Hill Heat

• Imtiaz Ahmad, Vice President, Morgan Stanley
• Matthew Arnold, Co-Founder & Director, Sustainable Finance LTD
• Christopher Bell, Partner, Sidley Austin LLP
• Alan Bernstein, CEO, Sustainable Forestry Management
• Eric Bettelheim, Executive Chairman & General Counsel, Sustainable Forestry Management
• Bruce Braine, VP, Strategic Policy Analysis, American Electric Power
• Claude Brown, Partner & Co-Chair Environment and Climatic Trading Group, Clifford Chance LLP
• Mike Burnett, Executive Director, The Climate Trust
• Christopher Carr, Counsel, Vinson & Elkins
• Joelle Chassard, Manager, Carbon Finance Unit, World Bank
• John Curtis, US Practice Leader, Environmental Resource Management
• Yvo de Boer, Executive Secretary, United Nations Framework Convention on Climate Change
• Robert de Boer, Director- Sales, Noble Carbon Credits
• Neal Dikeman, Partner, Jane Capital Partners
• Andrew Ertel, CEO, Evolution Markets
• Doug Esamann, Senior Vice President, Strategy & Planning, Duke Energy
• Mr. Peter Etienne, Senior Counsel, Baxter
• Kevin Ewing, Partner, Bracewell Giuliani LLP
• Allen Fiksdal, Energy Facility Site Evaluation Council Manager, State of Washington
• Richard French, Senior Manager, Assurance/Business Advisory Services, PricewaterhouseCoopers LLP
• Gary Guzy, Senior Vice President, Marsh USA Inc.
• Gary Hart, Consultant, ICAP Energy
• Dennis Hirsch, Counsel, Porter Wright Morris & Arthur LLP
• Sam Hitz, Vice President, Policy & Operations, California Climate Action Registry
• Glenn Hodes, Energy Economist, United Nations Environment Program
• Jason Scott Johnston, Professor and Director, Program on Law, the Environment and the Economy, University of Pennsylvania Law School
• Vinod Kesava, Chief Operating Officer, Asia Carbon Group of Companies
• Matthew Kiernan, Chief Executive Officer, Innovest Strategic Value Advisors
• Jennifer Layke, Deputy Director, Climate & Energy, World Resources Institute
• William Luraschi, President, AES Alternative Energy
• Christopher Mcdermott, Manager-Environmental Investments, Hartz Capital
• Ronald Meissen, Sr. Director Sustainability Corporate Environment, Health and Safety, Baxter Healthcare
• Ricardo Nogueira, Counsel/Investment Advisor to Trading Emissions PLC, EEA Fund Management Limited
• Andrew Orringer, Partner, Clifford Chance US
• Nicholas Parker, Chairman & Co-Founder, Cleantech Group, Canada
• Lindene Patton, Senior Vice President & Counsel, Zurich
• Mark Proegler, Director, Emission Markets Group, BP
• Louis Redshaw, Head of Environmental Markets, Barclay’s Capital
• Zoe Riddell, US Director, Carbon Disclosure Project
• Nancy Ryan, Energy Advisor, California Public Utilities Commission
• Armin Sandhoevel, Head Allianz Climate Core Group Head Carbon Risk/CoC Renewables RM Dresdner Bank Chairman UNEP FI Climate Change Group, Dresdner Bank
• Mike Scott, Principal, Carbon Ventures, ENVIRON
• John Scowcroft, Head, Environment & Sustainable Development, Eurelectric
• Truman Semans, Director for Markets and Business Strategy, Pew Center for Climate Change
• Michael Sheehan, Chief, Mobile Source Planning Section, Division of Air Resources, New York State Department of Environmental Conservation
• Gray Taylor, Environment Practice Head, Bennett Jones LLP
• Bill Thomas, Counsel, Global Environment Group, Clifford Chance LLP
• Seb Walhain, Director, Environmental Markets, Fortis Bank
• Chris Walker, U.S. Director, The Climate Group
• Michael Walsh, Executive Vice President, Research, Chicago Climate Exchange
• David Webster, Founder, Clean Air Conservancy
• Martin Whittaker, Director, MissionPoint Capital
• Vikram Widge, First Vice President, KfW Carbon Fund, International Finance Corporation
• Cynthia Williams, Professor of Law, University of Illinois College of Law
• Sergio Wolkovisky, Structured Products, ING Financial Markets LLC
• Bernhard Zander, First Vice President, KfW Carbon Fund, KfW Bankengruppe

Energy Conservation

Growing certainty that the burning of fossil fuels is warming the Earth’s atmosphere has spawned proposals from governments and industry to conserve energy. The Senate legislation would save 88 billion kilowatt-hours of electricity per year, according to a Bingaman statement, or enough to power more than 11 million homes.

Greenhouse gas emissions would be cut by 500 million tons annually, or 1.5 percent, by replacing incandescent light bulbs worldwide, Paul Waide, a policy analyst at the International Energy Agency, said at the Senate hearing. He said that would be the equivalent of “installing 100 times current U.S. wind generation capacity in lieu of unsequestered coal-fired power plants.”

Replacing Bulbs

Under the Senate proposal, beginning in 2012 and continuing through 2014, the current 40-watt, 60-watt, 75-watt and 100-watt incandescent bulbs, which now number 4 billion in U.S. homes and businesses, will be replaced by lower wattage bulbs that produce equivalent amounts of light. Bingaman’s bill would allow for a reevaluation of how to raise standards in 2020.

The House bill requires existing wattage lights to be brighter, which industry and environmental groups say will lead to more efficiency, although not necessarily to energy savings. The House measure then requires efficiency gains by 2020 that industry says are untenable.

The House plan would raise lighting efficiency by about 30 percent by 2014 and by 75 percent by 2020.

“If it stays the way it is now, as far as we know now, it is basically a CFL standard,” Earl Jones, senior counsel for the consumer and industrial division of GE, said of the House bill. He said new technology could develop, however Congress should not lock in an approach now to be mandated in 2020.

GE, Siemens’ Osram-Sylvania and Philips are planning different kinds of new products that would not meet the House’s long-range standards.

‘Tough’ Standards

Representative Jane Harman, a chief sponsor of the House bill, said the two bills were not all that far apart and she would compromise on how savings are measured. She would not support a less stringent bill.

“The standards are going to stay tough,” the California Democrat said in an interview after testifying at the hearing. “We are not watering down savings.”

Harman wants states to be able to preempt the federal standard until 2020. Bingaman wants no state preemption. Harman said that issue would not lead to the measure’s downfall.

Steven Nadel, executive director of the American Council for an Energy Efficient Economy, who testified at the hearing, said the Senate bill will save a little more energy than the House bill through 2020, and a little less than the House bill through 2030.

Nadel said the Senate bill should be toughened in ways industry does not support. For example efficiency groups want lawmakers to close loopholes that would allow less efficient lighting products to be exempted from the rules.

“I could think of a dozen ways that I could evade these standards without any trouble,” Nadel said of loopholes in the Bingaman bill.

To contact the reporter on this story: Daniel Whitten in Washington at dwhitten2@bloomberg.net

Congressman Fred Upton (R – St. Joseph) testified this morning before the U.S. Senate Energy & Natural Resources Committee on his bipartisan amendment to transform the country’s lighting industry from obsolete, inefficient incandescent light bulbs toward higher-efficiency standards. Upton, a senior member of the Energy and Commerce Committee, and California Democrat Jane Harman are leading the effort to promote energy efficiency and reduce greenhouse gas emissions.

Both Upton and Harman testified during the hearing to examine “Energy Efficiency Standards for Incandescent Lamps.” Upton’s bipartisan amendment, supported by both environmental and industry groups, was included in a broad energy package that passed the U.S. House in early August.

“We must examine other solutions in addition to conservation as energy consumption across the globe is expected to increase approximately 50 percent by 2030,” said Upton. “Current incandescent bulbs on store shelves are obsolete and highly inefficient – only 10 percent of the energy consumed by each bulb is for light with 90 percent wasted on unnecessary heat. With more efficient bulbs, we will dramatically lower our energy use, reducing greenhouse gases as well as saving American families billions of dollars in their electric bills – and the benefits will be as easy as a flip of the switch. Every home will be on the front lines in the effort to reduce pollution and save energy, and we will be successful one light bulb at a time. I am confident that the Senate will embrace our common sense, bipartisan approach that partners with American industry to substantially reduce pollution.”

Across the nation, the environmental and economic benefits of more efficient bulbs will be substantial.

High efficiency bulbs will result in the:

• Reduction in electricity demand equal to the output of 23 nuclear plants;
• Reduction of airborne mercury emissions from coal burning plants – 4,500 lbs;
• Reduction in annual Carbon Dioxide emissions – 120 million tons; and
• $14 billion in reduced electricity costs for consumers.

The amendment sets technology-neutral performance standards to replace today’s inefficient 100 watt, 75 watt, 60 watt and 40 watt incandescent lights with a mix of products (halogen, compact fluorescent, high-efficiency incandescent, and LED’s) that will result in efficiency gains exceeding 50%. Starting in July 2012 , the 100 watt incandescent will be completely phased out, with the 75, 60 and 40 watt bulbs phased out for more efficient bulbs in 2014, 2015 and 2018 respectively. The transition will result in the annual phasing-out of the production of 2 billion inefficient incandescent bulbs. Upton and Harman worked very closely with industry and environmentalists to craft common sense legislation that seeks to clean up the environment, all the while protecting American jobs.

Upton and Harman are also leading the effort to require that each agency, department, and office within the Federal Government, beginning Oct. 1, 2007, purchase light bulbs that meet the Department of Energy’s “Energy Star” efficiency ratings. Their bipartisan amendment has been included in every spending bill that has passed the House.

1. Bali: In addition to setting a timetable for negotiating a comprehensive post-2012 agreement, the Parties should agree in Bali on four pathways for negotiation that address mitigation, adaptation, technology, and finance. Initial draft articles should be presented to the Conference of the Parties in 2008 as a first step towards concluding a new and comprehensive agreement in 2009.

2. UNFCCC: Given the scale of response required, and in order to avoid the most adverse impacts of climate change, there should be a comprehensive post-2012 agreement under the auspices of the UNFCCC. Targeted agreements – for example, on industrial sectors, energy efficiency, renewable energy, and technology cooperation – should be encouraged and incorporated within a new comprehensive agreement.

3. Targets and timetables: All countries should commit to reduce collectively global emissions by at least 60% below the 1990 level by 2050. Developed countries should take the lead in emissions reduction by adopting effective targets and timetables. As a first step, this could include a commitment to reduce their collective emissions by 30% by 2020. Rapidly industrializing countries should commit to reduce their energy intensity by 30% by 2020 (an average of 4% per year) and agree to emissions reduction targets afterwards. Other developing countries should commit to an energy intensity target differentiated by their responsibilities and capabilities. The international community should develop a monitoring and review system and clear criteria for determining when and how various categories of countries should assume stronger climate commitments.

4. Renewable energy and energy efficiency: Long-term policies, as well as measurable and verifiable targets, should be adopted by all countries to increase substantially the use of renewable energy and to promote greater efficiency in energy production and use. In addition, global standards for end-use efficiency should be developed and adopted.

5. Avoided deforestation: To reduce the emissions of carbon dioxide cost-effectively, a full range of interventions to create and maintain biological sinks of carbon should be included in a post-2012 climate change regime in order to capture the many co-benefits of sustainable livelihoods, land management, forestry, and biodiversity conservation.

6. Carbon pricing: In order to deliver the greatest climate benefits efficiently and effectively, a carbon price should be set through carbon taxes or trading. The preferable mechanism is a system of harmonized, universal carbon taxes. For a cap-and-trade system, well functioning and financially linked carbon markets need to be developed across the globe, incorporating various national and regional cap-and-trade programs. Emissions allowances should be auctioned, thus raising resources that can be allocated by national governments for other purposes, such as clean energy development and adaptation.

7. Adaptation: A post-2012 climate agreement should address both mitigation and adaptation. Adaptation should be seen as part of sustainable development and strategies to alleviate poverty. It should include vulnerability assessments, enhancing resilience to climate impacts, access to information and best practices, building human and institutional capacity, and making public and private investments in developing countries less susceptible to climate change. A substantial package of financial support, including public and private funds, should be established (see Recommendation 11). Centers for Adaptation in Agriculture should be established, particularly by the Consultative Group on International Agricultural Research in Africa.

8. Energy R&D: Recent declines in investments for energy research and development should be reversed. Research, development and demonstration of more efficient and less costly energy technologies, such as advanced solar thermal technologies, as well as carbon capture and storage, should be a high priority. Aggregate public expenditures should be increased to US$20 billion per year.

9. Clean energy deployment: In order to tackle climate change at the requisite scale, clean energy technologies should be made available and utilized by all countries. All developing countries, especially rapidly industrializing countries, should have access to clean energy technologies on preferential terms. The barriers that hamper the dissemination of such technologies in developing countries, such as intellectual property rights and competitive rules, should be overcome. In order to encourage collaboration on a “clean technology revolution,” the formation of a “Consultative Group on Clean Energy Research” should be considered as part of a global climate agreement. Innovation targets to bring new technologies to market, as well as incentives for meeting them, should also be considered.

10. Sustainable development financing: The Clean Development Mechanism should be reformed in order to deliver its full potential during the 2008-2012 commitment period, and in the post-2012 regime an additional market mechanism should support sectoral approaches capable of transforming whole sectors of rapidly industrializing countries at a speed commensurate with the challenge of taking emissions reductions to global scale.

11. Funding: Finance is a critical element of any strategy to address climate change effectively. A climate fund of additional resources, starting at US$10 billion and growing to US$50 billion per year, should be established to support climate change activities in developing countries (adaptation, avoided deforestation, and clean energy development and deployment) and should include both public and private resources. It should have an innovative structure and governance that is transparent and inclusive. In addition, existing mechanisms, such as the Global Environment Facility and the Multilateral Development Banks, should be strengthened and their resources enhanced to continue their important work in demonstrating new approaches, building human and institutional capacity, and leveraging private finance.