# Presentation: 924004

## Key Features of Proposal

| Scope/Point of Regulation | Economy-wide; point of regulation (upstream or point of emissions).  Market-based & flexible. |
| --- | --- |
| Target | Starting in 2012 – slows, stops, and begins to  reverse emissions |
| Safety valve | Set at a pre-determined price and increasing at 5% above inflation annually |
| Allocation of Emission Allowances | Allocation approach helps spur investment in innovative technology and protect U.S. competitiveness and consumers |
| Technology | Large RD&D program funded by emission allowance auction and safety valve revenues |
| International | Future stringency dependent on actions of other countries |

## Covered Greenhouse Gas Emissions(million metric tons carbon dioxide equivalent)

**6,000**

**6,500**

**7,000**

**7,500**

**8,000**

**8,500**

**9,000**

**2004**

**2006**

**2008**

**2010**

**2012**

**2014**

**2016**

**2018**

**2020**

**2022**

**2024**

**2026**

**2028**

**2030**

- Business as Usual

- Target

- The target seeks to stabilize emissions at 2014 levels before reducing emissions.

**Notes:**
This slide illustrates the impact of the proposal on GHG emissions

The target deviates from business as usual beginning in 2012.  The target rises at first, but then falls as the intensity target ratchets up and baseline economic growth slows.  By 2030 the target level for 2030 returns to roughly its 2012 level

 At the start  of the program, emissions are reduced below the target, mostly due to low-cost reductions in GHG emissions outside the energy sector.  Emissions reductions below the target provides allowances that can be banked for future use.

As emissions start to exceed the target, banked allowances are used for compliance.  Once banked allowances are exhausted, the safety valve comes into play.

BY 2030 projected GHG emissions grow to nearly 7500 MMTCO2E, compared to 6200 MMTCO2E in 2004 and 6800 MMTCO2E in 2011.  The reference case  projects emissions of 8750 MMTCO2E by 2030.  Overall EIA projects that the proposal cuts emissions growth between 2004 and 2030 in half.  Over time, energy sector reductions supply an increasing share of overall reductions.

Note that emissions results for the Phased Uaction and Full Auction cases are virtually indentical.  However, the effects of the pilot seuqestration program in the Phased Auction case are not shown.  

## Gross Domestic Product (GDP)(billion 2000 dollars)

**$10,000**

**$12,500**

**$15,000**

**$17,500**

**$20,000**

**$22,500**

**$25,000**

**2004**

**2006**

**2008**

**2010**

**2012**

**2014**

**2016**

**2018**

**2020**

**2022**

**2024**

**2026**

**2028**

**2030**

- Business as Usual

- Proposal

## Point of Regulation

- Primary regulated entities
- petroleum refineries
- natural gas processing plants and LNG facilities
- coal mines
- point of emissions possible
- Regulated entities submit allowances for CO2 content of fuels produced or processed

## Allocating Emission Allowances

- Allowances ($30-40 billion/year) are allocated to spur technology investment and to help protect U.S. competitiveness and consumers.  Allocations include:
**Private Sector Entities** to protect U.S. competitiveness
**Auction** to fund technology
**Farmers** to promote sequestration projects
**Early Reduction Allowances** to reward early action
**States [or the President]** to protect consumers in a way that recognizes regional differences

## Technology R&D and Deployment

- Establishes a $50 billion “Climate Change Trust Fund” to be used for R&D and deployment incentives (funded by auction and safety valve)
- Zero or Low-Carbon Energy Technology
- Advanced coal and cellulosic biomass deployment
- Advanced Technology Vehicles

## Coal Consumption(million short tons)

**600**

**800**

**1,000**

**1,200**

**1,400**

**1,600**

**1,800**

**2,000**

**2004**

**2006**

**2008**

**2010**

**2012**

**2014**

**2016**

**2018**

**2020**

**2022**

**2024**

**2026**

**2028**

**2030**

- Business as Usual

- Proposal