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Clean Energy and Climate Change Law and You.
Analysis by Dick Kamp / Wick Communications Environmental Liaison
17 July 2009 updated
On June 26, the House of Representatives passed a 1,428 page plan to reduce the U.S., and perhaps other parts of the world's carbon emissions, the major cause of climate change as agreed upon by the vast majority of global scientists, by a squeaker: 219-212.
The American Clean Energy Stimulus bill, (ACES, also known as Waxman Markey), convinced a majority of members including 8 Republicans, without 44 Democrats, that this country could reduce it's climate change impact and develop clean energy at no net cost. The Congressional Budget Office estimated that it would reduce our debt by $24 billion and leading Republican opponents predicted it would lead our country to ruin.
The day before the hard-fought vote, a joint Republican-Democratic poll (Mellman Group/Public Opinion Strategies) showed that 78% of Americans want climate legislation implemented and that 72% supported the core principals behind ACES.
Climate change legislation has now moved into the Senate where Environment and Public Works Chair Barbara Boxer (D-Ca) began hearings July 7. Boxer expects to have a bill introduced this summer, modeled after Waxman Markey. Senate Majority Leader Harry Reid (D-Nv) wants a bill and 60 compromised votes to ensure passage before the end of the year. President Obama is pushing the process.
The final law is likely to be changed as the coal industry and environmentalists try and simultaneously weaken and strengthen ACES. However, "It will almost certainly have all the same issues embodied in it as Waxman Markey," says a House Energy and Commerce Committee attorney/bill author. Committee staff involved in writing the bill spoke anonymously and they will later work on a joint Senate-House bill.
The final law, like this one, will have political pork in it for different regions, farmers, coal country utilities, refineries, steel industry and the nuclear power industry. The bill was lobbied and manipulated on the floor of the House right down to the last 10 minutes of voting.
"Liars Figure and Figures Lie Section": Waxman-Markey purports to cut U.S. carbon emissions from large sources by 83% from 2005 levels (over 6 billion metric tons) no later than 2050. Most of that is later since the goal is 17% by 2020. In late June, Scotland passed a law reducing emissions 43% from 1990 levels by 2020. US emissions increased 20% between 1990 and 2005 according to the last (2008) US Energy Information Administration report.
Waxman Markey sets a goal of 450 parts per million (ppm) of carbon dioxide (CO2) in the atmosphere by 2050. Unfortunately, most scientists, (as opposed to politicians), fear that unless that goal drops to 350 ppm, sea rise will be aggravated by far faster glacier melt than anticipated (levels of glacier melt predicted for 2050 by some UN estimates in 2005 are now predicted within ten years from now).
Sea rise of only a few feet-anticipated in conservative scenarios-will cost trillions of dollars and a loss of major coastal development and scientists have discovered that as glaciers melt, more carbon is released by frozen soils that may up atmospheric levels of CO2 by more than 20%.
Most international carbon goals call for cuts of 25% to 40% below 1990 levels by 2020-slightly less than the Scotland range but far greater than the 4% drop from 1990 levels by 2020 in ACES. The ACES pace grows rapidly after that.
What ACES sets out to do: ACES lays out how this country will control high carbon and low carbon energy consumption through a system of capitalist trading ("cap and trade") to limit carbon emissions and a few others climate changing chemicals. It funds social and investment programs to make the process easier on both industry and consumers:
(1) it "caps" emissions from large sources and then sets "allowances" that get sold, creating a cash pot used for various stuff that the bill defines, (2) it provides "offsets" to some sources who emit carbon that allow them to reduce carbon from other US sources if they can't do it at specific installations, and (3) it allows a percentage of offsets to reduce deforestation in tropical rainforests around the world since climate change is a global problem.
This "cap and trade" strategy politically has stomped the main alternative proposed, a "carbon tax" on fuels that emit lots of carbon. Fossil fuels would have been taxed at various points of production and usage. The alternatives are not clear-cut: Shell and Conoco-Phillips strongly back this bill and Exxon-Mobil wanted a carbon tax. Both wanted some business certainty for an inevitable policy recognized by the oil industry for many years.
The cap in a "cap-and-trade" system sets the number of emission allowances that are available. These allowances are equal to the amount of emissions that are permitted under the cap and they decline between 2012 and 2050 as the cap is ratcheted down.
These allowances are about half freely distributed as well as "auctioned" through a carbon market how the emission allowances are distributed. At first, allowances are a cash bonus to several industries since the carbon that they get to emit is free as long as it doesn't exceed their "cap.".
Electricity is the largest carbon emitter and coal is the largest utility carbon emitter and accounts for roughly half of the electricity generation in the U.S.-mostly in the Midwest and northeast, New Mexico and Wyoming; natural gas has about 40% the carbon of coal per energy produced. Petroleum fuel in cars and petroleum fuel to heat houses are roughly 85% carbon.
With carbon, the less you burn, the more you control emissions. Department of Energy (DOE) says that residential and commercial buildings together account for 40 percent of U.S. energy consumption, and energy standards for new buildings are one major section of the bill. Wood or biomass are relatively low carbon emissions since they did not turn to fossil fuels (but emit other pollutants,) however biomass generators are included among low carbon "renewable" alternatives for electricity generation.
Put another way, the goal of ACES is to make it increasingly economically painful to use oil and coal, and after awhile natural gas, and to encourage renewable energy development.
If successful, this strategy will go a long way to make the country energy independent, which is also a goal of those who mock climate change. They just would not go at it this way, and would encourage more domestic fossil fuel use as a main goal.
Carbon dioxide is not toxic, making it entirely different from any air "pollutant" ever to be regulated in the past. Carbon cap and trade proponents often point to how successful trading was in reducing sulfur dioxide emissions from power plants, but the sulfur was a life threatening pollutant and if a power plant chose to reduce sulfur in one spot while spewing it out from another stack, people suffered. So even if overall emissions were reduced, there are still many people living near coal plants emitting levels of sulfur that can cause asthma attacks. Carbon trading reducing planetary concentrations of CO2 has little to do with sulfur trading in the context of immediate local health protection.
In addition the bill lowers emissions from coal bed and landfill methane as well as hydrofluorocarbon chemicals that also exacerbate global warming.
Big Industry Loves It Except When It Doesn't: Joe Loper is Senior Vice President, at the political Alliance to Save Energy, one of several utility-manufacturing-environmentalist coalitions that include, among others, Duke Energy, Dow Chemical and General Electric and the Natural Resource Defense Council.
Loper says, "if you think global warming and climate change is a hoax, this bill embodies something evil. If you believe it is real, as we do, it is a huge step forward on the road to energy efficiency and addressing a planetary crisis and effectively saves our country energy."
The Alliance is one of a number of groups that include industries seeking ground rules for their economic future, with environmentalists fearing an unknown climatic one. Most powerful is the US Climate Action Partnership which adds the big three automakers, Shell and Conoco-Philips, Alcoa Aluminum, and mining giant Rio Tinto to pro-ACES groups
Even he American Coalition for Clean Coal Electricity got a number of demands out of ACES even though there's no technology on the shelf today that scrubs the carbon out of coal power plants.
Yet, ultraliberal bill opponent, Dennis Kucinich (D-Ohio) says ACES, "encourages incineration, promotes coal and makes carbon sellable instead of taxable." He is joined by Friends of the Earth and Greenpeace. And they are joined by House Republican Leader John Boehner (R-Ohio) who sees "a job-killing 1,500 page national energy tax through the House that will raise electricity prices, increase gasoline prices, and ship American jobs overseas to countries like China and India."
These quotes may encourage you to either read on or switch to the comics page.
Will you gain or lose economically from this bill? There is a lot of money until 2025 to develop better ways to produce renewable electricity, capture carbon and sequester it in the ground from existing coal fired plants, and mostly to help consumers and utility purchasers pay for a transition from high carbon to low carbon electricity.
Over the lifetime of the bill, revenue from about 80 percent of the total available "allowances" are used to buffer consumers from higher energy prices, for clean energy research and climate change adaptation efforts. 15 percent of allowances are returned as a rebate to low- and moderate-income households. 22 percent of allowances are given to electric utility and natural gas "local distribution companies", primarily in the early years of the program to create rebates for consumers to offset higher energy bills.
There is money for you if you have an old gas hog and you buy a new low gas consuming vehicle-actually not that low, you can get cash ($4500 max) for buying a new car getting 22 miles per gallon if that is 10% better than the old BMW you drive. On the other hand, if you drive an old Honda Civic you may have a hard time finding a car that gets better mileage.
During the floor vote at least a couple of dozen supporters quoted EPA that the bill would cost consumers "less than a postage stamp a day"-actually 22-38cents when taking into account energy savings from the bill for consumers. The Congressional Budget Office declared a slightly larger 50 cents a day by the year 2020 without including benefits to consumers from energy efficiency measures.
Energy and Commerce committee staff spoke with this reporter on some of the accusations leveled during the House vote by Representative Boehner, for example that "this bill will make it illegal for you to sell your old house if it doesn't meet energy standards."
"Untrue," said the staffers, "the new energy efficiency standards are for new houses, and if they become law require 30% upgrade in efficiency by 2012 and 50% by 2016. Any standards for older houses are voluntary and recommended."
Job projections and losses are highly speculative. There are state by state projections-for example EPA projects 30,000 jobs gained in Arizona from access.
ACES would provide a boost to new jobs in the renewable energy field, in new government bureaucracies and in carbon trading markets. If ACES becomes law, it is difficult to imagine that investments in coal plants will continue to grow although jobs in existing coal power plants and by connection, coalmines, get protection through the mid 2020s. Then coal will probably be less competitive, although new plants could in theory be built.
"Clean coal" with carbon capture or sequestration into the ground may or may not ever happen in spite of the large amount of money in this bill to be spent on encouraging the technology and although some workers will gain, some will suffer and they won't be in the same professions and sometimes regions.
ACES would put $90 billion into new clean energy efficient and renewable technologies by 2025 out of the sale of carbon emissions, as well as $60 billion into carbon capture and sequestration in those cases that the technology works said Energy and Commerce Committee staff. Another $20 billion will go into scientific research and development with still another $20 billion into electric cars or other transportation alternatives.
States, using funds from allowances will be able to create energy efficient transportation, provide energy efficiency programs for low-income recipients, create energy efficient manufactured homes, revamp building codes to be more energy efficient, set up statewide "smart grids" to use renewable energy first or think of other similar energy efficient programs.
PART 2 OF 2:A CLEAN ENERGY AND CLIMATE CHANGE LAW AND YOU
On June 26, the House passed ACES, a climate change bill sought by President Obama to control carbon emissions, the main cause of climate change from industrial and mobile sources in the U.S. The Senate expects to follow the ACES model and has begun hearings, hoping to come to a floor vote later this year. A totally new coalition of automakers, electric utilities, mining companies and industry giants like GE and Dow Chemical joined forces with environmental groups to pass a "cap and trade" bill that will ultimately lower US emissions from over 6 billion tons of carbon in 2005 to about 1 billlion in 2050. Most reductions will come post 2020 and from now until 2025 there will be considerable consumer rebates, and enormous Federal investments in renewable energy and clean coal technology. Under a "cap and trade" system, companies may trade their "allowances" to emit carbon, over the shot term, for investments in projects ("offsets") that will reduce carbon in the U.S. and elsewhere but will have to cut a lot of emissions by the mid2020s. EPA and Congressional estimates are that it will reduce debt and cost consumers under 50 cents per day; Republicans disagree.
The Carbon Market, a New Pillar of Trade: Legislation like ACES will ultimately join with global agreements to catapult the carbon trading market to new heights from marginality. ACES has an increasing amount of the carbon allowances given to industry auctioned off as the years go by. Many believe that the carbon market may be the largest traded commodity on the planet in another decade; at least a couple of experts forecast a $2 trillion market. Wall Street, obviously, sees this as a positive.
Through 2013, the government will issue 85 percent of the carbon allowance permits as "free" to utilities and manufacturers and auction off 15 percent on the carbon trading market. Of the free permits, 35 percent are entirely for electricity generators but these free permits are reduced after 2013 and phased out between 2026 and 2030.
"Carbon Offsets" : Up to two billion tons plus of carbon offsets to be invested in projects that will reduce global carbon emissions are available under ACES prior to 2020 and many fear just how useful they may be. Up to one billion offsets can be domestic but if they are difficult to invest in then they can be international. Offsets are not clearly defined.
Climate scientist and political analyst Joseph Romm said recently regarding offset usage that. "The 17% reduction from 2005 levels (by 2020).. will be so easy to achieve with various low-cost clean energy strategies that it's hard to see why polluters would avail themselves of the higher-cost offsets option....I doubt even 150 million tons of offsets will be used by emitters in 2020."
EPA projections agree that far less than the billion domestic offsets allowed will be used, or be practical to invest in, and that international offsets will become a larger market. EPA also maintains that under ACES, 65% of new power by 2025 will be renewable-92% will be low carbon.
ACES defenders say that domestic U.S, offsets will have rigorous requirements in terms of the number of steps demonstrating that carbon will be reduced, how it is enforced, how a new Offset Advisory Board will be structured and proving that CO2 reductions actually took place.
It is also true that offset reductions in carbon do not add to the overall reductions that will be required by the carbon "cap". They simply allow for potential specific carbon reducing projects to take place in lieu of reducing carbon emissions from industry sources. More actual carbon reductions would need to take place if no offsets were used by carbon emitters.
Trusting International governments and taxing China: Foreign "offsets"-where you invest in some carbon-reduction project using your carbon allowances-- are complicated enough to allow both good projects and scams if they are not closely enforced. Michael Brune of the Rainforest Action Network told Yale University that, "A coal company could 'offset' its pollution by paying a logging company to raze a rainforest for a palm plantation in Indonesia"
Former carbon bank executive Jon Sohn is worried, "There are limited offsets in the U.S. and they'll be highly regulated. If you're Duke Energy and you have 72% coal generation looking for cheap offsets to balance out investments in renewable energy, you decide to invest in saving the rainforest somewhere. Here's the reality: you are going to ask U.S. utility companies to invest in national policy reforms within governments like Brazil or the Congo. Those governments and many others in developing countries want to control the investments in carbon offsets and deforestation reduction policies just as they have in exploiting oil, gas and mining. The government will promise you that they will refer to all the land titles in order to preserve rainforest and you don't have to do a thing. Many governments have had terrible policies that have provided neither rights nor title to indigenous people on their own land."
Sohn adds, "How will Duke know what their funds are doing under these governments? There is a lot of information that is going to be needed on what is happening on the ground if we want to avoid conflict and actually see deforestation stopped and effective renewable projects developed."
The bill contains between 150 million dollars to help the developing world develop renewables projects and adapt to climate change. Investments will be far greater due to offsets.
Steel and other heavy industries included in ACES a border tariff on specific goods that are made in countries that do not have the same stringent standards for carbon as the U.S. Frequently mentioned are China and India. The President must impose an import tax on countries that do not meet U.S. standards for emission reduction or he has to request that Congress provide a joint resolution from both chambers to support his request.
Obama, generally highly supportive of ACES, opposes the tariff as language that will lead to litigation and trade challenges and an obstacle to U.S. negotiations over global climate change accords.
Some Farm Support: Minnesota Representative Colin Peterson and his Agricultural Committee negotiated several deals to attract farm organizations. These included an exemption from "taxing" cows for methane generation due to their digestion and having US Department of Agriculture (USDA) oversee farm programs allowing offsets under the bill instead of EPA.
Rural offset examples could be planting substantial numbers of trees to absorb carbon, no-till farming to store carbon in the soil, or installing methane capture systems over animal waste lagoons.
Farmers trust USDA and its 27 000 employees more than EPA but USDA has a history of vague bookkeeping. Peterson's committee found a number of problems in possibly billions of dollars in duplicate grants and non-compliance with wetlands and wildlife laws. The USDA inspector general was unable to account for many of the funds distributed by the USDA's Natural Resources Conservation Agency.
Biofuels made from soy biodiesel and corn ethanol will be greatly increased in production as low carbon fuels under ACES. Both fuels have been considered as being "indirectly" higher carbon users because of the fossil fuels involved in the life cycle of producing the fuel.
ACES would temporarily halt EPA from calculating which fuels qualify as having low carbon emissions through all stages of creation. The question is put on the back burner for at least five years before EPA and USDA would have to agree on emissions. Before, EPA had sole authority to determine that question and most studies have questioned soy and corn as "low carbon" fuels.
Nucs or no Nucs: Nuclear reactors are low in carbon emissions, extremely costly to build, uranium mining is carbon intensive and impacts human health, and the milling, enrichment and waste disposal phases are carbon intensive. Taking such factors into account, nuclear power is not necessarily carbon or cost competitive with solar, wind, ocean tidal and biomass power.
Under ACES, new nuclear plants would end up receiving some subsidized loan guarantees and EPA estimates twice as many new nuclear plants would be built by 2025 under it than without the legislation.
Under a new required "Renewable Electricity Standard," electricity generated from new nuclear units is not added to a utility's baseline electricity level. Therefore a utility would not need to add renewable electricity to compensate for any nuclear plants built. A renewable standard does not provide a disincentive to new nuclear construction or a credit, it's neutral.
ACES creates a new DOE administration to promote domestic development and deployment of clean energy technologies with direct loans, loan guarantees, and letters of credit, and these include nuclear power who also increase and reform existing loans.
New reactors could continue to be stifled by economic competition and existing plants are unlikely to be decommissioned quickly.
Will this slow down Climate Change? Almost all recent climate change scientific analyses claim that if we have not hit the CO2 levels this bill calls for by 2030 in the next six-ten years we will not be able to slow down the CO2 level to 350 ppm. That is not a political statement, and it would require a global effort.
Based on U.S. technological and environmental post-1970 history of reducing air pollution economically if we are on a road to developing and marketing renewable energy, it is probable that technological innovation and the marketplace will make it more economic to produce low carbon energy and less fossil fuel. That, in turn, will make it easier to mandate carbon reductions as we are better able to assess the impacts on our environment and our economy.
A marked rise in sea levels by 2025 will certainly change the debate on whether we need to cut 83% of our emissions by 2050 or as fast as humanly possible. The politics are as uncertain as the climate.
17 July 2009 updated
On June 26, the House of Representatives passed a 1,428 page plan to reduce the U.S., and perhaps other parts of the world's carbon emissions, the major cause of climate change as agreed upon by the vast majority of global scientists, by a squeaker: 219-212.
The American Clean Energy Stimulus bill, (ACES, also known as Waxman Markey), convinced a majority of members including 8 Republicans, without 44 Democrats, that this country could reduce it's climate change impact and develop clean energy at no net cost. The Congressional Budget Office estimated that it would reduce our debt by $24 billion and leading Republican opponents predicted it would lead our country to ruin.
The day before the hard-fought vote, a joint Republican-Democratic poll (Mellman Group/Public Opinion Strategies) showed that 78% of Americans want climate legislation implemented and that 72% supported the core principals behind ACES.
Climate change legislation has now moved into the Senate where Environment and Public Works Chair Barbara Boxer (D-Ca) began hearings July 7. Boxer expects to have a bill introduced this summer, modeled after Waxman Markey. Senate Majority Leader Harry Reid (D-Nv) wants a bill and 60 compromised votes to ensure passage before the end of the year. President Obama is pushing the process.
The final law is likely to be changed as the coal industry and environmentalists try and simultaneously weaken and strengthen ACES. However, "It will almost certainly have all the same issues embodied in it as Waxman Markey," says a House Energy and Commerce Committee attorney/bill author. Committee staff involved in writing the bill spoke anonymously and they will later work on a joint Senate-House bill.
The final law, like this one, will have political pork in it for different regions, farmers, coal country utilities, refineries, steel industry and the nuclear power industry. The bill was lobbied and manipulated on the floor of the House right down to the last 10 minutes of voting.
"Liars Figure and Figures Lie Section": Waxman-Markey purports to cut U.S. carbon emissions from large sources by 83% from 2005 levels (over 6 billion metric tons) no later than 2050. Most of that is later since the goal is 17% by 2020. In late June, Scotland passed a law reducing emissions 43% from 1990 levels by 2020. US emissions increased 20% between 1990 and 2005 according to the last (2008) US Energy Information Administration report.
Waxman Markey sets a goal of 450 parts per million (ppm) of carbon dioxide (CO2) in the atmosphere by 2050. Unfortunately, most scientists, (as opposed to politicians), fear that unless that goal drops to 350 ppm, sea rise will be aggravated by far faster glacier melt than anticipated (levels of glacier melt predicted for 2050 by some UN estimates in 2005 are now predicted within ten years from now).
Sea rise of only a few feet-anticipated in conservative scenarios-will cost trillions of dollars and a loss of major coastal development and scientists have discovered that as glaciers melt, more carbon is released by frozen soils that may up atmospheric levels of CO2 by more than 20%.
Most international carbon goals call for cuts of 25% to 40% below 1990 levels by 2020-slightly less than the Scotland range but far greater than the 4% drop from 1990 levels by 2020 in ACES. The ACES pace grows rapidly after that.
What ACES sets out to do: ACES lays out how this country will control high carbon and low carbon energy consumption through a system of capitalist trading ("cap and trade") to limit carbon emissions and a few others climate changing chemicals. It funds social and investment programs to make the process easier on both industry and consumers:
(1) it "caps" emissions from large sources and then sets "allowances" that get sold, creating a cash pot used for various stuff that the bill defines, (2) it provides "offsets" to some sources who emit carbon that allow them to reduce carbon from other US sources if they can't do it at specific installations, and (3) it allows a percentage of offsets to reduce deforestation in tropical rainforests around the world since climate change is a global problem.
This "cap and trade" strategy politically has stomped the main alternative proposed, a "carbon tax" on fuels that emit lots of carbon. Fossil fuels would have been taxed at various points of production and usage. The alternatives are not clear-cut: Shell and Conoco-Phillips strongly back this bill and Exxon-Mobil wanted a carbon tax. Both wanted some business certainty for an inevitable policy recognized by the oil industry for many years.
The cap in a "cap-and-trade" system sets the number of emission allowances that are available. These allowances are equal to the amount of emissions that are permitted under the cap and they decline between 2012 and 2050 as the cap is ratcheted down.
These allowances are about half freely distributed as well as "auctioned" through a carbon market how the emission allowances are distributed. At first, allowances are a cash bonus to several industries since the carbon that they get to emit is free as long as it doesn't exceed their "cap.".
Electricity is the largest carbon emitter and coal is the largest utility carbon emitter and accounts for roughly half of the electricity generation in the U.S.-mostly in the Midwest and northeast, New Mexico and Wyoming; natural gas has about 40% the carbon of coal per energy produced. Petroleum fuel in cars and petroleum fuel to heat houses are roughly 85% carbon.
With carbon, the less you burn, the more you control emissions. Department of Energy (DOE) says that residential and commercial buildings together account for 40 percent of U.S. energy consumption, and energy standards for new buildings are one major section of the bill. Wood or biomass are relatively low carbon emissions since they did not turn to fossil fuels (but emit other pollutants,) however biomass generators are included among low carbon "renewable" alternatives for electricity generation.
Put another way, the goal of ACES is to make it increasingly economically painful to use oil and coal, and after awhile natural gas, and to encourage renewable energy development.
If successful, this strategy will go a long way to make the country energy independent, which is also a goal of those who mock climate change. They just would not go at it this way, and would encourage more domestic fossil fuel use as a main goal.
Carbon dioxide is not toxic, making it entirely different from any air "pollutant" ever to be regulated in the past. Carbon cap and trade proponents often point to how successful trading was in reducing sulfur dioxide emissions from power plants, but the sulfur was a life threatening pollutant and if a power plant chose to reduce sulfur in one spot while spewing it out from another stack, people suffered. So even if overall emissions were reduced, there are still many people living near coal plants emitting levels of sulfur that can cause asthma attacks. Carbon trading reducing planetary concentrations of CO2 has little to do with sulfur trading in the context of immediate local health protection.
In addition the bill lowers emissions from coal bed and landfill methane as well as hydrofluorocarbon chemicals that also exacerbate global warming.
Big Industry Loves It Except When It Doesn't: Joe Loper is Senior Vice President, at the political Alliance to Save Energy, one of several utility-manufacturing-environmentalist coalitions that include, among others, Duke Energy, Dow Chemical and General Electric and the Natural Resource Defense Council.
Loper says, "if you think global warming and climate change is a hoax, this bill embodies something evil. If you believe it is real, as we do, it is a huge step forward on the road to energy efficiency and addressing a planetary crisis and effectively saves our country energy."
The Alliance is one of a number of groups that include industries seeking ground rules for their economic future, with environmentalists fearing an unknown climatic one. Most powerful is the US Climate Action Partnership which adds the big three automakers, Shell and Conoco-Philips, Alcoa Aluminum, and mining giant Rio Tinto to pro-ACES groups
Even he American Coalition for Clean Coal Electricity got a number of demands out of ACES even though there's no technology on the shelf today that scrubs the carbon out of coal power plants.
Yet, ultraliberal bill opponent, Dennis Kucinich (D-Ohio) says ACES, "encourages incineration, promotes coal and makes carbon sellable instead of taxable." He is joined by Friends of the Earth and Greenpeace. And they are joined by House Republican Leader John Boehner (R-Ohio) who sees "a job-killing 1,500 page national energy tax through the House that will raise electricity prices, increase gasoline prices, and ship American jobs overseas to countries like China and India."
These quotes may encourage you to either read on or switch to the comics page.
Will you gain or lose economically from this bill? There is a lot of money until 2025 to develop better ways to produce renewable electricity, capture carbon and sequester it in the ground from existing coal fired plants, and mostly to help consumers and utility purchasers pay for a transition from high carbon to low carbon electricity.
Over the lifetime of the bill, revenue from about 80 percent of the total available "allowances" are used to buffer consumers from higher energy prices, for clean energy research and climate change adaptation efforts. 15 percent of allowances are returned as a rebate to low- and moderate-income households. 22 percent of allowances are given to electric utility and natural gas "local distribution companies", primarily in the early years of the program to create rebates for consumers to offset higher energy bills.
There is money for you if you have an old gas hog and you buy a new low gas consuming vehicle-actually not that low, you can get cash ($4500 max) for buying a new car getting 22 miles per gallon if that is 10% better than the old BMW you drive. On the other hand, if you drive an old Honda Civic you may have a hard time finding a car that gets better mileage.
During the floor vote at least a couple of dozen supporters quoted EPA that the bill would cost consumers "less than a postage stamp a day"-actually 22-38cents when taking into account energy savings from the bill for consumers. The Congressional Budget Office declared a slightly larger 50 cents a day by the year 2020 without including benefits to consumers from energy efficiency measures.
Energy and Commerce committee staff spoke with this reporter on some of the accusations leveled during the House vote by Representative Boehner, for example that "this bill will make it illegal for you to sell your old house if it doesn't meet energy standards."
"Untrue," said the staffers, "the new energy efficiency standards are for new houses, and if they become law require 30% upgrade in efficiency by 2012 and 50% by 2016. Any standards for older houses are voluntary and recommended."
Job projections and losses are highly speculative. There are state by state projections-for example EPA projects 30,000 jobs gained in Arizona from access.
ACES would provide a boost to new jobs in the renewable energy field, in new government bureaucracies and in carbon trading markets. If ACES becomes law, it is difficult to imagine that investments in coal plants will continue to grow although jobs in existing coal power plants and by connection, coalmines, get protection through the mid 2020s. Then coal will probably be less competitive, although new plants could in theory be built.
"Clean coal" with carbon capture or sequestration into the ground may or may not ever happen in spite of the large amount of money in this bill to be spent on encouraging the technology and although some workers will gain, some will suffer and they won't be in the same professions and sometimes regions.
ACES would put $90 billion into new clean energy efficient and renewable technologies by 2025 out of the sale of carbon emissions, as well as $60 billion into carbon capture and sequestration in those cases that the technology works said Energy and Commerce Committee staff. Another $20 billion will go into scientific research and development with still another $20 billion into electric cars or other transportation alternatives.
States, using funds from allowances will be able to create energy efficient transportation, provide energy efficiency programs for low-income recipients, create energy efficient manufactured homes, revamp building codes to be more energy efficient, set up statewide "smart grids" to use renewable energy first or think of other similar energy efficient programs.
PART 2 OF 2:A CLEAN ENERGY AND CLIMATE CHANGE LAW AND YOU
On June 26, the House passed ACES, a climate change bill sought by President Obama to control carbon emissions, the main cause of climate change from industrial and mobile sources in the U.S. The Senate expects to follow the ACES model and has begun hearings, hoping to come to a floor vote later this year. A totally new coalition of automakers, electric utilities, mining companies and industry giants like GE and Dow Chemical joined forces with environmental groups to pass a "cap and trade" bill that will ultimately lower US emissions from over 6 billion tons of carbon in 2005 to about 1 billlion in 2050. Most reductions will come post 2020 and from now until 2025 there will be considerable consumer rebates, and enormous Federal investments in renewable energy and clean coal technology. Under a "cap and trade" system, companies may trade their "allowances" to emit carbon, over the shot term, for investments in projects ("offsets") that will reduce carbon in the U.S. and elsewhere but will have to cut a lot of emissions by the mid2020s. EPA and Congressional estimates are that it will reduce debt and cost consumers under 50 cents per day; Republicans disagree.
The Carbon Market, a New Pillar of Trade: Legislation like ACES will ultimately join with global agreements to catapult the carbon trading market to new heights from marginality. ACES has an increasing amount of the carbon allowances given to industry auctioned off as the years go by. Many believe that the carbon market may be the largest traded commodity on the planet in another decade; at least a couple of experts forecast a $2 trillion market. Wall Street, obviously, sees this as a positive.
Through 2013, the government will issue 85 percent of the carbon allowance permits as "free" to utilities and manufacturers and auction off 15 percent on the carbon trading market. Of the free permits, 35 percent are entirely for electricity generators but these free permits are reduced after 2013 and phased out between 2026 and 2030.
"Carbon Offsets" : Up to two billion tons plus of carbon offsets to be invested in projects that will reduce global carbon emissions are available under ACES prior to 2020 and many fear just how useful they may be. Up to one billion offsets can be domestic but if they are difficult to invest in then they can be international. Offsets are not clearly defined.
Climate scientist and political analyst Joseph Romm said recently regarding offset usage that. "The 17% reduction from 2005 levels (by 2020).. will be so easy to achieve with various low-cost clean energy strategies that it's hard to see why polluters would avail themselves of the higher-cost offsets option....I doubt even 150 million tons of offsets will be used by emitters in 2020."
EPA projections agree that far less than the billion domestic offsets allowed will be used, or be practical to invest in, and that international offsets will become a larger market. EPA also maintains that under ACES, 65% of new power by 2025 will be renewable-92% will be low carbon.
ACES defenders say that domestic U.S, offsets will have rigorous requirements in terms of the number of steps demonstrating that carbon will be reduced, how it is enforced, how a new Offset Advisory Board will be structured and proving that CO2 reductions actually took place.
It is also true that offset reductions in carbon do not add to the overall reductions that will be required by the carbon "cap". They simply allow for potential specific carbon reducing projects to take place in lieu of reducing carbon emissions from industry sources. More actual carbon reductions would need to take place if no offsets were used by carbon emitters.
Trusting International governments and taxing China: Foreign "offsets"-where you invest in some carbon-reduction project using your carbon allowances-- are complicated enough to allow both good projects and scams if they are not closely enforced. Michael Brune of the Rainforest Action Network told Yale University that, "A coal company could 'offset' its pollution by paying a logging company to raze a rainforest for a palm plantation in Indonesia"
Former carbon bank executive Jon Sohn is worried, "There are limited offsets in the U.S. and they'll be highly regulated. If you're Duke Energy and you have 72% coal generation looking for cheap offsets to balance out investments in renewable energy, you decide to invest in saving the rainforest somewhere. Here's the reality: you are going to ask U.S. utility companies to invest in national policy reforms within governments like Brazil or the Congo. Those governments and many others in developing countries want to control the investments in carbon offsets and deforestation reduction policies just as they have in exploiting oil, gas and mining. The government will promise you that they will refer to all the land titles in order to preserve rainforest and you don't have to do a thing. Many governments have had terrible policies that have provided neither rights nor title to indigenous people on their own land."
Sohn adds, "How will Duke know what their funds are doing under these governments? There is a lot of information that is going to be needed on what is happening on the ground if we want to avoid conflict and actually see deforestation stopped and effective renewable projects developed."
The bill contains between 150 million dollars to help the developing world develop renewables projects and adapt to climate change. Investments will be far greater due to offsets.
Steel and other heavy industries included in ACES a border tariff on specific goods that are made in countries that do not have the same stringent standards for carbon as the U.S. Frequently mentioned are China and India. The President must impose an import tax on countries that do not meet U.S. standards for emission reduction or he has to request that Congress provide a joint resolution from both chambers to support his request.
Obama, generally highly supportive of ACES, opposes the tariff as language that will lead to litigation and trade challenges and an obstacle to U.S. negotiations over global climate change accords.
Some Farm Support: Minnesota Representative Colin Peterson and his Agricultural Committee negotiated several deals to attract farm organizations. These included an exemption from "taxing" cows for methane generation due to their digestion and having US Department of Agriculture (USDA) oversee farm programs allowing offsets under the bill instead of EPA.
Rural offset examples could be planting substantial numbers of trees to absorb carbon, no-till farming to store carbon in the soil, or installing methane capture systems over animal waste lagoons.
Farmers trust USDA and its 27 000 employees more than EPA but USDA has a history of vague bookkeeping. Peterson's committee found a number of problems in possibly billions of dollars in duplicate grants and non-compliance with wetlands and wildlife laws. The USDA inspector general was unable to account for many of the funds distributed by the USDA's Natural Resources Conservation Agency.
Biofuels made from soy biodiesel and corn ethanol will be greatly increased in production as low carbon fuels under ACES. Both fuels have been considered as being "indirectly" higher carbon users because of the fossil fuels involved in the life cycle of producing the fuel.
ACES would temporarily halt EPA from calculating which fuels qualify as having low carbon emissions through all stages of creation. The question is put on the back burner for at least five years before EPA and USDA would have to agree on emissions. Before, EPA had sole authority to determine that question and most studies have questioned soy and corn as "low carbon" fuels.
Nucs or no Nucs: Nuclear reactors are low in carbon emissions, extremely costly to build, uranium mining is carbon intensive and impacts human health, and the milling, enrichment and waste disposal phases are carbon intensive. Taking such factors into account, nuclear power is not necessarily carbon or cost competitive with solar, wind, ocean tidal and biomass power.
Under ACES, new nuclear plants would end up receiving some subsidized loan guarantees and EPA estimates twice as many new nuclear plants would be built by 2025 under it than without the legislation.
Under a new required "Renewable Electricity Standard," electricity generated from new nuclear units is not added to a utility's baseline electricity level. Therefore a utility would not need to add renewable electricity to compensate for any nuclear plants built. A renewable standard does not provide a disincentive to new nuclear construction or a credit, it's neutral.
ACES creates a new DOE administration to promote domestic development and deployment of clean energy technologies with direct loans, loan guarantees, and letters of credit, and these include nuclear power who also increase and reform existing loans.
New reactors could continue to be stifled by economic competition and existing plants are unlikely to be decommissioned quickly.
Will this slow down Climate Change? Almost all recent climate change scientific analyses claim that if we have not hit the CO2 levels this bill calls for by 2030 in the next six-ten years we will not be able to slow down the CO2 level to 350 ppm. That is not a political statement, and it would require a global effort.
Based on U.S. technological and environmental post-1970 history of reducing air pollution economically if we are on a road to developing and marketing renewable energy, it is probable that technological innovation and the marketplace will make it more economic to produce low carbon energy and less fossil fuel. That, in turn, will make it easier to mandate carbon reductions as we are better able to assess the impacts on our environment and our economy.
A marked rise in sea levels by 2025 will certainly change the debate on whether we need to cut 83% of our emissions by 2050 or as fast as humanly possible. The politics are as uncertain as the climate.
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