The Center for Climate and Energy Solutions seeks to inform the design and implementation of federal policies that will significantly reduce greenhouse gas emissions. Drawing from its extensive peer-reviewed published works, in-house policy analyses, and tracking of current legislative proposals, the Center provides research, analysis, and recommendations to policymakers in Congress and the Executive Branch. Read More
Prepared remarks by Bob Perciasepe
President, Center for Climate and Energy Solutions
Challenges for the New President
Harvard University Center for the Environment
November 15, 2016
I want to thank Doctor (Daniel) Schrag and the Harvard University Center for the Environment for inviting me to speak. And my thanks to all of you for coming to listen. Dan and I have been talking for some time about my coming up from Washington to do a lecture. I’m not sure either one of us had quite this backdrop of current events in mind.
What a week. I know folks are still processing what happened seven nights ago and what happens next. The truth is: Elections have consequences. That’s why it’s so important to exercise our right to vote.
It’s too soon to tell exactly what steps the next administration will take on climate and energy policy. The rhetoric of campaigning doesn’t always exactly match the realities of governing. We hope President-elect Trump and his advisers take some time to study the issues and hear a broad range of perspectives.
They’ll find that a majority of Americans support stronger climate action.
They’ll find that many cities and states are promoting energy efficiency, deploying renewable energy, and supporting alternative fuel vehicles.
And they’ll find that business leaders recognize the rising costs of climate impacts, and also see opportunities in clean technologies. You could say they want to “win” in the growing global clean-energy economy.
This evening, I want to explore three questions:
- What are the climate and energy realities facing this president, and all of us?
- What might we expect from a Trump Administration?
- And what can we do to promote environmentally responsible policies in the years ahead?
To put my remarks in context, it helps to know a little bit about my organization C2ES – the Center for Climate and Energy Solutions. C2ES is a nonpartisan, nonprofit think tank. We work to forge practical solutions to climate change. Our mission is to advance strong policy and action to reduce greenhouse gas emissions, promote clean energy, and strengthen resilience to climate impacts.
We believe a sound climate strategy is essential to ensure a strong, sustainable economy. I want to underline that. It’s a conviction our think tank was founded on. And it’s a message I hope you’ll leave here with tonight: Environmental and economic progress go hand in hand.
I came to C2ES a little over two years ago because of its reputation:
- As a Trusted Source of impartial information. We rank regularly among the top environmental think tanks in the world.
- As a Bridge-Builder. We bring city, state, and national policymakers together with businesses to achieve common understanding.
- As a Policy Innovator. We explore market-based solutions and other practical policy approaches.
- And as Catalyst for Business Action. We work with Fortune 500 companies to strengthen business support for climate policy.
The idea of bringing disparate groups together is part of our DNA. Here are four quick examples:
At the international level, C2ES brought together negotiators from two dozen countries for a series of private discussions that helped lay the groundwork for the landmark Paris Agreement.
Our Solutions Forum is fostering collaboration to reduce emissions, mobilize climate finance, and strengthen resilience to climate impacts. That last one -- climate resilience -- is relatively new. With communities experiencing climate impacts here and now, it’s something we can’t afford to ignore.
We recently partnered with The U.S. Conference of Mayors to create the Alliance for a Sustainable Future, whose goal is to strengthen public-private cooperation.
And our multi-sectoral Business Environmental Leadership Council is the largest U.S.-based group of companies devoted solely to addressing climate change.
That’s who we are and where I’m coming from. Now, let’s look at the some of the realities facing the next administration.
Realities on the Ground
Depending on your point of view, this was either a “Change Election” or a “Fear of Change Election.” What I can tell you is that it wasn’t a “Climate Change Election” because nobody was talking about it.
Climate change didn’t come up once in any of the presidential debates. The only question about energy policy came from that guy in a red sweater, Ken Bone. Climate change was not top of mind in the voting booth. Asked before the election where climate change ranked among their concerns, voters put it No. 19 out of 23.
But when asked where they stand, the majority of Americans – of all political viewpoints -- support climate action. A majority of Democrats, Independents, and Republicans support funding renewables research, providing tax rebates for energy-efficient vehicles or solar panels, and regulating carbon dioxide as a pollutant.
Americans support climate action because they understand that climate change is occurring, and that human actions are largely responsible.
Here are a few more facts:
- 2014 was the hottest year globally ever recorded. Until 2015. 2016 has been even hotter.
- Climate change is a matter of science, but also a matter of dollars and cents. This year, the United States experienced a dozen billion-dollar disasters.
- Climate impacts like rising sea levels and more frequent and intense heatwaves, downpours, and droughts threaten the way we all live our lives.
Another reality is that our energy landscape has already changed. This isn’t your grandfather’s energy system. When I was born, the United States didn’t get any commercial power from natural gas or nuclear. Zero. Now those two sources together are responsible for more than half of our electricity.
Let’s talk a minute about those two. First, natural gas. Thirty years ago, before many of you were born, it was illegal to use natural gas in a power plant. Now it makes up more than a third of U.S. electricity supply. Coal makes up another third of our energy mix, down from about half 10 years ago. This change is due in large part to market forces. Natural gas is inexpensive, so utilities have switched to if from coal.
These same market forces are posing a challenge for nuclear energy. Nuclear is responsible for more than 60 percent of zero-carbon electricity in the United States – It’s the biggest source. A number of reactors have been closing prematurely, which could make it even harder to meet our climate goals.
Renewables have been surging as costs have plummeted. Wind and solar generation have grown nearly twelve-fold since 2005. That’s nearly eight times greater than expected.
Thanks to diversifying our energy mix, and improving energy efficiency, power sector emissions have fallen by more than 20 percent in the past 10 years. We’re moving in the right direction. The challenge will be to keep doing so.
What to expect
What can we expect from the new administration? I’ve been getting two questions for the past week: What will happen to the Clean Power Plan? And what will happen with the Paris Agreement? So let’s talk about those.
Every new president usually halts regulations that are in the process of being formulated, so we can expect that. For a final regulation, like the Clean Power Plan, a simple stroke of the pen can’t undo it. It’s a process. First, they’d have to do a rule-making, which requires public comment. Then, they'd need to come back with an alternative plan. That’s because under previous Supreme Court rulings, EPA is still under a legal obligation to reduce greenhouse gas emissions. It’s mandatory. They’ll be sued if they don't.
The Clean Power Plan is currently in the courts. So we could find ourselves replacing the current legal uncertainty with new and different legal uncertainty.
On a positive note, the Clean Power Plan prompted a lot of state environmental officials, public utility regulators and other stakeholders to sit down together for the first time to talk about electricity reliability, efficiency and affordability. We hope those conversations bear fruit.
There’s no doubt that the Clean Power Plan could reduce power plant emissions faster and further than no plan at all. But progress has already been made and I think there are ways it can continue.
Mr. Trump has also said he wants to “cancel” the Paris Agreement. The bottom line is that he could legally pull the U.S. out of it. Let’s think through, practically, how that would work out for us. Consider that virtually every country in the world has committed to taking climate action. The Paris Agreement is a bottom-up, flexible framework. It relies on peer pressure. If we want to hold other countries accountable, we have to hold up our end. If we walk away from our commitments, we also give up being a player in the innovative energy and transportation technologies that can create U.S. jobs. China, Brazil and the US led the world last year in employment in renewable energy.
The Paris Agreement has widespread support among the business community. Eleven major companies we work with, including Berkshire Hathaway Energy, Microsoft, National Grid, and Shell, signed onto a C2ES statement applauding governments for bringing the agreement into force so quickly this month. Businesses say the agreement provides long-term direction, promotes transparency, and addresses competitiveness.
Because the Paris Agreement is flexible, there are a lot of ways for an individual country to tailor its efforts. It was also designed to be durable – It can survive shifts in political currents. The nearly 100 other countries that have already ratified it are reducing emissions for a variety of reasons, including economic opportunities and health benefits to their people. I expect they will remain committed to moving forward.
As for what else we can expect – we’ll have to wait and see. From opening up public lands and offshore areas to more drilling to re-assessing pipelines to appointing agency leaders with very different priorities from the past eight years, we’re going to see changes.
What we can do
So that brings me to my final question tonight: What can we do to promote environmentally responsible policies in the years ahead? Let’s look at four vantage points – federal, state, local, and business.
First: The executive branch has been the focus of climate action for a number of years. That’s going to change. I want to posit that it may be time to return our focus on the legislative branch. Three areas where bipartisan support already exists are: building infrastructure, incentivizing carbon capture technologies, and preserving the nuclear fleet.
Both presidential candidates talked about the need to modernize our aging infrastructure. That’s not just roads and bridges. We need to modernize our electric grid to move renewable power from where it’s generated to where it’s needed. We need to improve the natural gas pipeline system to reduce leaks. And we need to expand electric vehicle charging. The electric grid should be able to accommodate clean energy technologies like energy storage, time-of-day pricing, and grid-to-vehicle interfaces.
Millions of miles of pipes carrying drinking water and wastewater are nearing end of life. And it takes a lot of energy to move a gallon of water. The nation’s utilities lose about $2.6 billion dollars annually from trillions of gallons of leaked drinking water.
Infrastructure projects can also help communities be more resilient to extreme weather, make communities more livable, increase property values, and save energy and water. And, of course, infrastructure projects create jobs.
The second area where we could make progress is carbon capture, use and storage, or CCUS. Some of you might be skeptical about this as “clean coal.” The truth is, there’s no scenario for achieving the emission cuts we need globally without carbon capture. We need to keep emissions out of the air not only from coal and natural-gas power plants around the world, but also the industrial sector like steel, chemical, and cement plants. The industrial sector is responsible for more than 20 percent of U.S. greenhouse gases.
Right now, there are bipartisan bills in the House and Senate that would spur carbon capture technology. Imagine Senate Majority Leader Mitch McConnell and Hillary Clinton’s running mate, Senator Tim Kaine, on the same bill. It’s true.
A third area where we might get some bipartisan agreement is preserving our nuclear fleet. There’s a bill right now that both Senators Whitehouse and Inhofe support. From a climate perspective, it doesn’t make sense to prematurely close nuclear plants when, in the short- and medium-term, they cannot realistically be replaced by zero-emission power sources. Keeping these reactors operational also buys us time to address energy storage and transmission challenges to support more renewable generation.
Let me add one more area as a possibility where we might see some agreement at the federal level: helping the communities most affected by the transition to clean energy. Remember that market forces – not regulations -- have mainly been driving the decline of coal. And natural gas will continue to displace coal in our power generation fleet at current prices. There are no plans for new coal-fired power plants in the United States. What coal communities need is opportunities for new jobs. The United States could be world leaders in manufacturing clean energy and transportation technologies. More Americans work now in the solar industry than work in either oil & gas extraction or coal mining. It will take a concerted effort involving education and training, but we have to help.
Moving to the states, which have always been the incubators of policy, we’ve seen a lot of progress on clean energy. Twenty-nine9 states require electric utilities to deliver a certain amount of electricity from renewable or alternative energy sources. Ten states that are home to a quarter of the US population already have a price on carbon and are successfully reducing emissions. Those states are California and the nine Northeast states, including Massachusetts, in the Regional Greenhouse Gas Initiative (RGGI). RGGI has added $243 million in value to Massachusetts’ economy. Massachusetts has also been named the most energy efficient state in the country for the last six years.
Every state has either an operational wind energy project, a wind-related manufacturing facility, or both. Some of the biggest wind energy producers are Texas and Iowa. They won’t want to reverse the economic prosperity they’ve seen as a result. America’s first offshore wind farm has just come online off Rhode Island, launching new industry with the potential to create jobs in manufacturing and the marine trades.
Time and again, we’ve seen leadership at the state level and I expect that will continue.
On environmental policies, so much often comes down to the local level. Many cities have already taken the ball and are running with it. They’re improving the energy efficiency of buildings, deploying cleaner energy, and encouraging cleaner transportation.
Cities see the real and rising risks of climate change. They’re dealing with the impacts now. They also see opportunities to for energy and transportation systems that are cleaner and more efficient than today. To keep their efforts moving forward, partnership and collaboration will be key, especially between cities and companies.
That’s why we at C2ES recently launched a partnership with The US Conference of Mayors called the Alliance for a Sustainable Future. The main goal is to spur public-private cooperation on climate action and sustainable development in cities. Santa Fe Mayor Javier Gonzales is leading the steering committee. Founding sponsors include JPMorgan & Chase Co., Duke Energy, and AECOM, and the mayors of Austin, Des Moines, New York City, and Salt Lake City.
Finally, business leadership has been and will continue to be crucial in transitioning to a clean energy and clean transportation future. A C2ES study found more than 90 percent of the companies in the S&P Global 100 Index see climate change as a business risk. They see rising sea level and more frequent and extreme heat waves, downpours and drought damaging and disrupting their facilities and operations, supply and distribution chains, and water and power supplies.
More than 150 companies -- from Alcoa to Xerox -- signed the White House American Business Act on Climate Pledge. They committed to cutting emissions, reducing water usage, and using more renewable energy. Business leaders see opportunities in clean energy and transportation.
Here’s another thing to think about, the power of the consumer. In the past year, three in 10 Americans say they’ve rewarded companies for taking steps to address climate change.
The reality is that we have strong momentum in the right direction. Our economy has begun decarbonizing. Power sector emissions are down, thanks largely to market forces and to incentives for renewable energy that have strong bipartisan support. Many cities, states and companies, along with a number of congressional Republicans, want to keep that momentum going. Smart investments and technological innovation have started America on a clean-energy transition. Building on that momentum will protect communities from rising climate damages and will contribute to strong and sustained economic growth.
The longer we wait to address climate change, the costlier it will be. I urge all of you to work at the local and state level to support common-sense policies that lead us toward a sustainable future.
Globally, countries are committing to near-term actions to address climate change and many, including Canada, Mexico, Germany and the U.S., are beginning to look much further ahead to the long-term strategies needed to reduce the significant risks of a changing climate. These strategies highlight options that can yield the necessary reductions to avert the worst impacts of climate change.
In addition, on Thursday the climate champions Laurence Tubiana and Hakima El Haite announced the 2050 Pathways Platform to support other countries in the development of their mid-century strategies. Twenty-two countries have signed up for the initiative, and many have indicated they will work toward their own strategies. In addition, 15 cities, 17 state and regions, and nearly 200 companies have joined the initiative to support national strategies.
All of the plans submitted thus far focus on technology pathways rather than specific policies. Another common element is a focus on changes to land use and forestry that can absorb some of the carbon dioxide already in the atmosphere. The strategies also prioritize which sectors of the economy really need to transform: energy, transportation, land-use and forest sequestration, and short-lived climate pollutants.
The decision to release the U.S, Canadian and Mexican mid-century strategies together at COP 22 in Marrakech was made at a joint leaders’ summit in Ottawa in June, building on the countries’ economic ties and shared energy and transport infrastructure.
In the U.S., there are three focus areas for achieving significant emission reductions: decarbonizing the energy sector, improving the U.S. land sink, and reducing emissions of non-CO2 greenhouse gases. The U.S. strategy identifies positive trends over the last decade in each of these areas, and puts forward priorities for strengthening those trends.
These priorities include improved efficiency throughout the energy system, transitioning almost completely to non-emitting energy sources (including nuclear and fossil fuel with capture capture technology for electricity generation), enhancing carbon sequestration on U.S. lands, developing negative emissions technology (BECCS, or Beneficial Bioenergy with Carbon Capture and Storage), and reducing methane, nitrous oxide, and hydrofluorocarbon emissions.
The U.S. strategy does not give a preferred balance between these priorities, but does include model scenarios showing that overachieving on any one priority would mean other priorities would need to contribute less. For example, the analysis that underlies the strategy includes a scenario with no CO2 removal technology. If negative emission technologies do not become available, the U.S. could still meet its 2050 goal by creating a larger land sink and achieving larger reductions in the energy sector.
While the mid-century strategy does not specify policy recommendations, it does note that “a key priority for future policymakers is a transition to efficient carbon pricing over time,” either at a subnational or economy-wide level.
Mid-century strategies can guide the private sector to make long-term investments consistent with the 2050 goals. It may also provide a framework for collaboration between governments and cities, states, and companies around a vision for deep decarbonization. C2ES looks forward to working with businesses and governments at all levels to provide vital input to these strategies.
(Contributing author: C2ES Solutions Fellow Ashley Lawson)
|Business leaders at COP 22 in Marrakech, Morocco, explain how investments in clean energy and efficiency make good sense for everyone. L to R: Elliot Diringer, Executive Vice President, C2ES; Cathy Woollums, Senior Vice President, Environmental Services and Chief Environmental Counsel, Berkshire Hathaway Energy; Nanette Lockwood, Global Director, Policy and Advocacy, Ingersoll Rand; Kevin Rabinovitch, Global Sustainability Director, Mars Incorporated; Tamara “TJ” DiCaprio, Senior Director of Environmental Sustainability, Microsoft.|
Businesses have invested billions in clean energy and efficiency because it makes business sense.
At a side event at the U.N. climate talks in Marrakech, Morocco, leaders of major companies reiterated the benefits of those investments – for their companies, customers, the environment and the economy -- and said they will keep moving toward sustainability.
“We see a clear business case for this,” said Kevin Rabinovitch, Global Sustainability Director at Mars Inc. The global food and candy company has committed to eliminate all greenhouse gas emissions from its operations by 2040. Working toward energy efficiency helps the company cut costs, he said, but also motivates employees who are working toward a higher purpose.
“These targets, these programs, these goals need to transcend individual leaders, be they in government or in corporations,” Rabinovitch said. “We’re solving long-term problems. We need to put structures and systems in place that are consistent and durable.”
“You’re now looking at decades of investment. Businesses are not going to walk away from this,” said Nanette Lockwood, Global Director, Policy and Advocacy at Ingersoll Rand. The maker of air conditioners and refrigeration systems has committed to invest $500 million by 2020 to develop alternative refrigerants to HFCs and to reduce emissions by 50 million metric tons by 2030. “Once we set a direction and we create value and markets, we continue down that path.”
The C2ES event, co-sponsored with the Edison Electric Institute, featured senior representatives from Berkshire Hathaway Energy, Ingersoll Rand, Mars and Microsoft. They are among the more than 150 U.S. firms that have committed to specific climate actions as part of the American Business Act on Climate Pledge.
“Microsoft is committed to its sustainability goals, to its clean energy goals. Our investments in innovation in this area are good not only for the environment, but also for our business and for the economy,” said Tamara “TJ” DiCaprio, Senior Director of Environmental Sustainability at Microsoft, whose operations have been carbon neutral since 2012. Microsoft uses an internal carbon fee to fund energy efficiency, renewable energy, and sustainable communities.
As the largest regulated owner of renewable energy generation in the U.S., Berkshire Hathaway Energy has invested more than $15 billion in renewable projects, and has pledged to invest up to another $15 billion going forward.
“We can bring renewable solutions to our customers at very low cost and sometimes no additional cost,” said Cathy Woollums, Senior Vice President for Environmental Services and Chief Environmental Counsel. “It’s a win for the environment; it’s a win for our customers; and it’s a win for us.”
In a C2ES statement released in October when the Paris Agreement reached the threshold for entry into force, 11 leading companies said they are “committed to working on our own and in partnership with governments to mobilize the technology, investment and innovation needed to transition to a sustainable low-carbon economy.” The statement notes that the Paris Agreement facilitates stronger private sector action by providing long-term direction, promoting transparency, addressing competitiveness, and facilitating carbon pricing.
Speakers at the event agreed on the importance of consistency, transparency and partnerships moving forward. The Paris Agreement, with nearly all of the world’s nations committing to move in the same direction, is sending signals that the business and investment community are internalizing in their long-term investing and decision-making. And working together with cities and states, and other companies, helps them share best practices and go further, faster to reach their goals.
A lot of the progress that has been made, especially in the United States, in reducing emissions has been driven by market and technology forces, and those forces will continue even in the absence of federal action on climate change.
Asked what will change under the new U.S. administration, Woollums said, “We need to give the new administration a chance to develop rational policies. The President-elect understands business. To the extent that the things that we’ve been doing make business sense, we will continue to do those things.”
November 15, 2016
US: Laura Rehrmann, firstname.lastname@example.org, 703-516-0621
Marrakech: Anthony Mansell, email@example.com, 202-384-0774 (cell)
Major companies back Paris Agreement
Hear from companies at livestreamed event today
MARRAKECH – At an event today at COP 22 in Marrakech, the Center for Climate and Energy Solutions (C2ES) will highlight climate action by business, including a recent statement signed by 11 leading corporations in support of the Paris Agreement.
The event, to be held at the U.S. Center at the U.N. Climate Change Conference, will feature remarks by senior representatives of Berkshire Hathaway Energy, Ingersoll Rand, Mars and Microsoft. They are among the more than 150 U.S. firms that have committed to specific climate actions as part of the American Business Act on Climate Pledge.
The event occurs at 4 p.m. Marrakech time (11 a.m. EST) and will be livestreamed. (See details below).
C2ES Executive Vice President Elliot Diringer will highlight a statement organized by C2ES and signed by 11 major companies based or with major operations in the United States welcoming the Paris Agreement's entry into force, and pledging to work with governments to implement their contributions.
The statement, released when the threshold for entry into force was reached in October, says the Paris Agreement establishes “an inclusive, pragmatic and, hopefully, durable framework for progressively strengthening efforts globally to address the causes and consequences of climate change.”
The statement was endorsed by Berkshire Hathaway Energy, Calpine, HP Inc., Intel, LafargeHolcim, Microsoft, National Grid, PG&E, Rio Tinto, Schneider Electric, and Shell.
“As businesses concerned about the well-being of our investors, our customers, our communities and our planet, we are committed to working on our own and in partnership with governments to mobilize the technology, investment and innovation needed to transition to a sustainable low-carbon economy,” the statement says.
It says the Paris Agreement facilitates stronger private sector action by providing long-term direction, promoting transparency, addressing competitiveness, and facilitating carbon pricing.
“Many companies recognize the costly impacts of climate change, and see investment and growth opportunities in a clean-energy transition,” said C2ES President Bob Perciasepe. “These companies are taking action and are looking to governments to help lead the way.”
Read the full business statement: http://bit.ly/Biz4Climate
Watch the livestream: http://www.state.gov/e/oes/climate/cop22/video/index.htm
CHARTING A LOW-CARBON COURSE FOR THE U.S. ECONOMY
Tuesday, November 15, 2016, 4 p.m. – 5 p.m. local time (11 a.m.-Noon EST)?U.S. Center, Blue Zone, Marrakech?Livestream: http://www.state.gov/e/oes/climate/cop22/video/index.htm
Senior officials from major corporations discuss ways business leadership can help achieve climate goals in this live-streamed event co-sponsored with the Edison Electric Institute (EEI).
• Cathy Woollums, Senior Vice President, Environmental Services and Chief Environmental Counsel, Berkshire Hathaway Energy
• Nanette Lockwood, Global Director, Policy and Advocacy, Ingersoll Rand
• Kevin Rabinovitch, Global Sustainability Director, Mars Incorporated
• Tamara “TJ” DiCaprio, Senior Director of Environmental Sustainability, Microsoft
• Elliot Diringer, Executive Vice President, C2ES
• Eric Holdsworth, Senior Director, Climate Programs, EEI
For reporters in Marrakech, C2ES will also host a second side event:
Post-Election: The Outlook for U.S. Climate Policy
November 16, 2016
6 p.m. – 7:30 p.m.
IETA Pavilion, Blue Zone
• Nathanial Keohane, Vice President, Global Climate, Environmental Defense Fund
• Josh Klein, Senior Professional Staff, Senate Foreign Relations Committee
• Matt Rodriquez, Secretary for Environmental Protection, California
• Cathy Woollums, Senior Vice President, Environmental Services and Chief Environmental Counsel, Berkshire Hathaway Energy
• Elliot Diringer, Executive Vice President, C2ES
About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonprofit, nonpartisan organization promoting strong policy and action to address our energy and climate challenges. Learn more at www.c2es.org.
Statement of Bob Perciasepe
President, Center for Climate and Energy Solutions
November 9, 2016
On the results of the 2016 U.S. election:
We urge President-elect Trump to take time to study the issue of climate change and hear a broad range of perspectives. He’ll find that a majority of Americans across the political spectrum support stronger climate action. Many cities, states and businesses are already acting. Business leaders recognize that extreme weather is driving up costs and that clean energy is creating economic opportunities essential to America’s future.
Smart investments and technological innovation have started America on a clean-energy transition. Building on that momentum will protect communities from rising climate damages and will contribute to strong and sustained economic growth.
The longer we wait to address climate change, the costlier it will be. The modern infrastructure and advanced technologies we need to cut emissions and strengthen climate resilience will create jobs at home and position U.S. firms to better compete in the emerging clean-energy economy.
Virtually every country in the world has committed to taking climate action and U.S. leadership is needed to hold them accountable for their promises.
As an independent, nonpartisan organization, C2ES will continue to provide evenhanded analysis and is committed to working with our newly elected leaders and with business and other stakeholders to build common ground toward common-sense climate solutions.
To talk to a C2ES expert, contact Laura Rehrmann at firstname.lastname@example.org
About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonpartisan, nonprofit organization working to forge practical solutions to climate change. Our mission is to advance strong policy and action to reduce greenhouse gas emissions, promote clean energy, and strengthen resilience to climate impacts. Learn more at www.c2es.org.
How significant a source of emissions is air travel?
Aircraft are a rapidly growing emissions source within the transportation sector, which is second only to the power sector as a source of U.S. carbon dioxide emissions. In 2013, aircraft were responsible for about 3 percent of total U.S. carbon dioxide emissions and nearly 9 percent of carbon dioxide emissions from the U.S. transportation sector. Commercial air travel accounted for most of the aircraft carbon dioxide emissions, with military and general aviation making up the rest.
From 1990 to 2013, U.S. carbon dioxide emissions from domestic commercial flights grew 4 percent. Recent studies estimate that U.S. aircraft emissions will increase substantially in the next 20 years. Moreover, airplanes remain the single largest source of carbon dioxide emissions within the U.S. transportation sector that is not yet subject to greenhouse gas regulations.
U.S. aviation is part of the increasingly interconnected global aviation sector, which makes up about 2 percent of global carbon dioxide emissions but is one of the fastest growing sources. From 1990 to 2010, global aircraft carbon dioxide emissions grew about 40 percent. If global aviation were a country, it would rank as the seventh largest carbon dioxide emitter, and U.S. aircraft emissions are 29 percent of all global aircraft emissions. Absent new policies, global aircraft emissions are projected to triple by 2050.
Figure 1: 2013 U.S. carbon dioxide emission, by sector and transportation source
The transportation sector is responsible for more than one-third of U.S. carbon dioxide emissions. Aircraft are responsible for nearly 9 percent of U.S. transportation sector carbon dioxide emissions.
Source: U.S. Environmental Protection Agency (EPA), Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2013 (Washington, DC: U.S. Environmental Protection Agency, 2015), http://www.epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2015-Main-Text.pdf.
What is the status of regulation?
In 2012, the DC District Court ruled that the U.S. Environmental Protection Agency (EPA) is required under the Clean Air Act to determine whether greenhouse gas emissions from aircraft cause or contribute to air pollution, which may reasonably be anticipated to endanger public health or welfare. An endangerment finding would trigger regulation under the Clean Air Act.
On July 25, 2016, EPA issued the final endangerment finding under section 231(a)(2)(A) of the Clean Air Act for aviation emissions. This finalizes the process following the proposed endangerment finding issued on June 10, 2015. The final finding builds on the previous 2009 endangerment finding for light-duty vehicles and found greenhouse gas emissions from aircraft engines used in certain types of aircraft are responsible for contributing to climate change, which threatens public health and welfare.
Covered aircraft are those subject to international carbon dioxide emission standards, subsonic jet aircraft — ranging from smaller jet aircraft such as the Cessna Citation II to larger jet aircraft such as the Boeing 747 — and subsonic turboprop aircraft — e.g., Bombardier Q400. The proposed endangerment finding will receive public comment before a final endangerment finding may be issued.
How does EPA action fit with global action?
Unlike stationary sources, such as power plants, and many mobile sources, such as cars, aircraft frequently travel between jurisdictions with different environmental laws and standards. As such, the United Nations' International Civil Aviation Organization (ICAO) serves as a global forum to develop policies and standards for the global industry, including a comprehensive set of measures to address greenhouse gas emissions.
In 2010, industry’s goal of carbon neutral growth from 2020 onwards was formally adopted by ICAO. Within the sector, the key pathways to reduce emissions are improvements in aircraft technology, improvements in operations and infrastructure, and further use of aviation biofuels.
In addition, ICAO agreed at its 38th Assembly in 2013 to develop a Global Market-Based Mechanism (GMBM) that allows emission reductions occurring outside the aviation sector to be used to meet its goals. At the 39th ICAO Assembly in October 2016, ICAO formally adopted a resolution establishing the GMBM as an offsetting mechanism available to airlines to offset their growth in emissions from 2020 onwards. A Global Market Based Mechanism Task Force is currently working to establish the technical details of what types of offsets will be permittewd in the GMBM, and will conclude their work no later than 2018. ICAO adopted additional measures, including a CO2 standard that will be phased in for new aircraft design to continue improvements in energy efficiency.
Traditionally, both the EPA and the Federal Aviation Administration (FAA) have worked within the ICAO process to establish international emission standards and related requirements for other pollutants. Under this approach, international emission standards are first adopted by ICAO, and EPA subsequently initiates rulemaking under section 231 of the Clean Air Act to establish domestic standards equivalent to international standards where appropriate. Both EPA and FAA expect to take a similar approach in promulgating future domestic aircraft greenhouse gas standards for covered aircraft.
What are the next steps?
The endangerment finding does not create any regulation in of itself and does not prejudge what future EPA standards for aircraft engines will be. Nevertheless, the final endangerment finding triggers EPA’s duty under the CAA to enact emissions standards applicable to GHG emissions from the classes of aircraft engines included in the endangerment finding. EPA can then proceed with developing regulatory standards, including a CO2 standard based from the agreed standard adopted by ICAO in October 2016.
Top: Siemens 2.3 MW Offshore Wind Turbines, courtesy Siemens Press.
Bottom: The ADA-ES 1 MWe pilot unit, courtesy US Department of Energy.
This fall, America’s first offshore wind farm will come online off the coast of Rhode Island, launching a new industry with the potential to create clean energy jobs in manufacturing and in the marine trades, attract private investment to New England, and reduce carbon emissions.
New energy technologies often need both state and federal support to be deployed commercially. Rhode Island has been a leader in supporting offshore wind. In 2010, its legislature authorized a state utility to enter into an offtake agreement for offshore wind power. This year, Massachusetts did the same, and New York announced a new Offshore Wind blueprint.
Rhode Island also brought stakeholders together to create an Oceanic Special Area Management Plan outlining multiple uses for the marine environment. These efforts laid the groundwork for Deepwater Wind to develop the Block Island Wind Farm, a 30 MW, five-turbine project that can provide power for most of Block Island’s 1,051 residents.
Similar state policies could help deploy more carbon capture technology as well. A handful of states have clean energy standards that include carbon capture technology, including Illinois, Massachusetts, Michigan, Ohio and Utah. This year, Montana Gov. Steve Bullock highlighted carbon capture in his state’s Energy Future Blueprint. Other states could follow this model.
Both the Western Governors’ Association and the Southern States Energy Board have issued resolutions supporting carbon capture technology as did the National Association of Regulatory Utility Commissioners.
National policies and early financing support played a role in the success of offshore wind projects in Europe. A report by the Global Carbon Capture and Storage Institute noted that European nations included offshore wind in national energy policies and established feed-in tariffs to provide incentives for deployment.
Multilateral development banks like the European Investment Bank played a leadership role by lending to early offshore wind projects, paving the way for commercial banks to follow. Once these major factors were in place, then technology development, the establishment of standardized contract structures, and maintaining a certain level of deal flow helped drive efficiencies that brought down costs.
When it comes to financing carbon capture, use and storage (CCUS) in the U.S., we have some pieces of the puzzle in place. There is already a basic federal and state regulatory framework for underground storage of CO2, for example.
Still, financing policies are needed to enable investment in carbon capture projects. We should extend and expand commercial deployment incentives like tax credits and open up the use of master limited partnerships and private activity bonds to carbon capture, among other things.
A third lesson to draw from offshore wind is that to create new domestic industries, it helps to take a regional approach. Last year, the U.S. Department of Energy (DOE) announced funding for a multi-state effort for offshore wind in the Northeast to develop a regional supply chain.
DOE is taking a similar approach with CCUS and launched seven Regional Carbon Sequestration Partnerships to characterize CO2 storage potential in the U.S. and to conduct small and large-scale CO2 storage injection tests. Millions of tons of CO2 have already been stored for decades in West Texas as part of enhanced oil recovery operations. The regional partnerships characterized the potential for more CO2 storage in deep oil-, gas-, coal-, and saline-bearing formations as illustrated in the Carbon Storage Atlas. To date, the partnerships have safely and permanently injected more than 10 million metric tons of CO2 in these types of formations.
Investing seriously in carbon capture technology has economic benefits including for electrical workers, boilermakers, the building trades, and steelworkers. A new CO2 commodity industry could be created to reuse CO2 to make other products.
Carbon capture also has environmental benefits, helping us address emissions from industrial plants, which are the source of 21 percent of U.S. greenhouse gas emissions, and from coal and natural gas power plants, which currently supply two-thirds of U.S. electricity.
This fall, as we celebrate the beginning of the new offshore wind industry in the U.S., let’s keep thinking big about what is possible with carbon capture technology. With sufficient financial and policy support, we can create skilled jobs, attract private investment, and lower CO2 emissions.
Q&A: EPA Regulation of Greenhouse Gas Emissions from Existing Power Plants
On August 3, 2015, the U.S. Environmental Protection Agency (EPA) adopted Carbon Pollution Standards for Existing Power Plants, known as the Clean Power Plan.
Adopted pursuant to EPA’s authority under the Clean Air Act, the Clean Power Plan establishes unique emission rate goals and mass equivalents for each state. It is projected to reduce carbon emissions from the power sector 32 percent from 2005 levels by 2030. Individual state targets are based on national uniform “emission performance rate” standards (pounds of CO2 per MWh) and each state’s unique generation mix.
On February 9, 2016, the U.S. Supreme Court issued a stay of the Environmental Protection Agency’s (EPA’s) Clean Power Plan, freezing carbon pollution standards for existing power plants while the rule is under review at the U.S. Court of Appeals for the District of Columbia Circuit.
See more resources and maps at the C2ES Carbon Pollution Standards Resource Page.
Q: Why did EPA develop rules to regulate carbon dioxide?
Under the Supreme Court decision in Massachusetts v. EPA, greenhouse gases meet the definition of air pollutants under the Clean Air Act, meaning they must be regulated if they could be reasonably anticipated to endanger public health or welfare. EPA made this determination in 2009. In June 2013, President Obama directed EPA to work closely with states, power plant operators, and other stakeholders in developing carbon standards for existing power plants, and to finalize the standards by June 2015. EPA released its proposed rule in June 2014 and the final rule in August 2015.
Q: Why do we need to regulate power sector carbon emissions?
The power sector is one of the largest sources of U.S. carbon emissions, which are contributing to global climate change.
Many businesses, cities and states are cutting emissions, increasing renewable energy, and improving energy efficiency. In addition, cheap, abundant natural gas continues to displace coal (which emits twice as much carbon) in the U.S. electricity generation mix. But in the absence of the Clean Power Plan, U.S. emissions are projected to increase slightly as the economy grows, and as natural gas prices rise. Stronger policies are needed to increase energy efficiency, thereby reducing electricity consumption, and to expand the use of low- and no-carbon energy sources. In the absence of the Clean Power Plan, fossil fuels are projected to provide 62 percent of the U.S. fuel mix in 2030 compared with 58 percent under the Clean Power Plan, with most of the reduction coming from higher-emitting coal plants. Therefore, in the absence of the clean power plan, carbon dioxide emissions from the power sector are expected to increase around 2.7 percent (from 2015 levels) to 1,942 million metric tons in 2030, while under the Clean Power Plan carbon dioxide emissions would fall more than 17 percent (from 2015 levels) to 1,559 million metric tons in 2030.
Figure 1: US CO2 Emissions
Figure 2: Projected Electric Power Sector Carbon Dioxide Emissions under Business-as-Usual Scenario
Q: What is in EPA’s Clean Power Plan?
Typically, under the Clean Air Act, EPA sets standards and states implement them. The Clean Power Plan:
- Sets unique emission rates goals and mass equivalents for each state, reflecting the variation in their electricity generation mixes, to be met starting in 2022;
- Provides states significant flexibility in choosing how to meet their targets;
- Provides incentives for early deployment of renewables and efficiency measures benefiting low-income communities;
- Provides tools to assist states choosing to implement market-based approaches; and
- Contains a Federal Implementation Plan that EPA would use in states that do not accept adequate implementation plans.
EPA set interim and 2030 targets for each state based on uniform emission performance rates (application of BSER) and its unique generation mix.
Q: How was each state’s target calculated?
Uniform, national emission performance rates for affected power plants are based on the “best system of emission reduction” (BSER), using three “building blocks” or potential pathways applied regionally to reduce CO2 emissions:
- Make affected fossil fuel power plants more efficient;
- Increase generation from lower-emitting natural gas combined cycle plants; and
- Increase generation from new zero-emitting renewable power sources.
See a map of state targets for a more detailed explanation.
Q: What are the big differences between the proposed and final plans?
States will have more time to submit their implementation plans (they can get extensions to 2018) and two more years (until 2022) to begin phasing in pollution cuts. C2ES and others encouraged allowing states more time so they could take a longer view on planning and investment.
The final plan also proposes a voluntary Clean Energy Incentive Program (CEIP) to encourage early installation of renewable energy projects and energy efficiency programs for low-income communities before the 2022 compliance start date. EPA has invited comments on the CEIP and will address design and implementation details in a future action.
Market-based mechanisms are more explicitly encouraged in the final rule. The proposed federal implementation plan includes an option for states to join an interstate cap-and-trade program. It also outlines how states could participate in emissions credit trading without the creation of interstate compacts.
In calculating individual state targets, EPA had proposed taking into account each states’ energy efficiency potential, but it chose not to do so in the final rules. However, like the proposal, the final plan allows states to use energy efficiency programs for compliance.
EPA also changed its methodology for determining incremental renewable energy to better reflect regional technical potential, rather than state-level renewables policies, as in the proposal.
Unlike in the proposed plan, states with nuclear power plants under construction – Georgia, South Carolina, and Tennessee – will be able to count this generation toward compliance instead of having it factored into their targets.
The final rule also takes the interstate nature of the electric system into greater consideration. The proposal calculated state targets by applying building blocks to each state. The final rule uses the characteristics and potential of electric grid interconnections (Eastern, Western and Texas) to determine emission performance rates for units, which are then applied to each state’s unique generation mix to calculate a target.
Q: How can states reduce power sector carbon emissions?
States have wide latitude in designing their strategies to reduce emissions. In most cases, they will rely on a variety of measures. Major options include substituting natural gas for coal; improving energy efficiency; and increasing reliance on renewable energy.
States can implement the Clean Power Plan individually or in cooperation with other states. They also can employ market-based mechanisms, such as averaging or trading, to help power companies identify least-cost emission reductions.
Examples of steps to reduce carbon dioxide emissions in the power sector are illustrated in Figure 3 and Table 1.
Figure 3: Opportunities to reduce carbon dioxide emissions in the power sector
Table 1: Policy options to reduce power sector carbon dioxide emissions
|Power plant performance standard||Each power plant must achieve a set emissions intensity||California, New York, Washington|
|Renewable Portfolio Standard||Utilities must deliver a set percentage of renewable electricity||Colorado, Hawaii, Kansas, Missouri, Nevada, Rhode Island, and others|
|Energy Efficiency Resource Standard||Utilities must cut demand by a set amount by target years||Arizona, Connecticut, Maryland, Minnesota, Texas, and others|
|Decoupling||Reduce utility incentive to deliver more electricity by decoupling revenue and profit||California, Idaho, Massachusetts, Michigan, Oregon, and others|
|Net Metering||Encourage residential solar by paying homeowners to put excess electricity back on grid||Arkansas, Colorado, Georgia, Louisiana, and others|
|Cap & Trade||Issue a declining number of carbon allowances, which must be surrendered in proportion to each plant’s emissions||California, Regional Greenhouse Gas Initiative|
|Carbon Tax||Charge a tax for emitting carbon||British Columbia|
|Grid Operator Carbon Fee||Add a carbon price to grid operator decision over which power plants to run||None currently|
|Appliance Efficiency Standards||Require new appliances sold to meet set electricity consumption standards||California, Florida, New Jersey, and others|
|Commercial & Residential Building Codes||Require new buildings to include electricity saving measures||California, Illinois, Maryland, Mississippi, and others|
Q: How could states use market-based approaches to implement the plan?
Economists consider market-based approaches to be the most efficient way to reduce greenhouse gas emissions.
The Clean Power Plan encourages states to consider using market mechanisms, which could include a cap-and-trade program, a carbon tax, or tradable renewables or efficiency certificates.
EPA intends to set up and administer a program to track trading programs for states that choose to use them. In addition, the Federal Implementation Plan that EPA would employ in states without adequate plans includes market-based programs, which can be used by states as a model for their own plans.
Under EPA’s proposed new Clean Energy Incentive Program, states that act early to cut carbon pollution, either with renewables or energy efficiency, would be rewarded with emission reduction credits (ERCs), which they could use to meet their targets or sell to other emitters.
Q: How can states work together to implement the Clean Power Plan?
States have long collaborated to achieve energy and environmental goals. The successful trading program to reduce sulfur dioxide, which causes acid rain, is an example.
The plan is designed to facilitate interstate compliance strategies, including different forms of trading. The federal implementation plan outlines strategies to determine the equivalence of emission reduction credits in different states. It would also create a national platform that can be used to track the buying, selling, and trading of credits across state lines.
An example of states already working together is the Regional Greenhouse Gas Initiative in the Northeast. A multi-state approach could also be accomplished through another existing authority such as a Regional Transmission Organization (RTO) or Independent System Operator (ISO).
Q: Will states be able to use Canadian hydropower to comply?
Renewable energy from outside of the United States, including Canadian hydropower, can be used for compliance purposes, provided it is incremental and installed after 2012 and meets some other conditions. More than a dozen U.S. states already import a significant amount of Canadian hydropower. According to a C2ES report, importing hydropower from even a modestly sized new Canadian project (250 MW) could help a state bridge the gap between its current carbon emissions rate and its 2030 target.
Q: Will the Clean Power Plan affect the reliability of the electric grid?
In response to concerns raised by EPA’s proposed rule, the final plan includes a “reliability safety valve” temporarily relaxing emission standards on individual electric generating units under extraordinary circumstances where electric system reliability is concerned.
To mitigate reliability issues, states are required to address reliability in their compliance plans. Importantly, the plan gives states up to seven years before interim targets must be met, providing time for state regulators and reliability entities to work with utilities and other key stakeholders.
The plan is also expected to encourage energy efficiency, which helps lower demand growth and improve reliability.
Q: How much will implementing the plan cost?
EPA calculates that savings from increased energy efficiency will outweigh the costs of implementing the plan, reducing household electric bills by about $7 per month by 2030. The agency estimates compliance costs of $5.1 billion to $8.4 billion and total benefits of $34 billion to $54 billion.
Q: How does the plan address nuclear power?
Nuclear provides nearly 20 percent of the nation’s power and is the largest source of carbon-free baseload electricity. Five reactors are now under construction in Tennessee, Georgia and South Carolina and are expected to be online by 2030.
Unlike the proposal, the final rule does not consider existing or new nuclear power for the purposes of setting state targets. Therefore, the five reactors under construction and any new units or upgrades can count toward compliance.
Q: How is natural gas treated in the plan?
Both the proposal and the final plan envision about a third of U.S. electricity coming from natural gas in 2030. However, under the final plan, less new natural gas generation capacity is anticipated.
Natural gas demand was expected to grow more quickly under the earlier compliance date called for in the proposed rule. Proposed incentives for early deployment of renewables may encourage more investment in renewable energy in the short term.
Q: What does this plan mean for coal?
Demand for coal in the U.S. has been decreasing for many years because of the availability of relatively less expensive natural gas to meet baseload power demands and because of other environmental and safety regulations. Even before the Clean Power Plan, very few new coal plants were expected to be constructed. According to EPA’s IPM modeling of the final rule, coal is expected to make up 27 to 28 percent of the electric generation mix in 2030. In the absence of the Clean Power Plan, coal is expected to deliver a little more than 30 percent of U.S. electricity in 2030.
Figure 4: Distribution of Fossil Fuel Power Plants across the Contiguous United States
Q: What does the Supreme Court stay mean for the regulation?
The Supreme Court granted a stay in response to a legal challenge from some states, utilities and coal companies, who argued that EPA’s regulation was burdensome. Other states and utilities are participating in the legal challenge by supporting EPA. The court’s decision does not address the merits of the challenge but puts implementation of the rule on hold while a lower court decides the merits of the challenge. There’s no telling how it will play out, but the high court is likely to wind up deciding the case.
Whether or not the Court ultimately upholds this particular rule, the legal requirement to cut carbon emissions will remain, and states need to figure out the most cost-effective ways to do that. It’s important to note that a number of states challenging the rule in court are simultaneously working on their implementation plans. Some states may suspend their planning efforts but others will press on with preparations. If the plan is ultimately upheld, the implementation timeline may have to be extended.
The Environmental Protection Agency’s authority to regulate greenhouse gases is settled. The issue is whether EPA’s particular approach is appropriate.
Regardless of the ultimate legal outcome, the broader trends at play favor continued momentum toward stronger climate action.
Q: What is the timetable for implementing the plan?
Before the stay was issued, states had until September 2016 to either submit a plan or request an extension. All final plans were due by September 2018. EPA would approve or disapprove a final plan within a year.
The Clean Energy Incentive Program was to begin on January 1, 2020. States that had expressed their interest in participating in this program in their final plans were eligible. This program was to run throughout 2020 and 2021.
On January 1, 2022, states were to begin complying by meeting their interim targets. On January 30, 2030, states must meet their final CO2 reduction goals.
During the period of the stay, no deadlines are binding, and they may be extended when the legal challenge is resolved.
Q: What happens to states that fail to comply?
States were given up to three years to write implementation plans, applying their knowledge of their utilities and the programs that have worked in the past.
Under the Clean Air Act, any state that would fail to submit a plan or get EPA approval for its plan would be subject to a federal implementation plan. The current proposals for the federal implementation plan would use flexible, market-based solutions for compliance.
September 14, 2016
Contact: Laura Rehrmann, email@example.com, 703-516-0621
Analysis: Clean Power Plan will reduce emissions at minimal cost to consumers
WASHINGTON – The Clean Power Plan will drive down power sector emissions at little to no cost to consumers, according to a Center for Climate and Energy Solutions analysis of recent modeling studies.
C2ES examined five recent economic modeling studies that project the likely impacts of the Clean Power Plan on carbon emissions, the U.S. power mix, and electricity prices.
Among the key insights:
- The Clean Power Plan reduces total power sector emissions compared to business-as-usual scenarios in every study.
Market forces alone, such as lower costs for renewables and natural gas-fired generation, do not achieve the same reductions, even with federal tax credit extensions for wind and solar. On average, the scenarios project total emissions in 2030 under the Clean Power Plan will be 18 percent lower than what they’d be under a business-as-usual scenario.
- Renewables increase and coal decreases compared to business-as-usual generation levels across all five studies.
In each study, power sector emissions decline under the Clean Power Plan because of changes in the electricity generation mix, including an increase in renewables and a decrease in coal. The models are less consistent on the impact on natural gas and nuclear generation, though they suggest that these technologies will benefit from Clean Power Plan implementation. In all studies, the diversity of power generation is maintained.
- The Clean Power Plan will have minimal impact on U.S. national average retail electricity rates.
Two of the five studies examined the likely impact on rates. In most scenarios, rate changes range from a 2 percent decrease to a 5 percent increase, depending on how the Clean Power Plan is implemented in each state. A 5 percent increase translates to $4.65 per month, or about 15 cents a day, for the average household.
“Our energy mix is diversifying, which benefits the environment and the economy, and the Clean Power Plan can accelerate this trend,” said C2ES President Bob Perciasepe. “Even as the Clean Power Plan makes its way through the courts, many states are considering ways to implement it. They see this as an opportunity, not a threat – a chance to modernize their economies and energy infrastructure.”
The models were released this spring and summer by MJ Bradley & Associates, the U.S. Energy Information Administration, Bipartisan Policy Center, Center for Strategic and International Studies and Rhodium Group, and the Nicholas Institute for Environmental Policy Solutions. They take into account the extension by Congress of solar investment and wind production tax credits and the latest projections for natural gas prices.
Read the C2ES brief: Insights from a Comparative Analysis of Clean Power Plan Modeling
About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonpartisan, nonprofit organization working to forge practical solutions to climate change. Our mission is to advance strong policy and action to reduce greenhouse gas emissions, promote clean energy, and strengthen resilience to climate impacts. Learn more at www.c2es.org.