Forget Cap-And-Trade. This Is a Climate Bill You Can Love.

Bob stamp Bill McKibben's 'Cap and Cash' is the ultimate start with people way to solve the climate crisis, for two reasons.  First it will build public support for a Cap on carbon emissions, and remove a lot of opposition.  We give the money from the fee back to consumers, not to coal companies, Wall Street financiers and others at the federal government trough.  Second, if people get a pollution tax credit on their tax returns, they will realize that they, the American public, owns our resources and 'sinks.' 

They will respect nature more, and look for more ways to protect it (while getting getting compensated for any use and damage).  Let's see if environmentalists can rally around a populist bill that has a chance of passing!

Introduction by Bob Perkowitz

Posted April 5, 2010
By Bill McKibben, The New Republic

This is a tale of two bills—a tale
that illuminates how policy-making may unfold under the most progressive
administration, and the most Democratic Congress, in a generation. And
it’s not a tale with an especially happy ending.

The target of both bills is carbon. From early on, President Obama
has indicated that climate and energy legislation would come second in
his administrative batting order, only after health care reform.
(Originally, he thought that would mean last fall, but health care was
like a hitter who fouled off pitch after pitch. Since it took forever,
we get to the next priority with the midterm elections already looming
on the horizon.) The intellectual problem is relatively simple: How do
you put a price on carbon so that we burn less of it, and hence prevent
the potentially catastrophic heating of the atmosphere? The political
problem is immense: How do you change a system that has rewarded energy
companies with obscene profits, and that has shaped the American psyche
and landscape by providing endless, cheap fossil fuel?

The most straightforward answer, of course, would be a simple tax on
coal and gas and oil. Europe began that approach 60 years ago, and, as a
result, the continent has dense and livable cities, great train
systems, and half the energy use per person. But we live in a society
where “tax” is a scary word, and so, from the beginning, everyone has
hunted for an alternative, a tax-that-isn’t-a-tax. Both the bills I’ll
describe use the same basic mechanism: a cap on the amount of carbon
that the country produces, one which goes steadily down as the years go
on. The law of supply and demand stipulates that such a cap would raise
the price of fossil fuel, which, in turn, would cause us to slowly
Eurofy.

Bill One grows out of a strategy called “cap-and-trade.” Credits
granting the right to emit carbon dioxide are divided up between
factories and utilities and so on. The ones that are able to most
cheaply cut their emissions will have extra credits to sell to the
others, and, in theory, the invisible hand should point you toward the
shortest, smoothest path to emission reductions. (The invisible hand
aided, of course, by the guys at Goldman Sachs, who would actually do
the deals.) This approach has worked reasonably well with nitrogen and
sulfur over the last few decades, which is one reason our air is
demonstrably cleaner than it was in the 1980s. Cap-and-trade has lots of
problems (beginning but not ending with Goldman Sachs), but it’s hardly
worth detailing them because it’s no longer really on the table.

In the House last summer, the so-called Waxman-Markey bill loaded
down the original cap-and-trade formula with 1,400 pages of offsets and
sweeteners and bailouts—it turned the reasonably straightforward into
the highly complex. And, along the way, it offered one particularly
crucial gift to the energy industry: Instead of having to bid for the
permits to pollute, it’d get many of them free, sort of like the way we
handed over the broadcast spectrum to the networks decades ago. It was
an ugly deal—but nowhere near ugly enough for the Senate, where John
Kerry needed some votes and so let Lindsey Graham and Joe Lieberman go
to work with a vengeance.

By most reports, the cap now being contemplated will initially apply
only to electric utilities, there will be some kind of minimal tax on
gasoline, and factories will be exempted for a few years to delay any
adverse effects on the unemployment rate. And there will be door prizes
for nuclear, for offshore drillers, for the shimmering mirage of clean
coal! As Kerry explained recently, in its new incarnation, cap-and-trade
legislation is “primarily a jobs bill, and an energy independence bill
and a pollution reduction-health-clean air bill. Climate sort of
follows. It’s on for the ride.” In fact, the White House and the various
sponsors now agree that “cap-and-trade is dead” (as Graham put it),
and, for the moment, there’s not really a name for
Kerry-Graham-Lieberman, so let’s call it what a software writer would
call it: a kludge—a messy fix putting one patch on top of another until
you end up with a gift-laden package that might, despite its
near-incoherence, attract just enough senators to push it over the top.
Think health care bill, but with vastly more expensive versions of the
Cornhusker Kickback. And it may come with a couple of truly costly
giveaways from an environmental point of view: The EPA would be
forbidden to regulate carbon, and states couldn’t do anything tougher
than Washington allows.

Bill Two—of which we have an actual Senate draft, and one only 39
pages long—has actually been introduced, by a bipartisan duo: Susan
Collins, Republican of Maine, and Maria Cantwell, Democrat of
Washington. It goes at the problem in another way. It sets a cap—but it
makes the energy companies bid each year for their permits to put carbon
in the atmosphere instead of awarding most of them as gifts. And then,
it takes most of the money from that auction and—here’s the weird
part—uses it to write a check to every American every year. It’s usually
called “cap-and-dividend,” though “cap-and-cash” has a nicer ring.
Under cap-and-dividend, Americans would pay more at the pump and at the
plug because Exxon and Con Ed would pass on the permit fee. And that’s
good—when gas is $4 per gallon, you’re likely to ask, “Where’s the bus
stop?” But the check in the mailbox will make most Americans whole—seven
out of ten will come out ahead, with only real energy hogs hurting.
And, politically, it enables you to more easily ratchet down the cap,
and hence the amount of carbon in the atmosphere, in the future—every
time you do, the price at the pump will rise, but so will the size of
the check. And we like getting checks—even Sarah Palin would
admit that the best day of the year for an Alaskan governor involved
mailing out the proceeds from the state’s oil revenues.

Now, this is far from perfect legislation. For one thing, its targets
are tragically weak (ditto Bill One), though at least they’re
plausible, not a stew of offsets that let you claim dubious credit for
some forest you’ve theoretically protected. For another, in a just
world, those checks would probably go to people living in poor and
vulnerable countries who are even now facing the effects of the climate
change we’ve caused. (The international funding in Bill One is its best
feature, though I’m willing to bet it won’t survive the sausage
factory.) Somehow or another, we need to make good on Hillary Clinton’s
pledge to send billions of dollars to poor countries already suffering
from climate change. (For a really good idea, Google “Robin Hood tax.”)
But we also need a bill that cuts carbon emissions with enough vigor
that islands don’t drown and deserts don’t spread—that’s the most bottom
of carbon bottom lines—and Bill Two at least sets up a plausible
mechanism for proceeding down that path.

In compensation for its flaws, the Cantwell-Collins bill is the kind
of legislation you could actually campaign around. “In my ten years as a
full-time, community-based climate organizer in the Chesapeake region,
I’ve never seen an idea truly inspire average people quite like the
cap-and-dividend concept,” says Mike Tidwell, director of the Chesapeake
Climate Action Network. “When I first explain it to people, they love
it. They are relieved to finally learn there is a real solution that
makes sense and can get the job done.” Let me second that: In the course
of organizing for 350.org, our global
climate campaign, I’ve given thousands of talks in church basements and
community college auditoriums. Cap-and-dividend makes sense to people—it
sounds fair. It also sounds post-partisan: It’s a new way of thinking
about taxation that should appeal to conservatives as easily as
liberals. It’s even been endorsed by those insane, whacked-out leftist
radicals at the AARP.

So here’s the question. Why is Bill One, the porky kludge,
viewed as “serious” and “realistic” and the center of the action, while
Bill Two barely gets a mention?

One answer I heard from half a dozen people on both sides of the
issue was surprising: “They’re women.” One would hope, in Nancy Pelosi’s
Washington, that this isn’t actually the cause. But what do I know?

The even scarier, and probably even truer, answer is that Bill One,
Kerry-Graham-Lieberman, is seen as serious precisely because it’s
weighed down with a thousand compromises. “A cynical press thinks all
these corporate giveaways make the bill viable,” says John
Passacantando, the former executive director of Greenpeace. “So this is
the one that gets the attention, while the smart bill by Cantwell and
Collins is ruled unrealistic from the start.” Peter Barnes, the
California entrepreneur who is the intellectual father of the
cap-and-dividend bill, put it like this: “The assumption among D.C.
insiders—including the big green groups—is that buying off industry
lobbyists is the only way to pass a climate bill.”

So, just as the health care debate began with the administration
promising Big Pharma that any reform would not lead to negotiating
prices or reimporting drugs from other countries, so energy legislation
begins with a promise to the electric utilities not to interfere with
their business model in any major way. And you can make an argument that
this is what we have to do. Joe Romm, the indefatigable climate blogger
whose collection of posts comes out between book covers this month
under the title Straight Up, doesn’t mince words: “It’s
energy-intensive businesses that hate [cap-and-dividend], and I’m afraid
they drive the process more than the public. If public support
mattered, we’d have passed a bill a long time ago!” If President Obama
joins Kerry in pressuring senators to sign on to his bill, Romm says, we
might get some version of it passed this year. “If we don’t pass a bill
this year, it is difficult to see a new effort for a bill before 2013
at the earliest.”

Of course, you could also make an argument that a fired-up president
could go out and stump for a new, innovative notion like
cap-and-dividend, which is actually fairly close to the plan he
campaigned on when running for president. If he did, he’d likely get
lots of support—newspaper editorialists have shown far more interest
than D.C. insiders. And campaigners—the kind of environmentalists who
organize real people—could produce at least a modest groundswell of
support. (That will be difficult to muster for
Kerry-Graham-Lieberman—I’ve yet to meet anyone eager to take to the
streets for a combination of nuclear subsidies and Wall Street
enablement, even if it will start us slowly down a carbon-cutting path.)
Most of the Beltway greens are backing Kerry, but regional climate
groups have endorsed the cap-and-dividend bill; cue the AARP and
you’ve got yourself a campaign. Hell, you could run for office on this
thing: Vote for me, and you’ll get green energy and a check.

It’s more likely, though, that the lesson the administration will
take from the health care debate is that it’s enough to get something
through—you can take a compromised bill, compromise some more to get
the last few votes, and then claim a historic victory. (The current talk
is that the administration may try to include a watered-down dividend
as a small part of the deal, to pick up those two votes from Maine and
Washington.) This strategy seems almost certain now that the president
has announced his support for offshore oil drilling, stressing the need
to “move beyond the tired debates between right and left.” If any bill
comes up for a vote, or so the argument will go, it will be the first
real chance for congressional action on global warming, even if the
climate is only “on for the ride.” The pressure on any and all
environmentalists and other tired leftists not to oppose it will be
powerful. But it’s hard to watch, knowing there’s another path.

Bill McKibben wrote the first book for a general audience on
climate change,
The End of Nature, in 1989. A
scholar-in-residence at Middlebury College, he is co-founder of 350.org.

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