Washington, D.C., May 21, 2009 – Today's passage of the American Clean Energy and Security Act by the House Energy and Commerce Committee is the most significant step to date in making the United States a world leader in advancing energy efficiency and addressing climate change, the Alliance to Save Energy said.

“By creating a market-based incentive to reduce emissions in a cost-effective manner, the carbon cap and trade program created by the American Clean Energy and Security Act has the potential to be the most significant energy efficiency policy, as well as the most significant climate policy, ever implemented in this country,” said Alliance President Kateri Callahan. “It would help make the U.S. a world leader.”

“This is landmark legislation for energy efficiency and for everyone concerned about reducing greenhouse gas emissions and investing in clean technology,” said Alliance Senior Vice President Joe Loper. “Clean energy advocates need to come together in support of this bill to ensure that it navigates the many hurdles that lie ahead in Congress.”

The combined energy and climate bill, introduced May 15 by House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) and Energy and Environment Subcommittee Chairman Edward Markey (D-Mass.), would establish an economy-wide cap on greenhouse emissions and put the U.S. on a trajectory to reduce covered emissions by 83 percent below current levels by the year 2050.

The Alliance praised several provisions in the bill that are specifically designed to overcome barriers to investments in energy efficiency. Perhaps most significant, according to Alliance Director of Policy Lowell Ungar, are the provisions for improving building energy codes and getting buildings nationwide to follow them.

“While buildings today are our largest source of greenhouse gas emissions, this provision will slash building energy use, energy bills, pollution, and global warming,” stated Ungar. The provision would direct DOE to help independent code-setting organizations develop much better energy codes and help states and local governments implement and enforce the codes. But it also would quickly initiate federal action as a backstop to ensure strong codes throughout the country. “With this bill we can see a future when energy bills are not an issue for consumers and carbon emissions due to buildings are not an issue for the world.”

The bill creates a host of additional energy efficiency policies, including an Efficiency and Renewable Electricity Standard (RES), which will require utilities to meet customer needs in part through renewable resources and energy efficiency programs, and a building energy performance labeling program. The bill also creates energy and/or water efficiency standards for a variety of products, most notably outdoor lights, and improves the DOE standard-setting process. The Alliance strongly supports these policies.

The Alliance estimates that funding for energy efficiency from as many as two dozen different provisions in the bill could total more than $100 billion over the 2012-2050 period, for an average of about $3 billion per year (about 4 percent of allowances). But that funding could range from a low of $81 billion to a high of $167 billion or much more. The uncertainty is because the bill combines funding for energy efficiency with funds for renewable energy, the smart grid, and consumers.

A significant part of the funding will come from the 5-10 percent of total carbon allowances given to state and local governments (depending on the year), of which as little as one-fifth or as much as four-fifths could be used for energy efficiency. Of that, 0.5% of allowances are specifically to implement building energy codes. Additionally, natural gas utilities must use at least one-third of their free allowances specifically for energy efficiency programs.

While acknowledging that the spending levels would be a significant increase over historical levels of federal funding for energy efficiency, the Alliance, along with more than 140 other efficiency advocates, urges a more robust energy efficiency allocation of roughly 26 percent of the cap and trade proceeds for energy efficiency. “As this landmark bill works its way through Congress, one area where we would like to see improvement is the funding set-aside for energy efficiency,” said Brad Penney, Alliance Director of Government Relations.

The Alliance cautions that the large amount of carbon offsets allowed in the bill could present challenges. Offsets comprise an increasing proportion of total allowance over time, up to 60 percent in 2050. Stated Loper, “the bill needs to be very clear about how the many issues associated with evaluating, measuring and verifying savings will be addressed, and should ensure that the entities tasked with making key decisions are independent of political pressure. Any attempts to dilute these safeguards should be vigorously opposed.”