Emission Reductions Under Cap & Trade Proposals In The 111th Congress

This assessment is an update to a previous analysis WRI released on June 25, 2009 and includes an assessment comparing the Manager’s Amendment to S.1733 the Clean Energy Jobs and American Power Act (CEJAPA) sponsored by Senators Kerry and Boxer and H.R. 2454 the American Clean Energy and Security Act of 2009 (ACESA) passed by the House of Representatives on June 26, 2009. To account for the effects of different components of these proposals, reduction estimates are divided into three scenarios that are then applied to both proposals considered in this analysis:

• Total emission reductions achieved solely by the proposed emissions caps.
• Total emission reductions achieved by proposed caps and all other complementary requirements, including emission performance standards for uncapped sources, allowances set aside for cost-containment and required components of supplemental reduction programs for reduced deforestation through 2025.
• A range of potential additional reductions that could be achieved through domestic supplemental reductions in all years, international supplemental reductions beyond 2025 and the 1.25 offset requirement for international offsets.

Key Findings

• The emissions caps in the CEJAPA and ACESA achieve reductions of 17 and 14 percent respectively relative to 2005 levels in 2020. By 2050, both the CEJAPA and ACESA achieve reductions of 72 percent relative to 2005 levels.
• Estimates of total US emissions in 2012 under the emissions caps in both the CEJAPA and ACESA are approximately 300 million tonnes higher than recent short-term projections of U.S. emissions for 2010 published by the Energy Information Administration.
• While the CEJAPA and ACESA contain similar complementary measures in addition to emissions caps, they are sometimes applied in different ways and in turn result in somewhat different relative emission reductions. Specifically:
  • When all complementary requirements are considered in addition to the caps, GHG emissions would be reduced 29 and 28 percent relative to 2005 levels by 2020 and 73 and 75 percent relative to 2005 levels by 2050 for the CEJAPA and ACESA respectively.
  • When additional potential emission reductions are considered, the CEJAPA and ACESA could achieve up to 34 and 33 percent relative to 2005 levels by 2020 and up to 78 and 81 percent relative to 2005 levels by 2050 respectively. The actual amount of reductions will depend on the quantity and quality of international offsets used for compliance and the effectiveness of supplemental reduction programs that do not explicitly contain GHG reduction requirements.

“Emission Reductions Under Cap-and-Trade Proposals in the 111th Congress, 2005-2050” graphically presents total GHG reductions achieved by S.1733 and H.R.2454 relative to U.S. historic and projected emissions under the three reduction scenarios.

“Estimates of Total GHG Emissions and Emission Reductions Achieved by Cap-and-Trade Proposals in the 111th Congress, 2005-2050” presents a table of total GHG reductions that could be achieved by these proposals for selected years.