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Policy Options for Climate Change Mitigation

Page history last edited by Abby Halperin 13 years, 10 months ago

 

 

This policy option or model program profile relates to the following issue overview(s):

  • Climate Change
  • Energy 

 

Summary  


This policy brief outlines two potential first steps to reduce green house gas emissions in the United States. The first, a short-term approach, involves the implementation of community-based projects, such as increasing home insulation and providing incentives for renewable energy. The second, a long-term approach, focuses on comprehensive energy legislation, a more aggressive form of the bill that Kerry and Lieberman just introduced. In both approaches, we take the perspectives from other nations, specifically Australia and The United Kingdom, to inform our suggestions.

 

Goal 


Considering the climate initiatives of other developed countries, specifically the United Kingdom and Australia, we propose two alternatives for energy reform. One is an aggressive energy reform bill, which takes into account both the shortfalls and benefits of the policy attempts in Australia. The other approach is for the government to support community initiatives and grassroots activism, modeled after progressive approaches by the UK's Department for Energy and Climate Change. Either approach would signal government willingness to begin mitigating climate change.  

 

 

 

 

Policy Option One: A Community Action Approach  


 

This option is rooted in federal support of local initiatives to increase efficiency and promote renewable energy generation. The major advantages of such a program are to foster local and individual involvement, address social justice concerns, and make meaningful carbon reductions in ways that are not politically controversial. The two key components outlined below are increasing efficiency in homes and subsidizing small-scale renewable energy generation.

 

Increasing Home Energy Efficiency

This strategy is modeled after the successful "Greener Homes, Warmer Homes" initiative in the United Kingdom. The initiative is expected to reduce 29% of emissions from homes by 2020. In the UK, buildings make up around a quarter of the country’s emissions. In the U.S., our single largest source of emissions is from electricity,[1] so taking steps to reduce electricity consumption, even on a residential scale, is an important stride towards climate change mitigation. Furthermore, there is scarce legislation that focuses on efficiency, which is a vital to sustainability.

 

Some key components of the "Greener Homes, Warmer Homes" initiative could also be implemented in the U.S., hopefully with similar results.[2] The premise of the system requires that utilities conserve a portion of their energy or pay fines. This places the burden of reduction on the supplier rather than the consumer. Local authorities regulate these energy companies, which insures that new jobs will be created locally, people with local knowledge can direct resources, and there will be more flexibility for innovation.

 

Furthermore, this plan has two components directed specifically to help the poor. First, new standards will be set for social housing, including free energy upgrades and smart meters for tenants. This could save them up to £300 a year on energy bills. Secondly, new standards on rented properties will assure that landlords do not neglect energy efficiency improvements because their tenants are responsible for the energy bills. These two parts of the strategy focus on people who are most in need of relief from high heating bills.

 

Some specific targets are geared toward both correcting the distributive injustice of high heating bills for the poor and mitigating emissions. First, by the end of 2011, the UK hopes to insulate six million homes. Secondly, they will insulate all cavity walls and practical lofts by 2015. By 2020, they will have offered seven million eco upgrades (such as solid wall insulation or heat pumps) and all homes will have smart meters. In addition to these specific targets, they will also offer pay-as-you-save financial policies to reduce capital expenditure, allowing more to invest in efficiency. A similar timeline could be adopted for the U.S., with increased scope to reflect a population that is approximately five times larger.

 

Encouraging Small Scale Renewable Energy

While other options should certainly consider large-scale renewable investment, the fostering of decentralized local power supply increases community involvement and efficiency. The efficiency gains are both from structural changes, such as no heat lost in transmission, and behavioral changes, the consumer becomes more invested in reducing their energy use. This component is modeled after the UK's Feed-in Tariff program (FIT), which is also in effect in forty other countries.[3]

 

 

The main goal of the Feed-in Tariff program is to encourage small-scale renewable energy production. This is accomplished in a number of ways: First, there are incentives for renewable generators per unit of electricity, regardless of whether they consume it or it is sold back to utilities. There are additional incentives for power to be sold back to the grid, and FIT allows producers to sell power for a minimum price or at market values. This is paid for by utilities, which may increase utility bills slightly as costs are passed to consumers. FIT also encourages local authorities to get involved, through improving community housing and their own properties.

 

One component that the FIT program does not include, but has been demonstrated on a local scale, is to provide government loans for the upfront costs of renewable installation. This makes renewable affordable for anyone, especially if the increased taxes become attached to the house, so the homeowner can pass the taxes and power generation equipment (thus energy savings) on to the next owner. This would address some of the inequities in the current scheme, by making renewable more affordable for all socioeconomic classes.

 


[1] Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2006, USEPA #430-R-08-005 Available at: http://www.epa.gov/climatechange/emissions/usgginventory.html 

[2] HM Government. Warmer Homes, Greener Homes: A Strategy for Household Energy Management. Published March 2010.

[3]http://www.decc.gov.uk/en/content/cms/news/pn10_055/pn10_055.aspx

 

 

Policy Option Two: A Comprehensive Energy Legislation Approach  


The main goal of energy legislation ought to be the switch from centralized fossil fuel-based energy production to decentralized renewable energy. Without strict policy standards it may take far too long for this switch to occur. Several studies from Australia have shown that weak policy, though comprehensive, have not or will not lead to effective change.[1] It is with this fact in mind that I present ideas for amendments to currently proposed energy bills. 

 

Mandatory Renewable Energy Target

This policy would force energy companies to make a certain percentage of their energy portfolio consist of renewable energy sources. In this system, companies are taxed for not having renewables but can avoid these taxes by investing in renewable sources.  It is a policy that was attempted by Australia in 2001 and was at first considered a failure because the target of 4% of total electricity production was far too low[2]. However, in 2009, they revised their target to be 20% renewables by 2020. Though little time has passed, this much stricter goal is much more likely to make noticeable reductions. 

 

An even greater target of 30% would show U.S. leadership in the area of greenhouse emission reductions. But just as importantly it would be a major step toward the overall switch from fossil fuels to renewable sources of energy. Instead of relying on new investors to just take up the business of renewable energy production, it forces those who already have the resources and knowledge of energy production to participate in this change.

 

Cap And Trade

Cap and trade has advantages over other systems. Australia attempted a carbon pricing system in which the government set up a baseline for each company and rewarded them in the form of tax breaks for emitting below this level.[3] However, companies constantly objected to the baselines set because they were subjective. Cap and trade has the advantage over carbon pricing because it sets an overall national baseline and the free market works out differentiation. 

 

The current proposals for a cap and trade system in the U.S. set overall reductions too low. A study done by the Australian Agricultural Alliance on Climate Change predicts that low targets will only cause power companies to make minor adjustments in their production, but that fossil fuels will still dominate.[4] High targets, however, will cause any production that releases carbon to suffer reduced profits. It would also mean that renewable production would be able to compete because their energy will be cheaper and more desirable than carbon-heavy methods. This would provide a market for landowners and businessmen from rural areas to use these lands for the production of sustainable energy.

 

 We recommend increasing the cap to 25% of 1990 levels by 2020. This would make renewable energy the preferred method of energy production and get both big energy companies and small investors to come on board.

 


[1] Agricultural Alliance on Climate Change. "Rural Australia Providing Climate Solutions". October, 2007.

[2] MacGill, Dr. Ian. “Australian Climate Change Policy and its Implications for AP6 Countries”. Centre for Energy and Environmental Markets. University of New South Whales. April, 2007.

[3]Ibid.

[4] Agricultural Alliance on Climate Change. "Rural Australia Providing Climate Solutions." October, 2007.

 

 

Recommendation

 

    


Both Australia and the U.S. export large amounts of coal, the worst culprit in the production of greenhouses gases. They are also industrialized nations dependent on the production of cheap energy. Therefore, industry has a great deal of sway in the political system where economic concerns are often the top priority in many decisions. The bills currently proposed in the U.S., such as Kerry-Lieberman, indicate the strong influence of industry.

 

That being said, we believe it would be in the best interest of the U.S. to adopt some climate change legislation because even a light cap is better than no cap at all. We believe that the Kerry-Lieberman bill is a good start in that it limits offshore drilling which promotes the overall shift away from fossil fuels. We suggest that, in the long term, you introduce the amendments that increase renewable portfolio standards and raise the cap to make this legislation more effective.

 

Given political circumstances, in the short term, we recommend that you focus on a community action approach. Programs such as "Greener Homes, Warmer Homes" have the advantages of effectively reducing emissions soon, while addressing the social justice issue of disproportionately high energy bills for the poor. These initiatives have greater potential to appeal to a bipartisan audience because they do not directly attack industry and do not place a financial burden on the government.

 

In light of the Deepwater Horizon oil spill, the public expects some government action to facilitate a move away from fossil fuels, which can wreck such damage to both ecosystems and economies. These community action programs create the framework for grassroots movements to increase efficiency and reduce reliance on the coal-powered grid. While they are just a small step in this direction, empowering communities to install renewable energy generators such as solar and wind or making sure the poor have access to insulation, are actions that lay the foundation for greater public support for more aggressive energy legislation.

 

Furthermore, the Feed-in Tariff program is necessary to make the United States competitive in the renewable resource industry worldwide. Forty other countries already have a Feed in Tariff program in place, and encouraging decentralized renewable generation is the first step to making our technology competitive on the global market. As we pass peak oil and the environmental costs of mining coal already surpass the benefits, we need to make the energy transition. Since this transition is inevitable, we need to start with small programs today that will facilitate the switch from fossil fuels to renewable energy that must happen sooner rather than later. 

 

 

 

Status


Domestic Initiatives and Legislation:

The Waxman-Markey bill passed the in the House of Representatives last year, but has not been discussed in the Senate. A new bill for energy reform, brought forward by Senators Kerry and Lieberman, was introduced in May 2010. The Kerry-Lieberman Bill is generally less stringent than Waxman-Markey, not regulating industry till 2016 and offering no renewable or efficiency standards; it does, however create new obstacles for offshore drilling along the Atlantic and Pacific coasts, in the light of the Deepwater Horizon oil spill.[1]

 

Another avenue for energy reform may be through the EPA, which has declared carbon dioxide a pollutant that can be monitored and regulated. While the EPA has historically been underfunded and over-committed, perhaps they could be an avenue for reform, although we will not explore that option in this brief.

 

Many programs to reduce GHG emissions exist on local, state, and regional levels. The Regional Greenhouse Gas Initiative, the Western Climate Initiative, and Midwestern Accord all represent cap and trade agreements among many states. California has also established a statewide initiative, the Global Warming Solutions Act, which utilizes fines to cap GHG emissions at 1990 levels by 2020.[2] On a local level, cities like Berkeley have pioneered programs such as Financing Initiative for Renewable and Solar Technology, where the city will fund the upfront costs of photovoltaic installation and then take the funds out of property taxes for the next twenty years. Because the energy savings typically offset the increased taxes, programs like these make renewable energy available to many more socioeconomic classes.

 


[1] http://news.sciencemag.org/scienceinsider/2010/05/kerrylieberman-american-power-ac.html

[2] Pew Center on Global Climate Change.

"Climate 101 Cap and Trade." 2009

 

 

 

For More Information    


Agricultural Alliance on Climate Change. "Rural Australia Providing Climate Solutions." October, 2007.

 

This report studies the effect of various emission reduction plans on the rest of the economy, particularly on rural Australia. It finds that more reductions will increase the price of carbon. Greater reductions cause exponentially larger economic opportunities for private, rural landowners.

 

AR4 WGII Chapter 1: Assessment of Observed Changes and Responses in Natural and Managed Systems - 1.ES Executive Summary." IPCC - Intergovernmental Panel on Climate Change. Web. 17 May 2010. <http://www.ipcc.ch/publications_and_data/ar4/wg2/en/ch1s1-es.html>.

 

This is the most recent report done by the Intergovernmental Panel on Climate Change, which is generally regarded to be the most professional and comprehensive study of the climate. They have prepared many thorough assessments and concluded that anthropogenic climate change is occurring.

 

Bullard, Robert D., and Glenn S. Johnson. "Environmental Justice: Grassroots Activism and Its Impact on Public Policy Decision Making." Journal of Social Issues 56.3 (2000): 555-78.

 

Bullard writes about the rise of environmental justice in the U.S. and outlines how it informs policy making in the U.S. He talks about what constitutes an Environmental Justice issue and why it so important to take them into account.

 

Chellaney, Brahma. "Lessons of Copenhagen Must be Heeded." Taipei Times. April 27, 2010. Web. 17 May 2010.

 

This article sums up some of the important lessons learned from Copenhagen. One key point made is that any global agreement must include China and the United States, the two largest polluters. This article also touches on the ineffectiveness of such global agreements because of the politicization of the issues at hand and the divide between the smaller poorer countries and the larger industrialized polluters. 

 

"Comparing the American Power Act with the House Climate Bill and Clean Energy Jobs Bill." Climate Progress. Web. 17 May 2010. <http://climateprogress.org/2010/05/12/american-power-act-senate-bill-house-climate-bill-and-clean-energy-jobs-bill/>.

 

This article provides a side-by-side comparison of the various bills that have been proposed in Congress: the Obama Proposal, Waxman-Markey, and Kerry-Lieberman. It goes down a list of categories and says what each of the three bills proposes in that category.

 

HM Government. Warmer Homes, Greener Homes: A Strategy for Household Energy Management. Published March 2010.

 

This report outlines the UK’s “Greener Homes, Warmer Homes” strategy. This strategy focuses on increasing energy efficiency in homes through insulation and smart meters. It is particularly directed towards low-income households, to help offset the burden for those who suffer the most from high energy bills.

 

Klein, Naomi. "A New Climate Movement in Bolivia." The Nation. April 21, 2010. Web. 17 May 2010.

 

Naomi Klein writes about the Climate Change Submit in Boliva and the issues that are particular to a developing nation that will face some of the worst consequences from climate change. She writes about how these countries were left out of the agreements at Copenhagen, and Boliva's role in global climate change policies.

 

Krugman, Paul. "Building a Green Economy." The New York Times 5 Apr. 2010. Web. 17 May 2010.

 

Paul Krugman does an excellent job of outlining the basics of climate change, particularly focusing on the costs of action and inaction. His extensive article makes the argument that inaction on climate change would be far costlier for the United States. He also gives a clear picture of where there are broad agreements on climate change economics and where the uncertainties lie.

 

MacGill, Dr. Ian. “Australian Climate Change Policy and its Implications for AP6 Countries. Centre for Energy and Environmental Markets.” University of New South Whales. April, 2007.

 

This report outlines the various carbon emission reduction strategies attempted by the U.K. It goes through the pros and cons of each strategy. Even though some had marginal success, most are considered failures because they were too lax to produce noticeable changes.

 

Pew Center on Global Climate Change. "Fifteenth Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change and Fifth Session of the Meeting of the Parties to the Kyoto Protocol." Copenhagen, Denmark. December 7-18, 2009. <www.pewclimate.org/docUploads/copenhagen-cop15-summary.pdf> 

 

This is the Pew Centers' review and analysis of the negotiations in Copenhagen. The take home point is that the biggest emitters are also the strongest negotiators and that they are preventing real action from being achieved. While commitments were made, none of them are binding.

 

Pew Center on Global Climate Change. "Climate 101 Cap and Trade." 2009. <http://www.pewclimate.org/docUploads/Climate101-CapTrade-Jan09.pdf>

 

This source gives a comprehensive and academic overview of cap and trade. It illustrates the process in an easy to understand fashion. It talks about specific and regional and statewide cap and trade initiatives.

 

 

"U.S. Greenhouse Gas Inventory | Climate Change - Greenhouse Gas Emissions | U.S. EPA." US Environmental Protection Agency. Web. 17 May 2010. <http://www.epa.gov/climatechange/emissions/usgginventory.html>.

 

This is a report by the EPA, quantifying the yearly green house gases emitted by the U.S. This report is then sent to the U.N. for their recording and analysis. It also breaks them down into sectors to show which sources are emitting the most gases. Electricity generation tops the list with transportation in a close second.

 

 "Welcome to the Department of Energy and Climate." Home - Department of Energy and Climate Change. Web. 17 May 2010. <http://www.decc.gov.uk/en/content>.

 

This is the UK's Department of Energy and Climate. They have pioneered many environmentally and socially progressive initiatives such as "Greener Homes, Warmer Homes." To check the progress on these programs, or to see what other innovative ways they have developed for combating climate change, visit their website.  

 

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