America's ACES vs. UK's Low Carbon Transition Plan

Jul 24, 2009

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The UK has sought to position itself as a world leader in fighting climate change with a commitment to push emissions 34% below 1990 levels by 2020, a legally binding goal that's among the world's most ambitious targets. Last week, it unveiled a roadmap for making that happen.

In a July 15 white paper, the Department of Energy and Climate Change rolled out a raft of policies making up the UK's Low Carbon Transition Plan — an economy-wide strategy aiming to slash emissions and help the UK meet its five-year carbon budgets, goals it set in last year's Climate Change Act.

So how does the newest plan from across the pond stack up to the U.S. climate legislation currently before Congress?


Two National Low-Carbon Strategies

In the UK, the power and heavy industry sectors, which account for a full 50% of emissions, have been subject to carbon caps under the EU Emission Trading System since 2005. But up to now, no umbrella policy has explained how the UK will reduce emissions and increase efficiency in non-traded sectors that together generate the other half of UK emissions: transportation, homes, workplaces and agriculture.

The new low-carbon transition plan closes the gap, extending low-carbon policies to cover the entire scope of the UK economy.

That includes a stronger push for home energy efficiency and small-scale renewable power production; tighter vehicle emission standards and investments in developing low-carbon cars; and support for sustainable agricultural practices.

Likewise, the major U.S. energy and climate bill — the American Clean Energy and Security Act (ACES), which just passed by the House and is now awaiting action in the Senate — seeks to provide a comprehensive framework for jump-starting the U.S. transition to a clean energy economy. It too shoots for energy efficiency in homes, buildings, transportation and agriculture.

The differences between the two are often stark, though, starting with the very goals they're seeking to achieve: ACES aims to cut emissions by 17% below 2005 levels by 2020 — a far less demanding baseline and target than the UK's 34% below 1990 levels.

Improving the energy efficiency of buildings is a key element of both plans. In the UK, building codes will contribute to emissions cuts under a regulation requiring that homes built after 2015 meet a standard of zero net emissions. Similar provisions in ACES set a target for buildings to use 30% less energy, working up to 50% less by 2015.

In the transportation sector, the UK pledges government support for green vehicles, and it mandates that cars sold in the UK after 2020 emit 40% less carbon dioxide per kilometer than cars did in 2007. ACES complements Obama's tough new fuel economy standards — fleets must average 35.5 miles per gallon by 2016, cutting emissions 30% — by laying preliminary groundwork for more transportation efficiency, through investments in plug-in hybrid electric vehicle (PHEV) production and support for electric vehicle infrastructure.

Agriculture provisions are sparse in both plans, since the sector is responsible for only about 6-7% of emissions in each nation.

While the UK plan sets no hard mandates for farmers, the government will encourage them to undertake voluntary efforts for reducing emissions through more efficient use of fertilizer, better management of livestock and manure, and reduced energy use. In ACES, few provisions address emissions reductions from farming and land use, except with regard to funding for emissions-reducing agricultural practices financed by domestic offsets under the ACES cap and trade program.


Low-Carbon Power Generation

The UK's Low-Carbon Transition Plan also reaches farther than ACES when it comes to renewable energy. Looking forward, the UK aims to get 40% of its electricity from low-carbon sources by 2020, with 30% coming from renewable sources and 10% from nuclear and "clean coal" technology.

In comparison, ACES' Renewable Electricity Standard (RES) would require utilities to get 20% of their power from renewable sources by 2020, but that 20% has some give to it: as much as 8% of the requirement could be met through energy efficiency measures, and the RES could also be relaxed for power suppliers that generate some electricity from hydro or nuclear, or use carbon capture and storage.

According to Nate Gorence, a policy analyst at the National Commission on Energy Policy, the ACES renewable standard could be seen as slowing what's already being done in some parts of the country. The proposed national RES is lower than those set by many states; in California, for instance, the requirement calls for renewables to hit 20% of electricity generation as early as 2010.

"I think certain states will not see the federal standard as being as strong as they would have liked, but states will not be preempted and will still have some leverage to move the ball forward. At least this way there will be a federal baseline," Gorence said. "But it's still not as ambitious a standard as it would seem the UK has set."

In the UK, policymakers say they'll help meet the high renewables standard by launching an Office for Renewable Energy Deployment within the Department of Energy and Climate Change. The new agency will work to remove investment and regulatory barriers to ensure the UK's use of renewables is rapidly ramped up.

The U.S. currently lacks a counterpart agency comprehensively focused on spurring clean energy deployment, although ACES does contain a new Clean Energy Deployment Administration to leverage private capital for clean energy projects via credit supports like loan guarantees.


Smartening Up the Power Grid

The UK plan also helps speed and broaden grid access for renewable power projects, with its announcement that the government will take direct action to reform the regulatory regime currently controlling connections to the grid. The move comes after a government review determined that the UK's main grid regulator, the Office of Gas and Electricity Markets (Ofgem), might not complete needed reforms rapidly enough.

"The new rules should be in place within 12 months, and instead of waiting for over a decade for grid connections as can happen now, we can get the fast access to the grid the renewable projects need," said UK energy secretary Ed Miliband.

The British government is also working with Ofgem on plans for an improved smart grid, which will be better equipped to handle increased capacity as well as greater fluctuations in power supply and demand. DECC expects to publish a policy statement outlining the government's vision for future grid investments and regulatory reforms later this year.

On the U.S. side, smart grid reforms are also in the developing stages, with regulators just starting to write the ground rules for technology and interconnection. Under ACES, utilities would adopt mandated peak demand reduction goals, while the Department of Energy would conduct assessments on the potential for making more appliances and technologies smart grid-ready.

Meanwhile, DOE recently dished out $47 million in grants to smart grid demonstration projects as part of the $3.9 billion in stimulus funds earmarked for smart grid deployment.


Will Either Plan Deliver?

Advocates of ACES have predicted wide-ranging effects:

"The legislation will create millions of new clean energy jobs, save consumers hundreds of billions of dollars in energy costs, promote America's energy independence and security, and cut global warming pollution," said Rep. Henry Waxman, an author of the bill.

But others aren't so sure.

Analysis by the EPA, for instance, casts doubt on ACES ability to meet a target of 17% emission cuts by 2020, predicting widespread use of international offsets would render the bill's emissions cap effectively non-binding for up to two decades. The bill's efficiency regulations and modest carbon price signal will drive U.S. emissions reductions, the EPA projects, but U.S. emissions would remain above 1990 levels until after 2025, if the Agency's projections are realized.

The ACES bill's combined efficiency and renewable electricity standard also "does not ensure that any new renewable electricity will be developed" beyond already conservative business-as-usual projections from the U.S. Energy Information Administration, according to analysis from the Union of Concerned Scientists.

Likewise, critics warn that rosy-sounding targets in the UK plan could be a set-up for a let-down. The current British Labor government could be replaced when the UK government calls an election within the next year.

Though the United States and the UK have both placed sweeping national strategies on the table this year, Gorence said the UK's four-year jump on the United States in the carbon-trading arena puts it a step ahead:

"You can certainly debate about the effectiveness of the ETS, but they are ahead of us in terms of codifying national climate policy. I think that's clear."

 

See also:

Grading a Climate Bill: 8 Ways ACES Must Be Strengthened

Oh, Those Sexy Building Codes: More Effective Than 100 Nuclear Plants

White House, Job Creation Keys to a Stronger Renewable Energy Standard

Europe's Cities Show How to Lower Emissions While Raising Living Standards

 

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