Transcript John W. Rowe (co

Climate Change Policy
Landscape
Brief to the
APPA CEO Roundtable
March 19, 2007
Dave Conover, Counsel
National Commission on Energy Policy
The National Commission on Energy Policy
• Launched in 2002, Commission met a dozen
times; sponsored over 35 independent
research analyses
• $10 million effort over 3 years
• Privately funded, principally by the William and
Flora Hewlett Foundation along with its funding
partners
• Funding extended; revised recommendations
soon
The Commissioners
John Holdren (co-chair),
Harvard University; Director of the Woods Hole
Research Center
William K. Reilly (co-chair)
Founding Partner, Aqua International
US EPA Administrator, Bush I
John W. Rowe (co-chair)
Chairman and CEO, Exelon Corporation
Philip Sharp (congressional chair)
President, Resources for the Future; Former
Congressman, Indiana
Marilyn Brown
Georgia Tech University; former Director, Oak
Ridge National Lab
Ralph Cavanagh
Co-Director, Energy Program, NRDC
Erroll B. Davis, Jr.
Chancellor, University System of Georgia
Rodney Ellis
State Senator, Texas
Leo W. Gerard
International President, United Steelworkers of
America
Robert E. Grady
Managing Partner, Carlyle Venture Partners,
former Executive Associate Director of
the Office of Management and Budget (OMB)
F. Henry Habicht
CEO, GETF; Deputy Administrator , US EPA
(Bush I)
Frank Keating
CEO of the American Council of Life Insurers;
former governor of Oklahoma
Richard A. Meserve
President of the Carnegie Institution; former
Chairman of the U.S. Nuclear Regulatory
Commission (NRC)
Mario Molina
Professor, University of California, San Diego
Sharon L. Nelson
Board of Directors, Consumers Union
Richard L. Schmalensee
Dean, Professor of Economics and
Management, MIT
Susan Tierney
Managing Principal, The Analysis Group;
former Assistant Secretary of Energy
R. James Woolsey
Vice President, Booz, Allen, Hamilton;
former Director of Central Intelligence
Martin Zimmerman
Clinical Professor of Business, Ross School of
Business, University of Michigan; Group Vice
President, Corporate Affairs, Ford Motor
Company (2001 - 2004)
Science Informs
IPCC AR-4, February 2007:
• “Warming of the climate system is unequivocal, as is
now evident from observations of increases in global
average air and ocean temperatures, widespread
melting of snow and ice, and rising global mean sea
level.
• There is a 90% probability that human activities have
contributed to this warming
• The main ingredients for global climate change,
increases in the concentration of carbon dioxide,
methane, and nitrous oxide are “due primarily to fossil
fuel use . . . land-use change” and “agriculture.”
Science Predicts
Scientific Expert Group, Confronting Climate
Change: Avoiding the Unmanageable and
Managing the Unavoidable, February 2007
• “Global climate change . . . is a growing threat
to human well-being in developing and
industrialized nations alike. Significant harm
from climate change is already occurring, and
further damages are a certainty. The challenge
now is to keep climate change from becoming a
catastrophe.”
Science Warns
Stern Review, October 2006:
• Stern review:
– The evidence shows that ignoring climate change will
eventually damage economic growth.
– Our actions over the coming few decades could
create risks of major disruption to economic and
social activity, later in this century and in the next, on
a scale similar to those associated with the great wars
and the economic depression of the first half of the
20th century .
Political System Responds
• The stage is set
– House in Democratic hands for first time since
1994
– Senate in Democratic hands
• As long as Senator Johnson (D-SD) stays healthy
– Lame Duck President looking for a legacy
House of Representatives
• Pelosi, Markey, Waxman
– Dingell, Boucher, Blue Dogs
• House Select Committee on Climate Change
– “Feathers on a fish”
– “Committee on press releases and junkets”
• Legislative markers:
– Waxman
– Gilchrest-Olver
– Udall-Petri
United States Senate
• Boxer, Bingaman, Carper, Lieberman,
McCain
– Domenici, Inhofe, McConnell, Lott
• EPW versus ENR or EPW + ENR?
• Legislative Markers:
– (Sanders)-Boxer – 1990 GHG levels by 2020
– McCain-Lieberman – 2004 levels by 2012
– Bingaman-Specter – Slow, stop, reverse w/
safety-valve
Senate Whip Count
• Sanders-Boxer
– ~29 votes
• McCain-Lieberman
– ~45 votes
• Bingaman-Specter
– 60+ votes?
Whip Count Principles
•
•
•
•
•
Don’t support Boxer or Mc-L
53 for 2005 SOS assumed for Bingaman
Assume additive, not retributive
Assume good faith, not holdout
Assume favorable vote structure, i.e.,
– Up or down on Boxer, then Mc-L, then
Bingaman
• Any change in above changes result
Key Targets – No, No, Yes?
•
•
•
•
•
•
•
•
•
Baucus
Byrd
Casey
Conrad
Dorgan
Johnson
Landrieu
Levin
Tester
•
•
•
•
•
•
•
•
•
•
•
Alexander
Brownback
Coleman
Domenici
Murkowski
Specter
Smith
Stevens
Sununu
Vitter
Warner
How and when, not whether
• Carbon tax?
– Economists “yes”
– Politicians “NO”
• Cap and trade?
– 1990 Acid Rain program – pro
– European experience - con
• Clean energy portfolio standards + CAFE
–?
Can we get there from here?
CO2 Emissions (GTC/Year)
25
20
15
10
Avoided Emissions = 500 GtC
5
Cumulative Emissions = 780 GtC
0
1990
GTC = Giga-Tonnes Carbon
2005
2020
2035
2050
2065
2080
2095
13 GtC/Year
in 2100
Source: Placet M; Humphreys, KK; Mahasenan, NM. Climate Change Technology Scenarios: Energy, Emissions and Economic Implications.
Pacific Northwest Nation Laboratory, PNL-14800, August 2004. Available at: http://www.pnl.gov/energy/climatetechnology.stm
15
Expected Benefits of Advanced Climate Change
Technology Development
1,200
200
Cumulative Emissions vs. Cumulative Cost (2000-2100)
for Different Mitigation Levels and Advanced Technology Scenarios
180
178
Cumulative CO2 Emissions (Gt)
160
950
140
800
780
120
600
100
80
470
400
73
66
60
47
40
200
30
16
13
-
450 ppm
7
11
4
3
2 0
550 ppm
650 ppm
Cumulative CO2 Emissions
Ref
BSS
0
Cumulative Compliance Cost
(Trillions of 2000 US$; 0% Discount Rate)
1050
1,000
20
-
750 ppm
NEB
CLC
16
Technology can get us
there from here
• Double Federal $$ for energy R&D
• Expand cooperative domestic &
international RD3
• ↑ incentives for private sector energy RD3
– Coal gasification and carbon
sequestration
– Domestically produced efficient vehicles
– Domestically produced alternative
transportation fuels
– Advanced nuclear reactors
– Increased renewables and enabling
infrastructure