By Yael Borofsky and Jesse Jenkins

"Their behavior challenges everything that we're about here. If you don't like it, turn your back and walk out. It's almost like school children over there."

Those were the remarks of Sen. Frank Lautenberg (D-N.J.), chastising the Republican members of the Senate Environment and Public Works Committee (EPW) who have spent the past two days showboating for the press while boycotting the committee's markup of pending climate and energy legislation.

Sending just one Republican member to monitor the stalled hearings each day, the Republicans are using procedural tricks (rules require at least two members of the minority party present to consider amendments to pending legislation) to block any debate on the Kerry-Boxer climate bill.

The excuse for these schoolyard tactics? Republicans complain that the U.S. EPA has not fully analyzed the Kerry-Boxer climate bill, despite the fact that Agency analysts spent weeks looking at impacts of key differences between the House and Senate climate bills, which are nearly identical in most major components.

Continue reading "Everything EPW Republicans Need to Know They Should Have Learned in Kindergarten" »

For Breakthrough Institute's full collection of analysis of Congressional climate legislation, see here.

Published analysis in chronological order (most recent first):

• Kerry-Boxer "Clean Energy Jobs" Bill's Clean Energy Investments a Fraction of Expert Recommendations


• Kerry-Boxer Climate Bill Allowance Allocation Breakdown

Discussion of analysis from other sources:

• Kerry-Boxer Carbon Price Will Remain at Price Floor According to First Modeling of Draft Bill

Update: NASA climate scientist James Hansen has affirmed Williams and Zabel's criticism of cap-and-trade in pending climate and energy legislation. To read his commentary see Andy Revkin's Dot Earth blog here.

Two lawyers at the Environmental Protection Agency (EPA) with more than forty years of collective experience, wrote this week in the Washington Post criticizing pending climate and energy legislation and enumerating the flaws of the cap and trade system both House and Senate versions of the bill espouse.

According to Laurie Williams and Allan Zabel:

"Cap-and-trade means a declining "cap" on total emissions, while allowing trading of pollution permits. Confidence in the certainty of declining caps is based on the mistaken assumption that cap-and trade was proven in the EPA's acid rain program. In fact, addressing acid rain required relatively minor modifications to coal-fired power plants. Reductions were accomplished primarily by a fuel switch to readily available, affordable, low-sulfur coal, along with some additional scrubbing. In contrast, the issues presented by climate change cannot be solved by tweaks to facilities; it requires an energy revolution through investments in building clean-energy facilities.

The biggest obstacle to this revolution is that uncontrolled fossil fuel energy remains much cheaper than clean energy. Cap-and-trade alone will not create confidence that clean energy will become profitable within a known time frame and so will not ignite the huge shift in investment needed to begin the clean-energy revolution. In recent interviews, even the economists who thought up cap-and-trade have said they don't believe it's an appropriate tool for climate change."

Williams and Zabel go on to point out that perhaps the biggest flaw of the proposed cap and trade system is its inclusion of dubious carbon offsets, that are not only close to impossible to verify, but allow major carbon emitters to continue to maintain business-as-usual practices for the majority of the next two decades.

Continue reading "EPA Lawyers Criticize Cap and Trade, Carbon Offsets in Pending Climate and Energy Legislation" »

Friday again already eh? Well that makes it Friday Factoids time...

We'll keep this one short, with just the graphic below comparing the levels of clean energy R&D funding included in the House and Senate climate and energy bills with the strong and growing consensus among energy innovation experts that $15 billion per year in additional funding is needed to achieve national climate, energy and economic objectives.

I've also included the boost in FY2009 Department of Energy (DOE) R&D budgets provided by the economic stimulus bill, the American Recovery and Reinvestment Act. As Google's Dan Reicher warned the Senate on Wednesday: when these temporary stimulus funds dry up, the U.S. could fall of a "funding cliff" unless significantly larger allocations are made for clean energy R&D in Congressional legislation.

(click to enlarge)

Continue reading "Friday Factoids: Climate Bills vs. Expert Consensus on R&D" »

Breakthrough's Jesse Jenkins joined former Senator John Warner of Virginia on the KPFA Morning Show today to discuss Senate climate and energy legislation, the focus of hearings this week in the the Environment and Public Works Committee. (listen to the full interview below)

Senator Warner, a rare Republican champion of climate action, was the co-sponsor of the 2007 Lieberman-Warner "Climate Security Act." He retired in 2008 after thirty years in the Senate but remains an active advocate of Congressional climate legislation, and is working to convince his reluctant Republican former colleagues to embrace the climate and energy legislation authored by Senators John Kerry (D-MA) and Barbara Boxer (D-CA).

Jenkins was honored to join the discussion with Senator Warner (who's spent more time in the Senate than Jenkins has on this warming planet). He was also pleased to find consensus with the veteran Republican on the need for final Senate climate legislation to include much greater investments to ensure U.S. innovators, entrepreneurs and businesses invent and commercialize clean energy technologies here in America.

Agreeing with the strong consensus of energy innovation experts, the former Senator said that the current Kerry-Boxer bill invested too little in clean energy R&D and did not provide enough proactive support for American firms commercializing, manufacturing and installing clean energy technologies, but he noted that final legislation is still taking shape. Hopefully his common-sense attitude on clean energy innovation and technology investment will prevail on Senate Republicans, who so far have resorted to threatening to boycott hearings on the Kerry-Boxer bill, rather than work constructively to ensure the bill includes more funding for American innovators and clean energy firms.

Senator Warner, the long-time Chairman or Ranking Member of the Senate Armed Services Committee and a former Secretary of the Navy, also highlighted the need to avert climate change in order to mitigate future conflicts and humanitarian crises that would sap the resources of the U.S. military. For more on the Senator's views on climate legislation, you can read his testimony before the Environment and Public Works Committee on earlier this week here.

Listen to the full interview here or using the player below. The segment starts at 1:08:00 into the Morning Show.

$15 billion. That is the figure at the heart of a growing consensus of energy innovation experts, all calling for dramatically larger U.S. investment in clean energy research and development. Writing at theEnergyCollective.com, Breakthrough's Jesse Jenkins highlights mounting calls to address what Google Director of Climate Change and Energy Dan Reicher called "a serious energy R&D short-fall" in the current House and Senate climate bills. As Congress debates energy and climate change legislation, a chorus of voices including policy think tanks such as the Brookings Institution, Third Way and the Breakthrough Institute, as well as a collection of both the nation's top research universities and dozens of Nobel-prize winning scientists have joined leading businesses like Google to converge on a $15 billion increase in annual U.S. energy R&D budgets as a critical component of any final legislation.

Read the full post at theEnergyCollective.com here.

Continue reading "The Innovation Consensus: $15 Billion for Clean Energy R&D" »

Mark Muro, a fellow and director of policy at the Metropolitan Policy Program at the Brookings Institution, commented in The New Republic on the disappointingly low levels of clean energy R&D investments allocated by the latest draft of the Kerry-Boxer climate bill, the Senate version of House passed ACES. Muro, who has previously joined the Breakthrough Institute in writing about the need to make clean energy cheap, notes that while R&D investment under Kerry-Boxer is slightly higher than under Waxman-Markey's ACES, it still does not approach the $15 billion per year that Brookings, the Breakthrough Institute, and President Barack Obama have suggested is needed to transition to a clean energy economy.

Today, in The New Republic he writes:

Turning to investments in clean technology and energy innovation, the adjustments are minimal and quite disappointing. Looking broadly to clean tech, Boxer-Kerry would reserve some 12.6 percent of its permit value, or $8.6 billion a year at EPA-projected allowance prices, for clean tech purposes such as investments in renewable energy and energy efficiency, clean vehicle technology, building codes and efficiency retrofit programs, and R&D. By contrast, the Waxman-Markey promises 13.8 percent for clean tech, or roughly $9.7 billion a year--a bit more. Focusing more narrowly on pure R&D, the comparison is a better--but not enough better. Boxer-Kerry on this front would reserve some 1.9 percent of the revenue it raises (or about $1.4 billion a year) for clean energy R&D pursuits, such as the Advanced Research Projects Agency (ARPA-e) and what are termed "Clean Energy Innovation Centers," which is the latest moniker for the high-intensity energy innovation and commercialization institutes we and others have been proposing. These numbers compare favorably with the Waxman-Markey plan, which reserves just 1.5 percent of allowance revenue or just under $1 billion a year for R&D investments. However, in the larger scheme of things, they count as a major disappointment given that Metro Program analysis holds that the nation needs to be spending at least $15 billion a year on energy R&D, of which it least $10 billion a year might reasonably be expected to come out of the cap-trade system.

In sum, an only marginally different starting point in the Senate from where the House ended does not bode well for the changing the trajectory in Congress on the nation's energy and climate response. An acceptable regulatory response is falling badly short on applying sufficient quantities of revenues to the essential cause of energy innovation.

The nation's leading research universities are calling on the Senate to ensure dramatically more funding for clean energy R&D in the Senate climate and energy bill, investments they described as necessary to achieve the bill's targeted deep cuts in emissions.

In a letter delivered to Senate Majority Leader Harry Reid earlier this month, the Association of Public and Land-grant Universities (APLU) and the Association of American Universities (AAU) wrote:

"As the Senate moves forward with climate change legislation, we strongly urge you to ensure the amount of R&D funding designated for clean energy technologies is more in line with the President's proposal of $15 billion."

APLU and AAU collectively represent most of the nation's public and private research universities, and their letter imparts a pointed criticism of the House-passed ACES bill, calling for a frontloaded investment in research and development to kick-start critical clean energy innovation. The letter draws an apparent bottom line for the nation's top research universities, calling for dedicated R&D funding from the climate bill's cap and trade allowance revenues that totals at least one third of the $15 billion per year proposed by President Barack Obama.

Continue reading "Nation's Leading Universities Echo Calls for $15b/year in Clean Energy R&D; Draw $5b/year Bottom Line for Climate Bill" »

By Jesse Jenkins and Yael Borofsky

The latest draft of the Kerry-Boxer "Clean Energy Jobs and American Power Act" would invest less than $10 billion of the bill's nearly $80 billion in annual cap and trade allowance revenue in clean energy technology, assuming EPA-projected allowance prices (note: all figures in 2009 constant dollars).

Over a range of likely allowance prices, the bill's clean energy investments could total as little as $8.6 billion and as much as $15.4 billion annually, a fraction of the at least $30-80 billion annually advocated by the Breakthrough Institute and an investment level dwarfed by the $44-66 billion annually China plans to invest in clean energy industries, infrastructure and technology over the next ten years (see graphic below).

Investments in the kind of clean energy research and development critical to make clean energy cheap and develop the low-cost, commercial clean energy technologies needed to drive deep emissions cuts and secure America's energy independence at an affordable cost will receive just $1.2-2.2 billion annually, over a range of likely allowance prices. That's just $200 million more than the House-passed Waxman-Markey "American Clean Energy and Security Act" (ACES) would invest in R&D at EPA-projected allowance prices. While this is a (very) small step in the right direction, the clean energy R&D investments in Kerry-Boxer still fall far short of filling the massive energy innovation gap and would boost R&D spending by as little as one-tenth of the $15 billion annually advocated by President Barack Obama - as well as a broad range of energy innovation experts, including a recent report by the Breakthrough Institute and Third Way. Funding for R&D under CEJAPA will be about a quarter to half as much as investments currently being made by the economic stimulus package, ARRA.

With more revenue devoted to ensuring deficit neutrality in the Senate bill, total investments in clean energy technology, broadly defined, are actually $1.2 billion less in Kerry-Boxer than in Waxman-Markey, at EPA-projected prices.

As the graphics below illustrate, the Kerry-Boxer climate and energy bill does not invest nearly as much as numerous experts have deemed necessary to make clean energy cheap and put us on the path to the clean energy economy, of which President Obama so eloquently speaks. Nor will this level of investment be sufficient to keep the U.S. competitive with Asian and European competitors, particularly China, who are surging past the United States with major direct investments to support their emerging clean energy technologies and industries.

The first graph focuses on investments in clean energy R&D, only. The second depicts investments in clean energy technology, broadly defined.

How do you think this draft of CEJAPA stacks up?

(click any of these to enlarge...)

Sources and Notes:
[1] See "Kerry-Boxer Climate Bill Allowance Allocation Breakdown," Breakthrough Institute (Oct. 26, 2009).
[2] See "Investing in the Next Generation of Energy Technologies," WhiteHouse.gov. President Obama pledges to "Invest $150 billion over ten years in energy research and development to transition to a clean energy economy."
[3] See "Jumpstarting a Clean Energy Revolution with a National Institutes of Energy," Breakthrough Institute and Third Way (Sept. 2009)
[4] See "34 Nobel Prize Winners Write President Obama Urging Support for Clean Energy R&D," Breakthrough Institute (July 2009)
[5] See "Top Energy Scientists Call for $30 Bi Annual Investment in Clean Energy," Breakthrough Institute (Dec. 2007). Call for $30 billion in clean energy technology RD&D investments
[6] See "Energy Discovery-Innovation Institutes: A Step toward America's Energy Sustainability," Brookings Institution (Feb., 2009).
[7] See "Budget and Performance," U.S. Department of Energy.
[8] See "Detailed Summary of Energy Investments in Stimulus," Breakthrough Institute (Feb. 2009).
[9] See "R&D in the FY2009 Budget," American Association for the Advancement of Science (March 2009).
[10] See "New Apollo Program," Apollo Alliance (March 2009).
[11] See "Fast, Clean, & Cheap: Cutting Global Warming's Gordian Knot," Harvard Law and Policy Review. Breakthrough Institute (Jan. 2008).
[12] See "China's Big Plan to Win the Clean Energy Race," Breakthrough Institute (July 2009)

Late Friday night, Senator Barbara Boxer's Environment and Public Works Committee released a new draft of the Kerry-Boxer "Clean Energy Jobs and American Power Act" (S.1733), the first version of the legislation to detail how emissions allowances created by the bill will be divvied up. These allowances, which give polluters the right to emit greenhouse gases under the bill's cap and trade program, will be worth nearly a trillion dollars over the first ten years of the program alone.

Breakthrough Institute staff worked over the weekend to dig through the new legislation and get an accurate picture of the allowance allocation pie [see summary tables and graphics below and click here to download a comprehensive spreadsheet (*also in xls format) of allowance allocations in both Kerry-Boxer and the House Waxman-Markey/ACES bill. Note: updated after initial posting to convert EPA forecasts to 2009 constant dollars. Hat tip to Jason at 1Sky for catch].

Overall, the allowance allocation scheme mirrors the bill's House-passed sibling, the American Clean Energy and Security Act (ACES), aka the Waxman-Markey bill (HR 2454) [for a side-by-side comparison of the two bills, click here].

Depending on the value of emissions allowances under the cap and trade program, an average of roughly $70 billion to $126 billion in emissions allowances will be created and distributed on each year under the first ten years of the bill's cap and trade program, 2012-2021.

Of that value, by far the largest share, roughly 64% of the total allowances, will be distributed for free to shield energy consumers and industry from the higher energy prices driven by the establishment of a price on carbon dioxide and other greenhouse gases under a cap and trade system. This includes both direct rebates to end consumers and low-income energy assistance, as well as free allocations to electric and natural gas utilities (aka "distribution companies"), which they are directed to use "on behalf of" their customers. It also includes direct transfers of billions of dollars in free allowances to various industries, ranging from the relatively defensible (11.3% of allowances to heavy industries vulnerable to international competition), to the pretty indefensible, (e.g. a windfall-profit generating allocation of over 3% of the allowances -- worth at least $2 billion annually -- to the "merchant" operators of conventional coal plants).

By contrast, only about 13% of the value of allowances will be invested in various clean energy technologies, including incentives for the deployment of carbon capture and storage technology (aka CCS, given 2.2% of permits on average each year), federal, state and local government funds to incentivize renewable energy and energy efficiency (6.4%), and investments in advanced clean vehicle technologies (1.7%).

Just 1.9% of the allowances are dedicated to critical clean energy research and development (R&D) efforts, which amounts to an investment of just about $1.4 billion annually under EPA-projected allowance prices (in 2009 constant dollars).

Overall, the "Clean Energy Jobs and American Power Act's" investments in clean energy technologies will total under $9.5 billion per year under allowance prices projected by the EPA.

Continue reading "Kerry-Boxer Climate Bill Allowance Allocation Breakdown" »

Climate change legislation recently passed by the U.S. House of Representatives and now under consideration in the Senate will "succeed in perpetuating business as usual and fail to avert catastrophic climate change," according to a new Greenpeace report quietly released yesterday.

Titled "Business as Usual," the report was prepared on behalf of Greenpeace by David Sassoon, who publishes the climate news site, SolveClimate. It is written as a "plain-spoken" analysis meant to be "a call to action to the President of the United States," according to the document.

"In order for federal climate legislation worthy of this nation to pass Congress, we see no alternative to active and principled engagement from the Oval Office," Greenpeace writes.

The report levels five key criticisms of current Congressional legislation, calling attention to what Greenpeace describes as "five points of maximum danger" that the environmental group argues must be addressed to ensure climate legislation is capable of spurring "a swift transition to a clean energy future."

While we certainly don't share Greenpeace's position on all (most) climate matters, this new report levels a pointed and impassioned critique of current Congressional climate action well grounded in the details of the pending legislation. Here's a 'Cliffs notes' version of the full report below the fold...

Continue reading "Greenpeace: Climate Legislation More Likely to Perpetuate Fossil Fuel Economy than Spur Swift Transition to Clean Energy" »

The United States may be stuck in the middle of a climate conundrum. A proposal to establish border tariffs to account for the carbon associated with the imported manufactured products, like steel, looks critical to securing the support of key swing Senators interested in protecting the competitive position of American manufacturing. Without these key swing votes, including Ohio Senator Sherrod Brown and at least nine of his Democratic colleagues, a Senate climate bill has little hope of passing, which climate advocates argue would hamstring U.S. negotiators trying to forge an international climate agreement in Copenhagen this December.

Yet according to the New Scientist, those same tariff provisions that could win passage of a U.S. climate bill are firmly opposed by China and other developing nations and could both damage Sino-American trade relations and fissure international climate negotiations:

"Following lobbying by heavy industries, the US Congress is considering imposing tariffs on imports from China and other developing nations. That could be a deal-breaker for poor nations at December's climate change talks in Copenhagen.

If Congress passes laws imposing a limit on US greenhouse gas emissions, energy-intensive sectors such as steel-making and cement manufacture would almost certainly face increased costs. Competitors in China and other developing nations not subject to similar restrictions - and China has said that it will not set itself an emissions target - might be able to produce steel more cheaply, and take business away from US firms."

With critical Senate Democrats demanding border tariffs, there is no chance the bill will pass without their inclusion. Alternately, China, the world's largest emitter of greenhouse gases, and India will not be inclined to cooperate on an international agreement if they think the final legislation will include border tariffs.

Continue reading "Carbon Border Tariffs Put U.S. In Climate Conundrum" »

Senator Barbara Boxer (D-CA), chair of the Environment and Public Works Committee, said she's ready to green light debate by month's end on the Senate climate bill she has co-authored with Senate Foreign Relations Committee Chair John Kerry (D-MA). According to Politico:

A major Senate climate change bill is written and ready to be debated before the Environment and Public Works committee, the chairwoman of the panel said Tuesday.

Sen. Barbara Boxer's legislation would distribution of tens of billions of dollars of pollution allowances to power plants, manufacturing, and other industries. It will mirror cap and trade legislation passed by the House in late June with, she noted, "a few tweaks."

For a summary of those "tweaks" - at least as of the discussion draft version circulated by Kerry and Boxer two weeks ago, see my post "Anatomy of a Bill: Key Features of Kerry-Boxer Senate Climate Bill" over at theEnergyCollective.com.

Continue reading "Sen. Boxer Green Lights Senate Climate Debate" »

By Yael Borofsky and Jesse Jenkins

Initial modeling of the Kerry-Boxer climate bill (full text), the Senate sibling of the House-passed Waxman-Markey bill (aka ACES), reveals that carbon prices are likely to remain at the floor price set by the legislation through at least 2019, averaging just $15 per ton (in nominal dollars) through that period. According to E&E (subscription req'd), Point Carbon, the Norwegian consulting and carbon market analytics firm that released the analysis, was the first firm to model and analyze future carbon prices under the proposed legislation, and their findings corroborate Breakthrough's own analysis of Congressional climate legislation (see full series here).

In the Senate version of the bill, the Point Carbon model, which the firm dubs its "holistic" model because it accounts for major policy pieces within the legislation, identifies supply of domestic and international offsets as a major carbon price driver:

"Point Carbon analysts identified what they see as the major price drivers, including the supply of domestic and international offsets. The Senate bill, compared to the House version, includes more domestic offsets and allows fewer international credits into the system. Offsets are credits companies can buy for emissions reductions they contribute to in other parts of the country or globally."

Point Carbon concludes that the supply of permits and offsets will be sufficient to hold market prices for carbon to the lowest levels permitted by the legislation, a $10 per ton (in 2005 dollars) floor price, rising each year at 5% above inflation.

"The price of carbon emissions permits is expected to stay at the price floor through 2019. A price floor, if adopted, would provide an incentive for industrial plants and utilities to save, or "bank," their pollution permits in the early years, so they can be used in the later years as prices rise."(emphasis added)

As Breakthrough has shown in a series of analyses on the emissions cap under House climate legislation, banking of excess permits during early years helps delay required emissions reductions under the cap and trade program for many years into the future.

Continue reading "Kerry-Boxer Carbon Price Will Remain at Price Floor According to First Modeling of Draft Bill" »

As the Senate's climate and energy bill takes shape, it looks broadly similar to the House-passed Waxman-Markey American Clean Energy and Security Act, with a couple key exceptions, according to E&E News' ClimateWire service.

ClimateWire has obtained an early version of the bill (pdf) being written by Senators Barbara Boxer (D-CA) and John Kerry (D-MA). Key sections are still under development as Senate staffers put the finishing touches on the discussion draft version of the bill scheduled for public release tomorrow, but the early draft appears to mirror closely the structure and content of its House sibling.

Emissions targets in 2020 are stronger than the House-passed version (20% below 2005 levels instead of 17%) and the EPA's authority to separately regulate greenhouse gas emissions from major sources is reportedly preserved. A modest new nuclear title has been added as well. Other major provisions, including the extensive permitted use off offsets and a strategic reserve pool to control allowance prices, appear consistent with the House climate bill.

[Update, 9/29/09, 5:33 PST: additional details are emerging as successive drafts of the legislation are leaked to reporters and bloggers. An 801-page draft bill was leaked this afternoon, which is reportedly more current than the 684-page draft reported by ClimateWire earlier today. This version is still not the final, which we'll have to wait until tomorrow for.

The current draft apparently contains a cost collar on emissions allowance prices backed up by the same kind of strategic allowance reserve in the House bill. The floor price begins at $11 per ton in 2012 and the ceiling at $28 per ton, both rising steadily each year. The House version had a $10 floor price in 2012 and a ceiling that floated at 60% above a rolling average of market prices for allowances, providing little certainty of an upper price on carbon under the bill. E&E News also reports that the new bill contains greater support for research and commercialization of advanced biofuels and greater incentives to replace coal-fired power plants with new natural gas plants.]

Key sections on how the climate bill will divvy up hundreds of billions of dollars in allowance allocation revenue will remain blank, to be filled in later when Senator Boxer releases a "chairmans mark" before formal markup of the bill in the Environment and Public Works Committer, likely sometime in October. However, if theHill.com's observations are accurate, as in the House bill, these billions in new revenue will likely be considered "chits to use to negotiate support for their bill as they attempt to form a winning coalition," rather than a funding source for critical, proactive investments to spur clean energy technologies, industries and jobs.

Key excerpts from the ClimateWire story follow...

Continue reading "Waxman-Markey's Senate Sibling Mirrors House Climate Bill" »