Will the House Climate Bill Protect U.S. Competitiveness?

Yes, according to a recent government report examining the impacts of the House-passed climate bill.

An important concern in any climate legislation is the negative impact it might have on domestic energy-intensive producers that compete in global markets.  Climate policy can raise the production costs of U.S. manufacturers relative to their unregulated foreign competitors, and as a result production and emissions could shift overseas.  Responding to a request by five Democratic senators, the Obama administration recently released an interagency report on the competitiveness impacts of the climate bill that passed the House in June.  It finds that most U.S. energy-intensive, trade-exposed industries (EITEs) will experience only small increases in their production costs.  As a result, emissions "leakage" to countries that do not adopt climate policies will be minimal. 

Washington Should Note the Success of the Other Washington

COPENHAGEN - Governor Chris Gregoire made a presentation about the successes of Washington state in building a clean energy economy at an official COP 15 side event hosted by us and the World Business Council on Sustainable Development.  A packed room listened to how the experience of the Washington out West should provide insight for national policymakers of the Washington in the East.

She detailed how, given an appropriate state policy framework, the private sector has made significant innovations in technology, making Washington a national leader in solar manufacturing and the state with the 5th most wind energy production. All of this development occurred despite the fact that the state does not have large wind or solar energy resources.  The lesson here is that the innovativeness and drive of American business should never be underestimated, and there is nationwide potential for growth in a clean energy technology.  New and existing American companies will find ways to flourish given the right incentives.

The Governor also spoke about states leading the way in implementing cap-and-trade programs to reduce greenhouse gas emissions.    She pointed out that a multistate and multi-Canadian province effort, the Western Climate Initiative, is underway to enact a cap-and-trade program covering 20% of the US economy - despite the delays in development of a national program.  The WCI is the not the only state-level effort underway, with the Midwestern Greenhouse Reduction Accord signed in 2007.  Both of these efforts follow on the heels of an ongoing cap-and-trade program in the Northeast, which, as Gregoire pointed out, has proven that cap-and-trade programs can tackle greenhouse gas emissions without damaging the American economy – an important piece of empirical evidence as the nation and the world look towards developing emissions-reduction policy.

Of course, the government cannot do it alone.  The people in Washington state have a commitment to technology, whether it’s aerospace, software, clean energy, or coffee.  Now its time for legislators in Washington, DC to show the same commitment to technology promotion and emission reduction.

Michael Tubman is the Congressional Affairs Fellow

Copenhagen Talks Take (Week) Two

This post first appear in Opinio Juris.

COPENHAGEN -- The climate negotiations ground to a halt for much of Monday, as negotiators debated the organization of work for the second and final week of the meeting.  The ostensible cause of the breakdown was concern among some developing countries that the Kyoto Protocol (KP) track in the negotiations is moving more slowly, and getting less attention, than the Convention track (the so-called Long-Term Cooperation Action track, or LCA) Although since the LCA track is itself moving very slowly, it is a bit difficult to understand the concern.

For many members of the G-77, the differentiation enshrined in the Kyoto Protocol between developed countries (which have quantified emission reduction targets) and developing countries (which do not) is sacred. All last week, developing countries had been emphasizing the importance of continuing the Kyoto Protocol, rather than merging it into a single comprehensive agreement that addresses both developed and developing countries (as the EU, Japan and other industrialized countries would prefer).  At the procedural level, this developing country position is reflected in a desire to maintain the complete separation between the two tracks in the negotiations, rather than merging them into a single discussion, as the Danes apparently envisioned.

Embracing a Cleaner Coal Future

The role of coal in the future U.S. energy mix is a key issue in the Senate debate over climate legislation. Another senator has recently drawn attention to the importance of carbon capture and storage (CCS) technology to coal. On December 3, Senator Robert Byrd (D-WV) issued an opinion piece entitled “Coal Must Embrace the Future.”

West Virginia produces more coal than any state other than Wyoming and accounts for about 13.5 percent of total U.S. coal production. Coal-fueled power plants provide nearly 98 percent of West Virginia’s electricity. Coal mining accounts for about 6 percent of West Virginia’s state GDP and 3 percent of total state employment.

Senator Byrd’s opinion piece addresses issues related to mountaintop removal mining and climate change. Notably, on the question of climate change, Senator Byrd writes that:

To be part of any solution, one must first acknowledge a problem. To deny the mounting science of climate change is to stick our heads in the sand and say “deal me out.” West Virginia would be much smarter to stay at the table. The 20 coal-producing states together hold some powerful political cards.

Disinterested analyses (e.g, from MIT and EPRI) project coal with CCS to be a significant component of a least-cost portfolio of low-carbon energy technologies.  Coal currently provides nearly half of all U.S. electricity. Senator Byrd’s opinion piece reinforces the distinct importance of preserving a significant role for coal in a future U.S. energy supply in order to secure broad political support (i.e., at least 60 votes in the Senate) for action on climate change.

Senator Byrd earlier stated that he did not support the climate and energy bill passed by the House in June (H.R. 2454, the American Clean Energy and Security Act of 2009) “in its present form.” Our recent brief describes the significant investments the House energy and climate bill includes for demonstration and deployment of CCS with coal-fueled power plants. The senator does, however, highlight in his opinion piece that he has been working for the past six months with a group of coal state senators on provisions that could be included in a Senate climate and energy bill that would facilitate a transition to a low-carbon energy future for the coal industry.

In short, Senator Byrd’s opinion piece is a candid assessment of the situation as he sees it: the science supporting man-made climate change is clear; U.S. climate and energy legislation will pass eventually; cooperative, constructive engagement by coal state Senators in crafting such legislation is the best strategy for protecting the interests of their constituents.

Fittingly, one of the most advanced CCS projects in the world recently began operation in Senator Byrd’s home state—American Electric Power’s Mountaineer Plant Carbon Dioxide Capture & Storage Project.

Steve Caldwell is a Technology and Policy Fellow

Delivering More Than Promises

  
This post first appeared in  POLITICO: The Arena - Expert Insights, Live from Copenhagen

Amid the distracting dramas of purloined emails and secret texts, it’s easy to lose sight that Copenhagen has already proven a catalytic event.  Every major power arrives here with its own explicit pledge to curb emissions.  That these promises will be delivered in most cases by heads of state reflects an absolutely unprecedented level of political will.

It’s also easy to lose sight of precisely what more we need from this conference. 

A year ago in Poznan (the site of last year’s climate summit), my colleagues and I got beat up pretty badly for suggesting out loud that Copenhagen was unlikely to produce a final deal, and the aim instead should be an interim political agreement.  Here we are in Copenhagen, working on an interim political agreement. 

What’s that mean?  There’s a lot of emphasis from the United States and others on this being an “operational” agreement delivering “immediate” results.  Let’s hope so.  But an equally important test for Copenhagen is whether it charts a clear path toward the next agreement – one that turns political pledges into binding legal commitments.