Climate Change Policy in an Obama Administration Tom Lindley Perkins Coie LLP November 22, 2008.
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Transcript of Climate Change Policy in an Obama Administration Tom Lindley Perkins Coie LLP November 22, 2008.
The debate has shifted:• From causes and effects to
mitigation methods and timelines
• From voluntary, incentive-based programs to mandatory, market-based regulation
U.S. Federal Approach to Climate Change
• President Bush's approach focused on voluntary, market-based incentive programs and partnerships managed by the Environmental Protection Agency and Department Of Energy
• Only limited regulatory action has taken place recently:• Carbon Sequestration Rules (July 2008)• Advance Notice of Proposed Rulemaking (July2008)• GHG Reporting Rules (draft to OMB)
Federal Climate Change Policy in the Bush Administration: 2000-2008
• Regional Action:• RGGI, Midwest Accord, WCI
• California's AB 32 leads the way
• 18 states now have mandatory greenhouse gas reporting rules
State & Regional Climate Change Policy
There have been many more developments with regional and state-based regulation
President-Elect Obama:
Climate Change & Energy
Campaign policies vague, but emphasize:• Cap-and-trade-style emissions reductions• Improved energy efficiency• Energy independence• Green job creation
• Economy-wide cap-and-trade system
• Invest $150 billion over 10 years in advanced energy technologies
• Improve energy efficiency
• Make the U.S. an international leader in combating climate change
Obama Campaign
During the campaign, Obama proposed broad reforms in climate and energy policy :
• Mandatory, economy-wide• Reduce emissions to 1990 levels by 2020• 80% reduction below 1990 levels by 2050• Allocation: 100% auction of allowances• Limited use of offsets
Obama's cap-and-trade plan:
Obama Campaign
• Sectors covered• Reporting start date• Emissions cap start date• Early action credit• Preemption of state/regional programs
Obama's cap-and-trade plan does not specify:
Obama Campaign
• $150 billion over 10 years in:•Plug-in hybrids•Commercial scale renewable energy•Energy efficiency and weatherization projects•Low emissions coal plants•Next generation biofuels and fuel infrastructure•Transition to new digital electricity grid
• Assist workers and low income families with "transition" costs
Obama's cap-and-trade plan would reinvest allocation revenues:
Obama Campaign
• Re-engage with the UNFCCC• December 2008: UN Climate Change Conference, Poznań, Poland• November/December 2009: UN Climate Change Conference, Copenhagen
• Create "Global Energy Forum" of largest emitters• Technology transfer to developing countries• Confront deforestation; promote carbon sequestration
International Commitments:
Obama Campaign
Agency roles in the Obama Administration
• Possible elevation to cabinet status
• EPA to regulate emissions under existing Clean Air Act
• CA waiver would be approved
EPA DOE
• Large role: climate change is an energy issue
• Clean energy initiatives
• Possible appointment of National Energy Security Director
Congress & Climate Change Policy
• New cap-and-trade legislation is expected to be introduced in the latter half of 2009 or early 2010. • Until then, three recent bills are being discussed as starting points for the 111th Congress:
• Senate: Lieberman-Warner• House: Dingell-Boucher• House: Markey
Recent Climate Change Bills:
S. 2191 Lieberman-Warner
• First cap-and-trade bill to be voted out of committee• Defeated by Senate procedural vote in June 2008• Some language/initiatives may carry over, but bill will die in 110th Congress• New sponsorship needed: McCain, Boxer expected to lead
Congress & Climate Change Policy
Recent Climate Change Bills:
Dingell-Boucher "discussion draft"
• Released for comment October 7, 2008
• Four scenarios proposed• Less aggressive initial reductions• Blanket preemption of state/regional cap-and-trade initiatives • May become leading bill in 111th Congress unless Waxman replaces Dingell as chair of Energy and Commerce Committee
Congress & Climate Change Policy
Recent Climate Change Bills:
H.R. 6186: Markey's iCAP Act
• Chair of select committee on Energy Independence and Global Warming• Named by House Speaker Pelosi to specifically address global warming issues • Introduced June 4, but no further action taken• Committee may dissolve in favor of Rep. Dingell's Energy and Commerce Committee
Congress & Climate Change Policy
Policy Lieberman-Warner (S.2191) Dingell-Boucher (discussion draft) Obama (campaign policies)
Targets 19% below the 2005 emissions by 2020 71% below the 2005 emissions by 2050.
6% below 2005 levels by 202080% below 2005 levels by 2050
Reduction to 1990 levels by 2020 80% below 1990 levels by 2050
Allowance Allocation
Initially: 76% allocated and 24% auctionedBy 2036: 27% allocated and 73% auctioned
Mix of allocation and auction until 2026100% auction of allowances beginning in 2026 with revenues returned on a per capita basis to citizens unless Congress reauthorizes the legislation
100% auction from beginning
Preempt
state/regional programs
No explicit preemption, incentives to encourage states to fold into national program
Blanket preemption of state cap-and-trade initiatives
Not specified, but probably would not favor blanket preemption
Use of offsets 2012: 30% of allowance allocation may be satisfied with offsets
Initially limited to 5% of allowance allocation due to low initial reduction targets
2024: up to 35%
Not specified ("limited")
Cap-and-Trade Policy Comparison
Many competitors…• Recession, economy• Subprime mortgage crisis• Tax and healthcare reform• Wars in Iraq & Afghanistan
Will emissions reductions remain a top priority in an Obama Administration?
Federal Climate Change Policy
• Level and timing of cuts• Offsets: domestic, international, or none?• Grandfathered vs. auctioned allowances• Federal preemption of state and
regional programs
Many key issues under a cap-and-trade program remain unresolved…
Federal Climate Change Policy
• Leakage: whether to first obtain international commitments from developing countries• Support for bridge technology (CCS, nuclear)• Expansion of renewables (wind, solar, biofuels)• Early action credit
Key cap-and-trade debates continued:
Federal Climate Change Policy