Notes

Executive Summary

1 Request letters are provided in Appendices A and B.

2 Energy Information Administration, Annual Energy Outlook 2007, DOE/EIA-0303(2007)(Washington, DC, February 2007) ), web site: http://www.eia.doe.gov/oiaf/aeo/index.html.

3 The price increases are relative to either the Reference or High Technology case, as appropriate.  The prices are the average of the delivered cost of energy on a physical unit basis, with coal including the cost of allowances.

4 All of the cases examined in this analysis do not reflect the passage of the Energy Independence and Security Act of 2007, which was enacted on December 19, 2007.  This law, which is expected to reduce oil consumption, increase production of alternative fuels, and increase energy efficiency, would affect the results contained in this report.

Chapters 1 and 2

1 Request letters are provided in Appendices A and B.

2 The text of the bill is available at http://thomas.loc.gov/cgi-bin/query/z?c110:S. 1766:

3 The first early auction in 2009 is an exception to the 4-year rule.  Half of the 2012 allowance pool is auctioned that first year, along with half of the 2013 auction pool.

4 The term “Technology Adaptation Payment” implies the proceeds would be used to fund technology-related programs.   However, there appears to be no explicit mechanism in the S. 1766 that allocates this revenue source.  At the direction of Senate staff, we have assumed the proceeds are combined with auction proceeds to pay for technology programs, adaptation, and low-income assistance.

5 Energy Information Administration, Annual Energy Outlook 2007, DOE/EIA-0383(2007) (Washington, DC, February 2007), web site: http://www.eia.doe.gov/oiaf/aeo/index.html.

6 See Appendix C from the recent report, Energy Information Administration, Energy Market and Economic Impacts of S. 280, the Climate Stewardship and Innovation Act of 2007, SR/OIAF/2007-04 (Washington, DC, July 2007), for a discussion of updates to the AEO2007 Reference case, web site: http://www.eia.doe.gov/oiaf/servicerpt/csia/index.html.

7 Energy Information Administration, Energy Market and Economic Impacts of S. 280, the Climate Stewardship and Innovation Act of 2007, SR/OIAF/2007-04 (Washington, DC, July 2007), web site: http://www.eia.doe.gov/oiaf/servicerpt/csia/index.html.

8 In the policy cases with high technology assumptions, the cost and performance of new electricity generation technologies are reduced from the levels achieved in the policy case with Reference case assumptions, the S. 1766 Core Case.

9 For a copy of the letter and a related analysis, see Supplement to:  Energy Market and Economic Impacts of  S. 280, the Climate Stewardship and Innovation Act of 2007, web site http://www.eia.doe.gov/oiaf/servicerpt/biv/pdf/s280_1007.pdf.

10 These two points are also made in the Executive Summary of the recent S.280 report. See SR/OIAF/2007-04, page xiii.

11 The fuel economy provision is included in the text of H.R. 6 as amended by the Senate, June 2007, web site: http://energy.senate.gov/public/_files/HR6BillText.pdf.

12 The RPS policy assumptions are those analyzed in a recent EIA analysis report, Impacts of a 15-Percent Renewable Portfolio Standard, SR/OIAF/2007-03 (Washington, DC, June 2007), web site http://www.eia.doe.gov/oiaf/servicerpt/prps/pdf/sroiaf(2007)03.pdf.

13 For background on this scenario, see  Supplement to:  Energy Market and Economic Impacts of  S. 280, the Climate Stewardship and Innovation Act of 2007, web site http://www.eia.doe.gov/oiaf/servicerpt/biv/pdf/s280_1007.pdf.

14 The fuel economy provision is included in the text of H.R. 6 as amended by the Senate, June 2007, web site: http://energy.senate.gov/public/_files/HR6BillText.pdf.

15 The RPS policy assumptions are those analyzed in a recent EIA analysis report, Impacts of a 15-Percent Renewable Portfolio Standard, SR/OIAF/2007-03 (Washington, DC, June 2007), web site http://www.eia.doe.gov/oiaf/servicerpt/prps/pdf/sroiaf(2007)03.pdf.

16 The figure plots covered GHG gas emissions, less offset credits, compared to the target.  Emissions from covered emissions were about 86 percent of total GHG emissions in 2005. Not shown are the increases in biogenic carbon sequestration induced under the S. 1766 allowance allocation incentives.

17 Some impacts on emissions are evident before the 2012 regulation onset.  The pre-2012 impacts result from the bill’s early reduction incentives and the assumption that enactment would influence energy investment decisions immediately.

18 With the secondary information sources used, it was not possible to distinguish agricultural sequestration from forestry.  As a result, all biogenic sequestration was assumed to be eligible for the incentive.

19 In Figures 7 and 8, all emissions from purchased electricity are shown in the electricity sector.  Some of the emissions changes between cases reflect different levels of electricity usage in addition to direct emissions from generation.

20 The capacity estimates for biomass facilities do not include the biomass co-fired at coal plants.  This is counted in coal capacity projections.

21 Costs accumulated from 2005 through 2030. All dollar values are 2005 dollars.  Accumulated costs are discounted to 2005 using a 7-percent discount rate per guidance from OMB Circular A-94.

22 Additional revenue is raised from TAP sales and is assumed to be allocated as though raised from allowance auctions.

23 All dollar values reported in this section and beyond are expressed in real 2000 dollars unless otherwise stated