“Al Gore says support it. Paul Krugman says support it. Two Nobel Prize Winners. Who am I to question them?”
That is a question received, in more than one space, when it comes to the Waxman-Markey American Clean Energy and Security (ACES) Act.
Well, with all due respect to the infallibility of a Nobel Prize Winner (Kissinger, ‘73, James Watson, ‘03, etc.), we should be clear that the bill, as drafted, falls far short of what is necessary and quite likely falls short of what is possible.
How can this be? How can a bill driven by two of the most passionate and knowledgeable House members fall short of the possible?
For one, perhaps it is because of a fundamental failure of those advocating serious action in regards to climate change. In short, as per Gore’s and many environmental organizations’ praise for the draft bill, there is a clear impression (if not reality) that those advocating for action are prepared to take scraps from the table rather than fight for and demand adequate legislative action.
In short, the mainstream reaction to the House Energy and Commerce Committee’s passage of ACES last week has been: “YEAH, Congrats and Thanks to Waxman and Markey, oh, by the way, can we try to strengthen this a bit?”
Well, we need to ask ourselves a serious question: How does one “win”?
Do you win by saying “this ain’t what I want but YEAH” and then watching it watered down even further by attacks from anti-science suffering global warming deniers?
Or, do we get a stronger bill by reminding (STRONGLY) that this bill has tremendous shortfalls and does not even live up to basic principles?
What are some items to consider?
* Joe Romm, who has been cheerleading Waxman-Markey recently (despite much on-the-record work that provides a basis for highlighting its inadequacies), says that it might (MIGHT) give us a 10-20% chance of stabilization at 450 ppm and avoiding catastrophic climate change. Hmmm … what wonderful odds. (Romm believes, with reason, that this is an improvement over the odds without Waxman-Markey. That Romm is strongly supportive gives pause to what might otherwise be harsher criticism and conclusions. And for those who aren’t aware, Romm’s Hell & High Water is perhaps the top book on the intersection of climate change and U.S. politics.)
* The bill’s Renewable Electricity Standard (RES) doesn’t even meet the Energy Information Administration’s (EIA) latest business as usual (BAU) analysis of renewable power in the U.S. system come 2020.
* The bill’s 2020 target is such that it could well be met with zero actual reduction in US emissions from the EIA’s latest BAU analysis. (This is from a comment from the EIA’s acting director in a public session yesterday.)
* The bill gives over $1 trillion in direct and indirect subsidies to fossil fuel industries and about 1/10th that to renewable energy and energy efficiency.
And, so on ...
ACES Fails on Principle
Amid all this, we should recognize that this bill, despite all the hard work by good people, fails on basic principles.
1. Scientifically Sound: The IPCC benchmark, which is quite likely far too conservative, calls for the developed world to cut emissions by 2020 by 25-40 percent below 1990 levels. (2005 levels, being used as a benchmark for Waxman-Markey, are about 14 percent higher than 1990.)
Generously speaking, Waxman-Markey might achieve a 7 percent reduction below 1990 levels by 2020 and is more likely to be a near wash with those 1990 levels, leaving the United States significantly more polluting than the planetary system seems likely to be able to handle.
2. Polluters Pay: A very basic element of any sensible climate policy is actually establishing a price for carbon (actually, any greenhouse gas) that will create economic incentives to reduce polluting.
Waxman-Markey is stuffed with permit giveaways (especially in the near term) that simply violate what is a basic core principle. (Note: Revenues from making polluters pay certainly could be plowed back to help polluters cut their pollution (whether energy efficiency, new processes, renewables, etc). There could even be a discounted price (e.g., have “allowances” given at the “lowest” fee level) for some specific groups, but with placing some degree of costs.
At the end of the day, it is fundamentally wrong to be handing over pollution permits. It is not just immoral, it is counterproductive to the very desires to help drive down pollution levels, ASAP. And, by the way, it is uncertain as to whether there will even be a meaningful price on carbon in the coming decade or so.
(In the past week, crossing the desk have been assertions that the price will be essentially zero to, high end in 2020, $15 per ton of CO2, which is a near meaningless amount a decade+ into the future. Note that President Obama’s full budget submission to Congress, from just a week ago, called for 100% auction of permits and no giveaways.)
3. Improves Social Equity: Waxman-Markey holds many elements seeking to reduce any fiscal impacts on lower-income Americans through giving away permits and reserving permits to help poorer Americans. But, this bill also gives 2 percent of permits to oil refineries and similar giveaways to other major polluting corporations. The overall balance is unclear.
Grading it generously, ACES might merit a C- on Principle 1 (lookback provisions raise it from a D), perhaps a C on Principle 2 (yes, eventually, polluters are scheduled to pay, but there are a lot of giveaways), and gets an incomplete (or not yet graded) on Principle 3.
What Next?
I remain challenged. It is hard to scream “kill the bill” because we need to think, what next? And, the question is, where can we go from here? Are there paths to strengthen the bill?
At the stage where this is now, here are three proposed “strengthening items” that have, it seems, at least some potential if championed in Congress.
1. Polluters’ Pay: This is a basic principle that is thrown to the winds with 85% of the initial allocations simply given away. This is a sensible, basic rallying cry item: that those polluting our atmosphere should pay at least, even if token to begin, a price for the damage that they are creating. (Note that these free allocations are rewarding those who have, over time, chosen higher pollution, over lower pollution, investment paths.)
The House should institute a minimum fee to be paid for all given allocations, rather than simply giving them away. Why not a “base price” for 100% of permit auctions that would be the price paid allocated permits? As a notional suggestion, why not the year minus ten in dollars? Thus, in 2012, the “free” allocations would be charged, instead, a price of $2 per ton. For 100% coal-fired electricity, this would translate to a $0.001 cost per kilowatt hour. In 2013, that would increase to $0.0015 per kWh from 100% coal (remember, average U.S. energy mix is less than 50% coal).
2. Gracefully Degrade Banked Permits: In the bill, unused permits are permanently bankable. Don’t pollute to the level expected in 2015, don’t worry, you can save that “authority to pollute” for decades and dump out more CO2 come 2035. Almost certainly, the ACES targets are inadequate and learning/real-world events will likely lead to striving to strengthen targets in the future. The permanent banking undermines the ability to strengthen the bill in the future.
Why not institute a graceful decay of banked permits? Perhaps a 10% degrading per annum, starting six months after the year in which the permit was issued? This enables sensible business and institutional planning while offering an opportunity to help drive down future emissions.
3. Tax Permit Allocations as Income: For all permit allocations that are not used for passing along to consumers or for energy efficiency/renewable energy investments, treat the difference between the “base polluters’ pay price” and the actual value of auctioned permits as revenue. A large share of the permits are being granted to private corporations, a grant of potentially huge amounts of value. Treating this as revenue, open to taxation, helps make this a more socially equitable piece of legislation.
These are three thoughts that, in their own way, help strengthen the bill along basic principle lines.
(Originally published at Get Energy Smart! Now!!!)
See also:
Clean Energy Climate Bill Gives Coal a Competitive Future
Climate Bill Wins Enough Votes to Pass, But at What Cost?
Young Advocates Call for Framing Shift on Waxman Bill
Utilities, Coal-State Dems are Wrecking Our Last Chance on Climate Change
What to make of the new climate poll
Hot planet to Obama: What’s your Plan B?
Comments
View as Flat
Miles Grant Posted 9:18 am
01 Jun 2009
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Alec Johnson Posted 12:12 pm
01 Jun 2009
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A Siegel Posted 6:46 pm
01 Jun 2009
There are a number of critical problems with W-M, most notably the huge amount of give-aways that will be impossible to carve back in the future and that handicap (if not cripple) any ability to move toward something with even a marginal chance of doing enough to turn the tide on Global Warming's rising seas.
If the problem were solely the RES ... If the issue were solely that the 2050 targets were inadequate in face of what the IPCC laid out, ... Those are things that can be strengthened as time moves on, as we have success with EE/RE, as climate change's risks become ever clearer to a larger portion of the populace. A $trillion plus in direct and indirect subsidies for polluting energy is money that will never be retrievable once given away. That sort of massive rent seeking is not reversible. And, what is the message? Are you stating that W-M is "effective climate legislation"? That is, as noted, a hard nut to swallow.
No ... Alec ... you are not looking for a "healthy debate" ...
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BCC Posted 2:16 pm
01 Jun 2009
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BCC Posted 2:16 pm
01 Jun 2009
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Alec Johnson Posted 7:47 pm
01 Jun 2009
want mindless support, putting people on phone banks with a text that
you provide."You are putting quite a few words in my mouth without having a clue what sort of field work I'm engaged in or if I would even be using scripts, mindless or otherwise. I think you should take greater care as you sound quite shrill. I'm not sure precisely what nerve I stepped on that caused you to lose your civility, but I recommend you regain it presently.I work to try and produce effective political will for effective Climate legislation, the one thing we seem to have a precarious shortage of in this country. I have concerns about W-M. Indeed I share some of of the ones you cited. I believe that much might happen during the floor fight this summer, but only if we get lots of citizens to warm up congresses switchboards. I'm sure you'd agree. And not mindlessly driven ones either. I believe it works best when voters/citizens are passionate and well informed.Every day I recommend Grist.org to people. Indeed some of them may well read your post and find it eye opening, right until they read your somewhat insulting reply to me. I recommend that you strive for a little more dialogue before you rush to judgment. You've judged me poorly.I also think some of your facts may be wrong. Have you read Robert Stavins recent piece? (http://www.huffingtonpost.com/robert-stavins/the-wonderful-politics-of_b_208581.html). He directs Harvards Environmental Economics Program.I know how very unprecedented this all is and understand how huge the stakes are. And I admire your passion, but you should be careful how you manage it and where and how you direct your anger.
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A Siegel Posted 8:15 pm
01 Jun 2009
First, I will put forward a mea culpa ... it simply it is not worth it, for either of us, to engage in an unncecesasry battle. Thus, again, mea culpa for stepping out strongly.Re Stavins piece, I find it quite interesting -- as with all his work. Let me provide a misperception that I see that piece as continuing/reinforcing. From Stavins: "Given the nature of the allowance allocation in the Waxman-Markey
legislation, the best way to assess its implications is not as "free
allocation" versus "auction," but rather in terms of who is the
ultimate beneficiary of each element of the allocation and auction,
that is, how the value of the allowances is allocated. On closer
inspection, it turns out that many of the elements of the apparently
free allocation accrue to consumers and public purposes, not private
industry."I refer to direct and indirect subsidies to the fossil fuel industry/interests. Stavins (as many) places cost containment measures (such as Electricity and natural gas local distribution companies, 22.2%; Home heating oil/propane, 0.9%) as "consumers and public purposes". Let us simply accept that much (if not most or even all) of those funds will go to consumers. In my reading of financial interests, this represents an indirect subsidy of the continuation of fossil fuel usage by lowering/muting the price signal of any price being placed on burning dirty energy.
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Alec Johnson Posted 3:20 am
02 Jun 2009
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A Siegel Posted 3:44 am
02 Jun 2009
We have a real opportunity for significant change at a positive ROI, especially in the near (next decade or so due to efficiency opportunities) even without considering that pesky little problem of Global Warming.E.g., there is real power and opportunity for a 'no regrets strategy' part of the discussion since so much of what is required to be done can be done at an overall benefit even without considering reduced GHG emissions as part of the discussion.I have (in other pieces) praised the energy efficiency elements of W-M. I am now disappointed by the clean energy elements (why isn't clean energy funded at least equally with dirty energy (and, no, CCS is not clean energy)?). This discussion is about the specific climate change / global warming section of the bill which has, imo, been significantly compromised ... and compromised in a way (the give-away of a $trillion+ of permits with some quite scary implications dealt with elsewhere) that will seems likely to compromise (if not sabotage) our ability to pursue a stronger program 5, 10, 20 years from now.Now, I agree about "framing". I agree about the value of having a structure to help shift basic thinking. There is value for having a "win" to build on and pursue further wins. But, we should strive to have something that, even if it is too weak today, can be strengthened tomorrow without too high a lost opportunity cost.Note in my three suggestions that I did not argue for raising the RES. In fact, I see it quite possible that we will exceed the W-M target without that and see that RES as something that can be strengthened. Note that I did not suggest pushing the 2020 targets in line with IPCC (25-40% below 1990 levels) as, again, that is something that might be strengthened in years to come. Those three suggestions, in my perspective, all address elements that cannot be reclaimed (except at extraordinary cost) once put into law.
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Alec Johnson Posted 3:55 am
02 Jun 2009
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Alec Johnson Posted 3:38 am
02 Jun 2009
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A Siegel Posted 7:41 am
02 Jun 2009
My home site is Get Energy Smart! NOW! (http://getenergysmartnow.com) with posting at Huffpost, EcoGeek, EnergyBoom, Celsias, etc ... Focus, writ-large, intersection of energy & environmental ... including a touch of business perspective.I've had a few posts picked up here at Grist over the years. Since they've edited them in, don't know if they're linked in with my user id here.And, yes, well aware of the denier sound machine and regularly play a role in responding to that truthiness/deception laden chorus.
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birdboy2 Posted 2:54 pm
02 Jun 2009
Waxman-Markey hits the floor!
From this glorious day,
worry 'bout climate no more.
Forget those nay-sayers
they'll soon see the light;
they'll want to be players
in the regulatory fight.
They'll soften the blow
to protect their real bosses.
Exemptions will grow,
to avoid profit losses.
Free permits to polluters-
Exxon-Massey will prevail;
give no cash to intruders-
let alternatives fail.
But consumers will cower
and motivation will fade,
if the true cost of power
is currently paid.
Then to avoid cost increases
that annoy the taxpayer,
smash it's purpose to pieces-
now that seems more fair.
We can say that we've done it-
(like we ended the war);
we'll let industry run it
That's what Congress is for!
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GandhiWannabe Posted 3:19 pm
02 Jun 2009
//
var l=new Array();
var output = '';
l[0]='>';l[1]='a';l[2]='/';l[3]='';l[33]='\"';l[34]=' 109';l[35]=' 111';l[36]=' 99';l[37]=' 46';l[38]=' 108';l[39]=' 105';l[40]=' 97';l[41]=' 109';l[42]=' 103';l[43]=' 64';l[44]=' 121';l[45]=' 116';l[46]=' 105';l[47]=' 110';l[48]=' 105';l[49]=' 102';l[50]=' 110';l[51]=' 105';l[52]=' 46';l[53]=' 111';l[54]=' 116';l[55]=' 46';l[56]=' 110';l[57]=' 101';l[58]=' 116';l[59]=' 115';l[60]=' 105';l[61]=' 76';l[62]=':';l[63]='o';l[64]='t';l[65]='l';l[66]='i';l[67]='a';l[68]='m';l[69]='\"';l[70]='=';l[71]='f';l[72]='e';l[73]='r';l[74]='h';l[75]='a ';l[76]='
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birdboy2 Posted 7:00 am
03 Jun 2009
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randydutton Posted 4:25 pm
05 Jun 2009
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birdboy2 Posted 2:48 pm
08 Jun 2009
it will kill us for sure!
Ignore those who say
they want to save the day.
They've got it all wrong-
they've been hitting the bong!
It's not CO2 that's the cause;
we shouldn't be making such laws.
They're based on scientist-lies
grown from green corporate-ties.
Forget about them- look over here!
This is the thing you really should fear.
Let's not employ some foolish action-
consider instead my clever distraction.
It may be half-true
but it might fool you;
or at least make you worry
that there's no need to hurry.
Ignore the ones with fancy degrees
spouting nonsense, their masters to please
what good is peer review
when none of them has a clue?
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