the american clean energy and security act
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The American Clean Energy and Security Act Breakthrough Institute Analysis of the Waxman-Markey Climate and Energy Bill. What Will ACES Do?. “Reduce carbon emissions from major U.S. sources by 17% by 2020 and over 80% by 2050 compared to 2005 levels.” - PowerPoint PPT PresentationTRANSCRIPT
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The American Clean Energy and Security Act
Breakthrough Institute Analysis of the Waxman-Markey Climate and Energy Bill
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According to the House Energy and Commerce Committee, ACES will…1. “Reduce carbon emissions from major U.S. sources by 17% by 2020 and over 80% by 2050 compared to 2005 levels.”
[Source:] http://energycommerce.house.gov/Press_111/20090602/hr2454_reported_summary.pdf
2. “Require electric utilities to meet 20% of their electricity demand through renewable energy and energy efficiency by 2020.”
3. “Invest in clean energy technologies and energy efficiency…”
1. “Reduce carbon emissions from major U.S. sources by
17% by 2020 and over 80% by 2050 compared to 2005
levels.”
2. “Require electric utilities to meet 20% of their electricity
demand through renewable energy and energy efficiency
by 2020.”
3. “Invest in clean energy technologies and energy
efficiency…”
What Will ACES Do?
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Claim: ACES will “Reduce carbon
emissions from major U.S. sources by
17% by 2020 and over 80% by 2050
compared to 2005 levels.”
Emissions Reductions
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Analysis: ACES cap and trade would
legally permit continued growth in
U.S. emissions for up to two decades.
Emissions Reductions
[Source:] http://thebreakthrough.org/blog/2009/05/climate_bills_offsets_provisio.shtml
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20092011
20132015
20172019
20212023
20252027
20290
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Emissions in ACES Covered Sectors(Million Metric Tons CO2-e)
ACES Target
1990 baseline
2005 baseline
BAU
Full Offset Levels w/BankingEPA Offsets ProjectionCBO Offsets Projection
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Emissions Legally Permitted by ACES Cap and Trade3000
4000
5000
6000
7000
5056
5781
6245* 6245^
2020 U.S. Emissions in Covered Sectors under ACES (million metric tons CO2-e)
Target Emissions
BAU 62452005 6089
1990 5189
7% < 1990 4826
25% < 1990 3892
ACES Target17% < 2005
With CBO Offset Levels
With EPA Offset Levels
With FullOffset Levels
* Additional permitsbanked for future: 4,218
^ Additional permitsbanked for future: 12,109
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20122013
20142015
20162017
20182019
20202021
20222023
20242025
20262027
20282029
20300
20
40
60
80
100
120
140
Cumulative U.S. Emissions in Covered Sectors Under ACES 2012-2030 - (billion tons CO2-e)
Business as Usual Emissions
ACES Target Emissions Path
CBO Offset Levels
EPA Offset Levels
Full Offset Levels
2027
2037
2018
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20
25
30
35
40
45
50
55
60
49.5
54.5 55.4 55.4
Cumulative U.S. Emissions in Covered Sectors Under ACES 2012-2020 - (billion tons CO2-e)
Target Emissions
BAU 55.4
IPCC Target 43.7
ACES TargetEmissions Trajectory
CBO OffsetLevels
EPA Offset Levels
Full Offset Levels
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Analysis: Strategic Reserve Pool can
raise cap by 10% in any year.
Triggered when prices rise too high.
Floods market with more allowances,
“refilled” with forestry offsets.
Emissions Reductions
[Source] http://thebreakthrough.org/blog/2009/05/the_climate_bills_catch_22_is.shtml
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Emissions Reductions
[Source] http://thebreakthrough.org/blog/2009/06/climate_bill_analysis_part_vii.shtml
Conclusion:
ACES establishes a (modest) carbon
price and an emissions reduction
target. Does not provide “emissions
certainty” of a “hard cap.”
Conclusion:
ACES effectively
establishes a non-
binding “cap” on U.S.
emissions.
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Claim: ACES will “Require electric
utilities meet 20% of their
electricity demand through
renewable energy and energy
efficiency by 2020.”
Renewable Electricity Standard
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Renewable Electricity Standard
[Source] http://thebreakthrough.org/blog/2009/05/climate_bills_renewable_electr.shtml
Analysis: RES will have little to no
impact on U.S. renewable electricity
generation. (Breakthrough)
Analysis: RES will have “effectively
zero” impact on U.S. renewable
electricity generation. (Southern
Alliance for Clean Energy)
[Source] http://thebreakthrough.org/blog/2009/06/climate_bill_analysis_part_ix.shtml
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Percent of U.S. electricity from renewables under ACES RES0%
5%
10%
15%
20%
25%
20%
17%
13%10%
U.S. Electricity Generation from Qualifying Renewable Electricity in 2020 under ACES RES – (% of Total U.S. Elec-
tricity)
BAU = 10%
Nominal Requirement
After Exemptions
With 5%Energy
Efficiency
With 8%Energy
Efficiency
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[Source] http://thebreakthrough.org/blog/2009/06/climate_bill_analysis_part_xi.shtml
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Renewable Electricity Standard
[Source] http://thebreakthrough.org/blog/2009/05/climate_bills_renewable_electr.shtml
“[A] national RES [at] such a low level …
could severely blunt the signal to the private
sector to invest billions of dollars and
expand production, manufacturing, and job
creation.”
– American Wind Energy Association
[W]e remain skeptical that current versions of either
the RES or a carbon cap and trade policy will lead to
significant solar deployment. … [A] "sweeping"
federal energy bill that fails to deploy a portfolio of
renewable energy options is an underwhelming
outcome, ill-equipped to help us meet the challenges
at hand.” -Vote Solar
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Claim: ACES will “Invest in clean
energy technologies and energy
efficiency…”
Investments in Clean Energy
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Investments in Clean Energy
[Source] http://thebreakthrough.org/blog/2009/05/how_do_climate_bills_clean_ene.shtml
Analysis: ACES investments in clean
energy R&D are a tiny fraction of
President Obama’s budget;
Clean energy investments overall are
insufficient to the challenge at hand.
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$0
$5
$10
$15
$20
$25
$30
$35
ACES Clean Energy R&D Investments Compared to Expert Recommendations - (Billion $ per Year)
ACES R&D$0.5b to $1b
Obama Budget$15b
Breakthrough Institute
$15b
Energy Experts Letter$30b*
Brookings$20b to $30b
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$0
$5
$10
$15
$20
$25
$30
$35
ACES Clean Energy R&D Investments Compared to Actual Federal R&D Investments - (Billion $ per Year)
ACES R&D$0.5b to $1b
2009 DOE R&D Budget$5.3b Stimulus Energy
R&D Investment$4.1*
NIH 2009 R&D Budget$30.5b
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$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
ACES Total Clean Energy Investments Compared to Expert Recommendations - (Billion $ per Year)
Obama Budget, R&D Only$15bACES
$6b-$12b
Apollo Project$50b
Breakthrough Institute$30b-$80b
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$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
ACES Total Clean Energy Investments Compared to Actual Federal Investments - (Billion $ per Year)
ACES$6b-$12b
Stimulus$33b*
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New Energy Economy Old Dirty Energy Industries Overseas Offsets$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
ACES Annual Money Flow To...(Billion $ per Year)
$6-$12b
$30-$60b
$15-$30b
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Carbon Price• Strategic Reserve Pool price ceiling:
-> $28/ton from 2012-15; 60% above 3 yr rolling
average after 2015
• Price floor:
-> $10/ton at outset, rises 5% each year
• EPA estimate:
-> $12-15 per ton 2015; $15-20 per ton in 2020
• CBO estimate:
-> $15 per ton 2011; $26 per ton 2019
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[Chart] PointCarbon.com http://www.pointcarbon.com/news/historicprices/
EPA:$28 ceiling
$10 floor
EPA: $12-20
Carbon Price
CBO:$15-26
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2005
2006
2007
2008
1,400
1,450
1,500
1,550
1,600
1,650
1,700
1,6391,653
1,666
1,619
EU-15 ETS Emissions 2005 – 2008(million metric tons CO2 per year)
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2008 ETS Emissions Reductions?
“It confirms that the EU has a well functioning
trading system, with a robust cap, a clear price
signal and a liquid market, which is helping us to
cut emissions cost-effectively. This should
encourage other countries in their efforts to set up
comparable domestic cap-and-trade systems.”
- Stavros Dimas, European Environment
Commissioner
“The 3 percent [emissions] reduction [in 2008]
was partly due to businesses taking measures to
cut their emissions in response to the strong
carbon price that prevailed until the economic
downturn started.”
- Stavros Dimas, European Environment
Commissioner
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The Counter-Factual: the US
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
2008 Emissions Reductions (Annual Percent Reduction)
2.9%
2.5%
2.1%
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Jesse JenkinsDirector of Energy and Climate PolicyBreakthrough [email protected] x465
Ted NordhausChairmanBreakthrough [email protected] x305