Analysis finds benefits in clean energy bill

By Susanne Retka Schilll
Cap-and-trade policies are part of many options being considered by Congress this spring as the American Clean Energy and Security Act of 2009 is crafted. The House Energy and Commerce Committee launched a week of hearings starting April 20 taking testimony on options for climate and energy policy. It's too early to tell which direction cap-and-trade legislation is headed, Rob Kelter, senior attorney at the Environmental Law and Policy Center said. "Cap and trade can mean a lot of very different things," he explained, "How you set the prices and where that money goes makes all the difference in the world."

At the beginning of the week, an economic analysis by national energy and environmental experts was released, countering industry claims that carbon-cap-and-trade legislation will be too costly for consumers. The report suggests energy efficiency improvements and renewable energy standards will make cap-and-trade legislation affordable, create 300,000 jobs by 2025 and save consumers more than $200 billion.

"This report shows that the doomsday predictions utility companies are making don't take into account the consumer benefits of this bill," Kelter said. "This legislation will be good for the economy and good for the environment."

The Environmental Law and Policy Center was joined in the analysis by the American Council for an Energy-Efficient Economy, the Energy Future Coalitions, Environment NorthEast, National Resources Defense Council and the Union of Concerned Scientists. The full analysis is available on the Web site, http//, as well as a fact sheet summarizing the report's findings.

The report points out that the American Clean Energy and Security Act creates a three-pillar approach to climate and energy legislation. An Energy Efficiency Resources Standard would reduce electricity usage by at least 15 percent and natural gas usage by at least 10 percent by 2020. A Renewable Electricity Standard would increase renewable energy production to at least 20 percent by 2020. And a global warming cap would cut greenhouse gas emissions by at least 35 percent below current levels by 2020 and by at least 80 percent by 2050.

Some are saying the EERS and RES are overly ambitious and would increase costs to utility companies trying to meet emission reduction targets. The report argues that eliminating the standards or combining them in order to weaken both would be a mistake for the following reasons:

1. Weakening or eliminating the EERS or RES results in fewer new jobs, lower utility savings for consumers and businesses, and fewer opportunities for new economic development-at a time when jobs and economic growth are top national priorities.

2. Energy efficiency and renewable energy investments can help lower the cost of electricity under cap-and-trade legislation, saving consumers money. Energy efficiency reduces energy demand, providing utility bill savings and making the RES target easier to meet while renewable energy sources provide energy without the carbon dioxide emissions associated with traditional generation sources. Energy efficiency and renewable energy sources reduce the need for expensive new power plants, which in turn reduces the cost of generating power and cuts greenhouse gas emissions.

3. An American Council for an Energy Efficient Economy analysis shows that electricity prices under cap-and-trade legislation will be 15 percent less if an EERS and RES are in place. In other words, investing in energy efficiency and renewable energy will help minimize the cost of complying with climate legislation.