Climate & Energy Policies for the 44 th President & 111 th Congress

1. Climate & Energy Policies for the 44th President & 111th Congress William Becker Presidential Climate Action Project November 13, 2008

2. What science is telling us • Global warming is real. • It is underway now. • It is caused mostly by human activities. • If allowed to go much farther, it will have disastrous consequences for our economy, health, security & ecosystems. • We have the tools to prevent this. • We don’t have much time.

3. How Far?Emission Reduction Goals for Industrial Nations • By 2015 • Stabilize global emissions: IPCC • By 2020 (compared to 1990) • 25-40%: Bali action plan • 20-30%: European Union

4. How fast? • "If there's no action before 2012, that's too late. What we do in the next 2 to 3 years will determine our future. This is the defining moment.“ – Rajendra Pachauri, IPCC • “The next president and congress must define a course next year in which the United States exerts leadership commensurate with our responsibility for the present dangerous situation…” – Dr. Jim Hansen, NASA

5. Moving in Wrong DirectionMcKinsey & Company 2030 Reference Case for U.S. By 2030… • CO2e emissions increase 35% • Carbon absorption decreases 7% • Carbon intensity & per capita emissions improve • Growth factors • Population growth • Buildings & appliances • More carbon-based power

6. Moving in Wrong DirectionEnergy Information Administration - 2007

7. The challenge… 21st century economy • Security • Opportunity • Stewardship

8. Carbon EconomyPetroleum • Oil dependence to cost economy $560 billion & 1.5% of GDP in 2008 (Oak Ridge National Laboratory/DOE) • $1.7 trillion lost in past five years • $1 trillion transferred to oil-producing nations • Oil = 1/3 trade deficit • Cheap oil gone • Efficiency, conservation & new fuels can deliver 50 times more oil than expanded domestic drilling (Consumer Federation of America) Direct Economic Costs of U.S. Oil Dependence, 1970-2009 Source: U.S. Department of Energy

9. Carbon EconomyElectric Generation • U.S. power sector world’s largest • 2 times China • 3.5 times Russia • 5 times India • Per capita use in U.S. 5 times global average • 70% wasted in generation • 6-9% wasted in line losses • Congestion/blackouts cost $79 billion/year • BAU by 2030 • 60% power from coal • 34% of GHG emissions

10. Carbon EconomyCoal • 80% U.S. power plant CO2 • 1/3 existing plants to retire by 2030 • 151 plants in pipeline in 2007 • Nearly 90 stopped by lawsuit, permitting, lack of investment • CCS decade + away

11. Post-Carbon EconomyMarket opportunity • Global green market to reach $2.7 trillion by 2020 (UNEP) • U.S investments in renewables = $13 billion in 2007

12. Post-Carbon EconomyRenewable Energy • Today • 11% of generation • Wind capacity grew 45% 2006-2007 • Solar capacity grew 40% • Geothermal projects up 20% through Aug. 2008 • What’s Ahead • 20% wind by 2020 (DOE) • Solar grid parity in ~5 years (McKinsey) • Smart grids • Distributed power

13. Largest source of US energy supply for last 35 years 30% savings cost effective in the next 20-25 years (ACEEE) $1 for efficiency avoids more than $2 in new supply (IEA) Best cushion against rising prices Efficiency could hold US CO2 constant to 2030 (NREL) Post-Carbon EconomyEnergy efficiency

14. Post-Carbon Economy • $100 billion investment could produce 2 million jobs in two years - Center for American Progress • $500 billion investment could produce 5 million jobs in 10 years - Apollo Project • National push could create 2.5 million new metropolitan jobs by 2018 - U.S. Conference of Mayors

15. McKinsey Curve: Power of Efficiency

16. Project Sponsors: • Building and Construction Trades Department (AFL-CIO) • International Brotherhood of Boilermakers • Industrial Union Council (AFL-CIO) • United Association of Plumbers and Pipefitters • Environmental Defense Fund Available on 11/18 at: http://www.cggc.duke.edu/environment/climatesolutions/

17. Window Components Raw Materials Lumber Frames Sill, Sash, Stop, & Stool Aluminum Fiberglass • Gas Filling Vinyl Krypto Low-E, Solar Control Coatings Argon Nickel Insulating Spacer Titanium Dioxide Flat Glass Panes Chromium Nitrate Silver • Other Components • Backer Rod • Flange Polystyrene Foam High Performance Windows Silica

18. Raw Materials Components Manufacturers WindowManufacturers Consumer Market Retailers Low-E Coatings Seki-Sui-Lec: (Japan) Emirates Glass: (Dubai) CPFilms: (VA) Silica U.S. Silica Co., Wedron Silica Co.(IL), Shore Mountains Silica (TN) • Top Window Manufacturers • Jeld-Wen: (OR) • 25,000 employees, $ 2,900 million sales • Pella Co.: (IA) • 9,000 employees, $1,530 million sales • Andersen: (MN) • 9001 employees, $3,000 million sales • Milgard Windows: (WA, CA) 3,607 employees, $1,227.1 million sales • Atrium Windows and Doors: (TX) • 520 employees, $120.6 million sales • Gorell Enterprises(PA) 280 employees, $72.2 million sales • Alpen(co) Leading U.S. Window Retailers Lowe’s: (NC) 160,000 employees Home Depot: (GA) 331,000 employees 84 Lumber: (PA) 9,500 Employees Flat Glass Corning, Inc: (NY) 313 employees Cardinal Insulating Glass (ND) 280 employees Pilkington Glass Co.: (OH) 300 employees Nickel Russia, Canada, Australia, Indonesia Chromium Elements Chromium (TX and NC) Spacer Edgetech I.G.: (OH) 50 employees GED Integrated Solutions: (OH) 110 employees TruSeal Technologies: (OH) 40 employees Manufacturer Retail Stores/ Showrooms Polystyrene Foam Owens Corning (OH), Carpenter Co. (VA), Foamex Intl. (PA) Installation (Contractors) Argon Praxair (CT), Air Products and Chemicals (PA) • Gas Fills: • Praxair: (CT) 27,992 employees • Air Liquide: France • Air Products and Chemicals: (PA) 21,500 employees • Airgas: (PA) 14, 500 employees Professional Installation Contractors Within Each State Aluminum Alcoa Inc., A.M. Castle Fiberglass U.S., China Other Components: Backer Rod, Flange • Residential Construction Companies (Professional Installation) • D.R. Horton (TX) 6,231 Employees • Lennar (FL) 6,934 Employees • Pulte Homes (MI) 8,500 Employees • Centex (TX) 11,418 Employees Vinyl Dow Chemical Co., E.I. du Pont Frames: Most frames are made on-site at the finished product manufacturer: Pella, Jeld-Wen, Milgard LumberWeyerehouse Co.(WA), Jeld-Wen (OR), Pella Co.(IA) • Research & Development: • Manufacturers: Many component and window manufacturers employ research engineers (ex: Pella has over 300 engineers; CPF Films has an R&D department) • Industry Organizations: Energy Star Other: Krypton, Titanium dioxide, Silver

19. U.S. Component and Window Manufacturers

20. LED Lighting Manufacturing Companies

21. Status of U.S. Policy Americans can always be counted on to do the right thing...after they have exhausted all other possibilities. – Sir Winston Churchill

22. PCAP Mission Provide the 44th President of the United States with a comprehensive plan to take bold action on climate change within 100 days.

23. Background • Most comprehensive climate action plan yet • Two-year, $2 million project • Wirth Chair, UC-Denver • Sources of proposals: • Science & policy experts • Advisory Committee members • Original research • Current & former federal

24. Ray Anderson, Founder & CEO, Interface Inc. Dr. D. James Baker, former NOAA Administrator Scott Bernstein, Center for Neighborhood Technologies April Bucksbaum, Baum Foundation Dianne Dillon-Ridgley, Chair, Plains Justice Brian Castelli, VP, Alliance to Save Energy Boyd Gibbons, past president, Johnson Foundation Gary Hart, U.S. Sen. (ret) Sheila Slocum Hollis, PartnerDuane Morris LLP Van Jones, President & Founder, Ella Baker Center for Human Rights John Petersen, Arlington Institute Hunter Lovins, Natural Capitalism Solutions Michael Northrop, Rockefeller Bros. Fund Dr. David Orr, Oberlin College Theodore Roosevelt IV, Pew Center Larry Schweiger, President, National Wildlife Federation Jeremy Symons, National Wildlife Federation Dr. Gus Speth, Dean, School of Forestry & Environmental Studies, Yale University Adm. Richard Truly (USN ret), former NASA Administrator & NREL Director Heidi VanGenderen, Chief Climate Advisor, Colorado Governors Office National Advisory Committee

25. Comprehensive • Economic policy • Climate policy • Energy policy • National security • Agriculture/rural development • Buildings • Transportation • Federal carbon management • Natural resource stewardship • Ocean ecology • Freshwater resources • Equity • Adaptation • Public health • State/Local action • International policy • Presidential leadership

26. Presidential Climate Action Plan www.climateactionproject.com

27. PCAP by the Numbers • Action items • 181 recommendations • $160 billion/year • Executive authority analysis • 96 climate statutes • Landmark environmental laws • 140 federal court cases • 370 executive orders from 1937 • Climate Plum Book • 200 senior climate-critical positions • 250 nominees

28. Among the issues… • Carbon pricing • Perverse subsidies • Fed vs. state leadership • Carbon lock-in • Capital • International expectations

29. Carbon Pricing • President-elect Obama • Economy-wide cap & Trade • 100% auction • EPA regulation • GHG = 1990 by 2020 • 80% cut by 2050 • PCAP • Economy-wide cap & trade • Upstream allowances • 100% auction • No off-ramps/safety valves • Reductions measured in absolute tons • 25-30% cut by 2020 • 80%+ cut by 2050

30. Renewable Power • President-elect Obama • 25% by 2025 • $15 billion/year • PCAP • 30% 2020 • $30 billion/year • $1 billion platinum carrot • Energy storage • Plug-in hybrids • Cellulosic ethanol

31. Energy Efficiency Critical for Coping • President-elect Obama • Reduce consumption 15% below projected demand by 2020 • PCAP • 25% cut from today’s use by 2020 • 50% cut by 2050

32. Coal-fired Generation • President-elect Obama • Aggressive R&D on CCS • 5 demonstration plants • PCAP • Use efficiency/renewables to avoid new conventional plants • “Clean” = life-cycle CO2 • Explore converting existing plants to natural gas • CCS R&D • Continue but don’t wait • Increase industry cost-share • Continually evaluate cost-effectiveness

33. Nuclear PowerAvoid problem-switching • President-elect Obama • Solve storage, proliferation, safety problems • PCAP • Same as Obama • Meantime, implement clean energy surge

34. TransportationBeyond Futurama • President-elect Obama • Deploy 1 million plug-in hybrids by 2015 • Increase CAFE 4%/year • Offer $7,000 tax credit for advanced vehicle purchases • Provide $4 billion in retooling tax credits for automakers • Support liquids from coal if 20% less carbon than gasoline • PCAP • Increase CAFE to 50 mpg by 2025 • 200 mpg by 2050 • Reform Surface Transportation Program • Offer $1 billion in platinum carrot awards • No liquids from coal

35. Economic PolicyInvest in the New Economy • McKinsey & Company • 10-fold increase in carbon productivity in 4 decades • Comparable in magnitude to labor productivity increases of Industrial Revolution… • But in one-third the time • President-elect Obama • $150 billion investments over 10 years to produce 5 million jobs • PCAP • $100 billion investment over 2 years = 2 million jobs • Economic development grants for “climate enterprise zones” • Reform international aid & trade to spur emerging global markets for green energy

36. States & LocalitiesCreate Intergovernmental Action Plan • $1 billion/year for states that… • Decouple rates • Map renewables & extend grid • Promote distributed power & co-generation • Create interconnection standards • Implement net metering • Use feed-in tariffs • Implement climate action plans • Establish RPSs • $2 billion/year Energy Efficiency & Conservation block grants • $1.4 billion/year Weatherization Assistance Program States Climate Change Action PlansInformation current as of August 2008. Completed: 32AL, AZ, CA, CO, CT, DE, FL, HI, IA, IL, KY, ME, MD, MA, MN, MO, MT, NH, NJ, NM, NV, NY, NC, OR, PA, RI, SC, TN, UT, VT, WA, WI In Progress: 6AK, AR, ID, KS, MI, VA No Policy in Place: 13

37. International Climate ActionStrong domestic policy = Leadership • President-elect Obama • Join actively in post-Kyoto negotiations • Provide incentives for reductions by developing nations • Create Global Energy Forum G8+5 • Cooperate with China/India to reduce oil demand • PCAP • Send representative to Poland • Commit to holding warming to 2oC or less • Negotiate bilateral pact with China • Champion reforms in aid & trade • Propose OPIC • Meet with Congressional leaders early to collaborate on pre-Copenhagen plans

38. Questions for Congress The international community is looking for an early signal of U.S. commitment. Will Congress move cap & trade legislation in 2009? If not, what measures will it support to demonstrate U.S. commitment?

39. Questions for Congress Should we allow the construction of any more conventional coal-fired power plants? If so, how do we reconcile new plants with need to reduce CO2?

40. Questions for Congress European Union & other nations call for industrial nations to cut GHG emissions 25-40% below 1990 levels by 2020 That’s far short of any legislation in Congress or proposed during presidential campaign. Can the U.S. have credibility in international negotiations without the higher goal?

41. Questions for Congress If you support more oil production and a reduction in greenhouse gas emissions, how do you reconcile those two contradictory goals?

42. Questions for Congress On the one hand, there’s general agreement we should correct market signals by pricing carbon. On the other hand, market signals are distorted by fossil energy subsidies. Will you push for an end to public subsidies for the coal, gas and oil industries?

43. Questions for Congress The first big opportunity to make federal policy more “climate friendly” next year will be the reauthorization of the surface transportation act Will you shift the emphasis from building roads to building mass transit systems, high speed rail, and transit-oriented communities?

44. Questions for Congress Although everyone talks about “energy independence”, the U.S. has little control over oil prices or supplies. More domestic production will have little effect. What can the U.S. do to reduce this global vulnerability?

45. Questions for Congress Climate scientists tell us we need action far more aggressive than any contemplated by Congress so far. How do we close the gap?

46. Needed: Bold Action Soon • Reduce federal emissions 30% by 2020, 80-90% by 2050 • Cut oil consumption in half by 2025 • Offset all U.S. oil imports by 2040 • Achieve zero-net-carbon buildings by 2030 • Reduce energy consumption 25% by 2020 • Obtain 30% of electricity from renewables by 2020 • Reduce vehicle miles traveled 20% by 2020, 50% by 2050 • De-carbonize federal subsidies • De-carbonize international development policies • Form Organization of Petroleum Importing Countries (OPIC) • Require carbon impact statements

47. bill.becker@cudenver.edu www.climateactionproject.com