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Climate Change:
Making Community-Based Decisions
in a Carbon Constrained World
American Public Power Association
Pre-Rally Workshop
February 28, 2006
Washington, D.C.
The State of Climate
Change Policy
Glenn Kelly
Kelly Public Strategies, LLC
for
The Alliance for Climate Strategies
February 28, 2006
American Public Power Association
Alliance for Climate Strategies (ACS)
• Aluminum
Association
• American Chemistry
Council
• American Forest &
Paper Association
• American Iron & Steel
Institute
• American Petroleum
Institute
• American Public
Power Association
• American Road &
Transportation
Builders Association
• Edison Electric
Institute
• Nuclear Energy
Institute
• National Mining
Association
• National Rural Electric
Cooperative
Association
ACS Purposes
• To exemplify the principle that
voluntary actions are an effective
means of reducing greenhouse gas
emissions intensities
• To demonstrate that the ingenuity
and technological expertise of
American industry can achieve
meaningful reductions in
greenhouse gas emissions intensity
“The North Pole is Melting”
• Front Page Story . . .
• “The last time scientists can be
certain the [north] pole was awash
in water was more than 50 million
years ago." -- New York Times,
(August 19, 2000)
The Correction – 8/29/00
• The original article “misstated the normal
conditions of the sea ice there. A clear spot
has probably opened at the pole before,
scientists say, because about 10 percent of
the Arctic Ocean is clear of ice in a typical
summer.”
• Good News: Santa’s Workshop appears
safe
USS Hawkbill at North Pole, Spring 1999
Preliminary Lessons
• Don’t believe everything you read
• Make no assumptions of future in
climate debate
• Get involved if you care and have a
stake – everybody else is doing it
Sources of Energy-Related CO2 Emissions
US CO2 Emissions From Energy - 2003
Residential
(69% Elec)
21%
Transportation
32%
Commercial
(77% elec)
18%
Industrial
(38% Elec)
29%
Source: EIA, Emissions of Greenhouse Gases in the United States 2003
CO2 Growth Only 38% of GDP Growth
And Industry Emissions Down
Annual Average Percent Change
1990 to 2003
3.0%
CO2 Emissions from Energy
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
-0.5%
Residential
Commercial
Industrial
Transportation
Total
Real GDP
Source: EIA, Emissions of Greenhouse Gases in the United States 2003. GDP data from Bureau of Economic Analysis. Each
sector includes allocated electricity generation emissions.
Policy Dimensions/Overview
• International
– Without U.S.
– With U.S.
• U.S. National
• U.S. States
• Other “Drivers”
– Grassroots/activist investors/media
International Situation
Without the United States
• Kyoto Protocol ratified (Feb 2005)
• Binds parties to GHG reductions on
1990 baseline by 2012
• U.S. and Australia only
“industrialized” nations to pass
• Big issues loom for fate of Kyoto
International Situation
Without the United States (cont’d)
• Kyoto’s future uncertain
– Internal posturing among parties
• No “Enforcement Mechanism”
– No one wants penalties
• “2nd Commitment Period” ???
– Anyone’s guess
• Targets Expected to be Missed
– Only two nations expected to comply
European Environmental Agency
Targets = Reality?
EEA "Existing Measures" Projection for 2010
EU-15
Sweden
UK
Germany
Luxemb
France
Netherla
Italy
Greece
Belgium
Ireland
Finland
Austria
Portugal
Spain
Denmark
-10%
Percent Above Target
-5%
0%
5%
10%
15%
European Environmental Agency, November 30, 2004
20%
25%
30%
35%
40%
Source: Energy Information Administration, International Energy Outlook, 2005
Emissions from developing world surpass
industrialized nations by 2010
Demographic Realities
Population Growth
25%
US
Percent Change
20%
US
15%
10%
W. Europe
5%
W. Europe
0%
1990-2002
Source: Energy Information Administration, International Energy Outlook 2005.
2002-2025
International Situation
Lead by the United States
A New Approach?
UN Framework Convention on Climate
Change (UNFCCC)
• U.S. is still a party
• U.S. ratified this treaty
• Goal to stabilize greenhouse gas
concentrations in the atmosphere
– No targets
– No timetables
– No costly mandates
New U.S. International Directions
• G-8 Gleneagles Communique
– Voluntary actions tied to economic growth
• Asia-Pacific Partnership on Clean
Development and Climate
– Public-private partnership linked to
investments emphasizing “Clean
Development”
• Post-Kyoto Considerations
– Nations realizing goals will not be met
Asia-Pacific Partnership (AP6)
• U.S., Australia, South Korea, Japan, India & China
• Assist each country meet designed strategies for
energy security, reducing pollution and climate
change
• Promote development and deployment of
technologies among partner nations
– Includes “best practices”
• 8 specific areas, including generation and
transmission, renewables and clean fossil
U.S. National Issues
• White House focused on
– National 18% intensity reduction by 2012
– AP6 & Climate VISION Implementation
(approx. $52 million for AP6)
– Technology development/deployment (approx.
$3 billion)
• Hydrogen Fuel Init., etc.
• FutureGen, zero-emission coal generation
• Fusion
– Climate science research (approx. $2 billion)
US Making Strong Progress Reducing Carbon
Intensity (CO2/GDP)
1990-2001 Annual Average % Change
Germany
Includes reunification of Germany
United Kingdom
UK includes one-time "dash to gas"
United States
France
Netherlands
Canada
Italy
Other W.Europe
Australia/NZ
Japan
-4.0%
-3.0%
-2.0%
-1.0%
EIA, International Energy Outlook 2004
0.0%
1.0%
Trends in GHG Emissions 2000 - 2003
1. Lithuania
2. Iceland
3. Ireland
4. Czech
5. USA
6. France
7. Poland
8. Ukraine
9. Germany
10. Belgium
11. Japan
12. Netherlands
13. EU-25
14. Switzerland
15. Norway
16. EU-15
17. Monaco
18. Hungary
19. Canada
20. Portugal
21. Australia
22. Italy
23. Greece
24. Slovenia
25. Latvia
26. Sweden
27. Bulgaria
28. Belarus
29. Spain
30. Slovakia
31. New Zealand
32. Denmark
33. Estonia
34. Romania
35. Austria
36. Ukraine
37. Croatia
38. Luxembourg
39. Finland
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
Source: 2005 National Inventory Reports and Common Reporting Formats at http://unfccc.int/national_reports/
annex_i_ghg_inventories/national_inventories_submissions/items/2761.php
Energy Policy Act of 2005
• Signed into Law August 8, 2005
• Includes Incentives for Renewables,
Nuclear, Clean Coal and Geothermal
• Includes Incentives for Domestic
and Int’l Technology Development
and Deployment to Address Climate
Change
• Rejected Mandatory Emissions Caps
Energy Bill Tax Incentives
U.S. National Issues
• National Commission on Energy Policy (NCEP)
Plan
– Targets w/Emissions Trading
– “safety valve” or “carbon tax” ?
• Domenici/Bingaman “White Paper”
– Assumes emissions caps
– More questions than answers
• McCain/Lieberman
– Losing steam, Nuclear is a key factor
• Stevens/Vitter
– Jurisdiction battles and science
• Inhofe/Barton factor
• Mid-term elections
U.S. National Issues
• White House Mouse
• Supreme Court Mouse
• What happened to the House
Mouse?
– Too little attention paid to House
U.S. National Issues
• Balance against EPAct 2005 passage
–
–
–
–
•
•
•
•
Technology
Tax incentives
International cooperation
Renewables
Senate “climate fatigue”
House “skepticism”
Election-year efforts to appeal to voters
Other issue “background noise” and low
issue priority
U.S. States – a Mixed Bag
• RGGI – Regional Greenhouse Gas
Initiative
– Maine, New Hampshire, Vermont, Connecticut,
New York, New Jersey, Delaware
– 1990 levels by 2014
– 10% below 1990 by 2019
• California Tailpipes & Smokestacks
• Washington & Oregon
• Mayors Initiative
– Mostly short-life capital improvements
– Posturing
Other “Drivers”
•
•
•
•
•
TV Ad Campaigns
Petitions
Movies Starring Former Veeps
Movies
Agenda-based Institutional
Investors / Shareholder Activists
• Other Campaigners
• Politics
Present Reality
• Climate is “mainstreamed”
• Climate does not register as it does
in other nations
• Climate is serious business with
serious consequences
• If you care, get involved to get it
right . . .
. . . or someone else will do it for you.
Questions & Answers
Supplemental Information
Back in the US: McCain/Lieberman Emission Caps Require
Large Reductions
Million Metric Tons of Carbon Dioxide
EIA Projections of US GHG Emissions
12,000
10,000
Reference Case
8,000
SA. 2028:
22% Reduction
6,000
S.139:
33% Reduction
4,000
2,000
0
1990
2000
2010
2025
Source: EIA, Analysis of Senate Amendment 2028, the Climate Stewardship Act of 2003 , May 2004
McCain/Lieberman: A Huge New Program
Value of Issued Allowances:
SO2 Versus McCain/Lieberman
Billions of 2001 Dollars
$300
$250
S.139
$200
SA.2028
$150
$100
SO2 Program
(about $1.5 billion in 2003)
$50
$0
2003
2010
2025
Source: Calculated from EIA, Analysis of Senate Amendment 2028, the Climate Stewardship Act of
2003 , May 2004
Climate Change:
Making Community-Based Decisions
in a Carbon Constrained World
American Public Power Association
Pre-Rally Workshop
February 28, 2006
Washington, D.C.