Invigorating the innovation pipeline
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The document discusses several topics related to regulating greenhouse gas emissions and transitioning to renewable energy sources: 1) It argues that the EPA has the authority to regulate greenhouse gases under the Clean Air Act and discusses several Senate votes and bills related to regulating emissions from the oil, gas and coal industries. 2) It provides statistics on U.S. greenhouse gas emissions and their top sources, and suggests policies like cap and trade could help reduce emissions while creating new jobs. 3) It discusses the growth of carbon trading markets globally, with the EU ETS being the largest, and outlines the EU's goals to expand these markets to more countries and sectors over time. 4) It highlights Germany's success
Invigorating the innovation pipeline
- 1. Peter E. Barker-Homek invigorating the innovation pipeline The EPA has the authority to regulate greenhouse gasses = End of Discussion! In fact, the EPA is compelled to regulate greenhouse gasses under the Clean Air Act. 1
- 2. EPA must stand up to Oil, Coal & Power Lobbies (e.g., American Petroleum Institute a.k.a. Energy Citizens) Murkowski Resolution (Dirty Air Act). On June 10, S.J.Res.26, a resolution sponsored by Senator Murkowski that would have weakened the Clean Air Act and blocked new fuel economy standards, was narrowly defeated, 53 to 47. Senators voting in favor of the resolution have taken on average twice as much coal money and nearly three times as much oil money as those who voted against it. Sanders Amendment. On June 15, Senators voted on Senator Sanders’ Senate Amendment 4318 to Senate Amendment 4301 to H.R. 4213 (American Workers, State, and Business Relief Act of 2010), which would have amended “the Internal Revenue Code of 1986 to eliminate big oil and gas company tax loopholes, and to use the resulting increase in revenues to reduce the deficit and to invest in energy efficiency and conservation. The amendment lost 35 to 61, with 4 Senators not voting. CLEAR Act. On July 30, the House passed H.R. 3534, the Consolidated Land, Energy, and Aquatic Resources ‘CLEAR’ Act of Senators who voted against the amendment have 2009, 209 - 193, with 1 Present. Among other actions, the CLEAR Act taken 3.25 times more oil and gas money in the 111th modifies oil and gas industry regulations, including removing the Congress than those who voted for the amendment. liability cap for oil spills. Those Representatives voting against the CLEAR Act have taken NSPS is the most predictable, nearly five times the amount of oil and gas money on average in likely & practical pathway 2 the 111th than those voting for the Act.
- 3. USA left GHG dust? • The U.S. market is currently the largest single market for environmental technologies. • But foreign markets, like China (20% reduction target ‘05), continue to grow at a higher rate leaving the U.S. vulnerable to losing jobs overseas. • Over the past decade, America's green trade balance has deteriorated significantly; moving from a surplus of $14.4 billion in 1997 to a deficit of nearly -$8.9 billion in 2008. • If the U.S. is going to maintain a competitive edge, industry needs a clear signal from the government to encourage domestic production as well as domestic consumption. • Simply Standardizing Smart Grid is $171 billion market by 2014 and would eliminates 66 power plants in USA The World is now in the early stages of an energy revolution that over the next few decades will be as momentous as the emergence of oil and electricity 3 based economies a century ago!
- 4. Emissions • Management Information Services, Inc. (a Washington, D.C.-based economic and energy research firm), on economic growth potential of the renewable energy and energy efficiency 51% USA GHG Emission industry suggests that effectively 33% USA GHG from Coal Plants! tackling climate change will create up to 4.5 million new U.S. jobs by 2030 • The cap is lowered regularly, and because market forces reward those that make the biggest cuts, the system should produce a race to see whose carbon footprint can shrink the fastest. • States producing the most power by coal: Texas, Ohio, Indiana, Pennsylvania, & Illinois. • EPA will likely take over the following State’s permitting: Alaska, Arizona, Arkansas, California, Connecticut, Florida, Idaho, Kansas, Kentucky, Nebraska, Nevada, Oregon, & Texas. • Companies highest SO2 emissions (lbs./MWh): American Electric Power, Southern Company, Duke Energy, Reliant Energy, Allegheny Energy 4
- 5. The global carbon market • ETSs are already operating or planned in 35 countries around the world. • The European Union Emissions Trading Scheme (EU ETS) is the world’s largest carbon trading market. • The global carbon market has roughly doubled in size every year since 2005 and was worth US$126 billion in 2008. • It has been predicted to grow to a market value of US$3.1 trillion per year by 2020. • UK businesses are the biggest investors in carbon offset projects globally. • The UK Government and the European Union are major proponents of carbon trading. They are pushing for the extension of the schemes to developing countries and the inclusion of new international carbon trading mechanisms in international climate negotiations. 5
- 6. European Union ETS • The European Union Emissions Trading Scheme (EU ETS) is the world’s largest carbon trading market and the first mandatory international carbon trading scheme. • It covers over 11,500 energy-intensive installations across the European Union, including combustion plants, oil refineries, coke ovens, iron and steel plants and factories making cement, glass, lime, brick, ceramics, pulp and paper. Together these installations represent approximately 42 per cent of EU emissions. In total, the EU generates around 4 billion tones of CO2 a year, of which sectors participating in the EU ETS are responsible for 2.15 billion tones. • The top seven per cent of installations covered by the EU ETS account for 60 per cent of emissions covered and it is estimated that 55 per cent of allowances are held by the heat and power sector. • Key milestones on this roadmap include: – The establishment of caps on emissions from all developed countries by 2013 – The linking of the EU ETS with the newly established US trading scheme by 2015 – Capacity building for developing countries combined with the expansion of sectoral crediting mechanisms and their eventual replacement of the Clean Development Mechanism – The establishment of sectoral trading in more advanced developing countries by 2020. 6
- 7. Germany • The policy goal set in the late 1990s was 10 percent renewables. In 2009, 9,800 megawatts of solar power had been installed, as well as 25.8 gigawatts of wind. • Currently, 16 percent of electricity is produced by renewable sources. • And the experts suggest that it’s possible to go from 16 to 100 percent. • The German federal government recently updated its projection of renewables production for 2020 from 20 to 30 percent. The Bundesverband Erneuerbare Energie, an association of producers of renewable energy, goes further, claiming that 47 percent is possible by 2020 • The most important building brick of the German policy for renewable energy is the feed-in- tariff. It guarantees a fixed price for renewable energy, which decreases according to gains in efficiency. This simple concept increased investment in renewables and has been adopted by 18 states of the European Union as well as Japan, Brazil and China. Germany avoided pumping about 74 million metric tons of carbon dioxide into the atmosphere in 2009, and the environment ministry touts another side benefit—nearly 300,000 new jobs in clean power. • McKinsey & Company and the Imperial College co-authored “Roadmap 2050,” a study commissioned by the European Climate Foundation, on methods for achieving a “prosperous, low carbon Europe.” The findings: Europe can follow the German example and be powered completely by renewable energy, by developing a smart electrical grid, with strong transmission lines between North and South. Currently between France and Spain, but also Italy and its neighbors, these are lacking. Without these lines, it is impossible to share wind and solar power across Europe 7
- 8. Germany 100% Renewable Goal! National: The German renewable energy industry is one of the most important growth industries in Germany. It proved this again last year: – it employs around 300,500 people – it covers 16.3 percent of German electricity consumption, 8.8 percent of heat consumption and 5.5 percent of fuel consumption – renewable energy's contribution to total energy consumption in Germany was around 10.4 percent in 2009 – in 2009 it saved around 108 Mio. tons CO2 International: The German renewable energy sector continues to be a leader by international comparison too. – In 2008, plants and technology with a volume of approximately 12 bln euro were exported – the world market share of the wind energy industry is a good 25 percent – Germany is the top of the league worldwide for installed capacity of photovoltaic systems and holds second place in wind energy Prospects: As the prices for conventional fuels are exploding and the price for renewable energy is steadily falling the industry's growth will continue. – in 2008 the oil price exceeded the 140 dollar mark for the first time ever – between 2005 and 2020, the industry aims to invest a total of 200 bln EUR in plants for utilization of renewable energy 8 – by 2020 the industry will employ 500,000 people in total
- 9. Feed-in Tariffs Saved French Ratepayers Money • Conventional wisdom suggests that as more and more renewables are added to a utility's generating mix, the average cost of electricity increases. Thus, as France adds more renewable energy from its program of differentiated feed-in tariffs, the cost of the program should steadily increase. Generation from renewables in France increased nearly three fold from 2003 through 2009. • Bordier's analysis illustrated the role of the "merit order effect" in France on the total cost of renewables to ratepayers. The merit order effect results when renewable generation replaces more expensive fossil-fired generation at the margin. • Renewable energy advocates have long argued that renewables are a hedge against both the rising price of fossil fuels and fossil- fuel price volatility. The French data confirms that this is indeed the case. • France uses Advanced Renewable Tariffs--a system of differentiated feed-in tariffs--to Previous studies in Germany, Denmark, and develop renewable energy at minimal cost. Spain illustrated the significant monetary Differentiated feed-in tariffs allow program benefit when renewables offset conventional administrators to carefully control costs to generation. ratepayers while meeting development targets. 9
- 10. Environmental Trivia? What’s twice the size of Texas? Floats 600 miles off the California Coast? And is the result of letting unregulated industrialists decide? 10
- 11. Environmental Trivia? What’s twice the What’sTexas? the size of twice size of Texas? Floats 600 miles And floats 600 off the California miles off the Coast? California Coast? Pacific Garbage Patch And is the result of letting unregulated industrialists decide? 11
- 12. Actual v Projected Costs of Air Pollution Regulation Clean Air Act Acid Rain SO2 Low Emissions Reformulated Amendments Reduction Vehicles Gasoline 21% 30% 7% 32% P $104 bln/yr P $6 bln/yr P $1,500+ P $0.17/gal A $22 bln/yr A $1.8 bln/yr A $ 100+ A $0.05/gal The George W. Bush White House found that the • benefits of Clean Air Act programs from 1997-2007 • outweighed the costs by a range of • 3 to 1 to as much as • 22 to 1!!! 12
- 13. Take Action: Urge Your Mayor, Governor, Congressmen & Senators to Support a Strong EPA & Cap & Trade In 2008, a Tennessee Valley Authority storage site leaked and created a massive spill in Kingston, Tennessee which by some estimates was eight times as large as the Deepwater Horizon spill in the Gulf of Mexico. 13
- 14. Take Action: Include Retirement Urge Your Mayor, Governor, Obligations & Life Cycle Environmental Congressmen & Senators to Damage & Risk 20.28 Support a Strong EPA 14.26 & Cap & Trade In 2008, a Tennessee Valley Authority storage site leaked and created a massive spill in Kingston, Tennessee which by some estimates was eight times as large as the Deepwater Horizon spill in the Gulf of Mexico. 14
- 15. Do it for them! 15
- 16. Do it for them! And them too! 16