Is the Gulf of Mexico disaster a reason to pass climate legislation – or is that legislation largely irrelevant to curbing our oil use? A Greenwire article Tuesday quoted a number of economists arguing that the leading proposals in Congress wouldn’t do much to change our dependence on petroleum.
The only reasonable response is “yes, of course.” Climate proposals such as Kerry-Lieberman, Cantwell-Collins, or Waxman-Markey will have limited effects on oil consumption for two reasons: first, they are market mechanisms; second, they are weak market mechanisms.
To start with the good news, reducing carbon emissions from electric utilities is cheaper than reducing oil use. Any market mechanism is supposed to prompt us to do the cheapest things first; that’s the whole point. There are many ways to make electricity with lower carbon emissions than a coal plant; putting a price on carbon makes those alternatives cheaper relative to coal. There are also many ways to promote energy efficiency, incrementally reducing electricity use.
For most Americans, on the other hand, there is only one way to make transportation, and it runs on oil. In the short run, with all of us driving the cars we now own, there is very little chance to change our gasoline use. In the closing words of one of the best satirical videos about the oil spill, “BP: you’re not mad enough to not drive your car.”Full text
Even if a climate change bill like Kerry-Lieberman were to become law, the effects of climate change will still be dramatic, making adaptation a crucial complement to mitigation activities for addressing climate change. As specialists on local conditions with the capacity to innovate at a smaller scale, state and local authorities need to retain the authority to adopt adaptation strategies that prevent, reduce, and manage the effects that climate change will have on vulnerable natural resources under their jurisdiction. Though a federal role in adaptation planning is indispensable, it would be unwise to excessively tie the states’ hands in promoting natural resource adaptation. Unfortunately, Kerry-Lieberman and Waxman-Markey (ACES) risk doing just that by centralizing adaptation in a new federal authority. The bills should be written to encourage robust state and local action to formulate and implement natural resource adaptation measures.
Kerry-Lieberman and ACES, adopted in the House last year, seek to consolidate authority over adaptation planning in the President and Secretary of the Interior. Both bills seek to significantly increase executive oversight and control over federal and state natural resource adaptation. Though only ACES creates a National Climate Change Adaptation Program in the existing U.S. Global Change Research Program and a National Climate Service in NOAA to develop and disseminate climate information, both bills establish a Natural Resources Climate Change Adaptation Panel (see my previous post comparing the bills’ adaptation provisions). The Panel, headed by the chair of the CEQ and including the heads of federal public land and natural resource agencies, is given authority to develop and implement a National Resources Climate Change Adaptation Strategy. The bills also require adaptation plans for each federal natural resource agency that implement and are consistent with the Strategy. Similarly, state natural resources adaptation plans, required for any state to be eligible for federal funding, must be reviewed and approved by the Secretary of the Interior.Full text
Though in many respects similar to provisions in the House-approved American Clean Energy and Security Act (ACES) bill and the prior Boxer-Kerry bill in the Senate, the adaptation program proposed in the newly released Kerry-Lieberman American Power Act substantially decreases funding for federal and state adaptation programs and eliminates provisions establishing a public health adaptation program.
Like its predecessors, Kerry-Lieberman’s adaptation program, included in large part in Title IV, §§6001-6011, incorporates a number of provision focused on managing the effects of climate change on natural resources in the United States:
Though these adaptation provisions may be an improvement over the status quo, they nonetheless retain many of the same key weaknesses as those in ACES and Boxer-Kerry that I and others have detailed here and here. In addition, Kerry-Lieberman eliminates a number of significant provisions adopted in ACES. These include:Full text
While Kerry and Lieberman (and before two weeks ago, Graham) have tried to pitch the proposed new Senate climate and energy draft legislation as a “game-changer” the truth is that, aside from the stronger preemption language limiting the states, its effect is not terribly different from what has come before. Sure, there are sweeteners for the conservascenti, such as enhanced loan guarantees and permit streamlining for nuclear energy, continued support for carbon capture and sequestration, removal of a natural gas “penalty,” and ostensibly an opening up of now closed offshore oil areas. But whether this would be different than what would have happened by adoption of the ACES bill is questionable.
ACES also allowed the coal industry to continue with the help of monetary support of carbon capture and sequestration. As for increased offshore oil drilling, even with revenue sharing, opening new areas is going to be a hard sell for a long, long time. Alaska is a possible exception here, and the Alaska offshore revenue sharing provisions are clearly designed to get the Begich and Murkoswki vote. But even if offshore oil drilling is more attractive to Alaskans, the bottom line is that Alaska always wants to drill and the only thing stopping it has been the federal environmental reviews. The Deepwater Horizon spill called the prior MMS analysis of Alaska offshore drilling into question and has spurred another lawsuit.
The Kerry-Lieberman bill creates the very peculiar “linked” fee system for the oil and gas industry as a way to pay for their carbon intensity usage. While this is a strange and overly complicated part of the proposal and may be a boondoggle to the oil and gas industry, its ultimate effect on actual greenhouse gas reductions should be minimal.Full text
The Kerry-Lieberman bill's provisions on offsets are largely similar to those in the Waxman-Markey and Kerry-Boxer bill, but include a number of changes that make more specific policy choices in the use of offsets.
First, the proposal enumerates a specific lengthy list of eligible offset categories (whereas Waxman-Markey didn't list specific categories, instead giving instruction for a regulatory decision). This change might assist in providing market liquidity. In terms of offset regulation, there seems to be a complex dance between the EPA and the USDA, which requires consultations between the two in most cases for offset designation and removal. The USDA is given the primary role over agricultural and forest offset approval while the EPA has a similar role over other offsets; as I've written before, this could be potentially problematic if the USDA is not up to the regulatory task.
Environmental consideration of offsets is still present for sequestration projects, particularly to protect habitat and native species (proposed new CAA 735(h)), and general environmental considerations may even be stronger. For instance, as in both Waxman Markey and Boxer-Kerry, Kerry-Lieberman would create an advisory committee that proposes offsets and offset rules to the regulator. But in performing this task, the advisory committee is “to avoid or minimize, to the maximum extent practicable, adverse effects on human health or the environment resulting from the implementation of offset projects under this part.” (proposed new CAA 733(a)(2)(D)).Full text