1. Two North Carolina Efforts on Climate Change – CAPAG / LCGCC North Carolina Local Government Budget Association Summer Conference July 19, 2007 Brock M. Nicholson, P.E. Deputy Director Division of Air Quality D I V I S I O N O F A I R Q U A L I T Y

2. Two Major Activities n CAPAG – Climate Action Plan Advisory Group DENR Initiated Derived from Clean Smokestacks Act Focus on Mitigation Options n LCGCC – Legislative Commission on Global Climate Change Legislature Initiated 2005 Goal for Reduction in GHG Mitigation Options

3. Ecological and Societal Impacts of Global Warming n Sea Level Rise resulting in loss of low lands, salt water intrusion into aquifers (NC = >5000 square miles of land less than 1.5 meters above sea level) n Plants and Animals are projected to go extinct, some decline, and some will increase n Diseases and pests that thrive in warmer climate will spread n Crop and tree species will change n Population Shifts n Infrastructure Responses (Now or later)

4. North Carolina has a significant Greenhouse Gas Signature n 8.7 Million Citizens (~12M in 2030) n 3.4 million Homes (~ 5 M in 2030) n 7 million Cars and Trucks (~10 M in 2030) n Commercial, Industrial, and Institutional Heated and Cooled Spaces (Growing Daily) n 14 Coal Fired power Plants (today) n 40 Combustion Turbines (today) n Growth increases Electricity Demands

5. Green House Gas Emissions in North Carolina

6. Wrightsville Beach

7. Purpose & Goals of CAPAG n Develop Climate Action Plan Recommendations Range of individual mitigation actions Benefits and Costs Analysis –GHG Emissions Reduced – Cost / Benefit Determined –Jobs Potential Estimated Consensus of Stakeholders Support Commission on Global Climate Change

8. Background – CSA CO 2 Reports n Sections 13 required reports by DAQ on Sept. 1, 2003, 2004 and 2005 on CO 2 n 2003 Report was “State of Science” n 2004 Report was “Range of Options” n 2005 Report was “Recommendations”

9. CO2 – Assumptions & “Extrapolations” n Science of Global Warming in CSA – Not an Issue to Decide; Look at Options to Reduce n CO 2 Specified in CSA, but Assumed to be Inclusive of all GHG (Basically, Adds Methane, N 2 O, and Other but “Less Common” Gases) n CSA Directed Toward Coal-fired Power Plants, but Effort Conducted in Context of all Types and Sources of GHG – 6 Species / Stationary and Mobile

10. How Does The CAPAG Effort Relate to the Legislative Climate Change Commission? n Complements and Supports Legislative Commission n Technical Support and Knowledge on GHG Reductions to Include Costs and Benefits n Several LCGCC members on CAPAG and Technical Workgroups (TWGs)

11. Mitigation Option Sectors / TWGs n Agriculture, Forestry and Waste Management n Energy Supply n Residential, Commercial, Industrial Energy Use n Transportation and Land Use n Cross Cutting

12. LCGCC n Established by Legislature in 2005 n Impacts of Climate Change on NC n Need for Goal of GHG Reductions in NC? n If Need Determined; What Should Goal Be? n What Actions Should be Taken to Deal With Issue? n 34 Members; 18 Legislators – Others Broad Cross Section of Stakeholders n Interim Report – Early 2007 n Final Report April 15, 2008

13. What Has Been Done So Far? n CAPAG: Seven Meetings ~ 70 Calls or Meetings across Five TWGs Recommendations / Decisions by Consensus of Stakeholders Considered Over 300 potential mitigation Options Decided 53 Are Highest Priority for Analysis of Benefits and Costs Reached an Early Consensus (Unanimous) on 16 Options – Jan ’07 These Recommended to LCGCC Feb 22, 2007 Consensus on All 53 Mitigation Options as of the July 16 CAPAG Meeting Renewable / Energy Efficiency Portfolio Standard (REPS) Recommended in “Principle” (Levels yet to be decided on) n LCGCC: Six Meetings Numerous Science and policy Presentations Accepted CAPAG “16+” Recommendations Additional Suggestions from LCGCC Members – Mostly Consistent with CAPAG Options Anticipate Several Recommendations to be Picked up in Legislation

14. What Are the 16+ CAPAG Recommendations? n Residential, Commercial, Industrial (RCI): REPS (In Principle) Expand Energy Efficiency Funds EE Requirements for Government Buildings Market Transformation and Technology Development Programs Improved Appliance and Equipment Efficiency Standards Building Energy Codes “Beyond Code” Building Design Incentives and Targets Education (Consumer, Primary/Secondary, Post- Secondary/Specialist, College and University Programs) Residential, Commercial and Industrial Energy and Emissions Technical assistance and Recommended Measure Implementation

15. What Are the 16+ CAPAG Recommendations?, cont’d n Energy Supply, (ES): Removing Barriers to Combined Heat and Power (CHP) and Distributed Generation (DG) Incentives for CHP and Clean DG

16. What Are the 16+ CAPAG Recommendations?, cont’d n Cross Cutting (CC): GHG Inventories and Forecasts GHG Reporting GHG Registry Public Education and Outreach Adaptation Options for Goals or Targets (for CAPAG in Support of LCGCC)

18. Effect of Suite of CAPAG Mitigation Options

19. SB 3, Renewable / Energy Efficiency Portfolio Standard - REPS n PCS v.25, Passed Senate n 10 % X ’18 3 X ’12 6 X ’15 12.5 x ’21 (RE min. stays at 7.5 %) n Up to 25% of RPS Requirement Can be Met by EE n Min 0.2% by Solar n Min 0.2% by Biomass Resources n Instate Renewable Source Favored; Out of State Discounted n Cost Recovery Provisions n Utilities Commission Primary Implementing Agency n Revised Process for Cost Recovery on Base Load

20. What is a Renewable Resource in SB 3? n Solar n Wind n Hydropower n Geothermal n Ocean Current or Wave Energy Resource n Biomass – Ag, Animal, Wood, Residues, Liquids, Gases, Energy Crops, Landfill Methane n Waste Heat from Industrial Manufacturing n Hydrogen Derived from a Renewable Energy Source n “Renewable Energy Resource” Does NOT Include Fossil or Nuclear Energy

21. Remaining Schedule n Final CAPAG Meeting Oct 16, 2007, Conference n Jobs Analysis in the Works n Final Report and Recommendations Oct - Dec ’07 n Assist LCGCC Until Its Conclusion

22. Questions?

23. Contact Information n www.NCCLIMATECHANGE.US n www.ncair.org www.ncair.org n Brock.Nicholson@ncmail.net 919-715-05870