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Green Energy Policies

Green Energy Policies. Options, Options, Options Jason Busch Ater Wynne. Cap and Trade. Cap and Trade – WCI – 15% below 2005 levels by 2020. Benefits History of success Six U.S. emissions trading programs NOx and SOx This and other countries Kyoto Vast literature

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Green Energy Policies

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  1. Green Energy Policies Options, Options, Options Jason Busch Ater Wynne

  2. Cap and Trade • Cap and Trade – WCI – 15% below 2005 levels by 2020. • Benefits • History of success • Six U.S. emissions trading programs • NOx and SOx • This and other countries • Kyoto • Vast literature • Maximizes coverage of emissions • Minimizes costs • Regional better than statewide, and national even better • Costs less • Avoid leakage • Covers more emissions • Greater opportunities for mutually beneficial transactions • Shared administrative and transactions costs • Regional leads to national – states as laboratories • RGGI • WCI • WCI is most expansive system in US history • more sectors • more restrictive • 90 percent of regional GHG emissions

  3. Continued • European Union Emissions Trading Scheme • 1st phase was learning phase – 2005 to 2008 • negative publicity missed in part the intent of the first 3 years • 2nd phase will implement lessons • importance of accurate emissions data • suppliers quickly add price of emissions to business decisions • relationship between allowance allocation, allowance markets, and electricity regulation must be understood to avoid unintended consequences. • Linkage of 28 separate trading programs in the EU ETS provides valuable prototype for globally linked carbon markets

  4. Continued • Importance of establishing common standards across jurisdictions • Must have a common set of rules and guidelines to monitor and report emissions to ensure market transparency and compliance • Measurement • Reporting • Covered facilities or entities • Schedule for distributing allowances • Banking or borrowing • Acceptance of offsets • Compliance and Enforcement

  5. Drawbacks • Trading in pollution – no acceptance by some members of the environmental community • Perception, or reality, of capture by regulated industries • Only regional – given that GHG is global in effect, regional approaches are inherently inadequate • On other hand, because GHG is global in effect, any regional improvements become global improvements • Reality of China and India • "We all can make major strides, and yet there won't be a reduction until China and India are participants." George Bush at G-8 conference. • China has surpassed US as largest emitter • West has contributed to growth in China emission by transferring its carbon footprint to China • For the period from 2004 to 2010, China's CO2 emissions will have grown by at least 11 percent a year. • US emissions decreased by 1.3% in 2006. • Supposed Failure of Kyoto • Superiority of direct carbon tax – some support for carbon taxes, but political reality generally makes carbon taxes unlikely…but see B.C. • Superiority of Feed-in Tariffs and ARTs

  6. Carbon Tax • Preferred by many economists, policy wonks, and even Al Gore • Contraindicated by other economists • Dictate price and leave quantity to market • Not an either/or scenario • See BC • Requires increased regulatory oversight - and perhaps manipulation - to determine price

  7. Feed-in Tariffs/ARTs • Set price for renewable energy • More direct control over renewable energy production • Allows society to essentially dictate amount of RE • Requires society to essentially dictate amount of RE • European model vs American model

  8. Apollo Alliance A national coalition of labor, business, community, and environmental leaders working to catalyze a clean energy revolution in America to reduce our nation’s dependence on foreign oil, cut the carbon emissions that are destabilizing our climate, and expand opportunities for American businesses and workers.

  9. “New Energy for States – Energy Saving Policies for Governors and Legislators” • Sun, Wind, and Bio-based Power • Interconnection and Net Metering • Decoupling • RPS • RFS • Energy Efficiency Standards for Appliances • Incentives for Renewable Energy Systems

  10. Continued • New Technologies to Conserve Energy • Update Building Codes • Energy Audits and Retrofits • Green Building: Standards for Public Buildings • Green Building: Incentives for the Private Sector • Building Operations • Renewable Energy Sources for State Buildings • Purchasing

  11. Continued • Transportation Options and Efficient Fuel Use • Improve Mass Transit • Upgrade State Fleets • Incentives for Efficient Car-Use • Pay as you drive Insurance • Plug-in Hybrids

  12. Continued • High Performance Towns and Cities • Smart Growth Planning • Remove Barriers to Infill Development • Transit Oriented Development • Fix it First • Smart Growth Tax Credits • Stop Subsidizing Sprawl

  13. Continued • Smart Funding for Cleaner Tomorrow • Public Benefits Funds • Bonding Incentives • Clean Energy Funds • Pension Fund Investments • Reducing Risk • Energy Savings Performance Contracts • Leveraging Federal Dollars

  14. Continued • Skilled Workers for our New Energy Future • Apprentice utilization • Job Quality Standards • Best Value Contracting • Training and Certification

  15. Other Publications from AA • The New Apollo Program • New Energy America • Green-Collar Jobs in America’s Cities • Community Jobs in the New Economy • Renewable Energy Potential • Renewable Energy Demand • Component Manufacturing • New Energy for Cities • New Energy for States • New Energy for Campuses

  16. History of Oregon’s Energy Policies • 1979 Small Scale Energy Loan Program • 1980 Business Energy Tax Credit • 1981 Residential Alternative Energy Device Tax Credit • 1983 Building Codes Commercial and Residential • 1985 Property Tax exemption for renewable resources

  17. History Cont. • 1988 Industrial Assessment Center • 1988 Governor’s task force on global warming • 1991 Legislative strategy to reduce CO2 emissions • 1992 Oregon benchmark for CO2 emissions established • 1995 Oregon CO2 reduction strategy published

  18. History Cont. • 1996 Oregon Manufacturing Extension Program • 1999 Oregon global warming education campaign • 1999 Net metering legislation • 1999 Electric utility restructuring • 2000 Exec. Order on Sustainability for government

  19. History Cont. • 2003 Executive Order on Sustainability strengthened • 2005 Governors Renewable Energy Action Plan • 2005 Oregon biofuels legislation introduced • 2006 Renewable Energy Working Group

  20. Recent Legislative Advances

  21. SB 838 – Oregon Renewable Energy Act • Creates a Renewable Portfolio Standard (RPS) to be met by 2025 - 25 by 25 • RPS for large electric suppliers (at least 3% of the electricity) = 25% renewables • RPS for smaller electric suppliers (1.5%-3%) = 10% renewables • RPS for consumer-owned utilities = 5% renewables • Renewable sources include wind, solar, ocean, geothermal, biomass, hydropower and hydrogen gas • Utilities can use Renewable Energy Certificates (RECs) to comply

  22. HB 2210 – Oregon Biofuels Legislation • Creates a “farm to fuel” Renewable Fuel Standard • The RFS for biodiesel and ethanol is based on in-state production under the authority of the OR Dept of Agriculture • Gas cannot contain MTBE or other specific additives • State agencies must use biodiesel for backup power generation • Tax credit for agricultural producers and biomass collectors • Increases property tax incentives • Coal-fueled facilities are precluded from site certificate exemption for ethanol and biodiesel production. • Some biofuel production facilities can be on land zoned exclusively for farm use.

  23. Business Energy Tax Credit (BETC) • Increased max BETC to $10 million for facilities that: 1) use/produce renewable energy resources; 2) high-efficiency combined heat and power facilities; and 3) renewable energy manufacturing facilities • Increased cap of qualified project cost from $10 million to $20 million • Tax credit = 50% of eligible costs if completed on or after 1/1/2007 for: 1) qualifying renewable energy resource equipment manufacturing facilities; and 2) renewable energy resource facilities • Tax credit = 35% for other qualifying facilities • Tax credit for home-builder-installed renewable energy systems = $9,000 • Tax credit for high performance home = $12,000 • Mass transits districts that serve more than 50,000 residents qualify for the BETC • Combined heat & power projects are eligible for the BETC; size of these projects can be up to 10 megawatts • Sunset date of 2016

  24. Senate Bill 875 – Oregon Innovation Plan/Ocean Energy • “Ocean wave energy” added to list of renewable resources that qualify for tax incentives

  25. House Bill 2620 – Solar Energy • If a building receives state funds, state/local gov’t must dedicate 1.5% of the cost of constructing a new building or renovating an existing building to solar energy technologies.

  26. Call to Action • Green Economy • Jobs Creation – Manufacturing • Quality of Life • Capitalism - role of greed • Conservation of Precious Resources • Environmental Protection

  27. JRB@AterWynne.com • 503.226.8610

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