The climate change legislation on the floor of the Senate this week would be the most important piece of energy legislation ever – if it had a chance of becoming law. Instead the debate is, as Sen. Byron Dorgan (D-N.D.) put it, a “dress rehearsal.”
If it had a chance of passing, it would steer tens of billions of dollars of energy investment toward efficiency projects, renewable resources such as solar and wind, and nuclear power. More money could also end up in demonstration plants designed to capture and store carbon dioxide emissions from coal-fired power plants. The legislation would do all this in a roundabout, but theoretically politically palatable way: it would establish caps on emissions with a set of rules for companies to trade permits and offset credits needed to meet those caps. While commonly known as cap-and-trade, which sounds pithy and free-market oriented, a more accurate but less sexy-sounding name would be a system of tradable rationing coupons. In plain English, that would mean putting a price on greenhouse gas emissions, which would raise costs for anyone burning fossil fuels, whether in a gasoline tank, a coal-fired power plant, or a natural gas stove. (Columnist Robert J. Samuelson gives his views of the whole mess.)
But if all this is a dress rehearsal, why care?
Two reasons. First, this legislation, even if defeated, could end up being a baseline for future negotiations. That’s why some expensive lobbying has been going on and why people have been paying attention to the 25 or so congressional hearings that were held about this bill (and why we at the Post have spilled a fair amount of ink on it). Second, the debate over the bill could play a role in the elections later this year. At the moment, each side believes the political advantage lies with them. Supporters of climate change legislation believe foes could incur the disapproval of voters who mostly want to do something to slow climate change. But opponents of the legislation hope to convince voters that the bill would raise energy costs and be just like, as Sen. James M. Inhofe (R-Okla.) put it, “the largest tax increase in the history of the nation.” So love it or hate it, but the legislation might actually come to a vote because neither side will want to filibuster it.
Here is one of my questions about the future of climate legislation, assuming that supporters of this bill fail now and try again next year under a new president: Will climate legislation circa 2009 meet the same fate as the failed Clinton-backed health care legislation circa 1993? Both bills have good intentions. Both address problems that won’t go away. Both are immensely complicated. Both try to include something for almost everyone, but may wind up simply making sure that there is somethng for almost everyone to dislike.
Last Friday, Sen. Dorgan told me that he remembers getting briefed back in 1993 by Clinton healthcare gurus Ira Magaziner and Judy Feder. “I sat and listened to them. Since I couldn’t understand their explanation I figured I could never explain it to someone else,” Dorgan said. “This is, in some ways, more complicated than that.”
The climate change bill – proposed by Sens. John Warner (R-Vir.) and Joseph I. Lieberman (I-Conn.) and amended by Senate Environment and Public Works Committee Chairman Barbara Boxer (D-Calif.) – tries to cover almost all the political bases. It proposes big tax cuts to help the poor pay for higher energy prices that would come out of the legislation. It allocates far fewer emission permits than Europe does in its system, but the allocations are still substantial. It also takes a novel approach to state governments, many of which have already designed their own systems. Rather than force states to join a federal system, the bill provides scores of billions of dollars of incentives to entice states into joining the national system.
Paul Bledsoe, communications and strategy director for the National Commission on Energy Policy, says “if you have an economy-wide cap-and-trade system with some basic cost containment provision and incentives for developing country action, you have a fairly broad constituency for that approach. It’s when you have to get to the next level of detail that you alienate people all over the spectrum. That’s probably the danger here.”
Take stalwart Democrats Dorgan and Sen. Maria Cantwell (D-Wash.). Cantwell worries that the bill does too much for so-called clean coal projects that would capture carbon dioxide and not enough for places like Washington, where most electric power already comes from hydropower. Dorgan, however, frets that the bill doesn’t do enough for coal. A group of GOP senators say it doesn’t do enough for nuclear. Or consider the different stances within the environmental movement: Organizations like the Environmental Defense Fund approve of the way the bill woos big utilities by allocating them most of the permits they will need for current emissions then phasing out the allocations while Friends of the Earth believes that 100 percent of the emission permits should be auctioned. Or take the utility industry: Those with large amounts of nuclear power are happy with the bill, while big coal users such as Duke Energy want bigger allowances.
This sort of legislative gridlock isn’t unusual. But it has taken on a more alarming dimension because if climatologists are right, there is a very limited amount of time to start acting to steer the giant U.S. economy in a more environmentally and climate sustainable direction. The Boxer-Warner-Lieberman bill may fail this week, but this issue isn’t going away.