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Burning the Future

In Burning the Future: Coal in America, writer/director David Novack examines the explosive forces that have set in motion a groundswell of conflict between the coal industry and residents of West Virginia.

Burning The Future: Coal in America
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Featured Factoid

A Congressional Research Service (CRS) 2008 Report to Congress entitled "Renewable Energy R&D Funding History: A Comparison with Funding for Nuclear Energy, Fossil Energy, and Energy Efficiency R&D" by Fred Sissine, Specialist in Energy Policy Resources, Science, and Industry Division tells us:

" Over the 30-year period from the Department of Energy's inception at the beginning of fiscal Year (FY) 1978 through FY2007, federal spending for renewable energy R&D amounted to about 16% of the energy R&D total, compared with 15% for energy efficiency, 25% for fossil, and 41% for nuclear. For the 60-year period from 1948 through 2007, nearly 11% went to renewables, compared with 9% for efficiency, 25% for fossil, and 54% for nuclear. "

S2191: Cap and Trade Revisions Needed
Written by Administrator   
May 28, 2008

The Business Council for Sustainable Energy is a broad-based coalition that represents companies and trade associations in the energy efficiency, renewable energy and natural gas industries.  Members include power developers, equipment manufacturers, independent generators, retailers, green power marketers, and gas and electric utilities, as well as several of the primary trade associations in the renewable energy, energy efficiency and natural gas industries. 

The Council and its members have been working consistently with state, federal and international policymakers on market-based measures to reduce greenhouse gas emissions since its inception in the early 1990s.  The coalition supports the establishment of market-based programs for clean energy technology innovation and deployment, economic efficiency and enhanced energy security.    Scott Sklar is a cofounder and sits on the Board of Directors of the Business Council for Sustainable Energy - May 2008

BCSE Priorities for Clean Energy and Renewable Energy Technology Provisions of S.2191

To tackle the challenge of global climate change all technologies at our disposal will be required over a long time horizon. In the next ten to fifteen years, existing clean energy technologies such as renewable energy, energy efficiency and cleaner fuels such as natural gas, are the solutions that are readily available.  BCSE believes Congress should enact greenhouse gas emission reduction legislation that will send long-term, predictable signals to capital markets that will provide certainty about the price of carbon and direct new investments in low, and zero-carbon emitting generation and technologies.

Background

The current congressional debate over global climate change focuses on a program to establish an economy-wide cap-and-trade program for reducing greenhouse gas emissions.  Under a cap-and-trade program, an annual cap is placed on carbon on one or more emitting sectors.  Allowances, which represent one ton of carbon each, are allocated to regulated sources in an amount equal to that year’s cap.  Regulated sources must have emission allowances equal to their emissions in that year.  Caps can be static (one time reduction), stair stepped, or decline on an annual basis.  If companies over-comply, they can sell or “trade” their excess allowances to companies who under-comply.  Emission levels under the cap-and-trade program are certain but allowance prices are determined by the market

The term “allowance allocation” refers to how the government will distribute the emission allowances under a cap-and-trade program.  There are several different ways allowances can be allocated: 1) They can be given away based on the historic emissions of a covered source (input-based allocation); 2) they can be given away based on actual energy output of a source (output-based allocation); 3) they can be auctioned by the government to generate revenue; or 4) they can be distributed using a hybrid system.

The cap-and-trade program set forth under S.2191, the Lieberman Warner Climate Change Act, allocates allowances using a hybrid approach. Under the legislation allowances are allocated to existing fossil fuel fired electric generating units and to energy intensive manufacturing facilities based on their historic emission levels (input-basis); new sources of fossil fuel fired electric generation will receive emission allowances based on energy output (output-basis) while clean energy generation technologies do not receive allowances;  in addition, allowances have been set-aside for a number of specific purposes, such as allocations to the states for energy savings and mass transit, carbon capture and sequestration; greenhouse gas emission reductions from landfills and coal mines; agriculture and forestry, etc. Finally some of the emission allowances will be auctioned, starting with a smaller percentage in the early years of the program but transitioning to most of the allowances being auctioned over time.  Under the legislation proceeds from the auctions are directed to various programs.

BCSE believes that amendments are needed to S.2191 to put clean energy generation technologies on equal footing with fossil fuels.  Specifically the legislation should send long-term, predictable signals to capital markets that will provide certainty about the price of carbon and direct new investments in low, and zero-carbon emitting generation and technologies.

These goals can be accomplished through the allocation of greenhouse gas emission allowances and/or from use of the proceeds from the auction of emission allowances, and through the adoption of complementary policies.

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Emission Allowances Should be Allocated to Clean and Renewable Energy

1. Allowances should be allocated on an output basis to encourage clean electricity generation

The Council believes a greenhouse gas cap-and-trade program designed to mitigate the effects of global climate change should allocate any free allowances using a fuel-neutral, updating, energy output-based method. A focus on output over emissions would encourage energy efficiency, carbon efficiency and cleaner generation sources, including renewable energy, by sending a clear signal to the marketplace that lower-carbon emitting energy options receive direct, clear, consistent and bankable value.

2. S.2191 should be amended to allow renewable energy technology to qualify for the new entrant allowance set-aside 

One of the allowance set-asides contained in S.2191 has been designated for new entrants of fossil fuel fired electric generating facilities. BCSE believes the new entrant set-aside provisions need to be expanded to allow renewable energy generators to qualify. In addition, S.2191 currently defines the term “new units” for purposes of the new entrant set-side allowances, as units installed after 2008.  Using this date would exclude many existing innovative energy efficiency and clean generation projects, such as wind, from the allocation.  BCSE supports a change in the date to the year 2000 in order to include a broader range of projects.  Furthermore, BCSE supports changes to the definition of the amount of allowances new entrants receive. 

3. S.2191 should be amended to incorporate a set-aside of emission allowances for renewable energy

BCSE encourages Congress to incorporate a set-aside of 4% of the emission allowances for renewable energy for the purpose of encouraging renewable energy generation.  This change would be comparable to the 4% set-aside of emission allowances provided for carbon capture and sequestration that is currently included in the bill. Senator Klobuchar (D-MN) prepared such an amendment for the markup of S.2191 in the Senate Environment and Public Works Committee; BCSE supports the inclusion of a renewable energy set aside in the legislation.

4. Allowance value should be directed to purchasers in the voluntary renewable energy market to continue to encourage the reduction of greenhouse gas emissions that fall outside of federal mandates. 

Voluntary renewable energy markets include: renewable energy sold directly to customers in restructured electricity markets, renewable energy certificates sold to retail customers in both restructured and monopoly markets, renewable energy that is sold to consumers through utility green pricing programs, and renewable energy certificates that are translated into pounds of carbon dioxide equivalents and sold in voluntary carbon markets. Voluntary markets have been important in the development of new renewable facilities. A key driver for these markets is the ability to claim carbon reduction credits (to reduce a company’s greenhouse gas footprint or to help reduce global warming impacts). 

These transactions operate without government subsidies, so the environmental benefit of a voluntary renewable energy market is in addition to any benefit that government action produces. Voluntary renewable power markets are growing rapidly in many regions of the country, and are expected to be a larger driver for new renewable energy additions and voluntary carbon reductions in the future.  S.2191 should be amended to direct allowance value to the voluntary renewable market to preserve the ability of purchasers of voluntary renewable energy to make green market claims and contribute to the reduction of greenhouse gas emissions.  This can be done through either an output-based allocation that includes renewable energy generators, or through the renewable energy set aside.

5. Aggregation of small clean generation systems should be allowed both for purposes of allocating allowances, and for auction proceeds. 

BCSE supports the aggregation of smaller renewable energy technologies, such as fuel cells, photovoltaic, and other small distributed systems, to allow the smaller scale projects to qualify for allowances under a renewable energy allowance set-aside, as well as opportunities for small scale projects to be eligible to receive auction proceeds.

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Auction Proceeds should be Directed to Investments in Clean Generation

S.2191 contains provisions to auction a percentage of greenhouse gas emission allowances.  BCSE believes the proceeds from the allowance auction should be directed toward investments to promote the generation of clean energy. 

1. S.2191 should be amended to direct auction proceeds to upgrade the nation’s electricity transmission infrastructure.

Current electricity infrastructure is outdated and requires significant expansion and upgrading, particularly to meet growing U.S. energy demand and to improve efficiency.  An improved system could cut energy costs (lowering line losses; improving system peak efficiency) and better deliver power from areas more remotely situated, but which have significant potential to produce low or zero carbon energy.  An improved transmission and distribution system could provide greater reliability, flexibility for distributed generation and demand side management, including the realization of ‘smart grid’ applications. 

Congress should facilitate the transition to smarter, more efficient transmission and distribution grids and technologies which allow a broad portfolio of technologies that are cleaner, more reliable and agile.  Increased use of distributed generation (DG) will: improve electric power quality, substantially lowering surges, sags and transients; increase power reliability, allowing users and feeder line options for virtually uninterruptible power; overcome transmission and distribution blockages (power augmentation at substations); and level out peaks, thus lowering energy costs.



Last Updated ( May 28, 2008 )
 
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Programs and Tips

Energy Star is the national program that rates appliances and promotes energy savings activities. Experts at the US Environmental Protection Agency and US Department of Energy have also sorts of programs and tips. Here are three sites: