can be seen as a glimpse of what we’re in for as atmospheric greenhouse gases increase and the climate becomes more unstable. It simply defies common sense to ignore the link between man-made climate change and these numerous extreme weather events. I am not saying climate change caused these particular storms and bitter cold, but this is exactly the kind of thing scientists say we should expect more of in the years to come. Add to that the declining sea ice in the Arctic, receding and disappearing glaciers, and the many other signs of irreversible change, and it’s hard not to feel that we are loading the dice. I have three young grandchildren, another is on the way. And it is hard not to wonder about the world they will grow up in.
What kind of world will it be? To what extent will their generation have to pay for the things we didn’t do today?
This is what’s at stake. And this is why we need to persist in our work on these issues. Over the next two days, we will be talking about many important topics, from transportation and land use to adaptation to what it will take to build a clean-energy economy here in the United States and around the world. We will also be talking about the varying yet complementary roles of the state and federal governments in addressing these issues.
I want to use my remarks here this morning to share what I believe is a realistic outlook of the challenges we face and draw your attention to a few small signs of hope. Because while the politics can look bleak, there are a few indications that action on this issue might still be possible in the months and years ahead.
The first positive sign I want to point out is the commitment of this White House to clean energy as a priority for the United States. In his State of the Union address, the President set a goal for the nation: to get 80 percent of our electricity from clean energy sources by 2035. He may not have used the words “climate change” in making this proposal, but the implication for the climate is clear.
The White House knows full well that public support for renewables and other alternative energy sources remains strong. A recent Gallup poll found that more than 80 percent of voters favor clean energy legislation … although voter support does drop, sometimes below 50 percent, when people are asked to consider the costs of shifting to cleaner sources of energy, however manageable those costs might be.
Adopting a clean energy standard would obviously be a big deal and a significant step forward. But is it politically possible? My guess is no – not right now. Not to say that there isn’t real interest in a CES – but realistically, the chances of such an initiative passing the Senate are very small – and probably zero for getting through the House. Still – it’s useful to set a goal – and start the conversation.
This takes me back to the lesson from The King’s Speech that I mentioned: It takes hard work and determination to communicate in ways that mobilize people. Even in the face of considerable opposition, those of us who believe in the need for action on this issue must continue our efforts to connect with the public. We must continue to make our case. And we must continue to connect our cause to other related causes for which there is considerable public support.
This is why we should all be pleased that the White House has placed clean energy issues front and center as it continues to develop its “Win the Future” innovation agenda for the nation. As the Obama administration very rightly points out, China leads the world right now in clean energy investment, and we have a lot of work to do just to keep up, let alone overtake China as the world’s clean energy leader.
And the White House’s commitment on these issues is not all talk; it’s not all about photo opps and messaging. One unmistakable sign that the Obama administration wants to see real action on climate and energy issues comes from the Environmental Protection Agency.
Remember the message from The Fighter? Don’t count yourself out. Well, EPA is making an effort to stay in the fight despite some very long odds, and some very tough opponents in the opposite corner of the ring.
Even as he talked about reducing “unnecessary” government regulations in his State of the Union address, the President made a point of saying that he – quote – “will not hesitate to create or enforce common-sense safeguards to protect the American people.” This was an obvious shot across the bow to those members of Congress who have stated their interest in depriving EPA of the ability to regulate carbon dioxide emissions.
Let’s be clear here. The Supreme Court in 2007 decided that greenhouse gases meet the definition of pollutants under the Clean Air Act. The Court left it to EPA to decide if emissions of these gases presented a risk to public health and welfare. And EPA decided they did, based on overwhelming scientific evidence underlying the risks of climate change. It’s not just the Obama EPA that feels this way. We recently learned that the previous EPA Administrator under President George W. Bush came to exactly the same conclusion … and other senior Bush administration officials agreed.
In fact, EPA’s recent actions on this issue aren’t all that different than the step-by-step plan spelled out by the agency under President Bush, a plan that was described at the time by the Administration as “prudent and cautious yet forward thinking.” Today’s actions are largely the same, and yet they’ve come under attack by a vocal contingent in Congress.
What regulatory road is EPA headed down? The initial rules requiring mandatory reporting of emissions, substantially improved fuel economy for cars and vans, and best available control technology for large new and modified sources are a good start. Later this year, EPA is expected to propose additional stationary source controls, with a focus on the electric power and oil refinery sectors. And even in these cases, EPA’s actions are extraordinarily modest.
And so they may be pulling some punches, but the fact remains that EPA is staying in the fight. Of course, opponents of these and other reasonable EPA actions will continue to raise a ruckus, and there have already been loud cries in Congress to take away the agency’s regulatory authority and cut its funding. Indeed, the budget bill passed by the House of Representatives last week would repeal EPA’s authority to regulate greenhouse gases from stationary sources, although it leaves regulations of automobiles intact.
The House budget also proposes major cuts in climate-related programs at EPA and other agencies. EPA funding was reduced 30% overall, including the Global Change program, with even larger cuts to the greenhouse gas reporting program. NOAA’s Climate Service program was zeroed out as well. Among the many Energy Department programs with reduced funding, Energy Efficiency and Renewable Energy face a 40 percent cut. And for a high-profile hit, funding for the Assistant to the President for Energy and Climate Change, recently held by Carol Browner, was eliminated. Looking internationally, nearly all funding for U.S. commitments under the UNFCCC process was slated for elimination, including funding for the IPCC and the U.S. Special Envoy for Climate Change.
It’s not a pretty picture, and I cannot honestly tell you how it will be resolved. Certainly there will be cuts, certainly there will be policy riders to appropriations bills, and certainly there will be attempts to legislate away EPA authorities directly. But those seeking these changes will not have an easy ride, and I would guess that many of these attempts will fail.
So – sticking with the ‘fighter’ theme – on the budget front, we’re probably only in round 2 or 3 of a 12 round match.
More positive signs come from the world of business.
As all of you know, the White House right now is making a very deliberate effort to build business support for its policies. The President’s recent address to the U.S. Chamber of Commerce was just one part of this effort. It came, you will recall, shortly after he appointed Jeffrey Immelt of GE to head the President’s Council on Jobs and Competitiveness. GE and its CEO have been leaders in the American business community on the issue of building a clean-energy economy, so the Immelt appointment makes sense. And it’s a reminder to the American public that there is considerable support among U.S. business leaders for reasonable action to promote clean energy industries and jobs, reduce U.S. dependence on foreign oil – and, incidentally, reduce U.S. emissions of greenhouse gases, too.
There remains great interest in the business community in clear and certain U.S. energy policy. “Certainty.” You hear the word again and again today in conversations with business leaders. Dow CEO Andrew Liveris was on NPR last month and in simple, eloquent terms he stated that businesses need to know the regulatory rules of the road to have a better idea of what types of investments will pay off down the line. He clearly articulated the need for government to engage proactively with business to create public-private partnerships to spur innovation and create jobs in clean energy and other sectors.
So this idea that all of business is some scary villain standing in the way of action on these issues is inaccurate. In fact, the business world appears to be taking a lesson from the third film I mentioned, True Grit. Many of these companies started on their journey years ago to reduce emissions, increase efficiency, and pursue business opportunities in the clean energy sector. And they aren’t about to be dissuaded from staying on the trail. It may be tough sometimes, and the political winds may be blowing against them at the moment, but they are intent on pursuing this to the end.
Up to now, my remarks have been mostly Washington-centric, and I apologize. That’s what you get for coming to the nation’s capital to talk about climate change. But, of course, all of the action (or inaction) on this issue does not happen in Washington, and so let’s take a look at the picture at the state level. The news from the state capitals on this issue in recent months has been decidedly mixed. While regional climate initiatives continued to push forward in the past year, the November elections brought to the nation’s statehouses a group of new leaders who adopted strong stands against climate action in their campaigns. In the State of Montana, a bill was introduced that would overturn the laws of science and nature and simply declare that carbon dioxide does not cause global warming.
But this is another case where we should remember the story of Mickey The Fighter and not count ourselves out. Because there was an important bright spot in the elections. I am talking about the overwhelming defeat in California of Proposition 23. This measure, as you know, would have suspended a 2006 law intended to reduce the state’s greenhouse gas emissions. Shortly after the vote, the California Air Resources Board formally approved the state’s cap-and-trade program, which is designed to reduce California emissions to 1990 levels by 2020. While further legal challenges are pending, California is still in the fight. And there is strong public support for what the state wants to do.
Yes, Californiawill always provide a more hospitable climate for action on this issue. But the fact that the most highly populated U.S. state will soon be implementing a cap-and-trade system and other measures to reduce emission has to be a positive sign. It is a sign that the issue is not going to quietly disappear into the night. Much of the financial support for the “No on Prop 23” campaign came from the venture capital and tech industries in California. These companies understand the market opportunities that clean energy and energy efficiency provide, and despite the millions of out-of-state dollars poured into the Prop 23 campaign, they were willing to invest in making those opportunities real.
And, of course, California is not alone among the states in advancing serious measures that reduce emissions. Here at this workshop over the next two days, we will all learn more about what’s happening on this issue in states across the country.
For instance, Maryland has new energy laws to increase renewable energy production and create more incentives to purchase electric vehicles, which are especially well-suited to the state’s compact land use. And Maine has recently adopted laws to expand energy efficiency and boost clean electricity generation with the aim of preserving the Pine Tree State’s scenic landscape for its many vacationers.
As they have since the dialogue began way back in the 1990s, many U.S. states are taking the initiative, advancing solutions, and providing a learning laboratory for the rest of the country so we can see what works in practice. And that is definitely a positive sign.
The final very small positive sign I want to talk about is what’s happening outside the United States. The agreement reached by international negotiators in Cancún in December fills in many key missing elements of the 2009 Copenhagen Accord, including a stronger system of support for developing countries and a stronger transparency regime to better assess whether countries are keeping their promises. The Cancún Agreements also mark the first time that all of the world’s major economies have made explicit mitigation pledges under the U.N. Framework Convention on Climate Change.
Of course, the ultimate goal of the continuing international talks must be a comprehensive binding climate treaty. That’s the goal of the journey we started on this issue way back in 1992 at the Earth Summit in Rio. But in Cancún we saw countries agreeing on incremental steps that will deliver stronger action in the near term and keep the world on course toward someday (we hope) agreeing to binding commitments.
So to recap, I see four small but positive signs amid what I acknowledge is a very challenging environment. They are: 1) the White House’s continuing commitment to doing something on this issue in the face of very strong political headwinds, in part through common-sense steps at the EPA; 2) support for reasonable action on energy and climate issues among U.S. business leaders; 3) some progress on these issues in California and other states; and 4) continued progress in the international climate talks.
I don’t want to be a Pollyanna here. I understand as well as anyone else that all of these small positive signs I have mentioned are positive only when you compare them to all of the negative things that are happening out there today. We are like all of the leading characters in the movies I have mentioned. In a very difficult fight. On a journey in hostile territory with the odds sometimes appearing overwhelmingly stacked against us. Facing enormous challenges in communicating, getting our message across, getting more people on our side.
I cannot promise a Hollywood ending to this drama we’re in but I can say this: all is not lost. And getting to a place where we are confident about the prospects for action on this issue that we all care about so deeply is going to require each and every one of us to recommit ourselves to this fight. To recommit ourselves to staying the course in our journey. And to recommit ourselves to communicating in more compelling and more coherent ways about what’s at stake here, and about what we can and must do.
Think about transportation. With gas prices rising and oil now exceeding $100 a barrel, it’s hard to argue against realistic solutions that can lessen our oil dependence while reducing greenhouse emissions. The Pew Center just last month released a report that showed it’s possible to get to a cleaner, more secure transportation system that could deliver up to a 65-percent reduction in emissions from the sector between now and 2050.
Solutions are out there. We can meet the challenge of building clean energy industries and creating clean energy jobs. We can reduce U.S. and global emissions of greenhouse gases. But we are going to need true grit to get this done.
Thank you very much, and I hope you enjoy the conference.
With the long-awaited release of the Kerry-Lieberman clean energy and climate bill (The American Power Act) and EPA’s final action on its “tailoring” rule, two important clues emerged this week to the unfolding mystery of whether or not we will have climate legislation this year. And buckle up and enjoy the ride -- two more major developments are just around the corner. On Wednesday, the National Academy of Sciences will be releasing three of its panel reports on America’s Climate Choices and sometime in the next two weeks Senator Murkowski may bring forward for a vote her effort to overturn EPA’s endangerment finding.
The release of the K-L bill demonstrates both how far we have gone and how distant the goal remains. The bill achieved support from some key elements of the business community and goes much further in adding in elements (nuclear power and a hard price collar) that could expand its base of support. But the loss of Senator Graham as a co-sponsor and the absence of any bipartisan backing underscore the challenges it faces in achieving the 60 votes it will need to avoid a filibuster in the Senate. The Senate clock also continues to wind down making it harder to find floor time to move a comprehensive bill forward.
EPA’s recently issued interpretation of when greenhouse gases become regulated pollutants and its final tailoring rule show EPA’s willingness to make reasonable use of the existing Clean Air Act to tackle climate change. By delaying the effective date when new source review will apply to greenhouse gases, and limiting new source requirements for best available control technology to only the largest sources (estimated to impact approximately 900 additional major sources annually), the agency put to rest the fears of some that the Agency’s rules would sink the economy and harm small businesses. The rule shows that the existing Act, though cumbersome, can be used as a tool to reduce greenhouse gas emissions.
Both EPA’s action and the upcoming National Academy panel reports provide the perfect preface to the expected vote in the Senate on overturning EPA’s endangerment finding which links greenhouse gas emissions to health and welfare impacts from climate change. To argue for overturning the finding, some Senators will point to recent controversies: the errors in the IPCC report; the hacked e-mails referred to as “climategate;” and even the DC snowstorms of last winter as evidence that the science of climate change is somehow suspect. Despite the media attention these have received, none in any way undercut the overwhelming case underlying concerns about climate change. Three independent investigations have each cleared the scientists who authored the e-mails of charges that they manipulated data or infringed on the peer review process. The IPCC has corrected the two mistakes (the expected date of the melting of Himalayan glaciers and the percent of land in the Netherlands under water) uncovered to date in its reports – out of a total of thousands of pages, two mistakes neither of which undercuts the IPCC’s key conclusion that “warming of the climate system is unequivocal” and “that most of the observed increase in global average temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic GHG concentrations.” Finally, notwithstanding Washington D.C.’s blustery winter, globally 2009 proved to be one of the warmest years on record. The NAS panel reports this week are likely only to reinforce these conclusions, further calling into question any votes in support of overturning EPA’s endangerment finding based on denying what we know about climate science.
Others in the Senate, including Senator Murkowski, make the case that the goal of overturning the endangerment finding is really about the need to take the worst option (EPA regulations) off the table and thereby protect our economy from the potentially dire consequences of EPA action particularly on small businesses. They argue that this would allow our elected representatives the opportunity and time to address this issue. But the limits EPA adopted in its tailoring rule (and its earlier decision to delay implementation) appear to take off the table these concerns about widespread and costly controls on small sources. Although legal challenges to the tailoring rule are possible, they would take time to work their way through the courts, and if they were successful, Congress would then be in a far better position (and have a more compelling case) to provide a narrow legislative fix addressing a specific problem.
When the debate on overturning EPA’s endangerment finding moves to the Senate floor (10 hours of debate is permitted), many will be wondering why the Senate isn’t instead focusing its debate on finding the common ground solutions urgently needed to get our nation on a path that enhances our energy independence, spurs the growth of new technologies, and slows climate change.
Steve Seidel is Vice President for Policy Analysis
ANCHORAGE - Alaska is a big state, with big mountains, big wildlife, and big development projects. It’s also a place of big changes: the state has warmed more than 4 degrees, creating tremendous pressures on the natural environment and society. But in a place where the people are always looking for the next big economic driver, like a $40 billion Alaska natural gas pipeline, uncertainty about carbon regulation is an Alaska-sized problem.
We just added a brief on natural gas to its Climate TechBook that helps to explain why natural gas is unique among fossil fuels. Natural gas is both a contributor to climate change (natural gas combustion accounts for about 16 percent of total U.S. greenhouse gas emissions) and an option for reducing emissions since natural gas is less carbon-intensive than coal and petroleum. The United States could actually reduce total greenhouse gas emissions by burning more natural gas if it’s displacing other fossil fuel use (this is particularly the case for fuel switching from coal to gas in power generation).
Like coal, but unlike petroleum, natural gas is primarily a domestic energy resource, with net imports of natural gas constituting only about 13 percent of U.S. consumption and about 90 percent of imports coming from North America. Unlike coal (93 percent consumed for electricity generation) and petroleum (more than two thirds used for transportation), natural gas consumption is more evenly split across the electric power, industrial, residential, and commercial sectors.
The past few years have seen a “revolution” in the outlook for natural gas supply. Until recently, experts thought that the United States would become increasingly dependent on expensive imports of liquefied natural gas (LNG) from overseas, but the recent boom in domestic “unconventional” gas production (driven by shale gas) and the dramatically increased estimate of U.S. gas reserves have led to projections of increasing domestic natural gas production and declining imports.
Natural gas is receiving a lot of attention in the discussion about U.S. climate and energy policy. The gas industry is pressing for favorable treatment in possible climate and energy legislation, with a specific set of policy priorities recently put forth by a major industry lobby group.
While some tout natural gas as a “bridge fuel” to a low-carbon future others fear that a “dash for gas” (i.e., fuel switching by electric power generators) could increase demand for and the price of natural gas, thus negatively impacting manufacturers that rely on natural gas for energy and as a feedstock.
Recent analysis by the U.S. Energy Information Administration (EIA) of the climate and energy bill passed by the House in June 2009, illustrates how the projected role of natural gas in reducing U.S. greenhouse gas emissions depends in large part on the use of offsets under cap and trade and the relative cost and commercial availability of low-carbon technologies (e.g., wind, solar, carbon capture and storage, and nuclear power). When low-carbon technology deployment and offsets are constrained, EIA finds a much heavier reliance on natural gas for electricity generation under cap and trade, but the new outlook on U.S. natural gas supply means that even this pessimistic scenario does not lead to major increases in projected natural gas prices.
A new modeling analysis from Resources for the Future (RFF) sought to quantify the implications of the dramatically expanded U.S. natural gas supply. RFF researchers found that without new energy and climate policy, more abundant and less expensive natural gas could actually mean slightly higher U.S. greenhouse gas emissions in 2030 than would otherwise be the case (as cheaper natural gas competes with non-emitting energy sources and increases total energy consumption).
This last point brings us back to the overarching importance of implementing a policy that puts a price on carbon, as a greenhouse gas cap-and-trade program would do. Putting a price on carbon would harness market forces to drive the deployment of a portfolio of low- and lower-carbon technologies and fuels, including increased natural gas use to the extent it can cost-effectively reduce emissions.
Steve Caldwell is a Technology and Policy Fellow