ENERGY/CLIMATE BILL DISSECTED, APPROVED

Digging Into The Senate Climate Bill
Joseph Romm, May 13, 2010 (Forbes)

"…[ Analyses of the Kerry-Lieberman American Power Act] have shown how clean energy legislation will create 1.7 million jobs and opportunities for low-income families, including lower energy bills…[Two-thirds of revenues not dedicated to reducing the deficit will be rebated to consumers.] The rest goes to low-carbon energy development and deployment along with things to aid industries in transition to a low carbon economy.

"In the later years, every penny not spent to reduce the deficit will go directly back to consumers…You might call it cap-and-dividend, were the name not taken…[M]uch of this money goes back to consumers through the local regulated utilities, but that was not only inevitable from a political perspective — to keep utilities and Senators from the mid-west and south from immediately bolting — it’s actually a good idea from the perspective of regional equity…"

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"The auctioning…floor price starts at $12 in 2013 and rises 3% plus inflation each year. The ceiling starts at $25 increasing 5% plus inflation annually…[A]fter the regular allowances are auctioned off — and then after the strategic reserve is auctioned off…the hard ceiling is maintained by providing unlimited new allowances…[But] I can’t see us getting near the ceiling price until well into the 2020s since the emissions targets are so weak compared to where we are today…

"…[T]here are still 2 billion offsets, but they won’t vitiate the 2020 target because, again, it’s too easy to meet with efficiency, conservation, renewables, and natural gas fuel switching. Large quantities of offsets aren’t gonna be cheaper those solutions…I doubt offsets will comprise even 3% out of the 17% target achieved by emitters in 2020…The oversight provision seems pretty solid…[M]ost of the offsets sold will be domestic ones…The domestic offsets do represent the opportunity for some real income by farmers….A pay check for leasing a small portion of land for sustainable energy development like putting in a wind turbine that can earn them $3,000 to $15,000 per year…A paycheck for sequestering carbon in their soils by engaging in more sustainable and productive farming practices, and…A paycheck for producing 2nd generation biofuel crops…"

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"The bill has restrictions on new drilling…The bill does set aside a considerable amount of allowances to improve energy efficiency and promote renewable energy…The bill starts with capping the utility sector in 2013…Industrial sources will not enter the program until 2016…[when] energy-intensive and trade-exposed industries receive allowances to upset both their direct and indirect compliance costs. This assistance will be distributed in a way that rewards efficiency investment and make their manufacturing facilities more competitive…There are a number of provisions to block market manipulation…The bill creates…[incentives for researching and developing 72 GW of effective carbon capture and sequestration but since] I don’t expect we will see 72 GW of CCS until well past 2030, this isn’t going to cost taxpayers very much money…[T]he bill does flush a fair amount of money down the toilet incentivizing nuclear power…

"…[The bill ensures] that by the 2020s that we have…substantially dropped below the business-as-usual emissions path…started every major business planning for much deeper reductions ..goosed the cleantech venture and financing community…put in place the entire framework for U.S. climate regulations…accelerated many tens of gigawatts of different types of low-carbon energy into the marketplace…put billions into developing advanced low-carbon technology…started building out the smart, green grid of the 21st century…trained and created millions of clean energy jobs…negotiated a working innternational climate regime…brought China into the process…There really is no Plan B. Certainly leaving this to the EPA and a few states won’t [work]…Sadly, the conventional wisdom is that even this moderate bill has no chance — and I certainly think it doesn’t have very much chance if Obama doesn’t start pushing for it as hard as he pushed for healthcare…"