Corporate action and changes in state and federal policy on greenhouse gas emissions is rapidly evolving. In an effort to keep our clients briefed on recent events, CDM has highlighted recent key developments that may affect you.
The week ahead
January 22: An alliance of 10 major companies and 4 environmental organizations have announced their support of immediate federal legislation to reduce greenhouse gases by 30 percent in 15 years using a ‘cap and trade’ system. Much of the impetus for this comes from growing concern about differing mandatory GHG targets, timetables and reporting requirements from an increasing number of states. Companies in the “United States Climate Action Partnership” include: Alcoa Inc., BP America, Caterpillar Inc., Duke Energy, DuPont, FPL Group, Inc., General Electric, Lehman Brothers Holdings, PG&E Corp, and PNM Resources. Major environmental groups in the Partnership include: Environmental Defense, Natural Resources Defense Council, Pew Center on Climate Change and the World Resources Institute.
January 23: President Bush will outline a policy on global warming in his State of the Union Address, but is not expected to advocate mandatory limits on GHG emissions. It’s anticipated that he’ll launch a new biofuels initiative to help reduce GHG emission.
Last Week
RGGI Expands: Massachusetts joined the Regional Greenhouse Gas Initiative (RGGI) on Thursday, joining eight other Northeastern and mid-Atlantic states: CT, DE, ME, MD, NH, NY, NJ, NY and VT. Rhode Island’s governor recently signaled it will likely join. RGGI is a CO2 (only) cap and trade program for power plants larger than 25 MW that will begin capping emissions in 2009 with gradual reductions beginning in 2015.
EU GHG Limits: The European Union (EU) staff released an energy strategy last week that adopts a 20-percent reduction in greenhouse gas emissions from 1990 levels by 2020. The strategy is expected to be adopted my EU member country ministers in March. The UK, Germany, France and Switzerland offered to support cuts of 30 percent and initial EU policy positions reflected the greater reduction.
Methane Partnership: General Electric and American Electric Systems (AES) announced an alliance to create GHG emission offsets through the capture of methane and other gases in the US. This alliance reflects a similar alliance that CDM is close to finalizing.
Senate Action: According to Dan Delich, CDM’s Director of Government Affairs, US Senate GHG bills are beginning to take shape:
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Influential Senate Energy and Natural Resources Chairman Bingaman is proposing to reduce greenhouse gas emissions by 5 percent in 2015; by 11 percent in 2025, and by 14 percent by 2030.
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Environmental groups are supporting a more stringent proposal being developed by Senate Environment and Public Works Chairwoman Boxer. Boxer’s committee is expected to have sole jurisdiction over global warming in the Senate. Senator Boxer wants to model her legislation on California's Assembly Bill 32 which cuts statewide greenhouse gas emissions 25 percent by 2020.
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At the same time, Senators John McCain, R-Arizona, Barack Obama, D-Illinois, and Joseph Lieberman, D-Connecticut, announced a global warming bill to cut emissions by 2 percent per year. This bill is a revamped version of the bill that McCain and Lieberman unsuccessfully offered two years ago. The new bill includes cap and trade provisions for greenhouse gas credits.
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Senators are mixed in their support of GHG legislation, as exemplified by Senator Daniel Inhofe D-Okla who continues to declare global warming a “hoax.”
House Action: US House Speaker Nancy Pelosi announced the creation of a “special committee” to hold hearings and draft legislation on climate change. Normally that responsibility would fall to climate change critic, Jon Dingell, D-Michigan, the Chairman of the House Energy and Commerce Committee. It’s expected that Dingell will still have significant control over any global warming legislation in the House. The special committee relfects Pelosi and other Democrat’s interest in fast action and an effort to avoid objections by Rep. Dingell on any provisions that supports higher corporate average fuel economy (CAFÉ) standards for automakers. Several party members have been quoted being harshly critical of the special committee, including Rep. Dingell.