U.S. Senator Barbara Boxer (D-CA), Chairman of the Senate Environment and Public Works Committee, will be joined by the heads of America’s leading environmental organizations to discuss the need for action to address the challenge of global warming.Participants
- Sen. Barbara Boxer (D-CA), Chairman, Environment and Public Works Committee
- Frances Beinecke, President, Natural Resources Defense Council
- Carl Pope, Executive Director, Sierra Club
- Gene Karpinski, President, League of Conservation Voters
- Kevin Knobloch, President, Union of Concerned Scientists
Also participating will be representatives of Environment America, Environmental Defense, Center for International Law, Clean Water Action, National Wildlife Federation, Ocean Conservancy, Pew Environment Group, Physicians for Social Responsibility, and The Wilderness Society.
E&E News’s Darren Samuelson reports in a pair of stories that the House of Representatives is moving forward to introduce companion legislation to the Lieberman-Warner Climate Security Act (S. 2191), the cap-and-trade legislation wending its way through the Senate. Rep. John Dingell (D-Mich.), whose Energy and Commerce Committee has jurisdiction, told steel industry officials last week that he plans “to release one or more draft global warming bills for comment by mid-April.”Samuelson also reported that Rep. Markey, chair of the Select Committee on Energy Independence and Global Warming and a strong ally of Speaker Pelosi, has been meeting with “alternative energy producers, labor groups, financial market officials and industry representatives” to craft legislation.
Rep. Markey is preparing to send a report directly to Pelosi with proposals to address climate change or offer amendments when the House Energy and Commerce Committee holds a markup on a major piece of climate legislation, sources on and off Capitol Hill said today.
Markey said: “I think you should do the best you can each year. I do. And we have a real chance this year. If there’s an epiphany that occurred at the White House, then there we are with a chance to make history.”
The Sierra Club, until today, has stayed on the sidelines during the contretemps over Lieberman-Warner (S. 2191) fueled by a campaign by Friends of the Earth asking Sen. Barbara Boxer (D-Calif.) to “fix or ditch” the bill. The 1.3 million member organization has now made its position clear.
In an essay posted to Grist’s Gristmill blog this afternoon, Sierra Club executive director Carl Pope delineates clear principles for endorsing climate legislation, all of which Lieberman-Warner currently fails to satisfy:
- Reductions in total emissions on the order of 80 percent by 2050 and 20 percent by 2020
- All allowances should be auctioned or otherwise used to benefit the public
- Revenue should fund “highest-value solutions”, not coal or nuclear energy
- Ensure a just transition for workers, protect vulnerable groups, and help induce world action
He compares the current political situation to the one that led to the Clean Air Act in 1971, saying that “Maine Sen. Edmund Muskie, fearing that industry would block him on other points, acceded” to the industry insistence to grandfather old plants, and that environmentalists like the 25-year-old Pope went along.He then responds to Sen. Barbara Boxer and advocates of pushing a climate bill this year hell or high water:
Fast-forward to present day: the carbon industries are lobbying to get a deal done this year that would give away carbon permits free of charge to existing polluters – bribing the sluggish, and slowing down innovation. And politicians are telling us that while it would be better to auction these permits and make polluters pay for putting carbon dioxide into our atmosphere, creating that market unfortunately gets in the way of the politics. We are being urged to compromise – to put a system in place quickly, even if it is the wrong system.
The campaign, which challenges Senate Democrats to change Lieberman-Warner’s emissions targets and allowance distribution provisions (S. 2191) to reflect the platforms of the presidential candidates of their party, has drawn fire from Sen. Boxer (D-Calif.) and Environmental Defense as well as a passionate letter of support from Greenpeace.Meanwhile, American Prospect correspondent (and Tapped co-founder) Chris Mooney challenges the Democratic platforms of 100% auction and 80% reduction in emissions by 2050 in This Will Mean the World to Us (sub. req.):
Many Democratic campaigns, responding to their environmental base, are currently outlining cap-and-trade regimes featuring a highly ambitious 100 percent auction process for the initial pollution allowances or permits, with the proceeds going to other needed public policies, such as investment in the clean-energy technologies that must ultimately supplant fossil fuels. When it comes to specifying precise reductions, meanwhile, the campaigns generally seem to agree that we need something like bringing emissions back to 1990 levels by 2020 and decreasing them by 80 percent by 2050, through a cap that becomes progressively more stringent.
An 80 percent reduction by 2050 does indeed square with what scientists think would be necessary to avoid the worst climate impacts—most notably, the loss of large bodies of land-based ice currently perched atop Greenland and West Antarctica, which, upon sliding into the ocean, would drive catastrophic sea-level rise. It’s one thing to outline a policy in the abstract, however, and quite another to get it through the next Congress. As one climate policy insider says, “The environmental community has a tendency to run their leaders off a plank; that’s what they’re setting up right now with this 80 percent reduction by 2050.”
The more moderate approach of the Lieberman-Warner bill is to reduce capped emissions (and not all emissions are included) by 70 percent by 2050. Lieberman-Warner is also pragmatic in another way: It does not set up a 100 percent auction for emissions allowances, a system that major emitters oppose. They think they should be granted allowances gratis at the outset (or as climate experts say, there should be “grandfathering”). Under Lieberman-Warner, just 24 percent of allowances would be auctioned off initially, though the percentage would increase over time. It’s far easier to get buy-in from industry in this way, and although Lieberman-Warner may have a tough time passing both houses of Congress before the election (or surviving a possible presidential veto), it may be precisely the type of bill that can sail through in 2009.
What’s achievable in climate policy seems to be changing all the time, but still we mustn’t shoot the moon. Consider the perspective of Tim Profeta, current director of Duke’s Nicholas Institute, who previously served as a chief architect of the McCain-Lieberman Climate Stewardship Act, which failed by a 55-to-43 Senate vote in 2003. “As somebody who fought for a freeze of emissions in the 2003 Congress and was told it was too aggressive, it is hard for me to believe where we are now,” Profeta says. “The current movement to require 100 percent auctions and even deeper cuts faces strong political opposition from emitters, many of whom have good arguments about what is economically feasible for their companies. I fear that we might pass up the opportunity for real action now—when it is essential to have the U.S. begin to reduce its emissions—because someadvocatescontinue to shift the objectives to stricter and stricter limits as the debate proceeds.” It’s fine for Democratic candidates, at the moment, to answer the call of environmental groups—the Sierra Club, for instance, has criticized Lieberman-Warner—and present highly ambitious cap-and-trade proposals. But after the election, the new president will need to be flexible and focus on getting a workable bill passed. It can be strengthened later as more science comes in—2050 is, after all, still far away—but we must at least begin ratcheting down emissions now.
Last Thursday, Darren Samuelson of E&E News interviewed Sen. Barbara Boxer (D-Calif.) and an NRDC representative in response to the Friends of the Earth campaign to “fix or ditch” the Lieberman-Warner cap-and-trade bill (S. 2191). In its campaign, Friends of the Earth challenged Boxer for supporting Lieberman-Warner’s high degree of emitter giveaways and subsidies and its target of 60% reductions from 1990 levels of greenhouses by 2050, although the Democratic presidential candidates are calling for 100% auction and 80% by 2050.Sen. Barbara Boxer (D-Calif.):
Their logic doesn’t hold up. What we need to do is not waste time. If we can get a strong bill signed into law, we should get it. And if we can’t, we shouldn’t. . . . They’re sort of the defeatist group out there. They’ve been defeatists from day one. And it’s unfortunate. They’re isolated among the environmental groups.Boxer went on to emphasize the importance of holding senators accountable on global warming through test votes.
Julia Bovey, NRDC:
We do not agree with Friends of the Earth. We are not willing to give up the fight. We believe the Lieberman-Warner bill as passed out of committee is a very strong start. That doesn’t mean there isn’t room for improvement.
NRDC had previously described the bill as “a strong start”.
Brent Blackwelder, Friends of the Earth president, responded:
Far from being defeatists, we’re being realists. We’re focusing on what the scientists tell us has to be done to solve global warming. It’s not acceptable to pass a bill that falls short of the science. It’s not acceptable to pass a bill that gives $1 trillion to polluters.
On Monday, Environmental Defense Climate & Air director Mark McLeod sent an email to several Senate offices excoriating Friends of the Earth for placing L-W and Boxer “under attack”, claiming that opposition in the “liberal blogosphere” to Lieberman-Warner or the passage of any climate bill in this session “will become orthodoxy if we do not present a counterview from respected pro-environment voices.”
He characterized Friends of the Earth as “small and fairly isolated” in contrast to ED and “many other major environmental groups” who “are in favor of moving forward to get a strong bill like Lieberman-Warner,” saying also that Friends of the Earth is calling for “unrealistic dramatic changes.”
The full text of McLeod’s email is after the jump.
From: Mark MacLeod
Cc: Elizabeth Thompson
Sent: Mon Feb 04 XXXXXXXX 2008
Subject: Need your help challenging attacks on Chairman Boxer, the EPW Committee, and climate bill
Senator Boxer and the Lieberman-Warner Climate Security Act have come under attack in ads placed on liberal blogs. Some blog posts have picked up on the claims in these ads (see http://www.dailykos.com/storyonly/2008/1/31/183620/707). Environmental Defense has been defending the Lieberman-Warner Climate Security Act and the work of the EPW committee on these blogs and through posts on our own blog http://www.climate411.org, but we feel at this point it would be very helpful to have members of the Committee voice their support for Sen. Boxer, the committee, and the LWCSA. One idea we have would be to run ads on the blog sites and we would be happy to work with your office to arrange for filming of a short statement of support. Other ideas include a joint letter from the members of the committee who voted for the bill. The more members that would participate – the stronger the message (further details below).
Please let us know if you would consider participating in such an ad or taking other action. Time is of the essence. FYI – I am sending this message to all the offices that voted for the bill as well as other prominent supporters
Friends of the Earth (FOE) is running ads against the Lieberman-Warner Climate Security Act, calling for killing the bill (if unrealistic dramatic changes are not made).
– There are growing calls in the liberal blogosphere for opposition to the bill; and a general push against passing any climate bill in this Congress. This position has NOT yet solidified, but will become orthodoxy if we do not present a counterview from respected pro-environment voices.
– A major DailyKos contributor today (2/1/08) ran a full-throat expression of the FOE point view, directly attacking Sen. Boxer for wanting to move forward and for objecting to the FOE ads.
– Environmental Defense and many other major environmental groups (Friends of the Earth is small and fairly isolated) are in favor of moving forward to get a strong bill like Lieberman-Warner. We may differ on details and areas which require improvement, but are still pushing for action in this Congress.
– For scientific reasons, and to take advantage of political momentum (which should not be taken for granted), we think it is important to make a strong start on global warming by passing a bill like Lieberman-Warner this year. If there are more environmental supporters in Congress in the future, we can improve it, as we did the Clean Air Act and other important first steps. Delay only makes the solution harder and more expensive.
– We need a strong voices to stand up for Sen. Boxer, the committee, the LWCSA, and for the importance of acting NOW on climate change. Environmental Defense is interested in running ads featuring that voice on the same blogs where the FOE ad is appearing.
This advertisement is running on environmental and progressive blogs.
After years of ignoring global warming, the U.S. Senate is finally considering legislation to cap greenhouse gas pollution. Unfortunately, the Lieberman-Warner bill being advanced by Senate Democrats lavishes up to $1 trillion on industries responsible for global warming, and in return asks for reduction targets well below what scientists say are necessary. If this is the best Senate Democrats can do, the world is in trouble.
Friends of the Earth Action is leading the fight to either fix, or ditch, Lieberman-Warner, and we need your help.
The good news is that we already have some key allies: the Democratic presidential candidates. They all have plans that make polluters pay for emissions and that seek the carbon reductions called for by science. We think the Senate needs to build on their plans rather than the weak Lieberman-Warner bill, which is modeled on legislation by Senator John McCain.
At this morning’s House Global Warming Committee hearing on Auctions and Revenue Recycling in Cap and Trade, the witnesses presented some of the first Congressional testimony on the economic implications of a greenhouse-emissions cap and trade system such as the one proposed in Lieberman-Warner (S. 2191).A summary of some of the analysis presented in the written testimony:
- Power generators will raise prices the same whether allowances are given away for free or are auctioned, because the price is set by the limitation in supply (the cap)
- Investment in energy efficiency provides greater immediate taxpayer return than technology investment
- Because power generators are free from competition they don’t need any protection through free allowances
- A European Commission analysis found no macroeconomic negative impact of moving their cap-and-trade system to full auction
- Free allocation to load-serving entities is a subsidy to electricity consumption, which leads to an increase in allowance prices and requiring greater decreases from other sectors
- The “virtual tax” a cap-and-trade system imposes can be greatly alleviated if revenues are used to reduce pre-existing taxes
- To fully offset the costs on the electricity sector through free allocation of allowances would cost the government 2.5 to ten times the value of the economic harm to the emitters, depending on whether the free allowances are narrowly targeted (15% of sector allowances) or nationally distributed (65% of sector allowances)
- To fully offset the costs on the poorest 20% of the American public takes about 14% of total revenues of a 100% auction system
Excerpts from the testimony related to the above points are below the jump.
It is tempting to think that, if you make generators pay for the emissions they produce, it will drive electricity prices up, but if you give allowances away for free, it won’t. But it’s not true. The price impact is the same either way. . . As power generators determine the price at which it becomes economic for their plants to produce power, they have to decide whether to expend allowances in order to generate electricity, save those allowances for a time when electricity prices are higher, or sell allowances to other power producers who need to meet their compliance obligations. In any of these three scenarios, the market price of allowances becomes a component of the price of electricity.
While it is important that a federal program also give substantial new financial incentives to develop new clean energy technologies, energy efficiency gives the greatest near term return for the ratepayers.
Peter Zapfel, European Commission Directorate General for Environment:
Because the power generation sector is not exposed to competition from outside the EU, it can fully pass on the value of carbon allowances. Full auctioning should therefore be the rule from 2013 onwards for the power sector.
In order to underpin the energy and climate package of 23 January 2008 the Commission undertook a comprehensive (regulatory) impact assessment including an economic analysis of the effects of auctioning compared to free allocation of allowances. This analysis concluded that the full auctioning of allowances has no negative macroeconomic impact and is in fact preferable to other distribution methods in terms of efficiency of the emissions trading system and the elimination of any undesirable distributional effects of free allocation.
Dallas Burtraw, Senior Fellow, Resources for the Future
Unfortunately, free allocation to load serving entities comes with an important efficiency cost. When electricity customers do not see the increase in retail electricity prices they do not have the incentive to reduce electricity consumption. In the example we modeled it leads to a 15 percent increase in allowance price under the cap and trade program and requires greater emission reductions for the rest of the economy.. . Essentially, the free allocation to electricity customers is a subsidy to electricity consumption that is not received by users of natural gas or transportation fuels or by industry or commerce, except to the degree that they consume electricity.
Like any new regulation, climate policy imposes costs on households and firms and that cost acts like a virtual tax, reducing the real wage of workers . . . one of the most important findings in environmental economics and public finance in the last fifteen years is the recognition that the use of revenue raised through an auction (or an emissions tax), if dedicated to reducing other pre-existing taxes, can reduce this cost substantially. This so-called revenue recycling would have truly dramatic efficiency advantages compared to free distribution.
A key finding is that compensation has a significant opportunity cost, especially if the goal is to achieve full compensation. If the free allocation to achieve compensation is implemented at the federal level, we find the incremental cost of compensating for the last increment of harm in the electricity sector would cost ten times that amount in allowance value. Implemented at the regional/state level, that ratio falls, requiring the use of allowance value equal to about 4.5 times the harm.
Robert Greenstein, Executive Director of Center on Budget and Policy Priorities:
We estimate that a program designed according to the principles laid out later in this testimony, which would fully offset the impact on the poorest 20 percent of people and also provide some relief to many hard-pressed working families in the next 20 percent, could be fully funded with approximately 14 percent of the resources that would be generated by auctioning off all the allowances in a cap-and-trade system.
John Podesta, President and Chief Executive Officer, Center for American Progress, said that the federal government should pay for CCS investment:
Any cap and trade bill should also include an emission performance standard for all new coal-fired facilities equivalent to the best available carbon capture-and-store technology, and the provision of federal funds to help offset additional costs of implementing carbon capture-and-storage technology. Revenues from allowance auctions should pay for these incentives.
A massive switch from coal, oil, natural gas and nuclear power plants to solar power plants could supply 69 percent of the U.S.’s electricity and 35 percent of its total energy by 2050.
A vast area of photovoltaic cells would have to be erected in the Southwest. Excess daytime energy would be stored as compressed air in underground caverns to be tapped during nighttime hours.
Large solar concentrator power plants would be built as well.
A new direct-current power transmission backbone would deliver solar electricity across the country.
But $420 billion in subsidies from 2011 to 2050 would be required to fund the infrastructure and make it cost-competitive.
By way of contrast, the Friends of the Earth analysis finds that Lieberman-Warner (S. 2191) allocates approximately $800 billion in subsidies to the fossil fuel industry, with about $350 billion to subsidize carbon capture and sequestration specifically. About $350 billion is allocated to all sustainable technologies (wind, solar, biomass, geothermal).
Subject: A huge step forward
Our progress on moving global warming legislation through the Environment and Public Works Committee this month and sending it on to the full Senate was a huge step forward for America, and personally, it was one of my proudest accomplishments over my 30 year career in public service.
But we’ve still got many more steps to take over the coming years to fight global warming and save our planet for our kids, our grandkids, and generations to come.
That’s one big reason I’ve decided to run again for the U.S. Senate when my term expires in 2010—and, because we know that I’ll be a top target for the right wing, I’m already preparing for a tough race. . .
As Chairman of the Environment and Public Works Committee, leading the fight against global warming will continue to be my top priority. And, if 2008 goes our way, I may soon be working with a new Democratic President and expanded Democratic majorities in Congress who share our commitment to that fight.
But we’re not going to solve the climate change crisis with just one bill, a better Congress, or a Democratic President. Fighting global warming is going to require many years of focus, dedication, and leadership to see things through. . .
We’ve still got a lot of work to do on fighting global warming, ending the war in Iraq, protecting our environment, defending a woman’s right to choose, and so many other important issues—and I’m going to need you with me every step of the way.
Ed. – the fundraising pitches have been stripped out.
In Bali, EE News reporter Darren Samuelson interviews David G. McIntosh, Sen. Lieberman (I-Conn.)’s counsel and legislative assistant for energy and the environment, about the prospects for Lieberman-Warner (S. 2191) on the Senate floor in 2008.
Before joining Senator Lieberman’s staff in April 2006, McIntosh served briefly as a Maryland assistant attorney general representing the state’s air agency. Before that, he worked at NRDC as a Clean Air Act litigator and regulatory lawyer. After graduating from Harvard Law School in 1998, he clerked for a U.S. District Court judge in Washington, DC before joining the legal and lobbying firm Covington & Burling, for one year. He is not to be confused with former representative David M. McIntosh (R-Ill.), a strong fighter against environmental regulations.
“We could probably predict a half-dozen issues that would be top-line amendment issues,” McIntosh said during an interview at the United Nations’ global warming negotiations in Bali. “Some of them, we have the ability through negotiation and engagement to have those amendments be presented in a way that is not divisive, that does not divide up the votes that would otherwise support passage on the floor.”McIntosh hopes to be able to craft a nuclear title suitable for inclusion in Lieberman-Warner:
McIntosh predicted Senate negotiations over the climate bill from Lieberman and Sen. John Warner (R-Va.) would center foremost on the economic implications tied to creating a first-ever mandatory cap on U.S. greenhouse gas emissions. He also expects a strong push on incentives for nuclear power.
The bill’s lead cosponsors are interested in “seeing if it is possible to craft an amendment or to encourage others on nuclear enegry in ways that’d be seen as targetted and relevant and fitting within the confines of the bill rather than efforts to revive every type of support for nuclear power that anyone has ever thought of.”Sen. Kerry (D-Mass.), the only Senator in Bali, also spoke on Lieberman-Warner:
I can’t tell you precisely when, but we’re committed to having this debate regardless of whether or not we can pass it or where the votes are. We believe it’s an important marker, and we intend to make this part of the debate in the presidential elections of 2008.