Transcript IISD- WRI linking Workshop Nov 07

Context Setting: United States
IISD-WRI Workshop
Exploring the Challenges and Opportunities for
Establishing a North American Emissions Trading System
November 14-15, 2007
Jonathan Pershing [email protected]
Director, Climate, Energy and Pollution Program
World Resources Institute
http://www.wri.org
Key Points
•
•
•
•
•
•
US Emissions
State Action
Regional Action
Federal Action
Business Action
Looking Forward
2
US Emissions
3
GHG Emissions
Source: IPCC, AR4, 2007
US GHG Emissions
Source: WRI, Submission to US Senate, April 2006
US Emissions by Gas
Source: USEPA: April 2007, US GHG Inventory
State GHG Emissions
State Per Capita Emissions
State Action
9
States with Biofuel Mandates
Ethanol Mandates
Biodiesel Mandates
Source: WRI, CAIT
Renewable Energy Mandates
Source: Pew Climate Center
Stakeholder initiatives on climate change
States with climate change advisory groups or commissions, by initiator
2006
Legislature
Governor/Agency
NGO
Stakeholder initiatives on climate
change
are
becoming
the
norm
States with climate change advisory groups or commissions, by initiator
2007
Legislature
Governor/Agency
NGO
Climate Action Plans
Source: Pew Climate Center, July 2007
States with GHG targets: 30% of
US Emissions
IL: 1990 levels by
2020; 60% below
1990 levels by 2050
CA: 2000 levels by
2010; 1990 levels by
2020; 80% below
1990 levels by 2050
HI: 1990 levels by 2020
NJ: 1990 levels
by 2020; 80%
below 2006
levels by 2050
FL: 2000 levels by
2017; 1990 levels by
2025; 80% below
1990 levels by 2050
State action will reduce national
emissions
Business as Usual
(99% above 1990
levels)
13,000
12,000
11,000
U.S. emissions if
all current state
targets are met
(56% above 1990
levels)
Million Metric Tons CO2e
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
Current State Action
Business as Usual (DOE-EIA)
2,000
1,000
0
1990
Historical Emissions (U.S. EPA)
2000
2010
2020
2030
2040
2050
Key states to watch:
• Alaska
– Observer to Western Climate Initiative (WCI)
– Hard hit by climate change, big oil state
• Florida
– Considering joining Regional Greenhouse Gas
Initiative (RGGI)
– GHG targets on par with California
• Illinois
– Big coal, corn state
– Governor strongly considering cap and trade
• Utah
– Big coal state
– Participant in WCI, legislature not behind
Governor
Regional Action
Linking State Programs
18
The Climate Registry today:
Uniform GHG reporting across 40 states
State-based GHG trading is expanding
States involved in emissions trading program/design
Regional
Greenhouse Gas
Initiative (and
observers)
Western Climate
Initiative (and
observers)
NE Regional Greenhouse Gas Initiative
•
•
•
•
•
Source: www.rggi.org
10 States
Power Plants
Emissions sourcebased like EU ETS
Stabilize emissions
through 2014; 10%
Reduction by 2018
13% Below 1990
Levels by 2019
RGGI Offsets
• Quantitative Limit on Offsets: The RGGI “Offsets Valve”
– Initial 3.3% limit on offset use
– $7 trigger increases to 5.0%
– $10 trigger increases to 10%
• Offsets—5 Initial Types with Clear Requirements:
–
–
–
–
–
–
Natural Gas, Propane, Heating Oil Efficiency;
Land to Forest;
Landfill Gas Capture & Combustion;
Methane Capture from Animal Operations; &
SF6 Leak Prevention.
Add additional types over time as appropriate.
• Geography: Initially inside the United States; but
recognition of CDM Offset Credits above $10
RGGI Allowance Distribution
• Allocations
– States agreed to propose minimum 25%
“public benefit allocation” in MOU
– Most states will auction 100%, including
Connecticut, Maine, Massachusetts, New
Jersey, New York, and Vermont
– Delaware, Maryland, New Hampshire, &
Rhode Island yet to decide
• Auction Design in Progress
Other RGGI Features
• 3-year compliance period.
• Emissions from combustion of sustainably
harvested biomass or bio-fuel not subject to
compliance requirement.
• No cost-containment mechanism beyond offsets
component
• Linking with other mandatory caps desired
RGGI Status
•
•
•
•
Legislation in 5 of 10 States
Rulemakings underway
Program Launches January 2009
First Auction in 2nd Quarter 2008
RGGI Update: Is the cap tight enough?
RGGI region emissions by state 2000-2006
Source: PointCarbon
Emissions drop 20 million tons below 2009 cap
Emissions drop largely due to high oil prices
Annual emissions variability in the RGGI Region
Western Climate Initiative
• 6 U.S. States + 2 Canadian Provinces-AZ, CA, NM, OR, WA, UT, BC & MB
• Observers include: Colorado, Idaho, Kansas,
Nevada, Wyoming, Ontario, Quebec;
Saskatchewan; Sonora, Wyoming
• August 2007: regional reduction goal
• August 2008: design of a “regional marketbased, multi-sector mechanism”
WCI member requirements and goals
• Requirements
– Economy-wide GHG reduction goal
– Multi-sector action plan to meet goal
– Climate Registry membership
– Adoption of CA vehicle standards
• Goals
– Set regional GHG reduction target
– By 2008, establish a multi-sector cap and
trade program to help meet the goal
Aug. 07: WCI set regional target
15% below 2005 levels by 2020
33% below
BAU
15% below
2005 levels
Key Considerations for WCI
• “Multi-sector” Cap-and-Trade--will sectors
be phased in?
• Electricity sector--will WCI take an
emissions-source approach, a loadbased approach, or a hybrid approach?
• How will offsets be incorporated into the
program design?
The Midwest is a big emitter
GHG Emissions =
1.8 billion tonnes
CO2e
Midwest
India
•27% of U.S. GHG emissions
•5% of global GHG emissions
•24 votes in the Senate
•100 votes in the House of Representatives
Midwest Governor’s Association is poised
to jumpstart regional action
Gov. Jim Doyle (D-WI)
MGA Chair
Gov. Tim Pawlenty (R-MN)
MGA Former Chair
• Midwest Governor’s Association Energy Summit:
November in Milwaukee
• Focus on regional initiatives for biofuels, energy
efficiency, renewables and CCS
• Regional agreement to set GHG targets and
construct a Midwest cap and trade program is on
the table
Midwest states played a key role in
Climate Registry development
WRAP
LADCO
CCAR
ECR
Midwest could link state efforts,
increase pressure on Washington
Potential linking of state emissions trading programs
Midwest Governor’s
Initiative (and
observers)
Regional Greenhouse
Gas Initiative (and
observers)
Western Climate
Initiative (and
observers)
Midwest action could double state
GHG reductions
Business as Usual
(99% above 1990
levels)
13,000
12,000
11,000
U.S. emissions if
all current state
targets are met
(56% above 1990
levels)
Million Metric Tons CO2e
10,000
9,000
8,000
U.S. emissions
with Midwest
action (13% above
1990 levels)
7,000
6,000
5,000
4,000
Current State Action
3,000
Current State Action Plus Entire Midwest
2,000
Business as Usual (DOE-EIA)
1,000
Historical Emissions (U.S. EPA)
0
1990
2000
2010
2020
2030
2040
2050
Federal Action
37
Popular Opinion Is Shifting
110th Congress: Climate Bill
Comparison
Lieberman-Warner
Lieberman Warner: The Bill to watch
Potential emission reductions under S. 2191
Allocation distribution under S. 2191
2036 and beyond
2012
International
forestry
CCS
2.5%
4%
U.S. ag
5%
Tribal
governments
0.5%
International
forestry 2.50%
Tribal
governments,
0.50%
U.S. ag
5%
Early Action
5%
Auction
23%
States
9%
States
9%
Electricity
(LSE)
10%
Electricity (LSE)
10%
Power sector
20%
Manufacturing
20%
Auction
73%
Auction allocation distribution
(percent of total allocations)
Climate change
and security
(1.20%)
International
forestry 2.50%
Worker training
(1.14%)
Tribal
governments,
0.50%
U.S. ag
5%
CCS (3.51%)
States
9%
Electricity
(LSE)
10%
Auction
73%
Wildlife
adaptation
(4.56%)
Zero and low
carbon
technologies
(9.03%)
Low-income
energy
consumers
(4.56%)
State allocation distribution
(percent of total allocations)
States that
decouple and
adopt building
standards (1%)
States that adopt
model building
efficiency codes
(1%)
States with GHG
programs that
exceed federal
targets, (2%)
General state
allocation:
based on
population,
LIHEAP
expenditures and
fossil fuel
production
(5 %)
U.S. ag
5%
Early Action
5%
CCS
4%
International
forestry
2.5%
Tribal
governments
0.5%
Auction
23%
States
9%
Electricity (LSE)
10%
Power sector
20%
Manufacturing
20%
Winning and Losing States
Per capita allocations: power plants and & covered industry sources only
60
50
Per Capita TCO2e
40
State per capita allocation is higher than
national average
State per capita allocation is lower
than national average
30
20
10
U.S. National Average = 7.39
0
WY AK ND WV LA IN TX MT KY AL NM OK KS IA UT NE AR DE MO PA OH MS SC TN CO WI NV GA IL MN NC MI AZ VA SD HI WA FL MD NH ME OR NJ ID CA MA NY CT RI VT DC
-10
-20
Source: Clean Air Watch analysis
Business Action
45
USCAP Proposal
•
•
•
•
•
•
Call for a cap and trade program
Establishment of a national GHG inventory and registry
Credit for early action
Aggressive technology research and development
Policies to discourage new investments in high-emitting facilities
Policies to accelerate deployment of zero and low-emitting technologies
and energy efficiency
US CAP Members’ Market Capitalization: ~$2 trillion
Alcan Inc.
Alcoa
American International Group, Inc. (AIG)
Boston Scientific Corporation
BP America Inc.
Caterpillar Inc.
Chrysler LLC
ConocoPhillips
Deere & Company
The Dow Chemical Company
Duke Energy
DuPont
Environmental Defense
Exelon Corporation
Ford Motor Company
FPL Group, Inc.
General Electric
General Motors Corp.
Johnson & Johnson
Marsh, Inc.
National Wildlife Federation
Natural Resources Defense Council
The Nature Conservancy
NRG Energy, Inc.
PepsiCo
Pew Center on Global Climate Change
PG&E Corporation
PNM Resources
Shell
Siemens Corporation
World Resources Institute
Xerox Corporation
USCAP Recommended Reductions
Looking Forward
48
The Democratic Presidential Candidates
Clinton
• 80% reduction
by 2050
• 100% auction
• Co-sponsor of
Sanders-Boxer
• Co-sponsor of
Lieberman McCain in 2007
Obama
• 80% reduction
by 2050
• 100 % auction
• Co-sponsor of
Sanders-Boxer
• Co-sponsor of
LiebermanMcCain in 2007
The Republican Presidential Candidates
Giuliani
• Has not ruled out
cap and trade but
prefers voluntary
measures
• Has said he
believes the
earth is warming,
but has not said
definitively that
humans are
causing it
McCain
• Authored bill to
reduce
emissions 65%
by 2050
• First high-profile
Republican to
address climate
change (2003
bill with
Lieberman; reintroduced in
2005 and 2007)
• Has made
climate change
among top three
campaign issues
Romney
• Willing to
consider a cap
only if enacted
globally
• Introduced
climate plan as
Gov of MA to
reach a goal of
1990 levels by
2010 (largely
voluntary)
• Withdrew MA
from RGGI in
2005 due to cost
concerns
Issues to Watch
• Additional state policies
• Multi-state “national” climate registry--”The
Climate Registry”
• Midwest Regional Potential
• WCI design
• How do state efforts inform the federal debate
in Washington, DC?
– Preemption?
– Derogations?
• International processes, including ICAP, EUETS and UNFCCC
Jonathan Pershing [email protected]
World Resources Institute
http://www.wri.org