THE BUSINESS COUNCIL FOR SUSTAINABLE ENERGY Climate Change Policy and Clean Technology

1. THE BUSINESS COUNCIL FOR SUSTAINABLE ENERGY Climate Change Policy and Clean Technology IAB Meeting October 30, 2007 Washington, DC The Business Council for Sustainable Energy

2. About the BCSE • Broad-based coalition of energy efficiency, natural gas and renewable energy industries • The Council’s coalition includes power developers, equipment manufacturers, independent generators, green power marketers, large energy users, retailers, and gas and electric utilities as well as several of the primary trade associations in these sectors The Business Council for Sustainable Energy

3. Sample of Council Members • Energy Efficient Products • Insulation – NAIMA and PIMA • HVAC – American Standard/Trane, York International • Retailers & Energy Users • Wal-Mart • Developers, Equipment & Service Providers • GE Wind, Sun Edison LLC, PPM Energy, Solar Turbines • Gas & Electric Utilities, Generators • Sempra Energy, NiSource, SMUD, PSEG, PG&E, Calpine • Industry Organizations • Alliance to Save Energy, American Wind Energy Association, American Gas Association, Solar Energy Industries Association, Interstate Natural Gas Association of America, National Hydropower Association • Renewable Energy & Carbon Offset Developers & Providers • Econergy, EcoSecurities, NativeEnergy, 3 Degrees, 3C Company The Business Council for Sustainable Energy

4. Our Mission • Expand markets for clean energy generation, distribution and use • Energy Efficiency • Renewable Energy • Natural Gas • Quantify the environmental attributes of clean energy technologies • Promote market-based programs that recognize and reward clean energy technologies The Business Council for Sustainable Energy

5. Our Value – Composition and Focus • Broad-based industry coalition • Enhanced credibility • Larger political base • Focus on strategic issues and emerging markets for clean energy industries • Climate change and clean air policy • State/regional, federal and international levels • Expertise on designing market-based programs that recognize and reward clean energy and energy efficiency BCSE serves as a resource and platform for clean technology industries The Business Council for Sustainable Energy

6. State Action and Implications for Federal Policy The Business Council for Sustainable Energy

7. State Climate Change Activities • In the absence of Federal action on climate change, states have been leading the charge • Many states have developed climate change plans with non-binding goals • Some governors have issued Executive Orders establishing greenhouse gas (GHG) reduction targets • Some states are proposing GHG legislation • A few states have passed GHG legislation The Business Council for Sustainable Energy

8. U.S. State Climate Action Plans The Business Council for Sustainable Energy

9. Status of State GHG Initiatives The Business Council for Sustainable Energy

10. Significant State Actions • Massachusetts - CO2 emission limits in place for older power plants • Regional Greenhouse Gas Initiative (RGGI) - Cap and trade program for power plants starting in 2009. • Most states intending to auction all allowances. Funds to be used for energy efficiency and renewables • California - CO2 emission performance standard equal to NGCC for new long-term utility contracts • AB-32 limits 2020 economy-wide emissions to 1990 levels. Targets 80% reduction by 2050 • Six western state governors signed an MOU creating the Western Regional Climate Action Initiative The Business Council for Sustainable Energy

11. Western Governors’ Initiative and RGGI States The Business Council for Sustainable Energy

12. Implications of State Initiatives • States are implementing GHG reduction requirements • States are leading the move towards auction of allowances to support energy efficiency and renewables • States are promoting performance standards rather than trading programs alone: • CA vehicle standard, adopted by 11 other states • CA power plant performance standard • 1990 GHG levels by 2020 is becoming a common target • Nationally would be a 30% reduction from business as usual • Continued action by states pushes Congress to act and pushes industry to support a national program The Business Council for Sustainable Energy

13. Initial Observations • While the debate on regulation of greenhouse gases GHG has continued, the move toward regulation is accelerating • States are continuing development and implementation of their programs • Details of federal regulation continue to be hammered out • A second round of new federal proposals is developing • There are a variety of potential implications for the role of clean energy and energy efficiency in these programs The Business Council for Sustainable Energy

14. Federal Legislative Actionon Climate Change The Business Council for Sustainable Energy

15. 2006 GHG Legislative Proposals The Business Council for Sustainable Energy

16. Timing and Levels- 2007 Federal GHG Proposals The Business Council for Sustainable Energy

17. Selected Current Federal GHG Proposals The Business Council for Sustainable Energy

18. U.S. GHG Emissions – 2004 -- Total = 7,074 MMTonnes The Business Council for Sustainable Energy

19. Clean Tech Role in Carbon Markets • Offers existing technology to cost-effectively reduce greenhouse gas emissions – with co-benefits • Create jobs and expand economic growth • Enhance energy reliability and security • Improve local air quality The Business Council for Sustainable Energy

20. Orientation on Climate Change Policy • Urge integration of energy and environmental policy decisions • Urge holistic view of development of climate change policy • Design elements are inter-related • Need to send short-term and longer-term deployment signals • Benchmark: Is policy strong deployment vehicle for existing clean energy technologies The Business Council for Sustainable Energy

21. Clean Tech Carbon Policy Priorities • Press for allowance value under cap-and-trade program to be directed to clean technology deployment • Allocations, set-asides and offsets to clean generation and energy efficiency • Establish clean energy deployment title within climate change legislation • Complementary policies The Business Council for Sustainable Energy

22. What Clean Tech Industries Are Doing • Lobbying at federal, state/regional and international levels on behalf of clean energy industries • Educating and advising business leaders – inside and outside clean technology sectors on policy options • Facilitate business views into climate change policy development The Business Council for Sustainable Energy

23. Please contact Lisa Jacobson, BCSE Executive Director, for more information1620 Eye Street, NWSuite 501Washington, DC 20006 USAPhone: 202.785.0507Fax: 202.785.0514www.bcse.org The Business Council for Sustainable Energy