Archive for the ‘Cap and trade’ category

Is the future of climate change policy global or local? Yes.

May 4th, 2010

by Avrel Seale

It’s tempting to say that progress on carbon regulation is “glacial,” but considering how fast many glaciers are melting, that cliché doesn’t even work any more.

Last December’s U.N. climate change conference in Copenhagen might have been doomed early by the hype. But whatever the reason, the underwhelming results have many of those who care about the issue wondering if these huge annual meetings with their draft declarations and street-theater protests are really the way to a solution.

Recently, panelists at the “Climate Change Law and Policy after Copenhagen” colloquium at The University of Texas made the cases for and against the continued emphasis on a United Nations approach.

David Hunter of the International Union for the Conservation of Nature (the event’s cosponsor) argued that, though the Copenhagen Accord was but 12 paragraphs (long, dense paragraphs, it should be noted), and although it remains nonbinding or, in the oxymoron of the day, “soft law,” it was still measurable, reportable, and therefore valuable. Hunter especially called out progress on REDD and said that line of negotiation should be resurrected in Cancún.

But even Hunter, a fan of the U.N. framework, admits that Copenhagen at times felt like little more than “dueling press releases.” “The U.N. process took it on the chin a little,” he said.

Josh Busby of The University of Texas’ LBJ School of Public Affairs wasn’t as charitable. He called Copenhagen “a moment that freed us” from the U.N. framework. Busby said that he would be happy to see “the spectacle” of a 40,000-participant meeting “wither on the vine,” and made the case for smaller meetings with more flexible instruments. This is already happening, he noted, with meetings such as the G20 and the Major Economies Forum putting carbon on their agendas. Green Detectives Valerie Davis and Kevin Tuerff attest that there were nowhere near 40,000 participants in Bali or Poznan, and they don’t expect to see those numbers in Cancún either.

Hunter pushed back, saying that if we lost UNFCCC, and moved to negotiations with only the biggest actors at the table, “we’ll lose the moral authority of the island nations,” i.e. the small countries that will be first to succumb to the effects of climate change when a rising ocean swallows them up. (In related news, an island in the Bay of Bengal that had been disputed territory for years by India and Bangladesh is now completely underwater. Ten other islands in the area are on the verge, and officials estimate that if sea levels rise one meter by 2050, as projected by some climate models, 18 percent of Bangladesh’s coastal area will be submerged, displacing 20 million people.)

While David Hunter argues that the U.N. conferences create momentum for top-down change, he admits that the complexity of the issue is dumbfounding. The whole UNFCCC idea was modeled on the Montreal Protocol, the 1987 international treaty to protect the ozone layer. It successfully phased out CFCs. But replicating that success with something as basic as carbon dioxide, which affects every economy and therefore every person on earth, is different than dealing with a compound in aerosol sprays. Some have concluded it’s just too complicated for a Montreal-style process.

While the international process might seem like it’s all-or-nothing, there’s plenty that can be done and is being done at the national and sub-national levels, efforts like the European cap-and-trade system, the Western Climate Initiative in the American West, individual state efforts, and programs to reduce our carbon footprint city by city and house by house. It all, irrefutably, adds up.

The carbon-regulation debate on Capitol Hill seems to be a contest of who has the lowest expectations. It’s a soap opera that changes by the hour, with this issue, like most others, regularly held hostage by utterly unrelated issues. In the latest episode, a hopeful collaboration between senators Graham, Kerry, and Lieberman began to unravel last week when Graham, the lone Republican, withdrew his support, purportedly over pending congressional action on immigration, another issue on which he is likely to be a party outlier.

In the absence of congressional action, there is still the executive branch, and on April 1, the EPA and the National Highway Traffic Safety Administration (NHTSA) announced a new national program that will reduce greenhouse gas emissions and improve fuel economy for new cars and trucks sold in the United States from 2012 through 2016. EPA finalized the first-ever national greenhouse gas (GHG) emissions standards under the Clean Air Act, and NHTSA finalized Corporate Average Fuel Economy (CAFE) standards under the Energy Policy and Conservation Act.

The urgency of the situation forces us to think beyond geography and, of course, beyond regulation, too. Lee Scott, longtime CEO and now chairman of Wal-Mart, has been credited with sparking a cultural revolution at the retail juggernaut that resulted most recently in a voluntary commitment to slash 20 million metric tons of carbon emissions from its global supply chain by the end of 2015. When you’re talking about Wal-Mart, which is a de facto national economy unto itself, that voluntary goal surely has a greater impact than the regulatory triumphs of many smaller nations combined.

So should climate change be addressed from the top down, as with the U.N., or from the bottom up? The answer is, if climate change is as dire as scientists say, we’d be both crazy and criminally negligent not to attack it from both directions. We don’t have time for either/or arguments. Climate change action must be both/and. And we’ll need a little luck, even at that.

With rebranding effort, senators give hope for carbon regulation

March 3rd, 2010

Last year we were surprised to see climate legislation make it through the House by June and a Senate bill introduced by October. Of course, we weren’t optimistic the Senate bill would go anywhere before the U.N. climate change conference we attended in Copenhagen. And after the disappointing outcome there and seeing how the health care reform controversy has monopolized Washington’s attention, we didn’t expect to hear much out of Congress on climate anytime soon.

So we were surprised when news began to percolate last week about a revised Senate climate bill that tosses out “cap-and-trade” terminology, now virtually a dirty word on Capitol Hill, in favor of a new carbon pricing mechanism that will phase in different emissions caps for different industry sectors, starting with utilities and eventually going into effect for large emitters from industry.

Three senators — John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.) — have been working for months on the plan whose goal is reducing greenhouse gases by 2020 in the range of 17 percent below 2005 levels, and the trio is meeting privately this week with colleagues and floating the trial balloon in the press.

Cap-and-trade already exists in the United States for sulfur dioxide, the pollutant linked to acid rain. The largest cap-and-trade system for greenhouse gases in the world is currently the European Union Emission Trading System, and some have called it a failure in achieving its goals.

Where would the carbon revenue raised go under the new Senate plan? One potential recipient is the Highway Trust Fund, according to Senate aides. This fund does have a mass transit account, which we hope would be the destination, because, while highways certainly need to be maintained, wouldn’t it be smarter to route the money from a carbon fee toward a system that would help Americans drive less?

Reports today say that big oil — namely, ConocoPhillips, BP America, and Exxon Mobil Corp — prefers the new pricing plan, also being called a “transportation fuel fee,” to the economy-wide nature of cap-and-trade. Opponents of the plan are mostly those who oppose any regulation at all, and more will surely surface once details emerge. But we’re surprised to hear the word “climate” uttered in a supportive way on Capitol Hill at all, and so far reports make us cautiously optimistic. A poll conducted in December shows that U.S. voters prefer a “carbon tax” over “cap-and-trade,” 58 percent to 27 percent.

Last week Sen. Graham told The New York Times’ Thomas Friedman, “We can’t be a nation that always tries and fails. We have to eventually get some hard problem right.” Here’s to that! —Valerie Davis and Avrel Seale

Big Auto & Big Electricity Back Copenhagen; But Big Oil?

December 17th, 2009

As 110 world leaders arrive in Copenhagen today and tomorrow, I noticed a few ads in international newspapers at our hotel. The ads show support from major industry that will no doubt feel the effect of any agreement signed here. Big auto and big electricity are publicly supportive, but no big oil that I can find.

Big Auto: “We in the auto industry support the Copenhagen conference paving the way for a comprehensive, global framework for sustainability in the world market.”

According to Sustainable Mobility, members of the European Automobile Manufacturers Association (www.ACEA.be) are BMW Group, DAF Trucks, Daimler, FIAT Group, Ford of Europe, General Motors Europe, Jaguar Land Rover, MAN Nutzfahrzeuge, Porsche, PSA Peugeot Citroën, Renault, Scania, Toyota Motor Europe, Volkswagen and Volvo.

Members of the United States Alliance of Automobile Manufacturers are BMW Group, Chrysler Group LLC, Ford Motor Company, General Motors Company, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota and Volkswagen Group of America.

Members of the Japan Automobile Manufacturers Association are Honda, Isuzu, Mazda, Mitsubishi Motors, Nissan, Suzuki and Toyota.

From their Website: What do you want to see in any UN climate agreement?  Answer: The auto industry supports an ambitious yet attainable outcome. Sound long-term targets provide long-range clarity and direction for manufacturers. This is critical in the auto industry, where developing and deploying power trains can take 5-10 years and more. We also welcome the acknowledgement that consumers play an important role in achieving results, as do energy providers and government infrastructure policies. And we encourage the UN to support economy-wide approaches that engage everyone in some way.

The group agrees there should be GHG emission reduction targets, but only says that 50 percent seems like a stretch.

Big Electricity: Created in the wake of the 1992 Rio Summit, the e8 is a non-profit international organization, composed of 10 leading electricity companies from the G8 countries. From the US, both Duke Energy and American Electric Power are members.

From their quarter-page ad in today’s International Herald-Tribune: “The Electricity Sector Affirms its Key Role in Resolving Climate Change.” The e8 “calls on heads of governments and international institutions in Copenhagen to negotiate an international agreement on climate change that will deliver clear, long-term, ambitious, realistic and internationally enforceable targets, including clear interim milestones.” They also support government funding for research and development of Carbon Capture and Sequestration (CCS), addressing deforestation and energy efficiency.

Even the Big Coal folks behind the “celebrate clean coal” TV ads in the U.S. appear to be moving a bit:

A Dec. 11 statement by the American Coalition for Clean Coal Electricity “supports the adoption of a federal mandatory program that reduces greenhouse gas emissions, ensures continued access to affordable, reliable electricity for American businesses and working families, and promote s greater energy independence through the use of coal and other domestic energy resources. ACCCE looks forward to working with Senators Kerry, Graham, and Lieberman and others in pursuit of legislation that will achieve these goals.”

How About Big Oil?

Exxon-Mobil’s American lobbyist is a regular at COPs, but in Copenhagen his influence is visibly reduced. In Bali, we were in the room when he was the most talkative of the ten business/industry reps were briefed by the Bush Administration. In Copenhagen, there are no less than 90 business reps present for the same meetings from the U.S. State Department.

A quick search of the newspapers being read by world leaders arriving in Copenhagen revealed no similar industry ads like the ones above. Shell Oil bought a half-page ad with the headline, “For The New Energy Future We Need To Make It All Add Up.” Missing were any supportive statements to world leaders here.

A statement by the American Petroleum Institute seems to contradict itself by saying regulation of greenhouse gases under the Clean Air Act “poses a threat to every American family and business.” Yet four sentences later, acknowledges, “A fit-for-purpose climate law is a much preferred solution.”

Shell, BP America and ConocoPhillips are all members of the US Climate Action Partnership, which favors cap and trade legislation.