cap and trade

Statewide LG EE Best Practices: Weekly Update

Here are your wEEkly updates:

News and Opportunities

DOE Scaling Up the Next Generation of Building Efficiency Packages Program - $6.5 million
DOE is making available funding to drive innovation in real building technology demonstrations while fostering the collaboration of dynamic demonstration teams that include technology providers, energy organizations, efficient building hubs, utilities, and building professionals. Eligible entities include State, local, and tribal governments. Concept papers due November 21, 2016 (full application due February 21, 2017).

Upcoming Deadlines for California Energy Efficiency Coordinating Committee
Comments on revision 3 to proposed Conflict of Interest Policy due today; comments on Business Plans (except SCE's) due November 21; Comments on the topic list for the Policy Letter and Comparison Document due November 29; comments on deferred elements of draft BPs due November 30; and comments on SCE's draft BP due December 1.

2018 International Energy Conservation Code (IECC)
There are few key proposals on International Code Council's ballot that will boost efficiency, and nearly all of them will require a two-thirds majority to make it into the 2018 update of America's model energy code. The most significant residential proposal, RE 179 Builder Flex points, will achieve the modest 5% efficiency gain endorsed by the US Conference of Mayors. Check out Energy Efficient Code Coalition's voting guide here. Vote by November 22, 2016.

Cap-and-Trade Draft Funding Guidelines Supplement
ARB published draft guidelines for agencies administering Cap-and-Trade Auction Proceeds. The purpose of this supplement is to provide disadvantaged community investment targets, criteria for how to determine whether proposed projects provide benefits to disadvantaged communities, and guidance on reporting requirements. Comments due December 6, 2016.
Job Opportunity: City of El Cerrito
The City of El Cerrito is hiring for the position Management Analyst II in the Public Works Department - Operations and Environmental Services Division. This position is assigned to difficult and complex assignments in management and budgetary analysis requiring a high degree of knowledge of City, administrative, and budgetary policies, practices and techniques. Applications due December 7, 2016.

Job Opportunity: County of Sonoma
The Sonoma County General Services Department seeks a qualified bilingual (English & Spanish) professional to become an Information and Communication Analyst in their Energy and Sustainability Division. The analyst will plan, develop, coordinate, and implement Energy and Sustainability Division information, communication, education, and marketing efforts and act as the division spokesperson in dealing with the media and community groups. Applications due December 8, 2016.



12/1 (webinar) America's Next Top Energy Model: Tools and Best Practices
A peer exchange call through DOE's Better Buildings Challenge to see which energy models will be strutting their stuff down their runway.

12/8 (Fresno) Energy Efficiency Contractor and Customer Financing and Implementation Workshop

Register now for a morning seminar and complimentary networking lunch for an information-packed workshop offering powerful financing tools for contractors and their customers. Learn about the new On-Bill Financing Alternative pathway, bridge financing for OBF contractors, additional funding options, and developments in the Trade Pro Alliance program.

2/2/17 (St. Louis, MO) New Partners for Smart Growth Conference

Early-bird registration is now available through November 30th for the 2017 New Partners for Smart Growth Conference. This conference is the nation's largest smart growth and sustainability event and has been named one of 12 conferences not to miss by Planetizen.

5/5/17 (Long Beach) The Business of Local Energy Symposium - Community Choice Energy: It's All About Impact

Save the date and join CCE experts and local government leaders from across the state in Spring 2017 for a day-long event about accelerating CCA adoption and creating more benefits for local communities. Registration opens in early February.


Resources and Reports

Making the Best of the Second-Best: Welface Consequences of Time-Varying Electricity Prices
This research paper from the Energy Institute at Haas estimates the impacts of peak pricing on the commercial and industrial sector, discuses long-run investment efficiency in electricity markets, and provides second-best pricing policies under capacity constraints.

State Energy Efficiency Resource Standards
An ACEEE policy Brief from May 2016 highlighting twenty-five states that are currently implementing Energy Efficiency Resource Standards policies requiring electricity savings.



And that's all for this week! Enjoy your Thanksgiving break!




Statewide LG EE Best Practices: Weekly Update

Here are your wEEkly updates:

1. Coordinator transition (and job announcement!): For those that missed it last week: I will be leaving my position as your Statewide Local Government Energy Efficiency Best Practices next week, and so this is my last set of WEEkly Updates to you. In the interim, the Updates will continue via Julia Kim (jkim@lgc.org). It’s been a real pleasure working to connect you all with best practices, resources – and to each other! LGC is actively recruiting to fill the Coordinator position, posted here – please share widely with friends and colleagues.

2. Joint Agency Microgrid Commercialization Workshop 9/6: The CEC, CPUC, and CAISO will conduct a workshop on September 6th to learn about California customers’ microgrid implementation strategies and challenges with a focus on energy resiliency, renewable integration, costs/benefits performance, lessons learned, how cyber-security is being addressed and efforts to commercialize microgrids in California.

3. Joint IOU Webinar on LGP Project Reporting 9/7: PG&E, SCE, SCG and SDG&E will jointly host a statewide webinar 9/7 to review improvements to semi-annual data reporting and communication related to Local Government Partnership activities supporting the California Long Term Energy Efficiency Strategic Plan. Local Government Partnership reporting leads, and Local Governments conducting Strategic Plan support activity as part of a Local Government Partnership, are encouraged to attend.

4. Cap and Trade $$ Deal Passes Legislature: In the final hours of the legislative session, a last minute deal to release cap and trade funding was passed this week for transportation, housing, green space, and low/no-emissions vehicles.
5. New EE Municipal Policy in Santa Barbara County: Congratulations to Santa Barbara County, who has just passed a comprehensive new “County of Santa Barbara Energy Efficiency Standards Policy for County Owned and Leased Facilities” covering staff training, energy metering and reporting, zero net energy requirements for new construction, and more.

6. Updates from the CAEECC: Read the latest updates from the California Energy Efficiency Coordinating Committee, a committee that engages interested stakeholders in the process that energy efficiency ratepayer funding Program Administrators (PG&E, SCE, SCG, SDG&E, BayREN, SoCalREN, and MCE) are going through to plan energy efficiency goals, strategies, and programming under the new rolling portfolio cycle. (Not familiar with the CAEECC, or need background? FAQs and other resources are available.)

7. EE Compliance Resources: The California Energy Commission (CEC) has released Acceptance Test Technician Certification Provider (ATTCP) and Home Energy Rating System (HERS) reference cards, designed to quickly identify when acceptance testing or verification is required and how to find approved providers.

8. $$ for Air Sensor Best Practices, Tribal Clean Energy, and More: Check out the U.S. Environmental Protection Agency’s September newsletter for state and local governments for new funding announcements and climate change resources.

9. CEC Funding Announcement for Existing Building EE Innovations: The California Energy Commission (CEC) has recently released a $20 million solicitation for innovative large-scale development and demonstration projects that reduce electricity consumption in existing buildings. The solicitation is designed to accelerate the adoption of pre-commercial electricity saving technologies for existing government buildings; colleges, universities and K-12 schools; privately owned buildings; and facilities on military installations.

10. Attention emerging tech innovators: Know great cleantech innovators? Prospect Silicon Valley (ProspectSV) and its partners are seeking pre-commercial products and solutions from global clean technology innovators for energy efficiency, energy recovery and renewable energy solutions for potential inclusion in two state-funded demonstrations in San Francisco.

11. EE Facility Manager Decision Making: Looking for compelling resources to engage facility managers on energy efficiency? A new report from Ecova’s 2016 Energy and Sustainability Outlook Survey offers insight into how Facility Managers are prioritizing energy, water, and waste efficiency initiatives in light of the forces at work in today’s market. Learn how awareness of low/no-cost savings opportunities, and projections of energy pricing, are playing key roles in this article from Environmental Leader.

12. New EV research, news from other states: New studies from Navigant project that light duty plug-in electric vehicles (EVs) will make up half of the global EV market by 2024 – and that pairing deployment with smart grid technologies is critical. Get more coverage of these reports, and EV news from other states from UtilityDive.

13. Job Announcement: The San Diego International Airport is hiring for a highly-motivated individual to join its Environmental Affairs Department as an Environmental Specialist.

As always, you can keep track of relevant events by connecting to the EE Events Calendar, and find more resources being added daily on the EECoordinator website – including past WEEkly Updates.


That’s all for this week!







Statewide LG EE Best Practices: Weekly Update

Here are your wEEkly updates:

1. Coordinator transition (and job announcement!): I will be leaving my position as your Statewide Local Government Energy Efficiency Best Practices Coordinator in early September. It’s been a real pleasure working to connect you all with best practices, resources – and to each other! LGC is actively recruiting to fill the Coordinator position, posted here – please share widely with friends and colleagues.

2. New from ACEEE: the Updates will be kept short this week, as I am offsite at the ACEEE Summer Buildings Study. Great new research and experience is being shared on everything from opportunities for rural small business programs, to energy code structures to increase compliance paths, to low-income energy efficiency program penetration, to updates on the City Energy Project, to successes in data quality management in Prop 39 rollout (and what this can mean for other programs). If you are interested in any of these topics please contact me – I will also be sharing out more next week and through the upcoming Fall edition of CURRENTS. (Miss the Summer edition? Click here)

3. New Window Film Calculator: The California Energy Commission (CEC) recently approved a new Window Film Savings Calculator designed by the International Window Film Association for use by local educational agencies to determine whether a window film installation project qualifies for funding under Proposition 39 for energy efficiency upgrades to educational facilities.

4. Federal Funding Opportunities: Get access to new funding opportunities in climate change mitigation and adaptation modeling, environmental health and water quality technical assistance have been released by the USEPA and the NIH.

5. Codes & Standards Team Call for Local Governments: A call between the IOU Codes and Standards team and local governments interested in resources for going beyond the energy code in their jurisdictions will take place next Tuesday, August 30th. If you are a local government and would like to join this call please contact me (jdecker@lgc.org).

6. ZNE/Geothermal Building Performance: We heard from several local governments at the SEEC Forum about the importance of not just design, but performance, in zero net energy buildings. (Learn from Berkeley, Santa Monica, SMUD, and San Diego County here). A geothermal zero net energy commercial office building in Florida has turned 4 years old, and operators and tenants have shared their experience – and the building’s performance – with the Sierra Club.

7. Support the International Energy Code: The Energy Efficiency Codes Coalition has mounted a national campaign to help support the latest update to the International Energy Conservation Code (IECC), and is looking for help from local governments that vote in their International Code Council (ICC) chapters! Learn why this is so important and access fact sheets here.

8. Cap and Trade Review: As California legislators approve Senate Bill 32, which would extend the emissions-reductions targets under the state’s existing Global Warming Solutions Act, LGC Executive Director Kate Meis reviews the benefits that have been realized by the landmark legislation and its revenue-generating companion cap-and-trade program. (View investments by region released from ARB, or more on cap and trade.)

9. Job announcement: The Natural Resources Defense Council (NRDC) is hiring for a City Engagement Manager with the City Energy Project (CEP) in the Urban Solutions program.

As always, you can keep track of relevant events by connecting to the EE Events Calendar, and find more resources being added daily on the EECoordinator website – including past WEEkly Updates.



That’s all for this week!



Statewide LG EE Best Practices: Weekly Update

! Here are your wEEkly updates:

1. Webinar on Energy Technology Competition 8/28: The U.S. Department of Energy will present a live webinar titled “JUMP SIEMENS Call for Innovation” on Friday, August 26th. The Call is seeking innovative ideas for the use of personal “smart” devices to interact with public spaces.

2. Webinar on Hydrogen Infrastructure 8/30: The U.S. Department of Energy will present a live webinar titled “International Hydrogen Infrastructure Update” on Tuesday, August 30th.

3. Energy Storage Summit 12/7-8: The 2016 U.S. Energy Storage Summit will be held in San Francisco this December 7th and 8th – and early bird prices for registration end August 31st! Get the agenda, more information, and/or register.

4. CPUC Decision on the EE Rolling Portfolio Now Final: The CA Public Utilities Commission (CPUC) Proposed Decision Providing Guidance for Initial Energy Efficiency Rolling Portfolio Business Plan Filings (R.13-11-005) was voted on this week and was passed. Whether you are developing a business plan for energy efficiency funds and programs in the coming years, or providing feedback on one - or simply plan on seeking energy efficiency program funding – this decision covers a number of topics (Regional Energy Networks, issues by sector, pay for performance programs, third party and statewide programs, M&V) that may be of interest. You can access the Proposed Decision – and its table of contents – here.

5. Rolling Portfolio Background: Need a refresher on R-13-11-005 and the rolling portfolio? Check out coverage on this Proceedings, Decisions, and Legislation page. You can also get involved with current proceedings through the CA Energy Efficiency Coordinating Committee. Or, learn how to interpret CPUC documents and proceedings in this helpful 101 webinar.

6. CEC Staff Report on SoCal Electric Reliability: A new CEC staff report has been made available in preparation for the August 29th workshop on Electric Reliability in Southern California.

7. New Proposed Energy Storage in SoCal: Southern California’s utilities are turning to energy storage developers to get battery projects up and running at a record speed. This week, utilities Southern California Edison and San Diego Gas & Electric officially asked the California Public Utilities Commission to approve contracts for more than 50 megawatts’ worth of lithium-ion battery projects. Learn more from Greentech Media.

8. $1.2B in Cap and Trade Proposed by CA Senate: This Wednesday, California’s State Senate proposed a series of clean energy funding initiatives totaling $1.2 billion to address greenhouse gas emissions from the transportation sector and air pollution in urban environments.

9. Connecting Home Buyers with Metrics to Value EE: We’ve seen a lot of recent studies on how energy efficient homes are worth more; but, communicating this value has been a challenge, making the market slow to respond and leaving dollars and energy efficiency opportunities on the table in our communities. (This is especially unfortunate in low-income households, since connecting homes energy efficiency can help fight poverty.) This week, Greentech Media explores options for creating a easy metric to help home buyers include the value of energy efficiency in their decision making.

10. Low-Rise Mandatory Energy Code Measures Summary: The California Energy Commission (CEC) has just released the 2016 Low-Rise Residential Mandatory Measures Summary – this is a great document to share with your buildings departments as a resource to help designers and permit applicants in your jurisdiction comply with the new energy code.

11. California ZNE Milestone Achieved: The California Public Utilities Commission, California Energy Commission, and the New Buildings Institute (NBI) announced earlier this month California continues the march toward its zero net energy (ZNE) goals, with 108 new and renovated commercial buildings that have been either verified as generating as much energy as they consume or are working toward that target. More on zero net energy here – or, learn about ZNE tracking tools.

12. Waste Collection Zones Reduce GHGs: A new study of New York City reveals that commercial waste collection zones may reduce truck traffic and greenhouse gas emissions associated with waste collection.

13. New Research on Water and EE: Increased coordination between the water and energy sectors breaks down traditional silos and paves the way for an integrative approach to saving energy and water. This week, ACEEE has released a new summary of water-energy efficiency research and best practices, The Energy–Water Nexus: Exploring the Stream of Opportunities, which summarizes past research (see below) and discusses new opportunities, including joint energy and water utility collaboration.

14. Job Announcement: MCE is hiring for a Marketing Manager! Learn more here.

15. RFP Announcement: The City and County of San Francisco Department of the Environment (SFEnvironment) announces a Request for Proposals for As Needed Energy Services for the Department’s energy and climate programs, including energy efficiency, renewable and alternative energy components, and climate protection initiatives.

As always, you can keep track of relevant events by connecting to the EE Events Calendar, and find more resources being added daily on the EECoordinator website – including past WEEkly Updates.



That’s all for this week!




Emission Benchmarks for Industrial Processes



California Air Resources Board (CARB) has been working hard to achieve California’s goal of reducing emissions of greenhouse gases to 1990 levels by 2020. This is equivalent to a 30% reduction in projected emissions--a lofty goal to accomplish within the next 7 years. Ultimately, the intent is to reduce emissions by 80% by 2050. If you factor in situations such as population growth and thus increased demand, it becomes a very ambitious goal. 

Can we make it? 

It has become apparent to me that when the cost of compliance becomes more cost effective than the cost of pollution, pollution be able to be controlled.

The University of California, Berkeley and Northwestern University are working with the CARB to establish output-based benchmarks for industrial processes. Such benchmarks will be used for the distribution of free emission allowances facilities covered by the California Cap-and-Trade Program, which is one of the newest policy instruments the state has adopted to reduce emissions cost-effectively. 

One of the main results of the project will be output-based benchmarks for selected sectors, for which benchmarks do not currently exist (mainly food processing, important for the Central Valley). Another major part of the project focuses on the benchmarking approach for refineries in the period after 2015. 

US Climate Action: Calling individuals to put on the uniform and step up to the plate.



By adopting an ambitious mandatory energy saving target for 2030 the State of California is well on its way to addressing the pressing issue of Climate Change. Global climate change affects the American public with growing visibility and ferocity. As severe weather events wreak havoc on the East coast or wildfires consume hundreds of thousands of acres here in the West, concern about the effects of climate change grows. In addition, the American public bears a heavy financial burden as tax dollars fund increased firefighting efforts; provide disaster relief to flooded cities and towns; and subsidize the climate issues affecting the American bread basket. However, despite the growing cost to cope with the effects of climate change, national policy to address climate change is still a long way off.

Cap-and-Trade in the US
The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory CO2 reduction cap-and-trade program in the US. Under RGGI Northeastern and Mid Atlantic states have capped the CO2 emissions in the power sector with the goal of reducing power sector CO2 emissions 10 percent from the 2002-2004 average by 2018.

California began its own cap-and-trade program as well, with several major industrial sectors joining power as capped entities. Many other states – and hopefully the federal government- are watching intently to see how the California program plays out, as California prides itself on its trailblazing adoption of many environmental policies.

Federal cap-and-trade programs are not new in the U.S., with many people being familiar with the 1990 Clean Air Act Acid Rain Program’s SO2  trading system. This cap-and-trade system is widely considered a major success,with an Office of Management and Budget study finding benefits exceeding costsby a 40:1 ratio

Policy on Climate Change
Americans, witnessing a relentless onslaught of wildfires, droughts and recent flooding are fearful of losing their freedoms and way of life. As severe weather is becoming the new normal across the U.S., the price of inaction is becoming ever clearer. The specific cost and benefits of the cap-and-trade programs are yet to be determined, and a public that traditionally looks so favorably on market-based solutions and “quick wins” remains unconvinced on the potential of a market-based cap and trade solution.

Climate change could fundamentally change how we as Americans interact with each other, the rest of the world, and our environment. As the U.S. struggles with national policy on climate change, we fall behind other countries on this important global issue. In his victory speech on election night, President Obama gave brief but equal mention to ending the dependence of the US on foreign oil and tackling climate change. Perhaps by addressing climate change in terms of energy security federal action stands a chance. Perhaps, under the emerging “new energy economy” America can reclaim its position of leadership in the world.

Photo Credit: http://www.flickr.com/photos/sully_aka__wstera2/4388591845/

Mystery unveiled, California and how it trades its caps.

"Let the Hunger Compliance Games begin!"

What is California’s Cap and Trade and what makes California believe it can achieve something the nation could not?  For starters, you may be asking, what is all the hoopla about cap and trade? Well, the basics of cap and trade are simple; it uses the power of the marketplace to reduce pollution, in theory doing so at the lowest possible cost. In the Golden State system, government regulators set an annual limit (cap) on the GHG emissions produced by the state’s factories, power plants and oil refineries. The cap will decline about a percentage point for the first two years and three percent each year after that.

The basic premise of cap-and-trade is that government doesn't tell polluters how to clean up their act. Instead, it simply imposes a cap on emissions. Each company starts the year with a certain number of tons allowed—a so-called right to pollute. The company decides how to use its allowance; it might restrict output, or switch to a cleaner fuel, or buy a scrubber to cut emissions. If it doesn't use up its allowance, it might then sell what it no longer needs. Then again, it might have to buy extra allowances on the open market. Each year, the cap ratchets down, and the shrinking pool of allowances gets costlier. As in a game of musical chairs, polluters must scramble to match allowances to emissions.


Companies will buy and sell allowances to emit carbon dioxide and other heat-trapping gases (GHG). Now, each allowance represents one ton of Carbon Dioxide (CO2). The minimum price starts at $10 per allowance (ton of Co2) and will slowly increase over time. The number of allowances that a company must hold is determined based on the standard emission from their type of business or facility. Companies that cut their emissions quickly will have spare allowances they can sell to other businesses that are having a hard time making reductions. This is easy to see if we look at emissions through an industry specific looking glass, as it would be difficult to conceive of a cap and trade program working without allowances being industry specific.

In the beginning were the electric utilities. The utility companies will be getting all the allowances they need for free (for a while anyhow).  The utilities will be required to sell allowances at state-organized auctions that occur four times each year. The money the utilities make must be used to benefit their ratepayers, possibly through a credit on customers’ bills or maintenance on equipment and transmission lines that would offset rate hikes much like the one the CPUC just approved. Most manufacturers will receive 90 percent of their allowances for free in the first two years, dropping to 75 percent in 2015.

The first auction happened last November and had 23,126,110 tons of 2013 vintage Co2 allowances up for sale on an electronic trading platform. Companies and traders who registered in advance submitted sealed bids specifying how many allowances they wanted to buy, and at what price. The bids were ranked from highest price to lowest until all the allowances have been allocated. The lowest price at which allowances were allocated became the price that all participants paid, regardless of their original bids. In November’s auction, the allowances sold for $10.09 with the reserve price set at $10 and the maximum price submitted was at $91.13 mean price was $15.60 and the Median price was $12.95. Where is Effie Trinket when you need her? Now, as far as the secondary market, companies and traders can continue trading outside the auctions, but each allowance has a serial number, and all transactions must be recorded in a central tracking system.

There was also an advance auction of 2015 vintage allowances that sold 5,576,000 of 39,450,000 available allowances for sale at the price of $10.00 with a maximum bid of $17.25 and the mean of $11.07 and Median price being $10.59, the maximum price submitted was $17.25 and the minimum was $10.00 and therefore all 2015 vintage allowances were sold at $10.00. The drawback of buying vintage 2015 allowances is that your funding source is tied up two years in advance; the benefit is that you pay a much cheaper price for allowances purchased today that will be used in 2015, when the number of allowances will be dropping to 75 percent. In layman’s terms, if you know your company will need allowances in 2015 and it has the capital to purchase allowances today, the price will be rock bottom today ( hence the $10 price tag) vs. purchasing them in 2015 when every industry will need them and the price is much higher. How about this for a business venture, buy up all the 2015 allowances you can and sell them when 2015 comes around for three to four times the price they were originally purchased for.  Sounds like a great way to make it rich to me.


See the air resource board for a complete list of qualified bidders and a more detailed account of the November 2012 auction. Below is a sampling of what you can expect to find:

Offsets
Companies can also buy offsets, credits generated by forestry projects and other endeavors that either remove greenhouse gases from the atmosphere or reduce emissions. But the offsets must be generated in the United States and can account for no more than 8 percent of all the allowances that a company needs. To me, offsets should be limited to the state of California (for this specific situation) as other states and federal entities are not participating and thus, should not be allowed to participate in an offset program?

Market manipulation?
The Air Resources Board has set limits on the percentage of available allowances that any individual company or trader can hold, to prevent anyone from cornering the market. Consultants will also monitor the auctions, looking for unusual trading behavior. We can all see this one happening or at least someone trying to make this happen.

Where does the money go?
Amazingly enough, this hasn't been decided; by law, money the state raises by selling allowances must be used to help reduce greenhouse gas emissions and cannot simply be dumped into California's general fund as if it were tax revenue. But the Legislature has not yet hammered out the details.

Important information
Hirschman-Herfindahl index (HHI):  The HHI is a measure of the concentration of allowances purchased by winning bidders relative to the total sale of current vintage allowances in the auction.  The percentage of allowances purchased by each winning bidder is squared and then summed across all winning bidders.  The HHI can range up to 10,000, representing 100% of the current vintage allowances purchased by a single bidder (i.e., 100x100=10,000).




Read more:
 

Photo Credit: Jacobsen, Nina and Kilik, Jon (Producers) & Ross, Gary (Director). 2012. The Hunger Games [Motion picture]/ United Sates. Lionsgate, Color Force. 

Photo Credit:  http://www.flickr.com/photos/cecmtl/5594631871/

The best way to use California's carbon windfall


New studies show that using revenue from California's landmark carbon-trading system for energy efficiency and residential renewable energy programs would yield the biggest bang for the buck, and have the strongest chance of surviving a legal challenge.

Nonprofit group Next 10 commissioned studies to determine the best use of proceeds from the cap-and-trade program effective 2013. Most of the models end up generating new revenue for the state through economic growth and new jobs, with programs that improve residential lighting and make other energy-slashing upgrades generating the most. Here is a link to the report that sums up the findings.

University of California, Berkeley, and Resources for the Future examined ways state officials could spend money - the group used the sum of $100 million although the real figure could be higher - raised by the sale of emissions allowances to non-utililty entitites.
The teams modeled scenarios ranging from giving the money to taxpayers in the form of rebates to creating green lending programs to using it on portions of the high-speed rail project. A rebate program would be the most risky legally because it doesn't directly support the greenhouse gas reduction goals of AB 32, the researchers determined.

Energy-efficiency projects, however, could create many more jobs and pump more money into state coffers, depending upon the program. The strongest potential and least legal risk appear to be with programs that fund energy upgrades in lower to middle-income households.

Funding components of high speed rail with carbon-trading revenue would create fewer jobs and less money for the state. It also would be more risky legally, the analysts discovered.

"The most pro-growth options would invest auction proceeds in expanding energy efficiency and renewable technology at the household level," said the study's author, University of California professor David Roland-Holst.

This San Francisco Chronicle story and  this Sacramento Business Journal piece go into more detail about cap and trade, including other possible impacts - and offsets  - on consumers.

The carbon auction is new, so predicting the outcome of legal challenges is itself a challenge. The authors concluded, however, that the cap-and-trade program was not intended to raise revenue, and thus is not a tax. "If the program is challenged in court, we consider spending scenairos that support the primary goal of AB 32 - to cut or mitigate greenhouse gas emissions - to be relatively 'low risk' from a legal standpoint," said co-author and law professor Daniel Farber of UC Berkeley.

The conclusions of the research don't surprise us. Our nonprofit focuses much of its work on energy-efficiency programs that cut power bills. It is almost shocking the amount of money seemingly simple adjustments can make. The city of Fresno, where I live, crunched utility data and discovered that a widespread energy-saving program could pump $260 million into the local economy. Talk about an economic stimulus!

That is why energy efficiency is called the "low hanging fruit" of the clean energy movement.

California Adopts Ambitious Cap And Trade Program


California regulators have approved an ambitious carbon-trading program in a move that some businesses fear will increase their costs, but also could be a potential revenue boon to the financially struggling state.

The 9-1 vote by the California Air Resources Board - at a packed meeting that featured climate skeptics with signs reading, "Global Warming: Science by Homer Simpson," according to Huffington Post - creates a complicated market for carbon credits effective in 2012. It allows big emitters, such as power plants, refiners and other industries, to buy carbon credits as a way to comply with mandatory emission cuts.

As the Wall Street Journal notes, the regulations come on the heels of the Cancun climate talks and six weeks after voters in California kept AB 32, the state's landmark climate law - of which cap and trade was a portion. Attempts to create a national cap and trade program have not been successful.

Supporters hope the California program will be a model for other states to follow.
There also is talk of linking it to cap and trade programs in New Mexico and Canada.

Air Resources Board Chair Mary Nichols said the state will create mechanisms to prevent manipulation of the carbon market, and wants a fund that uses carbon auction funds for energy-savings programs for low-income families.

The state plans to give away most of the carbon allowances in the first few years, but, by some estimates, $7 billion of revenue could eventually be created through a market. Here is a Los Angeles Times story that gives a good analysis of the program.

Meanwhile, manufacturers weren't necessarily keen on the whole thing, this San Diego Union-Tribune story notes. Here's a quote: "It will hurt manufacturers hard — raising costs on all types of energy,” warned Dorothy Rothrock, their lead negotiator on the issue for a business organization. “Manufacturers can’t pass along the costs of cap and trade when prices are set in global markets.”

There also is some speculation that the program could lead to rate increases.
Good or bad, the new regulation is an indication that California is serious about climate change.

"Billions of dollars are being poured into California in clean technology venture capital investment," Gov. Arnold Schwarzenegger said in the Wall Street Journal story. "Of course, we have to be sensitive because it's an economic downturn, and this Air Resources Board knows they have to be sensitive. But we have to reach our goals by 2020."

Photo by heatingoil.com