Transcript Slide 1
Climate Change Policy
in an Obama Administration
Tom Lindley
Perkins Coie LLP
November 22, 2008
U.S. Federal Approach to
Climate Change
The debate has shifted:
• From causes and effects to
mitigation methods and
timelines
• From voluntary, incentivebased programs to mandatory,
market-based regulation
Federal Climate Change Policy in the
Bush Administration: 2000-2008
• President Bush's approach focused on voluntary, marketbased incentive programs and partnerships managed by the
Environmental Protection Agency and Department Of Energy
• Only limited regulatory action has taken place recently:
• Carbon Sequestration Rules (July 2008)
• Advance Notice of Proposed Rulemaking (July2008)
• GHG Reporting Rules (draft to OMB)
State & Regional Climate Change Policy
There have been many more developments with
regional and state-based regulation
• Regional Action:
• RGGI, Midwest Accord, WCI
• California's AB 32 leads the way
• 18 states now have mandatory
greenhouse gas reporting rules
U.S. Regional Programs
Pew Center on Global Climate Change, Oct. 17, 2008
President-Elect Obama:
Climate Change & Energy
Campaign policies vague, but
emphasize:
• Cap-and-trade-style emissions
reductions
• Improved energy efficiency
• Energy independence
• Green job creation
Obama Campaign
During the campaign, Obama proposed broad
reforms in climate and energy policy :
• Economy-wide cap-and-trade system
• Invest $150 billion over 10 years in
advanced energy technologies
• Improve energy efficiency
• Make the U.S. an international leader in
combating climate change
Obama Campaign
Obama's cap-and-trade plan:
• Mandatory, economy-wide
• Reduce emissions to 1990 levels by 2020
• 80% reduction below 1990 levels by 2050
• Allocation: 100% auction of allowances
• Limited use of offsets
Obama Campaign
Obama's cap-and-trade plan does not specify:
• Sectors covered
• Reporting start date
• Emissions cap start date
• Early action credit
• Preemption of state/regional programs
Obama Campaign
Obama's cap-and-trade plan would reinvest
allocation revenues:
• $150 billion over 10 years in:
•Plug-in hybrids
•Commercial scale renewable energy
•Energy efficiency and weatherization projects
•Low emissions coal plants
•Next generation biofuels and fuel infrastructure
•Transition to new digital electricity grid
• Assist workers and low income families with "transition" costs
Obama Campaign
International Commitments:
• Re-engage with the UNFCCC
• December 2008: UN Climate Change Conference, Poznań, Poland
• November/December 2009: UN Climate Change Conference, Copenhagen
• Create "Global Energy Forum" of largest emitters
• Technology transfer to developing countries
• Confront deforestation; promote carbon
sequestration
Agency roles in the Obama Administration
EPA
DOE
• Possible elevation to
• Large role: climate
cabinet status
• EPA to regulate
emissions under
existing Clean Air Act
• CA waiver would be
approved
change is an energy issue
• Clean energy initiatives
• Possible appointment of
National Energy Security
Director
Congress & Climate Change Policy
• New cap-and-trade legislation is
expected to be introduced in the latter
half of 2009 or early 2010.
• Until then, three recent bills are being
discussed as starting points for the
111th Congress:
• Senate: Lieberman-Warner
• House: Dingell-Boucher
• House: Markey
Congress & Climate Change Policy
Recent Climate Change Bills:
S. 2191 Lieberman-Warner
• First cap-and-trade bill to be voted out of committee
• Defeated by Senate procedural vote in June 2008
• Some language/initiatives may carry over, but bill
will die in 110th Congress
• New sponsorship needed: McCain, Boxer expected
to lead
Congress & Climate Change Policy
Recent Climate Change Bills:
Dingell-Boucher "discussion draft"
• Released for comment October 7, 2008
• Four scenarios proposed
• Less aggressive initial reductions
• Blanket preemption of state/regional cap-and-trade
initiatives
• May become leading bill in 111th Congress unless
Waxman replaces Dingell as chair of Energy and
Commerce Committee
Congress & Climate Change Policy
Recent Climate Change Bills:
H.R. 6186: Markey's iCAP Act
• Chair of select committee on Energy Independence
and Global Warming
• Named by House Speaker Pelosi to specifically
address global warming issues
• Introduced June 4, but no further action taken
• Committee may dissolve in favor of Rep. Dingell's
Energy and Commerce Committee
Cap-and-Trade Policy Comparison
Policy
Lieberman-Warner (S.2191)
Dingell-Boucher (discussion draft)
Obama (campaign policies)
Targets
19% below the 2005
emissions by 2020
71% below the 2005
emissions by 2050.
6% below 2005 levels by 2020
80% below 2005 levels by 2050
Reduction to 1990 levels by
2020
80% below 1990 levels by
2050
Allowance
Allocation
Initially: 76% allocated and
24% auctioned
By 2036: 27% allocated and
73% auctioned
Mix of allocation and auction until
2026
100% auction of allowances
beginning in 2026 with revenues
returned on a per capita basis to
citizens unless Congress reauthorizes
the legislation
100% auction from
beginning
Preempt
state/regional
programs
No explicit preemption,
incentives to encourage states
to fold into national program
Blanket preemption of state cap-andtrade initiatives
Not specified, but probably
would not favor blanket
preemption
Use of offsets
2012: 30% of allowance
allocation may be satisfied with
offsets
Initially limited to 5% of allowance
allocation due to low initial reduction
targets
2024: up to 35%
Not specified ("limited")
Federal Climate Change Policy
Will emissions reductions remain a top
priority in an Obama Administration?
Many competitors…
• Recession, economy
• Subprime mortgage crisis
• Tax and healthcare reform
• Wars in Iraq & Afghanistan
Federal Climate Change Policy
Many key issues under a cap-and-trade program
remain unresolved…
• Level and timing of cuts
• Offsets: domestic, international, or none?
• Grandfathered vs. auctioned allowances
• Federal preemption of state and
regional programs
Federal Climate Change Policy
Key cap-and-trade debates continued:
• Leakage: whether to first obtain international
commitments from developing countries
• Support for bridge technology (CCS, nuclear)
• Expansion of renewables (wind, solar, biofuels)
• Early action credit
Questions &
Comments