\nused
\nfor our initial analysis which includes good resources for those who
\nwould like
\nmore details on the APA’s provisions. We
\nwant to single out the great work<\/a> by Eric
\n De Place at Sightline, who also helped us with our
\nbriefing call for key business and community leaders.<\/p>\n
<\/p>\n
We will continue working for the strongest possible bill that limits
\nglobal warming pollution, reduces our dependence on fossil fuels, and
\naccelerates innovation and investment in clean and efficient energy.
\nOur advocacy focuses on mobilizing our
\nefforts and friends to fight for the best policy possible, incorporating
\n the
\nstrongest provisions from a number of bills and policy proposals into
\nthe final
\nproduct. We are particularly
\nappreciative of the tremendous contributions of Sens. Cantwell and
\nCollins
\nin the CLEAR Act, and believe their focus on a simple, fair approach is
\nhaving
\na positive influence as the Senate moves forward. <\/p>\n
<\/p>\n
A note on the spirit of these comments, and the difficult <\/p>\n Our first cut on the American Power Act’s provisions:<\/p>\n <\/p>\n Limiting global warming pollution<\/strong><\/p>\n <\/p>\n Our top priority for comprehensive climate <\/p>\n The APA establishes reduction targets for <\/p>\n Because of the central importance of the <\/p>\n Structure of the cap<\/strong><\/p>\n <\/p>\n The bill takes a somewhat different approach than ACES (or other <\/p>\n For transportation, the bill requires the petroleum companies to <\/p>\n Eric De Place at Sightline has a <\/p>\n Offsets<\/strong><\/p>\n <\/p>\n Our biggest concern with the emissions reduction provisions in the <\/p>\n We strongly support projects that reliably store carbon or reduce <\/p>\n Market protections<\/strong><\/p>\n <\/p>\n The bill contains extensive provisions that limit the ability of <\/p>\n Price collars<\/strong><\/p>\n <\/p>\n As a method to reduce price volatility, the bill contains both a <\/p>\n Allocation of allowances<\/strong><\/p>\n <\/p>\n As in ACES, many of the emission allowances are distributed without <\/p>\n Over time, the percentage of free allowances will decline and the <\/p>\n Climate Solutions has always <\/p>\n Consumer protection<\/strong><\/p>\n <\/p>\n As noted above, the bill provides significant protections through <\/p>\n The Clean Air Act and EPA authority<\/strong><\/p>\n <\/p>\n One of the areas of intense debate and concern is how new climate <\/p>\n However, APA would reduce CAA authority in one key area: major <\/p>\n We will be advocating for stronger preservation of EPA’s <\/p>\n State authorities<\/strong><\/p>\n <\/p>\n The APA appropriately allows states to retain most of their authority <\/p>\n Renewable energy and energy efficiency<\/strong><\/p>\n <\/p>\n APA’s energy efficiency and renewable energy provisions (standards <\/p>\n We do note the addition of a Rural Energy <\/p>\n The APA also contains far less financial support for state programs <\/p>\n In addition to these examples, there are many important policies that <\/p>\n Dirty energy giveaways<\/strong><\/p>\n <\/p>\n Presumably in an effort to find a path to 60 votes, the APA contains <\/p>\n The APA contains a large program to demonstrate carbon capture and <\/p>\n Offshore drilling<\/strong><\/p>\n <\/p>\n The recent disaster in the Gulf graphically illustrates the costs of <\/p>\n Climate Solutions has joined with <\/p>\n Conclusion and recommendations for strengthening<\/strong><\/p>\n <\/p>\n The American Power Act is much less than we need and much more than <\/p>\n We urge the Senate to pass the strongest possible climate Stronger and more certain emission limits, including So the APA is clearly a mixed bag. But we’re going to keep fighting—creating the political space for what Related Links:<\/strong><\/p>\n Outcomes, not mechanisms: the effects of the American Power Act<\/a><\/p>\n Friedman nails Obama for his timid response to the “environmental 9\/11”<\/a><\/p>\n
\nsituation we face as advocates for real climate solutions<\/strong>:
\n Like every piece of major legislation in our
\nsomewhat dysfunctional political system, this one will bear the scars of
\nfear-based special interest politics and insufficient ambition. We will
\n keep fighting hard for what’s right
\nand necessary, while understanding (at the risk of echoing Sec.
\nRumsfeld) that
\nwe have to go to the policy field with the Congress we’ve got. In every
\n major climate bill that sees the
\nlight of day, we can expect (without condoning) big problems; but there
\nare few
\nproblems bigger than continuing to fail to respond to the climate
\ncrisis. If we can find a way to move in a positive
\ndirection, we need to move. This may
\nwell include provisions of the APA as well as other bills, including the
\n CLEAR
\nAct. We’re focused on the destination
\nmore than the vehicles.<\/p>\n
\nand clean energy legislation is that it puts us firmly on the path to
\nrapidly
\nreducing fossil fuel dependence and building a strong clean energy
\neconomy. Science-based limits on global
\nwarming pollution are an essential foundation for that policy. We
\nneed a declining cap on emissions to
\nsend clear market signals that accelerate deployment and unlock
\ninnovation in
\nclean and efficient energy solutions and to responsibly address the
\nclimate
\ncrisis. <\/p>\n
\ncovered sources of 17 percent below 2005 levels by 2020 and 83 percent by 2050. While
\nthese reductions are not steep enough,
\nespecially in the near-term, they do track with President Obama’s
\ncommitments
\nin Copenhagen,
\nACES, and other proposals considered in Congress. The bill includes
\nprovisions which allow
\nadjustment of the targets to the best available science. What is
\nscientifically necessary may not yet
\nbe politically possible. We will continue to advocate for doing the
\nwhole job.<\/p>\n
\nemissions cap, we elaborate on it more than other features:<\/p>\n
\nlegislative proposals)—a “sectoral” approach rather than an
\neconomy-wide cap
\nor trading system. It establishes caps
\nthat are phased in for four primary sectors—electricity generation,
\nindustrial
\nsources, natural gas, and petroleum-based fuels. Together, these sectors
\naccount for
\napproximately 85 percent of national emissions. Electrical utilities and petroleum based transportation fuels are
\ncovered starting in 2013, and the largest industrial emitters and
\nnatural gas
\ncompanies are phased in beginning in 2016.<\/p>\n
\npurchase allowances for the carbon emissions caused by their fuels at a
\nprice
\nset by the market for other sources. The
\ntransportation sector is directly subject to the declining cap on carbon
\nemissions, and oil companies will pay a price set by the market for
\nthese
\npermits.<\/p>\n
\ngood description<\/a> of how this works. <\/p>\n
\nbill
\nrelates to the excessive amount of offsets that are available (2 billion
\n tons
\nannually). This is not new or unique to this bill—these provisions are
\nlargely unchanged from the ACES bill—but they do pose a significant
\nthreat to
\nthe integrity of the cap. The bill does establish oversight and
\naccountability
\nprovisions<\/a> that generally improve on the international standards and
\nACES.
\n International offsets would be limited and
\ndiscounted (1.25 tons of international offsets are required for every
\nton of
\nemissions covered). <\/p>\n
\nemissions in uncapped sectors like agriculture.
\nBut they should not be used to excuse or “offset” a large proportion of
\nthe energy sector emissions within the cap. And two billion tons is just
\ntoo much—enough to substantially
\nundermine the incentives for technology innovation and deployment in the
\n core
\nenergy sectors. We’ll be advocating a
\nreduced scope for offsets and strong oversight to ensure they are
\nlegitimate
\nand effective.<\/p>\n
\ntraders
\nto manipulate the market. It limits auction participation to the
\ncompanies that
\nare required to have permits. It also protects against synthetic
\nderivatives. The bill incorporates some
\nof the strong market protection provisions of Sen. Cantwell’s CLEAR
\nAct as
\nwell as other efforts to better regulate markets. Again, Eric DePlace has
\n a very good description<\/a> of the market
\nprotection provisions and his opinion that they constitute an
\nimprovement over
\nprevious bills.<\/p>\n
\nceiling
\nand floor on the price of carbon credits (which both escalate over the
\nperiod
\nof the reductions) and establishes a strategic reserve to reduce the
\nlikelihood
\nthat hitting the ceiling will “break the bank” by requiring EPA to issue
\nadditional permits above the levels allowed by the cap. We oppose a
\nprice ceiling, because it could
\nallow emissions in excess of the cap. At
\nminimum, we believe the ceiling should be higher and should escalate
\nmore
\nrapidly to minimize the likelihood of exceeding the emission limits in
\nthe
\nbill. <\/p>\n
\ncharge in the early years to electric and natural gas utilities, with
\nprovisions requiring the value to be distributed to ratepayers to reduce
\n rate
\nimpacts and promote energy efficiency (note: the efficiency provisions
\nare a bit unclear
\nyet, and may not have the intended effect). 75 percent of the allowances would be distributed based on historical emissions
\nand 25 percent based on the load served (ACES had a 50\/50 split). The bill also
\n follows ACES in allowing free
\ndistribution in the initial years to trade-sensitive industries. A
\nsubstantial percentage of allowances are
\nallocated for public purposes, such as support for state programs,
\ndeficit
\nreduction, protection of low income consumers, and transit projects that
\n reduce
\nGHGS (this transit and other “smart growth” funding is new and welcome
\nin the
\nAPA—the kind of legitimate, carbon-reducing public purpose that merits
\n public
\ninvestment much more than, say, provisions that shift financial risk
\nfrom nuclear
\noperators to taxpayers.)<\/p>\n
\namount
\nauctioned will increase. After 2026, an
\nincreasing percentage of allowances will go to a trust fund which will
\nrebate
\n75 percent directly to households and allocate 25 percent to deficit reduction.<\/p>\n
\nadvocated an auction-based system and will continue to push for
\ntransparency,
\nequity, and efficiency. The sky is a
\npublic resource, and any proceeds from the private use of that resource
\nbelong
\nto the public. It is important to
\nremember, however, that the allocation system does not directly affect
\nthe
\nmarket signals or emission limits that are established by the declining
\ncap.<\/p>\n
\nutility rebates and (in the later years) direct refunds. It also
\nprovides direct refunds for
\nlow-income consumers who would be disproportionately affected by any
\ncost
\nincreases and have done the least to cause global warming. We
\nstrongly support
\nhaving good provisions that ensure that basic energy service is
\naffordable to
\nall. <\/p>\n
\npolicy
\nwould affect EPA’s existing authorities to regulate climate pollution.
\nThe carbon reduction provisions of APA are a
\ntitle of the Clean Air Act and would mark the first significant
\nexpansion of
\nthat Act since the 1990 Amendments (which established the Acid Rain
\nProgram). EPA would be the entity primarily responsible
\nfor implementation of the program. <\/p>\n
\nstationary sources. This is essentially the same approach taken
\nin the 1990 Amendments—when Congress replaced individual source
\npermitting
\napproaches with a sectoral cap. The APA
\nalso establishes performance standards for coal-fired power plants built
\n after
\n2020, and allows EPA to set performance standards for older power
\nplants. It
\nwould preserve existing Clean Air Act authority over mobile-source
\nemissions of
\nglobal warming pollution and other types of air pollution. <\/p>\n
\nexisting authority, especially for the largest and dirtiest sources.
\nSome changes to existing authority are likely
\ngiven the scope of new authorities in the legislation, but it’s
\nimperative that
\nwe emerge overall with a much more effective national commitment to
\nregulate
\nclimate pollution.<\/p>\n
\n to
\nregulate global warming pollution and promote clean and efficient
\nenergy. The one major exception involves state cap-and-trade programs, like the one implemented in the Northeast States and
\nproposed in the Western States under the Western Climate Initiative,
\nwhich
\nwould be preempted. States that have
\nimplemented caps will get financial compensation for their lost
\nrevenues. In the House bill, these programs were
\nsuspended. While we prefer the House approach (or no preemption at all)
\nwe will
\nlikely be focusing our efforts on preserving the Bill’s broad retention
\nof
\nstate authority and pushing for better funding and support for state
\nprograms. This is likely to be an
\narea of continuing contention, and maintaining the ability for leading
\nstates
\nto serve as pioneers and innovators is vital to our continuing progress.<\/p>\n
\nand
\nfunding) are substantially weaker than ACES. In part, the reason is jurisdictional. In the House, a single committee
\ndeveloped the energy and climate
\nportions of the bill. In the Senate, by
\ncontrast, different committees have jurisdiction. The Senate Energy
\ncommittee
\nreported a bill (the American Clean Energy Leadership Act or ACELA) last
\nJune,
\nthat contains provisions on these issues, but they are generally much
\nweaker
\nthan the comparable provisions of ACES. For example, ACELA contains a
\nnational Renewable Power Standard that is weaker<\/strong> than what many experts predict will be achieved in a business as usual
\nscenario, without any new policy<\/a>. <\/p>\n
\nSavings Program, authored by Sen. Merkley, that will provide
\nsubstantial
\nefficiency benefits in rural communities. Energy efficiency and
\nrenewable energy standards remain a critical
\npiece of any successful emission reduction and clean energy job creation
\nstrategy; strengthening provisions will be a major focus for us.<\/p>\n
\nthat
\npromote energy efficiency and renewables than ACES. According to the
\nAmerican Council For An
\nEnergy-Efficient Economy<\/a> (ACEEE), APA only provides one quarter of the
\nstate
\nfunding for efficiency programs as ACES and much less funding
\nfor gas utility programs to benefit consumers. ACEEE has estimated that
\nthe House bill would save the average American
\nconsumer $200 on their energy bills. One
\nissue that we will have to look at more closely, though, is the
\npotential
\ntrade-offs between these funding mechanisms for state programs and
\nconsumer
\nprotection. For a variety of reasons,
\nthe Senate Bill allocates less public funding overall, so the tradeoffs
\nbecome
\nsomewhat more difficult. Since we
\nstrongly support both clean energy and consumer protection, we need to
\nadvocate
\nfor solutions that provide adequate funding without “robbing Peter to
\npay
\nPaul.” One obvious place to look for this funding is the extensive
\ngiveaways to
\ndirty energy, discussed below. <\/p>\n
\nwill promote energy efficiency and renewables that should be amended
\ninto this
\nbill or adopted separately. These
\ninclude nationwide building codes, appliance and equipment efficiency
\nstandards,
\nprovisions to accelerate home and building efficiency (such as HOME STAR
\n and
\nBUILDING STAR), research and development support, renewal and expansion
\nof
\nincentive programs established under ARRA, and clean energy financing.
\nMany of these provisions were contained in
\nthe House bill, and should be considered as part of a final package. A
\nnumber of the leading associations
\nrepresenting renewable and energy efficiency businesses issued a joint
\nstatement<\/a> last month highlighting a number of areas that they believe
\nshould be
\nincluded in a comprehensive climate and energy bill. <\/p>\n
\nunwarranted and inefficient subsidies to dirty, risky, and expensive
\nenergy
\nsources. Nuclear power gets more than
\n$50 billion in federal loan guarantees, along with risk protection, cost
\n recovery
\nand streamlining\/elimination of critical environmental and regulatory
\nreviews. Taxpayers should not be asked
\nto shoulder huge financial and other risks for a well-established
\ntechnology
\nlike nuclear. And Senators who support
\nfiscal discipline and oppose big government should be the last to insist
\n on
\nsuch provisions.<\/p>\n
\nsequestration for coal plants. While we
\nsupport research into CCS, the amounts of money involved perpetuate a
\nhuge
\ninvestment in coal fired generation, well in advance of any solid
\nevidence that
\na cost-effective solution for disposing of carbon emissions is at
\nhand. We will advocate redirection of these
\nsubsidies to clean energy sources that entail less risk and greater
\npublic
\nbenefit.<\/p>\n
\nour
\naddiction to fossil fuels. The APA provisions on this issue are clearly a
\n work
\nin progress, and are being amended to respond to the enormous public
\nsentiment
\nand concerns from coastal state senators. On the one hand, the bill provides a financial incentive (revenue
\nsharing) for states that open their coastline to offshore drilling. On
\nthe other hand, the bill provides veto
\nopportunities for states that would be affected by spills, and
\ninstitutes some
\nother protections. <\/p>\n
\nother groups in calling for a ban on new offshore drilling, at least
\nuntil a
\nfull review of the Gulf disaster has been completed. We also support
\nthe efforts of the Senators
\nin Washington, Oregon,
\nand California to ban drilling off our states,
\nas well as a stop to drilling in the sensitive and extremely hazardous
\nenvironments of the Beaufort and Chukchi
\nSeas off arctic Alaska. Expanded fossil fuel exploration has no place in a climate bill,
\nsince it demonstrably promotes increased emissions. And in the wake of
\nthe Gulf oil disaster,
\nthese provisions may well cost the bill more votes than it attracts.<\/p>\n
\nwe
\ncurrently have for a national climate policy. It would, for the first time, establish a flawed but significant
\nnational commitment to climate solutions. Given the ticking clocks of
\nclimate change, the threats to our national
\nsecurity, and the race to compete in the global clean energy economy, we
\n must
\ndo everything possible to get the best possible bill enacted now. And
\nthere are few signs that our
\ndysfunctional political system is going to make meaningful change easier
\n in the
\nnext session or near future.<\/p>\n
\nand clean energy bill this year. Initial
\npriorities for strengthening the APA include:<\/p>\n
\nstronger near-term targets, provisions to limit the quantity and quality
\n of
\noffsets, and a price collar that preserves the integrity of the cap.
\nStronger
\n energy efficiency and renewable energy
\nstandards and funding, with a significant change in the balance of
\ninvestment
\nfrom higher cost, dirtier technologies to cleaner ones with greater
\npublic
\nbenefit and less risk.
\nPreserving and enhancing key
\nregulatory authorities of
\nEPA and the states. <\/p>\n
\nwe need, and pushing the Senate to do more than it appears to believe it
\ncan. We hope you’ll join us.<\/p>\n
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