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Senate Climate Bill Passes 2 Billion Ton Test

Dan Lashof

Posted October 1, 2009

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In a previous post I argued that the fundamental test for any climate and energy bill is the total reduction in global warming pollution it will achieve. The ACES bill passed by the House in June would reduce emissions by 2 billion tons in 2020. How does the Clean Energy Jobs and American Power Act introduced in the Senate yesterday stack up?

The most obvious improvement is in the emission limit for 2020. The House bill limits total emissions from sources covered by the cap (about 85 percent of all U.S. global warming pollution) to 5056 million metric tons; the Senate bill limits these emissions to 4873 million metric tons (see Sec. 721 of both bills). That is an addition reduction of 183 million metric tons, or about 0.2 billion tons in round numbers.

(How the Washington Post editorial today missed the fact that the Senate bill includes an emissions cap is completely beyond me.)

Another improvement in the Senate bill is the treatment of bioenergy and offsets. Both the House and Senate bills assume that there are no net emissions from the use of "renewable biomass" because the emissions from burning this plant material are compensated by CO2 removed from the atmosphere by these plants when they grew. Reality is far more complicated than this because the net emissions from using biomass actually depend on how such use changes the overall carbon balance of forests and soils worldwide. For example, using corn to make ethanol in the United States increases emissions from Indonesia as forests are cleared to grow soy beans to replace the corn diverted from the animal feed market. Amendments adopted on the House floor broadened the definition of "renewable biomass," making this problem worse. The Senate bill avoid this problem, improving its overall environmental performance, although it is very difficult to estimate by how much. A further improvement would be to require a rigorous study of the net emissions from using bioenergy and to require EPA to use this study to account for these emissions in the cap.

As discussed in my previous post, the environmental integrity of offsets is also a critical factor in determining whether the emission reduction aims of climate legislation are actually achieved in practice. House amendments created unworkable parallel programs to oversee offsets-a problem the Senate bill avoids. The Senate bill also improves on the House bill by establishing an Office of Offsets Integrity and strengthens the criteria for issuing offsets.

On the other side of the tally, the Senate bill delays implementation of New Source Performance Standards for sources not covered by the cap until no sooner than January 1, 2020 (Sec. 811). This provision is designed to allow earlier reductions in emissions from these sources to qualify as emission offsets. Such offsets reduce the cost of compliance with the bill, but do not result in net emission reductions beyond those achieved by the cap itself. It will take some effort to make a sold estimate of the extra emissions permitted due to this provision, but it is almost certainly less than 100 million tons, which was the WRI's estimate of the benefits of the New Source Performance Standards provision of the House bill.

Finally, both the House and Senate bill establish a fund designed to reduce emissions from tropical deforestation by at least 0.7 billion tons in 2020. The House bill allocates enough allowances to this fund to make this a realistic goal. The specific allowance allocation percentages have not yet been specified in the Senate bill and it will be important to ensure that this program has adequate resources to achieve the goal.

As debate and negotiations over the Clean Energy Jobs and American Power Act get under way we can expect many changes to address the concerns of different interests and line up the votes needed for passage. The bottom line for the atmosphere, however, will be largely determined by the final provisions related the five topics discussed here:

  • The cap
  • Performance standards for uncapped sources
  • Treatment of bioenergy
  • Offsets integrity
  • Incentives for reducing deforestation

As introduced, the Clean Energy Jobs and American Power Act passes the 2 billion ton test. A strong outpouring of public support will be essential to prevent backsliding and enact this crucial legislation.

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