UNAS Model United Nations Preparatory Conference The Seventh Edition

The United States Senate Primary Issue: The question of sustainable development of the energy industry

UNAS Model United Nations Preparatory Conference The Seventh Edition

Chair Foreword Alexis Loh Alexis is a Secondary 4 student at Raffles Girls’ School and has been to over a dozen MUNs in many capacities: notepasser, press member, delegate or chair; you name it, she’s done it. UNASMUN 2017 will be her second time chairing, being a returning student officer from last year. In her free time, she spends her time on AO3 desperately waiting for fics to update, holding highly emotional mini-concerts in her room, or closely following figure skating (no, she hasn’t watched Yuri on Ice. Yet.). If ever need a companion to watch the 2018 Pyeongchang Olympics, or submit your hopefully-not-pre-written resolutions, she can always be contactable at alexisloh0@gmail.com .

Joshua Tan Beneath that angry look (as what many of his friends have described), Joshua is a rather friendly Year 4 student at NUS High School, and longs for the day on which he receives his perfect 5.0 CAP. Having attended more than 7 MUNs, he hopes that his second-time chairing would not include a dramatic series of pre-written definitional clauses and plagiarised WHO articles. While he’s not browsing the spectrum of news applications he subscribes to, Joshua watches the current season’s anime and fails to rank up on Hearthstone. If you ever require someone to fulfil your 80 gold quest or simply chatter about Trump’s latest policies, Joshua is readily contactable at joshuatan5201@gmail.com .

UNAS Model United Nations Preparatory Conference The Seventh Edition

I. Introduction The United States Senate is the upper house of the American Congress, the country’s legislative body, and comprises a hundred senators, two per state. Beyond serving as a check and balance for the lower house of Congress, the House of Representatives,the Senate also contains standing committees to whom bills are referred to, and the ability to create special committees with investigative authority. 1 The two main parties of the Senate are the Democrats and Republicans. At first glance, the development of sustainable energy might seem like a contentious issue, irreconcilable between both parties. As early as 2004, when responding to the Kyoto protocols, the Republicans have always maintained the stance that greenhouse gas emissions should not be regulated by the government as it would stunt economic growth and reduce American jobs. 2 The Democrats, on the other hand, are largely in favour of sweeping measures to combat climate change, characterised by the blanket carbon emission reduction goals put in place by the Obama administration under the Clean Power Plan. 3,4 Beyond party lines, however, the nature of the development of energy necessitates the consideration of factors such as physical geography and demographics when formulating a state’s stance. For instance, the United States Climate Alliance, formed in protest of President Trump’s

withdrawal from the Paris Climate Accord, also comprise states that have Republican governors, such as Vermont and Massachusetts. 5 Both of these states are alike in that they do not possess many opportunities for the harvesting of fossil fuels, and their landscape and abundance of water bodies allows for more opportunities for the development of the green energy industry. 6,7 Similarly, an adherence to party stance does mean that practical factors are ignored. Texas, also traditionally Republican and lacking a statewide carbon emissions reduction target, is the top producer of wind energy in America, providing nearly a quarter of the country’s production and experiencing a 40-fold increase between 2001 and 2016. 8 This happens mostly not because of government intervention, but because conventional power plants that often utilise steam turbines were comparatively more costly in the water-scarce state. The growth of the renewable energy sector was hence for the practical reason of reducing the consumption of limited natural resources. It follows, then, that garnering support of the development of sustainable energy is not impossible to achieve in both parties, but, ideally, should be couched as a means to an end, with that end being greater efficiency in managing natural resources, faster economic development and increased energy independence. A bill hoping to receive

UNAS Model United Nations Preparatory Conference The Seventh Edition

support from both parties must endeavor to respect the Republican preference for deregulation and protection of American jobs, with the government providing assistance, rather than regulation, while simultaneously supporting the Democrat preference for the effective reduction of the emission of greenhouse gases, as the Democrats envision for the country. Definitions According to the World Commission on Environment and Development, ‘sustainable development’ is defined as development that “meets the needs of the present without compromising the ability of future generations to meet their own needs” . 9 Sustainable energy itself does not have a clear definition, but the key types of sustainable energy generators include but are not limited to: wind turbines, photovoltaic cells, nuclear generators, hydroelectric dams and geothermal generators. 10 The sustainability of an energy source can be determined by looking at its impact in different sectors, such economic, social and environmental, and determining weighing the major, long-term drawbacks involved against the potential benefits. This is different from renewable energy, where the source is ‘renewable’ through natural process, such as sunlight or wind. For instance, nuclear energy is seen by some as sustainable as it emits little to no greenhouse gases, but it is by no means renewable. 11

Background Information The last major bill passed relating to the development of the sustainable energy industry is the Energy Policy Act of 2005, which serves as an amendment to the previously passed Energy Policy Act of 1992 (EPAct). 12 EPAct addressed issues such as the increasing of energy efficiency, renewable energy as well as the funding of research into alternative fuel sources, amongst other issues. 13 The 2005 amendment was designed to introduce more concrete measures to the original EPAct such that it could better achieve its objective of increasing American energy efficiency. One such programme introduced is the Renewable Fuel Standard, which mandates that a certain volume of renewable fuel replace current petroleum-based transportation fuel. 14 The amendment also further introduced additional programmes such as the Clean Air Coal Programme and refined numerous programmes, such as the District Heating and Cooling Programme and regulations on energy in Indian reservations. It also conducted reviews on the impact of the 1992 EPAct. 15

However, since then, it has been over a decade since any large-scale legislation was drafted on improving the infrastructure of renewable energy. The Energy Policy Modernisation Act was drafted just last year, but fell short when communications between the Senate and the House did not follow through. Typically, bills that originate from

UNAS Model United Nations Preparatory Conference The Seventh Edition

and are successfully voted on in the Senate are then passed to the House for them to carry out a vote. However, the draft never reached the House as the 2016 Congressional Session was suspended early with the inauguration of President Trump. 16 As a follow-up, the Energy and Resources Act of 2017 was introduced in July of this year, but its objective seems to be modernising America’s current energy grid, rather than a focused development of sustainable forms of energy. 17 Therefore, it is clear that an energy reformation policy targeted at improving the sustainability of America’s energy and resources is needed. This is especially considering the weaknesses of conventional energy, such as health and safety issues, and it leaving America in a vulnerable position being subject to severe price fluctuations, owing to the monopoly of supply by OPEC countries. Furthermore, technology has advanced rapidly since the passing of EPAct to develop the sustainable energy industry, and must now be taken into account and taken advantage of in developing an energy framework. II. Scope of Debate Ideally, sustainable energy is energy produced with minimal to no greenhouse gas emissions, such that the environment is not harmed in such a way that would disadvantage our future generations. This would require the reduction of carbon

emissions from current conventional energy producers and an increased dependence on renewable energy sources in order to eliminate the need for carbon-creating forms of energy completely. However, achieving both of these ideals are not without their own challenges. Opposition Against Carbon Reduction As mentioned before, a key Republican stance is the opposition of the concept of a federal-wide carbon tax or carbon reduction scheme, as they foresee detrimental effects on the country’s economy. Some argue that taxing conventional energy sources will cause its prices to increase dramatically; as fossil fuels comprise 65% of electricity production in America, the price hikes could be rather severe, causing households to have less disposable income to contribute back to the economy. 18 Of particular concern is low-income families who would most likely also be badly affected if there were to be an increase in their utilities bill, which they may not be able to support. 19 Some argue that the rise in prices of conventional energy would also cause its demand to drop. Utility companies would then not be able to sell as much electricity, possibly causing workers in the conventional energy sector to be retrenched and them to lose their livelihoods. 20 Others also refute the argument that implementing carbon taxes would increase jobs, as this

UNAS Model United Nations Preparatory Conference The Seventh Edition

needs the revenue from the tax to be directly invested in helping the American economy. Instead, they argue that this money is not spent effectively, or is deliberately, unfairly, in favour of the renewable energy sector. 21 While it is possible that the jobs lost in the conventional energy industry could be recuperated in the renewable energy sector, this might not happen within the very same state. 22 States that are typically high producers of conventional energy, such as West Virginia and Kentucky, also rank close to last among states in terms of solar jobs per capita, meaning that any new jobs created by a carbon tax would likely go to states with a more mature solar industry, rather than states that face the greatest loss of jobs in the conventional energy industry. 23 Therefore, while the severity of the impact of a carbon tax or carbon reduction scheme may not be widely agreed upon, those who wish to pursue such a course of measure must take into account these possible repercussions. Increasing the supply of sustainable energy In 2015, approximately 14 percent of energy generated at the utility scale, roughly 560 million out of over 4 billion megawatt hours, came from renewable energy sources. 24 It is also heartening to note that from 2005 to 2015, power generated from wind increased by 173,000 megawatt hours and photovoltaic cell generation by 22,000, with

the numbers set to rise even further in coming years. The best way to ensure that the use of sustainable energy grows even further in the coming years is to achieve grid parity, where the cost of producing renewable energy is lower than that of traditional sources, from the “grid”. 25 As of 2016, though 20 states have reached grid parity, it is only when considering the subsidies placed by the American government on residential ownership of renewable energy sources such as photovoltaic cells. 26 For instance, the Residential Renewable Energy Tax Credit provides 30% tax credit for buyers of solar-electric systems installed before 2020. 27 Subsidies for wind and solar generators can help to greatly accelerate the attaining of grid parity, but improvements in efficiency and utilization must be made if grid parity is to be sustained once subsidies are removed. 28

Moreover, one concern that is often raised is how the nature of renewable energy generation entails a definite amount of variability. As of now, a large challenge faced in the sustainable development of energy is in the technology generating sustainable energy itself. For example, both wind and solar energy generation have some measure of variability, such as cloud cover or wind speeds. The amount of energy generated also stands independent from consumer needs, meaning that a deficit or surplus of energy could be created on the

UNAS Model United Nations Preparatory Conference The Seventh Edition

local scale, leaving conventional energy sources to fill in the gaps, increasing or decreasing their energy output in a way that decreases optimisation. 29 The most obvious solution to this would be to coordinate energy generation efforts on a state- or even nation-wide scale, but this would definitely need greater improvements and modernisation of the current energy grid. 30 Moreover, especially for wind and hydroelectricity, the power generation plants have to be situated where the resource is in abundance, which could be far from a city centre. 31 This, once again, would incur cost in the laying down of transmission lines. Renewable energy sector is thus one that would require a high level of initial investment and though it would be able to be compensated in the long-term, the hefty sum is what deters many potential investors. 32

Directly solving the issue would require diverting large amounts of government funding and subsidies into the sustainable energy industries. Seeing as how 70% of government subsidies in the energy industry from 1950 to 2010 were invested in oil, coal and natural gas, mostly in the form of tax policies, such a decision would necessitate reforming the energy budget in a way that contrasts with decades of energy expenditure. 33 However, though conventional energy industries receive much support from the government, if these efforts were channeled into the sustainable energy sector instead, they could potentially yield

greater results. For instance, as of 2016, government support to the oil industry amounted to 4 billion annually. The removal of these subsidies are predicted to reduce domestic oil production by merely 5 percent and, had they been removed between 2005 and 2009, carbon emissions would have been reduced by less than 1 percent. 34 This casts doubts on the need for subsidies in the conventional energy sector at all, as they remain largely unaffected with or without the subsidies. There is room for improvement in how the budget for energy subsidies can be reformatted, and its priorities should be determined in order to eliminate inefficiency and allow for advancement in research and capacity building. 35

III. Potential Solutions Delegates should note the party alignment, demographics and geography of their states when considering the solutions listed, as they are only outlines possible courses to take. Mitigating the Impacts of Carbon Restrictions As mentioned, one concern raised by conservatives is that the restriction of carbon emissions, by law or taxation, will result in an unsupportable electricity bill for low-income families. Thus, those hoping to restrict the carbon emissions should provide ways to mitigate the possible damage in

UNAS Model United Nations Preparatory Conference The Seventh Edition

order to provide a more well-rounded solution. One way that the impact on low-income households can be circumvented is to reduce their dependency on electricity from the grid and help them lower electricity bills and save money in the long-term. 36 One such way is through independent, local ownership of solar photovoltaics (PV), subsidised through third party ownership and solar loan financing. 37 Third party ownership involves an individual paying an installer or developer to use their solar system for a fixed period of time or for the electricity generated from solar itself, typically at a rate lower than what public utilities are offering. 38

A solar loan, on the other hand, allows the individual to retain ownership of the solar energy producing system, while paying the supplier in monthly installments. 39 However, these schemes may not be possible to implement immediately or effectively in areas where the solar industry is just emerging or completely undeveloped. One way that states can incentivise the growth of local solar ownership is through ‘net metering’, allowing individuals with solar generating technology to be able to sell their excess energy produced back to utility companies at the standard electricity price. While this would benefit locals, it comes at a detriment to individuals involved in the conventional energy industry, meaning that states that are partial to conventional energy may not be as willing to implement this.

Incentivising the usage of renewables Furthermore, those who wish to see a greater share of renewable energy being used on the industrial level must work towards providing a more efficient system to incentivise individuals to choose to produce renewable energy instead of the seemingly more lucrative conventional energy. For instance, the Solar America Board for Codes and Standards works on improving building codes, reliability, and safety of the solar industry in order to provide a smoother adoption of solar technology and so stimulate market growth. 40 However, owing to the different set of regulations and infrastructure each state has in place regarding renewable energy and sustainable energy, attempting to integrate them on a federal level will be a difficult process especially if efforts are not made to modernise the current electricity grid. Moreover, due to the nature of renewable energy production, efficient zoning and planning of land use will have to be carried out such that the renewable energy reaches its maximum potential. 41 For instance, certain areas are more conducive for the production of wind or solar energy and must be planned accordingly for maximum output to be reached. Hence, local governments will also have to work on a more transparent and accessible system, especially for small-scale energy producers, such that they can be allocated the best possible land.

UNAS Model United Nations Preparatory Conference The Seventh Edition

IV. Further Questions

1. What are the concerns raised by individuals in the conventional energy industry with the growth of the sustainable energy industry?

2. How can we best protect the needs of individuals currently working in the conventional energy industry? Should we create a balance between conventional and sustainable industries or help to integrate the former into the latter?

3. What are the drawbacks of conventional and sustainable energy? What should be prioritised on a state and a national level?

4. On the ground level, what are some factors preventing individuals from choosing renewable energy sources? How can this mindset be changed?

5. For states that are more reticent to increase on renewable energy sources, what are some baseline compromises that can be made? What are some non-negotiable terms that must be upheld?

6. Should policies implemented in developing the sustainable energy industry by implemented as a blanket policy, or should individual states be given the jurisdiction to set their own policies? Should there be a minimum baseline that each state should follow?

V. Conclusion In conclusion, though there are many factors standing in the way of the wide-scale sustainable development of energy, politics is one of the main obstacles. Owing to the nature of America’s political system, it is nigh on impossible to agree on standards that can be applied to every state, and efforts to do so in the past are mostly in the process of unravelling. This should not deter delegates, however. This problem must be considered from not just party lines, but must adhere to the state’s own fundamental interests. Though each state has different demographics and available resources, no state wants to have a vulnerable energy supply and all states want to protect the welfare of their people. It is only in finding where these interests intersect, can we truly formulate a federal policy that favours all states.

UNAS Model United Nations Preparatory Conference The Seventh Edition

VI. Bibliography 1. The Editors of Encyclopaedia Britannica. “Senate”. February 9, 2017.

https://www.britannica.com/topic/Senate-United-States-government 2. On the Issues. “Republican Party on Energy & Oil”. January 10, 2017.

http://www.ontheissues.org/Celeb/Republican_Party_Energy_+_Oil.htm 3. Democratic National Committee. “The 2016 Democratic Platform”. Accessed September

30 2017. https://www.democrats.org/party-platform 4. Union of Concerned Scientists. “The Clean Power Plan: A Climate Game Changer.” Last

updated March 28, 2017. http://www.ucsusa.org/our-work/global-warming/reduce-emissions/what-is-the-clean-power-plan#.Waq_hNMjFZ2

5. US Climate Alliance. “US Climate Alliance”. Accessed September 30, 2017. https://www.usclimatealliance.org/

6. Mireles, Sandra. “List of Natural Resources in Massachusetts”. Accessed 15 October, 2017. http://getawaytips.azcentral.com/list-of-natural-resources-in-massachusetts-12379482.html

7. Kenney, Ian. “List of Natural Resources in Vermont”. April 24, 2017. https://sciencing.com/list-natural-resources-vermont-6162333.html

8. US Energy Information Administration. “Electricity Data Browser”. Accessed October 14, 2017. “ https://www.eia.gov/electricity/data/browser/#/topic/0?agg=1,0,2&fuel=008&geo=vvvvvvvvvvvvo&sec=o3g&linechart=ELEC.GEN.WND-US-99.A~ELEC.GEN.WND-IA-99.A~ELEC.GEN.WND-TX-99.A&columnchart=ELEC.GEN.WND-US-99.A~ELEC.GEN.WND-IA-99.A~ELEC.GEN.WND-TX-99.A&map=ELEC.GEN.WND-US-99.A&freq=A&start=2001&end=2016&ctype=columnchart&ltype=pin&columnendpoints=2&columnvalues=1&rtype=s&pin=&rse=0&maptype=0 ”.

9. World Commission on Environment and Development. “Our Common Future.” March 20, 1987. http://www.un-documents.net/our-common-future.pdf

10. Renewable Energy World. “Types of Renewable Energy”. Accessed September 30, 2017. http://www.renewableenergyworld.com/index/tech.html

11. Dujardin, Thierry. “Is Nuclear Energy Sustainable?” February 12, 2007. http://hir.harvard.edu/article/?a=1473

12. United States Congress. “Energy Policy Act of 2005.” January 4, 2005. https://www.gpo.gov/fdsys/pkg/BILLS-109hr6enr/pdf/BILLS-109hr6enr.pdf

UNAS Model United Nations Preparatory Conference The Seventh Edition

13. Environmental Protection Agency. “Summary of the Energy Policy Act.” Accessed September 2, 2017. https://www.epa.gov/laws-regulations/summary-energy-policy-act

14. Environmental Protection Agency. “Overview for Renewable Fuel Standard”. Accessed September 2, 2017. https://www.epa.gov/renewable-fuel-standard-program/overview-renewable-fuel-standard

15. 109th Congress. “Energy Policy Act of 2005”. August 8, 2005. https://www.ferc.gov/enforcement/enforce-res/EPAct2005.pdf

16. Harris, Michael. “US House stalling Energy Policy Modernization Act as Congressional adjournment approaches”. December 8, 2016. http://www.hydroworld.com/articles/2016/12/u-s-house-stalling-energy-policy-modernization-act-as-congressional-adjournment-approaches.html

17. Electric Light & Power. “Senate energy committee releases Energy and Natural Resources Act of 2017.” March 7, 2017. http://www.elp.com/articles/2017/07/senate-energy-committee-releases-energy-and-natural-resources-act-of-2017.html

18. U.S. Energy Information Administration. “Electricity in the United States”. May 10, 2017. https://www.eia.gov/energyexplained/index.cfm?page=electricity_in_the_united_states

19. Taylor, James. “No, A Carbon Tax Cannot Create Jobs, Jobs, Jobs”. October 8, 2014. https://www.forbes.com/sites/jamestaylor/2014/10/08/no-a-carbon-tax-cannot-create-jobs-jobs-jobs/#5d992786707a

20. Kreutzer, David. “Impacts of Carbon Taxes on the US Economy”. Novermber 17, 2014. http://www.heritage.org/testimony/impacts-carbon-taxes-the-us-economy

21. Green, Kenneth. “Alberta’s carbon tax will lead to loss of jobs, income, exports, revenues, etc.” June 21, 2016. https://www.fraserinstitute.org/blogs/alberta-s-carbon-tax-will-lead-to-loss-of-jobs-income-exports-revenues-etc

22. Hafstead, Marc and Williams, Roberton C. “How Do Environmental Policies Affect Employment?” September 24, 2015. http://www.rff.org/research/publications/how-do-environmental-policies-affect-employment

23. Montanaro, Domenico. “What Trump Misses About Energy Jobs in America”. March 28, 2017. http://www.npr.org/2017/03/28/521805360/what-trump-misses-about-energy-jobs-in-america

UNAS Model United Nations Preparatory Conference The Seventh Edition

24. Energy Information Administration. “Table 1.2. Summary Statistics for the United States, 2005-2015”. Accessed October 1, 2017. https://www.eia.gov/electricity/annual/html/epa_01_02.html

25. U.S. Mission South Africa. “What is ‘grid parity’?” November 9, 2016. https://za.usembassy.gov/what-is-grid-parity/

26. Ritchie, Earl J. “Despite Claim Of ‘Grid Parity’, Win and Solar Are Still More Expensive Than Fossil Fuels”. April 4, 2017. https://www.forbes.com/sites/uhenergy/2017/04/04/despite-claims-of-grid-parity-wind-and-solar-are-still-more-expensive-than-fossil-fuels/2/#5278f4f93e00

27. US Department of Energy. “Residential Renewable Energy Tax Credit”. Accessed October 1, 2017. https://energy.gov/savings/residential-renewable-energy-tax-credit

28. Given, George and Motyka, Marlene. “Journey to Grid Parity”. Accessed October 1, 2017. https://www2.deloitte.com/us/en/pages/energy-and-resources/articles/journey-to-grid-parity.html

29. Office of Energy Efficiency and Renewable Energy. “Advantages and Challenges of Wind Energy.” Accessed September 3, 2017. https://energy.gov/eere/wind/advantages-and-challenges-wind-energy

30. Union of Concerned Scientists. “Barriers to Renewable Energy Technologies.” Accessed September 3, 2017. http://www.ucsusa.org/clean_energy/smart-energy-solutions/increase-renewables/barriers-to-renewable-energy.html#.WarV9dMjFZ1

31. Amin, Adnan Z. “The Reliability of Renewable Energy Systems: Why the Conventional Wisdom Is Wrong.” December 4, 2015. http://www.huffingtonpost.com/adnan-z-amin/post_10689_b_8716758.html

32. Management Information Services, Inc. “60 Years of Energy Incentives.” October, 2011. http://www.misi-net.com/publications/NEI-1011.pdf

33. Porter, Eduardo. “Do Oil Companies Really Need $4 Billion Per Year of Taxpayers’ Money?” August 5, 2016. https://www.nytimes.com/2016/08/06/upshot/do-oil-companies-really-need-4-billion-per-year-of-taxpayers-money.html

34. Bird, L. M. Milligan and D. Lew. “Integrating Variable Renewable Energy: Challenges and Solutions.” September, 2013. https://www.nrel.gov/docs/fy13osti/60451.pdf

35. Marcacci, S. “What’s the best way of encouraging solar power?” February 6, 2015. https://www.weforum.org/agenda/2015/02/206621/

UNAS Model United Nations Preparatory Conference The Seventh Edition

36. United States Environmental Protection Agency. “Understanding Third-Party Ownership Financing Structures for Renewable Energy.” Accessed September 3, 2017.

37. Greenpower Technology. “Advantages and Disadvantages of Solar PV”. May 22, 2014. http://www.greenpower-technology.co.uk/solar-pv/advantages-disadvantages-pv/

38. Feldman, David and Travis Lowder. “Banking on Solar: An Analysis of Banking Opportunities in the U.S. Distributed Photovoltaic Market.” November, 2014. https://www.nrel.gov/docs/fy15osti/62605.pdf

39. Tabuchi, Hiroko. “Rooftop Solar Dims Under Pressure From Utility Lobbyists.” July 8, 2017. https://www.nytimes.com/2017/07/08/climate/rooftop-solar-panels-tax-credits-utility-companies-lobbying.html

40. Solar America Board for Codes and Standards. “About Solar ABCs.” Retrieved September 3, 2017. http://www.solarabcs.org/about/index.html

41. Doerr, Alissa. “Zoned Out: An Analysis of Wind Energy Zoning in Four Midwest States.” December, 2014. http://www.cfra.org/sites/www.cfra.org/files/publications/Zoned-Out-An-Analysis-of-Wind-Energy-Zoning-in-Four-Midwest-States.pdf