Antitrust Reminder. August 25, Solar Energy Industries Association 1

Transcription

1 Antitrust Reminder As a trade association of competitors, SEIA must comply with federal and D.C. antitrust laws. Competitively sensitive matters cannot be discussed on this webinar, including product prices; sales terms or conditions; production levels; sales territories; marketing plans; industry forecasts; or bid terms. If any such topic is raised, SEIA will stop the conversation and, if necessary, end the webinar. For more information, SEIA s antitrust policy is available on its website: August 25, Solar Energy Industries Association 1

2 The Impact of Carbon Fee and Dividend on Solar Scott Nystrom, Senior Economic Associate, Regional Economic Models, Inc. Katherine Stainken, Manager, Government Affairs, SEIA Rick Umoff, Counsel and Regulatory Affairs Manager of State Affairs, SEIA

3 THE ECONOMIC, CLIMATE, FISCAL, POWER, AND DEMOGRAPHIC IMPACT OF A NATIONAL FEE-AND- DIVIDEND CARBON TAX Regional Economic Models, Inc.

4 Study Authors Scott Nystrom, M.A. Regional Economic Models, Inc. (REMI) Senior Economic Associate (202) Patrick Luckow, M.S. Synapse Energy Economics (Synapse) Associate (617) energy.com>

5 About REMI Regional Modeling Founded as an offshoot of research performed at the University of Massachusetts-Amherst in the late 1970s Software, data, consulting services, and issue expertise involving regional economic and demographic analysis Clients and Research Public sector: 47/50 states, federal agencies, regional authorities, cities, universities, international groups Private sector: consultants, Big 4 accounting firms, Fortune 500 companies, trade associations (AGA, NEA, NFIB, etc.) Recent projects on immigration reform and Medicaid expansion <

6 Client Base <

7 Policy Design Carbon tax Starts in 2016 at $10 per metric ton of CO 2 (and only CO 2 ) Escalates at $10 per year through at least the 2030s Point of extraction the well or the mine Fee-and-dividend (F&D) 100% of carbon tax revenues refunded to all American households in monthly checks or deposits Refund size based on number of adults (full share) and children (under 18, half share, and a maximum of two) Border adjustment Minimize carbon leakage and preserves competitiveness Goods imported to the United States charged a carbon tax on the emissions during their production process overseas Revenues used to compensate American exports for the higher costs <

8 Changing Incentives The Sun Capital The Earth Fossil Fuels Fee-and-Dividend Light, Wind Renewable Energy Fossil Energy Households Labor Air Quality Emissions Border Adjustment Industries

9 Three Models Regional Energy Deployment System (ReEDS) National Renewable Energy Laboratory (NREL) Long-term capacity and generation of electrical power by technology type (coal, gas, nuclear, wind, solar, etc.) Carbon Analysis Tool (CAT) Built off the Annual Energy Outlook (AEO) from EIA with adjustments based on price elasticity Models carbon emissions and carbon tax revenues REMI PI + Dynamic, multiregional economic and demographic model of subnational units of the United States

10 Nine Regions Pacific (PAC) West North Central (WNC) East North Central (ENC) New England (NE) AK and HI are in the PAC region Mid-Atlantic (MA) Mountain (MNT) South Atlantic (SA) West South Central (WSC) East South Central (ESC)

11 The ReEDS Model <

12 Carbon Analysis Tool Overhaul of the CTAM model by Keibun Mori Baseline comes from the AEO reference case Simulations of carbon taxes make adjustments based on price elasticity CAT adds internal power switching (from ReEDS), NO X and SO X, multiple regions, and integrates with REMI PI + Price on carbon emissions Changes end-use energy prices Reduces demand for energy Change from AEO reference case Tax revenues = price*emissions

13 REMI PI +

14 Model Integrations

15 Economic or demographic indicator Against the Baseline 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Baseline Alternative

16 Results Overview Economic Jobs and GDP Personal Income Prices By Region By Industry Climate Carbon Emissions NO X, SO X Emissions Savings from the Baseline Fiscal Carbon Tax Revenues Border Adjustment Size of Monthly Dividend Electricity Generation, Capacity by Technology Investment in Power Technology By Region Demographic Population Economic Migration Saved Premature Deaths

17 Thousands of jobs over baseline Regional Employment NE MA ENC WNC SA ESC WSC MNT PAC

18 Thousands of jobs over baseline National Employment 3,000 2,500 2,000 1,500 1,

19 Billions of 2012 dollars Gross Regional Product $40 $30 $20 $10 $0 -$10 -$20 -$30 -$40 -$50 -$60 -$70 NE MA ENC WNC SA ESC WSC MNT PAC

20 Billions of 2012 dollars Gross Domestic Product $90 $80 $70 $60 $50 $40 $30 $20 $10 $0

21 Percentage from baseline Employment (%) 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% USA NE MA ENC WNC SA ESC WSC MNT PAC

22 Percentage from baseline GRP and GDP (%) 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% USA NE MA ENC WNC SA ESC WSC MNT PAC

23 Trillions of 2012 dollars Trillions of 2012 dollars Baseline v. Alternative GDP (USA) GRP (WSC) $35 $4.0 $30 $25 $20 $15 $10 $5 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0 $0.0 Baseline Alternative Baseline Alternative

24 GDP by Industry Health Care and Social Assistance Finance and Insurance Retail Trade Real Estate and Rental and Leasing Information Other Services, except Public Administration Accommodation and Food Services Wholesale Trade Construction State and Local Government Administrative and Waste Management Services Arts, Entertainment, and Recreation Educational Services Professional, Scientific, and Technical Services Forestry, Fishing, and Related Activities Management of Companies and Enterprises Utilities Transportation and Warehousing Mining Manufacturing -$40 -$30 -$20 -$10 $0 $10 $20 $30 $40 Billions of 2012 dollars (annual average, ) National level results

25 GDP by MFG Industry Motor vehicles, bodies and trailers, and parts Food Beverage and tobacco Printing and related support activities Fabricated metal Furniture and related Nonmetallic mineral Wood Machinery Apparel; Leather and allied Paper Textile mills; Textile mills Miscellaneous Other transportation equipment Plastics and rubber Electrical equipment and appliance Primary metal Computer and electronic Chemical Petroleum and coals -$20 -$15 -$10 -$5 $0 $5 Billions of 2012 dollars (annual average, ) National level results

26 Jobs by Industry Health Care and Social Assistance Retail Trade Other Services, except Public Administration Accommodation and Food Services Administrative and Waste Management Services Construction Finance and Insurance Real Estate and Rental and Leasing Educational Services Arts, Entertainment, and Recreation State and Local Government Wholesale Trade Professional, Scientific, and Technical Services Information Manufacturing Transportation and Warehousing Forestry, Fishing, and Related Activities Management of Companies and Enterprises Utilities Mining Thousands of jobs (annual average, ) National level results

27 CO 2 Emissions 6,000 Millions of metric tons of CO 2 5,000 4,000 3,000 2,000 1,000 0 NEMS/ReEDS Baseline CAT/ReEDS Alternative National level results

28 Billions of 2012 dollars Carbon Tax Revenues $700 $600 $500 $400 $300 $200 $100 $0 Carbon Tax Revenues Border Adjustment Revenues National level results

29 Monthly dividend for a family of four (two adults and two dependent children) in 2012 dollars Monthly Dividend $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 National level results

30 Percentage from baseline Cost of Living 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% NE MA ENC WNC SA ESC WSC MNT PAC

31 Per capita 2012 dollars Real Income Per Capita $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 National level results

32 Generation (TWh) Power Generation Baseline ($0/year) Alternative ($10/year) 5,000 5,000 Solar 4,500 4,500 Wind 4,000 4,000 Biopower Geothermal 3,500 3,500 Hydro 3,000 3,000 Nuclear Oil-Gas-Steam 2,500 2,500 Gas-CC-CCS Gas-CT 2,000 2,000 Gas-CC 1,500 1,500 Coal-CCS Coal-IGCC 1,000 1,000 Coal-New Cofiring Coal-Old Scrubbed 0 0 Coal-Old Unscrubbed National level results

33 Billions of 2012 dollars Air Quality $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 PAC MNT WSC ESC SA WNC ENC MA NE 1 g of NO X = $0.005; 1 g of SO X = $0.025

34 Thousands (cumulative) Saved Premature Deaths PAC MNT WSC ESC SA WNC ENC MA NE Air quality benefit / $6.2 million = 1 saved premature death

35 Thousands over baseline Regional Population 1,200 1, NE MA ENC WNC SA ESC WSC MNT PAC

36 Results Summary Economic Climate Fiscal Electricity Demographic 2.0 to 3.0 million more jobs than in the baseline $70 to $90 billion in additional annual GDP Significant reduction in carbon dioxide emissions -33% from baseline by 2025, -52% by 2035 Up to $600 billion in revenues by the 2030s Familial rebate of $200 per month by 2025 Retirement of coal fleet by the mid-2020s Replaced by wind, nuclear, solar, and geothermal 11,000 to 13,000 annual saved premature deaths Larger population, mostly in the Midwest

37 Main Takeaways A strong economy and environmental quality are not mutually exclusive propositions from each other In fact, when understood as tax reform, environmental policies can have positive effects on the economy Removes the infernal tradeoff between two priorities Makes actions by foreign nations less relevant if it is good for our economy on its own, who cares about others? These results do not depend on a motive for why we might want to reduce carbon dioxide emissions Climate policy regarded as mundane budget reform Reducing the level of emissions is a secondary effect This policy makes no other changes to taxes or to spending No tax-and-spend, no change for the general tax code, no changes to Social Security, Medicare, Medicaid, etc.

38 Thank you. Regional Economic Models, Inc. (REMI) 1776 I St. NW Suite 750 Washington, DC (202)

39 Questions Please type your questions into the lower left corner of the window. Click the send button to submit. August 25, Solar Energy Industries Association 39