National Tribal Forum

OnAir Quality

Annual Conference 2008Arthur J. Harrington

Godfrey & Kahn, S.C.

780 North Water Street

Milwaukee WI 53202

Global Warming, Green Energy and Business

Opportunities for Tribes

Overview

• Need for tribal leadership on climate change.

• Efforts by states and regions and potential federal legislation.

• Development of sustainability programs.– Determining baseline/carbon foot print.– Identifying reductions.– Working toward energy self-sufficiency.– State and federal grants/incentives.– Marketing benefits for tribal businesses.

Need for Tribal Leadership

• Impacts of climate change.– On world as a whole.– On tribal ways of life.– On poorest groups.

• Lack of federal leadership.

• Efforts by states and regional groups creating opportunities for tribes.

Quick Start Guide: A brief summary of the climate change challenge

No debate: 500,000 years of CO2 at +/-280 ppm has increased to 390 ppm in the past 100 years

No debate: 500,000 years of CO2 at +/-280 ppm has increased to 390 ppm in the past 100 years

U.S. CO2 Emissions Sources

Electric ity

32%

Transportation

26%

Industrial

23%

Buildings

8%

Agriculture

7%Landfills

4%

Global Warming Potential (by GHG type)

Carbon dioxide is 85% of U.S. GHGs, but...

Carbon dioxide (CO2)* 1Methane (CH4) 21Nitrous Oxide (N2O) 310Hydrofluorocarbons (HFCs) 1,300 to 11,700Perfluorocarbons (PFCs) 6,500 to 9,200Sulfur hexafluoride (SF6) 23,900

U.S. = 5% of world population, but 28% of world GHGs (Scientific American, Sept. 2006)

The Cost-Benefit of Climate Solutions

• The Stern Report (U.K.) concludes…– The cost of doing nothing could reach 20% of

gross global product (GGP) by 2050, resulting in the worst economic depression in history.

– But the cost of action to reduce GHGs is likely to be no more than 1% of GGP in the same timeframe

The Benefit of Climate Solutions

• In California by 2020 the implementation of the state’s Climate Action Plan will result in a net increase of…– 83,000 new jobs– $4 billion annual income

• A comparable investment in low-carbon, energy-efficiency nationwide…– 1.4 million new jobs by 2025 in the U.S.– Average saving of $1275/year per U.S. household

(Redefining Progress 2004; CA Climate Action Plan 2005)

Delay in Federal Leadership

• No implementation of Kyoto protocol.

• Delay in consideration of climate change legislation.

• But, potential passage of cap-and-trade legislation this year.

State and Regional Initiatives

• California AB 32.• Similar laws and executive orders in other

states.• Climate change task forces in numerous

states.– Forest County Potawatomi Community

leadership in Wisconsin task force.

• RGGI, Western Climate Initiative, and MGA Accord.

Development of Carbon Reduction Markets

• Under potential federal cap-and-trade program.

• Under RGGI, Western Climate Initiative, and MGA Accord.

• Will provide significant incentives for reductions/sequestration of greenhouse gases and significantly increase costs of traditional energy.

U.S. Emissions Trajectory

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1990 1995 2000 2005 2010 2015 2020

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tCO

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Goals and actions patterned after leadership states

Additional federal actions (aviation, ODS substitutes, etc.)

Emissions after actions

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1990

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2000

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1990 1995 2000 2005 2010 2015 2020

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tCO

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Goals and actions patterned after leadership states

Additional federal actions (aviation, ODS substitutes, etc.)

Emissions after actions

2000

1990

GHG Reduction Cost Curve

Corporate Commitments and Results

10% reduction$650 million saved

69% reduction$2 billion saved

65% reduction$791 million saved

6% reduction

10% reduction“It’s made us

more competitive”

25% reduction$100 million saved

13% reduction

Absolute capQuickTime™ and a

TIFF (Uncompressed) decompressorare needed to see this picture.

Carbon Markets Already Exist

• Chicago Climate Exchange.

• The Climate Registry.

• Individual purchases of greenhouse reductions/sequestrations.– To meet offset requirements.– For green marketing.

• Renewable energy credits.

Chicago Climate Exchange

• Voluntary, private organization, whose membership includes leading companies, universities, municipalities, etc.

• National leadership opportunity.• Members make legally-binding commitment to

cap and slowly reduce emissions to 6% below 2001 levels by 2010.

• Members can buy and sell reduction credits.

CCX Exchange Participant Membership

• Exchange participants are not subject to the CO2 reduction schedule.

• Because of this, exchange participant membership would not provide the same national recognition as full membership.

• Tribes could purchase and retire credits to reduce their “carbon footprint.”

CCX Off-Set Projects

• CCX allows certain greenhouse gas reduction projects to generate credits that can be sold into CCX market.

• For example, new buildings to qualify as carbon off-set projects depending upon their energy star rating.

• Off-set projects generate credits based on their CO2 reductions.

Potential Forestry CCX Off-Set Projects

• Carbon off-sets can be generated from forestation and forest enrichment projects, as well as forest conservation if it is adjacent to and in conjunction with forestation.

• Requires long-term commitment, sustainable management, and independent verification.

Climate Registry• Collaboration of more than 40 states and

provinces, as well as tribes (Campo Kumeyaay Nation, Pueblo of Acoma, and Southern Ute Indian Tribe).

• The Climate Registry is developing and managing a common greenhouse gas reporting system.

• Benefits of joining include national recognition (on par with states and provinces) and reduced costs in developing own GHG reporting

and reduction policies.

Renewable Energy Credits

• Certified renewable energy.

• Creates additional value from renewable energy projects.

• Many states with RPS standards.

• In other states can certify renewable energy and sell RECs.

State Goal

☼ PA: 18%¹ by 2020

☼ NJ: 22.5% by 2021

CT: 10% by 2010

MA: 4% by 2009 + 1% annual increase

WI: requirement varies by utility; 10% by 2015 Goal

IA: 105 MW

MN: 10% by 2015 Goal +Xcel mandate of

1,125 MW wind by 2010

TX: 5,880 MW by 2015

*NM: 10% by 2011☼ AZ: 15% by 2025

CA: 20% by 2010

☼ NV: 20% by 2015

ME: 30% by 2000;10% by 2017 goal - new RE

State RPS

*MD: 7.5% by 2019

☼ Minimum solar or customer-sited requirement* Increased credit for solar or customer-sited

¹PA: 8% Tier I, 10% Tier II (includes non-renewable sources)

HI: 20% by 2020

RI: 15% by 2020

☼ CO: 10% by 2015

☼ DC: 11% by 2022

☼ NY: 24% by 2013

MT: 15% by 2015

*DE: 10% by 2019

IL: 8% by 2013

VT: RE meets load growth by 2012

SWH eligible

*WA: 15% by 2020

Renewable Portfolio Standards

Development of Sustainability Programs to Reduce Footprint

• Determining baseline/carbon footprint.

• Identifying reductions.

• Working towards energy self-sufficiency.

• State and federal grants/incentives.

• Marketing benefits for tribal businesses.

Addressing Tribe’s Carbon Profile

• Reasons to do this:– Environmental – be part of global warming

solution.– Public relations – leadership position on

climate change.– Cost savings – energy efficiency efforts can

reduce costs.

Determining Baseline/Carbon Footprint

• Sources of greenhouse gas emissions.– Electrical energy usage.– Natural gas/propane usage.– Use of transportation fuels.– Other sources.

• Existing sequestration/reductions.– Forestry.– Low-till farming.– Existing energy efficiency and green energy.

Energy and Other Audits

• Audits of energy usage:– Identify energy usage and existing

efficiency/green energy.– Identify opportunities and targets for energy

reduction and green energy development.– Often can be funded by public benefits

programs.

• Other audits:– Carbon sequestration (existing and

opportunities).

Examples of Opportunities for Reductions/Sequestration

• Electrical energy usage (public benefits often will help fund capital projects).

• Heating systems.

• Transportation systems.

• Community water systems and wastewater treatment.

• Forestry and agriculture.

Agriculture and Forestry

• Key areas– Forest protection: Prevent CO2 losses from deforestation

– Forest establishment and restoration: Increase carbon sequestration through new forest growth

– Forest management: Improve forest management to increase carbon sequestration

– Agricultural practices: Reduce GHG emissions from agricultural practices and increase carbon sequestration in soils

– Agricultural land use management: Prevent CO2 losses from land use changes (cultivation of grasslands/grazing lands)

– Production of bioenergy feedstocks: Increase production of biomass used in bioenergy sources

Green Energy Opportunities

• Based on specific characteristics of reservation.– Wind.– Sun.– Biomass.

• Incentives for renewable energy.– Production tax credit/investment tax credit.– RECs/RPS.– Carbon reduction credits.

Specific Tribal Advantages regarding Green Energy

• Control regarding siting issues.

• Accelerated depreciation.

• Employee tax credits.

Long-Term Advantages of Renewable Energy Development

• Ability to hedge against increases in costs of traditional energy.– Low or no cost fuel inputs.

• Avoidance of carbon costs associated with traditional energy.

• Ability to develop energy self-sufficiency.

State and Federal Grants/Incentives

• State public benefits funds.• Federal grants/incentives.

– EPA Partnership Programs– EPA Sector Strategies Program– EPA Green Buildings Program– Department of Energy

• Tribal Energy Program• Energy Efficiency and Renewable Energy

– Department of Commerce• Economic Development Administration• Minority Business Development Agency

– Small Business Administration• Entrepreneurial Development

Marketing Benefits for Tribal Businesses

• Green marketing of tribal casinos and other businesses.

• New casinos are offsetting construction emissions (Diamond Joe in Iowa) or LEED certified (St Regis Mohawk in New York).

• Focus customers on tribal leadership in protecting environment.

Supply Chain Initiatives

• In addition to addressing their own carbon footprint, tribes can ask their vendors to join in.

• Request greenhouse gas reductions based on amount of purchases by tribe.– E.g., one pound of CO2 for every dollar.

– Vendors could meet by own reductions

or purchase of verified credits.

Supply Chain Initiatives continued

• Godfrey & Kahn green office example– Energy Star equipment– Electronic instead of paper communications– Sleep settings on computers and printers– Double-sided printing and copying– Increased recycling– Incentives to receive electronic

instead of paper periodicals