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Week of 4.17.09

Options for Fighting Climate Change

When it comes to fighting climate change, lip service comes easily; real solutions do not. Below are some actionable options being floated both inside Washington and out, as America ponders some of the most sweeping energy policy reforms in its history.


Cap and Trade

Under a cap-and-trade program companies would each be given a yearly amount of greenhouse gases they can emit, as set by the government. Such companies would be able to buy and sell off their allowances, commonly referred to as credits, to the government or to other companies. For some companies it will be relatively cheaper or easier for them to reduce their emissions below the required limit. Heavy polluters will be able to purchase permits from these more efficient companies.

Over time, the emission limits become stricter, reducing the allowable amounts of pollution. Under the system, each company would be allowed to design its own efficiency strategy for limiting emissions as long as its overall emissions comply with the yearly limitations. Each company would be required to report annual emissions to the program's regulator, the Environmental Protection Agency (EPA). Companies that violate the limitations would face heavy fines. The European Union commenced a cap and trade scheme in 2005, with mixed results.

What's Being Done

The Waxman-Markey Bill, proposed by Democratic Reps Henry Waxman and Ed Markey in late March, sets targets that would cut carbon emissions by 20 percent from 2005 levels by 2020, and 83 percent by mid-century. While President Obama supports the bill, many Republicans and moderate Democrats oppose it, claiming it would lead to dramatically higher energy prices.

On an appearance on PBS' Tavis Smiley, Waxman admitted that prices would rise under the cap and trade system. "When we raise the price of energy, which will happen if we reduce the amount of carbon emissions, and industries have to live in a carbon-constrained environment, they are going to have to figure it out because it is in their profitable interest to figure it out," Waxman said.

The response to the Waxman-Markey Bill in the Senate was swift. Republican Senator Thune introduced an amendment declaring that any climate legislation should "not increase electricity or gasoline prices." It passed 89 to 8. Republican Senator Ensign then proposed an amendment stating that climate policy should not result in higher taxes on the middle class, which passed unanimously (98-0).

More Insight

The New York Times: Cap-and-trade advocates press on after budget battle

Reuters: US ready to take carbon mantle

Washington Post: Science Chief Discusses Climate Strategy




Carbon Tax

Some policymakers have proposed direct taxation on the fossil fuels that companies, businesses, and individuals use based on the amount of carbon dioxide the fossil fuels release into the atmosphere. Seen as a simpler approach than the cap-and-trade method, a carbon tax would not only slow down the process of climate change, say proponents, but it would also generate a form of tax revenue for the U.S. government.

What's Being Done

Although Canada has had success following the passage of a carbon tax, President Obama has not openly supported a direct national tax, tending to favor cap-and-trade programs instead. Legislation proposing a carbon tax has yet to be addressed formally as lawmakers are reluctant to introduce any new taxes that might hurt already-struggling businesses and individuals.

More Insight

Associated Press: More fuzzy math? How GOP estimates carbon tax impact

Huffington Post: Obama Administration Says Energy Reform Not Negotiable




Defining Carbon Dioxide as a Pollutant

The EPA has been under pressure in recent months from the Supreme Court to determine whether or not carbon dioxide can be classified as a pollutant under the Clean Air Act, which would declare it a danger to public health and harmful to the environment.

What's Being Done

Last month, the agency sent the White House a proposal concluding that carbon dioxide is a pollutant. EPA Administrator Lisa Jackson is expected to sign the proposal on the endangerment findings on April 16, 2009, after which the proposal will remain open for public comment for 60 days before it becomes final. Though the decision is expected to play out over months and possibly years, if the finding is approved by the White House Office of Management and Budget, it could set the groundwork for historic legislation that will lead the way towards America's first national limits on global warming and pollution. For its part, the Obama administration has said it would prefer Congress to create new legislation to pre-empt regulatory power on greenhouse gas emissions by the EPA.

More Insight

Greenwire: EPA document shows endangerment finding on fast track

New York Times: E.P.A. Expected to Regulate Carbon Dioxide

New York Times: Obama, Who Vowed Rapid Action on Climate Change, Turns More Cautious

Wall Street Journal: EPA Raises Heat on Emissions Debate




Another Approach: Green Investments

Some believe the best—and only—way to truly combat climate change is to directly invest in green energy and technology (pdf). Encouraged by funding and support from the Obama administration, some American organizations have begun making major strides in that direction.

Organizations like The Rockefeller Philanthropy Advisors are in the process of backing projects like The Breakthrough Institute's "Paradigm Building project" which is taking an investment approach to making clean energy cheap, creating new green jobs, and reducing dependency on oil.

Others, like the Community Wealth Organization, are working on solutions to building green communities among lower-income Americans. Their mission is to engage middle class and working class Americans by partnering with green community builders to assist in the creation of green collar jobs, the construction of environment-friendly buildings, and the development of wind and solar technology to make homes more energy-efficient.

The Apollo Alliance is a coalition of labor, business, and environmental leaders helping to mobilize a clean energy revolution by promoting investments in developing electric-powered vehicles, making improvements to mass transit, and funding the education and training of people to work with new energy-efficient technologies.

More insight

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The Breakthrough Institute

Community Wealth Organization

 
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