1. The American Clean Energy and Security Act Breakthrough Institute Analysis of the Waxman- Markey Climate and Energy Bill

2. According to the House Energy and Commerce Committee, ACES will… 1. “Reduce carbon emissions from major U.S. sources by 17% by 2020 and over 80% by 2050 compared to 2005 levels.” [Source:] http://energycommerce.house.gov/Press_111/20090602/hr2454_reported_summary.pdf 2. “Require electric utilities to meet 20% of their electricity demand through renewable energy and energy efficiency by 2020.” 3. “Invest in clean energy technologies and energy efficiency…” 1. “Reduce carbon emissions from major U.S. sources by 17% by 2020 and over 80% by 2050 compared to 2005 levels.” 2.“Require electric utilities to meet 20% of their electricity demand through renewable energy and energy efficiency by 2020.” 3. “Invest in clean energy technologies and energy efficiency…” What Will ACES Do?

3. Claim: ACES will “Reduce carbon emissions from major U.S. sources by 17% by 2020 and over 80% by 2050 compared to 2005 levels.” Emissions Reductions

4. Analysis: ACES cap and trade would legally permit continued growth in U.S. emissions for up to two decades. Emissions Reductions [Source:] http://thebreakthrough.org/blog/2009/05/climate_bills_offsets_provisio.shtml

5. ACES Target 1990 baseline 2005 baseline BAU Full Offset Levelsw/BankingEPA Offsets ProjectionCBO Offsets Projection

6. ACES Target 17% < 2005 With CBO Offset Levels With EPA Offset Levels With Full Offset Levels * Additional permits banked for future: 4,218 ^ Additional permits banked for future: 12,109

7. 2027 2037 2018

8. ACES Target Emissions Trajectory CBO Offset Levels EPA Offset Levels Full Offset Levels

9. Analysis: Strategic Reserve Pool can raise cap by 10% in any year. Triggered when prices rise too high. Floods market with more allowances, “refilled” with forestry offsets. Emissions Reductions [Source] http://thebreakthrough.org/blog/2009/05/the_climate_bills_catch_22_is.shtml

10. Emissions Reductions [Source] http://thebreakthrough.org/blog/2009/06/climate_bill_analysis_part_vii.shtml Conclusion: ACES establishes a (modest) carbon price and an emissions reduction target. Does not provide “emissions certainty” of a “hard cap.” Conclusion: ACES effectively establishes a non- binding “cap” on U.S. emissions.

11. Claim: ACES will “Require electric utilities meet 20% of their electricity demand through renewable energy and energy efficiency by 2020.” Renewable Electricity Standard

12. [Source] http://thebreakthrough.org/blog/2009/05/climate_bills_renewable_electr.shtml Analysis: RES will have little to no impact on U.S. renewable electricity generation. (Breakthrough) Analysis: RES will have “effectively zero” impact on U.S. renewable electricity generation. (Southern Alliance for Clean Energy) [Source] http://thebreakthrough.org/blog/2009/06/climate_bill_analysis_part_ix.shtml

13. BAU = 10% Nominal Requirement After Exemptions With 5% Energy Efficiency With 8% Energy Efficiency

14. [Source] http://thebreakthrough.org/blog/2009/06/climate_bill_analysis_part_xi.shtml

15. Renewable Electricity Standard [Source] http://thebreakthrough.org/blog/2009/05/climate_bills_renewable_electr.shtml “[A] national RES [at] such a low level …could severely blunt the signal to the private sector to invest billions of dollars and expand production, manufacturing, and job creation.” – American Wind Energy Association [W]e remain skeptical that current versions of either the RES or a carbon cap and trade policy will lead to significant solar deployment. … [A] "sweeping" federal energy bill that fails to deploy a portfolio of renewable energy options is an underwhelming outcome, ill-equipped to help us meet the challenges at hand.” -Vote Solar

16. Claim: ACES will “Invest in clean energy technologies and energy efficiency…” Investments in Clean Energy

17. [Source] http://thebreakthrough.org/blog/2009/05/how_do_climate_bills_clean_ene.shtml Analysis: ACES investments in clean energy R&D are a tiny fraction of President Obama’s budget; Clean energy investments overall are insufficient to the challenge at hand.

18. ACES R&D $0.5b to $1b Obama Budget $15b Breakthrough Institute $15b Energy Experts Letter $30b* Brookings $20b to $30b

19. ACES R&D $0.5b to $1b 2009 DOE R&D Budget $5.3b Stimulus Energy R&D Investment $4.1* NIH 2009 R&D Budget $30.5b

20. Obama Budget, R&D Only $15b ACES $6b-$12b Apollo Project $50b Breakthrough Institute $30b-$80b

21. ACES $6b-$12b Stimulus $33b*

22. $6-$12b $30-$60b $15-$30b

23. Carbon Price Strategic Reserve Pool price ceiling: -> $28/ton from 2012-15; 60% above 3 yr rolling average after 2015 Price floor: -> $10/ton at outset, rises 5% each year EPA estimate: -> $12-15 per ton 2015; $15-20 per ton in 2020 CBO estimate: -> $15 per ton 2011; $26 per ton 2019

24. [Chart] PointCarbon.com http://www.pointcarbon.com/news/historicprices/ EPA: $28 ceiling $10 floor EPA: $12-20 Carbon Price CBO: $15-26

26. 2008 ETS Emissions Reductions? “It confirms that the EU has a well functioning trading system, with a robust cap, a clear price signal and a liquid market, which is helping us to cut emissions cost-effectively. This should encourage other countries in their efforts to set up comparable domestic cap-and-trade systems.” - Stavros Dimas, European Environment Commissioner “The 3 percent [emissions] reduction [in 2008] was partly due to businesses taking measures to cut their emissions in response to the strong carbon price that prevailed until the economic downturn started.” - Stavros Dimas, European Environment Commissioner

27. The Counter-Factual: the US 2.9% 2.5% 2.1%

28. Jesse Jenkins Director of Energy and Climate Policy Breakthrough Institute Jesse@theBreakthrough.org 510-550-8930 x465 Ted Nordhaus Chairman Breakthrough Institute Ted@theBreakthrough.org 510-550-8930 x305