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Executive Summary

America’s dependence on fossil fuels wreaks havoc on our environment and is a drag on our economy. With a new president committed to tackling our energy challenges – and with the momentum generated by a decade of clean energy innovation at the state level – Congress has taken up the task of mapping out a new energy future for the nation.

The American Clean Energy and Security (ACES) Act, passed by the House this June and currently under consideration by the U.S. Senate, is the fruit of that effort. Passing the ACES Act – even with the compromises made to secure passage in the House – would be a significant step toward a clean energy future for the United States and would represent a ground-breaking political achievement.

We have the technology and the know-how to repower America with clean energy. Congress and the president should embrace and work to achieve ambitious goals to obtain our electricity from clean sources, curb our dependence on oil, create millions of new jobs, and prevent the worst impacts of global warming.

• America can save energy by improvingthe efficiency of our homes, businesses and factories. At the same time, America has access to enough energy from the sun, wind, water and other renewable sources to power the nation several times over. The nation should set a goal of obtaining 100 percent of our electricity from clean sources of energy.

• We have the tools to use less oil in our transportation system by vastly improving the energy efficiency of our vehicles, replacing at least some of the oil we use with cleaner sources of energy, and bringing new transportation options – including public transportation, high-speed rail, and more opportunities for walking and biking – to more Americans. The nation should strive to achieve energy independence by cutting our consumption of oil in half.

• Hundreds of thousands of Americans already work in clean energy industries. Repowering America would create millions of new jobs in manufacturing, installing, financing, selling and servicing energy efficient products and renewable energy technologies. America should embrace the goal of creating five million clean energy jobs to revitalize our economy.

• The actions we take to repower America with clean energy will also dramatically reduce our emissions of pollutants that contribute to global warming. To prevent the worst impacts of global warming, America should commit to reducing our emissions of global warming pollutants by at least 35 percent by 2020 and by at least 80 percent by 2050.

State and local governments have laid the groundwork for a new energy future for America through innovative public policies. The Obama administration, in its first months in office, has followed suit. Together, those efforts have made a meaningful contribution toward achieving the vision of an America powered by clean energy.

• More than two dozen states have adopted minimum requirements for the percentage of their electricity that comes from renewable energy. Nineteen states have set similar requirements for tapping energy savings from improved efficiency. Fourteen states adopted clean cars standards designed to reduce global warming pollution from cars and light trucks. Six states have adopted enforceable caps on global warming pollution. And many states, cities and towns have taken other important steps to promote clean energy.

• These state efforts are making a difference. America now gets a greater share of our electricity from wind, solar, geothermal and biomass energy than at any time in our modern history. In the two-year span between 2006 and 2008, America’s production of wind power nearly doubled and our production of solar power increased by two-thirds. State energy efficiency programs, meanwhile, saved approximately 63 billion kilowatt-hours of electricity in 2007, enough to power 5.6 million American homes.

• Recent efforts by the Obama administration and Congress – most notably the American Recovery and Reinvestment Act enacted in February – build on these efforts. By investing in clean energy technologies, the economic recovery plan will:

    • Double the amount of wind power produced in America in 2012 compared with business-as-usual projections.

    • Reduce energy consumption for home heating by 1.7 percent, and for cooling by 3.0 percent, in 2030.

    • Reduce household energy bills by $64 per year on average between 2009 and 2030.

• In addition, the Obama administration’s proposal to improve vehicle fuel economy will save 19 billion gallons of gasoline per year by 2030, reducing our dependence on foreign oil.

The American Clean Energy and Security Act moves the nation further toward a clean energy future.

• The ACES Act includes strong provisions to improve the energy efficiency of the American economy, as well as the nation’s first-ever mandatory nationwide limits on emissions of global warming pollutants. In addition, the bill establishes a framework for the future expansion of renewable energy in the United States.

• Analyses of the bill by the Environmental Protection Agency, the Department of Energy and others show that the ACES Act will move the nation one large step closer to a clean energy future. These analyses (which undersell the benefits of the bill because they omit analysis of several key provisions) project that the ACES Act will:

    • Reduce electricity consumption by 7 to 12 percent by 2030 versus business- as-usual projections through improvements in energy efficiency.

    • Increase the share of America’s electricity coming from non-hydroelectric renewable sources of energy from a projected 10 percent to approximately 15 percent by 2030.
    • Cut our consumption of oil by at least 4 to 7 percent below business-as-usual in 2030, with America using up to 12 percent less oil in 2030 than we did in 2006.

    • Create hundreds of thousands to millions of new jobs.

    • Reduce domestic emissions of global warming pollutants by 5 to 14 percent by 2020 and by 15 to 21 percent by 2030, and drive overall emission reductions (including reductions overseas achieved through the use of “offsets”) equivalent to 25 to 38 percent of 2005 U.S. emissions by 2020 and 40 to 46 percent of U.S. emissions by 2030 (assuming all offsets are real, additional, and permanent).

However, the ACES Act gets several important things wrong and so represents an incremental, rather than a transformative step toward a clean energy future. The following flaws in the bill should be fixed in the Senate:

• The bill removes EPA’s authority to regulate carbon dioxide emissions from existing coal-fired power plants – the majority of which are already more than a quarter-century old – removing an important tool from the toolbox of strategies that can speed the transition from inefficient, polluting technologies to clean, renewable sources of power.

• The ACES Act’s heavy reliance on offsets – global warming emission reductions that take place overseas or in areas of the economy not covered by the emission cap – and its lack of clarity regarding how the offset program will be implemented leave too much to chance, possibly eroding the bill’s effectiveness in reducing global warming pollution and promoting clean energy.

• The ACES Act misses out on important opportunities to expand the use of renewable energy and create new clean energy jobs. The renewable electricity standard (RES) in the bill will not result in any additions of renewable energy beyond those already forecast (although other provisions in the bill will promote renewables). And by giving away a significant number of valuable emission allowances to polluters, the bill fails to invest the resources necessary to encourage the clean energy technologies of the future.

Despite these flaws, passage of the ACES Act would be an historic achievement, for both substantive and political reasons.

• The ACES Act is a clear step in the right direction and, if passed into law, will result in significant improvements in the energy efficiency of the American economy and our use of clean energy – helping to reinvigorate America’s economy and prepare the nation for the serious energy challenges it faces in the decades to come.

• Passage of the bill would represent a political breakthrough – the first time the U.S. Congress has ever set mandatory limits on emissions of global warming pollutants – and establish a precedent for action that can be built on over time.

• The ACES Act requires periodic scientific review that creates a pathway for the bill’s goals to be strengthened over time.

• Passage of the ACES Act would send a message to the world that America is serious about dealing with our energy challenges, including global warming. American leadership is particularly important with world leaders scheduled to meet in Copenhagen this December to construct a successor to the Kyoto Protocol.

• Finally, the battle over the ACES Act presents an historic opportunity to educate the public about the need for a clean energy future and to build strength and momentum for future battles to come.

Even assuming passage of the ACES Act, much work will remain to be done to repower America with clean energy. Among the most urgent tasks are:

• Winning a national renewable electricity standard that assures that the nation will get at least 25 percent of its electricity from new, renewable sources of power by 2025.

• Adopting a national energy efficiency resource standard designed to cut America’s electricity consumption by 15 percent by 2020.

• Implementing a national low-carbon fuel standard with a goal of cutting the global warming impact of transportation fuels by 10 percent by 2020 – encouraging a transition to cleaner, non-petroleum fuels for cars and trucks.

• Investing in new transportation choices for Americans, including efficient public transportation and high-speed rail, and expanding Americans’ opportunities to walk and bike to the places they need to go.

• Encouraging the development and implementation of innovative clean energy policies and programs by state and local governments.

• Ensuring that the ACES Act and similar efforts to reduce global warming pollution at the state level deliver real results and ensuring that the United States takes leadership in securing a worldwide agreement to reduce global warming pollution.