CPR Member Scholar Victor Flatt has an op-ed piece in this morning's Houston Chronicle, in which he argues that the week of April 20 will likely be recalled as "one of the most pivotal and important weeks in the history of energy in this country," citing the confluence of the explosion of the Deepwater Horizon offshore oil drilling platform and its disastrous environmental consequences, and the federal approval of the massive Cape Wind project in Nantucket Sound to capture wind energy. He writes:
To be sure, offshore wind power has costs: impacts on animal habitat (notably birds'), possibly on fishing and on view-scapes. But in this case, cold calculation has determined that these costs are worth it when compared to the benefits of mostly pollution-free energy production. In the last few months, studies have shown that a string of offshore wind projects along the East Coast could provide ample electricity and, if the projects were linked by transmission lines, very dependable electricity, as wind variation is not uniform up and down the coast. In Germany and Denmark, linked wind systems have become so dependable that wind is sometimes preferentially used as base power over coal and nuclear.
The confluence of both these events also illustrates a move in the direction of the public good over the private good. Despite claims to the contrary, it is rarely the general public that is clamoring for more offshore oil drilling. While many people might like to have lower gasoline prices and reduced dependence on foreign oil, when the public actually sees the trade-offs in price, few make offshore drilling a priority. The political push for offshore drilling comes from the companies themselves, which realize profit through the recovery and processing of this product. Cape Wind also hopes to realize a profit, but it also has significant support from a public that wants to see viable greenhouse-gas-free energy become the norm. The public's clamor was enough to overcome even the most politically well-connected private opposition to Cape Wind, and this signals the breaking of a logjam. More and more approvals will be forthcoming, and this will transform the energy landscape.
The Deepwater Horizon platform exploded and the Cape Wind project was approved the same week that ongoing political rancor prompted a delay in the long-awaited Kerry-Graham-Lieberman energy/climate change bill. That legislation was originally seen as history in the making. Today, we're seeing history made in a different and possibly more powerful way — outside the political process and inside the minds of the public.
In addition to his CPR role, Professor Flatt wears a few other hats. He's the Tom & Elizabeth Taft Distinguished Professor of Environmental Law at the University of North Carolina School of Law; and a Distinguished Scholar of Carbon Trading and Carbon Markets, at the Global Energy Management Institute, University of Houston Bauer College of Business.Full text
Monday April 26 was supposed to be the day that the much anticipated Kerry-Graham-Lieberman climate change bill was to be proposed in the Senate. Hopes had gone up that there could be a legislative solution to putting a price on carbon. The carbon markets themselves had responded, pushing up the price of allocations on RGGI in the hopes that these would be allowed to qualify for the expected federal cap and trade. Then over the preceding weekend, it fell apart. Senator Graham criticized the call from Majority Leader Reid to also take up a comprehensive immigration reform bill, claiming that it was driven by Senator Reid’s own political needs to increase his chances of retaining his Nevada Senate seat.
There is no doubt that this played an important piece in the very difficult political dance that has surrounded the emergence of the KGL plan. Senator Graham has positioned himself as the leading Republican supporter of both comprehensive climate change legislation and immigration reform. It is clearly too politically difficult for him to carry both of these simultaneously.
However, it may be that the proposal for immigration reform was not the only culprit. It was anticipated that KGL would have a cap and trade system for stationary sources (phased in over time), and a "tax" on fuels that will be linked to the market clearing price of the cap and trade sector. Ostensibly this was the only price on carbon that the oil and gas industry was willing to accept.Full text
Federalism battles over state roles under federal climate legislation may have appeared settled, but they are once again under debate. The previous leading bills–the Waxman-Markey bill passed by the House, and the Boxer-Kerry bill passed out of a committee in the Senate–lost momentum several months ago. After several months of legislative inaction, Senators Kerry, Graham, and Lieberman have been working on a new piece of climate legislation. After the senators’ comments indicated that this bill might broadly undercut state and local government actions to address climate risks, fourteen senators and a group of leaders of state environmental agencies recently sent letters to Kerry, Graham, and Lieberman arguing for preservation of state authority to address climate ills. These letters show that some national and state leaders appreciate the importance of climate federalism choices and the value of state action. However, despite historical lessons, a decade of state and local climate leadership, and risks of federal climate policy shortcomings, it is not clear if many environmentalists or enough legislators see preserving state roles as a battle worth fighting. This essay explains the federalism choices, their implications, and the main arguments for broadly and clearly preserving state and local roles.
I. Key Federalism Choices in Leading Bills and Proposed Amendments
The leading House and a Senate bills differed in some of their details, but in many respects shared similar architecture and regulatory strategies. Their key provisions would set up a greenhouse gas (GHG) cap-and-trade regime, under which GHG allowances and offset credits could be bought and sold, provided the aggregate GHG levels stayed below a declining, federally set cap. In addition, an array of other measures would either mandate or encourage lower pollution by large emitters, greater efficiency of energy-draining appliances, and smarter uses of transportation and urban planning. A smattering of provisions also would try to reward technological innovations that help address climate change causes and resulting harms.Full text