Memo to President Obama: Climate Change Policy Recommendations

(Cross-posted from “It’s Getting Hot In Here”)
As a final assignment for a climate course that I am in, I had the opportunity to write a memo to president Obama outlining what his climate goal should be and what policies/strategies he would use to reach those goals.

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Plans B and C: EPA regulation and the federal common law

As the Senate continues to wrestle with healthcare reform, some speculation has been flying around that the climate change bill might not make it out this session. So, what would happen if Congress doesn’t pass a climate change bill this year? Will the fossil-fuel polluters be free to run amok?

Maybe not! You may have heard that the EPA now has the legal authority to regulate CO2 as a pollutant under the Clean Air Act. David Roberts at Grist wrote a great explainer on the situation: the aptly-titled “Everything you always wanted to know about EPA greenhouse gas regulations, but were afraid to ask”. So in fact, EPA could regulate CO2 without Congress passing a climate bill — it would just take some really tough rule-making on the agency’s part, which would likely be challenged in court by carbon-intensive industries. However, one potential upshot that Roberts points out is that EPA regulation could mean relatively painless integration of the various existing regional cap-and-trade schemes — something the House climate bill doesn’t account for.

What if EPA regulations don’t pan out? Well, the Second Circuit has stepped into the breach by remanding Connecticut v. AEP, a nuisance suit brought by eight states and New York City, along with NRDC, the Open Society Institute, Audubon Society of New Hampshire, and others. The plaintiffs claimed that the defendant power companies contributed CO2 emissions causing global warming, which constitutes a public nuisance causing myriad injuries and expected injuries (ranging from reduced snowpack in California’s mountains to salinization of marshes and water supplies.) Today, the Second Circuit held that the plaintiffs could bring their claim “unless and until the legislative and executive branches actually regulate that pollution, either under the existing Clean Air Act or the comprehensive new energy and climate legislation bending in Congress,” as David Doniger, policy director of NRDC, explains in his great blog post on the case and what the remand means.

Doniger’s post also points out the disheartening news that Senator Murkowski of Alaska intends to introduce an amendment to prevent EPA from regulating carbon — see how it comes back in a circle? Senator Murkowski will try to add her amendment to the Interior and EPA appropriations bill; thus, EPA’s funding would be conditioned on its not regulating CO2, although Murkowski’s amendment does allow for continued regulation of CO2 from cars. (Note that essentially, this preemptively creates the same “loophole” that I’ve blogged about here before – a “loophole” that I think is less problematic in the context of an actual cap-and-trade statute.) The Senator says she’s offering the amendment to allow Congress the appropriate “breathing space” to properly consider climate change legislation.

But others say that EPA’s authority to regulate GHGs – and now, the people’s right to bring nuisance claims based on global warming – are just what’s needed to get Congress to pass a strong climate change bill.

How the Climate Bill can help protect our waters.

When you try to picture a world where a cap-and-trade scheme for carbon emissions is perfectly implemented, you probably envision cleaner skies, or an end to devastating mountaintop removal coal mining. But as Nancy Stoner at the Natural Resources Defense Council points out, the House climate bill can have major beneficial effects on our beaches and oceans through various requirements that will help reduce extreme storm events. Fewer storm events will also help water quality in all of our nation’s waterways by reducing stormwater, which carries pollutants, sediment, pesticides, chemical fertilizers, and in many communities with combined sewer systems, untreated sewage straight into our rivers, bays and oceans. Nancy Stoner highlights three key ways the climate bill will help protect beaches:

1. It will set firm limits on global warming pollution, which will help minimize the impacts of climate change, including storm events.
2. It calls for protecting the wetlands, coastal dunes, and other natural systems that buffer us from storms and help filter out pollutants in stormwater.
3. It offers funding for water utilities and sewage treatment plants to update their storm drains and make their infrastructure more resilient to climate change.

Another critical effect of global warming is ocean acidification. The Conservation Law Foundation does a great job explaining this phenomenon and how it will affect the American industries that depend on marine resources that depend on healthy ocean waters. Here in Maryland, agencies are struggling to sustainably manage the depleted populations of oyster and crab fisheries already severely stressed by pollution and other factors. Climate change will further stress fish and shellfish populations, constituting an economic threat for all the people whose jobs depend on these natural resources. However, a strong climate bill like ACES can help protect American fisheries, waters, and local jobs.

There is no grandfathering.

Joe Romm at Climate Progress has a great post today arguing against the contention that the climate bill contains a gaping loophole for old coal plants. This is the same conclusion I reached in a previous post, so it’s gratifying for me to see that my interpretation wasn’t completely off-base. Today’s Climate Progress post is in response to a piece written by the leaders of the Sierra Club, Earthjustice, and Environmental Integrity Project which claims that the climate bill gives old coal plants “a free pass to continue business as usual — without making any serious reductions in heat-trapping carbon dioxide for 15 years or more.” In response, Romm explains how ACES/ACELA in fact would result in those very same old coal plants to bear the brunt of the emissions reductions required under the shrinking cap.

In fact, it seems like Pope, Van Noppen and Schaeffer’s concerns are with the mechanism of cap-and-trade and its effectiveness:

Instead of assuring that the oldest, least efficient, and most polluting plants are phased out, Waxman-Markey leaves that up to the cap-and-trade system created by the bill.

As Romm makes clear, the cap-and-trade system is designed to cause the phasing out of those plants. They don’t come out and say it, but it seems like Pope, Van Noppen and Schaeffer would prefer a command-and-control solution — which might be more effective at combating global warming, but is undoubtedly politically unfeasible in terms of passing legislation.

Romm manages to in two sentences sum up how the climate bill works and why it should be passed:

In the real world the much-maligned House climate and clean energy bill would do what clean energy and climate advocates have been demanding for decades: It would set up the framework to allow low-carbon technologies to compete against fairly — and thus steadily replace — existing coal at the lowest possible cost.

Fear of carbon markets is bipartisan.

A couple weeks ago, Senator Dorgan (D-ND) caused a small kerfuffle in the blogosphere by stating his opposition to a cap-and-trade system for carbon emissions. In an op-ed published in the Bismarck Tribune, Senator Dorgan argued that creating carbon markets is a bad idea because of the possibility of speculation and exploitative trading:

I know the Wall Street crowd can’t wait to sink their teeth into a new trillion-dollar trading market in which hedge funds and investment banks would trade and speculate on carbon credits and securities. In no time they’ll create derivatives, swaps and more in that new market. In fact, most of the investment banks have already created carbon trading departments. They are ready to go. I’m not.

Unless he proposes abolishing all markets out of fear of market speculation, Dorgan’s argument is, of course, unsupportable. Nobel economist and New York Times columnist Paul Krugman explained that the problem is inherent to markets, not carbon emissions allowances:

For example, the fact that wheat is traded means that there’s also a wheat futures market; and because wheat can be stored, futures prices affect spot prices.

So, should fear of speculation lead us to ban trading in wheat? Nobody would say that. Yes, sometimes speculators will get it wrong — but the advantages of having a wheat market vastly overshadow the possible harm that may sometimes come from speculation.

As Joe Romm makes plain, the Waxman-Markey bill already contains provisions against carbon speculation, including lodging regulatory oversight with both the Federal Energy Regulatory Commission (FERC) and the Commodities Future Trading Commission (CFTC) and explicitly criminalizing fraud and manipulation in carbon markets. Permit bidders are also required to publicly disclose information and are limited to purchasing no more than 5% of permits on the market.

Further, steps have already been taken in the Senate towards carbon market oversight. Senators Feinstein (D-CA) and Snowe (R-ME) have introduced a bill to regulate carbon markets under the CFTC: the Carbon Market Oversight Act of 2009 (S. 1399). There are more details on the CMOA at Global Climate Law Blog.

But the unsubstantiated fears of taking action don’t end there! On Thursday, the Senate Environment and Public Works Committee held hearings on the theme of “Climate Change and National Security,” where Senator Barrasso (R-WY) expressed his concern that carbon markets could become a source for “funding streams to international organized criminal elements.” (Behold his stirring oratory on YouTube.)

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Loopholes worth worrying about? Exempting old coal plants

Last week, the New York Times ran an editorial bemoaning loopholes in the Waxman-Markey bill.  I don’t think anyone would seriously contend that the final bill out of the House is perfect, but I think there is plenty of room for debate as to what actually counts as a significant weakness as opposed to a provision that just looks funny on first glance.

The Times editorial pointed out two problems: (1) the bill’s grandfathering of existing and already-permitted coal plants, and (2) offsets.  I’ll leave the complex issue of offsets for some hypothetical day in the future and for now, just look at Waxman-Markey’s treatment of existing coal plants.

The Times notes that Waxman-Markey

sets tough performance standards on new power plants permitted after 2009, requiring emissions reductions of 50 percent or more. …

The bill does not, however, impose any performance standards on existing power plants. And it explicitly removes these plants from the reach of the Clean Air Act. This is a mistake. The overall cap on industrial emissions will not be fully effective for a long time, and, meanwhile, the government should be able to impose lower-emissions requirements on the older, dirtiest plants.

You may have heard in the news or from politicians similar statements about how the climate bill removes the EPA’s authority to regulate coal plants, or that it strips the agency of its power under the Clean Air Act to deal with carbon dioxide. Of course, a little context here is useful. After all, the EPA was powerless to regulate CO2 until this past April, when it issued its finding that greenhouse gases endanger public or welfare. Only after making this finding was EPA allowed to regulate greenhouse gases as pollutants under the Clean Air Act – a law that was enacted long before the science of climate change was well-understood. Thus, it’s not surprising that in many ways, the Clean Air Act is not really well-suited for regulating greenhouse gases. Over on Climate Progress, Joe Romm has done a great job explaining why the EPA cannot single-handedly stop dangerous global warming.

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1Sky Policy Update

I received this email from 1Sky and I could not find it on their blog, so I thought it would be helpful to repost it here in it’s entirety.

A big thanks goes to 1Sky’s Rhiya Trivedi (rhiya {at} 1sky.org), with guidance from Jason Kowalski (jason {at} 1sky.org) for putting this together!!

1Sky is relieved by the House of Representatives’ passing of the American Clean Energy and Security Act in a close 219-212 vote last Friday. 1Sky activists sent more than 18,000 faxes to Members of Congress in 390 districts to convince them to strengthen and support the clean energy bill. Additionally, 1Sky enthusiasts logged 1,600 phone calls to their members of Congress to make sure they heard from constituents who care about a clean energy future. Over 900 1Sky members in 49 states and the District of Columbia signed up to visit their congressional district offices on June 19 to urge their elected representative to strengthen and support the energy bill. 570 climate activists sent letters-to-the-editor urging support of bold climate change legislation.

In the days preceding the vote, key Democratic representatives and members of President Obama’s Cabinet worked hard off the floor to whip up last minute votes, while strong grassroots pressure helped log thousands of calls and faxes to Congress from across the country, so many that the congressional switchboard was shut down. While Chairman Waxman, Representative Markey, and all who worked to get the votes and pass the bill deserve much gratitude for this historic victory, a great deal of work remains to be done in the Senate to pass the strongest climate legislation possible, and grassroots voices will have to be louder than ever in the coming months to demand it.

Read more for the great analysis!

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ACES passes the House of Representatives 219-212

I’ve been live-blogging all day as the House debated and eventually passed HR 2454, the American Clean Energy and Securities Act.

The bill got the votes it needed to pass today, but only by a narrow margin. This is a huge step forward for climate legislation in the United States, but there is more work to be done to help it pass the Senate.

Tally sheet of how each representative voted

Ayes: 219
Nays: 212

Republicans who voted aye: 8
Democrats who voted nay: 44

Who is on the fence in the House?

This report by EENews.net gives a great breakdown of how is for, against and on the fence with the Waxman-Markey climate bill. With a floor vote expected tomorrow in the house, it’s looking like it’s going to be a very close vote.

Here are the fence-sitters:

To call your representative and ask them to support the bill, check out this call tool from RePower America.

Climate Bill Analysis, Part I: Waxman-Markey Gives Nearly 5 Times More to Polluters than Clean Energy

By Teryn Norris & Jesse Jenkins

[Cross Posted from The Breakthrough Institute]

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

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