The American Clean Energy and Security Act

1. The American Clean Energy and Security Act Breakthrough Institute Analysis of the Waxman-Markey Climate and Energy Bill

2. What Will ACES Do? “Reduce carbon emissions from major U.S. sources by 17% by 2020 and over 80% by 2050 compared to 2005 levels.” “Require electric utilities to meet 20% of their electricity demand through renewable energy and energy efficiency by 2020.” “Invest in clean energy technologies and energy efficiency…” 3. “Invest in clean energy technologies and energy efficiency…” According to the House Energy and Commerce Committee, ACES will… 2. “Require electric utilities to meet 20% of their electricity demand through renewable energy and energy efficiency by 2020.” 1. “Reduce carbon emissions from major U.S. sources by 17% by 2020 and over 80% by 2050 compared to 2005 levels.” [Source:] http://energycommerce.house.gov/Press_111/20090602/hr2454_reported_summary.pdf

3. Emissions Reductions • Claim: ACES will “Reduce carbon emissions from major U.S. sources by 17% by 2020 and over 80% by 2050 compared to 2005 levels.”

4. Emissions Reductions • Analysis: ACES cap and trade would legally permitcontinued growth in U.S. emissions for up to two decades. [Source:] http://thebreakthrough.org/blog/2009/05/climate_bills_offsets_provisio.shtml

5. CBO Offsets Projection EPA Offsets Projection Full Offset Levels w/Banking BAU 2005 baseline 1990 baseline ACES Target

6. * Additional permitsbanked for future: 4,218 ^ Additional permitsbanked for future: 12,109 ACES Target17% < 2005 With CBO Offset Levels With EPA Offset Levels With FullOffset Levels

7. 2037 2027 2018

8. ACES TargetEmissions Trajectory CBO OffsetLevels EPA Offset Levels Full Offset Levels

9. Emissions Reductions • Analysis: Strategic Reserve Pool can raise cap by 10% in any year. Triggered when prices rise too high. Floods market with more allowances, “refilled” with forestry offsets. [Source] http://thebreakthrough.org/blog/2009/05/the_climate_bills_catch_22_is.shtml

10. Emissions Reductions Conclusion: ACES establishes a (modest) carbon price and an emissions reduction target. Does not provide “emissions certainty” of a “hard cap.” Conclusion: ACES effectively establishes a non-binding “cap” on U.S. emissions. [Source] http://thebreakthrough.org/blog/2009/06/climate_bill_analysis_part_vii.shtml

11. Renewable Electricity Standard • Claim: ACES will “Require electric utilities meet 20% of their electricity demand through renewable energy and energy efficiency by 2020.”

12. Renewable Electricity Standard Analysis: RES will have little to no impact on U.S. renewable electricity generation. (Breakthrough) Analysis: RES will have “effectively zero” impact on U.S. renewable electricity generation. (Southern Alliance for Clean Energy) [Source] http://thebreakthrough.org/blog/2009/06/climate_bill_analysis_part_ix.shtml [Source] http://thebreakthrough.org/blog/2009/05/climate_bills_renewable_electr.shtml

13. BAU = 10% With 5%EnergyEfficiency Nominal Requirement After Exemptions With 8%EnergyEfficiency

14. [Source] http://thebreakthrough.org/blog/2009/06/climate_bill_analysis_part_xi.shtml

15. Renewable Electricity Standard “[A] national RES [at] such a low level …could severely blunt the signal to the private sector to invest billions of dollars and expand production, manufacturing, and job creation.” – American Wind Energy Association [W]e remain skeptical that current versions of either the RES or a carbon cap and trade policy will lead to significant solar deployment. … [A] "sweeping" federal energy bill that fails to deploy a portfolio of renewable energy options is an underwhelming outcome, ill-equipped to help us meet the challenges at hand.” -Vote Solar [Source] http://thebreakthrough.org/blog/2009/05/climate_bills_renewable_electr.shtml

16. Investments in Clean Energy • Claim: ACES will “Invest in clean energy technologies and energy efficiency…”

17. Investments in Clean Energy Analysis: ACES investments in clean energy R&D are a tiny fraction of President Obama’s budget; Clean energy investments overall are insufficient to the challenge at hand. [Source] http://thebreakthrough.org/blog/2009/05/how_do_climate_bills_clean_ene.shtml

18. Brookings$20b to $30b Energy Experts Letter$30b* Breakthrough Institute$15b Obama Budget$15b ACES R&D$0.5b to $1b

19. NIH 2009 R&D Budget$30.5b 2009 DOE R&D Budget$5.3b Stimulus Energy R&D Investment$4.1* ACES R&D$0.5b to $1b

20. Breakthrough Institute$30b-$80b Apollo Project$50b Obama Budget, R&D Only$15b ACES$6b-$12b

21. Stimulus$33b* ACES$6b-$12b

22. $30-$60b $15-$30b $6-$12b

23. Carbon Price • Strategic Reserve Pool price ceiling: -> $28/ton from 2012-15; 60% above 3 yr rolling average after 2015 • Price floor:-> $10/ton at outset, rises 5% each year • EPA estimate: -> $12-15 per ton 2015; $15-20 per ton in 2020 • CBO estimate: -> $15 per ton 2011; $26 per ton 2019

24. Carbon Price EPA:$28 ceiling CBO:$15-26 EPA: $12-20 $10 floor [Chart] PointCarbon.com http://www.pointcarbon.com/news/historicprices/

26. 2008 ETS Emissions Reductions? “The 3 percent [emissions] reduction [in 2008] was partly due to businesses taking measures to cut their emissions in response to the strong carbon price that prevailed until the economic downturn started.”- Stavros Dimas, European Environment Commissioner “It confirms that the EU has a well functioning trading system, with a robust cap, a clear price signal and a liquid market, which is helping us to cut emissions cost-effectively. This should encourage other countries in their efforts to set up comparable domestic cap-and-trade systems.”- Stavros Dimas, European Environment Commissioner

27. The Counter-Factual: the US 2.9% 2.5% 2.1%

28. Jesse JenkinsDirector of Energy and Climate PolicyBreakthrough Institute Jesse@theBreakthrough.org510-550-8930 x465 Ted NordhausChairmanBreakthrough Institute Ted@theBreakthrough.org510-550-8930 x305