Legislation to Reconcile Energy Policy with Action on Global Warming: Need and Prospects Robert M. Simon Democratic Staff Director Senate Committee on Energy and Natural Resources

Global Surface Temperatures Have Greatly Increased Since the 1800s

Global Surface Warming Has Been Greatest in Polar Regions – In Agreement with Global Warming Model Predictions

The Oceans Have Warmed At All Levels Over the Past 50 Years

Polar Ice Caps Have Shrunk Dramatically from 1979 to 2003

Power Dissipation by Atlantic Hurricanes Has Doubled Over the Past 30 Years

Recent Increases in Global Temperature Cannot Be Ascribed to Increases in the Sun’s Output – As Some “Climate Skeptics” Have Claimed

Increased Emission of Human-Generated GHGs Is the Consensus Explanation Among Scientists

National Academy of Sciences (2002): Abrupt Climate Changes Are Not Only Possible, But Likely “Recent scientific evidence shows that major and widespread climate changes have occurred with startling speed.” “Abrupt climate changes were especially common when the climate system was being forced to change rapidly.” “Greenhouse warming and other human alterations of the Earth may increase the possibility of large, abrupt, and unwelcome regional or global climatic events.” Possible non-linear responses to global warming: –Changed ocean circulation-- Rapid glacier melting –Changed patterns of rainfall/drought –Decline in forest health

Source: GlobeScan Presentation to G8+5 Legislators Forum, 6 December 2005

Changed Political Landscape in the U.S. Senate 2005 Senate Resolution (Adopted 53-46) “It is the sense of the Senate that Congress should enact a comprehensive and effective national program of mandatory, market-based limits and incentives on emissions of greenhouse gases that slow, stop, and reverse the growth of such emissions at a rate and in a manner that— “(1) will not significantly harm the United States economy; and “(2) will encourage comparable action by other nations that are major trading partners and key contributors to global emissions.”

Climate Change Conference: Key Questions Who would be regulated? Where in the flow of GHGs through the economy would regulation occur?

Climate Change Conference: Emerging Answers to Key Questions Who would be regulated? Where in the flow of GHGs through the economy would regulation occur? –Regulation should address emissions economy-wide and not target only one sector –It might be most efficient administratively, as well as fairest to all sectors, to put the point of compliance “upstream” of major carbon users.

Climate Change Conference: Key Questions Who would be regulated? Where in the flow of GHGs through the economy would regulation occur? Should some entities receive allocations of allowances? If so, which entities and why?

Climate Change Conference: Emerging Answers to Key Questions Who would be regulated? Where in the flow of GHGs through the economy would regulation occur? Should some entities receive allocations of allowances? If so, which entities and why? –The main goal of an allocation system would be to ease the transition into a rational and fair system, and to provide some relief to existing infrastructure for the balance of its capital life. –A good allocation system signals the desired future direction for technology and gives an incentive to start implementing those technologies now. –Some allocations should go to important actors who will experience additional costs due to the program, and not just those who must turn in allowances. –Even a good allocation system will be imperfect, given the diversity of industrial actors. –The corollary of this is that allocations should diminish over time to zero.

Climate Change Conference: Key Questions Who would be regulated? Where in the flow of GHGs through the economy would regulation occur? Should some entities receive allocations of allowances? If so, which entities and why? Should a U.S. GHG cap-and-trade system interface with other cap- and-trade systems (e.g., Canada; EU)? If so, how?

Climate Change Conference: Emerging Answers to Key Questions Who would be regulated? Where in the flow of GHGs through the economy would regulation occur? Should some entities receive allocations of allowances? If so, which entities and why? Should a U.S. GHG cap-and-trade system interface with other cap- and-trade systems (e.g., Canada; EU)? If so, how? –Careful and well-structured linkages to other systems (e.g., comparable programs for allowing offsets to increased emissions) are desirable.

Climate Change Conference: Key Questions Who would be regulated? Where in the flow of GHGs through the economy would regulation occur? Should some entities receive allocations of allowances? If so, which entities and why? Should a U.S. GHG cap-and-trade system interface with other cap- and-trade systems (e.g., Canada; EU)? If so, how? How should the implementation of a U.S. system factor in actions by other GHG emitters who are International economic competitors (e.g., China, India)?

Climate Change Conference: Emerging Answers to Key Questions Who would be regulated? Where in the flow of GHGs through the economy would regulation occur? Should some entities receive allocations of allowances? If so, which entities and why? Should a U.S. GHG cap-and-trade system interface with other cap- and-trade systems (e.g., Canada; EU)? If so, how? How should the implementation of a U.S. system factor in actions by other GHG emitters who are International economic competitors (e.g., China, India)? –Take a first step, but condition further steps on a review of whether countries like China and India are beginning to control their GHGs.