ENVIRONMENTAL, BUSINESS GROUPS URGE WHITE HOUSE
TO DOUBLE SIZE OF CLIMATE CHANGE TAX PACKAGEFor Release: December 10, 1998 Contact: Ken Bossong 301-270-2258
In a letter delivered today to President Clinton, sixteen member groups of the Sustainable Energy Coalition warned that the "warmest global temperatures ever recorded accompanied by the costliest weather-related disasters ever experienced worldwide" necessitated the Administration devoting "additional resources" to its proposed climate change tax package.
Specifically, the Coalition recommended that "the proposal be at least doubled to provide no less than $7.0 billion [over five years] to support and encourage the use of a broad range of energy efficient and renewable energy technologies to reduce the emission of carbon dioxide and other greenhouse gases."
The letter outlined proposed "provisions to support environmentally-sound development of the cross-section of renewable energy technologies" as well as "to reduce the emission of greenhouse gases in the transportation sector." It also recommended expanding energy efficiency incentives for new and existing housing, industrial processes, appliances, combined heat and power systems, and the agricultural sector.
The full text of the letter follows.
SUSTAINABLE ENERGY COALITION
315 Circle Avenue, #2; Takoma Park, MD 20912-4836
301-270-2258; fax: 301-891-2866
December 10, 1998
President Bill Clinton
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500
Dear President Clinton:
We, the undersigned business, consumer, environmental, and energy policy organizations, are writing to urge you to expand the size and scope of the climate change tax package your Administration is developing for consideration by the new Congress.
We were pleased by your announcement in your State of the Union address earlier this year that you planned to submit a proposed five-year, $3.6 billion climate change tax package as part of your effort to meet the nation's goals for reducing the emission of greenhouse gas emissions. While we considered the proposal to be modest, it was, nonetheless, a good first step.
However, during the past year, we have witnessed the warmest global temperatures ever recorded accompanied by the costliest weather-related disasters ever experienced worldwide. Evidence ranging from the retreat of glaciers to the northern migration of tropical diseases to the loss of coastal wildlife suggest that the impacts of global climate change are being felt earlier and more severely than anticipated. At the same time, U.S. greenhouse gas emissions continue to rise and are now 10.7% above 1990 levels.
Accordingly, we do not believe the proposed $3.6 billion climate change tax package is adequate to meet the Administration's climate change goals. Instead, the Administration should be prepared to devote additional resources to the package to meet its goals through a broader mix of actions including those outlined below. We therefore recommend that the proposal be at least doubled to provide no less than $7.0 billion to support and encourage the use of a broad range of energy efficient and renewable energy technologies to reduce the emission of carbon dioxide and other greenhouse gases.
We recommend that the package include provisions to support environmentally-sound development of the cross-section of renewable energy technologies. Provisions should include a five-year extension of the wind and biomass production tax credit, expansion of the scope of the biomass tax credit, alternative minimum tax relief, and incentives to encourage the use of geothermal heat pumps. We also recommend including a new 30% investment tax credit for small wind energy systems of 50 kilowatts or less.
We further recommend that the package include provisions to reduce the emission of greenhouse gases in the transportation sector. It should include incentives to encourage the purchase of vehicles that are significantly (i.e., at least 50%) more fuel efficient than the current class average and could be expanded to specifically favor fuel cells and hybrids as well as encourage the use of renewable fuels in all power systems: engines, hybrids, and fuel cells. However, vehicles taking the credit should be excluded from the manufacturers fleet for the purpose of calculating CAFE compliance and vehicles should meet California's recently adopted SULEV standards to qualify.
In the building area, provisions should be expanded to encourage the purchase and use of lighting fixtures and appliances in residential and commercial buildings that expand the market for emerging, ultra-efficient technologies. Such provisions should be supplemented by incentives to promote the construction of super-efficient new homes as well as the use of energy-efficient components such as windows with high R-values. A larger package would allow the much needed adjustment of qualification thresholds for the new home credit proposed in your earlier package. While we recognize the difficulties inherent in designing cost-effective provisions, we also believe that some incentives should also be provided to encourage owners of existing buildings to substantially upgrade the efficiency of residential and commercial buildings.
Finally, we recommend incentives for low-emission technologies in the industrial, agricultural, and electric-generation sectors. These would include advanced industrial process technologies for such key sectors as steel, aluminum, and pulp and paper; district energy and combined heat and power systems; as well as low- and no-till farming technologies and other practices that increase organic matter in the soil. In the utility sector, tax incentives, credits, and other incentives (e.g., full funding of the Renewable Energy Production Incentive program) should provide equivalent benefits for state and locally-owned as well as investor-owned electric utilities recognizing their different financial and tax status.
However, to support the breadth of provisions that are necessary to secure significant reductions of greenhouse gas emission in all sectors, we again note that your proposed climate change tax package must be broadened in both size and scope.
The modest tax incentives we propose -- many of which have already been successfully implemented at the state level -- will deliver huge public benefits for the Administration. We look forward to aggressively assisting you with the U.S. Congress as you present your revised tax package in the coming months.
We would be happy to discuss this with you further and review specific policy proposals with members of your Administration.
Sincerely,
Alliance to Save Energy
American Bioenergy Association
American Council for an Energy Efficient Economy
American Green Network
American Public Power Association
American Wind Energy Association
Americans for Clean Energy
Communications Consortium Media Center
Environmental & Energy Study Institute
Geothermal Energy Association
Geothermal Resources Association
Global Biorefineries, Inc.
International District Energy Association
Natural Resources Defense Council
Pellet Fuels Institute
SUN DAY Campaign
December 6, 1998
The articles provided below were initially compiled by the SUN DAY Campaign
for the member organizations of the Sustainable Energy Coalition.
Feel free to distribute this newsletter to others. Please let us know of other
organizations, businesses, or government agencies that would like to be added
to the e-mail list for this publication.
FEDERAL ENERGY BUDGET
1.) Fiscal Year 2000 Budget Request:
The November 30 issue of "Inside Energy" reports that the U.S. Department of
Energy (DOE) Fiscal Year 2000 budget submission for fossil energy R&D sent
earlier to the Office of Management & Budget (OMB) was slightly below the
$384 million provided by Congress for FY'99. However, in the pass-back, OMB
cut the fossil request by 33% overall with natural gas programs taking a 50%
cut. The pass-back increased the FY'00 energy efficiency and renewable
energy (EE/RE) budget by $15 million above the $1.12 billion originally
requested by DOE. The article included no info on the nuclear R&D budget but
noted that "among environmental cleanup activities, DOE's Rocky Flats
Environmental Technology Site in Colorado and the Hanford Site in Washington
did not fare well in the passback."
Separately, several DOE officials have indicated that the passback from OMB
is unacceptable and that they will be working with the White House to improve
the EE/RE numbers. However, White House officials have responded that the
FY'00 budget caps are very tight, that OMB imposed lots of cuts from original
requests in the passbacks elsewhere, and they could not promise an increase.
Members of the Sustainable Energy Coalition have told the White House that
without a substantial increase in the EE/RE programs, they are likely to
publicly criticize the request when it is formally released.
2.) Ron Packard's Record:
The November 30 "Inside Energy" reports that Rep. Ron Packard (R-CA), the
next chairman of the House Appropriations Subcommittee on Energy & Water
(which handles the renewable energy and nuclear power budgets), in the past
has cast votes on several important DOE-related issues, including supporting
fusion and nuclear energy R&D. He has also co-sponsored legislation directing
DOE to build an interim storage facility for nuclear waste near Yucca Mountain,
Nevada. However, he has voted against House floor amendments aimed at
increasing spending on DOE energy efficiency and renewable energy programs.
3.) Climate Change Tax Package:
White House officials say they are working on coming up with a more politically
sellable climate change tax package, meaning they are considering changes
to proposals to get more industry buy-in as well as adding some additional
products/initiatives. However, the Treasury Department is still costing all this
out and the Administration will have to balance expanding initiatives (e.g.,
biomass) with holding down the overall cost. Members of the Sustainable
Energy Coalition are urging the White House to put more money into the $3.6
billion, five-year package if that's what it takes to get industry support.
ELECTRIC UTILITY RESTRUCTURING
1.) Draft Executive Order/EE-RE:
The November 27 issue of "Inside EPA" included the full text of a 6-page draft
executive order under consideration by the Clinton Administration that would
commit federal agencies to purchase electricity generated from renewable fuel
sources even when that power costs more than other alternatives, and would
set strict energy efficiency goals for federal agencies. It envisions 5% of the
federal government's energy needs being met with renewables by 2005 with
energy use in federal facilities being reduced by 30% by the same date. The
draft executive order is now being reviewed by OMB and may be issued "early
next year." Let us know if you would like us to send you a copy (warning: print
is small & may not fax well). Members of the Sustainable Energy Coalition
have suggested including carbon emissions reduction goals for the federal
government as well.
2.) Administration's Restructuring Bill:
DOE officials have told members of the Sustainable Energy Coalition that they
are willing to consider changes in the Administration's draft utility restructuring
bill. However, they want to avoid major revisions that would trigger an extensive
interagency review process. They have flatly rejected carbon caps or similar
measures aimed directly at emissions for feat that such a proposal would
simply sink the bill. Regarding a Renewable Portfolio Standard (RPS) and
Public Benefits Fund, DOE officials have expressed a willingness to consider
options to strengthen these proposals somewhat. For example, the RPS might
be increased from the Administration's earlier proposal of 5.5% renewables by
2010 to 6% or 6.5%.
3.) Rich Glick:
A November 27 Reuters story reported that Rich Glick will serve as principle
adviser to DOE Secretary Bill Richardson on electricity issues. Richardson
noted: "One of my priorities as energy secretary is to help our nation's electric
utility system make the transition to choice." Glick worked as legislative
director and chief counsel to retiring Senator Dale Bumpers (D-AR) where he
managed legislative staff and formulated policies on electric utility restructuring,
oil and natural gas issues, global climate change, and nuclear waste disposal.
4.) Los Angeles/Green Power:
The Los Angeles City Council gave the Los Angeles Department of Water &
Power permission last Wednesday to offer customers the option of purchasing
"green power." The utility said it would launch the program in the first quarter of
next year. The utility believes that most "green power" customers "will see no
difference on their bills and in many cases costs will be reduced" because the
higher premium for the higher costs to purchase renewable-based electricity
would be offset by a variety of energy-efficiency programs such as discounts on
energy-saving appliances.
CLIMATE CHANGE
1.) Climate Change/Losses:
A November 28 Associated Press story on a new Worldwatch Institute study
reports that storms, floods, droughts, and fires have caused a record $89 billion
in economic losses this year worldwide. That is more than was than the $55
billion that was lost from weather-related disasters in all of the 1980s.
Preliminary estimates put total losses from weather-related disasters for the
first 11 months of the year 48% higher than the previous one-year record of over
$60 billion in 1996. In addition to the material losses, the disasters have killed
an estimates 32,000 people and displaced 300 million -- more than the
population of the United States. A combination of deforestation and climate
change caused this year's most severe disasters among them Hurricane Mitch,
the flooding of China's Yangtze River, and Bangladesh's most extensive flood of
the century. The report can be found at .
2.) CO2/Early Reductions:
The Environmental Defense Fund has provided the text of S.2617, the "Credit
for Voluntary Early Action Act," which is designed "to encourage voluntary
greenhouse gas emission mitigation actions by authorizing the President to
enter into binding agreements under which entities operating in the Untied
States will receive credit, usable in any future domestic program that requires
mitigation of greenhouse gas emissions, for voluntary mitigation actions before
2008." Let us know if you would like us to fax or e-mail the bill to you.
MISCELLANEOUS
1.) Combined Heat & Power:
Reuters (December 1) reports that the U.S. Department of Energy wants to
double the use of combined heat and power (CHP) systems in commercial,
industrial, and institutional buildings throughout the U.S. by 2010. Savings from
increased use of the energy-saving CHP units would amount to some 46
gigawatts of electricity, equal to the output of more than 50 large power plants.
CHP can generate system efficiencies greater than 70% as compared to
central generating plants that operate at a national average of 33%.
2.) Ethanol Record:
The Renewable Fuels Association reports that the domestic fuel ethanol
industry has achieved a new all-time high for production, manufacturing a
record of 103,000 barrels/day or ethanol in October. The previous record of
100,000 barrels/day was set in February 1995. Production for 1998 thus far
exceeds 1.36 billion gallons and the industry is expected to set a new annual
production record in 1998. Since passage in June of the extension of the
federal ethanol tax incentive, two new farmer-owned cooperative production
facilities commenced production in Minnesota: Pro-Corn, LLC, a 10-million
gallon plant in Preston, and Agri-Energy, LLC, a 15-million gallon facility in
Luverne. In addition, several plants in Iowa, Illinois, South Dakota, Louisiana,
and Minnesota have celebrated ground-breaking ceremonies and are expected
to begin production in 1999.
3.) Wind Powers America:
The American Wind Energy Association reports that between now and next
July 1, new wind plants will be installed and begin operating in Colorado, Iowa,
Kansas, Minnesota, Nebraska, New Mexico, Oregon, Texas, Wisconsin, and
Wyoming. This surge in new construction will boost installed U.S. wind
capacity by approximately 50%, to a level sufficient to power more than half a
million average American households.
4.) Wisconsin Wind:
Madison Gas & Electric Co. were to start construction this past week on a
$14.5 million wind farm in Kewaunee County, Wisconsin that will include
seventeen wind turbines -- sufficient to produce enough power to light 4,400
homes. The project is scheduled to start operating in June 1999 and would be
the largest wind power project in the eastern United States. It will be financed
by customers who designate that they want wind power as a source of part of
their electricity. An average residential customer who signs up for 20% of
electricity from the wind turbines will pay another $4 to $5 a month.
5.) More Wind News:
A ribbon-cutting ceremony for the 24.9 MW Vansycle Ridge Wind Farm near
Pendleton, Oregon on December 3 initiated construction of the first commercial
wind energy facility to be built in the Pacific Northwest in more than a decade.
Texas Utilities and York Research Corporation announced the unveiling of
"phase one of the 34,000-kilowatt, $40 million Big Spring (TX) WindPower
Project, which will include the largest wind turbines in America." A November
30 article from the "Omaha World-Herald" discussed the Alta (IA) wind power
project whose "wind turbines can collectively produce almost 193 megawatts of
electricity per hour." The article notes that there are now 37 wind projects in
different phases of construction nationally, including eight in Iowa. Let us know
if you would like us to fax you copies of any of these materials.
6.) EXXON-Mobil Merger:
In response to the EXXON-Mobil merger, SUN DAY released a 1-page
statement discussing the adverse impacts on sustainable energy and climate
change. A 1-page news release by US PIRG warns that the merger is "Big Oil
at its worst" that will help the industry to "drill in even the remotest parts of the
planet; consumers, however, will not benefit, and the environment will almost
certainly suffer." Let us know if you would like us to fax you a copy of either
release. Similarly, Public Citizen observed that "consumers are eventually
going to pay the price for this since it induces non-competitive behavior." The
transcript of an interview by Chris Flavin (Worldwatch Institute) with Jim Lehrer
concerning the environmental impacts of the merger is on the web at:
https://www.pbs.org/newshour/bb/business/july-dec98/oil_12-1.html; in
addition, a statement by the Worldwatch Institute on the merger can be found
at www.worldwatch.org.
7.) Supreme Court/NuclearWaste:
Reuters reports that the U.S. Supreme Court declined on November 30 to
review a U.S. Appeals Court ruling that refused to force the U.S. Department of
Energy to start accepting the high-level radioactive waste piling up at nuclear
power plants, but allowed utilities to seek compensation from the government.
A lawsuit filed by more than 30 states and state public utility commissions and
by more than 40 utilities ought to force DOE to take the waste. A earlier
(October 5) 6-page news release from the Minnesota Department of Public
Service noted that "28 state utility commissioners [had] joined 68 of their
colleagues already demanding that $6.5 billion in on-going Nuclear Waste Fund
payments be deferred until the DOE provides the nuclear waste disposal
services the fees already have paid for." Let us know if you would like us to fax
you a copy.
8.) Yucca Mountain Doubts:
A 1-page article in "Armed Forces Newswire Service" reports that a new
geological study of Yucca Mountain has found that at some time in the past
the proposed radioactive waste repository site area was flooded with water.
DOE's predictions of performance at Yucca Mountain depend centrally on its
location well above the level of the water table. Let us know if you would like to
see a copy.
