Polswatch

Outlining a Progressive Future

US Climate Bill An Okay Start

As US legislators debate the content of the biggest climate bill ever introduced into the US congress, debate is raging as to whether this bill will deliver the action required to curb US Greenhouse emissions. Whilst we are not going to know exactly what the bill will look like if and when it passes the US House or Representatives and Senate, probably by the end of this year, we can make some major guesses based on the drafts that are now being discussed in the committees of Congress. These drafts give a picture of something that although may not be perfect is quite dramatic and will see a real shift in the energy policies of the United States. The question still remains however; will this bill provide what is needed for the US to take real action on climate change?

The Bill

There are really three key issues regarding the effectiveness of such a climate bill; the reduction target, the renewable energy target and how much the bill forces polluters to pay for their pollution. Here is how the bill looks regarding these three issues:

Reduction Target: The bill proposes the introduction of a massive cap and trade scheme in the United States, which has the current aim of cutting Greenhouse emissions by 17% by 2020 (based on 2005 levels) and 83% by 2050. The target for 2020 was originally a 20% cut, but this has been watered down due to concerns from some Democrats in the House.

Renewable Energy Target: The bill would also require energy companies to source 15% of their power from renewable sources by 2020, a cut from the original proposal of 25% by 2025.

The price polluters must pay: Whilst the original bill proposed the sale/auction of all pollution permits it looks almost certain that changes intended to gain the support of key Democratic Senators from the greenhouse intensive rustbelt states (i.e. Michigan, Ohio, Pennsylvania) will see at least some of the permits given out for free to greenhouse polluters. For example, Business Green reports that drafts available would see 35% of permits given to the energy industry, 15% to heavy industrial firms and 3% to auto makers, leaving the other 47% to be sold.  At the moment I cannot find any sort of discussion regarding how much these permits would originally be priced at, which is another key point regarding the bill.

The Reaction

There is no doubt that there are people who are disappointed with how the bill is going at the moment. The watering down of the original targets related to emissions reductions and renewable energy targets as well as the fact that many of the permits will be given out for free has many people complaining, some who argue that the bill is now worthless. For example, Greenpeace claims:

“A piece of legislation that started out as a real opportunity for the US to combat climate change has been co-opted by special interests and now threatens to do more harm than good.”

Whilst I believe Greenpeace has succumbed to using a little too much hyperbole, their arguments are fair. Whilst the cuttings of the targets could be considered to be minor (given that the reduction target has only dropped 3%) the fact that permits are now going to be given out for free is a serious concern. Giving out free permits not only takes money away from possible investment to create a ‘green economy’ but also has been proven to be a policy disaster in a range of ways (see the European experience, where the existence of free permits dramatically dropped the price of carbon, making greenhouse reductions extremely difficult).

However, on the other side of the coin one needs to ask whether these sorts of compromises were ones that we should have expected from the US climate deal and if so, can we deal with them? I think there is no doubt that this bill was going to be watered down. In its original form this bill was extremely ambitious, which is great. However, even with the control of the Democrats in both houses of Congress there was always going to be problems, especially from those Democratic Senators from the ‘rustbelt’ area. It seems like these changes will allay the fears of these Senators and will probably ensure the passage of the bill.

So, do these changes compromise the bill and will they stop the it having any effect? Whilst the cuts in the bills targets are extremely disappointing, I don’t believe they create the biggest problem for these bills. Cuts of 17% by 2020 and 83% by 2050 are quite impressive coming from a US Congress that has historically been dominated by climate sceptics and even though 17% by 2020 is not enough, the bill importantly improves on this by 2050, which is a key date. However, the bigger problem lies in the giving out of free permits. It is very likely that this will cause problems for the bill in the future and it does divert a large amount of money (at current estimates $40 billion) from possible investment in green industries.

I am not sure if I am convinced, however, that this will make the climate bill as useless as Greenpeace claims. It is an unfortunate reality of the US political system (unlike Australia, the EU and other industrialised countries) that having a climate bill with such targets and with such a large amount of money being poured into it is a huge achievement and whilst this bill is definitely not perfect, has been compromised to some extent and should be better we must be happy that it is most likely going to be passed. The US environment movement should and will need to continue to fight for changes in the bill once it is passed (as has occurred in the EU) but it must also be happy with the fact that the country that used to lag behind the rest of the world is now probably going to leapfrog a number of countries (i.e. Australia) when it comes to climate action. This is not the perfect start but it is probably better than I would have expected, which is nice for a change.

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June 6, 2009 - Posted by | Climate Change and the Environment, Options for a Progressive Future | , , ,

4 Comments »

  1. At least your country is doing something. Which is more than I can say for Canada right now. Our PM has scrapped 3 climate change bills and has now decided to do nothing until the US plan is fully underway – about 2016. In the meantime, instead of working on the economy, he’s creating attack ads against his opponents. This guy is losing popularity fast…I can only hope that he will be replaced by someone who actually respects the future of young people.

    Have you seen my blog? I think you might find it interesting – it deals with climate change in the context of ideas such as credibility, responsible journalism, and risk management. You can probably just click on my username to get there.

    Thanks!

    Comment by climatesight | June 7, 2009 | Reply

  2. That’s really bad about Canada. I think the same sort of thing is happening in New Zealand too. They have just changed government away from one that was really pro-active on climate change to one that is now taking away all the good work. Hopefully having the US bill like this will put more pressure on Canada to take more action.

    Do you think there is likely to be a no confidence vote against your Prime Minister? I know it came close to happening at the end of last year – would be interested to see if it might happen again.

    Comment by simon2013 | June 7, 2009 | Reply

  3. The no-confidence vote was actually all the opposition parties (there are 3) taking advantage of a loophole in the constitution, where parties can create a coalition to defeat a minority government. It’s totally legitimate and legal, if not common, and it was pretty amazing to see all the parties putting aside their differences so they could work together to actually get something done. It didn’t happen, however, as Harper (the PM) asked the Governor General to recess Parliament (put it on hold, sort of) and they came back a few months later and some of the parties had switched leaders and they decided to try again.

    The new leader of the Official Opposition, however, will likely inititate a non-confidence vote and there will be an election in the summer or fall. Nobody really wants an election, but Harper is losing momentum fast (a great quote I heard – “In Quebec, Harper is about as popular as some forms of hepatitis”) so it will probably be the best thing for Canada.

    Comment by climatesight | June 7, 2009 | Reply

  4. Simon, thanks for putting this post together. While this will be a moving feast as negotiations continue, the major work for Obama, his climate team and the Democratic Party is to keep core elements. And not core as in former PM John Howard’s definition of core and non-core.

    You can track the Bill’s progression through Politics4All which provides a Bill tracking service; much like OpenAustralia.org.. (As an aside they’ve just launched their tracking service for Australian legislation.) Thought you might be interested in a way of tracking the Bill and some of the associated documentation.

    The GOP has fortunately spent a lot of effort fighting each other and “reforming” the party to make too much of a dent, politically, in the process. But whether they can force changes is really yet to be seen, and whether they’ll try to attach other Bills.

    Interesting times for climate politics in the US. Looking forward to your follow up.

    Comment by Alex Schlotzer | June 18, 2009 | Reply


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