emissions trading and climate change: what’s happening in...

Emissions Trading and Climate Change: What’s Happening in the U.S.

Emissions Trading and Climate Change: What’s Happening in the U.S.

Green WeekJune 13, 2007

Vicki ArroyoDirector of Policy Analysis

Pew Center on Global Climate Change

Green WeekJune 13, 2007

Vicki ArroyoDirector of Policy Analysis

Pew Center on Global Climate Change

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Pew Center on Global Climate ChangePew Center on Global Climate Change

• Founded in May 1998• Independent, non-profit, non-partisan• Divided into five major program areas:

• Scientific Studies/Analyses• Domestic and International Strategies• Outreach Activities

• Business• States

• Solutions• Communications

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Selected Pew ReportsSelected Pew Reports

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43 BELC Companies43 BELC Companies

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Increased Media AttentionIncreased Media Attention

6

ABC NEWS/STANFORD UNIVERSITY POLL (4/2007)

Public Opinion

Views of Global Warming: Then & Now1998 2006 2007

Think it’s probably happening 80% 85% 84%Personally see it as very/extremely important 31 49 52

Know at least a moderate amount about it 44 58 62

Think U.S. government should do more about it -- 68 70

Think scientists disagree about it 67 64 56

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State GHG ReportingState GHG Reporting

Independent Voluntary Registries

The Climate Registry Independent Mandatory Reporting

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State GHG Emission TargetsState GHG Emission Targets

State Near- to Mid-Term Targets

OR: 10% below 1990 levels by 2020

NM: 10% below 2000

levels by 2020

CA: 1990 levels by

2020

NY: 10% below 1990 levels by 2020

CT: 10% below 1990 levels by 2020RI: 10% below 1990 levels by 2020

ME: 10% below 1990 levels by 2020

VT: 10% below 1990 levels by 2020

MA: 10% below 1990 levels by 2020NH: 10% below 1990 levels by 2020

AZ: 2000 levels by 2020

WA: 1990 levels by 2020

IL: 1990 levels by 2020

NJ: 1990 levels by 2020

MN: 15% below 2005 levels by 2015

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Regional InitiativesRegional Initiatives

State Near- to Mid-Term Targets

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State Programs: RGGIState Programs: RGGI

Regional Greenhouse Gas Initiative• Regional cap-and-trade • Initiated 2003 by NY Gov. Pataki• CO2 emissions from power plants• Cap

– Current levels between 2009 and 2015– 10% reduction below current levels by 2019

• Standardized approach to offsets• Safety valve expands scope of offsets• Model rule (template) announced August 2006• Each state must adopt final model rule through

legislation or regulation by Dec. 31, 2008

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State Programs: CaliforniaState Programs: California

• Governor Schwarzenegger targets– 2000 levels by 2010– 1990 levels by 2020– 80% below current emissions by 2050

• California Public Utilities Commission GHG cap on regulated utilities

• Nunez-Pavley AB 32: Global Warming Solutions Act– Set California’s targets at 1990 levels by 2020– First enforceable state-wide program to cap major industrial GHG

emissions and include penalties– Authorizes market-based mechanisms (cap-and-trade); allows one-

year extension on targets– Possible linking with RGGI, EU-ETS

• Low Carbon Fuels Standard (reduce carbon intensity of vehicle fuels sold in California at least 10% by 2020)

• Renewable Portfolio Standard (20% by 2010)

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• No Kyoto• More research• GHG intensity target• Voluntary reporting• Long-term technology development

(but no plan for deployment)

Bush Climate PolicyBush Climate Policy

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U.S. GHG Emissions 1990-2005U.S. GHG Emissions 1990-2005

5,500

5,700

5,900

6,100

6,300

6,500

6,700

6,900

7,100

7,300

7,50019

90

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Year

MM

T C

O 2e

Source: US EPA

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U.S. GHG Emissions 1990-2005U.S. GHG Emissions 1990-2005

5,500

5,700

5,900

6,100

6,300

6,500

6,700

6,900

7,100

7,300

7,50019

90

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Year

MM

T C

O 2e

Source: US EPA

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Choice of Baseline MattersChoice of Baseline Matters

0%5%

10%15%20%25%30%35%40%

1971

1975

1980

1985

1990

1995

2000

2001

2002

2003

2004

Year

% In

crea

se in

Em

issi

ons

US EmissionsEU-15 Emissions

Source: IEA

Emissions growth since…

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Emissions and Economic GrowthEmissions and Economic Growth

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Agenda for Climate ActionAgenda for Climate Action

• 15 recommendations in 6 key areas:– Science and technology– Emissions markets– Sectoral reductions– Energy supply and use– Adaptation– International engagement

• Released February 8, 2006 at National Press Club– 6 companies spoke on need for federal policy

• Briefings for Administration, Hill, key sectors

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US CAP PartnershipUS CAP Partnership

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US CAP RecommendationsUS CAP Recommendations

• Targets– Between 100-105% of today’s levels within five years– 90-100% of today’s levels within 10 years– 70-90% of today’s levels within 15 years. – Goal of 60-80% reduction by 2050 (atmospheric

concentrations of 450-550 ppm)• Economy-wide cap-and-trade system is essential to create

market price signal for GHGs

• Additional policies/measures where price signal alone is not sufficient– Transportation– Power generation– Buildings and energy efficiency

• Technology research, development, demonstration, and deployment

• Need for renewed U.S. leadership in international efforts

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Congressional ActivityCongressional Activity

Electricity Sector Legislation in the 110th Congress

Senate

• Feinstein-Carper: includes all GHGs, some offsets, funds for tech R&D. 25% below 1990 in 2050.

• Alexander-Lieberman: 4P bill, some offsets, standards for new power plants. 17% below 1990 CO2 level by 2025.

• Carper: 4P bill, some offsets, funds for tech R&D. 25% below 1990 CO2level in 2050.

• Sanders: 4P bill, funds for tech R&D. 17% below 1990 CO2 level by 2025 (if no economy-wide GHG bill passed by 2012, further 3%/year reduction in electricity CO2 emissions).

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Congressional ActivityCongressional Activity

Economy-wide Legislation in the 110th Congress

Senate• Lieberman-McCain: offsets, technology title. 60% below 1990 in 2050.• Sanders-Boxer: cap & trade permitted but not required, offsets not

specified, other sectoral standards. 80% below 1990 in 2050.• Kerry-Snowe: offsets and cost-control not specified, other sectoral

standards, funds for tech R&D. 62% below 1990 in 2050.• Bingaman (not introduced): intensity-based growth target, $7/ton CO2

safety valve—emissions continue to rise. (Expected to be amended per new NCEP proposal)

House• Olver-Gilchrest: offsets, 70% below 1990 in 2050.• Waxman: cap & trade permitted but not required, offsets not specified,

other sectoral standards. 80% below 1990 in 2050.

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Economy-wide Bill TargetsIntroduced in 110th Congress as of May 2007

0

5000

10000

15000

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

Em

issi

on

s (M

Mt

CO

2e

)

Historical U.S. emissionsBusiness-as-usual projectionLieberman-McCainBingaman*Kerry-SnoweSanders-Boxer / WaxmanOlver-Gilchrest

Congressional Bill TargetsCongressional Bill Targets

* Not introduced and may change per new NCEP proposal

1990 Baseline

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For More InformationFor More Information

Vicki ArroyoDirector of Policy Analysis

Pew Center on Global Climate ChangeArroyoV@pewclimate.org

www.pewclimate.org