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The Climate It is A-Changin: NecessaryConsumer Protections inClimate legislation

NEUAC June 14, 2010

Marti T. Doneghy

Sr. Legislative RepresentativeGovernment Relations and Advocacy, AARP

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AARP is a nonprofit, nonpartisan membership

organization that helps people 50+ have

independence, choice and control in ways that are

beneficial and affordable to them and society as a

whole. AARP does not endorse candidates for public

office or make contributions to either political

campaigns or candidates. We have staffed offices inall 50 states, the District of Columbia, Puerto Rico,

and the U.S. Virgin Islands.


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AARPs Livable Communities

agenda includes Affordable UtilitiesAARP advocates for policies and

programs to ensure consumers canafford the energy they need to meet

their basic needs


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Solutions to Global Warming Pose

Challenges for Many Consumers

Energy costs are a burden for low and fixed income

consumers.

High energy prices cause consumers to cut back on usage

and other necessary spending.

Energy affordability is linked to health and safety.

Incentives and price signals can increase energy bills

and have negative, even life threatening consequences for

segments of residential consumers


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Older consumers pay a higher percentage

of income for utilities


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Transition to a Low Carbon

Economy At what price?

According to the

EIA, energy

consumption is

increasing by1.07% each year

At this rate

energy demand

will rise by a

full 26% by theyear 2030.


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Energy Costs to Increase

Regardless of climate change legislation, energy costs

will increase for U.S. consumers.

Demand could potentially rise by more than 50% by2030 in the absence of any government action.

Continuing the current trend in energy supply anduse, carbon emissions would rise by 55% by 2030.

Page 10-38 AARP 2009 Policy Book


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H.R. 2454, The American Clean Energy and

Security Act and the Kerry-Lieberman bill

85% of allowances given free to utilities

and other polluters

The percent of allowances given away will

decline over time between 2026 and 2030

when most are auctioned, with the revenuerebated to consumers.


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AARP, NCLC Public Citizen, and more than 40

environment groups on essential consumer

protections for cap and trade billEPW letter, July 22, 2009

The clear preference is to providea greater percentage of allowances

for auction with more of the

revenues used for direct consumerrelief.


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The Carbon Limits and Energy for Americas

Renewal (CLEAR) Act

Cap and Refund Approach

100% auction of allowances - No industry giveaways

75% of proceeds go directly to non-taxable, monthlycash refunds to every legal resident as offset to increased

energy costs.

25% of proceeds fund transition to clean energy

technologies, fuels research, development anddeployment activities (includes worker assistance,

energy efficiency, weatherization and LIHEAP).


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High Energy Costs

Create Incentives to Reduce

Usage-Heat, Cool or Eat.

2008 AARP survey (consumers 45+) found

nearly half (46%) heated or cooled only

certain parts of their homes; 81 percentturned the thermostat up or down.


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Concerns:

LDC Free Give Away of Allowances

Ratepayer benefit under LDC scheme that gives free

allowances is vague. Do regulators need more guidance in

bill?

Does complex market scheme invite speculation, false pricesignals?

Are regional variations overstated?

Cap will affect all economy sectors and increase the cost of

goods and services through out the economy for consumers. AARP also supports an explicit requirement that the value of

any allowances given free to utilities be used to directly

reduce customer bills.


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Challenges:

What is the goal and how can it be achieved at thelowest reasonable cost for consumers?

Consider how the policy impacts specific groups ofconsumers, including low-usage, low income and

older consumers?

Do consumers change their behavior and put their

health at risk? And what about vulnerable

populations?


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We can achieve:

AARP urges Congress to offset increases in

consumer energy costs by returning the

proceeds of a carbon emissions reductionsystem to consumers through a monthly

direct rebate or direct dividend.

AARP has the power to make it better 15


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We Can Achieve:

Who will be at the table when ratepayer

benefitis defined in each of the fifty states

and territories utility commissions

industry -- consumer advocates?

AARP is calling on Congress to create a

Consumer Advocate Office to provide an

independent voice for consumers and

support for intervenor funding.

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We Can Achieve:

A transition to a clean, green world with reduced

greenhouse gas emissions that will protect consumers and

maintain energy affordability for consumers.

Additional assistance to low and fixed income consumers

who pay a disproportionate share of their income on

utilities.

Climate laws and policy that are simple, transparent, and

equitable.

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We Can Achieve:

Reduction of greenhouse gas emissionswhich is crucial for the future of our society

and our planet, but it will certainly come at a

cost.

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Contact Information:

Marti T. DoneghySr. Legislative RepresentativeAARP202 434-3804

[email protected]

carbon market impact on low income populations 2d_doneghy

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