Kyoto Protocol and Global Climate Change Agreements

15-Dec-2007 – Bali talks kick off negotiations for post-Kyoto climate change agreement – Under the auspices of the United Nations Framework Convention on Climate Change, 190 nations agreed to begin a negotiation process to come up with a new agreement by the end of 2009 to replace the Kyoto Protocol, which expires in 2012. The agreement to begin negotiation process came after two weeks of talks in Bali, Indonesia on Dec 20-22, 2007. The talks nearly broke down in acrimony, but finally produced an agreement to start new talks after the Bush administration successfully prevented specific emission reduction targets from being cited in the agreement and after developing nations such as China and India showed some flexibility in perhaps agreeing to emission reductions at some point in the future. In a footnote, the Bali statement calls for negotiation to achieve emission cuts of 25% to 40% by 2020 from 1990 levels.

The bottom line with that the post-Kyoto negotiation process is unlikely to make any significant progress while the Bush administration is in power because of its often-stated opposition to mandatory emission reductions and because China and other developing nations are likely to continue to resist mandatory caps. Progress in the talks will likely come only after a new US president takes over in January 2008. Progress can then be made if the new president strong supports the process of mandatory emission reductions and takes a leadership role in cajoling developing nations such as China and India to join the program with large aid packages and delayed targets.

US Federal Alternative Energy Legislation

December 2007—The US Congress in December 2007 approved, and President Bush signed, an alternative energy bill that contained the following major items:

CAFE standards – The bill mandated the first increase in the CAFE mileage standards since 1975, raising the fuel economy standard by 40%. The bill requires a fleet average of 35 miles per gallon by 2020.

Biofuels – The bill mandated a big increase in the Renewable Fuels Standard from the current standard of 7.5 billion gallons by 2012 to 36 billion gallons per year in 2022 of renewable fuels. The RFS of 36 billion gallons per year equals about one-quarter of the US fuel supply.

Efficiency – The bill increased energy efficiency standards for federal buildings.

The bill was also notable for what it did not include. The Senate left out of the bill a providing a long-term extension of the investment tax credit and a short-term extension of the production tax credit (which currently expire Dec 31, 2008). The House bill contained an 8-year extension of the existing solar Investment Tax Credit (through 31-Dec-2016) with no cap for businesses and a 6-year extension for residential property (through 31-Dec-2014) with an increased cap of $4,000. The bill also contained a provision to remove the current bar and allow utilities to claim the ITC. House Democratic leaders said they planned to try again in early 2008 to get the solar incentive extensions approved in a new bill.

The other major item in the House bill that was rejected by the Senate was a federal Renewable Portfolio Standard (RPS), which would have required utilities to obtain 15% of their power from renewable sources by 2020. More than 20 states have Renewable Portfolio Standards (see latest state RPS info at the Union of Concerned Scientists), but there no is federal RPS as yet. Senate Republicans and the Bush administration were opposed to the RPS and successfully prevented it from being included in the final Senate bill. Groups lobbying against the RPS included the Edison Electric Institute (which represents investor-owned utilities), the National Association of Manufacturers, the Chamber of Commerce, and groups representing the paper, petrochemical and refining industries, according to the NY Times (“Industry Flexes Muscle, Weaker Energy Bill Passes, 14-Dec-2007).

US Greenhouse Gas Emission Regulation

5-Dec-2007 - Senate panel approves cap-and-trade bill — The Senate Environment and Public Works Committee on December 5, 2007 approved the Lieberman-Warner cap-and-trade bill and sent it to the full Senate for debate in 2008. The passage of that bill illustrates the support in parts of Congress for greenhouse gas emission curbs.

Clean Energy Regulation Links

SEIA State Incentives for Solar Power - http://www.seia.org/incentives.php

SEIA Guide to Federal Tax Incentives for Solar Power - http://www.seia.org/taxmanualdownload.php