This post is first in a series from CPR Member Scholars examining different aspects of the Boxer-Kerry bill on climate change, which was released today.
With respect to offsets, the Boxer-Kerry bill is a distinct improvement over the ACES. It allows a relatively strong approach to offset integrity, avoiding negative social or environmental effects, and facilitating possible integration with other systems. It also addresses some issues that will be important to the functioning of a trading market, but still leaves some uncertainties that could cause problems in the market.
Probably the most important difference between the bills is that the Boxer-Kerry bill does not specify which agency would be in charge of administering and ensuring the integrity of any offset program. In the House bill, a last minute compromise switched all of the administration of biological sequestration offsets to the USDA from the EPA, a change widely criticized by environmentalists because of the belief that the USDA would not be as effective in regulation. The Boxer-Kerry bill doesn’t specify any agency, instead referring to the executive branch actor only as “the President” (which means it could be delegated to one or more different agencies). Of particular interest is that in the 801-page draft which leaked out yesterday, the program was administered by the EPA, but that this provision was dropped from the proposed bill. This might indicate that Senators Boxer and Kerry prefer the EPA as the offsets administrator, but that they are willing to have some ambiguity on the issue if it helps win farm state votes.
With respect to offset integrity, Boxer-Kerry makes accounting for offset reversals (when the anticipated amount of offsetting fails to occur) a key part of the bill; and unlike the Waxman-Markey bill, reversals are to be avoided and accounted for in all offset categories, not just biological sequestration. This is very important as it closes a huge loophole which could have destabilized the system and market. Though expanding the accounting for reversals to all offset categories, Boxer-Kerry does generally follow the lead of Waxman-Markey in dealing with offset reversals. Section 734(b) requires that the President require offset developers to either contribute offset reserve amounts to a central account registry equal to the probability of reversal times the total offset credit amount, or to hold insurance that would allow for the purchase of offset or emission allowance credits for any offset failure. The offset reserve option also features the requirement that the reserve be replenished by the project offset developer with half of the lost credits for an unintentional reversal or all of the lost offset credits if an intentional reversal. One could suppose that since unintentional reversals could be fully accounted for in the initial reserve requirements (since unintentional offsets should coincide with statistically likely failures) having a replacement of only one half of the loss would be more than sufficient to preserve the integrity of the system. The truth is that reversal probability calculations are so unknown at this time that we cannot be sure about the ratio of reserves to failures. Requiring a one-half replenishment might be more than sufficient or not enough. It is really a guess at this point, and though the statutory requirement of one-half is pretty specific, other provisions of the bill would allow the President to take actions to preserve the integrity of the required reductions.
Full textThe full 821-page bill is up here.
That's not to be confused with the 801-page pre-draft everyone was checking out yesterday, or the 684-page one earlier yesterday.
They’ve also got a section-by-section outline of the bill.
We'll have much more soon.
Full textThis just in: trying to stop climate change will cost the world about $50 trillion a year, but the impacts of climate change will only cost about $1 trillion a year, so the choice is clear! That's the thesis of Bjorn Lomborg's op-ed in Monday's Washington Post.
Presumably the flooding of much of Bangladesh doesn't count for much, since those lives are totally worth less than ours, etc.
Update: For more on this, see Joe Romm and Miles Grant.
Full textThe Second Circuit's ruling Monday in State of Connecticut, et al. v. American Electric Power Company Inc., et al. revived a public nuisance lawsuit against the nation’s five largest electric power companies. The case opens the door to a potential judicial remedy for the alleged harm and increases the pressure on Congress and the Executive Branch to devise a more comprehensive solution to our greenhouse gas problem.
In an ideal world, would we give the task of designing facility-specific climate controls to the courts? Of course not. But we don’t live in an ideal world. Congress is paralyzed and EPA’s authority under the Clean Air Act has not yet been translated into concrete limits on greenhouse gases. The Second Circuit’s decision maintains the courts’ traditional common law powers to adjudicate claims that one party’s actions are harming another. The other two branches of government should take note.
Eight states, the City of New York, and several non-profit land trusts brought the case against five large power companies, companies that generate about a quarter of the U.S. electric power sector’s carbon emissions and about 10 percent of the nation’s total emissions. Pointing to current impacts on water supplies and coastal erosion and a litany of future impacts on the states’ interests, the plaintiffs alleged that the companies’ carbon emissions constitute a “public nuisance” – “an unreasonable interference with a right common to the general public.”
Full textImagine if the end of the world were coming and everyone was just too polite to talk about it. That’s been the eerie feeling I've gotten over the past eight months listening to the President talk about energy policy. Not wanting to be a downer, he couches his energy talk in positive spin: We’re going to invest in the new clean green economy, create jobs, sell American ingenuity and know-how around the world, and reduce our dependence on foreign oil. Missing is any mention of the reason we’re going to all the trouble of undertaking a vast and expensive transformation of our well-entrenched carbon economy in the first place: all those coal plants and gas guzzling cars threaten to end life as we know it on this planet (not my words – NASA climate scientist Jim Hansen’s). Just a minor detail – but one worth mentioning, perhaps?
It was refreshing, then, to hear President Obama acknowledge the real issue – that pesky little end-of-the-world problem – at a speech before the United Nations today. He talked about the stuff that’s been keeping climate scientists up at night for decades now: rising seas, storms and floods, drought and crop failure, families fleeing and becoming climate refugees, and the implications of all this for political stability and security around the world.
But then, he knew his audience. He was talking to a bunch of U.N. policy wonks to whom none of this was particularly surprising or controversial.
But he needs to do more. President Obama needs to use his gift for high-minded oratory and his bully pulpit to take the message to the American public.
Full textCap-and-trade legislation making its way through Congress has become enormously complex, embodying a host of arcane political deals governing the distribution of the vast majority of emissions allowances being given away for free, with crucial details being left to EPA. This complexity threatens to hinder the effort to address climate disruption (see my article Capping Carbon). It would lead to long delays and weak implementation, just like other laws delegating a lot of controversial and litigable decisions to administrative agencies. Delays and weakness could prove disastrous in the climate disruption context, because greenhouse gas emissions have already warmed the planet and gases emitted while implementation flounders can create irreversible and potentially catastrophic ecological problems. Auctioning of 100% of the allowances would make the program run smoothly.
The Regional Greenhouse Gas Initiative—a cap-and-trade program that regulates utility emissions in the northeastern states— has relied on auctioning nearly 100% of the allowances. As a result, the long administrative delays typical of environmental programs have simply not arisen in this program. One Congressional bill, the Cap and Dividend Act of 2009, H.R. 1862, likewise relies on auctioning 100% of the allowances, but it has not gained political traction, at least not yet. But growing strife over political allocation decisions (see E&E Daily, subs. required) may make members of Congress realize that enactment of a simpler alternative based on auctions is better.
The cap-and-trade program for acid rain ran smoothly without auctioning only because Congress made all of the major design decisions itself, even including a table in the legislation allocating allowances to each phase one utility unit, thus leaving EPA with relatively few decisions to make in inevitably contentious rulemaking proceedings. Unfortunately, absent a decision to focus cap-and-trade on upstream providers of fossil fuels, duplicating this degree of specificity is not possible in a comprehensive cap-and-trade bill. The Waxman-Markey bill, for example, contemplates some 270 actions by agencies to implement the bill, some of which are essential to the cap-and-trade program’s operation. (See Michael Gerrard's database, accessible via his site, listing required agency actions under Waxman-Markey).
Full textCross-posted from Legal Planet.
Since opponents can’t seem to come up with any new arguments against climate change legislation, they seem determined to recycle the old, discredited ones. Here’s Tuesday’s example, straight from the GOP press release:
Rep. Jim Sensenbrenner, R-Wis., and Rep. Darrell Issa, R-Calif, today urged the Environmental Protection Agency to include several relevant studies in its decision-making record for a major finding on climate policy after it was made public that a senior EPA official suppressed the scientific evidence for apparently political reasons.
“I’m sure it was very inconvenient for the EPA to consider a study that contradicted the findings it wanted to reach,” said Rep. Sensenbrenner, the ranking Republican on the House Select Committee on Energy Independence and Global Warming. “ . . .
This is actually an old story, which has been debunked as many times as the urban myths about alligators in the sewers. (For example, take a look at this June posting in Grist.) But apparently Sensenbrenner and Issa don’t have anything better to do with their time than recycle discredited stories.
As EPA made clear months ago, the individual in question is in an economist, but his comments weren’t about economics, they were about climate science — a subject on which he has as much professional expertise as my cat. His professional expertise as an economist was completely irrelevant as a matter of law – EPA isn’t allowed to consider cost at all in determining whether a pollutant endangers human health. That’s a scientific issue, not an economic one. The likelihood that he would contribute anything worthwhile to EPA’s findings about climate science was approximately zero anyway, and he might well have been reprimanded for wasting time rather than sticking to his job.
Notwithstanding his lack of any relevant expertise, however, EPA was more than generous in providing him a forum. His comments were submitted to the EPA endangerment team; and his manager allowed his general views on the subject of climate change to be heard and considered inside and outside the EPA and presented at conferences and at an agency seminar. In short, there’s just nothing here at all except EPA leaning over backwards to be tolerant toward an employee’s amateur hobbyhorse. Finally, his manager had enough of him wasting time and told him to get back to his day job.
If there’s a story here, it seems to be EPA’s tolerance of internal dissent, even when the dissenter has little or no credibility.
Full textFive State Attorneys General sent a letter to the Senate leadership on August 31st urging the Senate to enact strong climate legislation. The AGs letter is unusual in that states directly lobbying Congress on the details of federal legislation is a fairly infrequent phenomenon in and of itself. The AGs from California, Arizona, Connecticut, Delaware, and New Jersey are asking Congress to strengthen the House-passed American Clean Energy and Security Act (ACES), despite several important ways in which ACES would largely displace state regulation of climate change. They accept some of these limitations on state power, but argue strongly for preserving their often pathbreaking roles in devising strategies to combat climate change.
Not surprisingly, the AGs first order of business is to tell Congress how important it is that any federal climate law enacted preserve state authority to regulate greenhouse gas emissions generally. They specifically argue that they should have the right -- recognized in the House bill -- to regulate greenhouse gases more stringently than federal law requires. The AGs have a good point. The states have been out ahead of the feds on climate change for the past decade and that alone ought to demonstrate the wisdom of preserving state regulatory authority. States can regulate in areas not addressed by the federal government, provide federal regulators with the results of their experience with different regulatory approaches and tools and enforce the law against violators who have escaped the federal government’s radar. Perhaps most importantly, the AGs want to ensure that they will have the right to regulate more stringently than their federal counterparts, a right they have under just about every other environmental law and one which enables more ambitious states to move ahead more aggressively against climate change without taking the entire nation with them.
Full textThose of us worried sick over climate change confronted a depressing piece of excellent reporting in Monday's Washington Post. Environment reporter David Fahrenthold wrote that environmental organizations are getting their proverbial clocks cleaned by a well-organized and pervasive campaign mounted by affected industries in small and mid-size communities throughout America. “It seems that environmentalists are struggling in a fight they have spent years setting up,” Fahrenthold wrote. “Even now, these groups differ on whether to scare the public with predictions of heat waves or woo it with promises of green jobs.”
If scaring the public is the objective, environmentalists don’t have to look very far for hard facts to support the effort. All they really need to do is focus on what the world’s most prominent and reputable scientists keep trying to tell us about the dismal state of the environment that we’re preparing to hand over to our children—not in 100 but in 30 or 40 years—if we don’t control our energy consumption. Spend an hour perusing the various reports of the Intergovernmental Panel on Climate Change (IPCC), a remarkable consortium of thousands of the world’s leading experts in all of the relevant scientific disciplines, and the scope and severity of the problem will be abundantly clear. It’s even more troubling when one considers that the IPCC is an international group that operates by consensus, and still manages to frame warnings that will turn your hair white.
So what’s the dilemma for environmentalists? Why don’t they simply recite the facts, reminding Americans of the great damage caused by unregulated pollution and the important benefits of cleaning it up? It’s a strategy that has worked on a number of environmental issues in the past, even in the face of brutally misleading industry campaigns along the lines of the one we’re now witnessing. Why, when even John McCain ostensibly agrees with them on this issue, have so many decided they need to convert climate change into an economic development issue?
Full textAs fellow environmental law professors David Schoenbrod and Richard Stewart take their advocacy for market mechanisms and skepticism about regulation public, with an op-ed in the Wall Street Journal on Monday, I thought it was time to speak out in favor of a role for regulation. They claim that the climate change bill that passed the House in July, the American Clean Energy and Security Act of 2009 (the Waxman-Markey bill), relies too much on “top-down” regulation and not enough on pure market mechanisms. Regulations, in their view, are bureaucratic, inefficient, and politically motivated to favor key industrial constituencies. Market mechanisms would be more efficient and effective, they say, because once an emissions cap is set, industry and consumers would make their own rational emissions reduction decisions.
Ideological claims that “markets work” and “regulations don’t work” miss the point. Schoenbrod and Stewart identify failed regulations and successful markets. I can identify failed markets and successful regulations. For example, the European Union’s European Trading System, its initial foray into greenhouse gas controls, failed to reduce emissions or generate innovation incentives, while many U.S. regulatory initiatives have successfully reduced traditional pollutant emissions. We can all point to examples of success or failure for a given policy instrument. While markets and regulations have differing intrinsic strengths and weaknesses, the most critical factor is how well or poorly they are designed, not the choice between them. In a fraught regulatory environment presenting plenty of opportunities for either method to fail, Congress should provide the Environmental Protection Agency with the flexibility to adopt regulatory requirements to complement -- or rescue, if necessary -- its predominant market strategy.
Professors Schoenbrod and Stewart rue the instances in which Waxman-Markey calls for regulation. What they do not emphasize is that the bill’s predominant approach for directly addressing emissions sources is cap-and-trade. The bill strips EPA’s authority to impose regulations on most stationary emissions sources by exempting all sources covered by the cap-and-trade program from the Clean Air Act’s regulatory provisions. (EPA can set “new source performance standards” only for the uncapped sources that are too small to be included in the trading program.) While some Clean Air Act provisions are indeed ill-suited for addressing greenhouse gases, Waxman-Markey fails to provide a better-tailored regulatory alternative.
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