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Wednesday, den 19. September 2012

by Justin Guay, via the Sierra Club A few months back I wrote a post about the $80 billion clean energy access opportunity from capturing remittance flows. I thought that was revolutionary given its scale and applicability (especially compared to mechanisms subject to the excruciating dynamics of the UNFCCC like the Green Fund). Now an even bigger, and far more advanced innovation in clean energy access finance has come along — and the $90 billion opportunity it presents is tremendous.

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Wednesday, den 30. November 2011

EIA analysis finds that Senator Bingaman’s clean energy standard would reduce carbon emissions by 43% and lower GDP growth by just .02 percent. by Richard W. Caperton Imagine if we could create jobs, increase renewable energy generation, improve air quality across the country, and reduce our carbon dioxide pollution — all at effectively zero cost to our economy. Wouldn’t that be great? Well, the Energy Information Administration just informed us that we can do all of these things, by adopting a strong national clean energy standard. (In fact, as the map above shows, 29 states have already done so.) If you were to believe the hyperbole from the fossil fuel advocates, you would think that a clean energy standard would ruin the United States.  For example, the Heritage Foundation recently declared that a similar policy “ would be bad for families, bad for business, and bad for the economy. ” As I said at the time , Heritage was simply building a straw-man that isn’t even a serious clean energy proposal, and they weren’t actually modeling our electricity system. Fortunately, we now have an accurate study of a real clean energy standard proposal, and the EIA has given us some insight into how this policy could benefit our country. In response to a request from Senator Jeff Bingaman (D-NM), EIA modeled a proposal to get 80% of our country’s power from low-carbon and zero-carbon sources . They allow all generation resources to qualify, and weight them based on actual carbon emissions (roughly, that means that natural gas only gets half of the clean energy credits of wind or solar power, for instance). EIA also models several different cases to identify the effects of specific policy choices, like including a cap on program costs or exempting some utilities from compliance. Here are the top line findings: Under the Bingaman clean energy standard, electricity generation from renewable resources like wind, solar, and biomass are almost twice as high as the business-as-usual case. The clean energy standard reduces annual carbon emissions from the power sector by 43 percent by 2035. GDP growth is virtually unchanged with a CES. With a clean energy standard, America’s GDP grows at 2.67 percent from 2009 to 2035.  Without a clean energy standard, GDP grows at 2.69 percent over the same time period. Including a cap on the price for clean energy credits and pairing the CES with strong energy efficiency standards significantly reduces the impact on electricity prices. These findings are not a surprise to those of us who know that clean energy is the best way to power our future. The Center for American Progress has previously advocated a strong clean energy standard with many of the same features as Bingaman’s proposal. But it also has a few important differences. Earlier this year, we laid out five characteristics that would define a successful clean energy standard: It must generate new, long-lasting jobs and grow the economy It must effectively spur development and deployment of renewable energy and energy efficiency technologies It must account for regional diversity in resources and electricity markets It must be simple and transparent, and minimize costs It must provide a floor not a ceiling for clean energy, strengthening and building on existing state leadership To reach these goals, our clean energy standard proposal includes policy tools like different clean energy requirements for different regions (accounting for regional diversity) and a tiered system that sets a specific target for certain renewable energy and energy efficiency targets, so that natural gas doesn’t dominate new investments. Spreading benefits across the country is critical. The EIA’s analysis finds that economic stimulus from the new infrastructure investments needed to shift our power system essentially balances out any cost to the economy from rising electricity prices.  But EIA finds that power price impacts vary across the country, and it’s important that places with increasing prices also see increasing stimulative investments. EIA’s analysis confirms that Senator Bingaman’s proposal is a serious step in the right direction. The United States would benefit if Congress moved forward with a clean energy standard. — Richard Caperton is Director of Clean Energy Investments at the Center for American Progress

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Wednesday, den 9. November 2011

As the political jostling over Department of Energy loan guarantees to clean energy companies continues, the hypocrisy keeps getting worse. The latest is from Republican Pennsylvania Senator Pat Toomey, who co-wrote a letter to the Inspector General on Monday urging him to investigate a conditional commitment for a $730 million loan guarantee to a high-strength steel producer under the DOE’s Advanced Technology Vehicle Manufacturing program. His argument? That this high-strength, lightweight steel technology is too mature to need subsidies: “Given the tremendous fiscal crisis that we find ourselves in today, it does not seem appropriate for the program to subsidize technologies that have already achieved commercial success through private-sector means.” That’s quite a noble fiscal mission. However, this is coming from a Senator who has repeatedly voted to maintain tax breaks to the most profitable and commercially successful oil and gas companies in the world. In the first three quarters of 2011 alone, the top five oil companies have brought in a staggering $101 billion in profits. But Senator Toomey, who says he’s against funding companies that have “achieved commercial success” due to the “tremendous fiscal crisis” has voted against repealing $21 billion in tax breaks over 10 years that could be used to close the deficit or fund clean energy. In fact, Senator Toomey’s record has been so consistent, the American Petroleum Institute just issued a new ad praising him on his record: Toomey isn’t alone in having an odd stance on subsidies. Last month, Florida Republican Congressman Cliff Stearns explained to Climate Progress that “when somebody is successful, then you give them subsidies.” As Republican members of Congress continue to push this mind-bending logic on how subsides should work, 62 others — many of whom have been critical of government investments in clean energy after the Solyndra bankruptcy — have requested money from the Department of Energy to fund clean energy projects in their districts. Toomey’s co-signer to the letter, Indiana Republican Senator Dan Coats, has at least entertained the idea of rolling back oil tax breaks to reduce the deficit. When it comes to questioning the loan guarantee, their concerns are not completely unfounded. Although the market for high-strength steel is expected to grow substantially with the increase in advanced automobile manufacturing, there is debate about whether this particular loan guarantee was instrumental in helping build new facilities, or if expansion would have happened without government backing. That is a legitimate question to be asking. But it’s far different to blast a potential $730 million loan guarantee (one that is designed to create a whole new supply chain for a whole new innovative industry) in the name of fiscal responsibility, and then turn around and support tens of billions in tax breaks to the most profitable companies on the planet. Related Post: After taking $96K from oil and gas firms, Toomey pushes for more offshore drilling.

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Thursday, den 28. July 2011

by Richard Caperton It sure would be nice if members of Congress actually listened to the Congressional Budget Office. If they did, they would learn what we’ve known for quite some time: shifting to cleaner electricity generation is an affordable and effective way to reduce carbon emissions. The CBO just released a summary of seven different types of standards from a variety of sources. The summary uniformly finds that either an RES (renewables alone) or a CES (some combination of renewables, natural gas, nuclear and CCS) will reduce carbon emissions, and that any price impacts to consumers will be minimal. Some consumers may even pay lower utility bills. The report does acknowledge that some regions could see price increases. You can bet that some people will jump all over this and claim that clean energy mandates drive up rates. But let’s put the figures into perspective. Only one out of seven scenarios sees a price increase of more than 5 percent by 2030. At the same time, in five of the seven scenarios, at least one region of the country is projected to see lower electricity prices. Virtually all price impacts are between plus or minus 5 percent, which is extremely small compared to other expected price impacts. For example, a price increase of 1 percent would be overwhelmed by any change in the price of natural gas generation or in a regulated utility’s allowable rate of return. Electric rates for all consumers will change by 2030, and virtually none of that change would be because of a clean energy standard. The CBO report also discusses the best ways to make clean energy standards more cost-effective for consumers. While CBO isn’t in the business of making recommendations, it’s clear that these will be a key part of designing a successful clean energy standard.  In fact, that’s why the Center for American Progress included these cost-effective measures in our clean energy standard proposal. Specifically, CBO’s report validates these aspects of our proposal: Allowing utilities to use energy efficiency to meet part of the standard reduces compliance costs.  Obviously, accounting for energy efficiency can be challenging, and this aspect of a CES needs to be properly designed, but it’s important to include the most cost-effective emission reduction measures possible. A federal CES should complement existing state standards, and utilities should be able to use clean energy credits from state programs to meet a federal standard. Different regions of the country have different clean energy resources, and should be given flexibility to use the least-cost resources available. Clean energy credits should be tradable. The timing of interim targets should be flexible and gradual, so that utilities have sufficient time to develop the most cost-effective resources. CBO’s report points to the need for more modeling of specific clean energy standard proposals. All of the studies in this report differ from serious policy proposals in significant ways. Specifically: A study that doesn’t allow for all clean energy sources (including wind, solar, biomass, geothermal, hydropower, nuclear, and natural gas, to name a few) is unnecessarily imposing false constraints that will only increase the costs of compliance. Studies that have less ambitious targets than 80 percent clean power will project fewer benefits, especially in terms of reduced carbon emissions. CAP’s clean energy standard proposal includes a tiered approach, in which utilities should meet 35 percent of their target with renewables and energy efficiency.  Ignoring energy efficiency will lead to exaggerated costs of compliance, and ignoring specific targets for renewables will underestimate deployment of the most economically beneficial technologies. Non-utility generators – like industrial facilities that use biomass or combined heat and power – need to be included in any modeling.  These facilities are key parts of the electricity system and their actions will lower the costs of compliance by contributing to a liquid trading market, especially in the southeast. Frustratingly, none of the studies CBO includes look at actual policy proposals. Whereas the President has proposed getting 80 percent of the country’s power from a diverse mix of low-carbon sources, the studies in the CBO report are based on meeting much lower targets with much smaller sets of technologies. Inevitably, this means that CBO has underestimated the benefits and overestimated the costs of actual CES proposals. — Richard Caperton, Senior Policy Analyst at the Center for American Progress

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