1. Developments in Federal Climate Change Policy Jay Hakes Georgia Climate Change Conference May 6, 2008

2. Federal Climate and Energy Policies Overlap Four fifths of greenhouse gases come from combustion of fossil fuels Four fifths of greenhouse gases come from combustion of fossil fuels In addition, methane emissions come from flaring of natural gas & leaks in gas pipelines In addition, methane emissions come from flaring of natural gas & leaks in gas pipelines Energy is a big deal Energy is a big deal

3. Energy Policies 1973-1981 Helped Cut Emissions Major energy legislation passed in 1975, 1978 & 1980 Major energy legislation passed in 1975, 1978 & 1980 Decontrol of oil prices completed in 1981 Decontrol of oil prices completed in 1981 Intended to reduce oil imports, but for a while also reduced carbon emissions Intended to reduce oil imports, but for a while also reduced carbon emissions This largely overlooked relationship analyzed in my new book available in July This largely overlooked relationship analyzed in my new book available in July

5. Energy Independence and Security Act of 2007 First major energy/climate initiative since 1981 First major energy/climate initiative since 1981 Combined goals of reducing oil imports & carbon emissions Combined goals of reducing oil imports & carbon emissions Passed overwhelming with bipartisan support (only 8 votes against in the Senate) Passed overwhelming with bipartisan support (only 8 votes against in the Senate)

6. What Does EISA Do? Raises vehicle mileage efficiency from current 25 mpg to 35 by 2020 Raises vehicle mileage efficiency from current 25 mpg to 35 by 2020 Increases requirements for ethanol (including cellulosic) to robust levels Increases requirements for ethanol (including cellulosic) to robust levels Requires greater lighting & appliance efficiency Requires greater lighting & appliance efficiency

7. EISA Impacts Will be lagged, because of imbedded capital stock Will be lagged, because of imbedded capital stock According to the Energy Information Administration, sharply cuts projected growth in carbon emissions According to the Energy Information Administration, sharply cuts projected growth in carbon emissions But they still continue to rise But they still continue to rise

8. Next Steps? Renewable portfolio standard? Renewable portfolio standard? Comprehensive cap & trade emissions a la Warner-Lieberman bill? Comprehensive cap & trade emissions a la Warner-Lieberman bill? Cap & trade on electric industry a la Carper-Feinstein? Cap & trade on electric industry a la Carper-Feinstein? Default to carbon taxes? Default to carbon taxes?

9. Big Issues How tough? How tough? How comprehensive? How comprehensive? Grandfathering vs. auctions? Grandfathering vs. auctions? Spending vs. offsetting tax cuts? Spending vs. offsetting tax cuts?

10. Warner-Lieberman Bill Main legislative vehicle Main legislative vehicle Very complex, with many compromises Very complex, with many compromises Comprehensive – covers 87 percent of greenhouse gases Comprehensive – covers 87 percent of greenhouse gases

11. Warner-Lieberman Tough – allowed levels in 2030 are 39 to 72 percent below levels in 2006 Tough – allowed levels in 2030 are 39 to 72 percent below levels in 2006 More will need to be done More will need to be done Bipartisan support – four Republican sponsors (Warner, Coleman, Collins, and Dole), three Democratic (Harkin, Cardin & Klobuchar) and one independent (Lieberman) Bipartisan support – four Republican sponsors (Warner, Coleman, Collins, and Dole), three Democratic (Harkin, Cardin & Klobuchar) and one independent (Lieberman)

12. Predictions for 2008 Big Senate debate on Warner-Lieberman this summer? Big Senate debate on Warner-Lieberman this summer? No action this year? No action this year? A more serious debate in 2009? A more serious debate in 2009?

13. Hurdles Modest goals provide rhetoric not results Modest goals provide rhetoric not results Lobbyists take advantage of complexities Lobbyists take advantage of complexities Fear of hurting the economy Fear of hurting the economy But EIA sees limited impacts on GDP But EIA sees limited impacts on GDP

14. Hurdles Fear of … Fear of …

15. CHINA!

16. Reasons for Hope We did it once before We did it once before 2007 Act may mark major turning point 2007 Act may mark major turning point Young people have big stake in issue Young people have big stake in issue Presidential candidates left have more advanced positions than any previous prez Presidential candidates left have more advanced positions than any previous prez