Article by Kyle Danish, Shelley Fidler, Kevin Gallagher, Megan Ceronsky and Tomás Carbonell
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Commentary
The tick-tock on climate change legislation continues. The Kerry-Graham-Lieberman (K-G-L) team is targeting April 26th for their release date. Senate Majority Leader Harry Reid (D-NV) has said he will shepherd the bill directly to the Senate floor . . . . The White House has been having preparatory consultations with environmental groups and industry . . . A group of 10 Democratic Senators from industrial states sent a letter to the K-G-L team with a list of asks for the bill, including transitional financing for energy retrofits and border adjustment measures . . . The states continue to make themselves heard. State air quality officials wrote to the Senators requesting that the bill not preempt state authority to regulate greenhouse gas emissions, and the Western Climate Initiative released a series of papers outlining issues and options for auctions, carbon market oversight, and offsets . . . The State Department will take a pass on the ALBA "People's" climate change conference.
Executive Branch
- State Dept. Announces That U.S Will Not Formally Participate in "People's Climate Conference." The U.S. Department of State will not be a formal participant in the "People's World Conference on Climate and Mother Earth Rights" (People's Climate Conference) next week in Cochabamba, Bolivia. Instead, the U.S. will attend as an informal observer to the proceedings. The conference was organized by the Bolivarian Alliance for the Peoples of our America (ALBA), a coalition of countries that includes Bolivia, Cuba, Venezuela, and Nicaragua. The ALBA countries were vociferous opponents of the Copenhagen Accord. People's Climate Conference attendees are expected to include approximately 10 heads of state, as well as a number of ministers and ambassadors.
- DOE Launches Clean Energy Partnerships for the Western Hemisphere. U.S. Department of Energy (DOE) Secretary Steven Chu announced several new Western Hemisphere partnerships aimed at addressing clean energy technology and energy security issues. Among the five new partnerships are an initiative aimed at creating an energy innovation center at the Inter-American Development Bank to coordinate financing of regional energy projects, and a project that will establish a biomass energy "innovation hub" in Columbia to identify and promote sustainable biomass-to-energy technologies. The initiatives were announced during a week-long meeting of the Energy and Climate Partnership of the Americas.
- DOE Releases Guidance for Agency Vehicle Fleet GHG Reductions. As directed by Executive Order 13514, DOE released guidance to help federal agencies reduce greenhouse gas (GHG) emissions from and petroleum use by federal vehicle fleets. The guidance directs federal agencies to implement a three-part plan that involves collecting information, developing a GHG emission reduction strategy, and then implementing the strategy. The guidance is available at http://www1.eere.energy.gov/femp/pdfs/fleetguidance_13514.pdf .
Congress
- Kerry, Graham, & Lieberman Hope to Release Bill Draft April 26. The goal for release of the compromise climate package being prepared by Senators John Kerry (D-MA), Lindsey Graham (R-SC), and Joe Lieberman (I-CT) is reportedly April 26th. Sen. Kerry said that the bill will provide incentives for private investment in clean energy technologies that will create 1.9 million jobs and increase GDP by $111 billion over the next 10 years. Sen. Lieberman announced that the three Senators will give the proposal directly to Majority Leader Sen. Harry Reid (D-NV) rather than formally introduce the bill, as an "introduced" bill must be sent to all committees with jurisdiction over its contents. However, the bill will "reference" the energy bill passed by the Senate Energy and Natural Resources Committee last summer, and all relevant committees will be given a limited (but unspecified amount of time) to outline desired changes. Majority Leader Reid said that he hopes to bring a climate-energy bill to the floor before the Senate's July 4th recess. Sen. Mark Begich (D-AK) told reporters that he believes the bill has a 60% chance of passing the Senate.
- Manufacturing State Senators Release Climate Asks. In a letter to Senators Kerry, Graham, and Lieberman, ten Democratic Senators from manufacturing states described components of an energy-climate bill that they argued are necessary to prevent "leakage" of emissions-intensive industry from the U.S. to countries without carbon controls. The recommended provisions include: financial assistance for companies investing in energy efficiency or diversification into clean energy technologies; assistance to manufacturers affected by energy price increases; delay of the application of carbon controls to manufacturers; allowance rebates for energy-intensive and trade-exposed industries; border measures to prevent "carbon leakage"; harmonization of federal and state carbon controls; and transition aid for communities and workers dependent upon energy-intensive industries. The letter was signed by Democratic Sens. Sherrod Brown (OH), Debbie Stabenow (MI), Carl Levin (MI), Bob Casey, Jr. (PA), Arlen Specter (PA), Mark Warner (VA), Claire McCaskill (MO), Evan Bayh (IN), Kay Hagan (NC), and Robert Byrd (WV). Sen. Bayh told reporters that he is open to climate legislation, but that "there's some serious concerns that have to be addressed if this is going to get done." The letter is available here .
- Drilling May Cost N.J. Votes. Both New Jersey Senators signaled that they might vote against a climate bill authorizing offshore drilling. Sen. Robert Menendez (D) said that the drilling provisions would require "very significant alteration" or they would "probably lose" his vote. Sen. Frank Lautenberg (D) said that he wants the climate bill to include renewable energy development rather than offshore oil drilling.
States and Cities
- WCI Releases Auction Design, Offsets White Papers. Officials from the Western Climate Initiative (WCI) followed last week's release of a market design white paper with the release of two additional white papers. The new releases provide recommendations on allowance auction design and offsets, respectively. The auction design white paper analyzes possible design options for the regional cap-and-trade program's allowance auction mechanism. The three main auction format elements considered in the paper are whether the auction should consist of a single or multiple rounds, whether the bid format should be open or sealed, and whether allowances should be priced uniformly or according to a "pay as bid" approach. Other issues addressed include the concept of a reserve price, the procedure for allocating unsold allowances, lot size, the timing and frequency of auctions, and who may participate in the allowance auctions. The offsets white paper, the second released by the WCI's Offsets Committee, provides recommendations related to the definition of an offset credit and the criteria for offset project eligibility. The auction design white paper is available at http://www.westernclimateinitiative.org/news-and-updates/105-wci-markets-committee-releases-auction-design-white-paper . The offsets white paper is available at http://www.westernclimateinitiative.org/news-and-updates/104-wci-offsets-committee-releases-offset-system-essential-elements-draft-recommendations-and-offset-protocol-review-report .
- State Air Officials Call for Congress to Retain GHG Authority for EPA, States. The National Association of Clean Air Agencies (NACAA), a group of state air quality officials, sent a pair of letters to the U.S. House of Representatives and Senate urging the Congressional bodies to preserve the authority of EPA and the states to regulate GHGs in climate change legislation. The House passed climate change legislation in June of last year that would have preempted state cap-and-trade GHG programs from 2012 through 2017 if the programs affect the emissions subject to the federal cap. The House bill would also have prohibited EPA from regulating GHGs as criteria or hazardous air pollutants under the Clean Air Act, or from regulating a facility under the New Source Review program on the basis of the facility's GHG emissions.
Industry and NGOs
- Businesses Call for Energy-Climate Bill Passage. Business leaders from Alaska, Arkansas, Florida, Indiana, Massachusetts, Michigan, Ohio, Pennsylvania, South Carolina, Tennessee, and Virginia wrote to their Senators urging passage of a "pragmatic, bipartisan solution to comprehensively address our energy and climate challenges," including cutting carbon emissions and increasing energy independence. The letters specifically reference the efforts of Senators Kerry, Graham, and Lieberman, and argue that "strong energy and climate legislation will create millions of new American jobs by providing market certainty and enabling a transition to a new energy economy." The letters were organized as part of the of the "We Can Lead" coalition of over 200 businesses around the country that support enactment of comprehensive energy and climate legislation. The letters are available at http://wecanlead.org/newsroom/april_letters/ .
Studies and Reports
- RFF Study Finds Forestry Investments Lower Climate Bill Costs. A study by Andrew Stevenson and Nigel Purvis at Resources for the Future found that each dollar invested in capacity building in tropical forest nations to prepare the countries to generate offset credits from reductions in tropical deforestation CO2 emissions would save Americans more than a dollar. According to the study, failing to provide public funding for capacity building could reduce the supply of international offsets by 4-27 percent, which would in turn increase the annual costs of a climate program by 3-24 percent. H.R. 2454, the energy-climate bill passed by the House of Representatives in June of 2009, dedicated 5 percent of emission allowances annually to investments in tropical deforestation prevention. The study is available here .
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