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
H.R.6 E.N.R.: The Energy Policy Act of 2005, as enacted (also referred to as Public Law 109-190) is intended primarily to increase the supply of energy, largely by providing subsidies, but also by setting standards that would increase the use of certain types of energy and energy-saving technologies. The energy sources and technologies promoted by the law include some that are climate-friendly and some whose use will result in large emissions of carbon dioxide (CO2). Among the provisions of the law specifically mentioning greenhouse gases (GHGs) are those that promote the deployment of GHG-intensity-reducing technologies, both domestically and in developing countries; authorize programs to promote the development and deployment of technologies that would capture and sequester CO2 emissions; and commission a National Academy of Sciences study of fuel cell technologies. Among the provisions that do not specifically mention GHGs, but would nevertheless promote climate-friendly technologies and activities are provisions that:
- Establish a national biofuel standard mostly in the form of ethanol for gasoline. This will increase the biofuels from 4 billion gallons per year in 2006 to 7.5 billion gallons per year in 2012.
- Increase the requirement for the purchase of renewable power by the federal government to 3% in 2007 and 7.5% in 2013.
- Establish new efficiency standards for 15 new commercial and residential products.
- Extend, through the end of 2007, the renewable electricity production credit of 1.9¢ per kWh during the first ten years of operation.
- Create a new tax credit for residential investments in solar power and fuel cell systems of 30% at an estimated $31 million.
- Increase the credit for commercial solar installations from 10% to 30% for two years at an estimated $222 million.
- Provide for investment tax credits for improving residential energy efficiency at an estimated $556 million.
- Allow for deductions for commercial buildings that cut their energy consumption by 50% for an estimated $243 million.
- Provide credits to manufacturers of energy efficient appliances ($180 million) and for building contractors that meet certain efficiency standards ($28 million).
- Offer tax incentives for the purchase of alternative fuel vehicles beginning in 2006 for an estimated cost of $874 million.
- Provide a 30% credit to alternative refueling installations at both residential and commercial properties.
- Authorize a $200 million annual clean coal initiative to go primarily towards coal gasification projects.
- Create three new investment tax credits for clean coal facilities with an expenditure cap of $1.612 billion. (20% for industrial gasification projects, 20% for IGCC, 15% for other electricity producing projects)
- Authorize a $1.25 billion fund for the Next Generation Nuclear Plant at Idaho National Laboratory to produce both electricity and/or hydrogen.
- Provide a tax credit of 1.8¢ per kWh for new nuclear power facilities during their first eight years of operation.
- Provide financial support for to up to six new nuclear power reactors in case of unforeseen construction delays.
Action: 8/8/05: Signed into law as Public Law 109-190.
The Climate Stewardship and Innovation Act of 2005 (S.1151) introduced by Senators John McCain (R-AZ) and Joseph I. Lieberman (D-CT), would limit, from 2010 on, the total greenhouse gases (GHG) emitted by the U.S. electricity generation, transportation, industrial, and commercial sectors to the amount emitted in 2000. The affected sectors represented approximately 85% of the overall U.S. emissions in the year 2000. The bill also would provide for the trading of GHG emission allowances and reductions.
Target: The bill would cap the 2010 aggregate emissions level for the covered sectors at the 2000 level. The bill's emissions limits would not apply to the direct emissions of the agricultural and the residential sectors. Certain subsectors would be exempt if U.S. Environmental Protection Agency (EPA) determined that it was not feasible to measure their GHG emissions. The U.S. Department of Commerce would biennially re-evaluate the level of allowances to determine whether it was consistent with the objective of the United Nation’s Framework Convention on Climate Change of stabilizing GHG emissions at a level that will prevent dangerous anthropogenic interference with the climate system.
Allowances: An entity that was in a covered sector, or that produced or imported synthetic GHGs, would be subject to the requirements of this bill if it (a) owned at least one facility that annually emitted more than 10,000 metric tons of GHGs (measured in units of carbon dioxide equivalents – MTCO2E); (b) produced or imported petroleum products used for transportation that, when combusted, would emit more than 10,000 MTCO2E; or (c) produced or imported HFC, PFC and SF6 that, when used, would emit more than 10,000 MTCO2E. Each covered entity would be required to submit to the EPA one tradeable allowance for each MTCO2E directly emitted. Each petroleum refiner or importer would be required to submit an allowance for each unit of petroleum product sold that, when combusted, would emit one MTCO2E. Each producer or importer of HFC, PFC, and SF6 would be required to submit an allowance for each unit sold that, when used, would emit one MTCO2E. The EPA would determine the method of calculating the amount of GHG emissions associated with combustion of petroleum products and use of HFC, PFC, and SF6.
Allocation of Allowances: The Commerce Department would determine the amount of allowances to be given away or "grandfathered" to covered entities and the amount to be given to the Climate Change Credit Corporation established by the bill. The Commerce Department's determination would be subject to a number of allocation factors identified in the bill. The Corporation would use proceeds from the sale of allowances to reduce energy costs of consumers, assist disproportionately affected workers, help low income communities and individuals, disseminate technological solutions to climate change, and aid fish and wildlife in adapting and mitigating the impacts of climate change.
Flexibility Mechanisms: Covered entities would have flexibility in acquiring their allowances. In addition to the allowances grandfathered to them, covered entities could trade with other covered entities to acquire additional allowances, if necessary. Also, any entity would be allowed to satisfy up to 15% of its total allowance requirements by submitting (a) tradeable allowances from another nation's market in GHGs; (b) a net increase in sequestration registered with the National Greenhouse Gas Database established by the bill; (c) a GHG emission reduction by a non-covered entity registered with the Database; and (d) allowances borrowed against future reductions (as described below). A covered entity that agreed to emit no more than its 1990 levels by 2010 would be allowed meet up to 20% of its requirement through (a) international credits, (b) sequestration, and (c) registered reductions, but not (d) borrowed credits. An entity planning to make capital investments or deploy technologies within the next 5 years would be allowed to borrow against the expected GHG emission reductions to meet current year requirements. The loan would include a 10 percent interest rate.
National Greenhouse Gas Database: The EPA Administrator would be required to implement a comprehensive system for GHG reporting, inventorying, and reductions registrations. Covered entities would be required to report their GHG emissions and non-covered entities would be allowed to register GHG emission reductions and sequestration. The National Greenhouse Gas Database would be, to the maximum extent possible, complete, transparent, accurate, and designed to minimize costs incurred by entities in measuring and reporting emissions. The Commerce Department, within one year of enactment, would be required to establish, by rule, measurement and verification standards and standards to ensure a consistent and accurate record of GHG emissions, emissions reductions, sequestration, and atmospheric concentrations for use in the registry.
Penalty: Any covered entity not meeting its emissions limits would be fined for each ton of GHGs over the limit at the rate of three times the market value of a ton of GHG.
Research: The bill would establish a scholarship program at the National Science Foundation for students studying climate change. The bill would also require the Commerce Department to report on technology transfer and on the impact of the Kyoto Protocol on the U.S. industrial competitiveness and international scientific cooperation.
The bill also would make changes to the U.S. Global Change Research Program, establish an abrupt climate change research program at the Commerce Department, and establish a program at the National Institute of Standards and Technology in the areas of standards and measurement technologies.
Innovation: The bill would rename the Technology Administration, within the Commerce Department, the Innovation Administration. The responsibilities of the Commerce Department would be expanded to include the development of climate change innovation policies. The bill would establish a variety of programs and studies focused on fostering climate change innovation ranging from grade school education and university programs to technology transfer and patents.
The bill would establish additional research and demonstration programs for cleaner transportation, retooling of vehicle manufactures for advanced low-GHG-emitting vehicles, energy efficiency, and managing and monitoring agricultural and geological sequestration, among other concerns.
Technology: Revenues generated from the sale of allowances granted to the Climate Change Credit Corporation (see above) would be used to promote three different aspects of technology innovation and deployment: (1) first-of-a-kind engineering, (2) construction of the first generation of facilities that use substantially new technology, and (3) the marketing and procurement of low/no-GHG-emitting power or low-GHG-producing products. Projects for first-of-a-kind engineering and construction support would be selected according to the extent to which they reduce greenhouse gas emissions, are a substantially new technology, and attain cost effectiveness and economic competitiveness, among other criteria. The construction loan program for new facilities that meet the criteria would include at most three advanced coal power-generating facilities that combine Integrated Gasification Combined Cycle (IGCC) and carbon capture technologies with geological storage of greenhouse gases; three nuclear reactors (one of each new certified design); three large-scale biofuels facilities that maximize cellulosic biomass use; and three large-scale solar power facilities, and would be open to other unspecified technologies meeting the environmental and economic criteria.
Funding provided for first-of-a-kind engineering would be reimbursed to the Climate Change Credit Corporation by facilities that made subsequent use of the engineering and design supported by this program. Financial support for construction would be in the form of secured loans or loan guarantees that would be paid back to the Corporation. The reimbursed funds could be placed in a revolving fund to continue these programs as long as the Corporation deemed appropriate. Support for the marketing and procurement of low/no-emitting end products would be funded directly from the proceeds earned by auctioning 50% of the Corporation’s allowances. This program would be designed to evolve as innovation and technology moved forward.
For more information, see our Comparison of Climate Policy Proposals.
Statement of Eileen Claussen, President
Pew Center on Global Climate Change
November 15, 2005
The Pew Center enthusiastically welcomes the climate change resolution introduced by Senator Lugar and Senator Biden calling for the United States to participate in negotiations under the Framework Convention on Climate Change to establish mitigation commitments by all major greenhouse gas-emitting countries.
The timing of such a clear message from the leadership of the Senate Foreign Relations Committee is especially important coming on the eve of the Montreal climate negotiations, where governments will decide on launching a process to consider next steps in the international effort. Parties to the Kyoto Protocol are obligated to begin considering post-2012 commitments for those developed countries with commitments under the Protocol. It is critical that a parallel process be launched under the Framework Convention, which includes the United States, to consider a broader range of possibilities that can engage all major economies. We urge the Administration to support such a process as a step toward a more inclusive and effective international climate effort.
The current U.S. policy on climate change, both domestically and internationally, is wholly inadequate. The Lugar-Biden resolution is an important complement to the Bingaman resolution passed earlier this year by the Senate calling for mandatory market-based limits on U.S. greenhouse gas emissions. It is critical that as we move forward to establish a meaningful domestic effort, we also work with other nations to strengthen the international framework and ensure that all other major emitting countries also contribute their fair share to this global effort.
Exchange Between Senator Chuck Hagel (R-NE) and Eileen Claussen Regarding: U.S.-International Climate Change Approach: A Clean Technology Solution
Hearing of the Subcommittee on International Economic Policy, Export and Trade Promotion of the Senate Foreign Relations Committee, Panel II
November 14, 2005
Adopted from transcript by the Federal News Service
SEN. HAGEL: Secretary Claussen, welcome. We are glad you're here. When I say Secretary Claussen, those who are observing this hearing should note that you are not a secretary in the current government, but in a past government you were assistant secretary of State. And we're once again very grateful for your willingness to come before the Senate Foreign Relations Committee and offer some important thoughts. Your present capacity is president of the Pew Center on Global Climate Change. You have been a leader on this issue for many years. You know exactly what you're talking about and have very definite opinions and perspectives. We are always grateful to receive those.
And I'm pleased again that you'd take time to come before the committee. So please provide your testimony, and if you'd care to abbreviate it or read it all, either way. And then, we'll have an opportunity to exchange some thoughts.
President Claussen, thank you.
MS. CLAUSSEN: Thank you very much, Mr. Chairman. If I may, I would just like to summarize a few key points from my written statement.
The Hagel climate provisions of the energy bill go to a very important issue: how best to develop and deploy climate-friendly technologies urgently and on a global scale. Standards of living and energy demand are expected to rise dramatically in the developing world over the next few decades. China expects to build 544 gigawatts of new coal capacity over the next 25 years, and the city of Shanghai -- and these are just examples -- predicts a quadrupling of cars and trucks by 2020.
If we are going to address the climate change problem, the huge growth in energy demand in developing countries must be as climate- friendly as possible. We believe the Hagel provisions, if implemented properly, can help achieve that outcome. First, we would urge that assistance provided to developing countries be tailored to their specific needs. Rather than seeing climate-friendly technology deployment as an exercise in funding demonstration projects or increasing technology exports, our goal should be to integrate climate-friendly activities into national strategies for economic growth, poverty reduction and sustainable development.
This is the only way that it will make a lasting difference – that is, by becoming a part of the recipient country's own economic plans and programs.
Second, the Hagel provisions, like the many technology initiatives launched before it, can only be effective to the extent that they are adequately funded and managed. Time and again in the past, we have launched initiatives to much fanfare, but then provided inadequate funding and failed to manage them as a coherent whole. It would be a shame if the same happened to the Hagel program.
More important than any of this, though, is the need to establish a fair and effective international framework to engage all major emitting countries in the effort against climate change. We do not believe that technology initiatives in and of themselves will make a significant difference, and we do not believe that an international framework necessarily means putting countries on an energy diet -- a greenhouse gas emissions diet, yes; an energy diet, no.
But in order for countries to undertake and sustain ambitious efforts to limit or reduce greenhouse gas emissions, they need to be confident that other countries, and in particular their major trading partners, are also contributing their fair share to the overall effort. We need, therefore, some form of mutual assurance and some certainty. This is best accomplished in a common framework within which countries can take on commitments commensurate with their responsibilities and capabilities and appropriate to their national circumstances. Technology cooperation should be a part, but only one part, of such a global framework.
Through an initiative called the Climate Dialogue at Pocantico, the Pew Center has engaged with policymakers and stakeholders from around the world to look at options for creating such a framework. Dialogue members who participated in their personal capacities included policymakers from Australia, Brazil, Canada, China, Germany, Japan, Mexico, the United Kingdom and the U.S. Senate; senior executives from Alcoa, BP, DuPont, Eskom of South Africa, Exelon, Rio Tinto and Toyota; and experts from the Pew Center, India's Energy and Resources Institute, and the World Economic Forum. The final report of the dialogue will be released tomorrow, actually, in this room with Senators Lugar and Biden, and will be presented to government ministers at the upcoming climate change negotiations in Montreal.
We believe we've come up with some ideas for a path forward. Now what we need is for the United States to be constructively engaged in negotiating a framework, based perhaps on some of the ideas we will be suggesting. The climate negotiations taking place next month in Montreal would be an excellent place to start that engagement, and we know that nearly every country there would welcome U.S. leadership.
Unfortunately, we understand that the Administration is opposing efforts by other countries to initiate a process to begin considering next steps under the Framework Convention. We believe it is essential that such a process go forward.
So my final recommendation would be for the Senate to revisit and update the 1997 Byrd-Hagel resolution, advise the executive branch to work with other nations, both under the Framework Convention and in other international fora, with the aim of securing U.S. participation in agreements consistent with the following four objectives:
- First, to advance and protect the economic and national security interests of the United States.
- Second, to establish mitigation commitments by all countries that are major emitters of greenhouse gases.
- Third, to establish flexible international mechanisms to minimize the cost of efforts by participating countries.
- And fourth, to achieve a significant long-term reduction in global greenhouse gas emissions.
Doing that, if it leads to constructive U.S. engagement in the development of an international climate policy framework, is far and away the most important thing the Senate could do to create a positive context for implementation of the Hagel provisions.
Thank you very much.
SEN. HAGEL: President Claussen, thank you, as always, for your comments. And your entire statement will be included in the record.
I'm going to bounce around a little bit on some questions based on your testimony and some things that you did not specifically mention, but are in your statement, and then also based on some of the things that the previous witnesses mentioned.
First, Kyoto's cap and trade system – in your opinion, is it working for the European countries?
MS. CLAUSSEN: Let me put it this way. I think it is much harder than most of them thought it would be to actually implement the targets they negotiated. But I do think it has spurred a lot of activity, a lot of which is really positive in terms of reducing greenhouse gas emissions.
So, has it been helpful in educating people and getting them on the right path? I think the answer is yes. Is it going to fulfill the dreams of many of those that signed? Probably not.
SEN. HAGEL: Meaning that many will not meet their targets?
MS. CLAUSSEN: I think many will not meet their targets -- not all, but many.
SEN. HAGEL: Do you believe a cap and trade system is necessary to force new technologies onto the market?
MS. CLAUSSEN: No. I think a cap and trade system is one approach that can work quite effectively, but it is not the only approach.
It is certainly my vision that we need some different paths forward, of which that could be one. It could be chosen by some countries, but I think we need others as well.
SEN. HAGEL: You sat and carefully listened, as I noted, to the testimony of the first panel, and they referenced some of these areas, in particular Secretary Garman. How do you respond to what you heard? Do you think that's too far out? Is it too much on the periphery? Were you encouraged by what you heard? Give me your thoughts on that.
MS. CLAUSSEN: This is something that Jim Connaughton said at the end: I think we are at a point where many in the private sector are starting to think very seriously about long-term strategies that move us toward climate-friendly greenhouse gas technology. I think that's right. I think, though, that what he thinks spurred that development was maybe helpful, but not what actually did it.
If I look at what has changed in the world that would result in that kind of activity, it is much more likely to be implementation of Kyoto, warts and all; the efforts in California and along the West Coast of the United States; the efforts in the Northeast and the Mid-Atlantic, where they are developing and will soon announce a cap-and-trade system; lots of other activities at the state level – 21 states with renewable requirements. That activity is really what is spurring the change in the private sector, more investment in climate-friendly technologies.
But I do think it's happening. I do agree with that. I just see different reasons for it.
SEN. HAGEL: Would you generally say you agree with what you heard as the objectives of this administration from the three representatives of the administration?
MS. CLAUSSEN: On the assumption that what we're all after is a world where emissions are reduced pretty substantially in the next 50 or so years, I think the answer is yes. I just don't think you can get there only by a “push.” I think you need a “pull” to get the technologies into the market as well, and some kind of certainty and some kind of policy that's more than the current administration seems to be interested in.
SEN. HAGEL: If we are seeing significant increase in the potential and the technologies coming on line, then what additionally would mandates, caps or government regulation do?
MS. CLAUSSEN: What would they do? I think they would move the technologies much faster in the development stage, and much, much faster in the deployment and diffusion stage, which is what we need to do. We need to get moving faster than just a little bit of push.
Again, I think your provisions will be very helpful. They just need to be complemented with something that helps get those technologies into the marketplace.
SEN. HAGEL: You mentioned international dialogue and how you think maybe something can come out of that. Would you expand on that a little bit?
MS. CLAUSSEN: Well, I don't want to expand too much, because I don't want to talk about what we're going to announce tomorrow. But I'll give you a little flavor.
The fact that we had such a diverse group of people around the table and that they actually reached a consensus was pretty good. We agreed on a set of elements we think are really important. We talked about adaptation, and we talked about long-term targets.
But when we started to focus on mitigation, we thought that there were four elements that were really important. One of them was technology, one of them was targets-and-trading, one of them was sectoral approaches, and one of them was what we called policy-based approaches.
We looked at that range of elements because we thought some may be more appealing to some countries than others, and what we were really interested in, in the long term, was getting everybody on the right path.
So we are looking at something that provides maximum flexibility with real results. When you asked me about targets and trading, yes, it's important, and I think it's a path that many will want to go down. But there are other ones as well.
SEN. HAGEL: Let me ask you a question I asked Secretary Dobriansky about. What are some of the regions in the world where you think we have the most significant opportunity for cost- effective development of these technologies?
MS. CLAUSSEN: Let me put it a slightly different way. Twenty- five countries are responsible for 83 percent of global greenhouse gas emissions. These countries are also among the most populous, and they're also the countries with the largest GDPs.
But on the other hand, per capita emissions range by a factor of 14 and per capita incomes within that group by a factor of 18. So while they are the countries that absolutely have to be at the table -- and we feel very strongly that all of that group needs to be at the table -- we do need to have some kind of a flexible approach that allows each of those countries to do what is in their national interest, but that is also moving us on the right path on greenhouse gas emissions.
So I would look at it in terms of sort of major emitters, major economies, the people who have to be at the table.
SEN. HAGEL: You mentioned your idea about revisiting the Byrd- Hagel amendment, if I understood your point, to essentially update it.
MS. CLAUSSEN: Yes.
SEN. HAGEL: And you mentioned, I think, four specific areas. Would you care to expand on that point?
MS. CLAUSSEN: Our interest is in doing some of the things that you have in the Byrd-Hagel resolution, but instead of putting them in a negative context – what you shouldn't do – we think they should be put in a positive context of what the U.S. government should do. It is really important for the U.S. government to be engaged in this, and it's important for our private sector, too, to see the U.S. at the table shaping the solutions. Many in the private sector would feel that our views, our analysis, the way we look at these things is really important and should be a part of the process if we're going to have an outcome with which we can live.
So it's really important to urge engagement. I understand the context for the Byrd-Hagel resolution, but I think the context is different now, and it is really important for the U.S. to be at the table – at the table with ideas and at the table with solutions.
SEN. HAGEL: You do not think what you heard in the last hour and a half from three senior administration officials, talking about at the technologies, engagement, not only some of the legislation I sponsored that's now law, but even beyond that R11; you do not feel that's enough?
MS. CLAUSSEN: I don't, because I think most other countries, while they will participate in all of these initiatives that the last three witnesses talked about – and many of them have the potential to be effective, so I'm not trying to denigrate what contribution they can make – most countries are interested in a policy framework, not just a technology framework. As far as I understand it -- I may be wrong here, but I don't think so -- the U.S. has essentially said they don't want to participate in discussions about the future in a policy sense. And I think that's a mistake because the world needs both mutual assurance and certainty, you have to do that in some kind of a policy framework, and I think the U.S. should participate.
SEN. HAGEL: Thank you. Staying with your three colleagues here for a moment, let me give you an opportunity to respond to anything that you care to respond to that you heard while they were at the table.
MS. CLAUSSEN: Well, I talk to them all all the time, and we agree on a fair number of things. I just think the vision doesn't go where it needs to go if we're really going to address this. We have to start with a much greater sense of urgency, but not to do things that are bad for economic growth. I think that we can do things that are good for economic growth, that result much sooner in reductions in greenhouse gas emissions.
It's interesting when you look at the companies that have taken on targets, and there are probably 35 or 38 of them. Many of them have targets that are much more stringent than, say, the U.S.-Kyoto target. Thirteen of them have already met their targets, and not one of them on net has spent money doing it because they've found efficiency opportunities that would result in reductions in greenhouse gas emissions. I don't want not to take those while we can take them, while we're developing the technologies that would be good in a decade or two decades. We need some long-term technologies, but why wouldn't we take opportunities that exist right now to put us on the right path? And I just don't see the Administration moving in that direction. I seem them focused on the long-term. I don't want to see us miss opportunities in the short-term.
SEN. HAGEL: You were here for the question that Senator Alexander asked the panel about why we shall invest in the Australian project with the timeline as it is, versus the timeline here. Do you know anything about that?
MS. CLAUSSEN: I don't know any of the specifics about that, but I do know that the private sector is really interested in advancing the technology, and I see them marketing a lot of technologies abroad because they feel that the policy climate is more certain abroad, whether it's in a Kyoto country or a country that's more committed to long-term emission reductions.
If you talk to the CEO of General Electric, for example, who's just started to really focus in a major way on greenhouse gas reducing technology, he views a lot of his markets abroad rather than here, because he doesn't think we're at the same stage in our policy development and implementation. He's very much focused on abroad, and of course he wants to sell his technology, but it's interesting that he sees the markets there, not here. Well, I think he should be seeing them here as well.
SEN. HAGEL: But you don't know anything about why they would make that decision.
MS. CLAUSSEN: No, I don't. But I'm happy to try to find out and answer it for you.
SEN. HAGEL: Well, I'll tell Senator Alexander that you will take that assignment on. He'll be very pleased about that. As you know, he is very engaged in this overall issue and very knowledgeable.
MS. CLAUSSEN: Yes. Well, coal and transportation are the two things we really need to focus on, because we're going to burn a lot of coal, and China and India and Australia are going to burn a lot of coal, and we have to find a way to do it with capture and sequestration.
SEN. HAGEL: Yes, for a long time to come.
MS. CLAUSSEN: For a long time to come.
SEN. HAGEL: Well, we are going to vote shortly, so I will adjourn our committee hearing. But let me also say, as I did to the first panel, that we may have additional questions if that is acceptable to you.
MS. CLAUSSEN: Absolutely.
SEN. HAGEL: We'll get those to you in the next two days if we have some members that would require that. Your full testimony, of course, will be included in the record.
Again, I personally appreciate all of the time that we've had over the years to exchange views on this issue, and your continued leadership. Thank you very, very much.
MS. CLAUSSEN: Thank you very much.
SEN. HAGEL: The committee's adjourned.
POLITICS AND BUSINESS: CLIMATE CHANGE POLICY APPROACHES A TURNING POINT
SPEECH BY EILEEN CLAUSSEN
PRESIDENT, PEW CENTER ON GLOBAL CLIMATE CHANGE
DAVID BRADFORD SEMINARS ON SCIENCE, TECHNOLOGY, AND ENVIRONMENTAL POLICY
WOODROW WILSON SCHOOL OF PUBLIC AND INTERNATIONAL AFFAIRS
November 7, 2005
Thank you very much. It is a pleasure to be here at the Woodrow Wilson School and an honor to be delivering the David Bradford Seminar this week. I knew David when he was at the Council of Economic Advisors, and found him to be honest, thoughtful and engaged, so it is a double honor for me to be giving this seminar.
I am here today to talk about climate change policy. And I must admit that in the current political environment, with White House investigations and Supreme Court nominations dominating the agenda, it is a challenge to break through the noise and get people to pay attention to this issue. But never fear. In preparing my remarks, I had a couple of ideas for how to get action on climate change in the current political environment:
One is to start naming hurricanes after members of Congress who still say we don’t know enough about this issue to act. Or telling the White House that if they think they’re in hot water now, just wait. It’s only going to get hotter.
In all seriousness, the title of my remarks today is Politics and Business: Climate Change Policy Approaches a Turning Point. And I want to revise that, given the attention that’s gone to the recent bestselling book by the New Yorker writer Malcolm Gladwell. Rather than saying climate change policy is approaching a turning point, I want to say it is approaching a tipping point.
Gladwell defines a tipping point as “that one dramatic moment when everything can change all at once.” Granted, we are not there yet on climate policy, but we are certainly getting close. And I think there are two reasons for that: One is that the science of climate change has reached a point where it simply cannot be ignored or pushed aside. And the second reason is the growing number of financial and business leaders that are saying it is time to take this issue seriously – indeed, many are saying that it would be irresponsible not to take it seriously. As the private sector becomes increasingly vocal and active on this issue, particularly here in the United States, there is no doubt in my mind that our nation’s elected leaders will finally reach their tipping point – and step up and act.
Why are corporate leaders putting climate change on the agenda? The answer is simple: this is an issue that poses very real risks for business – and opportunities as well. And to ignore it is like ignoring those radar pictures we became so accustomed to this fall – those images of huge storms barreling toward our coastline. You can turn off the TV if you want, but that will not change the fact that we are all in the projected storm track for climate change. A business or an investor who is not thinking long and hard about how to respond is going to be like all those wrecked homes and boats we saw in the after-storm coverage. The boats all beaten and washed up on shore, the homes a shell of their former selves.
It is a tribute to the foresight of many in the private sector that they understand this and are beginning to plan for doing business in a world where climate change is a dominant concern. And today I want to talk about what investors and companies around the world are saying and doing about this issue.
Climate Change Science: An Open-and-Shut Case
But first I want to talk very briefly about the hurricanes we have seen this fall – and I will remind you the season’s not over yet. The U.S. Gulf Coast, as all of you know, was hit hard by hurricanes this year. Katrina alone killed more than 1,200 people, and we all know about the enormous destruction it left behind – an entire city decimated; 1 million displaced from their homes in coastal areas of Louisiana and Mississippi alone.
At the Pew Center, we have been quite busy answering questions about whether Katrina and these other storms were the product of global warming. And the honest answer is we don’t know for sure – no one does. But what we do know is that hurricanes draw their strength from the heat of the surface waters in the ocean. And as those waters get warmer, they are more likely to produce stronger storms. While Katrina was moving across the Gulf, the surface waters were unusually warm, about 2 degrees above normal for that time of year. Around the world, sea surface temperatures are more than 1 degree warmer on average than they were a century ago. So, whether or not Katrina and company were directly influenced by climate change, and there is certainly a case to be made that they were, they nevertheless are a sign of things to come.
Scientists have established beyond any reasonable doubt that the climate is changing, that these changes are the result of human activities, and that these changes are likely to become more pronounced – and more dangerous – in the decades to come. Instead of detailing all the various studies, I will refer you to the Pew Center website, www.c2es.org, for an overview of what we know.
An Economic Toll As Well
But it is not only the science of climate change that should cause us to stand up and take notice; it is also the economics of climate change. Katrina alone is projected to cost U.S. taxpayers as much as $200 billion. We saw disruption in our energy supplies, higher fuel prices, losses of farmland and crops, destruction of countless businesses large and small, effects on ports and shipping, and much more.
Consider the economic impact on the energy sector alone. Because of Katrina and Rita, 90 percent of crude oil production in the Gulf of Mexico was still “shut in” as of mid-October, meaning companies had made little progress in restoring output. Seventy-two percent of offshore natural gas production was still offline. And we’ve all heard what that is going to do to home heating bills this winter.
This is happening, I remind you, in an area that is responsible for 30 percent of U.S. oil production and about a quarter of our natural gas output. And that’s not even the whole story of how these storms damaged our energy infrastructure – because they also hit a region that boasts nearly half of the nation’s refining capacity. At its peak, Rita closed 16 refineries in Texas and Louisiana that together account for more than 5 percent of refining capacity. Some of these suffered significant damage and are likely to remain closed for months.
And the energy industry wasn’t alone in suffering these direct economic losses. Insurers took a big hit as well. Overall insured losses from Katrina and Rita are estimated at between fifty and seventy-five billion dollars. That’s not even counting the losses Wilma incurred in Florida, at this point estimated at between 8 and 12 Billion.
It is no wonder that the insurance industry has been out in front on the climate issue and making the case for action. Here is a statement from Munich Re Group, one of the world’s largest reinsurers. “The increasing weather extremes linked to impending climate change are already causing weather catastrophes of a new dimension.” End quote. According to another insurance giant, Allianz, climate change is increasing the potential for property damage at a rate of between 2 and 4 percent every year.
Allianz and Munich Re are not the only insurance companies that believe climate change is a risk. In the United States, AIG had this to say: “On the risk side, especially in the longer term of several decades and more, the potential impacts of climate change such as temperature rise, increased weather disturbance activity and sea level rise pose risks of widespread and possibly devastating damage to infrastructure in low-lying coastal areas, to forests and other ecosystems, to food production, to water resources and to human health. In turn, these potential consequences could result in far-reaching negative impacts on economies and societies worldwide.” End quote.
I believe the leadership of these insurance companies and their industry is emblematic of a broader shift in the private sector. You could say that insurers are the tip of the iceberg – and this one’s not melting.
The Investment Community Takes Note
Another segment of the private sector that is increasingly willing to raise this issue as a real concern is the investment community. Last May, there was a gathering at the United Nations titled the 2005 Investor Summit on Climate Risk. Participants included representatives of U.S. and international pension funds with collective assets of $5 trillion. CalPERS and CalSTERS, the pension funds for the state of California, were there, as were many other institutional investors from around the world. And the reason they were there was to talk about both the risks and the opportunities that climate change poses for investors.
Risks and opportunities. When you are entrusted with investing billions or trillions of dollars, you had better know a fair amount about both of these eventualities. What risks does climate change pose for investors? How can they know that the companies they invest in are positioned to manage those risks? And, in a similar sense, how can they gauge whether companies are prepared to take advantage of new opportunities presented by the growing movement toward regulation and carbon constraints?
The risks of climate change for the business sector can be broken out in three key ways. First, there is litigation risk – companies could face lawsuits. Some of these may be frivolous, while others may have merit. Either way, business needs to factor the risk of litigation into their planning.
The second category of risk facing the business sector is physical risk. Some sectors and businesses will face direct consequences from the physical impacts of climate change, including not just hurricanes, but also drought, sea level rise and flooding. I already talked about insurance companies. But what about agriculture, forestry, real estate and other industries that hinge on the physical environment?
In addition to litigation risk and physical risk, there is also regulatory risk – the risk of government taking action on this issue in a way that affects corporate profits. And this is the risk area that is likely to have the most immediate and substantial impact on businesses and investors.
I know what you are probably thinking. You are thinking that the chance of any meaningful regulation coming out of Washington on this issue any time in the near future is pretty dim. Of course it all depends on your definition of how near “near” is. And you are probably right. But the fact is that many companies, including U.S.-based multinationals, already are experiencing climate-related regulation in their operations in the EU, Canada and other countries working to implement the Kyoto Protocol. And, even here in the United States, most of the CEOs I talk to tell me they view regulation as an inevitability. Maybe not tomorrow or the next day, but sometime soon.
In fact, some of these CEO’s seem to prefer the certainty that comes with regulation to the no-man’s land they are operating in today. Consider what Jeff Immelt, CEO of GE had to say: “Long-term certainty would help us all make smart decisions,” he said. He continued: “We believe that the government can provide leadership by clarifying policy, by committing to market mechanisms [and] by promoting diverse energy sources.”
Jim Rogers, the CEO of Cinergy Corp., said it a little more succinctly: “One day, we will live in a carbon-constrained world.” End quote.
These are the CEO’s of major, major industry, and in the case of Cinergy, a major coal-burning energy company. And the air of inevitability in Jim Rogers’ statement should certainly be a wake-up call for investors that regulatory risk is real.
But of course, it is not just the risks associated with climate change that are attracting the attention of the investment community. It is also, as I said, the opportunities. Those companies that lead the way in low-emission vehicles, clean coal technologies, clean energy, and technologies for slashing emissions are going to be the winners in the 21st-century economy.
Right now, California’s massiveenvironmental risk management into the due diligence process of its private equity divisions.
What’s more, as part of the policy, JP Morgan Chase said it supports reductions in greenhouse gas emissions through market-based, national policies. This is a leading global financial services firm – $1.1 trillion in assets. And now it is leading in another way as well.
The actions of JP Morgan Chase and together with the United Nations Investor Summit on Climate Risk, are clear signs that investors are beginning to take this issue seriously.
And they are not the only signs. A couple of years ago, we saw the launch of The Ca state pension system is investing significant amounts in alternative energy businesses. GE plans to spend an additional $1.5 billion on research on clean technology. And every month, it seems there is another story of a major venture capital or private equity firm – I am talking about the big names like the Carlyle Group – investing in clean energy deals. So while there are many risks, there are also many opportunities out there because of climate change, and savvy investors know it.
Is everyone seeing this as an investment opportunity? Of course not. Just last month, Exxon Mobil announced nearly $10 billion in third-quarter profits but said it has no plans to put any of those earnings toward the development of alternative energy sources. “We’d rather re-invest in what we know,” said the company’s spokesman.
So it may not be for everyone. But you can’t deny that the investment community is beginning to factor climate change into their strategies and research. Last April, for example, JP Morgan Chase announced a set of environmental principles to guide the firm’s global investments and business efforts. Among the highlights: JP Morgan Chase will incorporate rbon Disclosure Project, or CDP. This is an initiative that enables a large number of institutional investors to collectively sign a request to companies for disclosure of their greenhouse gas emissions and climate strategies. When this project was launched in 2003, 35 investors totaling $4.5 trillion in assets signed on. Then in 2004, 95 investors accounting for $10 trillion became signatories. This year, the request to companies went out under the signatures of 155 institutional investors with combined assets of $21 trillion.
CDP then sends this request to the 500 largest companies in the world. Currently, more than 350 of these companies currently report their emissions and climate strategies through the CDP website.
What is happening here, I believe, is a reflection of the post-Enron, post-World Com environment. Investors are asking companies for an even higher level of transparency and information, not just in their accounting but in other risk areas as well. California’s massive pension funds and many others are actually pressuring the SEC to enact separate disclosure rules specific to greenhouse gas emissions.
A related factor in the movement toward greater disclosure is Sarbanes-Oxley. Because of this law, growing numbers of U.S. companies are weighing whether climate change may create a material impact on future earnings. And, as the number of companies disclosing emissions and exposure to climate-related risk increases, Sarbanes-Oxley actually strengthens the hand of activist shareholders who are pressing companies that have not yet addressed the issue.
A study by CERES last year found that oil and gas companies faced a record total of 31 shareholder resolutions on the climate issue in 2004. The filers of these resolutions included state and city pension funds, a foundation, socially responsible investment firms, and religious pension funds. And an important focus of the resolutions was risk disclosure – in other words, to what extent are these companies preparing for looming constraints on their carbon emissions?
So the bottom line, if you will excuse the pun, is that investors are flexing their muscle on this issue – these investors do not want to see corporate boards and CEOs with their heads buried in the sand. They want to see an acknowledgment of the problem, an understanding of its potential impact on business performance, and concrete strategies for staying ahead of the problem and even turning it into a platform for new products and increased profitability.
Business Steps Up to the Plate
And the good news is that those investors who are concerned about this issue are beginning to get what they want from the companies they invest in. At the Pew Center, we work with 41 leading companies to promote action on climate change. These are mostly Fortune 500 companies with a combined market capitalization of over $2 trillion and 3 million employees. They represent most industrial sectors and many of the largest emitters of greenhouse gases, including coal-burning utilities, mining companies, aluminum producers, automobile manufacturers, pulp and paper manufacturers, chemical companies, oil and gas businesses, and the cement industry. Council members include BP, Shell, General Electric, American Electric Power, DuPont, Toyota, Whirlpool, Intel, and more.
In joining the Council, these companies are united with the Pew Center in several beliefs, including this one – and I quote:
“We accept the views of most scientists that enough is known about the science and environmental impacts of climate change for us to take actions to address its consequences.”
To date, 30 of the 41 companies that work with the Pew Center have set targets to reduce their emissions, many of them more stringent than those in the Kyoto Protocol. And 13 of these companies already have met or exceeded at least one of their targets. And not a single one of these companies has found that it cost them money or market share. Of course, no one is under the impression that long-term efforts to address climate change will be cost-free. But the sooner we begin and the more we do to help companies manage these costs through market-based and flexible strategies, the more we will realize that we can reduce emissions without causing real and lasting damage to the economy or our competitiveness.
Let me talk briefly about what three of the companies we work with are doing – and I will start with one of the world’s largest companies, GE. GE just joined the Pew Center in July. It has committed to reduce its greenhouse gas emissions by 1 percent by 2012, relative to 2004 levels, and it will increase energy efficiency by 30 percent. Based on the company’s projected growth, GE’s emissions would have risen 40 percent by 2012 without further action.
But this is really not what is significant about GE. Much more important is that GE is committed to doubling its investment in environmental technologies to $1.5 billion by 2010. Think about that for a moment: $1.5 BILLION by 2010 – that is basically the equivalent of starting a new Fortune 250 company – focused exclusively on clean technology. These efforts are part of GE’s “Ecomagination” initiative to aggressively bring to market new technologies that will help customers meet pressing environmental challenges. In one instance here, you have a company addressing both the risks and the opportunities of climate change.
I also want to tell you about the work of Cinergy. I quoted Cinergy’s CEO, Jim Rogers, at the start of my remarks. This is a company that burns more than 30 million tons of coal each year, and it devoted its entire 2004 annual report to climate change – not to debunk the issue or attack the science, but to acknowledge that climate change is a problem, and that Cinergy should be a part of the solution. Cinergy’s goal is to reduce greenhouse gas emissions to an average of 5 percent below 2000 levels during the period from 2010-2012.
Cinergy recently announced plans to merge with Duke Energy, and Jim Rogers said that one rationale for the merger is the imminent arrival of carbon constraints. Duke Energy, he says, has a significant number of clean-burning natural gas plants, which will allow Cinergy to retire some of its coal-burning facilities more quickly.
The third company I want to talk briefly about today is Alcoa. Alcoa already has met its 2010 goal of reducing companywide emissions of greenhouse gases by 25 percent from 1990 levels. And in June, Alcoa issued a forecast that the aluminum industry could be greenhouse-gas neutral by 2017. Among the reasons: the increased use of aluminum in cars and trucks, which will reduce emissions from that sector. While this is an ambitious goal, there will likely be some lively debate about which industry – aluminum or autos – gets credit for this reduction.
GE, Cinergy, Alcoa and the other companies we work with at the Pew Center aren’t just looking internally at what can be done to address the climate problem. They are also looking beyond their own operations at public policies. For many years, there was a real hesitancy among business leaders to speak out on this issue, but that is changing. Why are the companies and the CEOs I have mentioned stepping out from behind the shadows now? Because they see that regulation is inevitable, and they want to make sure it is regulation they can live with. They see the states stepping into the void and adopting state and regional policies that seek to curb emissions. They see other countries putting together their own policies, some of them quite ambitious. They see that these actions are having a real effect – or soon will – on significant portions of their operations around the world. They get the picture. It’s inevitable to them that regulation is coming down the pike. In many cases, it is already here.
In addition to their interest in staying a step ahead of the regulations, these companies also want a higher level of certainty – they’re frankly tired of not knowing what’s going to be expected of them in the years ahead. It gets back to the issue of regulatory risk – they need to know what kind of risk they face.
Here is Wayne H. Brunetti, CEO and Chairman of Xcel Energy, as quoted in Business Week: “Give us a date, tell us how much we need to cut, give us the flexibility to meet the goals, and we’ll get it done.”
Four of the companies we work with at the Pew Center testified in front of the House Science Committee this year. The companies included Cinergy, DuPont, Baxter and United Technologies. Another company on the Council, Whirlpool, submitted written testimony. Their message: they are already living with greenhouse gas regulations in Europe and they are thriving in those places. These companies also told the committee that a lot of what they’re doing to cut emissions has bottom-line benefits. Efficiency pays. It’s smart business.
These companies are demonstrating a real boldness in entering the policy debate on this issue. They see it as absolutely essential to couple the work they are doing to reduce their emissions with a more active policy stance. The policy decisions that are made on this issue will have important implications for their future profits and performance, and these companies feel they have a responsibility to their shareholders to be involved.
Policies for Moving Forward
These companies also see a pressing need for U.S. leadership in the international arena. Remember: many of these firms are multinationals – they have operations around the world. So, in the same way that they want certainty here at home, they also want to know that policies around the world will be as predictable and as integrated and as consistent as possible.
At the G-8 meeting this past June in Gleneagles, Scotland, 20 business leaders were part of a special Climate Change Roundtable that identified a set of key principles for climate change policy. Included in those principles are the following:
- “Policy frameworks that use market-based mechanisms to set clear, transparent and consistent price signals over the long term offer the best hope for unleashing needed innovation and competition.”
- “Solutions must be global – participation of all major emitters is essential.”
The fact that these corporate leaders, including some from the United States, were able to agree to these and other principles shows how important they perceive this issue is for the future of their businesses. Business is in many respects leading the way, and it is time for policy makers, particularly those in Washington, DC, to get the message and act on their behalf.
What should policymakers do? Over the past year, the Pew Center brought together a group of policymakers and stakeholders from around the world to consider that question. We just recently held our last meeting and we’ll be releasing our final report, International Climate Efforts – Beyond 2012 next week. So without giving away too much, let me share with you a couple of key points.
First, while ultimately we need a fully global approach, what’s absolutely imperative at this stage is engaging the major economies. That includes the United States and the major developing countries. Twenty-five countries account for 83 percent of global emissions. They also account for 71 percent of global population and 86 percent global GDP. This is the core group that needs to act. It’s important, at the same time, that we recognize the tremendous diversity within this group. Their per capita emissions range by a factor of 14; their per capita income by a factor of 18.
So while all the major economies must commit to stronger action, we need to recognize and respect those differences, and allow different countries to take different kinds of approaches best suited to their needs and circumstances.
This leads to a second point: We need a more flexible framework, one that can accommodate different approaches by allowing for different kinds of commitments. Emission targets may work for some countries; but not for others. Maybe the best approach is some type of policy commitment that doesn’t entail a binding emissions limit. In the dialogue, we looked at a whole range of options, and the final report identifies those that seem most promising, and looks at ways they can be combined into a comprehensive framework. But for those details, I’ll have to ask you to stay tuned. The report will be out in just a few days, and we’ll have lots more to say about these ideas in the months ahead.
For now, suffice it to say that a tipping point is almost upon us. The combination of growing scientific certainty, growing concern – and growing action – among businesses and investors has brought us to a place where the kinds of international policies I am talking about are no longer a pipe dream. Even the U.S. Senate has shown support for real action, with a majority of senators supporting a resolution this summer that called for a mandatory national program to slow and eventually reverse U.S. emissions. The resolution was nonbinding, but it is yet another sign of change.
Thanks in large part to the leadership of the financial and business communities; climate change policy is approaching “that one dramatic moment when everything can change all at once.” My only fear is that this tipping point in policy arrives too late to keep another tipping point at bay – the point at which catastrophic climate change becomes inevitable, a force too strong to stop.
That is one case when tipping will not be appreciated. Thank you very much.
S.17: The Global Climate Security Act of 2003, which includes several climate change measures, including a provision establishing a commission to review measures necessary to prevent a doubling of GHG concentrations in the atmosphere, a provision which would require large emitters to report and disclose their GHG emissions (see S.194), and a resolution urging U.S. participation in international climate change negotiations (see S.925 under “International Negotiations”).
Sponsor: Sen. Thomas A. Daschle (D-SD) (17 cosponsors)
S.139: The Climate Stewardship Act of 2003, which would cap the GHG emissions of the electricity, manufacturing, commercial and transportation sectors of the economy (representing 85% of U.S. emissions) at their 2000 level by 2010 and their 1990 level by 2016. Emitters would be able to trade GHG emissions credits and get credit for pre-enactment GHG reductions, carbon sequestration, and international GHG reductions, up to a limit. (See S.Amdt.2028.)
Sponsor: Sen. Joseph Lieberman (D-CT) (9 cosponsors)
S.Amdt.2028: The Climate Stewardship Act of 2003, a revision of S.139, which would cap the GHG emissions of the electricity, manufacturing, commercial and transportation sectors of the economy (representing 85% of U.S. emissions) at their 2000 level by 2010. Emitters would be able to trade GHG emissions credits and get credit for pre-enactment GHG reductions, carbon sequestration, and international GHG reductions, up to a limit.
Sponsor: Sen. Joseph Lieberman (D-CT) (15 cosponsors) – Action: 10/30/03: Offered as an amendment to S.139. Not accepted by the Senate by a vote of 43 – 55.
Global Warming Amendment to the Energy Policy Act (H.R.6) offered during markup in the House Energy and Commerce Committee, which would require the President to establish a voluntary program to reduce the carbon intensity of the United States by 18% by 2012 (which is the same target announced in February 2002 by President Bush). The amendment would not grant new regulatory authority. (See H.R.6 E.H. under “Energy Policy.”)
Sponsor: Rep. Henry A. Waxman (D-CA) – Action: 4/2/03: Not accepted by the House Energy and Commerce Committee by voice vote.
H.R. 4067: The Climate Stewardship Act of 2004, which would cap the GHG emissions of the electricity, manufacturing, commercial and transportation sectors of the economy (representing 85% of U.S. emissions) at their 2000 level by 2010. Emitters would be able to trade GHG emissions credits and get credit for pre-enactment GHG reductions, carbon sequestration, and international GHG reductions, up to a limit. The bill would also require periodic NOAA reports on the projected impacts of climate change on coastal communities and oceanic and coastal ecosystems, and would identify adaptation measures that might be used to protect these resources and to estimate the costs of the measures.
Sponsor: Rep. Wayne Gilchrest (R-MD) (85 cosponsors)
S.194: The National Greenhouse Gas Emissions Inventory and Registry Act of 2003, which would require large GHG emitters to report and disclose their emissions. Entities could also register their GHG reductions. (See S.17 under “Greenhouse Gas Reduction.”)
Sponsor: Sen. Jon Corzine (D-NJ) (2 cosponsors)
Energy and Climate Change Amendment to the Energy Policy Act (S.14), which would require large GHG emitters to report and disclose their emissions. Entities could also register their GHG reductions. The amendment would also establish a National Climate Change Strategy, a White House Director of Climate Change Policy, an Office of Climate Change Technology at the Department of Energy, and a Forest Carbon Program at the Department of Agriculture. (See S.14 and H.R.6 E.A.S. under “Energy Policy.”)
Sponsor: Sen. Jeff Bingaman (D-NM) – Action: 4/29/03 The amendment was filed but not offered during markup in the Senate Energy Committee.
S.485: The Clear Skies Act of 2003, which would require reductions of power plant emissions of SO2, NOX, and mercury, but not CO2, and would exempt new power plants from the current requirement that they disclose their CO2 emissions. (See S.1844 and H.R.999.)
Sponsor: Sen. James M. Inhofe (R-OK) (1 cosponsor) Introduced at the request of the Administration.
S.1844: The Clear Skies Act of 2003, which would require reductions of power plant emissions of SO2, NOX, and mercury, but not CO2, and would exempt new power plants from the current requirement that they disclose their CO2 emissions. (See S.485 and H.R.999.)
Sponsor: Sen. James M. Inhofe (R-OK)
H.R.6 E.A.S.: The Energy Policy Act of 2003 as passed by the Senate, which is identical to H.R.4 E.A.S. in 2002, the Senate-passed Energy Policy Act of 2002. The bill included three climate change titles. Title XI would establish a National Greenhouse Gas Registry and allow entities to report voluntarily their GHG emissions and emission reductions to the registry. If, five years after enactment, less than 60% of U.S. anthropogenic GHG emissions had been reported voluntarily, reporting would be required of large GHG emitters. The title also would encourage future Congresses to consider registered reductions as applicable towards future GHG reduction requirements. Title X would establish a National Climate Change Strategy with the goal of stabilization of GHG concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system; an Office of National Climate Change Policy within the White House; and a research and development program toward the goal of stabilization of GHG concentrations. Title X also includes a Sense of the Congress Resolution urging the U.S. to participate in international negotiations, with the objective of securing U.S. participation in a future binding climate change treaty. Title XIII would authorize various climate change research activities. (See Energy and Climate Change Amendment under “Greenhouse Gas Reporting.”)
Sponsor: Rep. W.J. “Billy” Tauzin (R-LA) (4 cosponsors) – Action: 7/31/03: Passed by the Senate by a vote of 84 – 14, in lieu of S.14 (see below).
H.R.999: The Clear Skies Act of 2003, which would require reductions of power plant emissions of SO2, NOX, and mercury, but not CO2, and would exempt new power plants from the current requirement that they disclose their CO2 emissions. (See S.485.)
Sponsor: Rep. Joe Barton (R-TX) (1 cosponsor) Introduced at the request of the Administration.
H.R.1245: The National Greenhouse Gas Emissions Inventory Act of 2003, which would require large GHG emitters to report and disclose their emissions. Entities could also register their GHG reductions.
Sponsor: Rep. John W. Olver (D-MA) (51 cosponsors)
National Greenhouse Gas Emissions Inventory Amendment to the Energy Policy Act (H.R.6), which would require large emitters of GHGs to report and disclose their emissions and allow entities to register their GHG reductions (language identical to H.R.1245). (See H.R.6 E.H. under “Energy Policy.”)
Sponsor: Rep. Diana L. DeGette (D-CO) – Action: 4/2/03 The amendment was filed but not offered during markup in the House Energy and Commerce Committee.
(See also H.R.6 E.A.S. under “Energy Policy,” and S.17 under “Greenhouse Gas Reduction.”)
Sense of Congress on Climate Change Amendment to the Energy Policy Act (H.R.6), urging the U.S. to participate in international negotiations with the objective of securing U.S. participation in a future binding climate change treaty. (See H.R.6 E.H. under “Energy Policy.”)
Sponsor: Rep. Henry A. Waxman (D-CA) – Action: 4/2/03: Offered during markup of H.R.6 by the House Energy and Commerce Committee, but not accepted by a vote of 18 – 34. 4/9/03: Rep. Waxman filed the amendment with the intent of offering it during debate on H.R.6 on the House floor, but was not allowed to bring it to a vote.
S.925: The Foreign Relations Authorization Act, Fiscal Year 2004, which, among other things, includes a Sense of the Congress Resolution urging the U.S. to participate in international negotiations, with the objective of securing U.S. participation in a future binding climate change treaty.
Sponsor: Sen. Richard G. Lugar (R-IN) – Action: 4/9/03: During markup in the Senate Foreign Relations Committee, Sen. Joe Biden (D-DE) and Sen. John F. Kerry (D-MA) offered the climate change resolution as an amendment, and it was accepted by voice vote. The bill was then reported out of committee by a vote of 19 – 0. The bill was debated but not passed by the full Senate.
H.R.1950: The Foreign Relations Authorization Act, Fiscal Year 2004, which, as reported by the House International Relations Committee, included a Sense of the Congress Resolution urging the U.S. to participate in international negotiations, with the objective of securing U.S. participation in a future binding climate change treaty.
Sponsor: Rep. Henry J. Hyde (R-IL) (2 cosponsors) – Action: 5/2/03: During markup in the House International Relations Committee, the climate change resolution was offered as an amendment by Rep. Robert Menendez (D-NJ) and accepted by a vote of 21 – 18. 7/9/03: During markup in the House Energy and Commerce Committee, the climate change resolution was struck by a vote of 28 – 17. 7/16/03: Passed by the House by a vote of 382 – 42.
(See also S.17 under “Greenhouse Gas Reduction” and H.R.6 E.A.S. under “Energy Policy.”)
S. 309: Aeronautics Research and Development Revitalization Act of 2003, which, among other things, includes a finding that an aggressive federal initiative to develop technologies that would significantly reduce aircraft noise, harmful emissions, and fuel consumption would also benefit the United States by reducing the rate at which greenhouse gases are added to the atmosphere by aircraft.
Sponsor: Sen. George Allen (R-VA) (2 cosponsor)
S.788: The Second Century of Flight Act, which, among other things, would direct the Federal Aviation Administration to research emerging aircraft technologies to minimize the effects on climate change, and would direct NASA to research technologies enabling commercial aircraft to reduce carbon dioxide emissions. (See H.R.2271.)
Sponsor: Sen. Ernest F. Hollings (D-SC) (8 cosponsors)
S.821: The Hydrogen and Fuel Cell Energy Act of 2003, which would seek, among other things, to reduce the life cycle pollution and GHG emissions from energy use by promoting, e.g., hydrogen R&D, federal purchasing of stationary fuel cells, and tax incentives for hydrogen and fuel cell vehicles and related infrastructure.
Sponsor: Sen. Tom Harkin (D-IA)
S.824: The Aviation Administration FY2004-2006 Authorizations Act, which, among other things, would develop a research and implementation plan for the application of emerging aircraft technologies that would minimize the effects on climate change per unit of production of thrust and flight speed. (See H.R.2115.)
Sponsor: Sen. John McCain (R-AZ) (3 cosponsors) – Action: 6/12/03: The Senate incorporated this measure in H.R.2115 as an amendment, which passed the Senate by a vote of 94 – 0. 12/12/03: H.R.2115 became Public Law 108-176 with the provision described above.
S.1072: Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2003, which, among other things, would establish a multimodal energy and climate change program to study the relationship of energy, transportation, and climate change, and call for the development of strategies to reduce GHG emissions from transportation. (See H.R. 2088) This language was stripped from the bill when it was reported out of committee.
Sponsor: Sen. James Inhofe (R-OK) (3 cosponsors) Introduced at the request of the Administration. – Action: 1/9/04 Reported out of committee, without the climate change provision; 2/12/04: Passed by the Senate by a vote of 76 – 21, without the climate change provision; 6/9/04: S.1072 was redesignated H.R.3550 E.A.S. and sent to a Senate-House conference committee to resolve differences with the House-passed version of H.R.3550, which does not include climate change provisions. The bill was not enacted.
S.2541: NASA Authorization Act of 2004, which, among other things, finds that an aggressive initiative by the federal government to develop aircraft technologies would reduce the rate at which greenhouse gases are added to the atmosphere by aircraft. The bill also would earmark $5 million annually for climate change research.
Sponsor: Sen. John McCain (R-AZ) (3 cosponsors)
H.R. 586: Aeronautics Research and Development Revitalization Act of 2003, which, among other things, finds that an aggressive federal initiative to develop technologies to reduce aircraft noise, harmful emissions, and fuel consumption would benefit the United States by reducing the rate at which greenhouse gases are added to the atmosphere by aircraft.
Sponsor: Rep. John B. Larson (D-CT) (31 cosponsors)
H.R.1299: The Hydrogen Fuel Act of 2003, which includes, among other things, a finding that it is in the national interest to support the development of a light duty vehicle fleet that is free or near free of GHG emissions.
Sponsor: Rep. Sherwood Boehlert (R-NY)
H.R.1395: To provide for the establishment of research, development, demonstration, and commercial application programs for fuel cell and hydrogen production, delivery, and storage technologies for transportation and stationary applications. The bill would require the Department of Energy, among other things, to award projects for hydrogen production and capture of associated carbon dioxide.
Sponsor: Rep. John B. Larson (D-CT)
H.R.1491: Securing Transportation Energy Efficiency for Tomorrow Act of 2003, which, among other things, finds that the transportation sector is responsible for 27% of US GHGs, with transportation-related emissions of carbon dioxide increasing by nearly 15% in the 1990's.
Sponsor: Rep. James L. Oberstar (D-MN) – Action: (22 cosponsors)
H.R.1773: The George E. Brown, Jr. and Robert S. Walker Hydrogen Future Act of 2003, which would establish a program to accelerate the use of hydrogen and related technologies in stationary and transportation applications, among other things, addressing production of hydrogen from fossil fuels, in conjunction with carbon capture and sequestration.
Sponsor: Sherwood L. Boehlert (R-NY)
H.R.1774: The Freedom Act, which promotes hydrogen fuel cell vehicles, and finds, among other things, finds that it is in the national interest to develop a light duty vehicle fleet that substantially reduces dependence on foreign petroleum, assists the nation in meeting its requirements under the Clean Air Act and reduces greenhouse gas emissions in a manner that maintains the freedom of consumers to purchase the kinds of vehicles they wish to drive and the freedom to refuel those vehicles safely, affordably, and conveniently.
Sponsor: Sherwood L. Boehlert (R-NY)
H.R.1777: A bill to provide for the establishment at the Department of Energy of a program for hydrogen fuel cell vehicles and infrastructure. Among other things, the bill would require DOE to address the production of hydrogen from fossil fuels, which may include carbon capture and sequestration.
Sponsor: Rep. Sherwood Boehlert (R-NY)
H.R.2088: The Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2003, which, among other things, would establish a multimodal energy and climate change program to study the relationship of energy, transportation, and climate change, and call for the development of strategies to reduce GHG emissions from transportation. (See S.1072)
Sponsor: Rep. Don Young (R-AK) (3 cosponsors) Introduced at the request of the Administration.
H.R.2115: The Aviation Administration FY2004-2006 Authorizations Act as in the conference report, which, among other things, would develop a research and implementation plan for the application of emerging aircraft technologies that would minimize the effects on climate change per unit of production of thrust and flight speed. (See S.824. The House-passed version of H.R.2115 did not include the climate change-related provision.)
Sponsor: Rep. Don Young (R-AK) (3 cosponsors) – Action: 10/30/03 Conference report agreed to by the House by a vote of 211 – 207. 12/12/03: Became Public Law Number 108-176 with the provision described above.
H.R.2271: The Second Century of Flight Act, which, among other things, would require the Federal Aviation Administration to develop a research plan for emerging technologies that minimize the effects on climate change per unit of production of thrust and flight speed; and require NASA to develop a research plan to enable commercial aircraft to significantly reduce CO2 emissions. (See S.788.)
Sponsor: Rep. Todd Tiarht (R-KS) (1 cosponsor)
H.R.3551: Surface Transportation Research and Development Act of 2003, which, among other things, would establish a multimodal energy and climate change program to study the relationship of energy, transportation, and climate change, and call for the development of strategies to reduce GHG emissions from transportation.
Sponsor: Rep. Vernon J. Ehlers (R-MI) – Action: 2/4/04: Reported out of the Science Committee with the climate change provision.
H.R.3577: Intelligent Transportation Systems Act of 2003, which, among other things, would establish a multimodal energy and climate change program to study the relationship of energy, transportation, and climate change, and call for the development of strategies to reduce GHG emissions from transportation.
Sponsor: Rep. Vernon J. Ehlers (R-MI)
S.1164: The Abrupt Climate Change Research Act of 2003, which would establish within the National Oceanic and Atmospheric Administration (NOAA) a program of scientific research on abrupt climate change.
Sponsor: Sen. Susan M. Collins, (R-ME) (4 cosponsors) – Action: 3/9/04: Reported out of the Senate Commerce Committee.
S.1400: Ocean Observation and Coastal Systems Act, which would establish an integrated ocean and coastal observing system that would include a global ocean system to make observations in all oceans for the purpose of documenting long-term trends in sea level change, ocean carbon sources and sinks, and heat uptake and release by the ocean; and to monitor ocean locations for signs of abrupt or long-term changes in ocean circulation leading to changes in climate.
Sponsor: Sen. Olympia J. Snowe (R-ME) (8 cosponsors) – Action: 7/17/2003: Reported out of Senate Commerce Committee; 10/31/2003: Passed by Senate by unanimous consent.
S.1401: National Oceanic and Atmospheric Administration Reauthorization Act of 2003, which, among other things, as originally introduced, authorized $10.4 million for fiscal year 2004 for the NOAA Center for Weather and Climate Prediction, and an amount annually increasing to $228 million for fiscal year 2008 for climate research.
Sponsor: Sen. John McCain (R-AZ) (1 cosponsor) – Action: 7/17/2003: Reported out of the Senate Commerce Committee, but without the specific mentions of climate research.
S.1953: Deep Sea Coral Protection Act, which, among other things, states that some deep sea corals have a growth ring structure that records changes in water temperature and other information that can be used to track global climate change.
Sponsor: Sen. Frank R. Lautenberg (D-NJ)
S.2460: New Mexico Water Planning Assistance Act, which, among other things, authorizes the Department of the Interior to provide the state of New Mexico technical assistance in expanding climate monitoring networks.
Sponsor: Sen. Pete V. Domenici (R-NM) (1 cosponsor) – Action: 7/14//2004: Reported out of the Senate Energy Committee.
S.2647: National Ocean Policy and Leadership Act, which, among other things, would establish at NOAA an Associate Administrator for Climate and Atmosphere; establish a Presidential Panel of Advisers on Oceans and Climate to review issues relating to national ocean and atmospheric policy, including climate change; establish a program of ocean and atmospheric research, conservation, management, education, monitoring, and assessment that would recognize the linkage of ocean, land, and atmospheric systems with respect to climate change; provide for improvement of technologies for use in climate-related activities; require a biennial report to Congress on ocean and atmospheric environments, including with respect to climate change, that among other things would report progress in predicting climate change.
Sponsor: Sen. Ernest F. Hollings (R-SC) (10 cosponsors)
S.2648: Ocean Research Coordination and Advancement Act, which, among other things, finds that a coordinated program of education and basic and applied research would assist the nation and the world to further knowledge of the oceans and the global climate system.
Sponsor: Sen. Ernest F. Hollings (R-SC) (4 cosponsors)
S.Con.Res.49: A concurrent resolution designating the week of June 9, 2003, as National Oceans Week, which cites the role oceans play in the carbon cycle and in regulating climate.
Sponsor: Sen. Olympia J. Snowe, (R-ME) (19 cosponsors) – Action: 6/9/2003: The Senate agreed to the resolution by unanimous consent.
H.R. 984: National Oceanic and Atmospheric Administration Act of 2003, which, among other things, would authorize the Commerce Department to establish joint or cooperative institutes with qualified colleges and nonprofit research organizations to collaborate on long-term climate change research.
Sponsor: Rep. Wayne T. Gilchrest (R-MD)
H.R.1578: The Global Change Research and Data Management Act of 2003, which would promote and coordinate global change research.
Sponsor: Rep. Mark Udall (D-CO) - Action: 5/1/2003: The House Science Committee voted against reporting the bill by a vote of 18 - 23.
H.R.4218: High-Performance Computing Revitalization Act of 2004, which, among other things, directs NOAA to conduct basic and applied research on high-performance computing applications, with emphasis on improving weather forecasting and climate prediction.
Sponsor: Rep. Judy Biggert (R-IL) (7 cosponsors) – Action: 6/16/2004: Reported out of the House Science Committee.
H.R.Con.Res.202: Expressing the sense of Congress in support of a National Oceans Week, which cites the role oceans play in the carbon cycle and in regulating climate.
Sponsor: Rep. James C. Greenwood (R-PA) (25 cosponsors)
H.R.4546: To bill to provide for the National Oceanic and Atmospheric Administration, to authorize appropriations for the National Oceanic and Atmospheric Administration, and for other purposes, which, among other things, would establish within the National Oceanic and Atmospheric Administration (NOAA) a program of scientific research on abrupt climate change, and require NOAA and the National Weather Service to study the climate.
Sponsor: Rep. Vernon Ehlers (R-MI) (2 cosponsors)
H.R.4686: Mississippi River Protection and Restoration Act of 2004, which, among other things, would require the Secretary of the Army to establish a consortium of universities from throughout the Mississippi River Basin to demonstrate wetland values and functions to reduce nutrient loadings to the Gulf of Mexico and to sequester carbon.
Sponsor: Rep. Ron Kind (D-WI) (2 cosponsor)
H.R.4897: Deep Sea Coral Protection Act, which, among other things, finds that some deep sea corals have a growth ring structure that provides a living record of changes in water temperature and other information that can be used to track global climate change over time.
Sponsor: Rep. James C. Greenwood (R-PA) (37 cosponsors)
H.R.4900: Oceans Conservation, Education, and National Strategy for the 21st Century Act, which, among other things, finds that global climate change is among the major threats to marine ecosystem health; would require the National Oceans Council to develop a National Strategy for Ocean and Coastal Science that, among other things, would improve the ability to understand, assess, and respond to human-induced and natural processes of global climate and environmental change.
Sponsor: Rep. James C. Greenwood (R-PA) (9 cosponsors)
H.R.4928: Coral Reef Conservation and Protection Act of 2004, which finds, among other things, that studies indicate that coral reef ecosystems in the United States and around the world are being degraded and severely threatened by human activities including land-based pollution, overfishing, destructive fishing practices, coastal development, vessel groundings, and climate change.
Sponsor: Rep. Ed Case (D-HI) (5 cosponsors)
H.R.5001: Ocean and Coastal Observation Systems Act of 2004, which would establish an integrated ocean and coastal observing system, among other things, to track and understand climate change and the ocean's and Great Lake's roles in it.
Sponsor: Rep. Curt Weldon (R-PA) (6 cosponsors)
S.14: The Energy Policy Act of 2003, which, among other things, would establish a Hydrogen Fuel Initiative directing research into the production of hydrogen from fossil fuels, in conjunction with carbon capture and sequestration. The bill would authorize Clean Coal Power Initiative funding for projects that include the separation and capture of carbon dioxide. The bill would also establish a Genomes to Life Program, one long-term goal of which would be the advancement of science and technology regarding the conversion of carbon dioxide to organic carbon. (See S.1005 under this heading, S.582 and S.727 under “Clean Coal,” and S.682 under “Carbon Sequestration, Genomes.”)
Sponsor: Sen. Pete V. Domenici (R-NM) – Action: 4/30/03: Reported out of the Senate Energy Committee. The bill was debated on the Senate floor, but not passed by the Senate. H.R.6 E.A.S. (see above) was passed instead.
S.597: Energy Tax Incentives Act of 2003, which, among other things, conditions tax incentives for the construction of advanced clean coal technology units on their achieving carbon emission rate requirements specified in the bill.
Sponsor: Sen. Charles E. Grassley (R-IA) (4 cosponsors)
S.682: The Genomes to Life Research and Development Act, which would establish a research and development program in systems biology and proteomics (a proteome is a protein complement to a genome), one long-term goal of which would be to stabilize atmospheric levels of carbon dioxide to counter global warming, and one specific goal of which would be to understand the Earth's natural carbon cycle and to create strategies to stabilize atmospheric carbon dioxide.
Sponsor: Sen. Pete V. Domenici (R-NM) (3 cosponsors)
S.1867: National Beverage Producer Responsibility Act of 2003, which, among other things, states as a finding that increasing exiting rates of reuse and recycling of beverage containers to 80 percent would reduce greenhouse gas emissions by more than 4,000,000 tons annually, in addition to the 4,000,000 tons of emissions already being avoided through current recycling efforts. The bill would promote beverage container recycling and reuse.
Sponsor: Sen. James M. Jeffords (I-VT) (5 cosponsors)
H.R.6 E.H.: The Energy Policy Act of 2003 as passed by the House, which, among other things, would direct the Department of Energy to research technologies for ultra-deepwater and unconventional natural gas and other petroleum resource exploration and production, including for the reduction of GHG emissions and sequestration of carbon. The bill would also establish a research program in genetics, protein science, and computational biology of microbes and plants, one goal of which would be to develop technologies and methods based on the biological functions of microbes and plants to convert carbon dioxide to organic carbon. The bill would also authorize carbon capture and sequestration research and development. (See H.R.1213 under “Clean Coal,” H.R.238 and H.R.1645 under “Carbon Sequestration, Genomes,” the Global Warming Amendment under “Greenhouse Gas Reduction,” the Sense of Congress on Climate Change Amendment under “International Negotiations,” and the National Greenhouse Gas Emissions Inventory Amendment under “Greenhouse Gas Reporting.”)
Sponsor: Rep. W.J. “Billy” Tauzin (R-LA) (4 cosponsors) – Action: 4/11/2003: Passed by the House by a vote of 247 – 175.
H.R.6 Conference Report on the Energy Policy Act of 2003, which, among other things, establishes carbon emission rate requirements that advanced clean coal technology units must meet to be eligible for a clean coal technology tax credit; extends the enhanced oil recovery credit to high volume natural gas facilities which produce carbon dioxide that is injected into hydrocarbon-bearing geological formations; authorizes a “Clean Coal Power Initiative” that reforms the existing DOE Clean Coal Technology Program, which may fund projects that include the separation and capture of carbon dioxide; directs the Department of Energy (DOE) to conduct programs to address the production of hydrogen from fossil fuels, which may include carbon capture and sequestration; authorizes research, development, demonstration and commercial application of programs to facilitate coal-based power through carbon capture and sequestration research and development, and of ultra-deepwater exploration technologies for the reduction of greenhouse gas emissions and sequestration of carbon; requires a report to Congress that includes scenarios for decreasing natural gas demand and increasing natural gas supplies comparing relative economic and environmental impacts of, among other things, federal policies that encourage or require the use of natural gas to meet carbon dioxide emission reduction goals; and establishes a research, development and demonstration program in genetics, protein science, and computational biology that has the goal, among other things, of converting carbon dioxide to organic carbon. The climate titles of H.R.6 E.A.S. were not debated by the conference committee and not included in the conference report.
Conference committee chairman: Sen. Pete V. Domenici (R-NM) – Action: 11/18/2003: Conference report agreed to by the House by a vote of 246 – 180. 11/21/03: The Senate failed to end the filibuster on the conference report by a vote of 58 – 39 (recorded as 57 – 40 because Senate Majority Leader Frist (R-TN) voted to sustain the filibuster as a procedural move which allowed him to reattempt the vote at a later date).
H.R.318: The Biofuels Air Quality Act, which, among other things, would require consideration under the congestion mitigation and air quality improvement program of the extent to which a proposed project or program reduces atmospheric carbon emissions.
Sponsor: Rep. John M. Shimkus (R-IL) (16 cosponsors)
H.R.1337: To encourage the development of hydroelectric projects, and for other purposes. In arguing in support of hydroelectric projects, the bill states as a finding that the U.S. currently “utilize[s] large quantities of carbon fuels for electricity generation.”
Sponsor: Rep. John B. Shadegg (R-AZ) (3 cosponsors)
H.R.1644: The Energy Policy Act of 2003, which, among other things, would authorize clean coal research relating to the separation and capture of carbon dioxide. (See H.R.6 E.H.)
Sponsor: Rep. Joe Barton (R-TX) – Action: 4/10/03: Incorporated into H.R.6 E.H.
H.R.1645: To establish a research, development, and demonstration program in genetics, protein science, and computational biology of microbes and plants to support the energy and environmental mission of the Department of Energy. One goal of the program would be to develop technologies and methods based on the biological functions of microbes and plants to convert carbon dioxide to organic carbon. (See H.R.6 under “Energy Policy.”)
Sponsor: Rep. Sherwood Boehlert (R-NY)
H.R.2673: Consolidated Appropriations Act, 2004, which, among other things, provides $180 million to support policies and programs in developing countries and countries in transition that directly: (1) promote energy conservation, energy efficiency and clean energy; (2) measure, monitor, and reduce GHG emissions; (3) increase carbon sequestration activities; and (4) enhance climate change mitigation and adaptation programs. Also, the President must submit a report to the Appropriations Committees on federal agency obligations and expenditures, domestic and international, for climate change and technology transfer programs in fiscal year 2004. Also provides that funds may be used to support tropical forestry and biodiversity conservation activities and energy programs aimed at reducing GHG emissions.
Sponsor: Rep. Henry Bonilla (R-TX) – Action: 1/23/2004: Became Public Law Number 108-199.
H.R.2691: E.A.S. Department of the Interior and Related Agencies Appropriations Act, 2004, as passed by the Senate, which included a provision making up to $9 million of the funds previously appropriated for clean coal technology available for the development of technologies and research facilities that support the production of electricity and hydrogen from coal, including sequestration of associated carbon dioxide. The mention of carbon sequestration was deleted in the conference report on the bill.
Sponsor: Rep. Charles H. Taylor (R-NC) - Action: 9/25/03: Passed by the Senate by voice vote. (The final bill, without the mention of carbon sequestration, became Public Law Number 108-108 on 11/10/03.)
H.R.4500: Energy Science Act of 2004, which, among other things, would establish a program of technology research into coal and power systems, including programs to facilitate production and generation of coal-based power through carbon capture and sequestration research and development, and a joint project for permeability enhancement in coals for natural gas production and carbon dioxide sequestration. The bill would also establish a research, development, and demonstration program in genetics, protein science, and computational biology to with the goal of developing technologies and methods based on the biological functions of genomes, microbes, and plants that convert carbon dioxide to organic carbon; The bill would also direct the Department of Energy to research technologies for ultra-deepwater and unconventional natural gas and other petroleum resource exploration and production, including for the reduction of GHG emissions and sequestration of carbon.
Sponsor: Rep. Sherwood L. Boehlert (R-NY) (1 cosponsor)
H.R.4503: The Energy Policy Act of 2004 (essentially identical to the conference report on the H.R.6; see above).
Sponsor: Rep. Joe Barton (R-TX) – Action: 6/15/04: Passed by the House by a vote of 244 – 178.
H.R.4520 E.A.S.: The Jumpstart Our Business Strength (JOBS) Act as passed by the Senate, includes an extensive energy tax incentives title, that, among other things, establishes carbon emission rate requirements that advanced clean coal technology units must meet to be eligible for a clean coal technology tax credit; extends the enhanced oil recovery credit to high volume natural gas facilities which produce carbon dioxide that is injected into hydrocarbon-bearing geological formations. (See the conference report on H.R.6 above.)
Sponsor: Rep. William M. Thomas (R-CA) (40 Cosponsors) – Action: 6/17/04: H.R.4520 E.H. passed by the House by a vote of 251 – 178, but not with the energy tax incentives title (or the carbon-specific language) mentioned here. 7/15/04: Agreed to by the Senate by a vote of 78 – 15.
H.R.4704: To amend the Internal Revenue Code of 1986 to establish tax credits for climate neutral combustion technologies -- combustion systems to generate electricity from which the carbon dioxide emissions are captured and applied to a useful purpose, or stored in the Earth's subsurface by sequestration, and from which there are no atmospheric emissions of mercury or greenhouse gases, nor emissions that form fine particles, smog, or acid rain.
Sponsor: Rep. Doug Ose (R-CA) (3 cosponsors)
H.R.4818: Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2005, which, among other things, states that that funds appropriated to implement the Foreign Assistance Act of 1961 may be used to support tropical forestry and biodiversity conservation activities and energy programs aimed at reducing greenhouse gas emissions; appropriates $180 million to support clean energy and other climate change policies and programs in developing countries, of which $100 million is to directly promote energy conservation, energy efficiency, and renewable and clean energy technologies, and of which the balance should be made available to directly: (1) measure, monitor, and reduce greenhouse gas emissions; (2) increase carbon sequestration activities; and (3) enhance climate change mitigation and adaptation programs. In addition, the bill requires, within 45 days after the date on which the President's fiscal year 2006 budget request is submitted to Congress, a report on all federal agency obligations and expenditures for climate change programs and activities in fiscal year 2005; as well as fiscal years 2004 and 2005 obligations and estimated expenditures, and fiscal year 2006 requested funds by the United States Agency for International Development for a variety of climate change activities.
Sponsor: Rep. Jim Kolbe (R-AZ) – Action: 12/8/04: Became Public Law No: 108-447.
H.Res.442: Congratulating the United States nuclear energy industry on its 50th anniversary, which includes a finding that nuclear energy generates electricity without emitting greenhouse gases.
Sponsor: Rep. C.L. Otter (R-ID) (1 cosponsor)
H.J.RES.2: The Consolidated Appropriations Resolution, 2003, which, among other things, provides $175 million to support policies and programs in developing countries and countries in transition that directly: (1) promote energy conservation, energy efficiency and clean energy; (2) measure, monitor, and reduce GHG emissions; (3) increase carbon sequestration activities; and (4) enhance climate change mitigation and adaptation programs. Also, the President must submit a report to the Appropriations Committees on federal agency obligations and expenditures, domestic and international, for climate change and technology transfer programs in fiscal year 2003. Also provides that funds may be used to support tropical forestry and biodiversity conservation activities and energy programs aimed at reducing GHG emissions.
Sponsor: Rep. C.W. “Bill” Young (R-FL) – Action: 2/20/2003: Became Public Law No: 108-7.
S.1449: America's Healthy Forest Restoration and Research Act, which would direct the Department of Agriculture to establish a healthy forests reserve program, one goal of which would be to enhance carbon sequestration, as well as a program to inventory, monitor, characterize, assess, and identify forest stands, which among other things, would quantify carbon uptake rates.
Sponsor: Sen. Michael D. Crapo (R-ID) (1 cosponsor) – Action: 12/3/03: H.R.1904 (see below), the House companion bill of S.1449, became Public Law 108-148 with the carbon sequestration provisions.
S.1453: The Forestry and Community Assistance Act of 2003, which in enrolling forests a healthy forests reserve program, would give additional consideration to those lands whose enrollment will improve increase carbon sequestration. (See.H.R.1904.)
Sponsor: Sen. Patrick J. Leahy (D-VT) (1 cosponsor)
S.1910: To direct the Secretary of Agriculture to carry out an inventory and management program for forests derived from public domain land, which, among other things, would address the quantification of carbon uptake rates.
Sponsor: Sen. Ron Wyden (D-OR) – Action: 3/24/04: Reported out of the Senate Energy Committee.
S.1938: Act to Save America's Forests, which, among other things, finds that clearcutting and other forms of even-age logging operations aggravate global climate change by decreasing the capability of the soil to retain carbon; and during the critical periods of felling and site preparation, reducing the capacity of the biomass to process and to store carbon, with a resultant loss of stored carbon to the atmosphere.
Sponsor: Sen. Jon Corzine (D-NJ) (4 cosponsors)
H.R.238: The Energy Research, Development, Demonstration, and Commercial Application Act of 2003, which among other things, would direct the Department of Energy to research technologies for ultra-deepwater and unconventional natural gas and other petroleum resource exploration and production, including for the reduction of GHG emissions and sequestration of carbon. (See H.R.6 under “Energy Policy.”)
Sponsor: Rep. Sherwood L. Boehlert (R-NY) (1 cosponsor) – Action: 4/2/03 Reported out of the House Science Committee.
H.R.1904: The Healthy Forests Restoration Act of 2003, which would direct the Department of Agriculture to establish a healthy forests reserve program, one goal of which would be to enhance carbon sequestration, as well as a program to inventory, monitor, characterize, assess, and identify forest stands, which among other things, would quantify carbon uptake rates. (See S.1449 and S.1453.)
Sponsor: Rep. Scott McInnis (R-CO) (137 cosponsors) – Action: 11/21/03 Conference report agreed to by the House by a vote of 286 – 140, and agreed to by the Senate by unanimous consent. 12/3/2003 Became Public Law Number 108-148 with the carbon sequestration provisions.
H.R.2264: The Congo Basin Forest Partnership Act of 2003, which, in authorizing appropriations to carry out the Congo Basin Forest Partnership (CBFP) program, cites the role of Congo Basin forests in absorbing carbon dioxide.
Sponsor: Rep. Clay E. Shaw, Jr. (R-FL) (18 cosponsors) – Action: 10/7/2003 Passed by the House by voice vote. 2/13/2004 Became Public Law Number 108-200 with the carbon dioxide language.
H.R.2894: The Theodore Roosevelt National Wildlife Refuge Act, which, in establishing the Theodore Roosevelt National Wildlife Refuge, finds that the Lower Delta of the Mississippi River has the Nation's highest potential carbon sequestration storage capacity.
Sponsor: Rep. Bennie G. Thompson (R-MS) (3 cosponsors)
H.R.3566: To amend the Cooperative Forestry Assistance Act of 1978 to establish a program using geospatial and information management technologies to inventory, monitor, characterize, assess, and identify forest stands and potential forest stands, and addressing, among other things, the quantification of carbon uptake rates.
Sponsor: Rep. Greg Walden (R-OR)
S.2620: High-Performance Green Buildings Act, which, among other things, finds that in the US buildings generate 35% of the carbon dioxide emissions. The bill would promote buildings with reduced environmental impact.
Sponsor: Sen. James M. Jeffords (I-VT) (7 cosponsors)
In June 2005, Senator Jeff Bingaman (D-NM) drafted a proposal to impose mandatory limits on greenhouse gas emissions, based on the recommendations published by the National Commission on Energy Policy (NCEP). A draft bill of the proposal was named the “Climate and Economy Insurance Act of 2005,” although the bill was not formally introduced into Congress.
The Act would require the Secretary of Energy to set emissions intensity targets for years starting in 2010, and to translate these intensity targets into an annual cap on greenhouse gas emissions (GHGs). The cap would apply to “upstream” fuel producers and other entities including manufacturers, importers and emitters of non-fuel GHGs, and would provide for trading of emissions allowances between covered sources. The Act includes a safety valve price that may be paid in lieu of an allowance, limiting the cost of compliance, but also allowing emissions to rise above the established cap. The Energy Information Administration (EIA) projects that, at the safety valve price recommended by NCEP, emissions would exceed the target caps after 2016 and rise through the foreseeable future, though at a somewhat lower rate than projected under a “business as usual” scenario. (See graph of emissions according to the cap, and actual expected emissions due to use of the safety valve.)
Target: Each year’s target cap would be calculated on the basis of “emissions intensity,” defined as the total amount of covered GHG emissions divided by the forecasted Gross Domestic Product (GDP). In 2006, the Department of Energy (DOE) would calculate the target cap for each calendar year from 2010 through 2019 by (a) projecting the emissions intensity expected for 2009 (based on EIA’s projections of GDP and GHG emissions), (b) reducing that amount annually by 2.4% to arrive at the “emissions intensity target” for each year through 2019, and (c) multiplying the year’s emissions intensity target by the GDP forecasted for that year to arrive at an absolute emissions cap. In 2016, DOE would issue the target caps for 2020 through 2024 using the same procedure, but with a 2.8% reduction rather than 2.4%. The procedure would be repeated every five years, but could be modified under the Congressional Review procedure.
Allowances: The Act would annually require regulated entities to submit an allowance or pay the safety valve price for each ton of GHG emissions. Regulated entities include regulated fuel distributors (natural gas pipelines, petroleum refineries, coal mines of a certain size, natural gas processing plants, and fuel importers) and non-fuel regulated entities (producers or importers of HFCs, PFCs, SF6, or N2O; cement or lime producers; aluminum smelters; and various other non-fuel-related emitters). Fuel distributors would submit allowances based only on their covered fuels, while non-fuel entities would submit allowances based only on their non-fuel-related GHGs.
Allocation of Allowances: The bill specifies the amount of allowances that would be allocated for free, with 91% of emissions allocated in 2010, gradually dropping to 87% allocated after 2019. The Secretary of Energy would distribute the allowances to regulated entities and other affected sectors in such a way that offsets—but no more than offsets—expected losses of profits attributable to this program. One percent of allowances would be provided to organizations assisting affected workers. A small percentage of allowances would be auctioned rather than allocated, starting with 5% in 2010 and rising to 10% after 2019. Each year, an additional 3% of allowances would be reserved for offsets and 1% for early reductions. Any undistributed allowances would be auctioned.
Cost-Reducing Mechanisms: The most important cost reducing mechanism would be the provision allowing any entity to avoid submitting allowances by paying the “safety valve” price, starting at $7/ton-CO2 in 2010, and annually rising in price by a nominal 5% (i.e., not adjusted for inflation). As mentioned, this would assure an upper bound on costs, but also make it highly likely that emissions each year after 2016 would exceed the target caps. In addition, to minimize the cost of the program, allowances and credits could be sold, exchanged, purchased, or transferred. Credits, which could also be submitted in lieu of an allowance, would be distributed to entities that geologically sequester combustion-related carbon dioxide, export covered fuels or non-fuel GHGs, use covered fuels as feedstocks, or otherwise destroy non-fuel GHGs. A pilot program for international offset projects would be established to distribute the 3% of annual allowances reserved for offsets. Each year, 1% of the allowances would be made available to entities that reduce or sequester emissions before the initial allocation period, as demonstrated through reports to the EIA’s Voluntary Reporting of Greenhouse Gases Program (1605(b)).
Congressional Review: By January 2015 and every 5 years afterwards, the President would establish an interagency group to review and make recommendations regarding this program and any similar programs underway in China, India, Brazil, Mexico, Russia, Ukraine, or any OECD country. Recommendations may include modifications to the rate of emissions intensity improvement or the rate of safety valve price increases, along with the feasibility of including other non-regulated entities, or modifications to the percentage of allowances auctioned.
Monitoring and Reporting: DOE would establish procedures for reporting and monitoring emissions, and would determine eligibility for credits, offsets and early-reduction allowances.
Penalties: A regulated entity that failed to submit an allowance would pay an amount equal to three times the safety valve price for each allowance not submitted. Failure to comply would bring civil and criminal penalties.
The Act would also create a trust fund to support climate change adaptation and early technology deployment, with provisions for conservation, zero- or low-carbon energy technologies, advanced coal technologies, cellulosic biomass, and advanced vehicles. A subtitle on International Programs would facilitate the deployment of clean energy technologies in developing countries.
Comments on Draft Technical Guidelines for the Voluntary Reporting of Greenhouse Gases (1605(b)) Program
Comments by The Pew Center on Global Climate Change Regarding Draft Technical Guidelines for the Voluntary Reporting of Greenhouse Gases (1605(b)) Program
June 27, 2005
These comments by the Pew Center on Global Climate Change are written in response to the notice of inquiry by the U.S. Department of Energy (DOE) regarding the “Draft Technical Guidelines for the Voluntary Reporting of Greenhouse Gases (1605(b)) Program” (70 Fed. Reg. 15164 (March 24, 2005)). The Pew Center appreciates the opportunity to comment on this important issue.
The Pew Center previously submitted comments in response to the notice of inquiry by the U.S. DOE regarding “Voluntary Reporting of Greenhouse Gas Emissions, Reductions, and Carbon Sequestration” (67 Fed. Reg. 30370 (May 6, 2002)), as well as the “General Guidelines for Voluntary Greenhouse Gas Reporting; Proposed Rule” (68 Fed. Reg. 68204 (December 5, 2003)). These comments on the Draft Technical Guidelines follow an additional response to the “Interim Final, General Guidelines for the Voluntary Reporting of Greenhouse Gases (1605(b)) Program” (70 Fed. Reg. 15169 (March 24, 2005)), submitted separately.
We appreciate the attempt that has been made to develop a comprehensive program for greenhouse gas reporting. The use of a ratings system is a promising approach for addressing the wide range of GHG emission situations facing industries and sectors that a reporting system should cover. However, the values established for the various methodologies may result in inequities between registered reductions and may unintentionally disadvantage some industries or entire sectors. Likewise, other decisions have been made about which entity has the right to register particular emission reductions both within and across sectors. Where the range of stakeholders can reach agreement on equitable arrangements for allocation and reporting of emissions reductions, we recommend DOE consider adopting these arrangements. The Pew Center recommends that the first reporting period be considered a trial to determine how well the guidelines support sufficient and equitable participation in the registration of real reductions.
Following the first period, these Guidelines should be re-evaluated based on reporters’ experiences with (and the extent of participation in) the program in all sectors and revised in the light of these experiences. Finally, existing discrepancies between the General Guidelines and the Technical Guidelines (for example, discrepancies in accounting methods specified for geological sequestration) should be resolved prior to the Guidelines becoming final.
Comments by the Pew Center on Global Climate Change Regarding Interim Final, General Guidelines for the Voluntary Reporting of Greenhouse Gases (1605(b)) Program
June 27, 2005
These comments by the Pew Center on Global Climate Change are written in response to the notice of inquiry by the U.S. Department of Energy (DOE) regarding the “Interim Final, General Guidelines for the Voluntary Reporting of Greenhouse Gases (1605(b)) Program” (70 Fed. Reg. 15169 (March 24, 2005)). The Center appreciates the opportunity to comment on this important issue.
The Center previously submitted comments in response to the notice of inquiry by the U.S. DOE regarding “Voluntary Reporting of Greenhouse Gas Emissions, Reductions, and Carbon Sequestration” (67 Fed. Reg. 30370 (May 6, 2002)), as well as the “General Guidelines for Voluntary Greenhouse Gas Reporting; Proposed Rule” (68 Fed. Reg. 68204 (December 5, 2003)). While some of the issues raised in previous comments have been addressed in the Interim Final Guidelines, many significant points have not. The Center considers the issues reiterated below to be essential for the establishment of a successful program to reduce U.S. greenhouse gas emissions.
The Center believes that a mandatory GHG reporting and disclosure program is the logical next step in any effort to address climate change. Even a voluntary emission reduction program requires mandatory reporting in order to determine the overall efficacy of the voluntary effort.
Absolute Reductions in Emissions vs. Reductions in Emissions Intensity
While we think that the reporting of emissions intensity data would be interesting, the emissions reduction picture would more transparent and helpful if absolute emissions reduction data were published alongside intensity data.
We appreciate the effort to clarify the definition of an “entity” to be used in entity-wide reporting. However, the fact that reporters retain the flexibility to establish their own approach to entity definitions—rather than requiring reporting at the highest (parent company) level in the U.S.—is likely to provide a skewed view of true entity-wide emissions and make comparison across firms impossible. Additionally, a future mandatory program might be based on the emissions of individual facilities within entities, therefore that information would also be useful to incorporate into this system.
Registering of Activities Prior to 2003
Perhaps of greatest concern is the limitation of registered reductions to post-2002 activities. Under the new two-tiered guidelines, entities may report (but not register) emission reductions achieved prior to 2003. Reductions that were reported to 1605(b) before 2003 could not earn registration status, even if the entities met the new guidelines. The DOE’s decision to distinguish between reductions achieved prior to 2003 and reductions achieved from 2003 is counterproductive and arbitrary. Not only would real, verifiable reductions that occurred before 2003 not be recognized under the proposed system, but entities would have no assurance that a future revision process would not similarly fail to recognize post-2003 registered reductions. While we understand the desire to measure progress toward the President’s goal of reducing emissions intensity 18% from 2002 levels, allowing entities to register reductions that occurred before 2002 would not detract in any way from the ability to measure reductions that have occurred since 2002.
The Center urges that entities be able to register pre-2003 emissions reductions so long as they meet all other requirements of the revised, more stringent 1605(b) guidelines. Many companies have taken responsible actions to curb their GHG emissions and undertake GHG reduction projects over the last decade, due to concern about climate change impacts and in response to the United Nations Framework Convention on Climate Change and various U.S. voluntary programs such as this one that have encouraged early action. A number of these firms acted in good faith reliance on representations from previous government statements suggesting these actions would be rewarded—or at least not punished. These companies should receive credit for their early action. A GHG reporting program should make it possible for such entities to register (and receive baseline protection for) emission reductions and offsets implemented since 1990, so long as the information is certified by the reporting entity and is reported under the established reporting standards. Companies should be able to select any base year in this timeframe for which their emissions are well documented and verifiable.