We are 24 hours away from the most important climate vote of our lives. Everything hangs in the balance.
Either the House passes the American Clean Energy and Security Act and we carry forward with the goal of retiring fossil fuels. Or, we lose the vote and probably any chance of confronting the devastating threats of run-away global warming for the foreseeable future.
Key Features of the American Clean Energy and Security Act
- Sets a declining cap on greenhouse gas emissions at 17% below 2005 levels by 2020 and 83% by 2050
- Establishes a cap-and-trade program to spur investment in clean energy technologies and new manufacturing jobs
- Promotes clean energy by requiring that 20% of electricity comes from renewable sources such as wind, solar, certain types of biofuels, and energy efficiency by 2020
- Protects the competitiveness of energy-intensive industries (like steel and concrete) by giving them free permits, or allowances, to emit a certain amount of greenhouse gases in the early years; this helps solve the problem of international competition from uncapped countries
- Keeps utility rates low for consumers by giving 30% of allowances to local electricity and natural gas companies, and requiring the utilities to pass the benefits on to their customers
- Protects low- and moderate-income households by allocating 15% of allowances to minimize impacts on these households
- Provides an incentive for other countries without a cap on carbon to limit their emissions, by allowing the president to impose fees on carbon-intensive imports from nations that haven’t adopted their own greenhouse gas cap (starting in 2025)
More About What the Bill Will Do
Naturally, we at EDF are most excited about the declining cap on greenhouse gases. And we'll get to that—not to worry. But there's a lot more. Here are the highlights of the 946-page bill:
Requires utilities to use more renewable energy
Many states require that utilities get a certain share of their energy from renewable sources, like wind or solar. Waxman-Markey would take this idea nationwide: it would require big electric utilities to rely on renewable sources for 6% of their energy in 2012, rising to 20% in 2020.
What counts as renewable? Quite a few things: wind, solar, geothermal, some hydropower projects, ocean energy, certain types of biogas and biofuels, landfill gas, coal mine methane, and certain waste-to-energy facilities. Not nuclear, though: including nuclear power would swallow up the whole program and lead to no new renewable sources.
This part of the bill also creates programs that will support research into storing carbon pollution from power plants deep underground. This technology, called carbon capture and sequestration, could make it possible to continue to rely on our abundant supplies of coal while vastly reducing the pollution they create.
Encourages energy efficiency
Up to two-fifths of the 20% renewable energy requirement can be met through improving energy efficiency. The bill would create a wide range of programs to encourage just that.
For example, it would get the Department of Energy involved in pushing states and cities to adopt greener building codes. And it would promote the manufacture and sale of highly efficient refrigerators, light fixtures, air conditioners and other appliances.
Sets a declining cap on carbon pollution
At last.
The bill would put a national economy-wide cap on greenhouse gas emissions by large sources—coal-fired power plants, large factories, natural gas suppliers, and fuels. The cap will be phased in over the next few years—on electricity and home heating oil in 2012, for example, and on natural gas in 2016.
Here are the targets for covered sources:
- 3% by 2012
- 17% by 2020
- 42% by 2030
- 83% by 2050
The bill's 2020 pollution cuts would be equal to taking 500 million cars off the road. Those reductions would double by 2030.
Companies covered under the bill will need to have a permit—called an "allowance"—to emit greenhouse gases. Every year, the number of allowances for the covered sectors will shrink. And companies can trade allowances with each other, so whoever can reduce emissions most cheaply can profit by selling their excess allowances. Learn more about how the cap works and creates jobs while cutting pollution.
Cap and trade is a proven tool: the U.S. acid rain program dramatically cut sulfur dioxide pollution in the 1990s at 30% of the projected cost.
To minimize consumer impacts, and to help energy-intensive businesses compete with companies in nations that have not capped their carbon pollution, the bill gives away some allowances for free in the early years.
All told, consumers will get more than 60% of the value of the allowances. Over 30% will go to households: 15% directly in the form of tax credits and other payments; 1.5% for home heating oil use; and roughly 15% indirectly through benefits that utilities are required to pass on to end-users.
Confirming this point, a new analysis by Point Carbon, a market analysis firm, says that under Waxman-Markey, consumers would receive around $750 billion in direct and indirect payments through 2030 to offset higher energy costs and pay for energy efficiency upgrades.
In addition, about 15% of the allowances will, in the early years, be given away for free to U.S. industries—like steel, cement and glass—that use large amounts of energy and are exposed to imports from countries that don't yet have carbon caps.
Roughly 5% of the allowances will be used to secure additional emissions cuts from reduced deforestation, including preservation of tropical rainforests.
Where other allowances are going
- 2% for adaptation programs in the U.S., and another 2% for such programs internationally (including clean technology transfer) (both programs ramp up substantially in later years)
- 3% to the auto industry to encourage production of advanced technology vehicles (ramps down to 1% in 2018, phases out by 2026)
- 7% for state efficiency and renewable energy programs and improved building codes
- 2% to create incentives for deployment of carbon capture and storage (CCS), rising to 5% starting in 2018
- 5% for universities to conduct energy R&D
This sweeping legislation, crafted with broad support from the business and environmental communities, puts the United States on a path toward capping its carbon pollution. And that is the first big step to preventing catastrophic climate change.