issue immersion session: u.s. climate policy
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Issue Immersion Session: U.S. Climate Policy. WRI’s 2008 MindShare Meeting September 17, 2008. What has happened in Congress thus far and what can we expect in the future. - PowerPoint PPT PresentationTRANSCRIPT
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Issue Immersion Session: U.S. Climate Policy
WRI’s 2008 MindShare Meeting
September 17, 2008
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What has happened in Congress thus far and what can we expect in
the future •2008: Dry run in Congress: Senate bill (Lieberman-Warner) did not pass but momentum was gained; process was constructive in educating policy makers on the issue and highlighting concerns
•Numerous bills introduced in House of Representatives; legislative hearings taking place – won’t vote on a bill this Congress
•With a new president supportive of cap and trade, landscape will change next year, will increase Congress’ likelihood of enacting legislation
•Timing – legislative activity in 2009 – pass law in 2010.
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What are concerns most likely to slow down passage of legislation:• Cost to consumer; job losses; gas prices
• Is the technology available to meet the emission reduction targets called for by the science?
• Concerns about developing country actions, competitiveness and job loss
• Bill creates massive bureaucracy, redistribution of wealth, fighting over how revenue should be used
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How does US policy fit into international need for action
• Global problem; requires commitments from developed and developing countries
• Need strong US domestic policy to bring to international negotiation process
• Treaty: requires 67 or 60 Senate votes – a heavy lift
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WRI is working on many critical issues
Four examples:
• GHG reductions cost too much
• Technology is not available
• U.S. competitiveness will be compromised
• Targets and timetables are unattainable
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Identifying policy options to reduce the cost of climate policy
• Primary focus on cap and trade
• Cost of compliance as well as cost to consumers
• Options include:– Domestic, international
“offsets”
– Banking and borrowing
– “Allowance reserve”
• Related policies (e.g. allowance allocation) also important
WRI’s work on cost containment
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Evaluating mechanisms in federal bills
Boxer-Lieberman-Warner bill targets and U.S. emissions
if 15% offsets used
WRI’s work on cost containment
0
2000
4000
6000
8000
10000
12000
1990 2000 2010 2020 2030 2040 2050 2060
Year
Em
issi
on
s (M
MT
CO
2e)
Business as Usual (EPA)
Target
U.S. Total Emissions
w/ 15% offsets
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Trade measuresCoordinated
international action
Market price
Global market price
U.S. market price
Market price
Non
-CO
2 C
osts
CO
2 c
osts
InsideU.S.
Outside U.S.
Inside U.S.
Outside U.S.
Inside U.S.
Outside U.S.
“Leveling” mechanismsCost containment
mechanisms
Adapted from “Cutting Carbon in Europe”, April 31, 2008 presentation by Michael Grubb and Thomas Counsell
Pri
ce o
f ca
rbo
n i
nte
nsi
ve g
oo
d
Market price
Inside U.S.
Outside U.S.
WRI’s work on international competitiveness
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WRI’s work on international competitiveness
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Identifying what it takes to generate a “Wedge”
WRI’s work on GHG abatement technology
“Humanity already possesses the fundamental scientific, technical, and industrial know-how to solve the carbon and climate problem for the next half-century.”
- S. Pacala and R. Socolow, Science, 13 Aug 2004, Vol. 305
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Identifying the hurdles to deployment at scale
• Technical challenges• Policy challenges• Financing challenges• Example:
– CCS: Diverse stakeholder dialog to produce consensus guidelines on CO2 storage and liability
WRI’s work on GHG abatement technology
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Targets vary in stringency
WRI’s work on meeting targets
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5000
5500
6000
6500
7000
7500
8000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Example: Boxer-Lieberman-Warner bill would have been a significant departure from business as usual
B-L-W
BAU
Mill
ion
met
ric
tons
CO
2e
Total abatement required to meet national target
WRI’s work on meeting targets
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EPRI analysis finds that covered sector abatement is possible
0
500
1000
1500
2000
2500
3000
3500
1990 1995 2000 2005 2010 2015 2020 2025 2030
U.S
. Ele
ctri
c S
ecto
rC
O2 E
mis
sio
ns
(mill
ion
met
ric
ton
s)
EIA Base Case 2008
Technology EIA 2008 Reference Target
Efficiency Load Growth ~ +1.2%/yr Load Growth ~ +0.75%/yr
Renewables 60 GWe by 2030 100 GWe by 2030
Nuclear Generation 20 GWe by 2030 64 GWe by 2030
Advanced Coal Generation
No Existing Plant Upgrades
40% New Plant Efficiency by 2020–2030
130 GWe Plant Upgrades
46% New Plant Efficiency by 2020; 49% in 2030
CCS None Widely Deployed After 2020
PHEV None10% of New Vehicle Sales by
2017; +2%/yr Thereafter
DER< 0.1% of Base Load in
20305% of Base Load in 2030
EIA Base Case 2007
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5000
5500
6000
6500
7000
7500
8000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Abatement from EPRI analysis won’t get us all the way there.
B-L-W
BAU
Mill
ion
met
ric
tons
CO
2e
Abatement potential from power sector as presented in EPRI full portfolio scenario
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5000
5500
6000
6500
7000
7500
8000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
What do we need to get the rest of the way there?
BAU
Mill
ion
met
ric
tons
CO
2e
B-L-W
Remaining abatement needed to meet target
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What does your company need to achieve the abatement necessary
to meet strong targets?
• Technology
• Policy
• Management