The Economic, Employment, Energy Security, and Environmental Impact of the Proposed American Power Act

Washington—On May 12, Senators John Kerry (D-MA) and Joseph Lieberman (I-CT) released details of the proposed American Power Act, a comprehensive energy and climate change bill under development since last fall. With US unemployment just below 10 percent and a ruptured well pouring oil into the Gulf of Mexico, the Senators promised that the legislation would protect the environment and reduce US dependence on foreign oil while creating jobs and increasing US economic competitiveness at little cost to consumers.

A new study by the Peterson Institute for International Economics provides the first comprehensive assessment of the draft legislation’s ability to achieve these goals. Assessing the American Power Act, authored by visiting fellow Trevor Houser along with Shashank Mohan and Ian Hoffman, employs the Department of Energy’s National Energy Modeling System to forecast the legislation’s economic, employment, energy security, and environmental impact through 2030. Key findings of the study (summarized in attached table [pdf]) include:

Energy Sector Changes: The American Power Act would significantly alter the way the United States produces and consumes energy. The share of total energy demand met by fossil fuels would fall from 84 percent today to 70 percent in 2030. Renewable and nuclear energy would grow from 8 percent each of US energy supply today to 16 and 14 percent respectively in 2030.

Energy Security Implications: The Act would reduce US oil imports by 33 to 40 percent below current levels and 9 to 19 percent below business-as-usual by 2030. This would cut US spending on imported oil by $51 to $93 billion per year and, by lowering global oil prices, reduce oil producer revenues by $263 to $436 billion annually by 2030.

Environmental Impact: The Act would establish an economy-wide carbon price starting at $16.47 per ton in 2013 and growing to $55.44 dollars per ton in 2030, reducing greenhouse gas emissions from covered sources 22 percent below 2005 levels by 2020 and 42 percent by 2030.

Employment Effects: The Act prompts $41.1 billion in annual electricity sector investment between 2011 and 2030, $22.5 billion more than under business-as-usual. This stimulates US economic growth and job creation in the first decade, increasing average annual employment by about 200,000 jobs.

Impact on Consumers: By pricing carbon, the American Power Act raises the price of fossil fuels for businesses and consumers. Households see an average 3 percent increase in electricity rates and 5 percent increase in gasoline prices between 2011 and 2030. Energy efficiency improvements largely offset these energy price increases—households see somewhere between a $136 increase and a $35 decrease in average annual energy expenditures, depending on future improvements in vehicle efficiency.

>> Download news release and summary table [pdf]

Source: The Peterson Institute

Obama Urges Congress to Enact New Climate Law

Gulf oil spill may be fueling US efforts to finish work on a stalled energy and climate change bill

The environmental and economic disasters caused by the continuing oil spill in the Gulf of Mexico may be fueling efforts in the U.S. Congress to finish work on a stalled energy and climate change bill.

Though the House of Representatives passed its version a year ago, the national debates over health care and the economy delayed action in the U.S. Senate. Heightened concerns about America’s dependence on fossil fuels may be propelling renewed action on the energy and climate legislation.  

American Power Act

Democrat John Kerry and independent Joe Lieberman introduced the American Power Act in the U.S. Senate. The bill’s sponsors say that by putting a price on carbon released into the atmosphere, the measure would help reduce America’s reliance on fossil fuels and cut its greenhouse gas emissions.

Debate is expected sometime in the coming months. A Republican-sponsored measure is also in the works.

In a speech at Carnegie Mellon University, President Obama referred to the Gulf oil spill in making the case that it is time, as he put it, to “aggressively accelerate the nation’s transition to a clean energy economy. ”

In crafting the U.S. response to global climate change, the president said congressional lawmakers must take into account the real price of America’s heavy reliance on petroleum-based energy.

“If we refuse to take into account the full costs of our fossil fuel addiction – if we don’t factor in the environmental costs and the national security costs and the true economic costs – we will have missed our best chance to seize a clean energy future.”

High costs

A new report by the PEW Center on Global Climate Change, an independent policy research group, echoes the president’s view. But it adds that, even if aggressive policies are put in place to reduce future carbon emissions, steps must be taken now to adapt to greenhouse gases already in the atmosphere; emissions that will continue to pollute the air and affect the earth’s climate.

And who should lead that effort?

PEW Vice President for Policy Analysis and the report’s co-author, Stephen Seidel, says the federal government should lead, as the nation’s largest landowner and the guardian of its natural resources, national parks and highways, bridges and dams.  

“What the federal government does, has a huge impact on where we build in coastal zones, how we farm, what our infrastructure looks like,” says Seidel. “And so decisions that federal agencies are making will have an enormous impact in our ability to wisely adapt to climate change.”

Thinking ahead

The report recommends that all federal agencies begin long-term strategic planning on climate impacts.

It also recommends a coordinated climate adaptation research program and a national climate service to better inform all levels of government, the private sector, and the general public, about what climate change will mean for them.

Seidel says, “The first question anyone, when they are told that they have to adapt to climate change, they are going to ask, ‘What is that change I have to adapt to?  How much sea level rise?  How much temperature change?  How much change in precipitation are we really talking about?  Seidel says providing that information is a critical element to understanding climate change”.  

The report identifies models for adaptation strategies from other countries.  Seidel says many cities – including New York -  also already have aggressive adaptation plans in place.  

“[New York] looked at things like where should they locate waste water treatment facilities because of the impacts of climate change, what risks are likely to occur to their subway system because it’s underground and already requires enormous pumping of water during certain large rainfall events.”

Seidel says adaption to climate change is no longer an option. It is a necessity.

He believes that the first priority of any climate bill enacted by Congress must be to put a cap on global warming gases. Unless carbon emissions are brought under control, he says, the challenge of adapting to global climate change will become ever more difficult.

Source: VOA

U.S. senators are calling for bipartisan action in Congress on climate change

Some U.S. senators are calling for bipartisan action in Congress on climate change, ahead of the United Nations Climate Change Conference in Copenhagen in December. On Thursday, a Senate Foreign Relations subcommittee took up the issue of how the United States and other developed countries should help poorer countries that are most vulnerable to the impact of climate change. 

Democratic Senator John Kerry and Republican Senator Lindsey Graham have joined forces to push Congress to pass a comprehensive climate change bill. In an opinion piece in the New York Times, they said they refused to accept that the United States cannot lead the world on the issue. The Senate is planning several hearings on climate change at the end of this month.

At a Senate committee hearing Thursday, experts called on Congress to substantially increase its funding for the world’s poorest countries that are also the most vulnerable to climate change, including African countries, Bangladesh and Haiti. The experts said Sudan was an example of terrible droughts, and Bangladesh was an example of the threat of floods and rising sea levels, both made worse by climate change.

The Reverend Jim Ball is senior director of Climate Campaign for the Evangelical Environmental Network. He says an overwhelming majority of evangelical Christians in the United States support strong action.

“Climate change is a natural disaster intensifier,” he said. “It makes floods fiercer, hurricanes harsher, droughts drier. The one thing the world does not need are more victims of natural disasters.”

Peter O’Driscoll is executive director of ActionAid USA, a global anti-poverty agency. He says there is good news and bad news on climate change.

“The good news on climate is that the government of the United States is now fully engaged on the issue,” said O’Driscoll. “The bad news is that the impacts of climate change are already wreaking havoc on food production, poverty eradication programs and on emergency response systems in developing countries.”

O’Driscoll said those facing the worst consequences of climate change have done little or nothing to contribute to it.

“Perhaps the cruelest irony of the unfolding climate emergency, is that those most intensely and immediately affected, are least responsible for the greenhouse gas emissions that are driving global warming,” he said.

O’Driscoll said that women, as the poorest members of society, are the most adversely affected by climate change, and that their voices should be heard as solutions are sought. He singled out two women farmers, Joyce Tembenu of Malawi and Asya Begum from Bangladesh, who have been directly affected by climate change, and who are struggling to feed their families. He said the Senate’s deliberations on climate change are crucial to millions of people around the world, and that increased funding for agricultural adaptation programs is urgently needed.

Retired Air Force General Charles Wald, former deputy commander of United States European Command, said climate change has also become a national security issue, because it increases competition for scarce resources and could trigger new waves of refugees.

“What we are recommending is that we, the United States military, start putting climate change in our national security planning, that we, the United States demonstrate leadership in the world,” he said. “In my travels around the world it is very apparent that hardly anything major in the world is ever going to happen without U.S. leadership, and the world is begging for that.”
 
Wald says during his active military duty he did development work in Africa, and a study at the time confirmed that for every dollar spent on prevention, $10 was saved in response. He argued that the same principal needs to be applied now to help the world’s poorest countries prepare for climate change.

Some of the measures panel members discussed were planting mangrove trees or building seawalls in some places vulnerable to flooding, or creating floating gardens in other places, and growing drought-resistant crops in dry areas.