Transcript Air Update for 2008 ELULS Annual Meeting

Climate Change Activities in
Florida’s Air Program – Three Drivers
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2007 Governor’s Executive Order (07-127)
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2008 Florida Energy Bill (HB-7135)
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Authorizes electric utility cap-and-trade rule, to
be ratified by legislature
Governor’s Climate Action Team
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Diesel idle reduction rule (done)
California vehicle emissions rule (hearing open)
Electric utility GHG reduction rule (2009 priority)
Final report (October 2008) makes
recommendations for cap-and-trade rule
Diesel Idle Reduction Rule
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Rule effective 12/15/08
Applies to heavy-duty commercial and
governmental vehicles (trucks & buses)
Prohibits idling for longer than 5 minutes
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Exemptions for traffic, emergency operations, bus
passenger comfort, powering work equipment, etc.
After September 2013, long-duration idling to heat
and cool truck’s sleeping berth no longer allowed
Portion of clean diesel grant to provide $1,500
rebates, as funds permit, for auxiliary power unit
installations on older sleeper-berth trucks
Adoption of California Motor
Vehicle Emission Standards Rule
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Includes fleet-wide average GHG standards for
autos and light-duty trucks (Pavley standards)
Assumes EPA’s denial of California waiver will be
reversed; DEP has joined lawsuit
Rule adoption hearing opened 10/29/08 and
continued to 12/2/08; if adopted, rule must be
ratified by legislature
California program brings about greater and
sooner reductions than federal CAFE
Automakers claim rule will limit availability of
popular light-duty trucks and discourage use of
E85; DEP strongly disagrees
Highlights of 2008 Florida Energy Bill
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Creates Florida Energy & Climate Commission
Authorizes DEP to develop cap-and-trade rule for
utility GHG emissions; requires economic analysis
Allows utilities to recover cost of research and
geologic assessments of carbon sequestration
Requires utilities to report to the Climate Registry
Directs Public Service Commission to develop
Renewable Portfolio Standard rule
Mandates 100% E10 by end of 2010
Creates the Florida Energy Systems Consortium in
state university system
Electric Utility Cap-and Trade Rule - Key
Factors to be Considered (HB-7135)
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Overall cost-effectiveness
Minimizing administrative burden
Impacts to utility prices
Costs and benefits to state economy
Potential effects of leakage
Consistency with other state/federal programs
Feasibility of expanding to other emitters and
carbon sinks
Considerations for linking to efforts of other
states or countries
Electric Utility GHG Reduction Rule
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Governor’s order sets GHG reduction targets:
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Energy bill authorizes cap-and-trade approach and
requires DEP to:
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Year 2000 emissions by 2017
Year 1990 emissions by 2025
20% of 1990 emissions by 2050
Consult with Public Service Commission, Florida Energy
and Climate Commission (FECC), and Governor’s Climate
Action Team
Consider certain key factors in developing rule, and
provide report to legislature through FECC
Submit rule to legislature in 2010 for ratification
Overall Recommendations of
Governor’s Climate Action Team
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Final report provides 50 policy recommendations, plus additional
comments on cap-and-trade program. Report produced by
Center for Climate Strategies and available at
http://www.flclimatechange.us/documents.cfm.
If fully implemented, recommendations would result in GHG
reductions in excess of Governor’s 2017 and 2025 emission
reduction targets, for all sectors, by 11% and 34 %, respectively.
While some recommendations result in an overall societal cost to
implement, many were identified to have an overall societal costsavings. Net cost savings of all Action Team recommendations
combined is more than $28 billion from 2009 to 2025.
Recommendations would reduce dependence on fossil fuels,
resulting in total fuel savings of 53.5 billion gallons of petroleum,
200.2 million short tons of coal, and 6.394 billion cubic feet of
natural gas during the period 2009 through 2025.
Action Team General Comments on
Cap-and Trade Program
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First and foremost, a strong national cap-and-trade program is
the preferred method for achieving substantial reductions in
GHGs, and Florida should advocate for a national program.
However, as the federal government deliberates on a national
program, Florida should join a regional program to advance its
GHG reduction goals. Initial analysis indicates that Florida would
benefit from joining RGGI and may benefit from joining the capand-trade portion of WCI.
At the same time, Florida should reach out to other Southern
states to explore collaborating in one or more ways: (1) jointly
influence the development of a national cap-and-trade program;
(2) explore the potential for multiple Southern states joining one
or more regional programs; (3) help address “leakage” issues;
and (4) explore the creation of a Southern regional climate
initiative.
Specific Recommendations of Action
Team on Cap-and-Trade Rule
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Florida’s cap-and-trade rule should be designed to achieve the
emission reduction goals set forth in Executive Order 07-127.
The cap-and-trade program should strive to be revenue-neutral
to consumers as much as possible. There are five broad purposes
to which allowance value (either the allowances themselves or
proceeds from their sale) should be applied:
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Promote energy efficiency investments,
Mitigate impacts on ratepayers and consumers with particular
attention to low-income consumers,
Accelerate the development and use of emissions mitigation
technologies, including renewable or zero-carbon technologies,
Mitigate impacts of climate change (for example, fund adaptation
strategies), and
Protect regulated emitters from competitive disadvantage.
Other uses of allowance value should also be considered, such as
stimulating or rewarding development of emissions abatement
technologies, funding program administration, and protecting
regulated emitters from economic disadvantage.
Specific Recommendations of Action
Team on Cap-and-Trade Rule (cont.)
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The cap-and-trade rule should allow offsets without limits; however,
the offset program must ensure rigorous quality standards.
The cap-and-trade program needs appropriate allowance price
containment mechanisms, especially in the early years; further
study needed before specific mechanisms can be recommended.
The cap-and-trade program should allow unlimited banking.
Borrowing is an important cost containment mechanism and should
be allowed, but agreement by the Action Team was not reached on
what conditions (e.g., Warner-Lieberman-type limits by emitter,
time limits, or interest) should be imposed.
If any revenues are generated from the sale of allowances, they
should never be used to supplement General Revenue.
Leakage must be addressed by other means if a regional cap-andtrade program does not do so.