Though in many respects similar to provisions in the House-approved American Clean Energy and Security Act (ACES) bill and the prior Boxer-Kerry bill in the Senate, the adaptation program proposed in the newly released Kerry-Lieberman American Power Act substantially decreases funding for federal and state adaptation programs and eliminates provisions establishing a public health adaptation program.
Like its predecessors, Kerry-Lieberman’s adaptation program, included in large part in Title IV, §§6001-6011, incorporates a number of provision focused on managing the effects of climate change on natural resources in the United States:
Though these adaptation provisions may be an improvement over the status quo, they nonetheless retain many of the same key weaknesses as those in ACES and Boxer-Kerry that I and others have detailed here and here. In addition, Kerry-Lieberman eliminates a number of significant provisions adopted in ACES. These include:
Full textWhile Kerry and Lieberman (and before two weeks ago, Graham) have tried to pitch the proposed new Senate climate and energy draft legislation as a “game-changer” the truth is that, aside from the stronger preemption language limiting the states, its effect is not terribly different from what has come before. Sure, there are sweeteners for the conservascenti, such as enhanced loan guarantees and permit streamlining for nuclear energy, continued support for carbon capture and sequestration, removal of a natural gas “penalty,” and ostensibly an opening up of now closed offshore oil areas. But whether this would be different than what would have happened by adoption of the ACES bill is questionable.
ACES also allowed the coal industry to continue with the help of monetary support of carbon capture and sequestration. As for increased offshore oil drilling, even with revenue sharing, opening new areas is going to be a hard sell for a long, long time. Alaska is a possible exception here, and the Alaska offshore revenue sharing provisions are clearly designed to get the Begich and Murkoswki vote. But even if offshore oil drilling is more attractive to Alaskans, the bottom line is that Alaska always wants to drill and the only thing stopping it has been the federal environmental reviews. The Deepwater Horizon spill called the prior MMS analysis of Alaska offshore drilling into question and has spurred another lawsuit.
The Kerry-Lieberman bill creates the very peculiar “linked” fee system for the oil and gas industry as a way to pay for their carbon intensity usage. While this is a strange and overly complicated part of the proposal and may be a boondoggle to the oil and gas industry, its ultimate effect on actual greenhouse gas reductions should be minimal.
Full textThe Kerry-Lieberman bill's provisions on offsets are largely similar to those in the Waxman-Markey and Kerry-Boxer bill, but include a number of changes that make more specific policy choices in the use of offsets.
First, the proposal enumerates a specific lengthy list of eligible offset categories (whereas Waxman-Markey didn't list specific categories, instead giving instruction for a regulatory decision). This change might assist in providing market liquidity. In terms of offset regulation, there seems to be a complex dance between the EPA and the USDA, which requires consultations between the two in most cases for offset designation and removal. The USDA is given the primary role over agricultural and forest offset approval while the EPA has a similar role over other offsets; as I've written before, this could be potentially problematic if the USDA is not up to the regulatory task.
Environmental consideration of offsets is still present for sequestration projects, particularly to protect habitat and native species (proposed new CAA 735(h)), and general environmental considerations may even be stronger. For instance, as in both Waxman Markey and Boxer-Kerry, Kerry-Lieberman would create an advisory committee that proposes offsets and offset rules to the regulator. But in performing this task, the advisory committee is “to avoid or minimize, to the maximum extent practicable, adverse effects on human health or the environment resulting from the implementation of offset projects under this part.” (proposed new CAA 733(a)(2)(D)).
Full textCPR Member Scholar Victor Flatt has an op-ed piece in this morning's Houston Chronicle, in which he argues that the week of April 20 will likely be recalled as "one of the most pivotal and important weeks in the history of energy in this country," citing the confluence of the explosion of the Deepwater Horizon offshore oil drilling platform and its disastrous environmental consequences, and the federal approval of the massive Cape Wind project in Nantucket Sound to capture wind energy. He writes:
To be sure, offshore wind power has costs: impacts on animal habitat (notably birds'), possibly on fishing and on view-scapes. But in this case, cold calculation has determined that these costs are worth it when compared to the benefits of mostly pollution-free energy production. In the last few months, studies have shown that a string of offshore wind projects along the East Coast could provide ample electricity and, if the projects were linked by transmission lines, very dependable electricity, as wind variation is not uniform up and down the coast. In Germany and Denmark, linked wind systems have become so dependable that wind is sometimes preferentially used as base power over coal and nuclear.
The confluence of both these events also illustrates a move in the direction of the public good over the private good. Despite claims to the contrary, it is rarely the general public that is clamoring for more offshore oil drilling. While many people might like to have lower gasoline prices and reduced dependence on foreign oil, when the public actually sees the trade-offs in price, few make offshore drilling a priority. The political push for offshore drilling comes from the companies themselves, which realize profit through the recovery and processing of this product. Cape Wind also hopes to realize a profit, but it also has significant support from a public that wants to see viable greenhouse-gas-free energy become the norm. The public's clamor was enough to overcome even the most politically well-connected private opposition to Cape Wind, and this signals the breaking of a logjam. More and more approvals will be forthcoming, and this will transform the energy landscape.
The Deepwater Horizon platform exploded and the Cape Wind project was approved the same week that ongoing political rancor prompted a delay in the long-awaited Kerry-Graham-Lieberman energy/climate change bill. That legislation was originally seen as history in the making. Today, we're seeing history made in a different and possibly more powerful way — outside the political process and inside the minds of the public.
In addition to his CPR role, Professor Flatt wears a few other hats. He's the Tom & Elizabeth Taft Distinguished Professor of Environmental Law at the University of North Carolina School of Law; and a Distinguished Scholar of Carbon Trading and Carbon Markets, at the Global Energy Management Institute, University of Houston Bauer College of Business.
Full textVirginia AG Ken Cuccinelli II has taken his climate change vendetta to a new low, announcing that he will use Virginia's Fraud Against Taxpayers Act to force officials at UVA to spend months digging through a decade of university records in search of evidence that Dr. Michael Mann "defrauded" the Commonwealth by seeking funds to explore the boundaries of climate science.
Tuesday's article in the Washington Post gave the attention-seeking politician all that he needed from the civil investigative demand issued to Dr. Mann's former employer. Now Cuccinelli will move on to his next headline-grabbing venture without a care for the disruptions he's left in his wake.
As others have pointed out, threatening academics with legal penalties sets a terrible precedent that will stifle the innovation and progress that are the hallmarks of the United States' great research universities. It was bad enough when Rep. Joe Barton first started harassing Dr. Mann over his work, signaling to all climate scientists that they'd better be careful what they researched or the full force of a congressional investigation might be in their future. Now that Cuccinelli has set the precedent of making onerous demands on the universities that employ researchers who work on the cutting edge, there will be another dimension to the pressures that will constrain American academics.
Full textMonday April 26 was supposed to be the day that the much anticipated Kerry-Graham-Lieberman climate change bill was to be proposed in the Senate. Hopes had gone up that there could be a legislative solution to putting a price on carbon. The carbon markets themselves had responded, pushing up the price of allocations on RGGI in the hopes that these would be allowed to qualify for the expected federal cap and trade. Then over the preceding weekend, it fell apart. Senator Graham criticized the call from Majority Leader Reid to also take up a comprehensive immigration reform bill, claiming that it was driven by Senator Reid’s own political needs to increase his chances of retaining his Nevada Senate seat.
There is no doubt that this played an important piece in the very difficult political dance that has surrounded the emergence of the KGL plan. Senator Graham has positioned himself as the leading Republican supporter of both comprehensive climate change legislation and immigration reform. It is clearly too politically difficult for him to carry both of these simultaneously.
However, it may be that the proposal for immigration reform was not the only culprit. It was anticipated that KGL would have a cap and trade system for stationary sources (phased in over time), and a "tax" on fuels that will be linked to the market clearing price of the cap and trade sector. Ostensibly this was the only price on carbon that the oil and gas industry was willing to accept.
Full textCross-posted from Legal Planet.
Libertarians are, of course, deeply suspicious of government regulation. This may lead to a reflexive rejection of climate change mitigation. But Jonathan Adler, who provides a refreshingly distinctive view of environmental law from the Right, argues otherwise. In a forthcoming article (only the abstract is available on SSRN), he contends that libertarians are making a mistake in opposing climate mitigation:
[E]ven if anthropogenic climate change is decidedly less than catastrophic – indeed, even if it net beneficial to the globe as whole – human-induced climate change is likely to contribute to environmental changes that violate traditional conceptions of property rights. Viewed globally, the actions of some countries – primarily developed nations (such as the United States) and those nations that are industrializing most rapidly (such as China and India) – are likely to increase environmental harms suffered by less developed nations – nations that have not (as of yet) made any significant contribution to global climate change. . . . As a consequence, this paper suggests a complete rethinking of the conventional conservative and libertarian approach to climate change.
Adler’s argument seems unanswerable to me. Carbon emitters are causing harm to the property rights of others — for instance, through sea level rise that will directly deprive owners of portions of their land. People who really care about property rights should worry a lot about climate change. This doesn’t mean that they should necessary favor any particular approach to mitigation — Adler, for instance, favors heavy investments in developing new energy technologies. Yet, to favor inaction is inconsistent with libertarian principles.
Full textOn Monday, the Environmental Defense Fund announced that it had reached a settlement with Tenaska Inc. to withdraw opposition to that company’s proposed “Trailblazer Energy Center,” a 600 megawatt coal fired power plant in West Texas. In return for dropping its objections, the EDF signed an agreement with Tenaska that the company will sequester 85% of the CO2 it produces, selling much of the gas to companies who will use it for enhanced oil recovery (EOR) in the West Texas Permian Basin oil field.
The agreement is stunning on many levels. Trailblazer is the first large-scale proposal (and presumably will be the first operational coal fired power plant) to sequester significant amounts of the CO2 it produces. It is also the first large-scale use of enhanced oil recovery as a market for captured CO2. Last, it firmly and finally illustrates the reality of the fate of new coal fired power in the United States today. Sequester or give it up. Given the EPA’s endangerment finding on CO2, no new air permits can be granted by the EPA or delegated states without “considering” the impact of CO2. So even in a fossil fuel friendly state like Texas (one of the few who were even entertaining the idea of new coal fired power), the reality is that new coal without emissions capture is on the way out (and this is without a comprehensive climate change bill).
Despite the important reality this deal represents, as an individual deal, it may leave something to be desired. The agreement is not public yet, and it is unclear what penalties or breach of contract remedies will be available if Tenaska abandons the deal in the face of say a depressed oil market. Will the sequestration continue for the life of the coal plant? What if the Permian Basin is spent in ten years? And without access to studies of the specific area where the EOR will occur, it is also not clear what level of sequestration permanence we are talking about. Last, by engaging in this capture before the imposition of a mandatory cap and trade system, Tenaska might even be able to profit by selling its sequestration as an “offset” in the voluntary or unregulated market.
Still, the longer term implication is very important.
Full textSeven state attorneys general have written a letter this week, released today, urging senators Kerry, Graham, and Lieberman to retain key state authorities on combating climate change in their upcoming bill (The Hill, National Journal). The letter, from the AGs of California, Delaware, Maine, Maryland, Massachusetts, Rhode Island and Vermont, follows two recent letters (see ClimateWire, subs. required) from 14 senators and from 14 state environmental protection agencies that called for some similar steps. (Update: And here's an April 7 letter to KGL from the National Association of Clean Air Agencies).
The attorneys general write:
"... federal climate legislation that builds on, and works in conjunction with, existing and ongoing State initiatives is not only consistent with a long-established model of federal and State partnership, but will also create a robust and effective legislative scheme that will maximize environmental and economic benefits. Indeed, the great majority of federal environmental statutes allow States to adopt standards and requirements that are more stringent than federal law. For more than 40 years, this model has worked effectively to improve the nation’s environment, protect public health and welfare, and stimulate innovation through creative state experimentation."
Last week William Buzbee laid out some of the key arguments in favor of not preempting state and local authorities on climate change.
More from the AGs after the jump.
Full textFederalism battles over state roles under federal climate legislation may have appeared settled, but they are once again under debate. The previous leading bills–the Waxman-Markey bill passed by the House, and the Boxer-Kerry bill passed out of a committee in the Senate–lost momentum several months ago. After several months of legislative inaction, Senators Kerry, Graham, and Lieberman have been working on a new piece of climate legislation. After the senators’ comments indicated that this bill might broadly undercut state and local government actions to address climate risks, fourteen senators and a group of leaders of state environmental agencies recently sent letters to Kerry, Graham, and Lieberman arguing for preservation of state authority to address climate ills. These letters show that some national and state leaders appreciate the importance of climate federalism choices and the value of state action. However, despite historical lessons, a decade of state and local climate leadership, and risks of federal climate policy shortcomings, it is not clear if many environmentalists or enough legislators see preserving state roles as a battle worth fighting. This essay explains the federalism choices, their implications, and the main arguments for broadly and clearly preserving state and local roles.
I. Key Federalism Choices in Leading Bills and Proposed Amendments
The leading House and a Senate bills differed in some of their details, but in many respects shared similar architecture and regulatory strategies. Their key provisions would set up a greenhouse gas (GHG) cap-and-trade regime, under which GHG allowances and offset credits could be bought and sold, provided the aggregate GHG levels stayed below a declining, federally set cap. In addition, an array of other measures would either mandate or encourage lower pollution by large emitters, greater efficiency of energy-draining appliances, and smarter uses of transportation and urban planning. A smattering of provisions also would try to reward technological innovations that help address climate change causes and resulting harms.
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