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Evaluating Climate and Energy Proposals Under Two Conditions: High and Low Voter Concern May 13, 2010

Posted by Michael Hoexter in Climate Policy, Energy Policy, Sustainable Thinking.
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Senator Kerry has worked very hard this year on crafting a version of a climate and energy bill that might appeal to Senators of both parties (Photo: US Senate)

After months of deliberation, Senators Kerry and Lieberman have introduced the Senate’s version of the climate and energy bill, the American Power Act, that Obama requested from both Houses of Congress last year.  The Senate version has some of the more objectionable cap and trade provisions of the Waxman-Markey/ACES bill altered to remove the giveaway to financial carbon traders by instituting a more regulated cap and dividend system.  The bill shows the influence of Sen. Maria Cantwell and Susan Collins’ CLEAR proposal as well as Jim Hansen’s fee and dividend proposal (and perhaps, who knows, my criticisms of cap and trade here and here).  A good summary of the bill and comparisons to ACES can be found here at Grist.org.

What remains is still not nearly as strong an instrument to stimulate clean energy investment as fixed, ascending fee or tax per tonne on carbon but it, at least in its current unamended form, seems to recognize the danger of outsourcing the setting of the carbon price to an unaccountable market.  The starting price on carbon proposed operates within a trading range in the first year of $12 to $25 per tonne with the floor rising by 3% plus inflation while the ceiling rises 5% plus inflation.  The widening gap between the floor and the ceiling will create a great deal of uncertainty for investors about the exact value of an emissions-reducing investment: that investment will, at least in its carbon component represent a range of values that may be anywhere between a conservative base value to almost three times that value.  The price and the yearly increases involved are also extremely modest representing a price floor of $13.91 plus inflation and a price ceiling of $31.91 five years after the beginning of the program.  This represents at maximum an approximate addition of $.11-$.27/gallon of gas in carbon fees after 5 years which is a relative “flea bite” for users of petroleum.

The American Council for an Energy Efficient Economy finds that the bill will not offer the same level consumer benefits in terms of energy efficiency rebates and programs as did the ACES bill.

Erich Pica of Friends of the Earth warns of the curtailing of the powers of the EPA under the Clean Air Act, which would be superseded for GHGs by the passage of this act.  Many in the environmental movement feel that the expansion of the Clean Air Act by the Supreme Court’s Endangerment finding would allow the EPA via direct regulation to curtail emissions as an emergency measure.  The Kerry-Lieberman bill keeps the EPA in the game as the administrator of warming gas emissions but constrained by the dictates of the bill itself.

The bill focuses on large incumbent stakeholders with ample provisions for coal with CCS and some nuclear power.  A national renewable energy standard is mentioned by not specified in the documents I have seen.

As with the ACES bill, the near term targets are lax with a 17% reduction from 2005 levels targeted by 2020, with steeper reductions required to reach the 2030 goal of 42% and finally to 83% by 2050.

Overall Impression of Kerry Lieberman (So Far)

As Kerry admits in his Grist post, this is not a bill for “true believers” among which he includes himself.  He argues instead that this is a bill tuned to the political realities of the Senate.  The bill in some sense is a hodgepodge of ideas about what Senators think when they think “clean energy” but puts off aggressive moves to push even those ideas (like nuclear energy and coal CCS) until an indeterminate point in the future when these Senators will in all probability be retired from the Senate or dead.  The draft bill does not “push” anybody very hard… there is very little urgency in it.

Most aspects of climate and energy proposals have been “sanded down” in this proposal. The rough edges of the cap and trade instrument have been “filed off”  putting in its place a less objectionable instrument that, at least with its current low price collar and slow rate of ascent in the carbon price, will only slowly stimulate clean energy investments.

To Support or Not to Support?

Stance #1: Unconditional Support

To show support this means calling your Senator, blogging in support of it, commenting on blogs and on the Internet in support of it, organizing demonstrations, etc.  Large environmental and other supporting groups are running TV ads that call for support of KL/ACES as a “Clean Energy Jobs Bill”.   Unconditional support means in the end that you don’t really care so much what happens with the individual provisions of the bill during amendment only that it is a “climate and energy” policy sponsored by people you either trust, want to support, or to whom you want to ingratiate yourself.   For large environmental groups, their organizational logic “defaults to” support of big environmental packages, which they may have had a hand in drafting.  Some people feel that this is a “do or die” bill that must be passed, even if they don’t like provisions in it: they believe that there will be no future opportunities to pass a climate bill in the US.  I don’t see it this way and I don’t offer unconditional support for this bill.

Stance #2: Conditional Support

If you offer your conditional support you would be pressing for one or two provisions to be changed and then the bill would be OK.  There are a lot of luke-warm provisions in it and if you have a particular provision that you feel passionately about, you should write in to your Senator and urge that they change that provision.  A more difficult conditional support stance to have would be to pick multiple elements that need changing.  Conditional support involves enough self-belief to think that you can change the bill by voicing your opinion or being the leader of an organization that already has an activist network.  Conditional support could mean demonstrating, letter writing, blogging, meeting with Senators, etc.  For me, a lot of bill is very weak, so I am not sure if conditional support makes sense.  On the other hand, I need to sit with it longer to see if I feel that as a whole the bill offers progress with perhaps a modification and could be “shed” or be substantially reformed under different political conditions.

Stance #3:  Principled Opposition (in favor of other action)

Demonstrations can have an effect by showing passion, dedication, numbers of activists, and sending a readily identifiable message to policymakers.(Photo: Peter Blanchard)

This means opposing the bill on grounds of insufficiency and as a sell-out to or a reinforcement of the position of the fossil fuel interests.  If you provide a specific bill or action plan as an alternative to what is proposed, I think this can be a productive strategy.  If you are just saying no, never, then this is maybe less productive.  On the other hand if  you can get a lot of “no-nevers”  together and cause a ruckus in public or maybe even online about how insufficient the bill is you will also have an effect, perhaps strengthening the bill.  On the other hand, saying “no never” with no suggestion of a workable alternative, can lead to reactionary stasis, as may happen in certain NIMBY conflicts.

Presidential Support or Lack Thereof

Many unconditional supporters of these bills (ACES or KL) point out that a key ingredient in the success of these or any reform bill is if the President is involved in promoting the bill.  Currently it is not clear that President Obama will make a major push for a climate and energy bill especially one that contains even the suggestion of continuing offshore drilling.  He is able to talk a good game as an aside in many of his speeches but he would need to show a willingness to get combative with opponents to make a difference.  Conditional support by the President (in a behind the scenes manner) in combination with a show of unconditional support publicly, might either improve OR weaken the bill depending on the true commitments of the President.

Positioning the Bill(s) in the Real, Outside-the-Beltway, World

As I am clearly ambivalent about this bill, as are many, I think it makes the most sense to position the bill in the real world outside Washington politics, both psychological/political and Geophysical/Technological to gain a clearer understanding of how inside-the-Beltway political reality can interact with real reality.

KL and Geophysical/Technological Reality

The bill, as was ACES, is a meager and in parts misguided response to the challenges of climate change and energy independence.  It’s goal of 17% reduction of 2005 emissions by 2020 is laughably unambitious (30-35% is doable but would require a WWII style mobilization) and is insufficient in attempting to avoid tipping points and warming below 3 C.

The bill’s economic engine for stimulating low carbon investment creates too much uncertainty for investors and consumers about the carbon-related value of investments while not offering a rapid enough ascension of the carbon price that stimulates decisive movement to low- and zero-carbon within the critical near future.  Its energy efficiency standards are weak, while energy efficiency could provide a lot of early reductions in emissions; net or near net-zero buildings should be the national building standard for new buildings by 2020, representing already a small cost increment in Europe over conventional construction.

Kerry has promised “realer” offsets but the offset mechanism has had a checkered history and functions as a release valve in achieving emissions reductions goals.

Technologically, the bill ignores most of the means of getting off oil, including electrification of rail transport as well as encourages more offshore oil drilling.  The bill operates within the “economic fantasy” that domestically produced oil will make a significant difference in oil prices or supply in the US, when it will simply go onto the world market.

The bill ignores the rapid deployment of renewable energy which is the fastest way to deploy low-carbon generation.  It also doesn’t explicitly offer a research, test and certification program for breeder reactors and innovations in the nuclear fuel cycle.  It passes over an aggressive large-scale renewables plan in favor of courting votes from coal-state Senators by giving the never-likely-to-succeed coal CCS technology (working against entropy to compress and inject waste carbon dioxide from coal combustion into the earth, permanently).  It doesn’t contain a Big Solar Plan or a Big Wind Plan, within which 10′s of GW of generators can be put on line within a few years.

The most interesting but vague part of the bill are the “fast mitigation” solutions involving black carbon and super-GHGs which probably could be made very stringent given that they would evoke very little resistance from Republicans.

In general the bill seems to be using a political principle of compromise with officeholders, many of whom don’t “believe in” global warming, rather than technological, social scientific and natural scientific principles for determining which technologies it will support and how aggressively it will support them.  The bill then fails if matched with the task at hand.

Modifier:  “Reformability” of the Bill

Even if one believes that the bill is insufficient, one could support the bill if one has a theory that the bill can be modified to match or nearly match technological and scientific reality at a later date.  I’m calling this “reformability”, which is an attempt to put into one word what has been batted about throughout this year among supporters of various political reforms by the Obama Administration.  Others may want to use a different word.  In any case, the idea is that it is better to put a “placeholder” bill into place and fill it with better stuff as time goes on.  The example often given is Social Security, which was expanded numerous times since its inception in 1935.  This is a very long argument with many examples to give but I wouldn’t say that every bill is “reformable” even if it attempt to achieve laudable goals.

With a basically sound structure, I agree that it is possible that targets (numbers) can be changed and increased.  Offsets could be excluded and other rules could be changed.  On the other hand this bill shores up the role of the incumbent industries in the energy business, including no rigorous efforts to stop oil addiction.

I think, as Kerry acknowledges, that if the bill is truly insufficient that more explicit monitoring and review measures need to be put in place with regard to both emissions, climate effects, and the policy’s effects on oil imports.  Perhaps a bi-yearly review on all these fronts needs to be put in, rather than left to faith and good will.  Building in “reformability”, especially in an acknowledged weak bill makes sense.

KL and Outside-the-Beltway Political/Psychological Reality

Unconditional supporters of the efforts on climate of Congress and the Obama Administration in the last two years, I think , overlook an important boundary condition of current proposals:  they are being proposed during a time when most of the American electorate has much more pressing concerns and in many cases could care less about climate and energy.  Until recently gas prices had descended substantially from their historic highs in the summer of 2008 and we have also had reduced concern about global warming, under an avalanche of  “skeptical” attacks on climate science.

Furthermore, in my opinion, activists groups and Congressional leaders have for the last 15 years wedded themselves to the cap and trade instrument which was a needlessly complex and ultimately ineffective tool to address GHGs.  Activism in the area of global warming has become professionalized and in part corrupted by funding from polluter organizations.  While the public may not know all the details, there is no clear understandable “story” that emerges from the movement that also explains how policies actually work.  This is in part because activists themselves don’t understand how the policies would actually work in the real world.

So proposing solutions that are marginally effective to ineffective in the context of a disjointed movement and low voter concern looks different than proposing these same solutions with high voter concern and even activism.

The public also can be concerned but also misinformed so in a situation where there is high voter concern, policies may be proposed and enacted that are wrongheaded.  Last summer offshore drilling was considered by many to be a workable solution for energy, while currently not so much anymore.  It is the duty of specialist organizations and public educators to make sure that the public is as well informed as possible so that when there is greater concern, one arrives at

KL under Low Voter Concern

In the context of chronic Low Voter Concern about issues of energy and global warming, a “professionals and politicians only” climate and energy policy with substantial giveaways to the strongest energy lobbies is about the best you can do in a political system under the sway of powerful lobbies.  The politicians and their allies in non-profit organizations will attempt to structure policy according to how they think the policy should work but with awareness that not many politicians can risk either voter or lobbyist anger.  Ideally in conditions of Low Voter Concern you get weakened versions of what, with greater voter support, could be strong policies.  Alternatively you could pass bills that deal with parts of the climate and energy package a targeted manner, for instance, an energy efficiency bill, which might stir less opposition.

In a condition of chronic Low Voter Concern, Kerry-Lieberman might be considered adequate with some modifications. It does not introduce the financial industry as a co-regulator of the carbon pricing system, so this bit of stupidity in ACES is no longer in the bill.   However it could still be strengthened even without a great deal of voter scrutiny as suggested above.

Kerry-Lieberman works best as an exercise for political and industry insiders on showing that they have some form of “will” to do “something” about climate and energy with the caveat that massive compromises have been struck with industries and politicians that could care less or have very little understanding about climate change and energy independence.  It also may send some signals to investors that are “on the fence” about various green investments that they might consider some version of those investments in the next decade.  It does not decisively re-orient the economy.

KL under High Voter Concern

In the context of High Voter Concern about global warming and/or oil dependency, Kerry Lieberman as currently proposed is completely inadequate.  If voters were demanding timely solutions to our oil dependence or rapid action on global warming, Kerry Lieberman would be considered to be highly unambitious and a potential roadblock to better solutions.  Furthermore, if voters believed, independent of a climate and energy concerns that such a bill should jumpstart a generally sluggish economy, Kerry Lieberman as proposed would not produce enough of an immediate economic effect.

The Senators and/or Congress would under High Voter Concern need to go back to the drawing board and produce a bill with more aggressive targets and more specific solutions that would cut emissions in the next 5 to 10 years.  I believe such a bill would involve asking for more financial sacrifice and potential lifestyle change in exchange for positive movement on warming and energy.  Such a “trade off” between goals would be possible with true leadership coming from the Administration and Congress.

If the public were both concerned and also misinformed there would need to be period of politicians and activists attempting to educate the public about really workable solutions prior to the enactment of bills.   The Tea Party phenomenon is a example of voters with high concern but also, for the most part, badly informed about the issues that they protest about.

Voter Concern as of Mid-May 2010

With the oil spill in the Gulf and rising oil prices, voters may be moving from what might be called Low Concern to a higher level of concern about energy.  Certainly other oil spills, in particular the 1969 Santa Barbara spill, have galvanized public opinion about environmental issues.  Additionally we have been experiencing in the US some freakish weather this spring and may be facing a record year in temperatures with an El Nino coming on top of a secular warming trend.

Within a short while, it may be that voters will demand more concrete and direct solutions to environmental and energy problems than are contained in Kerry Lieberman.  At this point, then it would be a mistake to press Kerry Lieberman on the public as THE solution to these problems.  There are conflicting results from opinion polls that suggest a decrease or continued high support for offshore drilling.

Whether or not it is this year and at this time that the public becomes more concerned about energy and climate, it is only a matter of time before they do as events unfold both in the climate system and in the oil markets.  Even if shore communities are not as badly impacted by the Deepwater Horizon spill as anticipated, it makes sense to prepare for the post-oil future (more on this in the next post).

Roles for Climate and Energy Activists and Ethically Motivated Politicians

If we are moving towards an era where the broader public is genuinely looking for climate and energy solutions, I believe it is the duty of climate and energy activists and ethically motivated politicians to provide complete and understandable solutions.  By educating the public about the options and placing high demands on policymakers, we institute policies that are at the maximum feasible limit of what can be done today, with more action promised for tomorrow.

We are seeing this currently in financial reform, where a confluence of events has broken open the consensus that nothing substantive would be done.  Now we are seeing Senators voting nearly unanimously to institute changes in financial regulation that are close to what most economists are saying is required.  The fight is fierce, especially with lobbyists, and not yet over, but there is progress.

In order for a bill like Kerry Lieberman or similar to be truly meaningful, those parts of the bill that are just the continuation of “Business as Usual” need to be reduced or eliminated and those parts that are on the right path need to be strengthened markedly.

In the next post, I will offer a vision of what a science-based, rational response to the oil spill would look like.  It might be considered too ambitious by some but such is the role I am choosing in this discussion.

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