climate legislation

There is a great deal of speculation in the press and in the world of punditry about how the Massachusetts election will change the Obama administration’s agenda this year. For the climate issue there are clear implications, but no death knell. 

It is worth pointing out that this election represents only one vote in the Senate. But the real issue is how the moderate, swing senators will react, and whether they pull back on supporting climate action. This election does not change the fact that support from moderate senators in both parties is needed to pass a strong climate-energy bill.

While an economy-wide program to reduce emissions remains the ultimate objective, I believe there are many ways to get there. 

It’s critical that we find ways to promote low-carbon energy and reduce power sector emissions while accelerating the creation of clean energy jobs and promoting economic growth.  I continue to think we have a decent chance of getting meaningful legislation this year that reduces emissions and starts us on a path toward a clean energy future.

Eileen Claussen is President

The Pew Center just published a summary of many of the major clean energy policy developments of the past five years (2005 through 2009). This look back gauges progress on clean energy policy since the “10-50” Solution Workshop, sponsored by the Center and the National Commission on Energy Policy (NCEP) in 2004, which convened leading experts to discuss key technologies likely to enable a low-carbon future by mid-century (50 years henceforth) and to identify the critical policies necessary in the next 10 years to enable this long-term vision.

The Washington energy and environment community is abuzz with speculation about the fate of the energy-climate bill.  Given the bruising partisan battles that lie ahead for health care reform, the jobs bill, financial service modernization, and so on, does Congress have the time and political capital left to tackle climate change in its expected energy bill?  Would it not be best, some ask, to buy temporary relief, to put off climate for another day?

Temporary relief, unfortunately, will only buy us bigger headaches tomorrow. The energy-only proposals advocated by some would do little or nothing to address a host of issues that grow only more expensive, complicated, and politically challenging if we delay their resolution until, say, 2012. Here are some of the problems we begin to address with climate policy that are not resolved by the energy-only proposals we have seen:

• Power companies and businesses need to know the regulatory rules of the road before they will be willing to invest millions of dollars in new plants.  This uncertainty inhibits investment today, as well the jobs that would go with the investment.  In particular, it inhibits investment in coal carbon capture and storage and in nuclear power.
• China and other countries are investing heavily in clean energy and taking the lead in the booming global market in clean energy technologies.  American ingenuity is second to none, but time is running out.  Every year the United States delays in putting a price on carbon emissions we fall further behind in this race, and lose future jobs.
• The United States continues to be dependent on oil from countries that do not have our best interests at heart.  Until we reward low-emitting transportation fuels and methods by putting a cost on carbon emissions, this dependency is expected to grow.
• Other countries whose support we need to achieve so many of our international objectives – including fighting terrorism and ensuring economic growth – are dismayed that the United States has sat out the climate issue for so many years.  In Copenhagen, thankfully, we showed leadership.  Other nations made clear their intent to contribute to global efforts in Copenhagen; we shouldn't walk away from ours.  If we do not deliver on that promise by reducing our emissions, other countries may be more reluctant to ally with us on our other objectives.
• The States, our courts, and regulatory agencies have all taken actions to begin addressing climate change.  What is needed is the comprehensive national policy that only Congress can produce.
• And, oh yes, climate change itself:  Despite the campaign to convince the public otherwise, climate change is real, is happening now, is largely caused by human action, and presents our children and grandchildren grave risks if we do not start reducing our emissions now.

What would it take to begin to address these problems? The House of Representatives passed an energy-climate bill last year that includes a well-crafted economy-wide cap-and-trade provision, which would be our preferred approach. That said, there are many ways to integrate climate and energy policy to achieve multiple goals, including job creation, energy security, increased competitiveness in global clean energy markets, and reduced carbon emissions.  There may be a way to build an effective climate and energy program in steps, for example, by establishing the cap first on the power sector's emissions, or even through a "clean energy standard." The basic test is whether the policy would reduce U.S. greenhouse gas emissions and make emissions increasingly costly, thereby rewarding businesses that invent and deploy clean energy and other low-emitting technologies.

Manik Roy is Vice President, Federal Government Outreach

Domestically and internationally, climate action in 2009 laid critical groundwork for potential breakthroughs in Congress and global negotiations in 2010. Yet with an issue as complex and political as climate change, turning groundwork into policy is a challenge.  2010 will undoubtedly be a pivotal year for climate change – but first it is instructive to take a look back at what happened in 2009 and how that shaped where we are today.

We captured these highlights in our annual Year-in-Review Newsletter – a useful compilation of 2009’s big climate change stories and related insights. The year’s major domestic action included passage of the landmark House climate and clean energy bill along with numerous Obama administration efforts to improve our climate and economy. These accomplishments included the stimulus bill’s $80 billion in clean energy-related funding and EPA actions, including the endangerment finding, the greenhouse gas reporting rule, and stricter auto-efficiency standards.

Copenhagen consumed international climate attention in 2009, culminating in the pre-dawn hours of December 19 when final touches were put on an accord directly brokered by President Obama and a handful of key developing country leaders. While many questions remain after Copenhagen, our summary of the conference provides a sound starting point for grasping what transpired at the year’s largest climate event.

The lead-up to 2009’s main events required a great deal of work, and some of the year’s highlights include the detailed Blueprint for Climate Action released one year ago this month by the influential business-NGO coalition U.S. Climate Action Partnership (USCAP). More industry leaders also showed support for mandatory climate action by joining our Business Environmental Leadership Council (BELC). And efforts to reach business communities, employees, and families expanded through the Make An Impact program. In partnerships with aluminum manufacturer Alcoa and utility Entergy, we continue to provide individuals with strategies to save energy and money while protecting the environment. 

We continued to educate policy makers and opinion leaders, producing reports, analyses, and fact sheets on topics ranging from clean-energy technologies, climate science, competitiveness, and adaptation. Featuring expert insights and thoughtful opinions, we informed broad audiences about the immediate need for climate action. And our timely, relevant work moves forward in 2010 as we seek progress in addressing the most important global issue of our time.

Tom Steinfeldt is Communications Manager

Only time will tell whether the deal struck in Copenhagen proves a true turning point in the effort against climate change.  Flying home after two chaotic and exhausting weeks, I find I’m of two minds.  

The deadline of December 18, 2009, in fact drove many governments further than before.  In the weeks preceding, the United States, China, India and others felt compelled to come forward with explicit emission pledges.  Under the Copenhagen Accord, countries have until January 31 to put these numbers on record; then there is no taking them back. 

These pledges are not binding.  They are statements of intent, not obligation.  But that is not what disappoints me.  I never expected Copenhagen to produce more than a political accord.

What troubles me is that governments did not resolve to move next to a legally binding treaty.  That goal was part of the tentative agreement announced by President Obama.  But then he left, and in final deal-making, it somehow vanished.  The negotiations will of course continue.  Governments agreed they’d meet next year in Mexico, the year after in South Africa.  But with what type of agreement in mind?  That’s unclear.

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. 

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

The recent announcement by EPA, declaring that greenhouse gases are a danger to public health and welfare, should not come as a surprise to anyone.  EPA has made it clear that it would respond to what the science demanded and to what the Supreme Court (Mass v. EPA) mandated.

The endangerment finding, by itself, does not regulate any sources, but it lays the necessary foundation for future EPA regulations.  The likely first one will be the recently proposed light duty vehicle and engine rule which is scheduled to be finalized in March 2010. 

But EPA’s future actions are best viewed in the broader context of other activities also aimed at reducing greenhouse gas emissions.  State and regional partnerships have stepped up to the plate over the past several years and now 23 states either have or are developing programs to regulate greenhouse gas emissions.  In addition, several recent court decisions (see for example, Conn. v. AEP) have opened the door for common law nuisance claims against firms emitting greenhouse gas emissions. 

Both the judicial and executive branches of our government have answered the call and have begun to actively address concerns about climate change.  Now is the time for Congress to take control and pass comprehensive clean energy and climate legislation.  A broad consensus exists that comprehensive legislation would be far more cost effective than leaving the field to individual states, EPA or the judiciary. The path forward in the Senate won’t be easy, but it certainly is necessary.

Despite the recent hue and cry over hacked e-mails, the overwhelming scientific evidence supports the link between greenhouse gas emissions and climate change.  Yes, there are certainly aspects of some of the recently exposed e-mails that suggest scientists themselves can act peevishly toward one another and more substantively, that better guidelines for making data available and transparent might be useful.  But let there be no mistake, the compelling evidence from multiple data sets and from multiple lines of research hasn’t changed.  The words of a recent report by the US Global Change Research Program resound loud and clear, “global warming is unequivocal and primarily human induced.”

The case for Senate action is also unequivocal.

Steve Seidel is Vice President, Policy Analysis

The series of hearings on climate change before the Senate Energy and Natural Resources Committee continued on Wednesday, with a panel examining climate policy options.  Panelists spoke about cap-and-trade regimes, carbon taxes, performance standards, sectoral approaches, and research and development as potential ways to reduce emissions.  While Chairman Bingaman noted that emission-reduction policies are not necessarily mutually exclusive, a lot of attention was paid to the differences between carbon taxes and cap-and-trade programs during the hearing.

The panelists agreed that revenues are raised in both cap-and-trade and carbon tax regimes.  But not all uses of revenues are equal.  While Dr. Ted Gayer suggested that tax revenues raised be used to offset payroll taxes or for deficit reduction, such a plan ignores the real world consequences of implementing climate policy.  A comprehensive climate policy will need to transform our economy, support development and deployment of clean energy technologies, modernize infrastructure, assist consumers, help the nation adapt to the impacts of climate change, and support international climate efforts – and all of these things will require significant resources.  Using a carbon tax to send revenues to the Treasury for general use or to Congress for unrelated earmarking is not the way to ensure resources are dedicated to these purposes.

A responsible cap-and-trade program has the ability to direct a portion of allowance value (either directly by allocating allowances or indirectly by use of auction revenue) to a variety of economic, infrastructure, consumer, and adaptation needs.   The legislative process has the ability to tailor assistance sectorally or geographically in a way that would be far more difficult to accomplish in tax policy.  This redirection of revenues eases the transition to a clean energy economy and makes climate legislation more practically feasible and politically viable.

As Senator Byrd stated this week, the transition to a clean energy economy will not necessarily be easy, but it is one that is unavoidable.  Congress needs to pass cap-and-trade legislation that makes the transition as smooth as possible.

On Monday, members of the three North American regional greenhouse gas reduction programs met in Washington D.C. to discuss potential areas for collaboration, and to send a clear signal to Congress as it debates climate legislation: these regional initiatives – and state leadership in general – are not going away. Representatives from the various U.S. states and Canadian provinces participating in the northeastern Regional Greenhouse Gas Initiative, the Western Climate Initiative, and the Midwestern Greenhouse Gas Reduction Accord traded information with one another and with representatives from federal agencies on the status of their respective programs, and explored paths for working together on carbon offset design, complementary GHG reduction policies such as energy efficiency measures, and possible linkages among their existing and developing carbon markets. Members of the regional initiatives also took their message to Capitol Hill, where they briefed press and Congressional staff on their initiatives, their intention to continue developing these programs, and their strong preference for federal cap and trade policy.

It was clear from these discussions that the states are moving ahead regardless of what happens at the federal level. All of the states represented support a strong, rigorous federal cap-and-trade program to reduce greenhouse gases (GHGs), but should such a program fail to materialize, the states and the regional initiatives will continue to move ahead with the development and implementation of their own trading programs, and potentially move to link these programs. When 23 states – representing 48 percent of the U.S. population, over half of U.S. GDP, and 37 percent of U.S. GHG emissions – and their partners in Canada sit down to talk about uniting their efforts to reduce emissions, it is clear that the choice is no longer between having a federal climate program or not; it is between having comprehensive climate legislation designed and negotiated in Congress, or having a de facto national North American carbon market driven by these state efforts, working in concert with regulations issued by federal agencies. States strongly prefer a federal trading system, but as far as they’re concerned, the foundation for a national cap-and-trade program has already been laid.

The states and regions also made clear that as they move ahead, they want to form a strong partnership with the U.S. EPA and other federal agencies, regardless of what happens with federal legislation. EPA is already moving to regulate greenhouse gases (as evidenced by the recently announced endangerment finding, and the tailoring rule and vehicle standards released earlier this year) and the states will play a key role in the implementation and enforcement of these new regulations. Even with federal climate legislation, states will play a key role in its implementation.

In addition, the states made clear that any federal plan needs to allow them the flexibility to continue crafting effective greenhouse gas reduction policies that can complement cap and trade, such as energy efficiency and renewable energy standards. For many at Monday’s meeting, preserving states’ ability to achieve emissions reductions beyond what is mandated at the federal level is an imperative; it is not clear to them that pending federal legislation and the tools currently available to the U.S. EPA under the Clean Air Act can achieve the levels of GHG reductions required, and that it may fall upon the states to make up the difference through policy innovation.