SENATE, No. 2870
Report the committee on Post Audit and Oversight (pursuant to Section 63 of Chapter 3 of the General Laws, as most recently amended by Chapter 557 of the Acts of 1986) and the Senate Committee on Global Warming and Climate Change submitting a report entitled The Cost of Inaction:Climate Change in the Commonwealth. (Senate, No. 2737). |
The
Commonwealth of Massachusetts
In the Year Two Thousand and Eight.
THE COST OF INACTION:
Climate Change in the Commonwealth
A Report
of the
Senate Committee on Post
Audit and Oversight
and
Senate Committee on Global Warming and Climate Change
July 2008
| Massachusetts Senate | |
|---|---|
| The Honorable Therese Murray Senate President |
|
Senate Committee on |
Senate Committee on |
| Senator Marc R. Pacheco, Chair |
Senator Marc R. Pacheco, Chair |
| Senator Susan C. Fargo, Vice Chair | Senate Pamela P. Resor, Vice-Chair |
| Senator Steven A. Baddour | Senator Steven A. Baddour |
| Senator Michael W. Morrissey | Senator Michael W. Morrissey |
| Senator Richard T. Moore | Senator Jack Hart |
| Senator Benjamin B. Downing | Senator Robert L. Hedlund |
| Senator Robert L. Hedlund | |
Senate Committee on Post Audit & Oversight
Senator Marc R.
Pacheco, Chairman
It shall be the duty of the Senate Committee on Post Audit and Oversight
(established under Section 63 of Chapter 3 of the General Laws) to oversee the
development and implementation of legislative auditing programs conducted by
the Legislative Post Audit and Oversight Bureau with particular emphasis on
performance auditing. The Committee shall have the power to summon witnesses,
administer oaths, take testimony and compel the production of books, papers,
documents and other evidence in connection with any authorized examination or
review. If the Committee shall deem special studies or investigations to be
necessary, they may direct their legislative auditors to undertake such studies
or investigations.
Senate Committee on Global Warming & Climate Change
Senator Marc R. Pacheco, Chairman
It shall be the duty of the Senate Committee on Global Warming and Climate Change to investigate the issues involving global warming and climate change, including but not limited to carbon emissions, greenhouse gas emissions and renewable energies. The committee will explore viable solutions and other innovations that stimulate our economy, promote jobs, and protect our security and environment. The Committee may hold hearings, as needed, to investigate and gather information. The committee shall report, from time to time, with recommendations for legislative action based on their review or on the findings of the investigations. The committee shall have the authority to develop and report legislative proposals pertaining to global warming and climate change, which shall be referred to the Senate Committee on Ways and Means.
The Committee would acknowledge
the contributions from Senator Pacheco's office, including Mary Wasylyk, Chief of Staff; Ilda Marques, Executive Assistant; Charles Basler, Director of Constituent Services; Ryan Colton,
Director of District Affairs and Charles Keller, Intern.
The Committee would also
like to acknowledge the assistance of members of the Massachusetts Climate
Coalition, Environmental Entrepreneurs (E2) and all individuals who testified
and participated in the regional hearings held by the Senate Committee on
Global Warming and Climate Change.
∙ Executive Summary ∙
This joint report of the Senate Committee on Global Warming
and Climate Change and the Senate Committee on Post Audit and Oversight
outlines the consequences the Commonwealth will face if it fails to address the
most pressing problem of our time: climate change. Momentum is growing for
Throughout 2007, the Senate Committee on Global Warming and Climate Change (“Committee”) held a series of hearings across the state on issues associated with global warming, including environmental and health impacts, the state of our oceans, energy and buildings. These hearings allowed the committee to investigate a broad range of issues and provided a forum for discussion with experts on this complex problem. In addition to the hearings, the Committee investigated the costs and benefits of acting on climate change, as well as the impact of the transportation sector on global warming.
The common theme that emerged from the committee’s investigations was the need to immediately reduce carbon emissions in order to mitigate the effects of climate change on the Commonwealth. The solution is to adopt a comprehensive cap on carbon.
Global Warming at a Glance
- The Northeast region is
the world’s 7th largest emitter of greenhouse gases.
- In the Northeast region, the transportation sector emits the largest share of greenhouse gases (38 percent).
- Under a “business as
usual” scenario, by 2070 temperatures would rise to the point that the
climate in
Environmental Costs of Global Warming
- If the Commonwealth fails to adopt a carbon cap, and emissions continue to rise, scientists predict that we will face an environmental crisis of unprecedented magnitude. Hurricanes, tornadoes and floods, already causing tremendous damage, will continue to devastate the environment and the economy.
- There will be an increase in coastal erosion, sea levels, ocean temperatures, severe storm events and hotter days. Vast arrays of plant and animal species would not be able to adapt and would be vulnerable to extinction.
Serious
Economic Consequences of Global Warming
- Postponing action on climate change will put existing businesses, including the agricultural, fishing and tourism industries, at a severe disadvantage in the near term.
- The
Stern Review on The Economics of Climate Change concluded that, “[t]he
benefits of strong and early action far outweigh the economic costs of not
acting.”
[1]
“If we don’t act, the overall costs and
risks of climate change will be equivalent to losing at least five percent
of global
- A
report from
- An increase in storm intensity will lead to greater spending in emergency funding for coastal communities, as well as higher insurance rates for the 75 percent of the population that live along the coastline. According to the “Cost of Climate Change” report, as the sea surface temperature continues to rise due to global warming, an increase in category 4 and 5 hurricanes will cost the U.S. $422 billion in annual damages by 2100. [6]
- A modest cap-and-trade system would cost less than $20 per household annually and have no negative impact on employment, according to an independent MIT study. [7]
Economic Benefits of Putting a Cap on Carbon Emissions
- An economy-wide carbon cap would stimulate the green economy, a new rapidly expanding sector consisting of new jobs in clean energy manufacturing, technology, research and development.
- States
that support this growing sector early will effectively spur local job
creation, spark technological innovation, capture venture capital funding
and establish new industries. Following
passage of
- New clean energy companies are more likely to succeed in a regulatory environment that creates a level playing field by putting a cap on carbon emissions, according to recent research conducted by an economist at the Massachusetts Institute of Technology. A carbon cap puts these clean energy companies in a better position to succeed because all companies will have to address carbon emissions. Under the “business as usual” scenario, subsidies and tax incentives for fossil fuel industries hinder the success of new clean energy ventures.
· Introduction ·
Global climate change is by far the most complex and pressing issue of our time. It directly impacts everything from air quality, sea level, temperature and agriculture, to the spread of disease and our economy.
Over the last century, greenhouse gas emissions – primarily in the form of carbon dioxide (CO2) – have increased at an alarming and historic rate. As a result, global temperatures have risen substantially. These changes in emissions levels are mainly due to human activity and will continue to rise without immediate mitigation.
The
In February 2007, former Senate President Robert Travaglini,
with the support of current Senate President Therese Murray, announced the
formation of a new Senate Committee on Global Warming and Climate Change. A
bi-partisan effort, the Committee’s mission is to address climate change and
raise public awareness, as well as to investigate new technologies and methods
to reduce the state’s dependence on fossil fuels. The ultimate goal of the
Committee is to make the
The first state committee on climate change in the nation, the Committee has the authority to investigate, hold hearings and present legislative solutions to reduce greenhouse gases. Partnering with local legislative leaders, the Committee held regional hearings across the Commonwealth. These hearings enabled the Committee to have in-depth conversations about the various issues associated with global warming, such as green buildings, transportation, environmental and health impacts, energy and the economy. They also provided a forum to discuss and develop legislative solutions.
Through a series of regional hearings the Committee held
across the Commonwealth, it became evident that these accomplishments are not
enough.
The Committee compiled suggestions and solutions from the
hearings into legislation called the “Global Warming Solutions Act” (S2540). At
the heart of this comprehensive policy are mid and long-term goals to cap
carbon dioxide emissions across all sectors of the economy. The long-term
target mandates an 80 percent reduction in emissions from 1990 levels by the
year 2050. To ensure that the Commonwealth can achieve this goal, the
legislation also sets a mid-term requirement to reduce emissions incrementally
by 2020. These targets have the support of a diverse and growing coalition of
scientists, environmental advocates, economists, business leaders, and
students, as well as local, state and federal elected officials. Passage of the
“Global Warming Solutions Act” will not only help save the environment and
reduce the public health impacts of climate change, it
will also make
It is evident that the Commonwealth can not afford to conduct business as usual when it comes to global warming. This report explores the steep cost of inaction, for both the environment and economy, and demonstrates that the Commonwealth can achieve these goals today. It is imperative that the leaders of the state work together to enact local solutions to this global problem.
· Regional Hearings ·
According to leading scientists throughout the world, human activity, primarily the burning of fossil fuels, has increased the amount of heat-trapping gases in our atmosphere to an historic level. The intensity in greenhouse gases, such as carbon dioxide (CO2), has drastically altered the earth’s climate. From an increase in severe weather events and higher temperatures, to the rise in sea levels and increased coastal erosion, the dramatic effects of global climate change are already taking place throughout the Commonwealth. In order to avoid the worst effects of global warming, states must immediately stabilize and reverse greenhouse gas emissions.
The three largest contributing sectors to global warming are, in order of magnitude, transportation, buildings and electricity. In the region, transportation emits the largest amount of carbon dioxide (40 percent), while buildings and energy generation each contribute nearly another third [see chart below]. The impacts are widespread. Global warming affects everything: the spread of disease, the cost of food, the quality of our air and water, rise in sea level, public safety and infrastructure, and the ability of coastal homeowners to insure their properties.
Emissions of Carbon
Dioxide by
Sector in
Source:
In order to gather facts, educate the public and discuss
potential policy solutions, the Committee organized a series of regional
hearings across the state. Prominent scientists, academics, environmental
advocates, economists, citizen organizers, students, as well as leaders in
federal, state and local government, were invited to testify. All of the
hearings were chaired by state Senator Marc R. Pacheco (D-Taunton) and
legislative leaders throughout
Science and Impacts of Global Warming
In an unprecedented event held at the State House on
Dr. Bruce Anderson, Associate Chair for the Department of
Geography and Environment at
Dr. Anderson testified that “historically, the concentrations of carbon dioxide, in parts per million (ppm), over the last 400,000 years have never risen above 300 ppm until about 100 years ago, coinciding with the industrial revolution. Presently the concentrations are at 375 ppm.” In his research Dr. Anderson considered two scenarios for emissions over the next 100 years: the first called the “business-as-usual” trajectory and the second the “low emissions” trajectory.
The “business-as-usual” scenario assumes that no efforts are
made to mitigate greenhouse gas emissions levels. The result is an increase in
CO2 concentration levels to about 1000 ppm within the
next 100 years, four times the levels during pre-industrial times.
[11]
The “low emissions” scenario involves mitigation
measures that significantly reduce emissions levels. Under this scenario,
concentrations reach 500 ppm by the middle of the
century. Meanwhile, reducing emission levels 80 percent by the year 2050 - as
required by several other states, including
Present concentrations of carbon dioxide are already having
visible impacts on the region’s environment, health and economy. The northeast
is experiencing warmer winters and summers, more severe storm events, a rise in
ocean levels and temperatures, and an increase in the number of summer days
over 100 degrees. If we continue under the business-as-usual scenario,
temperatures will increase between 5-14 degrees Fahrenheit, turning
“We are already
observing changes in physical and biological systems that had been projected to
occur much later on in the century,” said Dr. Paul Epstein, Associate Director
of the Center for Health and the Global Environment at
The international scientific community, including the renowned Intergovernmental Panel on Climate Change (IPCC), agrees that at least an 80 percent reduction in emissions must be achieved by mid-century to avoid the worst effects of global climate change. We must start now to meet these reductions.
Solutions are at our finger tips, but they will take strong coordination, leadership and political will. Frank Gorke, former Director of Environment Massachusetts testified that the Commonwealth needs “[t]o put forth policy that will reduce global warming emissions by 80 percent from 1990 levels by the year 2050. To ensure that we get on the right path, we need to set short-term goals that reduce global warming emissions.” [16]
These actions, while perhaps initially daunting, will benefit both the environment and the economy. As Professor William Moomaw testified at the hearing, “The good news is that there are solutions that reduce the risk of climate change that provide opportunities to build a sustainable economy for the Commonwealth.” [17]
On
A prominent panel of experts spoke about green building designs, strategies and benefits. Green building design and construction practices give communities the opportunity to construct environmentally sound buildings, while reducing emissions, water and energy use. Building green also makes facilities healthier for occupants, thereby increasing overall productivity.
Jim Gomes, former President of the Environmental League of
Massachusetts (ELM) testified that “together we can develop solutions…to make
the heating, cooling and lighting of buildings more energy efficient.”
[18]
Also invited to testify was Eric Friedman, Director of State Sustainability for
the Executive Office of Environmental and Energy (EEA), Marc Price, residential
green building project manager for the Conservation Services Group (
Seventy percent of the nation’s electricity [19] and more than a third of the nation’s total energy resources are consumed by buildings. [20] In 2006, residential buildings emitted 1.2 billion metric tons of carbon dioxide, 20 percent of the nation’s total emissions. [21] The problem stems from outdated building codes and planning practices, as well as facilities with poor insulation and energy-inefficient heating, cooling and lighting appliances. The lack of integrated design and planning practices in traditional buildings means 40 percent of construction and demolition (C&D) waste is sent to overcrowded landfills. [22] Green building strategies and technologies reduce these environmental impacts.
The Leadership in Energy and Environmental Design (LEED) system provides guidelines and ratings for green building and design. Developed by the United States Green Building Council (USGBC), the voluntary system provides a checklist to measure and evaluate green building planning, design and construction practices. Facilities that meet LEED standards receive various levels of certification - Certified, Silver, Gold and Platinum – based on the credits accumulated from the checklist from the following eight major categories.
A 2004 Science article conducted an analysis of existing technologies that can mitigate carbon emissions and divided them into 15 stabilization options. Increasing building efficiency via “energy efficient space heating and cooling, water heating, lighting, and refrigeration in residential and commercial buildings” was identified as an immediate way to combat global warming. [24] Over the lifetime of a LEED certified home, carbon dioxide emissions are expected to be reduced an average of 100 metric tons. [25] “Building green homes is one of the best strategies for meeting the challenge of climate change because the technology to make substantial reductions in energy and carbon dioxide emissions already exists,” according to the U.S. Green Building Council.
Green buildings are commonly perceived as more expensive than traditional design. However, the financial benefits of building green outweigh the initial costs. A 30 percent energy savings on a 100,000 square foot facility yields $60,000 in savings a year. [26] Poor indoor environmental air quality in traditional buildings costs the country hundreds of billions of dollars a year in productivity and health costs. [27] Better lighting, heating and ventilation control found in green buildings improve the health of occupants and also boosts productivity. In a Gold LEED Certified facility, productivity has been shown to increase by 1.5 percent, equal to $1,000 a year per employee, or five dollars per square foot annually. [28] Over a twenty year span, the savings increase to $35-55 per square foot each year. [29] When facilities incorporate these construction practices, there is also a higher resale value. Overall, building green provides a 40 percent return on initial investment. [30]
It is evident that green building technologies and practices have the potential to reduce greenhouse gas emissions from one of the largest emitting sectors. Jim Gomes pointed out at the hearing that building green means “saving the planet, while saving money.”
Environmental and Health Impacts
On
Panelists were invited to speak about the impact global
warming has upon local forests, ecosystems, biodiversity, as well as how it
affects people’s health. Speakers included Julie Wormser,
former Director of Policy for the Appalachian Mountain Club, Steve Long,
Government Relations Director for The Nature Conservancy, and Steven Nodzin, Associated Professor of Natural Sciences at
Global climate change is having harmful effects on the environment, which in turn negatively impacts public health. The Committee’s first regional hearing touched upon how climate change, if it continues to go unchecked, will lead to significantly higher temperatures, an increase in severe weather events, more intense levels of air pollution and a rise in sea levels. Panelists at this regional hearing testified how these changes will also take a significant toll on the state’s forests, coastal lands, biodiversity and public health.
Some of the most negative effects include increases in ozone levels, heat-related deaths and illnesses, air and water pollution, and loss of native species. Climate change also contributes to increased amounts of ground-level ozone, which can damage lung tissue and exacerbate respiratory illnesses, such as asthma. Warming of the earth’s atmosphere also generates an environment where disease-carrying insects thrive, increasing the risk of mosquito and tick-borne diseases, such as Lyme disease.
Julie Wormser highlighted how
species evolve over hundreds and thousands of years. When environmental
conditions change quickly, many species can not adapt and risk becoming
extinct. The result can be catastrophic species loss. Worldwide, scientists
estimate a 50 percent species loss due to global warming.
[31]
“In less than 300 years we have set in motion
a level of species extinction that is predicted to take
What climate change means for
These changes are already taking place and have occurred at
a more drastic pace than experts originally anticipated. Despite the best
efforts, all effects of global warming can not be mitigated. Therefore, policy
makers need to devise ways to adapt to the physical changes that have already
begun and will continue to happen. Steve Long from The Nature Conservancy
testified that it is imperative
Mitigation measures will help prevent the worst impacts of climate change.
Adaptation measures will help species, including humans, survive the unavoidable impacts of climate change. This two pronged policy approach is backed by Intergovernmental Panel on Climate Change (IPCC), the winner of the 2007 Nobel Peace Prize. In the Northeast, adaptation means adjusting to less snow, more extreme storms, eroding coastlines, rising sea levels, and hotter summer days. These events are already having a profound impact on our ecosystems, economy, infrastructure and public safety.
The State of Our Oceans
On
Marine scientists, educators,
environmental advocates and business leaders testified about the impact that
global warming is having on the state’s oceans, ecosystems, coastline and
economy. Speakers included Robert Max Holmes, Associate Scientist at
As the warming of the earth’s
atmosphere causes icebergs to melt, ocean temperatures and levels continue to rise
across the globe. This global problem, however, has many local consequences. In
The rise in temperatures and seal
levels caused by global warming will also increase flooding and accelerate
coastal erosion. In
The change in temperatures and
currents continue to affect the productivity and diversity of the
Commonwealth’s historic fishing industry. Cod, herring, lobster, clams and
scallop are just a few of the local species in jeopardy of survival as the
temperature and level of ocean waters are altered. Dr. Rothschild pointed out that while fish
populations have increased and decreased in a cyclical pattern for centuries,
The answer to that question is
critical to the Commonwealth, since the fishing industry is a vital part of the
state’s economy and the fabric of life for coastal communities. Commercial
fishing is a $425 million industry, creating more than 76,000 jobs throughout
the Northeast in 2004.
[38]
The coastline is home to 75 percent of the state’s population and the ability to insure coastal properties is a growing concern for these coastal homeowners. Rachel Harold, an insurance specialist at Ceres, testified how climate change impacts the insurance industry. Basically, insurance companies’ business is to manage risk and climate change is making these risks “more severe, frequent and unpredictable.” [40] Throughout the country, “weather related insurance losses rose to $50 billion in 2005 from less than $10 billion a decade earlier.” [41]
In
Climate change has already started to have a visible impact upon the Commonwealth’s vulnerable oceans, coastlands, marine environments, as well as the state’s local economy. The rise in temperature and sea level caused by global warming will continue to accelerate coastal erosion, increase flooding, multiply severe storms and threaten ecologically sensitive salt marshes and estuaries.
Energy and Utilities
On
Experts on energy distribution, generation, renewable energy, energy efficiency and local “green” business leaders were invited to testify. Speakers included Rodney Powell, President of Western Massachusetts Electric Company, Laura Dubester, Director of the Center for Ecological Technology, and Lee Harrison, Executive VP of Berkshire Biodiesel. A large student population also turned out in support of finding local solutions to climate change.
The hearing highlighted the fact that if consumers’ energy needs are to be met, while significantly curbing greenhouse gas emissions, Massachusetts can not continue to conduct business as usual. Energy efficiency and conservation efforts need to be improved. The amount of power generated from clean, renewable energy sources, such as solar and wind, must be increased.
Distribution and Generation
ISO-
One of the key issues in
Rodney Powell, President of Western Massachusetts Electric, testified that even though their customer base has remained stable, the total demand for electricity has risen 79 percent since 2000. [47] Increased demand in energy drives the need for additional generating capacity, typically in the form of new power plants. However, dependence on fossil fuels is not sustainable and is a leading contributor to global warming. Fortunately, there are other possible routes to meet consumers’ growing energy needs. Increases in energy efficiency, demand response (i.e., on-demand energy conservation tools), and renewable energy measures effectively reduce demand, while cutting greenhouse gas emissions.
Energy Efficiency
Energy efficiency is the most cost effective way to meet demand, while at the same time reducing energy generation. Energy efficiency is available at a cost that is a third less than electricity supply and the savings can be passed onto ratepayers. “Efficiency costs 3.2 cents per kWh, while new electric supply costs roughly 10 cents per kWh. On the gas side, efficiency resources cost 25 cents per therm while new supply costs roughly $1.10 per therm,” according to written testimony from Dan Valianti, Ceres’ Northeast Climate and Energy Manager. [48]
Energy efficiency programs are administered by utility
companies and funded through a small system benefit charge (
The economic benefits of efficiency go beyond saving
ratepayers money.
Least cost procurement is a policy that requires energy
distributors to choose the most cost effective option available. Since energy
efficiency resources are available at a cost significantly less than energy
supply, least cost procurement reduces demand and greenhouse gas emissions,
while saving ratepayers money. Sam Krasnow, attorney
for Environment Northeast, testified that moving forward,
By reducing the need for more supply, energy efficiency also effectively reduces greenhouse gas emissions. The $150 million invested in energy efficiency each year has reduced 3 million metric tons of CO2, just from the electric sector alone. Efficiency essentially provides the same quality of service to consumers, while using less energy and protecting the environment.
Renewable Energy
Renewable energy also reduces greenhouse gas emissions by displacing traditionally dirty generation with clean energy. Since renewable energy is a domestic resource, it also spurs local economic development and promotes national energy security. The Commonwealth has tremendous potential to expand wind and solar capabilities. The Massachusetts Technology Collaborative is a quasi-state agency that promotes renewable energy by providing grants from the Massachusetts Renewable Energy Trust Fund so businesses and residents can conduct renewable energy feasibility assessments and install renewables, such as wind turbines and solar panels.
Twenty-five states have Renewable Portfolio Standards (RPS),
a regulatory policy that mandates that utilities deliver to their customers a
specific percentage of power generated by renewable energy sources.
RPS policies successfully stimulate development of new
renewable energy technologies. Half of all wind projects in the
Demand Response
Demand response programs work by encouraging consumers, usually through financial incentives, to reduce the amount of energy they use during high-demand times. Demand response mechanisms avoid energy use or shift energy use from on-peak hours to off-peak hours, thereby reducing emissions effectively and economically. A key finding from an analysis on meeting the region’s future energy needs shows that “demand-side resources appear to provide capacity and energy to the system at relatively low capital costs and with low emissions relative to other sources.” [56]
ISO-NE recently established a new system that will administer payments to entities that work with customers to voluntarily reduce their energy demand through dedicated control systems, load shedding or reduction and onsite electrical generation. Demand response programs are an effective way to reduce demand, enhance reliability and reduce greenhouse gas emissions. The capacities of electrical systems generally are dictated by the amount of energy needed during peak hours. Since demand response effectively lowers peak demand, it also reduces the amount of generating capacity and number of power plants needed. “Investments in efficiency, demand resources, and renewables will save the region hundreds of millions, if not billions of dollars. Moreover, these are the types of efforts that will be needed to slow, stop and reverse the devastating man-made effects of global warming,” according to Dan Valianti of CERES. [57]
Energy efficiency, renewable energy and demand response
mechanisms can effectively reduce the amount of energy that is needed
throughout
Transportation
In addition to its regional hearings, the Committee
investigated the impacts of the state’s transportation sector on global warming
emissions. This sector contributes more
than 40 percent of the state’s carbon dioxide, the main pollutant involved in
global warming.
[58]
The data show an 18 percent increase in
carbon dioxide emissions from transportation in
Reducing Vehicle Miles Traveled
A substantial portion of the state’s vehicle emissions (five
to eight percent) are attributable to commuting.
[63]
Just two percent of
Increasing public transit, carpooling and rideshare options
for commuters can significantly reduce greenhouse gas emissions and save on
fuel costs.
In addition to reducing vehicle miles traveled via enhanced transit options, smart growth and transit-oriented development should be promoted by local and regional planning agencies. [69] By encouraging more compact development around transit hubs, many commuters can reduce the need to use passenger cars for trips to work. As gasoline prices continue to climb, communities that cluster housing and retail development in a pedestrian-oriented setting will become more appealing to a wider range of residents.
Improving Vehicle Efficiency
What steps is