As you may know, “emissions trading” (also known as “cap and trade”) is an administrative approach designed to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants.
“Cap and trade” [hereinafter sometimes “C&T”], has not been the preferred approach of the Obama Administration. While recently the President has said he will accept a C&T policy that encompasses the entire economy, his preference was once for a system of regulating the emission of heat-trapping gases administered by the Environmental Protection Agency. (Just after he took office, President Obama appointed Carol Browner, the head of the EPA under Bill Clinton, as “climate czar.”) But this kind of governmental regulation — once used successfully in winning World War II and in other such unimportant contexts — is anathema to conservatives and opposed almost unanimously by Republicans in Congress.
So, over the past year or so, by default, C&T has become the only remaining alternative. (Interestingly, C&T was first proposed in the Senate in 2003 by John McCain and Joe Lieberman. McCain, however, forever the flip-flopper, is now against it.) It works like this: A central authority (usually a governmental body) sets a limit or cap on the amount of a pollutant that can be emitted. Companies or other groups are issued emission permits and are required to hold an equivalent number of allowances, or credits, which represent the right to emit a specific amount. The total amount of credits cannot exceed the cap, limiting total emissions to that level. Companies that need to increase their emission allowance must buy credits from those who pollute less on an open market. This enables polluters to decide for themselves whether it’s cheaper to cut emissions or buy credits. The transfer of credits is referred to as a trade.
In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions by more than was needed. Thus, those who can reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest cost to society. One of the big arguments used to attract conservatives to C&T is that it is “market-based,” that it “cut climate pollution by harnessing the power of the free market.”
One of the most oft-cited right-wing objections to C&T is that charging a polluter to pollute is actually (heaven forbid!) a tax. This is not altogether an unfair characterization. For those familiar with professional baseball, it’s a little like the New York Yankees, who have a team payroll in excess of $200 million (as opposed to the Florida Marlins, who have a team payroll of about $30 million), being forced to pay a “luxury tax” to the teams less financially endowed for the privilege of spending in excess of a specified limit (i.e., a cap) and thereby buying up a whole lot of the best players. This makes sense for the Yankees because, on top of their big market, with the better players they can win such things as the World Series, and thus make a lot more money, more than enough to cover their luxury taxes. So it is with the big carbon emitters (or big investment banks, or big pharmacueticals, or big health insurers, etc., etc.). It seems that in this country, in the name of free enterprise, the rich guys are given room to do pretty much whatever they damn well please.
In any event, C&T conceptually is shot-through with problems, the most obvious being that there’s no guarantee that the total level of emissions will be reduced; about all we can expect is that though the smaller emitters are likely to get smaller the bigger ones will likely get bigger. The fact is that “tracking CO2 from millions of sources poses a daunting challenge, and granting too many loopholes known as “carbon offsets” could render the entire system meaningless.” Another is that C&T “is almost perfectly designed for the buying and selling of political support through the granting of valuable emissions permits to favor specific industries and even specific Congressional districts.”
Oh, well. At least, in theory, it’s capitalistic all the way down, and, besides, it’s sooo American.
Nonetheless, just as it was about to be considered by the United States Senate, C&T lost its luster. For you see, Scott Brown, the newest member of that august body, went on record as opposing the idea in his campaign to claim Teddy Kennedy’s seat. If you’re about to say, “So what?” — wait just a minute. Brown’s success at the polls means there are now 41 Republican votes in the Senate and, as we all have learned in the past few years, whichever party controls 41 seats in the Senate controls the Senate. (The day after the election, a headline in the website of The Village Voice smartly announced: “Scott Brown Wins Mass. Race, Giving GOP 41-59 Majority.”) Never mind that this is still the largest majority either party has held in the Senate in 30 years. Never mind that as kids we learned that a democracy is supposed to run on majority rule, and that majority rule means rule by a majority of one, and that these days the Senate is comprised of 100 members. Be that as it may, as it now stands the C&T proposal is hovering on the lip of the dumpster.
In the face of these political realities, in his State of the Union address President Obama asked Congress “to send me legislation that places a market-based cap on carbon pollution.” But it didn’t take much time for the demise of the concept to be announced a few days after the speech by Senator Lindsey Graham (R. SC), who noted that “the cap and trade bills in the House and Senate are going nowhere.” Even Senator John Kerry (D. MA), a Democratic leader in the fight for energy legislation, admitted that he “can’t tell you whether it [passage of an energy bill] will happen this year or not.” On the very day of the SOU speech, The New York Times reported: “Some leaders in the energy industry were almost gleeful in pronouncing cap and trade dead for the year. They see an opportunity to win support from Congress for their businesses and to delay indefinitely the costs of reducing pollution from heat-trapping gases.” How sad is that?
But, once again — ta, da — wait just a minute. Two senators, Maria Cantwell of Washington, a Democrat, and Susan Collins of Maine, a Republican, have proposed a system known as “cap and dividend.” (This has bipartisan appeal because the “cap” idea sounds good to Democrats and “dividend” sounds good to Republicans.) Their proposal contemplates that power plants, steel mills, refineries and other major carbon emitters would have to pay for permits to pollute, with all the money being rebated to consumers to cover the higher costs of energy and manufactured goods. What geniuses these senators are!
But, hmmm. Let’s get this straight. We’re going to put a cap on the amount of emissions, but those emitters who can afford it (once again, the big ones) will buy permits to emit. These emitters by permit will therefore incur increased costs of production, which, in turn, will be passed on to consumers. But do not fear, Mr. and Mrs. Consumer — they’re thinking about you over in the Senate. You’ll be recompensed for your higher energy bills in the form of a rebate paid to you by the government out of funds raised by selling the permits. If this works, which is doubtful, it means that the real cost of generating emissions will be funneled backward 360 degrees and ultimately be borne by the emitters after all. (Yea, right.)
Of course, the Cantwell-Collins idea is no better than its progenitor, for it, too, is unlikely to decrease emissions at a level commensurate with our 2020 goals. But that’s no surprise, since it really isn’t designed to impact on emissions significantly in the first place; it’s designed to titillate conservatives “on both sides of the aisle,” as they say, into the fantasy that they’re actually accomplishing something. The United States Senate has no better insight into the importance of combating global warming than it does understanding of what’s meant by majority rule.
When all is said and done, it all comes down to nothing more than another senatorial circle jerk. Remember that the Senate’s complete lack of will to act last fall “helped torpedo the talks in Copenhagen, which not only failed to produce a binding treaty but postponed meaningful action until 2015.” As a result of that debacle, we are now “staring into the abyss,” says Dan Dudek, chief economist for the Environmental Defense Fund. “The United States and other developed countries must cut carbon emissions by 80 to 95 percent over the next few decades to avoid very serious climate change,” Robert S. Eschelman writes in the The Nation. So far, our efforts are “Lilliputian.” Atmospheric CO2 concentration, in case you wondered, is now somewhere around 390 ppm.
But once again, there appears to be a light, however dim, at the end of this seemingly endless tunnel. The light emanates from the EPA option for regulating carbon emissions, an option available to the president that can be implemented without the intervention of Congress. Simply put, he can impose the needed regulations by executive order — just as President Roosevelt imposed price controls during World War II. (Query: Which is more important, defeating Hitler or saving the planet? Hmmm.) The president, of course, is well aware that he has the power to do just that. Writing in the recent issue of Rolling Stone, Jeff Goodell reports that President Obama,“a month after taking office, moved to implement a 2007 ruling by the U.S. Supreme Court empowering the EPA to regulate carbon dioxide as a pollutant.”
“The threat to Big Coal and Big Oil was implicit,” Goodell continues, noting that “if energy interests balked at working with Congress to create a new system to curb carbon pollution, the administration would simply unleash federal regulators.” In similar vein, “if Congress does nothing,” warned Sen. Barbara Boxer, who was spearheading climate legislation as chair of the Senate Environment Committee, “we will be watching EPA do our job.” This is the very threat voiced by Senators Kerry and Graham last October when, in support of their proposed cut and trade legislation in the Senate, they jointly wrote in The New York Times that, should Congress fail to act on climate change, “the administration will use the Environmental Protection Agency to impose new regulations.” “Imposed regulations,” they added, “are likely to be tougher and they certainly will not include the job protections and investment incentives we are proposing.”
The current diddling in Congress makes the EPA alternative all the more likely, and all the more attractive. The big question, of course, is when the talking stops and the crunching begins, will the president have the guts to flip the switch, and divert his effort from the track heading up toward Capital Hill to the one leading to the Environmental Protection Agency?
If Congress defaults, and President Obama goes the EPA route, the political fallout from conservatives will be immense. Glenn Beck has already gone on record charging the industry-friendly market-based C&T bill is an instrument of government control and communist bureaucracy. “They are going to take our financial systems, and then they are going to nationalize industry, and then they are going to nationalize energy,” he blustered, adding that those who support pending C&T legislation “have exposed themselves quite honestly, I think, as treasonous.” Should the Obama administration actually turn to the EPA, you can imagine what Beck and his colleagues at Fox will have to say. On several occasions, one rather recent, the president has said that he would rather be a good and courageous president for one term than a poor, ineffectual one for two terms. It may come to that.
Bill McKibbon says that, right now, getting carbon emissions under control is “nothing more than a dream. Making it real depends on how hard we push the system. There’s no question it’s capable of responding, and no question that left to its own devices it won’t.” The kind of movement required to make the push, McKibbon contends, needs to grow and to grow now. “We’ll need civil disobedience, of the kind that blockaded Congress’s coal-fired power plant last spring; we’ll need symbolic witness, like 350.org; we’ll need old-fashioned lobbying.”
For the moment, despite the consequences, there are two questions hanging fire: First, will the president have the guts to do what he should, to do what’s right? And second, whatever he may do, will the American people have the guts to “push the system,” push it hard?
The answer to neither one of these questions is assured, and the likelihood that either will be in the affirmative is questionable. But for those of us who are even half-way paying attention, our moral and political obligations are clear: we should do what Bill McKibbon suggests — civil disobedience, symbolic witness, old-fashioned lobbying.
And I guess we’d better get on with doing them real soon.
