The first year of the 113th Congress (2013-2014) draws to a close with no passage of climate-specific legislation, but signs that some in Congress understand the importance of addressing this issue. More bills were introduced that support climate action than oppose it. (For brevity, we refer to all legislative proposals as “bills.”)
Here’s a by-the-numbers look at what Congress has done so far this term explicitly referencing climate change or related terms, such as greenhouse gases or carbon dioxide:
- 131 climate-specific bills have been introduced, surpassing the 113 introduced during the entire 112th Congress (2011-2012), and perhaps on track to match the 263 of the 111th Congress (2009-2010).
- 81 of the bills (62 percent) support climate action in some way.
- 31 bills are intended to build resilience to a changing climate, compared with nine introduced in the previous Congress.
- 30 bills have bipartisan co-sponsorship. Of these, 16 support climate action in some way.
- 25 bills, five of them bipartisan, would block or hinder the Environmental Protection Agency’s authority to regulate greenhouse gas emissions under the Clean Air Act. Two such bills have passed the House, though are unlikely to be passed by the Senate and signed into law.
- 12 of the bills supporting climate action were written by Republicans, while eight bills opposing climate action were written by Democrats, showing that climate issues don’t always fall neatly along partisan lines.
- 7 of the 16 bipartisan bills that support climate action promote energy efficiency. The bipartisan Shaheen-Portman energy efficiency bill is considered to have the best chance of enactment of any energy measure in this Congress.
- 3 bills would block or hinder federal agencies from using the social cost of carbon in federal rulemaking.
- 2 bills seek to reduce short-lived climate pollutants.
The discussion of a carbon tax continues. Conservatives met recently in Washington, D.C., to debate the mertis of a carbon taxt at an event hosted by the R Street Institute and the Heartland Institute, featuring representatives with opposing viewpoints from four conservative think tanks.
A 2013 C2ES brief found that a carbon tax was one way to put a price on carbon emissions, reduce greenhouse gas emissions, and raise significant revenue for the federal government. A tax starting at about $16 per ton of carbon dioxide (CO2) in 2014 and rising 4 percent over inflation per year would raise more than $1.1 trillion in the first 10 years, and more than $2.7 trillion over a 20-year period. This revenue could fund a wide range of things, including deficit reduction, a reduction in statutory corporate income tax rates from 35 percent to 28 percent (often cited as a goal by both conservatives and liberals), and research and development into low-emitting technology. Importantly, such a carbon tax could also reduce CO2 emissions by 9.3 billion tons over 20 years.
Last Wednesday’s House Energy and Power Subcommittee hearing on the Energy Tax Prevention Act lived up to its billing as being the first clash between the new majority and minority on the committee. For eight hours, the Members opposing regulation argued that EPA was overstepping its authority in regulating greenhouse gas (GHG) emissions. They asserted that such action would kill jobs and harm the economy. Members supporting regulations argued that EPA is required to act and is doing so in the interest of public health.
The Energy Tax Prevention Act, a draft proposal jointly released by Rep. Upton (R-MI), Rep. Whitfield (R-KY), and Sen. Inhofe (R-OK), would prevent EPA from regulating GHGs, remove GHGs from the Clean Air Act, and specifically repeal all actions related to climate change, including the scientific Endangerment Finding, the Tailoring Rule, New Source Review regulations, reporting requirements for GHG emissions, and proposed New Source Performance Standards. The lone exemption is the Clean Car rule, which would remain untouched.
The United States is at a crucial crossroad in its stance on clean energy policy. Once the leader in emerging clean technology markets, the U.S. now trails European nations and China in the research, development, and deployment of many new energy technologies. Financial analysts and industry insiders presented a stark choice at a standing-room only hearing hosted by the House Select Committee on Energy Independence and Global Warming last week: either we can adopt and extend policies that promote domestic growth of clean energy industries, or we can continue to fall further behind other countries around the world in our ability to compete in the markets of the 21st century. Chairman Ed Markey (D-MA) echoed the experts in saying that without clear long-term and short-term incentives, companies will invest clean energy dollars in other countries, most notably China. In effect, we will be trading our addiction to Middle Eastern oil for an addiction to Asian clean energy technologies.
Clean energy technology markets are already substantial in scope and are likely to grow in the coming decade. According to Bloomberg New Energy Finance, global investments in new forms of clean energy have already surged from under $50 billion in 2004 to more than $170 billion four years later. And as mentioned in our brief on Clean Energy Markets, annual investments in global renewable energy could reach $424 billion a year in 2030.
The panel of expert witnesses advised the Committee that if the United States wants to be a leader in clean energy, it needs to foster innovation by extending successful programs like tax credits, loan guarantees and grants, and adopt a renewable energy standard (RES). Tom Carbone, Chief Executive Officer of Nordic Windpower, said firms like his need clear market signals, such as a price on carbon or a RES, so they can respond to market demand.
Michael Liebreich, Chief Executive of Bloomberg New Energy Finance, emphasized the importance of market signals. Under an RES, the government would require that a certain percentage of utilities’ power plant capacity or generation come from renewable sources by a given date, and mechanisms such as credit trading would allow flexibility in meeting this requirement. However, the RES needs both to be ambitious and to have stiff penalties for noncompliance in order to be successful. Such a policy solution could help create the market demand clean energy firms need to establish footholds and ultimately achieve significant, self-reinforcing growth.
Mark Fulton, Global Head of Climate Change Investment Research at Deutsche Bank, urged the adoption of policies that are transparent, have longevity, and have certainty (TLC) in order to ensure the United States has a competitive advantage in global energy markets. Investors want transparent policies that clearly define the rules and create a level playing field. So to attract private funding, these policies should be in place for the length of the investment and should not be subject to the kind of frequent and uncertain renewal that has stymied the production tax credit and investment tax credit.
In addition to their environmental benefits, Ravi Viswanathan, General Partner at New Enterprise Associates, believes that these policies are exactly what are needed at this uncertain economic time. Mr. Viswanathan argued that clean energy investments can lead to job creation and energy independence. If we have the right incentives, clean energy jobs would be created domestically rather than abroad. Innovation has long been a source of our competitive advantage. Other countries, such as China, have speed, capital, and scale, and they are exercising their manufacturing advantage. Now, these countries are beginning to do something that investors had not anticipated: foster innovation. Once other countries start innovating in earnest, unless the United States takes action, the economic benefits associated with these technologies will go elsewhere.
In his closing statement, Chairman Markey highlighted the role government has played in fostering innovation and developing new markets, citing examples from the Manhattan Project to the internet. In all past cases, the United States showed leadership in developing a national plan that incentivized private investment. We need a similar plan today in the energy sector that incorporates Fulton’s principles of TLC and harnesses the power of the markets to spur innovation. As mentioned in our Clean Energy Markets brief, well-crafted climate and clean energy policy can give nascent clean energy industries a foothold by creating domestic demand and spurring investment and innovation. The time to act is now: through policy leadership at home and abroad, the United States can position itself to become a market leader in the industries of the 21st century.
Provisions in any legislation can be confusing. Trying to compare similar provisions across different bills can compound the confusion. To help make things more clear, the Pew Center on Global Climate Change has released two additional side-by-side comparison charts, one on domestic offset provisions, and the other on international offset provisions, of this Congress’ energy and climate legislation.