Climate 411

Lesson from The Climate War: the missing ingredient is presidential leadership

This was originally posted on the California Dream 2.0 blog by Jennifer Witherspoon.

An interview with editor and author Eric Pooley

Tonight, Eric Pooley, deputy editor at Bloomberg Businessweek, will join the Environmental Defense Fund at our San Francisco office to celebrate the release of his new book, The Climate War – True Believers, Power Brokers, and the Fight to Save the Earth.

California Dream 2.0 took the opportunity to interview Mr. Pooley about the book, which features EDF President Fred Krupp and Duke Energy CEO Jim Rogers and chronicles their efforts — along with other leaders of the U.S. Climate Action Partnership, Al Gore and the Alliance for Climate Protection, and many others, to pass national climate and energy legislation.

Q: When did you first get the idea for the book?

A: In the early spring of 2007, I wrote a cover story for Time magazine about Al Gore. Speculation was that he might be considering another run for president, following the major successes of An Inconvenient Truth. As I reported it I saw that the debate was finally changing from climate science to climate politics — from whether climate change was happening to what we were going to do about it. And I got interested in what was causing America to drag its heels on enacting comprehensive climate and energy reform. 

Q: What did you discover?

A: I didn’t come into this as an environmental journalist. I came to this as a political correspondent and the editor of a business magazine, Fortune. So I began to do a lot of research and what I discovered was that solutions existed and were being refined and improved. These policies had their roots in the 1980s, and that is where I got acquainted with EDF, which as you know has advocated for these market-based ideas since the Clean Air Act amendments of 1990, which imposed a mandatory declining cap on sulfur dioxide pollution from power plants. So I decided to write a book about the battle over climate action — the people at EDF and elsewhere who were trying to get these ideas signed into law — and people on the other side who were trying to keep it from happening.

It is no easy feat to transform the entire energy & industrial complex of the United States. I think that the market-based ideas behind the declining cap on carbon and the emissions trading program that was in the original Lieberman-Warner bill and was approved by the Waxman-Markey bill in the U.S. House is the best chance we have right now to address climate change. How that bill got passed a year ago is sign of what is right with the U.S. political system; it shows politics doing what politics are supposed to do, addressing economic imbalances and cushioning consumers and carbon-intensive industries from rising costs. 

Q: In light of the Gulf oil spill do you think the U.S. Senate will pass a climate bill this summer?

A: When I started the book three years ago, I had hoped that the narrative would start with the U.N. climate conference in Bali and end in Copenhagen. But as President Bill Clinton said, what the global warming story “doesn’t have is an ending; that part is still up to us.” I hope the Senate will act this summer. This is a big week right now, as President Obama meets with senators from both sides of the aisle to discuss what should be in a climate and energy bill.

I think the American people will get behind the idea of a carbon cap, but they need to understand it first. It can’t be forced upon them. That’s why we need President Obama to use the tragedy of the Gulf oil spill as a great teaching moment – now is the time for America to accelerate the transition to clean energy. Obama has the ability to explain how a cap on carbon will unleash America’s clean energy market, but his recent Oval Office speech was a disappointment, missing a major opportunity to explain the need for the carbon cap to the American people.

China is already ahead of America, spending nearly 9 billion dollars a month on clean energy. America is a decentralized, debtor nation. We can’t rely on the government to make those kinds of investments and create industries by decree. We need a market to do it. The government can pass smart policies, like the cap on carbon, to spur America’s ingenuity and draw private capital off the sidelines. America needs a market to compete with China and other nations and that’s what the Senate could provide this summer. But the senate won’t do it unless Obama makes the case forcefully and in a sustained way. The lesson of The Climate War is that presidential leadership is the necessary, and until now missing, ingredient.

Q: I’m sure you’ve heard about California’s cap on carbon, AB 32, the Global Warming Solutions Act and new efforts by out-of-state oil companies to roll back that law?

A: I cover AB 32 briefly in The Climate War. It was a real victory for California to pass the nation’s first climate cap. It is a shame that some would try to delay our future until some perfect moment. We need to move into the future with confidence. Business people understand that and that’s why so many of them support AB 32. We need to treat voters like grown ups, however, and not try to sweep the costs of transitioning to clean energy under the rug. There are short-term costs, but the benefits are greater down the line. After writing the book, I still don’t know if our political system will rise to the challenge. I just know that the time is now and that the president needs to lead.

Posted in Climate Change Legislation, News / Comments are closed

Important Caveats to Last Week’s CRS Analysis of Climate and Energy Bills

The Congressional Research Service released a brief report last week comparing three energy and climate bills currently under discussion in the Senate. This comparison is useful to anyone looking for a fairly objective look at the three proposals. One key point to recognize though is that the analysis solely focuses on the policy mechanisms proposed in each of the three bills, it does not compare or contrast effects (economic and otherwise) of the bills.

For example, in the bill proposed by Senators Cantwell and Collins, the Carbon Limits and Energy for America’s Renewal (CLEAR) Act, the analysis does mention that the bill includes a “safety valve” as a mechanism to control the price of carbon. A safety valve works by allowing for the increase of emission allowances if the price of carbon rises above a certain level. Intended as a cost containment measure, the so-called safety valve undermines the proposal’s ability to achieve the targeted levels of CO2 emissions reductions (in 2050, 83% below 2005 levels), put forth by its authors. When the safety valve is used, the targeted carbon reductions fly out through the window. The CRS report makes no mention of this significant potential consequence of the mechanism.

Another issue to keep in mind is that the CRS analysis does not consider the long-term trajectory of allowance allocations in the American Power Act, the bill Senators Kerry and Lieberman co-authored. The Congressional Research Service includes only a snapshot view of allowance allocations for the year 2016. Since allowance allocations vary in the later years on the proposal, it is more helpful to asses the allowance allocations for the full duration of the legislative period (2013 to 2050). The chart below shows the projected allowance allocations divided by sector, for the time period 2013 to 2050, in net present value and therefore offers a more complete picture. As this graph shows, 46% of the allowance value is directed at households over the course of the bill.

When attempting to compare Senate proposals, it is important to focus attention on both the proposed policy but especially its likely effects. This CRS analysis is a helpful tool in understanding the former, but it is essential to remember to also consider the latter before drawing any substantive conclusions on which proposal will work best to create clean energy jobs, control carbon emissions and keep America safe.  The more comprehensive a climate and energy bill, and the less loopholes, the more benefits will accrue.

Posted in Climate Change Legislation, Economics, Policy / Comments are closed

Leadership, Innovation and Security: Benefits We Can’t Measure

The EPA analysis of the American Power Act released last week was reassuring in its conclusion that the economy can absorb a shift to low carbon energy, and that costs will be no more than a 40 cents a day for households. (The reason that costs phase in later is that allowances to utilities in the early years serve as rebates to consumers to allow for a transition period of no added costs.)

But, as the bill’s co-sponsor Senator John Kerry (D-Mass.) notes, while the costs are relatively easy to model, some of the benefits are not. Among those is the fact that APA is, in essence, a very cheap insurance policy against the real costs from droughts, floods, storms, oil spills and other consequences of unchecked climate change and continued reliance on foreign oil. By including a cap on carbon, APA offers a very cheap insurance policy.

And there are other significant benefits, too. A year ago today, President Obama’s Economic Recovery Advisory Board voted 15-1 in favor of submitting a memo to the president endorsing a cap on carbon, specifically:

“The single most important policy is to put a price on carbon. Businesses want the certainty that will unleash innovation and investment to create jobs now and ensure America is the worldwide leader of the next great global industry: sustainable energy. We are not on that path today.… “

The memo went on to note that we are ceding leadership in new energy technology to other nations.

“The U.S. is now home to only two of the ten largest solar photovoltaic producers in the world, two of the top ten wind turbine producers and one of the top ten advanced battery manufacturers. That is, only one-sixth of the world’s top renewable energy manufacturers are based in the United States. Last year, less than half the 8,500 gigawatts of wind turbines used in the U.S. were made in the U.S.”

A cap creates the customer demand that allows companies to build market share and move into export markets. The emerging clean energy market could be anywhere from $500 B globally by 2020 to a trillion.

Are we in? So far, not really. A home market attracts investment and helps build local manufacturing. For example, after FedEx pledged to buy low-pollution hybrid delivery trucks, vehicle manufacturers started producing them – and once cleaner trucks were on the market, other U.S. companies started buying them too. The U.S. now leads globally in manufacturing key components for hybrid trucks. In contrast, “after estimating that China would be producing two-thirds of the world’s solar panels by the end of this year,” the U.S. solar equipment supplier, Applied Materials, set up its latest solar research labs in China. Without a cap on carbon emissions, private capital sitting on the sidelines can easily go to other countries, creating jobs and export opportunities elsewhere.

America has demonstrated time and again that we are an innovative global leader when we put our minds to it. It’s time for us to commit ourselves, our minds as well as our dollars, to a clean energy future that will spur the new economy and encourage green job growth.

Posted in Climate Change Legislation, Jobs, Policy / Comments are closed

The voices of a new clean energy future – June 22, 2010

IdahoStateman.com “Staying competitive in the clean energy race”

By Phyllis Cuttino, director PEW Environment Group’s climate and energy programs

“Our research found that nations like China and Germany – that have adopted national renewable energy standards, carbon reduction targets and financial incentives for investment and production-tend to be leaders in the clean energy economy. Those with weaker policy frameworks, including the United States, lag behind.”

“As President Obama seeks ways to facilitate global economic growth at Toronto’s G-20 summit he also should also reflect on how to further stimulate the growth of our own clean energy economy at home. This includes finding a way to bring together leaders in Congress to develop a comprehensive climate and energy policy.”

National Journal “Making Polluters Pay”

By Maggie L. Fox, President and CEO of Alliance for Climate Protection

“Without a cap on carbon emissions, we’ll do little to reduce pollution and create only a small fraction of the 1.9 million jobs expected under a comprehensive bill. We need to give American businesses the confidence that support for clean energy is here to stay.”

“Now is not the time for small steps. We have the technology and know-how we need to make the transition to a clean energy future. There will never be a better time for our leaders to pass comprehensive climate and clean energy legislation.”

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The voices of a new clean energy future – June 21, 2010

The New York Times“National Mission”

Editorial

“To anyone watching the oil spew into the Gulf of Mexico, the argument for curbing this country’s appetite for fossil fuels could not be clearer.”

“But Americans are rightly outraged by the spill in the gulf. This is clearly the moment for President Obama and Senate leaders to deliver a tough and ambitious energy bill capable of protecting the environment and the nation’s security.”

The Huffington Post “Clean, Baby, Clean”

By Robert Greenwald, Filmmaker, Brave New Films

“If any good is to come out of this horrible and unprecedented disaster, it will only be through people standing up and demanding political leadership around creating a clean energy economy and finally stopping offshore drilling.”

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The voices of a new clean energy future – June 19th, 2010

Seattle Post Intelligencer – “Comprehensive climate and energy bill needed now!

By Sylvia Perek, resident of Seattle, WA

We need Senators Cantwell and Murray to champion a strong version of comprehensive climate and energy legislation to bring certainty to our business leaders and create new clean energy jobs for America.”

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