But lets just hope this doesn't become another fiasco like the Energy Bill.

Where a lot of pork was put forward for things like "Clean Coal" and BioFuels.
Add a token 35mpg increase.
And the rest of the bill was essentially gutted.

-David Ahlport

I want to add a few potential differences between now and 2009 to the discussion:

(a) Next year, we might have a president willing to use the bully pulpit to advance a good bill.  That would be major difference.  Clinton, Obama and Edwards have all called for 100 percent auctions and emissions reductions that gets us 80 percent below 1990 levels by 2050.
(b) Public opinion about global warming is shifting rapidly.  Hurricane Katrina and An Inconvenient Truth served as catalysts, and it's possible more catalysts will appear in the next year -- perhaps the Olympics in China.  Regardless, I expect public opinion in favor of a strong solution will grow between this year and next.
(c) The international climate negotiations will be further underway and the higher targets being discussed there could have a ripple effect in the U.S.

I just don't think it makes sense to conclude that the political environment is unlikely to be better next year when there's a fair chance it will be.

Also, regarding your point about the potential to improve the Lieberman-Warner bill once it is passed -- the bill contains polluter giveaways worth up to a trillion dollars.  Once pollution permits are given away for free and other subsidies are handed out to polluters, it'll be impossible to get them back.

Nick Berning
Friends of the Earth

I say so to point out that there are new possibilities for action that no one ever considered before cap & trade measures were drafted, and that change the playing field significantly.

Imagine what an engaged Chief Executive could do unilaterally through EPA and CAA -- (admittedly, our appreciation of that branch of government has atrophied.)

There are very good alternatives that lead to results that will not require rushing an inadequate law through Congress during a recession in an election year.

David Sassoon, www.solveclimate.com

Basic idea being, to keep up the pressure.

But as shown with the whole EPA versus Fed issue on fuel economy regulation.  A week legistlation can be a stumbling block for implementing a stronger legistlation.

_

The Clean Air/Water Acts, etc for instance.

That was NOT enhanced by legistlation

That was enhanced by supreme court rulings, which furthered their implementation and enforcement of the existing law.

-David Ahlport

1. effectiveness in reducing emissions
   
2. effect on economy/society

So, how does L-W rate?

Effectiveness in Reducing Emissions

On the first, the IPCC 4th Assessment Report says that a long-term stabilization target of 2°C above pre-industrial levels is needed to have an even chance at avoiding the tipping point into catastrophic climate change.

The report also says that to achieve that target, the industrialized nations need to cut emissions to 25-40% below 1990 levels by 2020, and 80-95% below 1990 levels by 2050.

(Developing nations need to simultaneously achieve "substantial deviation from baseline" for overall reductions to be sufficient. See Box 13.7 in the 4th Assessment Report, p. 776.)

L-W is not close to either of these targets. L-W only covers 80% of emissions.  For covered sectors, it hits 1990 levels by 2020 and 65% below 1990 levels by 2050.

At Bali, the Annex I Kyoto signatories (every single industrialized nation except the US and Turkey) agreed to the IPCC targets. The EU has unilaterally committed to achieving 20% reductions from 1990 levels by 2020, and would shoot for 30% reductions if the US makes a comparable effort.

So, even assuming that the legislation is well designed and will be well implemented such that the targets in the bill will be met, if by "perfect" one means "an even chance of avoiding catastrophic climate change", L-W is not perfect in its targets.

Furthermore, its lookback and cap-adjustment provisions are heavily weighted towards short-term economic growth instead of scientific necessity or long-term economic health.

Is L-W good? Is it "strong"? ED, which did not publicly support the Sanders amendments in committee to strengthen the cap targets and lookback provisions, evidently thinks so. I'm not sure what science they're using to come up with that result.

Effect on Economy and Society

In this analysis, I am going to make two a priori assumptions:

1. Catastrophic climate change would be worse for our economy and society than doing nothing
   
2. some mandatory regulatory system will be put in place

In other words, I'm comparing L-W's economic effect against other hypothetical emissions reduction programs, not against the do-nothing scenario.

There is a well-developed consensus for some of the elements necessary to a "perfect" regulatory system, following principles of economic efficiency (maximum benefit to sector-wide industry and businesses) and economic justice (job creation, benefit to poor and middle class, etc.).

These include:

1. 100% auction of credits
   
2. Auction proceeds should go into minimizing economic disruption and investing in energy efficiency, renewable energy and other emissions-reduction technology, sustainable agriculture, and international/local mitigation/adaptation
   
3. To minimize economic disruption: Most efficient system is to make overall tax system more progressive (possibly improving other safety net systems like healthcare)
   
   1. Allocation of about 15% of auction to poorest 20% (preferably by reducing existing taxes, such as payroll taxes) protects them from harm
      
   2. About 6% of auction revenues sufficient to protect electricity producing sector from harm; can be phased out over time
      
   3. Similarly for other covered sectors
   
   
4. Energy efficiency:
   
   1. Short-term emphasis should be more on energy efficiency than new-tech investment (see Architecture 2030) -- free allocations to load-serving entities would block/slow this
      
   2. Smart grid/electranet/distributed grid should be emphasized -- support for traditional power system will block/slow this development
      
   3. Mass transit, smart growth, high-density urban planning should be emphasized -- subsidization for traditional highway system, etc. with block/slow this
      
   
   
5. Technology investment:
   
   1. no more than $8-$30 billion over 10 years needed to spur carbon-capture and sequestration technology
      
   2. Subsidization of renewable energy technology should be at least on par with subsidization for nuclear, natural gas, coal, oil. Would make sense to actually be more strongly subsidized. Would make sense to reduce/remove subsidies for gas/coal/oil that aren't emissions-reduction focused.
      
   
   
6. Agriculture:
   1. Sustainable agricultural practices (high-carbon farming, local farming, etc.) should be supported -- subsidies for industrial agriculture blocks/slows this
      
   2. Biofuels need to be locally and sustainably produced and used to be a net positive
   
   
7. International mitigation and adaptation support -- I'm not sure what the "perfect" system is here, but I know that, for example, the Nature Conservancy wants a real emphasis on preventing deforestation
   

Now, L-W is not "perfect" on any of these. In fact, it has nearly the exact opposite emphasis in most categories. Over its 4-decade span, allocates about 48% of the permits away for free, giving 22% directly to polluting entities. These giveaways are heavily frontloaded. About $350 billion is allocated to supporting CCS (also frontloaded). It lumps nuclear and "clean coal" tech with renewable energy. It allocates permits for free to load-serving entities. It allocates permits for free to state governments (guaranteed to make pricing more inefficient).

The ED and other groups like to argue that we shouldn't make the perfect the enemy of the good. It's also to remember that the bad is necessarily the enemy of the good.

It is possible to reform the existing framework in the L-W legislation, in my opinion, to arrive at a bill that is "good". It certainly wouldn't be perfect.

Perfect climate legislation requires:

1. 100% coverage of emitters, not 75-80%
   
2. Transformative reform of existing agriculture/land-use policy
   
3. Transformative reform of existing transportation policy
   
4. Transformative reform of existing tax policy
   
5. Transformative reform of existing resource extraction policy
   
6. Transformative reform of existing electricity distribution policy
   

So the best that a single cap-and-trade policy can be is "good". As Al Gore outlined a year ago, a comprehensive and effective climate policy merely starts with a strong cap-and-trade system.

By reasonable economic and scientific metrics, L-W is not a good bill unless you own coal and/or nuclear plants or belong to an investment bank.

Hill Heat

1.  Lieberman bill
   
2.  worse
   
3.  no bill.

Friends like Carper and Bingaman will shop safety valves and preemption hard, so passing the Lieberman bill -- even in the Senate -- is unlikely.  Indeed, Environmental Defense may push hard to weaken the Lieberman bill with state law preemption.

I FOE's view, a miracle occurs next year, and we get 100% auction.  Silly stuff.

Regional interests drive the train, and FOE has no plausible theory for addressing regional concerns.

International negotiations?  please.

public opinion?  well, who knows where that will be after the big Brown ad campaigns and the declining economy

The new Dem prez and the 100% auction promise?  Even assuming sincerity, both are cautious pols, and neither has demonstrated any talent for building legislative coalitions.

Politics does not bend to academic desires.

Horse trade, or get nothing.

Fact.

Let me try this:

In the Super Bowl on Sunday, there are three possibilities:

1. Patriots win in a squeaker
   
2. Patriots win by over 50 points
   
3. Patriots win by 25-50 points
   

A 25-point win is most likely.

In ce1907's view, a miracle occurs, and the Giants win. Silly stuff.

Bet on the Patriots to win by 25 points, or get nothing.

Fact.

(Admittedly, I think the Patriots are going to crush the Giants. Go Pats!)

Hill Heat

Because it is not a perfect fit, though, the down side of using the current Clean Air Act is that new regulation would get tied up court as soon as it got signed.

New legislation specifically mandating the elements of a carbon cap and trade program would have a much better chance of spawning regulation that could succeed.

....and Grey Falcon, I do believe you are not correct this time -- the Clean Air Act was enhanced enormously by legislation, both in 1990 with acid rain provisions, and in 1977 with new source provisions and some other restructuring (cue protest from Sean Casten here).

On the other hand, in both 1990 and 1977 we had a Congress that actually worked together, across the aisles. There were centrists in the Republican party, for goodness sake. That's been gone with the wind for some time.

So I believe our only hope is a more dominant Democratic majority and Democratic president.  Next year.

ce1907: Environmental Defense has long been on the frontlines of state climate action - we've worked across the country and across party lines to advance state-level emissions reduction commitments (including co-sponsoring and fighting to the nail-biting end for passage of AB 32), and we've been arguing in courtrooms from east to west to help secure a Clean Air Act waiver for the California clean cars program and the 17 other states that hope to adopt it.

We think the ability of states to set stronger-than-federal standards for global warming pollution should be preserved - just as it has been for other pollutants.  We also believe that we need an effective national climate policy, and we'll work with Congress to develop one that preserves state leadership while fostering an efficient carbon market.

Cunctator: We both agree that the Climate Security Act isn't the perfect bill. But is it a good bill, a strong start? We think so. It has an aggressive short-term emissions reduction target (more aggressive than other proposals in this Congress), cost-management provisions that don't compromise environmental goals (i.e. jettisoning the emissions cap), and a system of carrots and sticks to prompt action from developing countries.

We want to see tighter long-term targets in the bill. But as we've said before, it's important to get on the path to those long-term cuts before it becomes exponentially more difficult to achieve them.

David: Good question, and one that I will ask our Clean Air Act aficionados to weigh in on here.

Nick: As passed by committee, the bill only allocates 49 percent of allowances to regulated entities, and we get to full auction by 2031. There are a lot of good arguments for increasing the rate at which CSA moves to 100 percent auction, and there are a lot of good arguments for why that might not be achievable politically.

In the end though, without a cap on emissions, there are no allocations to make, no auctions to have, and no greenhouse gas reductions.  And that's what we're all working for here: reducing emissions.


www.edf.org