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Energy Consumer Industries Look for Alternatives Under Climate Policy Regulations

Four industries – iron and steel, aluminum, paper and pulp, and chemicals – account for nearly half of the energy consumed by U.S. manufacturing industries and over 10 percent of total U.S. energy consumption, making them highly vulnerable to volatile energy prices. Millennium Institute and High Road Strategies collaborated on three connected study commissioned by the National Commission on Energy Policy, the Environmental Defense Fund and AFL-CIO Working for America Institute (WAI) and developed with support from industry association organizations, to examine how increased energy prices associated with comprehensive and mandatory cap-and-trade climate policy proposals currently being considered by the U.S. Congress would affect the competitiveness of these industries in the long term. The studies also examined the industries’ capabilities and opportunities to mitigate adverse cost impacts and improve their economic performance under different climate policy scenarios.

In short, the findings strongly suggest that over the long-run, technologies are available to enable energy-intensive industries to achieve sufficient efficiency gains to offset and manage the additional energy costs arising from a climate policy. However, the authors also strongly believe that the industries analyzed will need additional measures that both mitigate these cost impacts in the short-to-medium term, and policies that encourage and facilitate the transition of energy-reliant companies to a low-carbon future, while enhancing their competitiveness in global markets.

Findings of these studies being circulated starting from Aril 2009 are substantially contributing to the debate on the introduction of climate regulations, both in the US and abroad.

Client National Commission on Energy Policy, Environmental Defense Fund, WAI
Authors/Consultants Bassi AM, Yudken JS

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More Information

Yudken J.S. and Bassi A.M. (2009). Climate change and US Competitiveness. Issues in Science and Technology, Fall Issue.
Bassi A.M. and Yudken J.S. (2009). Potential challenges faced by the U.S. chemicals industry under a carbon policySustainability 1: 592-611. Special issue on Energy Policy and Sustainability.

Yudken J.S. and Bassi J.S. (2009). Climate policy and energy-intensive manufacturing: the competitiveness impacts of the American energy and security act of 2009. High Road Strategies and Millennium Institute, February 2010, Washington DC, USA. Prepared for the Environmental Defense Fund (EDF).

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Mauritius Government Takes Integrated Approach on Energy Policy

Under the leadership of the Ministry of Renewable Energy and Public Utilities of the Republic of Mauritius and with support from UNDP, the Millennium Institute (MI) has carried out an assignment on supporting formulation and evaluation of Mauritius’ longer term energy policy framework. The goal of this project is to empower the Ministry of Renewable Energy and Public Utilities, and the Government of Mauritius, with a flexible, integrated, dynamic and user-friendly uniquely customized simulation model that allows for the evaluation of energy policy proposals to make informed decisions on longer term policy planning. This model was jointly developed with a team of experts, including representatives from Ministry of Public Infrastructure, Land Transport and Shipping, the Central Electricity Board (CEB), the Electrical Services Division (ESD), the Mauritius Sugar Industry Research Institute (MSIRI), the Central Statistics Office (CSO), the Maurice Ile Durable (MID) Fund, the University of Technology Mauritius (UTM).

Because of its flexibility and ease of use, in addition to its integrated and dynamic nature, the Mauritius Model allows for a cross sectoral analysis of the impacts of the energy policy provisions, with simulations running from 1990 to 2025.

This is important when operating in such a rapidly changing environment and volatile time.

The project included continuous group modeling sessions and daily exchanges with key stakeholders, to end with a two-day workshop and with a presentation to the Deputy Prime Minister of the Republic of Mauritius.

Results of the analysis proved to be of considerable value to the Ministry of Renewable Energy and Public Utilities, and led to an update of the longer-term energy policy document later approved. The utilization of an integrated, cross sectoral, national development model also served to bring together several ministries, the private sector and universities to jointly analyze results, both opportunities and challenges, arising from the implementation of the energy strategy.

More information on this case can be found in Bassi A.M. (2009). Systems modeling of long term energy policy, Mauritius. Prepared for the Ministry of Renewable Energy and Public Utilities, Republic of Mauritius, and UNDP Country Office Mauritius and Seychelles, Port Louis.

Client Ministry of Renewable Energy and Public Utilities, Mauritius
Authors/Consultants Bassi AM, Bainac K, Bokhoree C, Deenapanray P

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