On January 15th the US Climate Action Partnership, a group of 26 major industry players and 5NGOs (including NRDC), released its Blueprint for Legislative Action on climate change -- a document designed to provide Congress with a consensus approach to reducing our greenhouse gas emissions by 80% in 2050.

While the Blueprint's signers acknowledge "that this is not the only possible path forward and we stand ready to work with the Administration, Congress, and other stakeholders to develop environmentally protective, economically sustainable, and fair climate change legislation", the Blueprints' call for urgent action on climate change is groundbreaking in its acknowledgement that climate protection does not require economic sacrifice and can in fact help to provide a foundation for our economic recovery.

Indeed, momentum for passing climate change legislation this year seems to be gathering steam as House Energy and Commerce Committee Chairman Henry Waxman released a statement last week setting a timeline to pass comprehensive climate and energy legislation out of the Committee by Memorial Day. Chairman Waxman's announcement was then supported by House Speaker Nancy Pelosi who stated she "shares Chairman Waxman's sense of urgency" on climate change legislation and "his belief that we cannot afford another year of delay".

In order to meet the goal of an 80% reduction in emissions at a manageable cost, USCAP's Blueprint for Legislative Action recommends the creation of a cap and trade program for carbon emissions. Under this program, carbon emitted from point source facilities would be capped at a declining rate through 2050 (until emissions in the economy reach an annual target of less than 2 billion tons from just over 7 billion tons today). The right to emit carbon under the cap would then be either auctioned off or directly allocated to emitters on an annual basis. These allowances, amounting to trillions of dollars over the life of the program, would then be traded in an open market to facilitate the transfer of allowances from one economic actor to another and to provide a clear price signal for new investments in the clean technologies needed to transform the way our energy is "produced, delivered, and consumed". 

Since the price of carbon allowances over time will be primarily determined by how well low carbon innovation is able to keep up with a declining cap on our carbon output, USCAP recommends that some of the funds from a cap and trade system be allocated to promoting the scaleable deployment of clean technologies in the marketplace. To ensure that this supply/demand balance is achieved, the Blueprint calls for revenues from the program be used in part to fund the deployment of several low carbon technologies including; solar, wind, efficient vehicles, low carbon fuels, industrial efficiency, buildings efficiency, and carbon capture and storage.

Other uses for carbon revenues under the program would include providing funds to; 1) mitigate the financial impacts on consumers, businesses and the overall competitiveness of the economy, 2) advance carbon technology research and development, 3) provide workforce training, 4) facilitate adaptation at the state, tribal, and local levels, 5) provide financial relief for low-income families, and 6) dividend funds back to households.  

In particular, USCAP calls on Congress to provide substantial financial incentives for the early deployment of carbon capture and storage (CCS) technology to avoid "locking in" high carbon emissions from new coal facilities without CCS.  To ensure new coal facilities are developed in a manner that speeds the deployment of CCS, USCAP also recommends that all new coal and other solid fuel facilities permitted between now and 2020 be subject to a performance standard that would require new plants to emit no more than 1100lbs of CO2 per Mega-watt hour. The Blueprint also would require plants permitted after 2020 to emit no more than 800lbs of CO2 per Mega-watt hour. Financial incentives would be structured to achieve even better performance.

A Game Changing Call to Action

The USCAP Blueprint for Legislative Action is a game changing call to action and a significant step forward in getting climate change legislation on President Obama's 2009 agenda for the following reasons:

1) The USCAP Blueprint is a Consensus Document -The Blueprint for Legislative Action is a consensus document on climate legislation drafted from a diverse body of high carbon intensity manufacturers, utility service providers, and NGOs. While this group did not address the concerns of all affected parties, it did establish a meaningful starting point for more intense debate on this issue.

A complete list of the organizations involved is as follows: Alcoa, AIG, Boston Scientific Corporation, BP America Inc, Caterpillar Inc, Chrysler LLC, ConocoPhillips, Deere & Company, Dow Chemical Corporation, Duke Energy, Dupont, EDF, Exelon Corporation, Ford Motor Company, FPL Group, General Electric, General Motors, Johnson & Johnson, March Inc,, NRDC, The Nature Conservancy, NRG Energy, PepsiCo, Pew Center on Climate Change, PG&E Corporation, PNM Resources, Rio Tinto, Shell, Siemens Corp., World Resources Institute, and Xerox Corporation.

2)  The Blueprint is Designed to Reduce 80% of our Emissions at a Manageable Cost to the Economy- The CEOs issuing the Blueprint have agreed that reducing our CO2 emissions by 80% by 2050 can be achieved at a "manageable cost to the economy". This contradicts the claims and fears of some organizations and members of Congress that climate legislation will create a huge cost burden for the economy. Indeed, the USCAP CEOs have stated that action is urgent, not only to protect the climate but to provide a foundation for economic recovery.

3) "Early Action" Incentives Under the USCAP Plant would help to Re-power Stalled Clean Tech Investments - The USCAP plan allows investment in clean technologies to be accelerated to take advantage of "early action" performance incentives.

4) The Blueprint for Legislative Action Provides a Framework to Create Our New Energy Economy - The Blueprint calls for a transformation in the way we "produce, delivery, and consume" energy. This transformation would require large scale investments that would provide good paying jobs and reduce our dependence on foreign oil. Such a program would provide much needed stimulus to the economy as millions of Americans would be needed to engineer, manufacture, install and service this new energy economy. Further, by adopting a cap, invest now, and recover strategy, that uses future carbon allowance revenues to jump start energy productivity driven clean tech investments today, additional focus would be given to improving our energy productivity, easing the transition to a low carbon model once the program is officially launched.   

5) The USCAP Blueprint Creates a Performance Standards for Coal- Support for performance standards on coal is a major step forward to reducing our carbon output as it will push banks and rating agencies to evaluate the viability of new coal plants based on their ability to meet stricter carbon output standards.  In addition, a performance driven incentive structure is mapped out to deploy carbon, capture and storage (CCS) to scale at coal-fired power plants and other industrial sources of CO2. Carbon, capture and storage technology is seen as a critical "wedge" technology for global reductions in CO2 emissions as 8.3 Gigatons of CO2 are currently emitted from coal-fired power plants and a program which both puts a price on CO2 emissions and funds the development of CCS technology to scale will either prove out the ability of CCS to meet our reduction needs in the short term or force us to look beyond coal as a long term source of global energy supply.

In sum this Blueprint for Legislative Action presents a well-structured framework for capping our carbon emissions. Now it's up to President Obama, Congress, and others to build on the momentum provided by the Blueprint and focus at least part of our economic recovery strategy on the business of climate change.