The solar energy advocacy organization VoteSolar issued a pretty clear verdict on whether or not the Waxman-Markey American Clean Energy and Security Act will effectively make solar energy cheap and abundant: "The accurate answer is nuanced, but the short answer is no."

Continue reading "Solar Advocacy Group Says Climate Bill Will Fail to Make Solar Energy Cheap" »

Advocates of the Waxman-Markey American Clean Energy and Security Act (H.R. 2454, or "ACES" for short) argue that the bill is far more than just a climate bill. It's a comprehensive piece of clean energy, efficiency and climate legislation, and taken as a whole, they argue, it should be considered transformational -- even if the cap and trade portion of the bill may have been significantly weakened (see Breakthrough's detailed analysis of the ACES cap and trade program here).

The ACES bill does indeed include many provisions to set a new course for our nation's energy policy, including efficiency standards and regulations, authorization for new programs aimed at modernizing the nation's electricity infrastructure and paving the way for plug-in hybrid and electric vehicles, and a national renewable electricity standard. Many of these will move America in the right direction.

But the question remains: will ACES really be transformational? And will it propel American quickly away from business as usual and towards the prosperous clean energy economy and dramatic emissions reductions we need?

Breakthrough's team has taken a close look at the bill's cap and trade provision, and discovered that the combination of offset provisions and a little-known provision called the "strategic reserve pool" could allow U.S. emissions to greatly exceed the supposed emissions "cap" set by the legislation.

Here we examine one of the other major provisions of the ACES bill, the national renewable electricity standard (RES) established by Title I of the bill. Unfortunately, our analysis concludes that the RES has been severely weakened since initially proposed in the discussion draft version of the ACES bill; as it now stands, the RES may barely increase U.S. renewable electricity generation compared to business as usual projections.

Continue reading "Climate Bill Analysis, Part 7: Renewable Electricity Standard Severely Weakened; May Have Little to No Impact" »

Every climate bill, in the U.S. and abroad, contains provisions limiting how high carbon prices established by the policy can rise. The Waxman-Markey American Clean Energy and Security Act (ACES) is no different. As the Breakthrough Institute previously reported, ACES would allow polluters to purchase up to 2 billion tons per year of relatively cheap carbon "offsets," which could allow emissions in supposedly "capped" U.S. sectors to rise by up to 9% between 2005 and 2030. The EPA predicts that, largely due to the extensive use of offsets, carbon prices will remain less than $20 per ton of CO2 for the next decade.

Many proponents of ACES have argued that U.S. polluters will not utilize the 2 billion tons of authorized carbon offsets each year. The supply of credible offsets is limited, they say, and demand will eventually push their price above the cost of most alternative emission reduction strategies. (For now, let's put aside the fact that those same price pressures -- and the industries and sectors that stand to profit from selling more offsets -- will also be a powerful force for establishing weaker offset certification standards.)

However, even in the case where affordable offsets are unavailable, and emission allowance prices rise, ACES contains an additional cost containment provision that could allow U.S. global warming pollution to exceed the supposed emissions "cap" -- and "make up" for these additional emissions by purchasing several billion more tons of carbon offsets.

If allowance prices rise too much in any given year, this provision, known as the "strategic allowance reserve pool," would allow polluters to delay their emission reductions by purchasing emission allowances from the reserve pool, which would then be "refilled" over time with additional international forestry offsets. Based on our analysis, this provision could allow U.S. emissions to rise 10% above the "cap" in any year after 2016 and introduce up to 9.3 billion additional offset allowances between 2012-2050.

Therein lies a Catch-22 of ACES: if the annual use of up to 2 billion tons of offsets permitted by the bill is limited due to a restricted supply of affordable offsets, the government will pick up the slack by selling reserve allowances, and "refill" the reserve pool with international forestry offset allowances later. Here's how it would work (defined in section 726 of the bill).

Continue reading "Climate Bill Analysis, Part 6: Strategic Reserve May Allow "Cap" to Rise by 10 Percent, Introduce Billions More Offsets " »

"We're just savoring the victory and right now I love every provision in that bill."

-Energy and Commerce Chairman Henry Waxman (D-Calif.) on the passage of the American Clean Energy and Security Act (H.R. 2454) out of his committee last week.

Driven largely by strong economic growth in developing nations, world energy consumption will grow 44% between 2006 and 2030, according to updated projections released Wednesday by the U.S. Energy Information Administration.

The EIA reports:

World marketed energy consumption is projected to grow by 44 percent between 2006 and 2030, driven by strong long-term economic growth in the developing nations of the world, according to the reference case projection from the International Energy Outlook 2009 (IEO2009) released today by the Energy Information Administration (EIA).

The current global economic downturn will dampen world energy demand in the near term, as manufacturing and consumer demand for goods and services slows. However, with economic recovery anticipated to begin within the next 12 to 24 months, most nations are expected to see energy consumption growth at rates anticipated prior to the recession. Total world energy use rises from 472 quadrillion British thermal units (Btu) in 2006 to 552 quadrillion Btu in 2015 and then to 678 quadrillion Btu in 2030.

In the decades ahead, the world's rapidly developing nations will clearly demand abundant and affordable energy to power their economic growth. The question remains: what will the nations of the world do to ensure that demand is met by clean and cheap energy technologies?

Continue reading "EIA: World Energy Use Will Rise 44% By 2030; Developing Nations Demand Abundant, Affordable Energy" »

Late last Thursday night, the House Energy and Commerce Committee voted 33-25 to pass landmark legislation that promises to address our nation's urgent energy challenges and help avert potentially catastrophic climate change. The legislation, known as the American Clean Energy and Security Act (or ACES), also presents an unprecedented opportunity to renew our economy and position the United States at the forefront of a burgeoning global market for clean and affordable energy technology.

Momentum is now behind a serious effort to address climate change, and that itself is cause for celebration. The bill's champion's - notably Henry Waxman, Ed Markey and Jay Inslee and their dogged staff - deserve praise for bringing the bill through some pretty hostile territory in the Energy and Commerce Committee, and for their tireless efforts during the marathon sessions of the past week.

However, knowing how much is at stake, we must also take a close look at whether or not the bill lives up to its promises.

In my latest exclusive monthly column at the Energy Collective, I explain why, after spending all week digging through the 1,000 page ACES bill, I'm left worried, very worried. Head over to the Energy Collective and find out why...

U.S. Energy Secretary Steven Chu said Tuesday that the long-standing focus of climate policy on setting precise emissions reductions targets and timetables has led to an "over-obsession" with numbers, according to Reuters.

Reuters reports:

The comment came less than a week after a congressional panel approved President Barack Obama's landmark draft bill on climate change [see Breakthrough's analysis of the bill here], bringing it closer to debate in Congress.

"There was a great deal of discussion on the Kyoto targets, and I'm not really sure which fraction of the countries that took part in that actually met their targets," Chu, a Nobel laureate for physics, said at a conference in London. "In terms of the targets, whether it's 17 percent or 20 or 25 percent, I think there's perhaps ... an over-obsession on these percentages."

Continue reading "Secretary Chu: Climate Debate May Have "Over-Obssession" With Emissions Targets" »

Originally posted at Prometheus

Robert Allen, an Oxford professor, has a new book out with Cambridge University Press titled "The British Industrial Revolution in Global Perspective." Allen has a precis up over at VoxEU which provokes a few thoughts about efforts to spark a new green global economy.

Allen argues that a combination of factors led to the industrial revolution, among them international trade associated with the British Empire, an educated and wealthy populace which created a demand for the fruits of technology as well as the skills necessary to produce them, and, crucially, cheap energy. Allen provides the following graph, showing a comparison of energy costs across Europe in the early 1700s.

Continue reading "Why The Industrial Revolution Started in Britain" »

"The United States already has a working cap-and-trade system, used since 1995 to cut back the gases blamed for acid rain. The Environmental Protection Agency says the trading system has reduced the overall cost of cutting acid-rain-causing pollutants to one-third of what was projected.

But comparing the two problems is like comparing a horn section and an orchestra.

Acid-rain pollutants can be sucked out of a smokestack by adding "scrubbers." But nothing like that is commercially available for carbon dioxide -- polluters might have to replace the coal they burn with a different fuel, or replace the coal-burning plants with solar "farms" and windmills.

Also, greenhouse gases come from far more sources: power plants, factories, car tailpipes, and both ends of a well-fed dairy cow (though the bill doesn't tackle that one: cows could still burp free of charge)."

-The Washington Post, "Caps, Trades and Offsets: Can Climate Plan Work?" (May 26, 2009).

For more on the huge differences between SO2/Acid Rain and greenhouse gases/climate change, see our recent post: "Cap and Trade Worked for Acid Rain, Why Not for Climate Change?"

"Never mistake a clear view for a short distance."

-- Silicon Valley technology forecaster, Paul Saffo in the New York Times.

Breakthrough Institute spent the past week analyzing the Waxman-Markey climate bill. We released several objective and transparent analyses for the benefit of our readers, exploring the allocation of allowances and the use of offsets in an effort to illuminate some of the weaknesses and strengths of the bill. This analysis was cited by Time Magazine, National Public Radio, Reuters, and the Wall Street Journal.

Joe Romm responded to our analysis on Climate Progress yesterday attacking it as "anti-environmental," "anti-climate-action," and a "disinformation rampage," declaring that Breakthrough Institute should be considered "part of the anti-environmental movement." This follows his recent attacks on Greenpeace, Andrew Revkin, and other reputable environmental and climate advocates, as well as a two-year series of ad-hominem attacks on Michael Shellenberger and Ted Nordhaus.

For the record, Breakthrough Institute has a long history of advocating progressive climate and energy policy (see our history). In 2003, Michael and Ted co-founded the Apollo Alliance, the first-ever public campaign calling for a $300 billion federal investment in clean energy. In 2005, former Senator Obama introduced a proposal co-written by Breakthrough to raise fuel efficiency standards, "Healthcare for Hybrids." In 2007, the Obama campaign adopted a $150 billion clean energy investment platform based on Breakthrough's recommendations. And in April 2009, the Obama administration adopted Breakthrough's proposal for a National Energy Education Act. Throughout this time we have continually advocated (see our writing page) a national approach on climate change and clean energy capable of achieving the broad transformations we need.

Continue reading "Joe Romm Tries to Shut Down Climate Bill Debate by Attacking Breakthrough Institute" »

This week the Cape Wind offshore wind farm off the coast of Cape Cod received the necessary permits to go forward after a protracted battle. Here's an article from the Cape Cod Times, and here is the Clean Power Now press release:

Cape Wind Receives "Super Permit" as Final State Approval to Begin Development

The Massachusetts Energy Facilities Siting Board today gave its final approval to Cape Wind, issuing the long awaited "super permit" necessary for development to begin on the clean energy project supported by over 86 percent of Massachusetts residents.

"Today's step in approving Cape Wind is truly a landmark decision for both the Commonwealth and the nation," said Barbara Hill, executive director of Clean Power Now. "Massachusetts can now be called the leader in clean energy."

The super permit issued by the Energy Facilities Siting Board effectively rolls up all nine state and local permits related to the electric cables into one 'composite certificate'.

"Cape Wind will not only establish Massachusetts as a national leader in working to end global warming by eliminating a staggering 730,000 tons of carbon dioxide emissions," said Captain Richard Elrick, President of Clean Power Now's Board of Directors; "it will also serve as a springboard for the creation of thousands of offshore wind industry jobs at a critical time when new jobs are desperately needed to help rebuild our economy."

Clean Power Now is a non-profit grassroots organization based in Hyannis, Massachusetts with over 12,000 members committed to viable renewable energy projects and policies such as the Cape Wind project.

"If Waxman-Markey can't slow down the coal industry -- the single biggest source of greenhouse gas emissions in the world -- today's green celebrations will be just as unsustainable as the legislation itself."

--Bryan Walsh, Time

If all foreign offset provisions in the Waxman-Markey climate bill are used, the cap and trade regime would spend nearly three times more money overseas for carbon offset programs than it would invest in home-grown clean energy industries, technologies, and job creation.

Last week, our analysis showed that Waxman-Markey would, on average, invest between $6 to 9 billion annually in clean energy technology and energy efficiency between 2012-2025. These funds would be raised by auctioning a cumulative total of 8.4 billion emission allowances. This stands is contrast to the $41 billion in allowances that would be given to polluters each year, and it is far less than the $15 billion President Obama has promised for clean energy R&D.

But how do these clean energy investments stack up against Waxman-Markey's spending on international offsets? The bill would allow polluting firms in the U.S. to finance emissions reductions overseas instead of reducing their own global warming pollution. The number of U.S. emissions that could be covered by foreign offsets every year is one billion tons, however, if too few domestic offsets are available, this number could rise to 1.5 billion tons. Breakthrough Institute analysis shows this could allow U.S. emissions to rise through 2030.

If all 1.5 billion foreign offset provisions are used each year between 2012-2025, this adds up to a cumulative total of 21 billion emission allowances. That's 2.5 times times the allowances provided for clean energy during that period (8.4 billion). The table below compare allowances and potential funding under these scenarios, and the graph compares annual funding at an average allowance price of $15.

Continue reading "Climate Bill Analysis, Part 5: Foreign Offsets Receive 2.5 Times More Money than U.S. Clean Energy" »

a guest post by Breakthrough Senior Fellow, Bill Chaloupka

It's the era of the bubble -- a richly narrative metaphor that always promises of the burst. Bubbles are child's play, so they inject a welcome incongruity into grim topics like economic or environmental collapse. A grownup sees the bubble, knows it can't last, and decides whether or not to play with it for a while. To live in a bubble era -- once one sees the bubble for what it is -- is to embrace impermanence, opportunity, and change. Such an era rewards adroitness and self-aware reaction more than certitude and commitment. Nobody would seriously propose a bubble metaphysics. This is what makes Nordhaus and Shellenberger's application of bubble logic to environmental politics so intriguing. After all, the culture greens built was the antithesis of bubble.

There are plenty of bubbles in nature, of course. But the Nature environmentalists defined was singular and coherent. It was something to defend. After its post-Earth Day founding, greens pondered several potential focuses. Some emphasized the quality of human lives. Others acted as the wing of the left that tracked capitalism's pillaging of nature. Even earlier movement predecessors had promoted human transcendence or utopian communities. But "defending Nature" quickly emerged as the focus. It's probably not coincidence that Nature has a storied place in Euro-American thought, ever since the Enlightenment based its argument on a discernible Human Nature, interpreted by Science.

Built on Nature herself, underwritten by Science, green culture pursued that most timeless of public inclinations: moralizing. The movement was founded on a powerful cultural assemblage -- guilty over human disruption of the environment and thus committed to the worship and defense of Nature. This green culture preached -- preached -- limits and sacrifice. The movement touched most everything with moral teachings about how their fellow citizens should live. Food, travel, clothing, energy, illness, death, plants, animals, air, water, land, recreation, spirituality, and more: all were integral to green culture from the start.

Put that way, one sees the burst coming. For starters, the green scope and resolve meant every systemic economic downturn could break a green bubble in the rowdy political arena. Powerful adversaries learned to deploy resentment against greens regularly, even when times were good, pollution thick, and climate warming. This resistance was not insignificant for the "conservative revolution," as a glance at the rural west (with its disproportionate share of electoral votes and U.S. Senate seats) confirms.

Greens understandably greet conservatism's recent troubles as vindication. And perhaps they are right. We now know that Reagan conservatism was a bubble, too (albeit one with a 28 year float at the loftiest levels of global politics) and that an unsettled political landscape remains in its wake. Still, the phrase "green bubble" reminds us that recent successes, including candidate Obama's stump references to energy, might not be the final word in what greens sincerely believed was a page finally turned, and not a bubble at all.

Environmentalists built a culture that successfully gathered and motivated an enormous cadre of green activists and citizens. Organizations sustained themselves for decades. In many college towns, bohemian enclaves, and well-heeled suburbs, greens rule. But movement building is hardly ever the same as mass political transformation. The civil rights movement assembled a remarkable core in the 50s, but needed a cultural turn to reach broader success. Much the same happened (at various times and levels of triumph) with labor, feminists, gays and lesbians, and even conservatives. The groups that prospered found ways to surpass their founders' culture. Often, the turn was from a moralist culture toward politics.

So, what would a green turn look like? Like Madoff investors, these new greens would know that past success is no predictor of future results. Ten percent every year? Get serious bubble boy. The new greens would examine the Reagan bubble's remnants with apprehension. They might recognize Robert Redford's dazed line at the end of The Candidate ("What do we do now?") as among the smartest lines in the history of political cinema, not merely an acknowledgment of his campaign's accidents and manipulations. Alert winners worry. How will the Republicans recompose themselves? What can they do out of power that they couldn't do before? Do they know how terribly they've been wounded? Should we tell them?

The new greens would think seriously about coalition. Most bubbles don't last long enough to form a workable majority that could fully adopt green cultural commitments, so we're back to coalition logic. Who are greens willing to work with? Is that list long enough, or are more needed? How much core doctrine should greens be willing to shelve?

This dilemma is probably not best addressed by the superficial exercises in "framing" or "public relations" favored by most green organizations. What's really at stake is more fundamental. It's the difficulty of squaring the movement's moralizing foundations with its political future.

[Updated 6/18/09 to more clearly explain and depict the potential banking of offsets.]

At the heart of the nearly thousand page long climate change and clean energy bill being debated in the U.S. House of Representatives this week is a "cap and trade" mechanism aimed at limiting greenhouse gas emissions that contribute to global warming.

However, a provision in the bill, known as the American Clean Energy and Security Act (H.R. 2454 or "ACES"), allows polluting firms in the U.S. to finance emissions reductions overseas in lieu of reducing their own global warming pollution and may allow American emissions to continue to rise for up to twenty years, according to new analysis from the Breakthrough Institute.

The provision allows power plants, oil refiners, and other polluters regulated under the bill's cap and trade program to use up to one billion tons of international emissions reductions, or "offsets," to be used instead of reducing their own emissions each year. The bill also allows up to one billion tons of additional offsets each year, sourced from sectors of the U.S. economy that do not fall under the pollution cap, such as forestry and agriculture. If a suitable supply of domestic emissions offsets are unavailable, the limit on the use of international offsets may be raised to 1.5 billion tons annually at the discretion of the Administrator of the U.S. Environmental Protection Agency (EPA).

The extensive use of these international and domestic offsets would effectively allow U.S. firms in capped sectors to continue emitting global warming pollution at levels well above the reductions supposedly driven by the emissions cap. New analysis from the Breakthrough Institute reveals that if fully utilized, the offset provisions in the ACES bill would allow continued business as usual growth in U.S. greenhouse gas emissions until 2030. Emissions in supposedly sectors of the economy supposedly "capped" by ACES could continue to grow at BAU rates until as late as 2037.

Continue reading "Climate Bill Analysis, Part 4: Emissions "Cap" May Let U.S. Emissions Continue to Rise Through 2030" »

Driven by record-high gas prices in the first half of the year and the economic crisis that hit in the later half of the year, United States greenhouse gas emissions plunged by the largest amount in decades, according to preliminary data released today by the U.S. Energy Information Administration.

U.S. greenhouse gas emissions, which drive global climate change, fell to 2.8% in 2008 to 5.8 billion metric tons of carbon dioxide equivalent (CO2-e), the lowest level of emissions in any year since 2000. Total U.S. energy consumption also fell 2.2% in 2008, the EIA reports.

(Sorry for poor image quality, blame the source: the EIA)

Continue reading "U.S. Greenhouse Gas Emissions Plunge in 2008" »

The original discussion draft of Waxman-Markey included a key provision that would have required domestic and international offsets to reduce 1.25 tons of carbon dioxide in order to receive one pollution allowance equivalent to 1 ton of carbon dioxide. In other words, the conversion ratio for offsets to carbon allowances was 1:25 to 1.

However, the full version of Waxman-Markey (introduced on Friday) eliminates this provision for all domestic offsets and for international offsets between 2012-2017. The impact, according to new EPA analysis (download PDF), will be an 11% increase in domestic offset use, an unspecified increase in international offsets use during the first five years of the cap and trade program (2012-2017) and a 7% reduction in the price of all pollution allowances every year. The EPA writes:

The offsets provisions in H.R. 2454 differ from the provisions in the draft bill. Domestic offsets in the introduced bill have a one-to-one turn-in ratio (i.e., only one ton of offsets needs to be turned in for every ton of covered sector emissions being offset). International offsets have a one-to-one turn-in ratio for the first five years of the policy. After the first five years, five international offsets must be turned in for every four tons of covered emissions being offset...

As was shown in EPA's modeling of the draft bill, using a one-to-one turn-in ratio for domestic offsets instead of the five-to-four turn-in ratio that was specified in the draft increases the total purchase and use of domestic offsets by 11%... The effect of that change alone is to lower allowance prices by 7% in each year.

The EPA's initial estimate of allowance prices was $13-17 in 2015 and $17-22 in 2020. The combined impact of allowing additional offsets and the weakening of the 2020 emissions reduction target (now 17% vs. 20% in earlier versions) led the EPA to revise downwards their allowance price estimates by 10% or more (more in the case where up to 1.5 billion tons of international allowances are permitted). That would result in an allowance price estimate of $11.70-$15.30 in 2015 and $15.30 to $19.80 in 2020. In more round terms, call it $12-20 per ton of CO2-equivalent between 2015 and 2020.

Continue reading "Climate Bill Analysis, Part 3: Key offset limit eliminated, increasing domestic offset use, lowering allowance prices" »

Well, there's a lot to quote from out there, with all of the activity surrounding Waxman-Markey. Here's a selection:

"On the drawing board is a vast and unfathomably complex new system, which fosters corruption, raises little revenue and tries to suppress the incentives that are its entire purpose. Otherwise, it all looks quite promising."

--Financial Times op-ed (h/t Prometheus)

"I've been working extensively to fashion a controlled program that Congress can adopt which will preserve coal jobs, create the opportunity for increasing coal production and keep electricity rates in regions like Southwest Virginia affordable. The compromise that I have reached with Chairman Waxman achieves those goals....

First, we provide emission allowances under a cap and trade program to electric utilities for free. That provision will keep electricity rates affordable in regions where most of the electricity is coal fired, and Southwest Virginia is certainly such a region. Secondly, we provide two billion tons of offset each year during the life of the program. Those offsets would enable electric utilities like AEP (American Electric Power) to invest in forestry, agriculture and projects like tropical rain forest preservation in order to meet their CO2 reduction requirements under legislation. Therefore, they can comply with the law while continuing to burn coal."

--Congressman Rick Boucher (D-VA), key swing member of the Energy and Commerce Committee and lead negotiator of many of the weakening changes made to the bill over the weekend.

"[M]aking dirty energy more expensive doesn't make any clean energy. Making dirty energy more expensive will only make it relatively cheaper to produce clean energy, it won't make it absolutely cheaper. Meanwhile, folks back home will end up paying more than they have to for dirty energy and they won't necessarily have any more clean energy to show for it. And if they do have any new clean energy to show for it, it'll take a whole lot longer and a whole lot more time, and cost a whole lot more to get it.

I think that there's a more effective and fair way to get what we want. We need to make direct public investments in research and development of cheap and clean energy. Investing on the scale of the Apollo Program or the Manhattan Project is the best way to create clean energy that's both cheap and abundant, and that's what we need to do."

--Congressman John Barrow (D-GA), another swing member of the Energy and Commerce Committee, less than pleased with the bill's investments in clean energy innovation.

"The introduced bill includes significant improvement compared to the discussion draft circulated on March 31st, but some of the changes would reduce its ability to quickly transform our energy system. The legislation would reduce global warming pollution and consumer energy costs more effectively if it guaranteed greater investments in cost effective energy efficiency."

--NRDC letter of support for ACES (scroll down to find the letter).

"Chairmen Waxman and Markey have picked the lock; it's a huge boost for passage of a cap this year. This bill can win not only the support of environmentalists and business, but also the diverse group of regional interests that make up the Congress. It's a watershed agreement."

--Fred Krupp, president of Environmental Defense Fund.

"Despite the best efforts of Chairman Waxman, this bill has been seriously undermined by the lobbying of industries more concerned with profits than the plight of our planet. While science clearly tells us that only dramatic action can prevent global warming and its catastrophic impacts, this bill has fallen prey to political infighting and industry pressure. We cannot support this bill in its current state."

--Greenpeace statement of opposition.

A guest post by David Douglas.
Cross-posted from his Near Walden blog.

One of the common arguments for a cap and trade system for GHG is that it establishes a price for carbon which will drive changes in investment and behavior. However, the current draft of the proposed Waxman-Markey bill (W-M) has introduced a wide range of allowances, offsets, and other mechanisms which may alter the actual price of carbon on a case-by-case basis. So even though there may be a market price for allowances that are traded among large emitters, that price will usually have nothing to do with the price for carbon that is actually paid by an energy consumer. As a result, the system has not created a useful price signal for large sectors of our economy, including US households.

Furthermore, once the European cap and trade system was put in place, there were many cases of energy prices actually rising more than the cost of the corresponding emissions allowances. With the lack of consumer price transparency in W-M, it becomes impossible to to determine if energy price increases are a result of fluctuating emission prices or not. To rectify this I would like to propose the following addition to any proposed US cap and trade legislation:

Consumer Energy Price Transparency Amendment: whenever a consumer (individual or organization) is billed for energy, the bill must explicitly identify the portion of the bill which was used to pay for emissions allowances, and the effective price per ton of CO2e that the amount represents. In cases where the exact amount is difficult to allocate, or that the information is not available at the moment of billing (such as at a gas station), then aggregated averages or estimates based on past time periods are allowable, provided that the sum of allowance charges presented to all consumers is within x% of the actual total.

Originally published at Yale Environment 360

In early May, anxiety among climate activists about the fate of cap-and-trade legislation erupted into a full-throated roar with the release of a scathing open letter by Dr. James Hansen. In it, the NASA scientist called a bill by Representatives Henry Waxman and Ed Markey a "temple of doom," savaging it for being complex, corrupt, and "a minor tweak to business-as-usual." Hansen called for a carbon tax in its place, one that would establish a "substantial and rising price on carbon emissions."

Hansen was right about Waxman-Markey. It will do little to reduce U.S. emissions, will transfer billions to incumbent energy interests in the form of free pollution permits, and will send billions more to timber, agriculture, and other interests, here and abroad, in the form of dubious "offsets." But Hansen's analysis of why climate legislation has gone so terribly off the rails is wrong.

Hansen argues that the problem has to do with the mechanism by which Waxman-Markey would establish a carbon price -- a cap-and-trade system. In this, Hansen is joined by many other greens and economists, who argue that cap-and-trade is a cumbersome and economically inefficient means of establishing a carbon price, one that is particularly vulnerable to manipulation by polluters and politicians.

On the other side of this debate stand many business interests, some prominent climate scientists, and green groups like the Environmental Defense Fund and the Natural Resources Defense Council. They argue that cap-and-trade is a superior approach, because it guarantees certainty of actual emissions reductions, and a more pragmatic one, because it does not require politicians to vote for a new tax on pollution. They say taxes are just as prone to manipulation by politicians and polluters and that simple carbon taxes exist only in the ivory tower equations of academic economists, not in the real, rough-and-tumble world of politics and legislating.

The truth is, however, that neither of these approaches will lead to significant reductions in carbon emissions, and for a basic reason: Both Hansen and those he criticizes focus on pollution regulation and pricing to make fossil fuels more expensive, rather than on innovation to make clean energy cheap. This approach ignores the history of technological breakthroughs, which has primarily been driven by public investment. And public investment in clean energy is what is needed today, because no effort to achieve deep reductions in carbon emissions, domestic or international, will succeed as long as low-carbon energy technologies cost vastly more than current fossil fuel-based energy.

Continue reading "The Flawed Logic of The Cap-and-Trade Debate" »

[Updated 5/22/09: the ACES bill now includes a $10/ton price floor for auctioned pollution permits. The analysis below has been updated to reflect that change in the legislation]

Today, the House Energy and Commerce Committee began markup of the American Clean Energy and Security Act of 2009 (ACES). The bill promises to cap and reduce carbon pollution, create clean energy jobs, and spur technology innovation. Unfortunately, as our analysis of the use of carbon pollution allowances in the ACES bill revealed, the bill is on course to invest very little of the hundreds of billions of dollars in value created by the bill's cap-and-trade program over the coming years towards those objectives.

Most of the allowance value (74 percent) created by the ACES cap and trade program is dedicated to blunting the impact of the carbon price established by the program on industries and consumers (and securing the critical swing votes on the committee representing these entrenched energy and industry interests). In contrast, just 12 percent of the allowance value is dedicated to clean energy investments, broadly defined.

At an average allowance price of $10 to $20 dollars per ton of CO2 between 2012-2025, that would amount to clean energy investments of just $6-12 billion per year, and just $490-980 million for clean energy R&D (see our full analysis of the allowance allocations in ACES for more).

President Obama has repeatedly promised to, "Invest $150 billion over ten years in energy research and development to transition to a clean energy economy" (from WhiteHouse.gov). The President's 2010 Budget Outline specifically dedicated $15 billion per year in new revenue generated by a cap and trade program to this purpose. Yet the bill before us, depending on the allowance value it establishes, would invest just one-fifteenth to one-thirtieth of the $15 billion President Obama has pledged -- and specifically requested from Congress. Furthermore, this new energy R&D spending may amount to just a ten percent increase in current federal energy R&D budgets.

Likewise, the total investments in a new clean energy economy, more broadly defined, are an order of magnitude smaller than proposals advanced by the Breakthrough Institute, Apollo Alliance and others have deemed necessary to drive clean energy innovation, create millions of new energy jobs, and jump-start a prosperous, clean energy economy.

Below the fold, you can see how the clean energy investments made by the ACES bill compare with what a range of proposals and current R&D funding levels...

Continue reading "Climate Bill Analysis, Part 2: Clean Energy R&D Investment May Be 30 Times Smaller than President Obama's Budget" »

By Leigh Ewbank, Breakthrough Generation Fellow

Just one week after it bowed to political pressure and delayed the implementation of a national emissions trading scheme, the Australian Government has announced plans to invest billions of dollars in renewable energy. According to Bloomberg News:

Australia's government will invest A$4.5 billion ($3.4 billion) in the development of infrastructure to generate energy from clean sources such as solar and wind power and to reduce carbon emissions. The government will invest A$2.4 billion in low-emission coal technologies, including funding of A$2 billion for industrial- scale carbon capture and storage projects, according to its annual budget released in Canberra today. The government will invest A$1.6 billion over six years in large-scale solar electricity generation projects, the budget said.

While the Rudd Government's 2009-10 budget is by no means groundbreaking in terms of climate change and energy, it still allocates substantial cash for worthy renewable energy projects. To add much needed renewable energy to the national grid, there is $1.5 billion to build up to four large-scale solar thermal power plants. This is supported by $465 million to establish 'Renewables Australia', a new body to spearhead renewable energy research, development, and deployment in Australia.

Those of us familiar with the Breakthrough Institute will notice familiar themes with these renewable energy initiatives. In addition to the proposal reflecting Breakthrough's longstanding policy prescription for direct government investment in renewable energy, the new agency called Renewables Australia closely resembles the 'renewable energy hubs' that featured in the recent proposal by Breakthrough and Brookings (see 'To Make Clean Energy Cheaper, U.S. Needs Bold Research Push').

There are other significant points to make about the Rudd Government's plans:

1. The Australian Government is beginning to throw off years of strict adherence to neoliberal economic policy that barred direct government investment in building clean energy infrastructure. It's too early to tell, but with any luck the misleading notion of governments 'picking winners' will be put to rest.


2. As friends and foes weaken Prime Minister Rudd's cap-and-trade policy, Breakthrough-style investment measures are being put into practice and have--so far--escaped political opposition. In this case it's possible that government support for both carbon-capture and storage (CCS) technology and renewable energy was the reason for this--effectively neutralizing opposition. For those of you seeking to settle the 'cap-and-trade' v. 'investment' debate, you'll have to wait for another day.

The magnitude of investment the Australian Government will commit to renewable energy is much smaller than Breakthrough recommends for the US, but this type of investment-centered policy represents a step in the right direction. Let's hope that the Obama Administration and Congress secure US leadership in renewable energy by implementing a scaled-up strategy in 2009.

For more on Breakthrough's take on Australia's climate change policy, check out 'Australia Shelves Cap and Trade'.

In our first analysis of the Waxman-Markey bill's allowance allocation, we found it would spend about $9 billion annually on a range of things that could generously be classified as technology innovation. Only $735 million of this would go toward clean energy R&D, an order of magnitude less than the $15 billion consistently promised by Obama and the $30 billion called for by several Nobel laureates and many of the world's top energy experts.

However, this funding level assumed an average price of $15 per allowance from 2012-2025. Some analysts, including Joseph Romm of Climate Progress, expect the bill to maintain a low price of $5-10 per allowance for the first several years, due to the major carbon offset provisions and other factors. If the price was $5 from 2012-2025, the average annual investment in all areas generously classified as energy innovation would be $3 billion, roughly equivalent to current federal energy R&D. This table compares clean energy investments for $5 per ton vs. $15 per ton:

Cross-posted from Prometheus: the Science Policy Blog

[UPDATE] Congressman Rick Boucher (D-VA) helpfully sets the stage for this post (emphasis added):

I've been working extensively to fashion a controlled program that Congress can adopt which will preserve coal jobs, create the opportunity for increasing coal production and keep electricity rates in regions like Southwest Virginia affordable. The compromise that I have reached with Chairman Waxman achieves those goals.

First we provide emission allowances under a cap and trade program to electric utilities for free," Boucher said. "That provision will keep electricity rates affordable in regions where most of the electricity is coal fired, and Southwest Virginia is certainly such a region. Secondly, we provide two billion tons of offset each year during the life of the program. Those offsets would enable electric utilities like AEP (American Electric Power) to invest in forestry, agriculture and projects like tropical rain forest preservation in order to meet their CO2 reduction requirements under legislation. Therefore, they can comply with the law while continuing to burn coal.

[END UPDATE]

The Waxman Markey Bill is a massively complex, sprawling, and confusing piece of legislation (here in PDF). Reading through it I observed the large role of offsets in the legislation and decided to quantify that role.

Continue reading "All About Offsets" »

By Teryn Norris & Jesse Jenkins

The landmark Waxman-Markey 2009 American Clean Energy and Security Act was introduced in the House this afternoon (May 15, download PDF here), and the Breakthrough Institute has performed a preliminary analysis of how it would invest over $1 trillion in cap and trade revenue between 2012-2025. Our key findings for this period include (all numbers are approximate -- download spreadsheet here):

• Polluting industries: 57.3% of allowances would be freely distributed to polluting industries, including 36.7% for the electricity sector, 12.3% for energy-intensive industries, 6.5% for local natural gas distribution companies, and 1.8% for oil refiners
• Direct consumer protection: 16.5% of allowances would be used for direct consumer protection , including 15% for low and moderate-income families and 1.5% to benefit users of home heating oil and propane
• Energy efficiency and clean energy technology: 12.2% of allowances would be used to fund energy efficiency and clean energy technology development and deployment
• Adaptation and technology transfer: 4.7% of allowances would be used for domestic and global climate adaptation and technology transfer
• Workforce development: 0.6% of allowances would be used to fund worker assistance and job training
• Deficit reduction and other: 8.6% of allowances would be used to fund deficit reduction and other public purposes

How much money would these allocations translate into? That depends on the average price for each pollution allowance. The EPA's initial price estimate was $13-22 per allowance between 2015 and 2020, and has since revised that downward by at least 10% (to $12-20 per allowance) as the bill was weakened and additional offsets were permitted. We will assume here an average price of $15 per allowance. In that case, the allocation would look like this (click images to magnify):

Continue reading "Climate Bill Analysis, Part 1: Waxman-Markey Gives Nearly 5 Times More to Polluters than Clean Energy" »

"And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place."

--Senator Dick Durbin, on a local Chicago radio station

As sweeping climate and clean energy legislation is readied for debate in the House Energy and Commerce Committee, details are emerging on the deals and compromises struck between the bill's architects, Congressmen Henry Waxman (D-CA) and Ed Markey (D-MA) and the group of reluctant swing members of the committee who hail largely from states reliant on coal and heavy industry.

The "breakthrough deal" struck between Waxman, Markey and the swing E&C Committee Dems will enable a full subcommittee markup of the American Clean Energy and Security Act (ACES) beginning Thursday and likely proceeding through next week (markup = votes on a series of amendments on the proposed bill followed vote to pass the bill out of (sub)committee). The deal apparently involves a series of concessions that either incrementally weaken the objectives of the bill or give free greenhouse gas pollution permits to utilities and heavy industry in order to blunt the impact of the proposed cap and trade program on these sectors of the economy.

Continue reading "Climate Bill Heading for Markup - Will it Invest in a Clean, Prosperous Energy Economy?" »

Download:

• Overview


• Policy Recommendations Brief

One of the most often-repeated assumptions in the climate policy debate is that cap and trade, the preferred mechanism for reducing greenhouse gas emissions, worked for SO2 and acid rain, so it will work for GHGs. Sounds good. Until you take a second to think about the comparison.

Dealing with GHGs is a challenge of an order of magnitude greater scale and complexity. To see why, see the two graphics below:

First, here's a graphical representation of the Acid Rain cap and trade challenge:

Below the fold, you'll see a graphic representation of the global flow of greenhouse gas emissions, the challenge we have to deal with to avert potentially catastrophic climate change...

Continue reading "Cap and Trade Worked for Acid Rain, Why Not for Climate Change?" »

Results of a Rasmussen poll asking voters to identify (between the three options above) what cap and trade policy has to do with (correct answer: a regulation on greenhouse gas emissions causing global warming, aka "The environment"). Graphic via Andrew Sullivan.

Much ink was spilled last week around the release of the banks' stress test, and the reaction was largely negative. In case you missed the debate -- or if you're still looking for clarity -- here are a few key readings:

"Grading the Banks' Stress Test," NYT Room for Debate

"Stress Tests & the Nationalization We Got," Simon Johnson and James Kwak, Baseline Scenario

"Stressing the Positive," Paul Krugman, NYT

"We Can't Subsidize the Banks Forever", Matthew Richardson and Nouriel Roubini, Wall Street Journal

"Background on the Stress Tests," Dean Baker, American Prospect

But very few offered as comprehensive an analysis as Nouriel Roubini at RGE Monitor. For those still trying to make sense of these tests, see his take below (for the full version you need a free account at RGE):

Continue reading "Ten Reasons why the Stress Test Wasn't Stressful" »

Download the PDF here.

Stream it directly from the ABC News Australia site, or download the mp3 here (particularly if you're a Mac/Linux user).

From Peter Mares at ABC Australia National Radio:

"This week, Prime Minister Kevin Rudd announced changes to the Australian federal government's planned emissions trading scheme, postponing the start date, increasing the compensation for big polluters and promising deeper cuts to Australia's greenhouse gases (with the proviso that the rest of the world does the right thing). The result is a scheme that's both greener and browner - if such a thing were possible. But as we examine the pros and the cons of the decision, some argue it's all pointless anyway. Climate change sceptics dispute the need for any reductions at all; then there's the critique from sections of the environmental movement that an emissions trading scheme is like rearranging deckchairs on the Titantic: far too little, far too late. On the program today, we're going to hear the case for state intervention - the idea of a Marshall Plan for alternative energy in which public money is used to solve the global warming problem."

See more on the Breakthrough's take on this issue here: Australia Shelves Cap and Trade Until 2011.

President Obama and the Department of Energy are launching a new energy education initiative, very similar to the National Energy Education Act recommendations advanced by the Breakthrough Institute beginning in June 2008 (see recent post here). Today, the Department of Energy released official FY 2010 budget documents that start to flesh out what this new program will look like. It appears the program will receive $115 million in funding, if the President's budget request is implemented.

Here's the description of the program from the new 'Budget Highlights' document available here (pdf):

RE-ENERGYSE (REgaining our ENERGY Science and Engineering Edge)

The Department will launch a comprehensive K-20+ science and engineering initiative, funded at $115 million in FY 2010, to educate thousands of students at all levels in the fields contributing to the fundamental understanding of energy science and engineering systems. This initiative, which complements the Department's other education efforts, will provide graduate research fellowships in scientific and technical fields that advance the Department's energy mission; provide training grants to universities that establish multidisciplinary research and education programs related to clean energy; support universities that dramatically expand energy-related research opportunities for undergraduates; build partnerships between community colleges and different segments of the clean tech industry to develop customized curriculum for "green collar" jobs; and increase public awareness, particularly among young people, about the role that science and technology can play in responsible environmental stewardship.

Continue reading "DOE Budget Fleshes out Obama Energy Education Initiative" »

To the traveler, it may appear that a given stretch of forest or grassland or high steppe exists just as it has for thousands of years, untouched and in a pristine state, sculpted only by the hand of mother nature. Chances are, the traveler is dead wrong.

Erle Ellis, an Associate Professor at the University of Maryland's Department of Geography and Environmental Systems, wants you to understand this. In fact, he argues that understanding this is absolutely essential to understanding man's place on what so many like to lovingly refer to as "spaceship earth".

Ellis believes humans have been "interfering" in the development of the Earth and its biosphere for far longer than we give ourselves credit for. The danger of these prelapsarian narratives, as we at Breakthrough have argued in the past, is that we fail to see our own proper place in the greater scheme of world development.

In his latest op-ed in Wired magazine, Ellis argues bluntly that Nature -- and the idea that there exists a place untouched by Man, the John Muir wilderness where the River Runs Through It but little else -- is long gone.

Nature is gone. It was gone before you were born, before your parents were born, before the pilgrims arrived, before the pyramids were built. You are living on a used planet.

If this bothers you, get over it. We now live in the Anthropocene -- a geological epoch in which Earth's atmosphere, lithosphere and biosphere are shaped primarily by human forces.

Nature is, as he puts it, a back-seat driver, annoying us with natural disasters, those pesky laws of physics and the ultimate limits of certain resources; but in no position to "take the wheel".

Who took care of the sabre-toothed tiger? It wasn't the Ice Age. The wooly mammoth and the giant sloth? Man and man again.

The species that humans eliminated were keystone species whose lifestyles, like those of elephants in Africa today, tended to profoundly shape and sustain ecosystem form and function by their feeding habits. ...

And what of the wild forests of Amazonia and North America that we think of as pristine? Think again. The second line of evidence -- from archaeology, paleo-ecology and even epidemiology -- that humans lived all over these lands is growing. Man burned down the forests millenniums before Columbus, first to enhance hunting for the wild species attracted to the regrowth, and later for agriculture....

So there you have it: Ours is a used planet. Thanks to us, Earth has become warmer, less forested and less biodiverse for millenniums.

So what now? First of all, we've got to stop trying to save the planet. For better or for worse, nature has long been what we have made it, and what we will make it.

And it's time for a "postnatural" environmentalism. Postnaturalism is not about recycling your garbage, it is about making something good out of grandpa's garbage and leaving the very best garbage for your grandchildren. Postnaturalism means loving and embracing our human nature, the nature we have created to feed ourselves, the nature we live in. What good is environmentalism if it makes you depressed about the future?

This is about recognizing that our farms, and even our backyards and cities, are the most important wildlife refuges in the world and should be managed as such. We can keep people out of places we want to think of as wild, but these places will still be changing because of global warming and the alien species we introduce without even trying.

If we want these places to look like they did before us, we will have to constantly recreate them. It will be a huge job for us humans to keep nature "wild." ...

Don't like it? Stop trashing it!

Use renewable energy. Clean it up. Repair it. Get to work. There is plenty more mileage left in this spaceship Earth. Think about that while enjoying a trip to your local zoo or arboretum -- the most biodiverse places that ever existed on Earth.

Ellis is the director of the Laboratory for Anthropogenic Landscape Ecology, and anyone who cares to visit his website will discover his fascination for what he calls the planet's anthropogenic biomes, wherein Ellis divides the world's surface based on regional characteristics but also based on the interaction humans have had with their natural environments.

Read the full Wired magazine article here.

Bjorn Lomborg wants to make clean energy cheap. Unfortunately, the author of The Skeptical Environmentalist and Cool It doesn't seem to understand that making clean energy cheap is about much more than R&D.

In an interview on Wednesday with the San Francisco Examiner's Thomas Fuller, Lomborg says:

"I love this thought--it comes from the Breakthrough Institute. Basically, the idea is that everyone seems to be trying to make fossil fuels so expensive that we won't use them. But that's never going to happen. So why don't we try to make green energy so cheap that everyone will want to use it?"

He then argues, "We should spend vastly more on research and development."

Lomborg get's that part right. As we've long argued, today's paltry investments in clean energy R&D -- from both public and private sectors alike -- is woefully inadequate to the energy innovation imperative we face today. With a broad expert consensus making the case and politicians from President Obama to Republican Senator Lisa Murkowski (R-AK) calling for more public investment in clean energy R&D, we seem to be approaching the political 'critical mass' necessary for real change on that front.

But for Lomborg, clean energy R&D is something you do instead of deploying clean energy technology available today, and that's where we part ways with "the Skeptical Environmentalist."

What Lomborg apparently doesn't understand is that efforts to truly "make green energy so cheap that everyone will want to use it" will necessarily involve major direct public investments to spur the rapid deployment of emerging clean energy technologies. Far from something that just occurs in the lab, the innovation process extends well beyond R&D.

Continue reading "Bjorn Lomborg Wants to Make Clean Energy Cheap, Doesn't Know How" »

In this week's New Republic, Ted and Michael argue that the green bubble has popped -- and that's a good thing. Characterized by both fear of the apocalypse and the desire for transcendence, the green cultural moment that began with "An Inconvenient Truth" in 2006 and ended in the Great Recession of 2009 carried in it a dark, anti-modern impulse that liberals and progressives need to abandon if we are to create a politics grounded in prosperity, freedom, democracy.

Sometime after the release of An Inconvenient Truth in 2006, environmentalism crossed from political movement to cultural moment. Fortune 500 companies pledged to go carbon neutral. Seemingly every magazine in the country, including Sports Illustrated, released a special green issue. Paris dimmed the lights on the Eiffel Tower. Solar investments became hot, even for oil companies. Evangelical ministers preached the gospel of "creation care." Even archconservative Newt Gingrich published a book demanding action on global warming.

Green had moved beyond politics. Gestures that were once mundane--bringing your own grocery bags to the store, shopping for secondhand clothes, taking the subway--were suddenly infused with grand significance. Actions like screwing in light bulbs, inflating tires, and weatherizing windows gained fresh urgency. A new generation of urban hipsters, led by Colin Beavan, a charismatic writer in Manhattan who had branded himself "No Impact Man," proselytized the virtues of downscaling--dumpster-diving, thrift-store shopping, and trading in one's beater car for a beater bike--while suburban matrons proudly clutched copies of Michael Pollan's In Defense of Food and came to see the purchase of each $4 heirloom tomato at the farmer's market as an act of virtue.

For those caught up in the moment, the future seemed to promise both apocalypse and transcendence in roughly equal measure. The New York Times and San Francisco magazine ran long feature stories on the uptick of upper-middle- class professionals who worried to their therapists about polar bears or who dug through the trash cans of co-workers to recycle plastic bottles, as though suffering from a kind of eco-OCD. At the same time, folks like Pollan and Beavan provided a vision of green living that seemed to offer not just a smaller carbon footprint but a better life. Amid the fear was the hope that the ecological crisis would bring us together and make us happier.

And then, almost as quickly as it had inflated, the green bubble burst.

Read the rest here

Geoengineering is the idea that we as humans can somehow "hack the planet" and to control (i.e. engineer) climate systems on a large-scale and counteract the potentially disastrous impacts of global climate change. Once considered the realm of kooks, crackpots and science fiction writers, the idea was given a recent push towards legitimacy when none other than John Holdren, the White House's science advisor, mentioned that no option, no matter how farfetched, is off the table as far as climate change was concerned.

Holdren later clarified that this was only his own personal opinion and not that of the current administration, but when Obama's science chief admits to considering something it does add a note of credibility to the argument.

Breakthrough Senior Fellow, Roger Pielke Jr., was recently asked by Seed magazine to throw in his own two cents on the issue. Along with four other writers, scientists and environmental advocates, Pielke had this to say:

Writing in Nature last December, Dan Sarewitz and Dick Nelson offer three criteria by which to distinguish "problems amenable to technological fixes from those that are not." Here I apply these criteria to the technology of geo-engineering the climate system, defined by the American Meteorological Society as an effort to "deliberately manipulate large-scale physical, chemical, or biological aspects of the climate system to counteract the climate effects of increasing greenhouse gas emissions." Examples of geo-engineering thus include injecting aerosols into the stratosphere or seeding the ocean with iron, but would not include capturing carbon dioxide from coal plants or the ambient air.

Geo-engineering falls well short of all three of the criteria that Sarewitz/Nelson present as guidelines for when to employ a technological fix."

(read Pielke's response in full here)

Continue reading "The (Dangerous?) Allure of Geo-engineering" »

As we predicted back in March, Cap and Trade is going under Down Undah. Several outlets are reporting that Australian Prime Minister Kevin Rudd has promised to shelve the implementation of his proposed cap and trade system until 2011 in an apparent effort to quell concerns that the carbon pricing plan will impact the Aussie economy and shore up support for the controversial proposal in the testy Australian Senate.

To date, Rudd and his center-left Labor Party have already offered numerous industry-friendly concessions, including free allowances for major polluters as part of a so-called "global recession buffer." It wasn't enough to find the necessary votes, so today, Rudd announced even more concessions, including: more polluter giveaways; a delayed start for the program's cap and trade scheme, which won't go into effect until July 2011; and a fixed price for carbon emissions permits of just $10 (AUS) per ton of CO2 for the first full year of the program after that (through July 2012).

Continue reading "Australia Shelves Cap and Trade" »

Read more in Slate.

Download the PDF here.

Two polls released this week are being touted as evidence that the American public both wants the government to regulate carbon emissions and is willing to pay higher energy prices in return. Joe Romm over at Climate Progress concludes:

The public seems to have absorbed the Republican arguments and not been persuaded....Americans appear to fully understand the worst-case consequences of what they are supporting. Imagine how the polling will ultimately turn out when President Obama and his team actually launches an all out messaging blitz on energy and climate action, with a tax cut for the poor and middle class, with aggressive strategies to lower their energy bills and create green clean energy jobs, and with a clear message of the cost to Americans of inaction (bold in original).

For a slightly more restrained interpretation that nonetheless still reaches the same conclusion, the Union of Concerned Scientists just issued a press release entitled "Polls Show Opposition Message on Climate and Energy Legislation is Failing" and which leads with this statement:

A majority of those surveyed support climate and energy legislation--even if it would increase energy costs. Economic scare tactics from opponents of climate and energy legislation are failing to undermine public support for addressing global warming, according to two recent national polls.

To the credit of the UCS, their attention-grabbing lead is followed a straight-forward presentation of the poll questions and a reference to their own analysis that suggests that combating climate change and building a strong clean energy economy can be accomplished without raising consumer prices.

Yet these interpretations of the new polls are flat out wrong. In fact, they confirm the trends that we've seen in polls for the past few months about climate change: the American public supports government investment in clean energy technology more than it supports regulating or pricing carbon. The NBC/Wall Street Journal poll shows that more than two-thirds (68%) of the respondents approve of Obama's plan to spend $120 billion over the next decade to develop clean-energy technology, while only 58% approve of the proposal to charge fees to companies that emit greenhouse gases, even if the revenue is used for tax cuts. When asked the same question but only mentioning the possibility of higher utility bills and not tax cuts, the approval response goes down to 53%.

And while the ABC News/Washington Post poll does show that a strong majority supports action by the federal government to regulate greenhouse gases (75%), it also shows that 77% are concerned that such regulation would "significantly raise the prices of things you have to pay for". No reputable pollster would interpret these two separate questions to mean that the American public has internalized the reality of cost increases resulting from the regulation of carbon. Instead, these results show that people are highly concerned about the costs of any potential regulation. If the poll had re-asked the cap and trade question after raising the issue of cost, support would have gone down. And when real cost estimates are included in the questions, as they were in the Stanford poll cited below, support would have dropped even more.

Other recent polls that have explore more in-depth the issues of climate change and energy prices have come to far different conclusions. For instance, Public Agenda recently reported that while 89% percent of Americans are worried about increases in the costs of gas and fuel, only 71% are worried about global warming. Within these responses, only 32% worry a lot about global warming while 57% worry a lot about energy prices, Michael discussed in this post.

In addition, an ABC News/Planet Green/Stanford poll from July 2008 explicitly asked respondents if they supported cap and trade (without mentioning costs to the consumer), if they supported it if it meant a $10/month increase in their electrical bill, and if it meant a $25/month increase in their electrical bill. Initial support started at 59%, and dropped to 57% and then 47% when costs were explicitly included.

In the context of the current debate in Congress over climate change legislation, this slim majority of Americans who support regulation on carbon emissions (in whatever form) is a bad omen for those who want to see meaningful action on climate change. Support will likely decrease as this lengthy and heated Congressional debate drags on, especially if the debate stays centered on the costs of climate action.

A new strategy that places the politically popular clean energy investments at the heart of the agenda (and the policy) could fundamentally change this dynamic. It's interesting to note that there is no polling on support for cap and trade where the revenue is reinvested in clean energy technology innovations. That's because climate advocates are not advancing this agenda in any concerted way to date. But our repeated analysis of polling trends as well as the broad support for public investments shown in these recent polls argues that this agenda would have powerful political appeal. Instead of arguing about costs of action, climate advocates will advance a proactive agenda of job creation, clean energy technology development and direct investments to spur a clean, prosperous energy economy. Rather than cast themselves as defenders of our economy, opponents of this agenda will be forced to take a stand that is anti-jobs, anti-economic growth and anti-technology. And that's an argument we can win.

James Kwak on Baseline Scenario says that Wall Street exercises power over Geithner through cultural capital, not financial capital. In other words, Geithner is ideologically corrupted, not monetarily so. Referring to that long New York Times piece from Monday on Geithner, Kwak writes that:

he has internalized a worldview in which Wall Street is the central pillar of the American economy, the health of the economy depends on the health of a few major Wall Street banks, the importance of those banks justifies virtually any measures to protect them in their current form, large taxpayer subsidies to banks (and to bankers) are a necessary cost of those measures - and anyone who doesn't understand these principles is a simple populist who just doesn't understand the way the world really works.

But the best part of Kwak's long post, which begins by referencing the late great French sociologist Pierre Bourdieu's work on "distinction" -- cultural status -- is this extraordinary dispatch from a former NY Fed employee who sat in on meetings with Geithner:

The other thing I got from witnessing these meetings is that, in support of the cognitive capture theory (as opposed to the corruption theory), given that he was such a careful and deliberative thinker, he seemed to have a good deal of integrity. He respected people's opinions and considered them carefully, and he gave credit where it was due. He seemed to follow a Gandhian leadership philosophy: lead by walking behind."