The Congressional Budget Office recently issued its report on the Waxman-Markey bill. The Washington Times soon trumpeted: “CBO puts hefty price tag on emissions plan: Obama's cap-and-trade system seen costing $846 billion.”
This is quite misleading. Actually, the CBO report tells us virtually nothing about the economic costs of the bill or how much consumers will lose out of pocket. In fact, the way most people understand the idea of a budget deficit, it doesn’t really say much about that either. CBO’s analysis is based on some very technical accounting that may can easily be misinterpreted. In particular, CBO treats the issuance of free carbon allowances quite differently than most people would expect.
Full textThis past Sunday’s New York Times Magazine had a terrific piece by Matt Bai on the Obama White House and how it is “taking” Capitol Hill, one battle at a time. After extolling the team of congressional insiders Obama has assembled, and emphasizing the importance of their attentiveness to key players on the issue du jour -- health care reform -- Bai predicts that Obama will be compelled to wade up to his neck in the messy details of the legislation because only his personal power will be enough to guide this behemoth through. This prediction, which has already begun to come true -- note the stories last week saying he’d be willing to consider taxing benefits -- could spell disaster for a different issue: climate change legislation.
Allow me to pause for just a moment, in fairness to the Obama team, to lament congressional gridlock, which has yet to be resolved by the Democratic leadership, especially in the Senate. Because Majority Leader Harry Reid (D-NV) is unwilling to play even the mildest hardball with his recalcitrant Republican opposition on even the smallest issue (see, e.g., closing Guantanamo), the “wisdom” has taken hold there that everything declared controversial by the minority will have its content decided by whoever holds the 60th available vote -- or put another way, the 41st least oppositional senator. Not only is Reid unwilling to allow actual talk-all-night filibusters to proceed on issues that would affirmatively help Democrats politically, he has managed to send the signal that his own members can act up at will. So, for example, Sen. Evan Bayh, a Midwestern moderate, is suggesting that the United States should not act on climate change until China steps up with reductions of its own.
Full textThe first line of defense against climate regulation was that climate change didn’t exist. The next line of defense was that maybe it was real, but it wasn’t caused by humans. Now we’re up to the third line of defense: it does exist and it is caused by humans, but it’s too expensive to fix. For example, the Heritage Foundation estimates that Waxman-Markey would cost society a whopping seven trillion dollars by 2035.
These estimates fail to ask a critical question: Compared to what?
To begin with, the alternative to Waxman-Markey or other new legislation isn’t a regulation-free world. Instead, it’s a world in which a number of states like California are aggressively regulating greenhouse gas emissions – and more importantly, a world where the EPA is required by law to regulate greenhouse emissions under the Clean Air Act. There’s no reason at all to think that Waxman-Markey would be a less efficient tool than the Clean Air Act. Indeed, there’s every reason to think otherwise: the Clean Air Act is at best an awkward tool for regulating climate change and isn’t likely to coincide with the most efficient approaches.
Full textOn Friday, the House Energy and Commerce Committee released its anticipated Beta version of its comprehensive GHG and energy bill. Among other goals, the new discussion draft attempts to address concerns from moderate and conservative Democrats concerning the proposed cap and trade system and how it would work. The most notable change involves the free allocation of allowances to certain economic sectors to assist in the transition to the new system, and this is the part that seems to most directly respond to actual political pressures regarding the cost of controlling greenhouse gases.
With respect to offsets, the most problematic change is allowing the offsets, which are more uncertain than emission reductions, to be treated as equal in value to emissions allowances. The original Waxman-Markey discussion draft discounted all offsets by 20% with respect to equivalent greenhouse gas allowances, so that it took 1.25 offsets to be equal to one emission allowance credit. Though a rather blunt instrument, this was designed to account for the relative uncertainty of offset reductions, to provide an incentive to encourage actual reductions from regulated sources, and to even increase real reductions if the offsets proved 100% valid. The new draft retreats from this broad provision by allowing domestic offsets to count as equal to emission allowances on a one to one basis, though international offset credits are still subject to the 1.25 equivalency ratio.
Full textCPR Member Scholars William W. Buzbee and Victor Flatt have an op-ed in this morning's Atlanta Journal-Constitution offering a critique of the "discussion draft" of the Waxman-Markey climate-change bill. Several CPR Member Scholars have blogged extensively about the bill here on CPRBlog, and with this op-ed, and a similar piece published the week before last in the Houston Chronicle, Professors Buzbee and Flatt take that discussion to the opinion pages of two important regional newspapers. In the Atlanta J-C piece, they write: "The [Waxman-Markey] bill is smart and comprehensive, covering energy, fuels, cars and more. Despite some shortcomings, it's nevertheless a good place to start the congressional discussion about how to fix the most serious environmental problem the planet has ever faced. Polluting industries have mounted a scare campaign to persuade us that it's too severe, will cost jobs, choke the economy, and more -- the same complaints we hear every time industry worries about being inconvenienced. But the truth is that in important ways, the bill doesn't go far enough." Full text
On Thursday, Rep. Raul Grijalva introduced HR 2192, a bill on adapting to the impacts of climate change. The law would establish a "Natural Resources Climate Change Adaptation Panel" that would create a plan for several federal agencies to anticipate and seek to mitigate the effects of a changed planet.
The bill is very similar to the natural resource adaptation provisions (Title IV, Subtitle E, Subpart C) in the Waxman-Markey draft climate change legislation. Those provisions were a good start, though certainly not perfect (Holly Doremus and I previously analyzed the good and the bad of those provisions here).
E&E News reported (subscription required) that Grijalva's bill, along with a separate one in the works in the House Science Committee, are "expected to be voted on before Memorial Day and eventually to be folded into [Waxman-Markey]." If it came to it, should Waxman-Markey stumble, this bill could go ahead separately.
Full textA coalition of conservative and moderate Democrats has recommended deleting section 336 of the Waxman-Markey climate change bill because of "concern among industry about potential new liability for any emitter" under that provision (see the proposed amendments). Some polluters' objective, apparently, is to avoid liability for violating the law, and they recommend this deletion as a step toward accomplishing that goal.
But section 336 does not create any liability, new or old. Section 723 of the Waxman-Markey bill does that, quite appropriately, by establishing penalties for failure to meet targets or purchase sufficient allowances. And the liability in this other section does not apply to "any emitter," but only to emitters that violate the law by failing to reduce greenhouse gas emissions.
The whole notion that new obligations should create no new liability for violators, if accepted, would convert this bill from a mandatory cap and trade bill to another Bush Administration voluntary program. Industry concern about "potential new liability" should not be reason to amend a climate change bill at this point in the history of the world.
Section 336, however, has a much narrower effect. It attempts to preserve citizen standing in cases involving violations of climate change legal requirements by specifying that affected citizens may sue based on the potential contribution of a legal violation to global climate disruption. Without this provision, courts are more likely to make current law authorizing citizen enforcement of environmental law a dead letter in the climate change context.
Full textTwo weeks ago, Representatives Waxman and Markey put forth a 648-page legislative draft for dealing with climate change. That draft had proposals for the use of offsets, some good and some not so good (see my earlier post). Moderate and conservative Democrats on the Energy and Commerce Committee have now put forward suggested changes (as reported by ClimateWire) that they say are necessary to make the proposed bill less onerous. In general, these provisions would more or less weaken the targets and enforcement mechanism in the proposed bill, and that is not a positive thing. We already know that climate change is serious and that the U.S. is going to have to take a leading role in addressing it, or we will never reach the international consensus necessary to address the problem. Yes, it will be hard, but instead of shirking our responsibility to ourselves and the future, we should try to make real changes, but do them in the most economic way possible.
Full textIt must be worthwhile; at least, I keep doing it. Wednesday was the third time in the last eight months that I've testified before a House committee about the costs of inaction on climate change, a topic I study at the Stockholm Environment Institute-US Center, a research institute affiliated with Tufts University in Boston.
The Energy and Commerce Committee launched a week of hearings on the Waxman-Markey bill, the American Clean Energy and Security Act of 2009 ; by one account, they have invited 67 witnesses to testify.
Wednesday was a staggeringly long day, beginning with Cabinet secretaries at 9:30 in the morning, then a panel of USCAP members (an alliance of major corporations and environmental groups, in support of climate legislation), then a panel that was half conservatives and skeptics (guess which party insisted on inviting them), and finally, starting just before 6:00 PM, the panel on green jobs and economic benefits, where I ended up. Full text
On Sunday, John Boehner, the House Republican leader, explained his view of climate changeto George Stephanopoulos:
George, the idea that carbon dioxide is a carcinogen, that it's harmful to our environment is almost comical. Every time we exhale, we exhale carbon dioxide. Every cow in the world, uh, well, you know when they do what they do, you've got more carbon dioxide.
My first thought was that this was completely idiotic, making a childish argument that even George W. Bush would have scorned. The fact that some CO2 is normal and even necessary proves nothing about what happens when concentrations go beyond the normal level: salt is essential in small doses but you'd die of thirst drinking sea water. Even apart from the demonstration of abysmal ignorance of climate science, there's the fact that cows emit methane, not CO2, and that no one thinks CO2 is a carcinogen anyway.
My second thought, however, is that this is an outburst from someone who expects to lose on an issue and therefore sees no point in taking a responsible position. Maybe - just maybe - Boehner realizes that this train has already left the station.
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