Comprehensive Climate Action And Economic Planning November 18, 2009 Thomas D. Peterson, Center for Climate Strategies 1899 L Street, NW, Washington, DC 20036, www.climatestrategies.us tpeterson@climatestrategies.us, (202) 540-9121, x101
2 Center for Climate Strategies Leading Catalyst Policy Advancement Nonpartisan, Non Advocacy, Nonprofit 501c3, 30+ team members National leader on policy development and consensus building since 2004 Projects with 40+ states, 3 regions, 1,500+ stakeholders 22 U.S. State Climate Action Plans Policy facilitation, design, analysis, implementation Mitigation and Adaptation All sectors and instruments Funded by foundations, donors, agencies CCS Assisted States, 2004-2009 11/18/09 www.climatestrategies.us
3 U.S. State Climate Actions Contents Coverage 32 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 Over 1,500 Stakeholders
4 Importance of State Initiatives Value Added Global Significance Establish comprehensive planning capacity and fact base Identify best actions and instruments Integrate climate, energy, economic, environmental development Inform and support federal action Mobilize and target investments of resources International Agreement National Plans Support partnership actions State Commitments Local Commitments 11/18/09 www.climatestrategies.us
New York State 5 11/18/09 10/15/2009 www.climatestrategies.us 5
6 Climate & Economic Recovery Jobs and Income Response Curves Save energy, money Boost disposable income Boost investment Create jobs New, home grown energy New technology and products Value added investment New energy future Local actions Analysis by CCS, 2008
7 U.S. State Plan Results (Sample) State Policy Options Degree of Unanimity AZ 49 92% Amount of GHG Reductions 2000 level by 2020 Half 2000 level by 2040 CA n/a n/a AB-32: 1990 level by 2020 CO 70 87% 37% below projected emissions by 2020 FL 50 High 33% below 1990 level by 2025 MD 42 100% 25% below 2006 level by 2020 MN 46 83% 15% below 2005 level by 2015 30% below 2005 level by 2050 MT 54 98% 1990 level by 2020 NC 56 85% NM 69 97% 47% below projected emissions by 2020 2000 level by 2012 10% below 2000 level by 2020 Overall NPV Cost or Savings $5.5 billion savings 2007-2020 AB-32 $4 billion savings ~$3 billion savings 2007-2020 $28 billion savings 2009-2025 $2 billion savings 2008-2020 ~$1.3 billion energy savings 2009-2025; $725 million cost $78 million savings 2007-2020 $7.5 billion savings 2007-2020 $2.2 billion savings 2007-2020 Net Job Gain 289,000 AB-32 83,000 Not assessed 148,000 Not assessed Not assessed Not assessed 15,000 Not assessed
8 U.S. 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 Removed $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)
9 U.S. National Scale Up Greenhouse Gas Reduction Potential of United States With Sector Breakdowns (CCS, 2009) 9,000 Key Action Areas MMtCO 2 e 8,500 8,000 7,500 7,000 6,500 Total U.S. GHG Reductions: 41% Below 2020 BAU 10% Below 1990 Levels by 2020 ES RCI TLU 6,000 AFW 5,500 5,000 2005 2010 2015 2020 Analysis by CCS, 2008; 20 states, 900+ Options
10 Comprehensive Policy Integration Needs Solutions Achieve GHG targets Minimize costs Maximize savings Federal Caps and Price Signals Maximize co-benefits Maximize consensus Address governance Maximize implementation National Policies & Measures State & Local Measures
11 Implementation Barriers Investment (Outlays) Authority (Legal and Administrative) Markets (Split Incentives) Capacity (Program and Market) Awareness and Acceptance (Consumers, Producers)
12 Progress Through Action! Emissions baselines Recent and planned actions New policy actions and goals
13 Collaboration
14 CCS Ten Step Planning Process 1. Identify full range of existing policy actions and choices 2. Conduct gap analysis, innovate and expand range of choices 3. Narrow list for further analysis and development 4. Formulate draft policy specifications and tools 5. Formulate draft analytical approaches for analysis (best data, assumptions, methods) 6. Conduct preliminary analysis of options, iterate to final 7. Conduct analysis of cobenefits, feasibility as needed 8. Conduct aggregate impact analysis of full set of policies 9. Iterate to final agreement on policy recommendations and overall goals 10. Issue final report and recommendations
15 Policy Action Portfolio Sector Codes and Standards Targeted Funding Technical Assistance Price Mechanisms Agreements Disclosure Information and Educations Agriculture??????? Forestry??????? Waste??????? Transportation??????? Heat & Power Supply Residential, Commercial, Industrial Energy Use?????????????? Full Economy???????
New York State Greenhouse Gas Emissions by Source Category, 1990 2025 16 11/18/09 10/15/2009 www.climatestrategies.us 16
17 U.S. State GHG Growth Rates GHG Growth Rate 160% 140% 120% 100% 80% 60% 40% 20% State GHG Emissions Growth 1990-2020 (CCS Analysis, 2007) CT ME NC NY FL RI US AK AZ CA CO ID MT NM NV OR SD UT WA WY 0% 1990 Year 2020
18 U.S. GHG Forecast Changes Projected CO2 Emissions by Year in Which Projection Was Made Projected MMTCO2e 8,500 8,000 7,500 7,000 6,500 2005 Projection 2006 Projection 2007 Projection 2008 Early Release Projection 2008 Projection 2009 March Projection 2009 April Projection 6,000 5,500 2002 2006 2010 2014 2018 2022 2026 2030
19 Factors Reducing Emissions Recent and planned federal actions Recent and planned state and local actions Anticipatory actions Unrelated actions Price changes Recession effects
20 U.S. Electricity Sales Projections Electricity Sales - USA 5500 5000 4500 AEO2005 AEO2006 AEO2007 AEO2009 4000 3500 3000 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 TWh
21 U.S. Electricity CO2 Emissions Electric sector CO2 emissions 4000 AEO2005 AEO2006 3500 3000 2500 2000 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 million tons AEO2007 AEO2009
22 U.S. Transport Fuels Projection U.S. Transport Fuel GHGs 2007 vs. 2009 US Full Fuel Cycle Emissions (MMCO2e) 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
23 Vehicle Miles Traveled Growth Annual VMT (billions) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 US Total VMT (AEO 2008) 2005 2010 2015 2020 Heavy Duty Trucks Medium Duty Trucks Light Trucks Automobiles
24 Major Policy Options Agriculture, Forestry and Waste (AFW) Transportation and Land Use (TLU) Residential, Commercial and Industrial (RCI) Energy Supply/Heat and Power (ES) Forest Retention Urban Forestry Transit Reforestation/ Afforestation Soil Carbon Management Nutrient Management Smart Growth/Land Use Renewable Fuel Standard (biofuels goals) Vehicle Purchase Incentives, including rebates Anti-Idling Technologies and Practices Building Codes Demand Side Management Programs High Performance Buildings Coal Plant Efficiency Improvements and Repowering Renewable Portfolio Standard Carbon Capture Storage and Reuse Appliance standards Nuclear Power Combined Heat and Power Manure - Anaerobic Mode Shift from Truck Digestion and to Rail Methane Use Recycling of Municipal Solid Waste Landfill Gas Management
25 TLU Cost Effectiveness $80 TLU Marginal Cost Curve of SGA, 2020 (Center for Climate Strategies, 2009) Marginal Cost ($/tco2e) $60 $40 $20 $0 -$20 -$40 -$60 -$80 -$100 TLU-4: RFS TLU-6: Transit TLU-5: Smart Growth TLU-3: Mode Shift from Truck to Rail TLU-2: Vehicle Purchase Incentives TLU-1: Anti-Idling Technologies and Practices 0 1 2 3 4 5 Percentage Reduction of 2020 Economy-wide BAU GHG Emissions Draft Preliminary Results
26 ES Cost Effectiveness $60 ES Marginal Cost Curve of SGA, 2020 (Center for Climate Strategies, 2009) $50 $/tco2e $40 $30 $20 ES-3: CCSR ES-2: Nuclear $10 ES-1: RPS $0 ES-4: Coal Plant Efficiency -$10 -$20 0 2 4 6 8 10 12 14 16 18 20 Percentage Reduction of 2020 Economy-wide BAU GHG Emissions Draft Preliminary Results
27 RCI Cost Effectiveness $20 RCI Marginal Cost Curve of SGA, 2020 (Center for Climate Strategies, 2009) $/tco2e $10 $0 -$10 -$20 -$30 -$40 -$50 -$60 RCI-5: CHP RCI-4: Building Codes RCI-2: High Performance Bldgs RCI-1: DSM RCI-3: Appliance Standards 0 2 4 6 8 10 12 14 16 18 20 Percentage Reduction of 2020 Economy-wide BAU GHG Emissions Draft Preliminary Results
28 AFW Cost Effectiveness $/tco2e $60 $50 $40 $30 $20 $10 $0 -$10 -$20 AFW Marginal Cost Curve of SGA, 2020 (Center for Climate Strategies, 2009) AFW-2: Nutrient Mgt. AFW-1: Soil Carbon Mgt. AFW-7: Reforestation/Afforestation AFW-11: MSW Landfill Gas Mgt. AFW-8: Urban Forestry AFW-6: Forest Retention AFW-10: Enhanced Recycling of MSW AFW-3: Livestock Manure 0 2 4 6 8 10 Percentage Reduction of 2020 Economy-wide BAU GHG Emissions Draft Preliminary Results
29 EE and Cap-&-Trade Costs Doubling of EE levels for power generation cuts C&T allowance price more than in half. (MGA) $ Analysis by MGA, 2009
30 Florida Energy & Climate Plan Statewide Goals and Targets GHG Inventory and Forecast Climate Vulnerability Assessment Mitigation policy actions Adaptation policy actions Supporting analysis and documentation Reporting and Monitoring
31 Florida GHGs 1990-2025
32 FL GSP: Sector Results ($Billions)
33 FL Jobs (1,000s) Policy Option Based Results
34 FL TLU Policies, Jobs, Growth Florida Policy Recommendation 2017 GHG Savings 2025 GHG Savings $ NPV Millions $ Ton GHG Removed Develop and Expand Low-GHG Fuels 6.2 12.62 -$15,161 -$142 Low Rolling Resistance Tires and Other Add- On Technologies Improving Transportation System Management 0.8 1.84 -$1,259 -$90 3.94 6.98 -$5,106 -$80 Increasing Freight Movement Efficiencies 0.59 1.1 $21 $2 2010 2015 2020 2025 Cumulative Jobs (Thousands) 2.0 2.6 4.9 7.2 GSP Growth (Billons) $0.10 $0.19 $0.39 $0.63, NPV $2.93
35 Florida Results GHG Reductions 50 full consensus climate measures in all sectors, plus cap and trade Implementation substantially underway Mitigation Plan: GHGs 20% below 1990 levels by 2020 $28 billion net economic savings, 148,000 net job gains, $37 billion net economic expansion Costs/Savings Adaptation Plan: Covers all risk response areas, includes full set of early actions 125 stakeholders and technical work group members, 7 stakeholder meetings, 75 technical work group meetings
Maryland Results GHG Reductions 36 42 full consensus climate measures in all sectors, plus cap and trade Implementation substantially underway Mitigation Plan: GHGs 13% below 1990 levels by 2020 $2 billion net economic savings Costs/Savings Adaptation Plan: Covers all risk response areas, includes full set of early actions 27 stakeholders and technical work group members, 10 stakeholder meetings, 100 technical work group meetings
Michigan Results GHG Reductions 37 53 Recommended Climate Policy Actions in All Sectors 7 Stakeholder meetings, 75 Technical Work Group Meetings Full Consensus on 52 Recommendations (Supermajority on Nuclear Power) $10 Billion Net Economic Savings from Full Analysis of 33 Quantified Actions Pathways to Achieve Statewide Goals of 20% Below 1990 Levels by 2020 Next Steps include Priority Setting, Macro Economic Analysis, Investment Targeting, Early Actions Costs/Savings