The American Clean Energy and
Security Act
Breakthrough Institute Analysis of the WaxmanMarkey Climate and Energy Bill
What Will ACES Do?
1. “Reduce carbon emissions from major U.S. sources by
3. “Require
“Invest
in
clean
energy
technologies
According
2.
to
electric
the
House
utilities
Energy
to
meet
and
1.
“Reduce
carbon
emissions
from
17% by 2020 and over 80% by 2050 compared to 2005
and
energy
efficiency…”
Commerce
20%
of
their
Committee,
electricity
demand
ACES
will…
major
U.S.
sources
by
17%
by
2020
levels.”
through
renewable
energy
and
energy
and
over
80%
by
2050
compared
to
2. “Require electric utilities to meet 20% of their electricity
efficiency
by 2020.”
2005
levels.”
demand
through renewable energy and energy efficiency
by 2020.”
3.
“Invest in clean energy technologies and energy
efficiency…”
[Source:] http://energycommerce.house.gov/Press_111/20090602/hr2454_reported_summary.pdf
Emissions Reductions
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
Analysis: ACES cap and trade would
legally permit continued growth in
U.S. emissions for up to two decades.
[Source:] http://thebreakthrough.org/blog/2009/05/climate_bills_offsets_provisio.shtml
Emissions in ACES Covered Sectors
9,000
(Million Metric Tons CO2-e
CBO
EPA Offsets
Full Offset
Projection
Levels w/Banking
8,000
7,000
BAU
6,000
2005 baseline
5,000
1990 baseline
4,000
ACES Target
3,000
2,000
1,000
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
0
2020 U.S. Emissions in Covered Sectors under ACES
7000
* Additional permits
banked for future: 4,218
(million metric
tons CO2-e)
^ Additional permits
banked for future: 12,109
6245*
6000
Target
Emissions
6245^
5781
5056
5000
4000
BAU
2005
6607
6089
1990
5189
7% < 1990
4826
25% < 1990 3892
ACES Target With CBO
With EPA
With Full
17% < 2005 Offset Levels Offset Levels Offset Levels
3000
Emissions Legally Permitted by ACES Cap and Trade
2037
2027
2018
Cumulative U.S. Emissions in Covered Sectors Under ACES
60
2012-2020 - (billion tons CO2-e)
Target
55
Emissions
BAU
55.4
IPCC Target
43.7
50
45
40
35
30
25
20
ACES Target CBO Offset
Emissions
Levels
Trajectory
EPA Offset
Levels
Full Offset
Levels
Emissions Reductions
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.
[Source] http://thebreakthrough.org/blog/2009/05/the_climate_bills_catch_22_is.shtml
Emissions Reductions
Conclusion:
Conclusion:
ACES establishes
ACES
a (modest)
effectively
carbon
price and an emissions
establishes
reduction
a nontarget. Does not
binding
provide
“cap”
“emissions
on U.S.
certainty” of a “hard
emissions.
cap.”
[Source] http://thebreakthrough.org/blog/2009/06/climate_bill_analysis_part_vii.shtml
Renewable Electricity Standard
Claim: ACES will “Require electric
utilities meet 20% of their
electricity demand through
renewable energy and energy
efficiency by 2020.”
Renewable Electricity Standard
Analysis: RES will have “effectively
little to no
impactimpact
zero”
on U.S.onrenewable
U.S. renewable
electricity
generation.generation.
electricity
(Breakthrough)
(Southern
Alliance for Clean Energy)
[Source] http://thebreakthrough.org/blog/2009/06/climate_bill_analysis_part_ix.shtml
http://thebreakthrough.org/blog/2009/05/climate_bills_renewable_electr.shtml
U.S. Electricity Generation from Qualifying Renewable Electricity
in 2020 under ACES RES – (% of Total U.S. Electricity)
25%
20%
20%
17%
15%
13%
10%
10%
5%
Nominal
Requirement
0%
After
Exemptions
With 5%
Energy
Efficiency
With 8%
Energy
Efficiency
Percent of U.S. electricity from renewables under ACES RES
BAU = 10%
[Source] http://thebreakthrough.org/blog/2009/06/climate_bill_analysis_part_xi.shtml
Renewable Electricity Standard
[W]e national
remain skeptical
thatsuch
current
versions
“[A]
RES [at]
a low
levelof either
the RES or a carbon cap and trade policy will lead to
…could severely blunt the signal to the
significant solar deployment. … [A] "sweeping"
private sector to invest billions of dollars
federal energy bill that fails to deploy a portfolio of
and
expand
production,
manufacturing,
and
renewable energy options is an underwhelming
job
creation.”
outcome,
ill-equipped to help us meet the challenges
hand.” -Vote
SolarEnergy Association
–atAmerican
Wind
[Source] http://thebreakthrough.org/blog/2009/05/climate_bills_renewable_electr.shtml
Investments in Clean Energy
Claim: ACES will “Invest in clean
energy technologies and energy
efficiency…”
Investments in Clean Energy
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.
[Source] http://thebreakthrough.org/blog/2009/05/how_do_climate_bills_clean_ene.shtml
ACES Clean Energy R&D Investments Compared to Expert
Recommendations - (Billion $ per Year)
$35
Energy Experts Letter Brookings
$20b to $30b
$30b*
$30
$25
$20
Obama Budget
$15b
$15
$10
$5
$0
ACES RD
$0.5b to $1b
Breakthrough
Institute
$15b
ACES Clean Energy R&D Investments Compared to Actual Federal
R&D Investments - (Billion $ per Year)
$35
NIH 2009 R&D Budget
$30.5b
$30
$25
$20
$15
2009 DOE R&D Budget
$5.3b
$10
$5
$0
ACES R&D
$0.5b to $1b
Stimulus Energy
R&D Investment
$4.1*
ACES Total Clean Energy Investments Compared to Expert
Recommendations - (Billion $ per Year)
$90
Breakthrough Institute
$30b-$80b
$80
$70
$60
Apollo Project
$50b
$50
$40
$30
$20
$10
$0
ACES
$6b-$12b
Obama Budget, R&D Only
$15b
ACES Total Clean Energy Investments Compared to Actual
Federal Investments - (Billion $ per Year)
$90
$80
$70
$60
$50
Stimulus
$33b*
$40
$30
$20
$10
$0
ACES
$6b-$12b
ACES Annual Money Flow To...
(Billion $ per Year
$90
$80
$30-$60b
$70
$60
$50
$40
$15-$30b
$30
$20
$6-$12b
$10
$0
New Energy Economy
Old Dirty Energy Industries
Overseas Offsets
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
Carbon Price
EPA:
$28 ceiling
CBO:
$15-26
EPA:
$12-20
$10 floor
[Chart] PointCarbon.com http://www.pointcarbon.com/news/historicprices/
2008 ETS Emissions Reductions?
“The
3 percent
[in 2008]
“It confirms
that[emissions]
the EU hasreduction
a well functioning
was
partly
due to
businesses
trading
system,
with
a robust taking
cap, a measures
clear priceto
cut
their
in response
toisthe
strongus to
signal
andemissions
a liquid market,
which
helping
carbon
price that
prevailed until
theshould
economic
cut emissions
cost-effectively.
This
downturn
encouragestarted.”
other countries in their efforts to set up
- Stavros Dimas,
European
Environmentsystems.”
Commissioner
comparable
domestic
cap-and-trade
- Stavros Dimas, European Environment Commissioner
The Counter-Factual: the US
2.9%
2.5%
2.1%
Jesse Jenkins
Director of Energy and Climate Policy
Breakthrough Institute
[email protected]
510-550-8930 x465
Ted Nordhaus
Chairman
Breakthrough Institute
[email protected]
510-550-8930 x305