TODAY’S STUDY: HOW PRESIDENT OBAMA CAN BEAT CLIMATE CHANGE WITHOUT CONGRESS

Powering Forward: Presidential and Executive Agency Actions to Drive Clean Energy in America

January 21, 2014 (Center for the New Energy Economy/Colorado State University)

Even in the face of Congressional inaction, President Obama can leverage executive branch power, unleash enterprise and investment, and move America toward a clean energy future that curbs climate change. Featuring 200 specific recommendations developed by more than 100 industry experts and top energy thinkers, Powering Forward provides the Administration with options to move the nation closer to a clean energy economy.

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The Clean Energy Transition Has Begun But It Must Move Faster

The President has a wide variety of executive authorities to address climate change and shape energy policy without further action by Congress. The Constitution confers some; precedent establishes others; and most have been delegated to the Executive Branch by past Congresses.

How actively a president uses these authorities, however, may depend on the breadth of support from the American people. The challenge for the President and his team is to rally the American people around the objective of creating a clean energy economy, to encourage their support and concrete action, and to un leash the economy’s enormous reservoir of uncommitted private capital for investments in clean energy.

‘The reality is that America’s transition to a clean energy economy is not just a job for the future; it’s already underway. But, if we are to avoid the worst consequences of global warming and if we hope to capture the emerging global market for clean energy technologies, we must accelerate the pace of this transition. Indeed we must redouble our efforts for the sake of future generations.

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Doubling the Nation’s Energy Productivity

During his 2013 State of the Union address, the President announced a new goal: To double the energy productivity of the U.S. economy by 2030. That is both a challenge and an opportunity. According to the American Council for an Energy Efficient Economy, the national economy wastes 87% of the energy it consumes – a level of inefficiency that undermines our competitiveness, produces more greenhouse gas emissions, and costs every American family and business money.

The Alliance to Save Energy estimates that doubling our energy efficiency would save consumers $327 billion annually, including more than $1,000 each year for the average household. Businesses would save $169 billion annually, about as much as the entire corporate sector paid in federal income taxes in 2011.

President Obama already has taken several steps to improve the Federal Government’s productivity and cut its energy bills. Shortly after taking office, the administration cleared up a longstanding bottleneck in appliance efficiency standards. In October 2009, the President issued Executive Order 13514 directing agencies to reduce the energy and carbon intensity of federal buildings. And in December 2011, he direct ed agencies to execute $2 billion in energy saving performance contracts (ESPCs), arrangements in which private companies make energy efficiency improvements to federal buildings with guaranteed results. There is no cost to taxpayers. The companies are repaid by sharing the government’s savings on energy bills. In addition, the Administration cleared up a longstanding bottleneck in appliance efficiency stan dards shortly after taking office.

However, there is greater potential for using ESPCs. Roadblocks remain in the contracting process. And the backlog in appliance efficiency standards has reappeared.

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Financing Renewable Energy

Renewable energy is an essential element of a clean energy economy, and renewables are ready now. The amount of electricity from solar and wind power in the United States has doubled over the past four years. Today, wind energy supplies enough electricity for 15 million homes. By mid-century, renewable energy technologies commercially available today could provide more than 80% of America’s electricity, according to the Department of Energy’s National Renewable Energy Laboratory.

The administration’s goal is to make solar power cost competitive with traditional power generation by 2020. The President has nearly tripled his goal for renewable energy use in federal facilities, setting the target at 20% by 2020. He has proposed that the nation obtain 80% of its electricity from clean energy resources by 2035. And the Department of Defense is working to obtain 25% of its energy from renewable resources by 2025.

Renewable resources (including hydropower) provide 12% of America’s electricity today. The Energy Information Administration projects that if we continue business as usual, the contribution of renewable energy will grow to only 16% by 2040. That is not enough.

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Robust and Responsible Natural Gas Production

President Obama supports responsible natural gas production. Executives from the natural gas industry told CNEE they value reasonable government regulation. On one hand, regulation can weed out bad ac tors, provide certainty for business planning, and improve the industry’s “social license to operate”. On the other hand, ineffective, unnecessary or excessive regulations impede production and increase costs.

The regulation of natural gas production is largely a state responsibility, but the Federal Government can help in several ways.

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21st Century Utilities

Most Americans don’t fully appreciate the importance of their electric utilities until their lights go out. Yet the nation’s utility sector does an admirable job of providing reliable electricity vital to the economy and to our quality of life.

Today, electric utilities face enormous challenges adjusting to emerging trends—trends that raise questions about how renewable resources should be valued and incorporated into consumer rates; how distributed gen eration should be incorporated into the traditional electric grid; and how utilities should handle power dispatching when their energy mix includes resources that have no fuel costs. Utilities recognize their challenge, but they are without a working model or example. The Federal Government should pilot new revenue models for utilities to adapt to disruptive technology and environmental challenges.

Utility regulation is primarily a state responsibility, but the Feder al Government can help policy makers and public utility regulators answer these questions and reshape their business models for the 21st century.

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Alternative Fuels and Vehicles

A principal mission of national transportation policy should be to develop and deploy sustainable non-petroleum fuels, the infrastructure that moves them to market, and the vehicles that use them. This mission is not made less important by the prospect that the United States may soon produce enough oil to elimi nate petroleum imports. The world oil market will still control prices. Whether oil comes from the Persian Gulf or the Intermountain West, the need to control carbon emissions will impact oil’s overall use.

The President has already triggered a transformation in America’s transportation sector. In his first term, his administration nearly doubled fuel economy standards, requiring that new cars and SUVs must average at least 54.5 MPG by 2025. By September 2013, the average fuel economy of new cars and trucks had already climbed to 24.9 MPG, up from 20.1 MPG in 2007, according to a study by the University of Michigan. The administration projects that the new efficiency standards will save families more than $1.7 trillion in fuel costs and result in significant reductions in carbon emissions. The new regulations have also pushed American auto manufacturers from the brink of bankruptcy to resurgence in innovation and global leadership. Other administration initiatives have included:

• A Clean Energy Grand Challenge – EV Everywhere program designed to make electric vehicles as affordable and convenient as gasoline powered vehicles for the average American family by 2022.

• Requirements that all federal government fleet purchases must be alternative fuel vehicles by 2015 and that federal agencies must cut their petroleum consumption by 30%.

• The first-ever efficiency and greenhouse gas emission standards for heavy-duty vehicles starting in 2014.

• The now-accomplished goal to break ground on four commercial-scale cellulosic or advanced bio-refineries to bring advanced biofuel production to commercial scale.

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Conclusion

Among the more than 200 specific recommendations submitted to President Obama as a result of the CNEE leadership dialogue, there are several underlying messages.

First, to ensure the nation’s economic stability, environmental health, national security, and opportunity for generations to come, the transition to a clean energy economy must be accomplished more rapidly than any previous energy shift.

Second, the nation’s energy policies and investments must be determined not by political pressures, but by objective full life-cycle analyses of each option’s benefits and costs. Objective analysis will help resolve the inconsistencies between the President’s climate goals and an energy policy that makes no distinction between carbon-rich and clean energy resources.

Finally, President Obama can build an enduring legacy by activating the American people’s commitment to sustainable energy and by using the power of the Federal Government in partnership with states, utili ties and industry, to open new opportunities for private investment in the clean energy economy.

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