Why legislate for clean energy?....

Today's post: Wednesday, 7-22-2009

We need an 80% reduction in fossil fuel use by 2050 to avoid the worst global warming effects. And, practically speaking, we need to also double our electricity generation and double the useful work done per unit of electricity & other energy sources as well during that same time to have a decent economy.

One way to do this is to pass nationwide legislation that helps cause these changes to happen. The congress of the United States is considering such legislation now.

“….the Center for American Progress has offered twelve reasons to support clean energy legislation. See http://www.americanprogressaction.org/issues/2009/07/dozen_reasons.html/index.html .

The brief article provides data with supporting documentation, as well as a diverse list of ACES supporters.”

Here are the twelve reasons from the article. I’ll add my comments after the article.

“A Dozen Reasons for Clean Energy

By Daniel J. Weiss, Erica Goad | July 20, 2009

Senate Environment and Public Works Committee Chairwoman Barbara Boxer (D-CA) recently announced that she plans to introduce her version of the American Clean Energy and Security Act, H.R. 2454, immediately following August recess. “The bill will be introduced when we get back,” Sen. Boxer told reporters. “We're going to use the extra time we have to make it the best it can be.”

And what will that bill look like when she introduces her version of the bill? Sen. Boxer was coy, telling E&E News only saying that “I think the majority of the allocations will be spelled out,” meaning that the bill would have a distribution plan for the pollution allowances for ratepayer rebates, trade sensitive industries, and other recipients.

The House of Representatives in late June passed its clean-energy jobs and global warming bill. It would require utilities to generate electricity from the wind, sun and other renewable sources, reduce energy demand via efficiency, and require all major emitters of greenhouse gases to buy an allowance for every ton of pollution they emit. It is essential that the Senate follows the lead of the House by swiftly enacting comprehensive clean energy legislation to create jobs, cut our nation’s dependence on foreign oil, and reduce pollution to protect our planet.

To help focus the Senate on the importance of Sen. Boxer’s forthcoming legislation, here are 12 key reasons why the Senate should act on the House passed American Clean Energy and Security Act.

1. It would create 1.7 million new jobs
The legislation would create 1.7 million new jobs by unlocking billions of dollars in industry and public investment because of measures included in the House legislation and the economic stimulus legislation passed earlier this year, the American Recovery and Reinvestment Act. According to a recent University of Massachusetts report sponsored by CAP, these job gains would be enough to reduce the unemployment rate in today’s economy by about one full percentage point. John Doerr, one of the nation’s leading venture capitalists, told the Senate Environment and Public Works Committee: “These policies are straightforward; we've seen them work in states and in other countries. In Denmark, policies, including prices on carbon and building and appliance efficiency standards, have made a huge difference since 1970. It started their wind industry. Today, one-third of all terrestrial wind turbines in the world come from Denmark. And Denmark’s energy technology exports were more than $10 billion. That’s from a country with a smaller population than Missouri, Tennessee or Michigan. It has resulted in jobs; last year, the unemployment rate in Denmark last year was only 2 percent.”

2. It would reduce oil use
According to the American Council for an Energy Efficient Economy the House bill would save at least 240 million barrels annually of oil. Since our dependence on foreign oil threatens our national security, reducing oil use would not only be better for the environment but for the safety of the American people.

3. It would reduce electric bills
The Environmental Protection Agency determined recently that the American Clean Energy and Security Act would lead to a 7 percent decline in electric bills due to energy efficiency measures by 2020. The report noted that “increased energy efficiency and reduced energy demand simultaneously reduces primary energy needs by 7 percent in 2020, 10 percent in 2030, and 12 percent in 2050.” By 2020, the efficiency standards in the bill would save consumers $29 billion. The average family would save $84 per year in lower electricity bills. This means that consumers would be spending comparatively less on their utility bills simply because the houses they live in would be less wasteful.

4. It provides special protection for low-income households
The Congressional Budget Office projects that households with an average income of $18,000–in the lowest income quintile–would see an average net benefit of $40 annually by 2020. The clean-energy legislation would also sell some pollution allowances and use the money to provide additional assistance to low income households to help pay for their energy bills if necessary.

5. It would cost the average household a postage stamp per day
The cost of a nationwide carbon cap-and-trade program would ultimately amount to an average of $175 per household annually, or about the cost of a postage stamp per day. Along with this estimate, the CBO emphasized that the figure “includes the cost of restructuring the production and use of energy and of payments made to foreign entities under the program, but it does not include the economic benefits and other benefits of the reduction in greenhouse gas emissions and the associated slowing of climate change.”

6. It would spur investments in clean energy
A number of large energy companies including Exelon Corp., Symantec Corp., PSEG Inc., and others support the American Clean Energy and Security Act “because certainty and clear rules of the road enable us to plan, build and innovate our businesses. It would drive investment into cost-saving, energy-saving technologies, and would create the next wave of jobs in the new energy economy."

Inducements to invest include a nationwide renewable energy standard that requires energy companies to generate 15 percent of their electricity from renewable resources by 2020, and requires utilities to reduce electricity demand by 5 percent via efficiency measures. The legislation also provides a total of $190 billion through 2025 for investments in clean energy, efficiency programs and deployment of top-notch energy technologies.

7. It would create new income streams for farmers
There is great potential to generate clean energy in rural areas. The Department of Energy estimates that if 5 percent of the nation’s energy comes from wind power by 2020, rural America could see $60 billion in capital investment. Farmers and rural landowners would derive $1.2 billion in new income, and see 80,000 new jobs created over the next two decades. Leasing land for a single utility-scale wind turbine could provide a farmer with about $3,000 a year in income.

According to Ohio State University’s Carbon Management and Sequestration Center, agricultural lands have the potential to store the equivalent of one-third of the carbon pollution produced in the United States. The Consortium for Agricultural Soils Mitigation of Greenhouse Gases of Colorado State notes that “increasing soil carbon through soil carbon sequestration improves agricultural soil quality, fertility, and productivity…while reducing atmospheric greenhouse gas concentrations.”

The Energy Information Administration has estimated the value of agricultural offsets to be close to $24 billion annually. Farmers have the ability to reap benefits from leasing their land and from agricultural carbon offsets. For example, a new 107-megawatt wind farm in Minnesota yielded $500,000 per year in lease payments to farmers.

8. It would protect farmers from energy-related price increases
Agriculture is exempt from the greenhouse gas pollution reduction requirements in H.R. 2454. It also includes a provision to aid farmers should they face a reduction in purchasing power due to higher energy costs (see Title IV, Section 432 of the House bill). Under the bill, rural residents so affected would become eligible for monthly cash refunds.

9. It would protect energy intensive, trade-sensitive industries
The American Clean Energy and Security Act allocates 15 percent of its pollution allowances to industries that use significant amounts of energy and face international competition. This provision would protect them from competition from lower cost imports from countries that do not have greenhouse gas pollution reduction programs. This includes the cement, paper, chemical, aluminum, and steel industries. Estimated total value of the near-term allocation pool is around $100 billion by 2020, with the allowances for trade-sensitive industries consisting of $13 billion by 2020.

10. It would cut greenhouse gas pollution
The 17 percent reduction in carbon pollution required by 2020 would cut 2.2 billion metric tons of carbon dioxide equivalent in 2020 compared to inaction. Removing that much carbon is comparable to taking 500 million cars off the road, which is twice the number of U.S. cars today, and half the cars expected in the world in 2020.

The bill would shrink deforestation as well, which is essential because tropical forests help to absorb greenhouse gas pollution and remove atmospheric carbon. A small percentage of emissions allowances are set aside for projects in other countries that would reduce deforestation. The EPA estimates that the allowances to reduce deforestation would reduce pollution by one billion tons annually by 2015—equivalent to taking over 200 million cars off the road.

11. It would create a safety net for displaced workers
In the unfortunate event that some workers lose their jobs in high polluting industries, the bill has a $150 million workforce retraining program (Title IV, Subtitle B in the House bill). A worker can also petition the Secretary of Labor for payment of 70 percent of lost wages for three years, as well as job training, and health care premium payments.

This program is similar to the one in the Clean Air Act of 1990. This program authorized $250 million annually to the Job Training Partnership Act to retrain coal miners who lost their jobs due to demand reductions for high sulfur coal, which was responsible for acid rain pollution. Actual job losses were 75 percent lower than predicted, with a grand total of 2,363 people applying for aid so program costs were much lower. This would likely occur under the greenhouse gas pollution reduction program, but it is important to provide this safety for those who may be affected.

12. The American Clean Energy and Security Act is widely supported
Nuclear power companies, a civil rights organization, and a utility trade association have little in common. Yet the Nuclear Energy Institute, the NAACP, and the Edison Electric Institute all support prompt comprehensive action to create clean energy, reduce oil use, and cut carbon pollution."

X* X* X* X* X* X* X*

1. 1.7 million jobs is just the tip of the iceberg. If we really begin to both produce renewable energy in large amounts and tax fossil fuel use or limit it or charge it with its true costs, renewable energy will soon be less expensive than fossil fuel energy in most uses. Once that happens, 8.5 million jobs or more is more likely within 15 years.

2. If we really begin to both produce renewable energy in large amounts and tax fossil fuel use or limit it or charge it with its true costs, we will not only use less fossil fuels than we would have used, we’ll use less than we do now.

Then once renewable energy becomes less expensive than fossil fuel energy in most uses, we will use enough less to import less or even no oil at all and stop burning coal in a way that releases CO2 and other health harmful pollution.

3. 4. & 5.

In the short run, increases to utility bills may be more than this estimate. But programs for low income taxpayers will help. It will cost money to build new powerlines and smart grid components and both small scale and massive renewable energy installations.

But it won’t be excessive either.

But the much better news is that once a lot of this new infrastructure is built, utility bills will then be as much as half or a third of what they otherwise would have cost had we not switched to renewable energy. In addition, we will be spending much less fighting the consequences of global warming and have an economy strong enough to support paying the costs we do have.

The alternative, I think, is to face economic collapse that would ensue otherwise when we would have soaring energy costs, very high expenses to fight global warming, and a weak economy all at the same time.

Personally, I don’t think that scenario is a prudent choice. Slowing fossil fuel use a bit initially and building massive amounts of renewable energy will prevent that scenario.

Legislation that accelerates that set of actions is critically important because of this.

6. & 7. are true. Building this new infrastructure on a large scale will attract investments and give both entrepreneurs and many farmers a real shot at making more money than they do now. One building renewable energy pays well and new renewable energy costs less than fossil fuel based energy, that will really take off. At that point the needed changes will become self sustaining and speed up.

8. 9. & 11. show the current thinking is to minimize the negative impact of making these changes. It remains to be seen how effective this will be. But if good faith efforts are made from the outset, it will help.

10. Yes it will slow global warming and reduce the costs of it below what it otherwise would have been. That extra time may enable us to keep our ability to grow food and keep our coastal cities where we might have not been able to do so otherwise.

Taking a decent shot we’ll be able to do that is far better than giving up and for sure losing those two battles.

12. Anyone who sees the grave consequences of failing to do this supports it. And, of course people and companies who will benefit support it.

The interesting thing is that some large companies with unusually good management in place are beginning to support it.