Climate Compass Blog
Domestically and internationally, climate action in 2009 laid critical groundwork for potential breakthroughs in Congress and global negotiations in 2010. Yet with an issue as complex and political as climate change, turning groundwork into policy is a challenge. 2010 will undoubtedly be a pivotal year for climate change – but first it is instructive to take a look back at what happened in 2009 and how that shaped where we are today.
We captured these highlights in our annual Year-in-Review Newsletter – a useful compilation of 2009’s big climate change stories and related insights. The year’s major domestic action included passage of the landmark House climate and clean energy bill along with numerous Obama administration efforts to improve our climate and economy. These accomplishments included the stimulus bill’s $80 billion in clean energy-related funding and EPA actions, including the endangerment finding, the greenhouse gas reporting rule, and stricter auto-efficiency standards.
Copenhagen consumed international climate attention in 2009, culminating in the pre-dawn hours of December 19 when final touches were put on an accord directly brokered by President Obama and a handful of key developing country leaders. While many questions remain after Copenhagen, our summary of the conference provides a sound starting point for grasping what transpired at the year’s largest climate event.
The lead-up to 2009’s main events required a great deal of work, and some of the year’s highlights include the detailed Blueprint for Climate Action released one year ago this month by the influential business-NGO coalition U.S. Climate Action Partnership (USCAP). More industry leaders also showed support for mandatory climate action by joining our Business Environmental Leadership Council (BELC). And efforts to reach business communities, employees, and families expanded through the Make An Impact program. In partnerships with aluminum manufacturer Alcoa and utility Entergy, we continue to provide individuals with strategies to save energy and money while protecting the environment.
We continued to educate policy makers and opinion leaders, producing reports, analyses, and fact sheets on topics ranging from clean-energy technologies, climate science, competitiveness, and adaptation. Featuring expert insights and thoughtful opinions, we informed broad audiences about the immediate need for climate action. And our timely, relevant work moves forward in 2010 as we seek progress in addressing the most important global issue of our time.
Tom Steinfeldt is Communications Manager
Nearing the first anniversary of the United States’ first greenhouse gas (GHG) cap-and-trade program, members of the northeast Regional Greenhouse Gas Initiative (RGGI) joined with Pennsylvania to build on their effort to reduce GHG emissions. Governors from these eleven Northeast and Mid-Atlantic states signed a Memorandum of Understanding to establish the framework for a Low Carbon Fuel Standard (LCFS) by 2011.
The RGGI LCFS will operate in conjunction with national fuel economy standards that will increase the efficiency of passenger vehicles. A our new resource updates our comparison of fuel economy standards around the world and shows the fuel economy gains that will be made from these new standards. Click on the graph below for more detail.
In other climate and transportation news, we recently released a report on two modes of transportation that haven’t received a lot of attention from U.S. climate policymakers: the aviation and marine sectors. The report, Aviation and Marine Transportation: GHG Mitigation Potential and Challenges, finds that reductions in GHG emissions of more than 50 percent below business-as-usual (BAU) levels are possible by 2050. Though aviation and marine transportation currently represent only 3 percent of emissions, BAU CO2 emissions from the global aviation and marine transport sectors are projected to quadruple and nearly triple, respectively, by mid-century; controlling growth in these emissions will be an important part of reducing overall emissions from transportation.
Our President Eileen Claussen says, “Aviation and marine shipping are two of the fastest growing modes of transportation. Their greenhouse gas emissions are growing rapidly as well. To protect the climate, we need to reduce emissions across the entire economy. Aviation and marine shipping are part of the climate problem, and this report shows that they can be part of the solution.”
Tara Ursell is a Communications Associate
Shortly before the new year, Vice President Biden issued a memo summarizing the federal government’s progress in promoting “clean energy,” primarily via the 2009 stimulus bill (the American Recovery and Reinvestment Act, or ARRA). The Dec. 15 memo highlights significant incentives provided for efficiency, renewable electricity, biofuels, plug-in hybrid-electric vehicles, carbon capture and storage, and other low-carbon technologies. It summarizes where things stood one year ago (e.g., in terms of generating capacity, number of homes with smart meters) and where things are expected to be in the next few years.
The memo notes that ARRA provides $80 billion for clean energy investments. In terms of impacts, Vice President Biden claims, for example, that ARRA and other policies put the United States on track to double by 2012 non-hydro renewable electricity generation capacity compared to the level at the beginning of 2009. The memo says the rate of home energy efficiency retrofits will increase by an order of magnitude from 2009 to 2012 (to one million per year). While there are currently no commercial-scale carbon capture and storage projects in operation, the memo projects that there will be five by 2015. There are also evaluations of vehicle fuel economy, biofuels, nuclear power, electric vehicles, smart grid, and clean energy manufacturing.
While the clean energy advances touted by the Vice President are undoubtedly positive developments, the key policy for significantly reducing U.S. greenhouse gas emissions—i.e., putting a price on carbon—is still being debated in Congress. The House passed a climate and energy bill that included a greenhouse gas cap-and-trade program in June, and the Senate continues deliberations on a similar bill.
In considering efforts to transition to a low-carbon future, it’s helpful to remember that climate change is a “tale of two market failures.” First, and most importantly, businesses and households do not face any price associated with emitting greenhouse gases despite the social costs (e.g., costs of damage to coastal communities from sea level rise, increase in costs due to reduction in water resources) associated with their contribution to dangerous climate change. Thus businesses and households lack a key financial incentive to invest in efficiency or lower-carbon energy sources. Second, while intellectual property protections help firms profit from their investments in new technology, the nature of innovation is such that the gains to society (i.e., to other businesses and consumers) from a single company’s investments in innovation generally exceed the returns to that company. Thus businesses tend to under-invest in innovation.
With respect to fostering innovation, a summary from Harvard’s Belfer Center of U.S. Department of Energy research, development, and demonstration (RD&D) funding over time illustrates that the $7.5 billion in energy-related RD&D funding in ARRA is more than half as much as DOE received, cumulatively, in the five years from FY2005 through FY2009.
We know that a combination of a market-based climate policy that puts a price on carbon (e.g., via a greenhouse gas cap-and-trade program) to “pull” a portfolio of low-carbon technologies into the market coupled with incentives for low-carbon technology research, development, demonstration, and deployment (RDD&D)—i.e., policies to “push” low-carbon technologies into the market—make reducing greenhouse gas emissions less costly overall than a reliance on only “push” or “pull” policies alone.
The efforts outlined in the Vice President’s progress report are providing a much needed “push” for clean energy—such as government funding and loan guarantees to leverage private-sector investment in commercial-scale demonstrations of carbon capture and storage. But, ultimately, the United States will not make the required significant, absolute reductions in emissions without the market “pull” created by an economy-wide carbon price.
Steve Caldwell is a Technology and Policy Fellow
In February 2009 Congress passed the American Recovery and Reinvestment Act (ARRA or the stimulus package) providing the largest single investment in clean energy in American history. About $84 billion of the $787 billion in stimulus funds targets energy, transportation, and climate investment in the form of grants, tax cuts, and loan guarantees. Given the magnitude of this investment and its anticipated role of laying the groundwork for American leadership in a global clean energy economy, it is beneficial to follow how these funds are spent.
We recently published the first installment of a brief on the spending of ARRA funds by the U.S. Department of Energy (DOE), the agency with jurisdiction over the majority of energy expenditures. The brief specifically examines how the funds have been appropriated, awarded, and spent as a way to track how quickly the money is moving out the door along with the impact of this spending on job creation. We plan to keep tabs on the use of ARRA funds over time and update this brief accordingly.
On the whole, ARRA money is moving at a slower pace than expected – as of November 13, 2009 only 3.9 percent of the DOE’s total appropriated ARRA funds had been spent. But ARRA is leveraging private investment and, as Vice President Biden noted in a recent memo to President Obama, “jumpstarting a major transformation of our energy system.” For example, with these funds and additional leveraged private investment, renewable energy generation is expected to double from 27.8 GW in January 2009 to 55.6 GW by 2012.1
ARRA funds will also lead to significant growth in the manufacturing capacity for clean energy technology, advanced vehicle and fuel technologies, components of a smarter electric grid, home weatherization, and carbon capture and storage technologies. New industry and funding for programs already in existence will create and save jobs in the clean energy sector. At the end of October 2009, the Bureau of Labor Statistics reported nearly 10,000 jobs created from the DOE’s use of Recovery Act funds. This number is expected to grow considerably as more of the ARRA money is committed to and spent by recipients (Biden’s memo predicts 253,000 jobs will be supported from new renewable generation and advanced energy manufacturing alone).
Stay tuned for updates as we continue to follow the spending progress and impacts of DOE ARRA funds.
Olivia Nix is the Innovative Solutions intern
The smart grid is a hot topic these days. President Obama touted the smart grid during his campaign and continues to be a booster. The 2009 stimulus bill (the American Recovery and Reinvestment Act, ARRA) provided nearly $4.5 billion to the Department of Energy (DOE) for smart grid investments. In October, DOE made $3.4 billion in awards under the Smart Grid Investment Grant Program, and, in November, DOE announced awards totaling $620 million as part of the Smart Grid Regional and Energy Storage Demonstration Project.
Last month, we added a smart grid factsheet to its Climate Techbook. While it’s not easy to give a short definition of the smart grid, one can think of it as the application of digital technology to the electric power sector to improve reliability, reduce cost, and increase efficiency. Smart grid technologies—including communication networks, advanced sensors, and monitoring devices—provide new ways for utilities to generate and deliver power and for consumers to understand and control their electricity consumption.
The smart grid has several anticipated benefits unrelated to climate change, such as improving electricity reliability (e.g., fewer power outages) and reducing utilities’ operating costs (e.g., by eliminating meter reading). Much of the buzz around the smart grid, however, has to do with the ways that smart grid technology can facilitate greenhouse gas emission reductions.
Efficiency, renewables, and plug-in hybrid electric vehicles (PHEV) are three of the primary climate solutions the smart grid can enable. Initial evidence suggests that giving consumers direct feedback on their electricity use via smart meters and associated display devices can by itself lead to energy savings of 5-15 percent. One of the challenges that will become increasingly important as the United States relies more on renewable electricity from wind and solar power is that these resources are variable (i.e., they only generate electricity when the wind blows or the sun shines) rather than schedulable like traditional fossil fuel power plants. Smart grid technology makes it easier to add energy storage to the grid and to exploit demand response (e.g., cycling air conditioners on and off) to more easily balance electricity supply and demand as output from variable renewables fluctuates. Finally, smart grid technology would facilitate charging PHEVs during periods of low electricity demand (when generating costs are lowest and existing capacity is underutilized) so that PHEV charging can be done most cost-effectively.
Achieving greenhouse gas emission reductions at the lowest cost will require deploying a portfolio of energy efficiency measures and low-carbon energy technologies, several of which can build upon smart grid technology.
Steve Caldwell is a Technology and Policy Fellow