Energy Efficiency i and Climate Actions Federal Policy Briefing #3 Russell Senate Office Building 253 September 1, 2009 The Center for Climate Strategies 1899 L Street, NW, Washington, DC 20036, (202) 540-9121
2 Center for Climate Strategiest Nonpartisan, Non Advocacy, 501c3, 30+ team members in US, Canada and Mexico Projects with 40+ states, 4 regions, over 1,500+ stakeholders Facilitation, technical support, training and capacity building, information and education Policy options, design, measurements, instruments, programs, integration, goals CCS Assisted States, 2004-2009 Energy, industry, transportation, waste, agriculture, forestry
3 Overview of Sector Based Climate Actions Slides 4-12
4 Why is Efficiency i So Important? t? Long Term Lock In Decisions i Underway Major Opportunities Available Major Benefits Available Key to Overcoming Market Barriers Strong Public Support
5 The Built Environment 1. Transportation & Land Use Actions (TLU) Location and Design: buildings and facilities, communities, transportation systems and service infrastructure 2. Residential, Commercial, Industrial Actions (RCI) Design and Operation: buildings, facilities, manufacturing, service infrastructure t
6 Treatment t Under Waxman-Markey Separate Title Federal programs Standards Incentives Significant state-federal partnerships VMT reduction plans EE codes and standards Funding Integration with Cap & Trade
7 State t Climate Action Plans 31 climate action plans completed or in progress Cover 2/3 of U.S. economy and population Cover ½ of US GHG emissions Cover all sectors, tools, levels of government Include cost effectiveness
8 Comprehensive Climate Plans All GHG s Sources and Sinks All Economic Sectors All Implementation Mechanisms (price, non- price) Local, State, Federal Levels Short and Long Term Actions Co-benefits
9 National Costs/Savings By Sector $125 Marginal Cost/Savings Curves of US by Sector, 2020 (Center for Climate Strategies, 2008) $100 $75 TLU RCI ES AFW $/Ton GHG Re emoved $50 $25 $0 -$25 -$50 -$75 -$100 -$125 0 1 2 3 4 5 6 7 8 9 10 11 12 Bang for the Buck Percentage Reduction of 2020 All-Sector Baseline GHG Emissions (Over 900 Proposed Actions)
10 Sector Based Climate Actions Greenhouse Gas Reduction Potential of Us with Sector Breakdowns (Center for Climate Strategies Analysis, 2009) 9,000 8,500 8,000 Total U.S. GHG Reductions: 41% Below 2020 BAU 10% Below 1990 Levels by 2020 ES MMtCO 2e 2 7,500 7,000 6,500 6,000 AF 5,500 RCI TLU AF W 5,000 2005 2010 2015 2020
11 Economic Importance of EE in U.S. Potential US 2020 % National GHG Plan Reductions MMTCO 2 e $ per Ton Total GHG below BAU Removed 2020 Energy Efficiency i and Conservation (RCI) Clean and Renewable Energy (ES) Transportation and Land Use Efficiency (TLU) Agriculture and Forestry Conservation, Waste Management (AFW) 29% 1035 -$13/ton 12% 29% 1020 $6/ton 12% 16% 575 $13/ton 6% 26% 933 $8/ton 11% Total/Average 100% 3563 $3/ton 41%
12 SGA 2005 GHG Snapshot Fossil Fuel Industry 1% Industrial Process 4% Agriculture 6% Waste Management 3% Electricity it Consumption Based 37% Transportation 28% Residential Fuel Use 2% Industrial Fuel Commercial Use Fuel Use 17% 2% Draft Preliminary Results
13 Transportation and Land Use Improvements Slides 14-22
14 GHG Forecast Update 1200 2007 vs. 2009 GHG Emissions, 5 Southern States $/Ton GHG G Removed 1000 800 600 400 200 Prior Forecast (5-state Total) Updated Forecast (5-state Total) 0 Draft Preliminary Results
15 GHG Impacts of CAFE & Incentives US Transport Fuel GHGs 2007 vs. 2009 US Full Fuel Cycle Em missions (MMCO O2e) 2,400 2,200 2,000 1,800 1,600 1,400 1,200 EISA 2007 CAFE Obama 2009 CAFE Obama 2009 CAFE + Incentives 1,000 2005 2010 2015 2020
16 Effects of New CAFE Updates New LDV and Total LDV Fleet Fuel Efficiency MPG 40 35 30 New LDV MPG with Obama 2009 CAFÉ New LDV MPG with EISA 2007 CAFE 25 20 15 2005 2010 2015 2020 2025 Total LDV Fleet MPG with Obama 2009 CAFE Total LDV Fleet MPG with EISA 2007 CAFE
17 Vhil Vehicle Miles Traveled ld Growth 4,500 US Total VMT (AEO 2008) T (billions) Annual VM 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 Heavy Duty Trucks MediumDuty Trucks Light Trucks Automobiles 0 2005 2010 2015 2020
18 Transport Fuel Use Growth 35 U.S. Fuel Consumption (AEO 2008) Quadrill lion Btus 30 25 20 15 10 5 Other Marine Bunker Fuel Ethanol (E85) Jet Fuel Diesel Gasoline 0 2005 2010 0 2015 2020 0
19 AZ, CO, NM Climate Plans - TLU Southwest Climate Change Network
20 National TLU Costs/Savings TLU - Sector Marginal Cost/Savings Curves of US, 2020 (Center for Climate Strategies, 2008) $/Ton GH HG Removed $125 $100 $75 $50 $25 $0 -$25 -$50 -$75 -$100 -$125 0 5 10 15 20 25 30 35 40 45 50 Percentage Reduction of 2020 TLU BAU GHG Emissions
21 Proposed State t TLU Actions Major TLU Actions Smart Growth/Land Use * Transit * Renewable Fuel Standard (biofuels goals) Vehicle Purchase Incentives, including rebates * Anti-Idling Technologies and Practices * Mode Shift from Truck to Rail * Many Others
22 FL TLU Policies, i Jobs, Growth Florida Policy Recommendation 2017 GHG Savings 2025 GHG Savings $ NPV Millions $ Ton GHG Remove d Develop and Expand Low-GHG Fuels 6.2 12.62 -$15,161161 -$142 Low Rolling Resistance Tires and Other Add- On Technologies 0.8 1.84 -$1,259 -$90 Improving Transportation System Management 3.94 6.98 -$5,106 -$80 Increasing Freight Movement Efficiencies 0.59 1.1 $21 $2 2010 2015 2020 2025 Cumulative Jobs (Thousands) 20 2.0 26 2.6 49 4.9 72 7.2 GSP Growth (Billons) $0.10 $0.19 $0.39 $0.63, NPV $2.93
23 Residential, Commercial and Industrial Energy Efficiency Slides 24-34
24 AZ, CO, NM Climate Plans - RCI Southwest Climate Change Network
25 National RCI Costs/Savings RCI (Energy Demand) Marginal Cost/Savings Curves of US, 2020 (Center for Climate Strategies, 2008) $/Ton GHG Rem moved $125 $100 $75 $50 $25 $0 -$25 -$50 -$75 -$100 -$125 0 5 10 15 20 25 30 35 40 45 50 Percentage Reduction of 2020 0 RCI BAU GHG G Emissions s
26 Proposed State t RCI Actions Building Codes Major RCI Actions Demand Side Management Programs High Performance Buildings Appliance standards Combined Heat and Power Many Others
27 North Carolina: Net Income Gains Net Income Impact of Residential, Commercial & Industrial Options ($ 2004, millions) Total NC RCI Plan Recommendations Center for Climate Strategies Analysis, 2008
28 FL RCI Jobs, Economic Growth # Policy Actions MMTCO2e $NPV $/Ton $GSP Job Gains MMTCO2e Millions Thousands 2020 Demand-Side Management ESD-12 (DSM) Energy Efficiency 201.4 $8,566 $43 $2.40 8,660 Programs, Funds, or Goals for Electricity it ESD-13a Energy Efficiency in Existing Residential 50.4 $1,432 $28 $3.08 10,920 Buildings
29 Ready To Go RCI Policy Action Federal Programs State Programs Non-Utility Incentives and Funds To Promote Renewable Energy and Energy Efficiency: 1.Demand-Side Management (DSM) 2.Energy Efficiency Programs for Electricity, Natural Gas, Propane, and Fuel Oil 1. Federal Weatherization Program 2. Energy Star Qualified Manufactured Homes 3. DOE's Weatherization ti Assistance program Climate Challenge Program 4. Low-Income Home Energy Assistance Program (LIHEAP) 1. Arkansas Weatherization Program 2. State of Washington Treasurer's Program COP and LOCAL loan program 3. OR's Business Energy Tax Credit (BETC) program 4. SC Business Tax Credit 5. NW Energy Efficiency Alliance 6. State Energy Office grants 7. MPCA grants and loans 8. MnTAP 9. MnDOC Conservation Improvement Program (CIP) 10.CA Energy Commission PIER program 11.CA Solar Electric Incentives programs 12.NC Public Benefits Charge program 13.The EmPOWER Maryland goal 14.ME PUC's Carbon Free Homes Program 15.ME State Energy Programs 16.UT Weatherization Assistance Program 17.Alaska Weatherization Program (Bonding)
30 Cap and Trade Efficiency Role Regional Programs Reduce demand for C&T allowances Reduce and control target attainment costs Remove non-price market barriers Integrate supply and demand side programs Recycle auction revenues
31 EE Reduces Cost of Cap and Trade Doubling of EE levels for power generation cuts C&T allowance price more than in half. (MGA) $
32 State t GHG Growth Rates State GHG Emissions Growth 1990-2020 (Center for Climate Strategies Analysis, 2007) GHG Growt th Rate 160% 140% 120% 100% 80% 60% 40% 20% CT ME NC NY FL RI US AK AZ CA CO ID MT NM NV OR SD UT WA WY 0% 1990 Year 2020
33 California i Costs/Savings $200 Marginal Cost/Savings Curves of California by Sector, 2020 (Center for Climate Strategies, 2008) moved $/Ton GHG Re $150 $100 $50 $0 -$50 -$100 TLU RCI ES AFW -$150 -$200 0 2 4 6 8 10 12 14 16 18 20 Percentage Reduction of 2020 All-Sector BAU GHG Emissions
34 Ai Arizona Costs/Savings t/s $125 Marginal Cost/Savings Curves of Arizona by Sector, 2020 (Center for Climate Strategies, 2008) $/Ton GHG Removed $100 $75 $50 $25 $0 -$25 -$50 -$75 -$100 TLU RCI ES AFW -$125 0 2 4 6 8 10 12 14 16 18 20 Percentage Reduction of 2020 All-Sector BAU GHG Emissions
35 Conclusions Slides 36-38
36 Build it Right
37 State t and Federal Barriers Investment t (Outlays) Authority (Legal and Administrative) Market (Split Incentives) Capacity (Program and Market) Awareness (Consumers, Producers)
38 Comprehensive Climate Policy Objectives Tools Achieve GHG Targets Minimize Costs Maximize Savings Federal Caps and Price Signals Maximize Co-benefits Maximize Consensus Address Governance Integrate Policy Objectives National Policies & Measures State & Local Measures