How to Avoid Temporary Relief that Leads to Bigger Headaches

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 [2].  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 [3], and regulatory [4] agencies [5] 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 [6] 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