Copenhagen: A Progress Report
The second, and final, week of the United Nations Framework Convention on Climate Change ended
December 18, 2009 with a nearly all night battle to “take note,” rather than formally adopt, of a new accord
made by over 25 of the world’s largest greenhouse gas emitters to cut emissions and help poor countries
mitigate and adapt to climate change.
Led by President Obama, the Copenhagen Accord is the result of negotiations among the biggest emitters,
and includes short-term financing commitments of about $23 billion over three years, which is close to a $30
billion goal expected later in the year. The agreement includes an appendix that compiles the emission
reduction pledges of 26 countries and the European Union, but does not include specific reduction targets.
Large developing nations will register their emissions and verify their greenhouse gas reduction efforts. The
Accord also does not include an agreement to limit the increase in global temperatures to 2 degrees Celsius
but does note that the parties should enhance cooperative action to achieve this goal. On December 17,
Secretary of State Hillary Clinton announced that the U.S. would rally support for a long-term global
adaptation fund beginning in 2020 in which industrialized nations would provide poorer countries $100
billion per year to promote forests and help them address the impacts of climate change if an agreement was
met. The House bill passed in June as well as the Kerry-Boxer bill in the Senate include provisions dedicating
tens of billions of dollars in annual funding for international adaptation, forest preservation, and clean energy
technology transfer via emissions allowances revenue.
After two weeks of turbulent negotiations that were plagued by deadlock, boycotts, and numerous threats of
complete collapse, heads of state for the almost 200 nations in attendance signed the note, agreeing to begin
efforts to turn it into a legally binding treaty in 2010.
All but one Senator expected to attend the Conference remained in D.C. due to the Senate’s healthcare
schedule, but many sent aids in their place, and the House sent a 20 member delegation led by Speaker Nancy
Pelosi (D-CA). Senator John Kerry (D-MA) addressed the Conference December 16 and said that success in
negotiations would prompt Congress to act successfully on climate change legislation. Some in Congress are
concerned that without binding commitments from China and other large developing nations, the U.S. will
face unfair competition, especially in manufacturing and other energy-intensive industries.
The next set of negotiations will take place May 31-June 11 in Bonn, Germany, though an intermediate
meeting may also take place in Germany before then. The next Conference of Parties meeting will be held
mid-November in Mexico.

December 20, 2009

Jobs, Jobs, Jobs
House Democratic leaders filed December 15 a roughly $174 billion jobs bill (H.R. 2847) that they then voted
on and passed (217-212) December 16. The bill includes billions of dollars for infrastructure projects, jobs
preservation, and unemployment benefits and other emergency safety net programs. The Senate is planning
to take up similar legislation after the first of the year, though their version is likely to both refine on the
House-passed version and expand certain areas, such as adding additional funding to the 48C program and
including other clean energy provisions. The Jobs for Main Street Act adds $2 billion to the innovative
technologies loan guarantee program (Section 1705) out of the Department of Energy; it also expands the
program to include loan guarantees for energy efficiency projects.

Energy and Climate Legislation
Addressing the Conference on December 15, Former Vice President Al Gore called on the White House and
Senate leaders to set an Earth Day deadline, April 22, for completing final action on climate legislation. Senate
Majority Leader Harry Reid (D-NV) is expected to bring up a climate and energy bill in the spring after the
Senate finishes health care, a jobs bill and, most likely, financial regulatory reform. Aids for Senator Reid also
said that the Senate has until June to complete a climate bill before its chances of becoming law next year
almost disappear, as the election will make a tough vote difficult. House Majority Leader Steny Hoyer (DMD)
said last week that the President ought not set a deadline for the Senate to pass climate legislation, but
that they should move as quickly as possible to pass good legislation in 2010.
The Congressional Budget Office found that the Kerry Bill (S. 1733) would lead to a net increase in federal
revenues of approximately $21 billion over the next decade. According to a December 16 report, the bill
would generate $854 billion in federal revenue and would require about $833 billion in direct federal
spending. Allocations of free allowances are expected to generate $235 billion and auctioned allowances
would generate $625 billion from 2010 through 2019.
Senator Lisa Murkowski (R-AK) announced December 14 her intention to introduce a resolution in January
to reverse the EPA’s finding that greenhouse gas emissions endanger public health and welfare. Under the
Congressional Review Act, if the resolution is passed by both the House and Senate and signed by the
President, it would nullify the EPA’s finding. If 30 Senators sign a petition in support of floor action, the full
Senate must vote on the resolution. Instead, she is calling on Congress to pass legislation to address climate
change. Congressman Joe Barton (R-TX) is expected to file a similar resolution soon thereafter.

Senate

Delay on Tax Extenders Threatens Renewable Energy Industries
With the Senate focused on health care and appropriations bills, they may delay action on a number of tax
credits that expire at the end of the year. $31 billion in tax credits for biofuels, research and development and
heavy-duty hybrid trucks may expire December 31, thus creating investment uncertainty and possible job loss
in these sectors. Senate Majority Leader Harry Reid plans to consider a tax extenders package in mid January,
and similar time constraints in previous years have caused extenders bills passed in January to cover credit
lapses retroactively.

Legislation Extends Grants-in-lieu-of-tax-credits
Senators Dianne Feinstein (D-CA) and Jeff Merkley (D-OR) introduced legislation December 18 that would
extend a Treasury grant program that allows qualified renewable energy projects to exchange tax credits for
Treasury Department Grants. The Senators have proposed extending the grants of up to 30% of project costs
for wind, solar, biomass, and other renewable energy projects until 2012 and expanding the program to
December 20, 2009 include public electric utilities. The Department of Treasury has estimated that it will provide about $3 billion in grants to support $10-14 billion worth of projects under the program, which is slated to end in 2010. The
bill also expands the solar investment tax credit for manufacturing equipment and solar water heaters for
commercial and community pools and encourages the use of private land for solar development through a
30% investment tax credit for the purchase and consolidation of small tracts of land.

Legislation Improves Natural Gas Turbine Efficiency
Senator Kirsten Gillibrand (D-NY) introduced the Gas Turbine Efficiency Act December 17. The legislation
would improve the efficiency of natural gas turbines used in electric power generation systems by creating a
four year research, development, and demonstration grant program through the department of Energy to
help companies study ways to implement better energy efficiency technologies. The bill is similar to legislation
introduced by Congressman Paul Tonko (D-NY) earlier this year.

Committee Actions
On December 15, the Senate Energy and Natural Resources Committee held a hearing on several nuclear
energy bills.
House
After clearing the jobs bill on Wednesday, the House adjourned for the year. Barring any unexpected action
from the Senate, the House will be in recess until January 12.
Administration
The Vice President and Renewable Energy Manufacturing
According to a memo from Vice President Joe Biden, released by the White House on Monday, December
14, the Obama Administration is on track to meet its goal of doubling domestic renewable energy generation
by 2012 (from 27.8 GW to 55.6 GW).The memo is a progress report on $23 billion in stimulus funds for
renewable energy and its manufacturing that are expected to create 253,000 jobs and leverage over $43 billion
in additional private investment that could support almost twice that many more jobs.
The memo was released prior to a meeting of the White House Middle Class Task Force, at which Vice
President Biden proposed that Congress add $5 billion to the widely oversubscribed Advanced Energy
Manufacturing Tax Credit (48C) that was funded for $2.3 billion in the stimulus act. The program provides
up to a 30 percent tax credit for domestic manufacturing of solar panels, wind turbines, and other renewable
energy technology and is largely credited with projected renewable energy generation increase. The program is
expected to create 17,000 jobs, 200 manufacturing projects, and be matched by $5.4 billion and an additional
41,000 jobs from the private sector. The Department of Energy received more than 1,000 applications, 600 of
which they deemed acceptable, and a smaller number of which were approved because of the cap on the
amount of money available. The Department of Treasury will make formal announcements in mid January.
On Thursday, Senator Jeff Bingaman (D-NM), who recently introduced legislation to add another $2.5 billion
to the program, applauded the Administration’s announcement and pledged to work with Congress to add
additional funding to early 2010 legislation. Some argue that other offices, even those not usually in favor of
such provisions, will try to make permanent the 48C program and extend refundability programs such as
grants-in-lieu-of-tax-credits because the programs have thus far been widely successful and are viewed as
having high jobs potential.

December 20, 2009

The Task Force released December 16 a document called “A Framework for Revitalizing American
Manufacturing” which discusses the importance of American manufacturing on our economy and how the
government can support domestic manufacturing, and outlines the President’s Manufacturing Initiatives.
Green Initiatives Create Jobs
On December 14, President Obama contended that green spending can create sustainable economic growth
and jobs. He also encouraged Americans to make their homes more energy efficient and discussed possible
steps the Government will take to provide material incentives to do so. The next day, the President called on
Congress to pass legislation that would provide incentives for homeowners to add insulation, upgrade
inefficient appliances, and make other home retrofits that would save energy and create jobs. Both houses are
currently working on this “Cash for Caulkers” legislation, and it may be included in a jobs bill in January.

Department of Energy
Domestic Energy-Related GHGs to Increase
According to a preview of the Energy Information Administration’s Annual Energy Outlook 2010, in the
absence of new climate and energy policies, U.S. emissions of carbon dioxide from energy use will increase
8.7% by 2030. The full report will be available in March, but this reference case projects a lower increase per
year of 0.3% than the 0.7% usually discussed.

Miscellaneous
Solar Could Meet 15% of Energy Demand
The European Photovoltaic industry Association and the Solar Energy Industries Association issued a report
December 14 that determines that solar energy could meet up to 15% of global energy needs. Solar
photovoltaics could provide up to 12% of the European Union’s electricity demand by 2020 and
concentrated solar power could deliver 15% of the US’s demand by the same year.

Carbon Capture and Sequestration Market Growing
Global cleantech analysts for Pike Research announced December 16 that the market for carbon capture and
sequestration could reach $128 billion by 2030. No commercial-scale integrated power plant with CCS yet
exists, and adding CCS systems to power plants is likely to increase electricity production costs by 50-70%.

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