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Friday, May 15, 2009

Waxman-Markey Gives Nearly 5 Times More to Polluters than Clean Energy

By Teryn Norris & Jesse Jenkins

The landmark Waxman-Markey 2009 American Clean Energy and Security Act was introduced in the House this afternoon (May 15, download PDF here), and the Breakthrough Institute has performed a preliminary analysis of how it would invest over $1 trillion in cap and trade revenue between 2012-2025. Our key findings for this period include (all numbers are approximate -- download spreadsheet here):

(click image to magnify)

  • Polluting industries: 57.3% of allowances would be freely distributed to polluting industries, including 36.7% for the electricity sector, 12.3% for energy-intensive industries, 6.5% for local natural gas distribution companies, and 1.8% for oil refiners

  • Direct consumer protection: 16.5% of allowances would be used for direct consumer protection, including 15% for low and moderate-income families and 1.5% to benefit users of home heating oil and propane

  • Energy efficiency and clean energy technology: 12.2% of allowances would be used to fund energy efficiency and clean energy technology development and deployment

  • Adaptation and technology transfer: 4.7% of allowances would be used for domestic and global climate adaptation and technology transfer

  • Workforce development: 0.6% of allowances would be used to fund worker assistance and job training

  • Deficit reduction and other: 8.6% of allowances would be used to fund deficit reduction and other public purposes
How much money would these allocations translate into? That depends on the average price for each pollution allowance -- the EPA's initial price estimate was approximately $13-17 per allowance, so we will assume an average price of $15 per allowance. The allocation would look like this (click images to magnify):

Investment in clean energy technology development and deployment is broken out here (Note: the amount for clean energy technology within the "Renewable Energy and Efficiency" program is not specified):

Our analysis finds that Waxman-Markey would spend about $9 billion annually on a range of things that could generously be classified as technology innovation. By contrast, the legislation would give $32 billion to utilities, $9 billion to heavy industries, and $11 billion to low-income consumers annually. This $9 billion is far less than what Obama promised ($15 billion) and far less than the $30 billion that three dozen energy scientists and experts, including several Nobel laureates, called for in a sign-on letter during the fall of 2007. The large allowance giveaway to polluters also stands in contrast to Obama's previous calls for a 100% auction, which was included in his final budget proposal.

Of course, these funding levels assume a price of $15 per allowance. Some analysts, including Joseph Romm of Climate Progress, expect the bill to maintain a low price of $5-10 per allowance for the first several years. If the price was $10 from 2012-2025, the average annual investment in all areas generously classified as energy innovation would be $6 billion. This table compares clean energy investments for $10 per ton vs. $15 per ton:

Cross-posted from the Breakthrough Institute

1 comment:

Lacey said...

Bottom line-Waxman Markey will cost consumers more in energy and taxes. I know I can't afford that: