Why did environmentalists pursue cap-and-trade and was it a doomed strategy?

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"Why did environmentalists pursue cap-and-trade and was it a doomed strategy?"

We’re starting to see pieces of counterfactual history on the climate bill in  The New Republic and elsewhere based in part on a widely debunkedfalse narrative.”   Since cap-and-trade has  been so vilified by the entire right wing and even some on the left, I  thought I would try to set the record straight on some key points.

I’m not here to say cap-and-trade was the “correct” strategy.   And it may be that any strategy was extrinsically “doomed to fail” — that the Senate’s anti-democratic, super-majority 60-vote “requirement” meant that  a dedicated minority could have killed any approach — once the Republican Party decided to become the only major  political party in the world dedicated to denying science and blocking any action.

I mainly want to show that cap-and-trade was not intrinsically doomed to fail, that it was not obviously or inherently a flawed idea in, say, 2008 — or even 2009.  Quite the reverse.  Only someone  who doesn’t know history –  or who chooses to ignore it — could believe that.

Environmentalists and progressives and others pursued cap-and-trade for several reasons  most of which have been utterly ignored by the counterfactual revisionists:

  1. The obvious alternatives — especially a carbon tax or a major push on clean energy — had already been harshly rejected, primarily by Republicans.  They were both widely seen as divisive and failed strategies.
  2. Cap and trade had strong bipartisan political support, with genuine Senate GOP champions.
  3. Cap and trade had strong public support.
  4. Cap and trade had strong business support, especially from the crucial electric utility industry.
  5. Cap-and-trade could plausibly achieve the key goal of reducing greenhouse gas emissions, whereas an “innovation agenda” couldn’t.
  6. Cap-and-trade could allow the U.S. to make a firm, credible GHG reduction commitment to the world, which was an essential prerequisite for a successful international agreement, which is vital for addressing the problem.
  7. Cap-and-trade could pay for domestic and international adaptation efforts — as well as an international regime to stop deforestation.
  8. Cap-and-trade could pay for a major clean energy effort.

Let’s dive into these:

  1. The obvious alternatives — especially a tax and a major push on clean energy — had been harshly rejected,  primarily by Republicans.  They were both widely seen as divisive and failed strategies. The BTU tax was killed in the Senate,  primarily by the GOP, in 1993 and  widely seen as contributing to the loss of control of the House by the Democrats.  Clean energy — both  research and development as well as  deployment programs — have been rejected by Republicans for decades, starting with Reagan gutting Carter’s clean energy push.  Reagan cut renewables R&D deeply, along with efficiency, clean energy deployment, tax credits — he even took solar panels off the White House.   In spite of that, Clinton and Gore  tried to meet our Rio Treaty greenhouse voluntary commitment [yes, an oxymoron], returning to 1990 levels by 2000  — with an “innovation agenda” but Gingrich and his fellow GOPers campaigned against the Department of Energy and its clean energy programs and gutted many of them once in power.
  2. Cap and trade had strong bipartisan political support, with genuine Senate GOP champions. Indeed,  it was essentially a Republican market-based idea embraced by Reagan and both Bushes.  A cap and trade bill  for clean air pushed by Bush Sr. had passed Congress easily: “The House of Representatives (401-21) and the Senate (89-11).”  George W. Bush had actually campaigned in 2000 on a cap and trade for utility CO2 emissions.  People who hated clean energy, like McCain, were  ardent supporters of cap-and-trade (see “The greenwasher from Arizona has a record as dirty as the denier from Oklahoma“).  Heck, even clean-energy-destroyer Newt Gingrich endorsed it!  Even after McCain abandoned it, Lindsay Graham embraced it.  But once a cap-and-trade bill became a real possibility after Obama was elected with large Democratic majorities, the fossil fuel industry and conservative movement launched a voracious effort to undo this bipartisanship  — especially after the House passed a cap-and-trade bill with some moderate Republican support (see The GOP flip flops on cap and trade and Tim Pawlenty: “Every one of us” running for president has flip-flopped on climate change).  Perhaps everyone was duped by this bait-and-switch, but there is little doubt they would have launched a similar effort against any plausible strategy.
  3. Cap and trade had strong public support. It retained support in 2009 even though  opponents of the climate bill vilified it with  a brilliant disinformation campaign and even though “opponents of climate bill far outspent environmentalists.  I’ll post all the polling at the end and do a separate post on this because people still confuse polling on global warming and climate science with polling on whether/how the government should go about addressing global warming.
  4. Cap and trade had strong business support, especially from the crucial electric utility industry.  Could you pass a climate bill that the utility industry opposed?  Now that seems like a strategy intrinsically doomed to fail.  But in this case the utility industry had experience with cap-and-trade and had been brought to the table through the US Climate Action Partnership.  Many other major companies were also on board with this strategy.  Yes, it meant that utilities were going to demand a substantial fraction of the allowances, much as they had gotten 97% in the sulfur trading program of the bipartisan Clean Air Act Amendments of 1990.  I am aware that many of my fellow progressives think that we should have had a cap-and-dividend program where the money goes back to the public — but the big problem with this bill was not public support.  We had that.  Yes, it might have been broader than it was deep, but absent the support of utilities, no bill could have passed the House.
  5. Cap-and-trade could plausibly achieve the key goal of reducing greenhouse gas emissions, whereas an “innovation agenda” couldn’t.  I had issues with the final version of the climate bill, but one thing is certain, a purely clean energy agenda could not achieve the primary goal of a climate bill.  Indeed, during the mid-1990s I had overseen the most detailed analysis ever performed on how clean energy (efficiency and renewables and cogeneration — and including natural gas and nuclear power) could cut emissions.  It was performed by five national laboratories (See full study here and some history on it by California Energy Commissioner Art Rosenfeld here.).  That analysis showed that without a price on carbon, clean energy would mostly displace new natural gas, not old coal.  Only a price on carbon gets you the emissions reductions.  A massive ramp up in clean energy spending would be great, but it’s always been strongly opposed by conservatives and in any case couldn’t possibly solve the problem (see “The breakthrough technology illusion“).  A carbon tax could reduce emissions, but it was a political nonstarter.
  6. Cap-and-trade could allow the U.S. to make a firm, credible GHG reduction commitment to the world, which was an essential prerequisite for a successful international agreement, which is vital for addressing the problem. The Europeans had already embraced cap and trade, so it was viewed as credible internationally, despite the obvious flaws in the market for international offsets (the clean development mechanism).  Indeed, internationally it was viewed as a good idea that the United States would join this larger market.  We could never have come to the table with just a clean energy spending program.  Everyone in the world had already seen in the 1990s that we couldn’t deliver with that.
  7. Cap-and-trade could pay for domestic and international adaptation efforts — as well as an international regime to stop deforestation. We keep being told that adaptation is important strategy — but it ain’t cheap.  Anyone who truly believes we should be spending money on adaptation has to support a bill that generates substantial revenues to do so — otherwise they merely support rhetorical adaptation, whose inevitable result is misery and/or triage and/or abandonment, which has been the main adaptation strategies of choice so far (see “Real adaptation is as politically tough as real mitigation, but much more expensive and not as effective in reducing future misery“).
  8. Cap-and-trade could pay for a major clean energy effort.  Money doesn’t grow on trees.   The folks who somehow claim this could all be done with a massive ramp up in clean energy funding still need to pay for it in an era of big deficits.  If their answer is a carbon tax, as the leading proponent of this approach, the Breakthrough Institute, proposed, then they would have been trying to sell two, polarizing, failed ideas at the same time.  And that’s all for a strategy that would not allow an international treaty to be signed and wouldn’t actually reduce US greenhouse gas emissions.  That isn’t just a doomed-to-fail approach.  It is a suicidal one.

This is not to say that the environmental and progressive movements didn’t make mistakes.  I have discussed many of them, including the wrong message (see Can you solve global warming without talking about global warming?) and lack of a hard push by the President (see The failed presidency of Barack Obama, Part 2).

Indeed, cap-and-trade itself clearly has its flaws.  It is complex to explain and market-based solutions seemed less appealing in an era when markets were failing — although that last point could not have been anticipated when the strategy was being developed.

My colleague Dan Weiss likes to point out that we simply don’t pass environmental legislation when the unemployment rate is high, as he explained in his excellent post, “Anatomy of a Senate Climate Bill DeathThe deep recession, unified and uncompromising opposition in the Senate, and big spending by oil, coal, and other energy interests all had big roles in preventing climate legislation from moving through the Senate this year.”  He notes, “an analysis of the unemployment rate when fundamental environmental protection laws were enacted since Earth Day 1970 found that the annual unemployment rate was 6 percent or lower most of the year of enactment”:

unemployment levels when environmental laws passedThat said, the public did support action — and specifically cap-and-trade — in spite of all the obstacles:

Here’s a table from an Allstate/National Journal/Heartland Monitor poll of 1200 Americans conducted January 3 to 7, 2010.

poll 2010

But we needed 60 votes in the Senate and the conservative movement and the disinformation campaign were able to make that anti-democratic, super-majority “requirement” impervious to public opinion, especially in the absence of a major public push by the President of the United States — and in face of a collapse in media coverage (see Silence of the Lambs: Media herd’s coverage of climate change “fell off the map” in 2010“).

The 41 votes needed to kill anything in the Senate can come from states who comprise far below 40% of the population.  So the media’s failings and the big spending advantage the opponents of the bill had really do matter in the Senate, much more than in the House, where a bill’s overall popularity with the public makes it considerably easier to pass.   Counterfactual histories can claim otherwise, but only by ignoring history and by using phony scholarship.

This is not meant to be a definitive analysis of the climate bill and what went wrong.  And I do intend to do further posts on this.  But the notion that pursuing cap-and-trade was a strategy that was intrinsically doomed to fail is simply wrong.  Could it have been done better?  Yes.  Would doing it better have worked?  Who knows?  But was there an obviously superior alternative that met even a majority of the 8 critical features of a cap-and-trade bill described above, let alone all of them?  No.

UPDATE:   I asked David Hawkins Director of Climate Programs at the Natural Resources Defense Council (NRDC) to look this post over, and he adds these thoughts on why they supported cap-and-trade:

The goal was to get some GHG reductions quickly and set us on a path to get more reductions over time.

The lesson from acid rain (in contrast to the CAA SIP process) was not to have to implement on a series of administrative rulemakings to get reductions — that takes too long.  Better to put reduction targets in the statute and make them as self-implementing as possible.  That is the basis of the declining cap architecture.

The trading element was supported by groups like NRDC, a) to engage as many economic actors as possible in the search for lower emitting technologies, fuels, designs, etc. And b) to use flexibility to bargain for deeper cuts than would have been agreed to if there was no market flexibility.  The lesson from acid rain was that we were able to get business and Republicans to support deeper cuts when bundled with trading flexibility.

Formation of USCAP, whose biz members strongly supported trading flex, reinforced these preferences.

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35 Responses to Why did environmentalists pursue cap-and-trade and was it a doomed strategy?

  1. Gord says:

    We are not fans of ‘cap and trade’ because the traders always get rich no matter the outcome. We see it as introducing a whole level of bureaucracy and other things that make the system ponderous over time.

    We like markets and since the market mechanism is already set up and working, we see a simple cost on carbon emission as the cleanest (no pun intended) way of putting a price on carbon. Over time the cost can be ratcheted up leaving the market to do its magic.

    In either case we see a decrease in carbon emissions. The difference is the implementation and ongoing costs. We favour the KISS principle on this extremely important issue.

  2. Sasparilla says:

    Excellent analysis Joe, thanks for laying things out and will be useful for the future (for all those advocating a carbon tax, since it wasn’t politically possible in the U.S. and hasn’t been since at least the early 90′s). Personally I’d rather go with that, but its’ been a political non starter for the last 30 years.

    Sad to look back at, since it feels like we are so very far away from where we were 2 years ago.

    Gord – you should define who you mean by “we” in your comment, it normally refers to more than just the author. Did you mean to use “I” instead?

  3. Rob Mutch says:

    Wow! I’m always impressed with your detailed analysis Joe. Thanks for the overview and good job!

  4. John McCormick says:

    In Dave Hawkins’ added thoughts, he said:

    “The lesson from acid rain was that we were able to get business and Republicans to support deeper cuts when bundled with trading flexibility.”

    Unfortunately that ‘trading flexibility’ meant coal burners could switch from high sulfur to low sulfur coal. That made Appalachian Mountain low sulfur coal a “compliance coal”. An unintended consequence but a serious consequence nonetheless.

    John McCormick

  5. Mike Roddy says:

    Gord, that kind of says it for me, too- cap and trade was positioned to be another bonanza not only for banks, but for traders and developers who could game the system. Carbon tax proponents became isolated due to the assumption that the American public would not accept an additional tax on heating oil and gasoline.

    As it turns out, the fossil fuel companies, ever ingenious in manipulating public opinion, told their reporters and politicians to call cap and trade “cap and tax”. The messaging advantage of cap and trade vs. a carbon tax became neutralized.

    I don’t understand the issue well enough to determine which solution is either more workable or more palatable to the public- studies are all over the map. In either case, political leadership needs to let the public know that we can’t make the switch from fossil fuels without experiencing a little pain. The Democrats are currently in disarray, and have lost the initiative, but they should be able to revive this kind of rational discussion after the election. The question is: can we trust them to do the right thing? The jury is out on that one.

  6. Acid rain and the ozone hole showed how a cap-and-trade plan might work, at least on a small scale and with demonstrated technology. CO2, however, is much larger in scale and the technology is not available.

    “We have all the technologies we need” was a demonstrably false claim. Without available technology for capturing CO2 from smokestacks and then doing something with it (CCS, or “carbon capture and sequestration”), the only way to get under the cap would be offsets.

    [JR: No, actually was a demonstrably true claim for meeting the 2020 target -- and nobody ever asserted it was true for the 2050 target, except in the sense that we knew which technologies were needed and we were in the process of commercializing them.]

    Carbon offsets had a bad odor from experience with the Kyoto Clean Development Mechanism. Without any honest appraisal of available technology to meet the cap, and no plan to spend what it would take to develop it, the “price on carbon” would be nothing more than an fiat value on offsets of dubious validity, which Wall Street could use as the underlying commodity for derivatives so as to pump up another junk bubble.

    Let’s recall that in 2008, just before Waxman-Markey was introduced, there was a big crash, so naturally the public became more skeptical of cap-and-trade and the possible involvement of Wall Street. When the “we have all the technologies we need” claim proved to be false, cap-and-trade began to smell like a scam, and the Greens began to look like liars and fools.

    [JR: The public didn't become more skeptical. Opponents of the bill had a good talking point that resonated with the media who always like a good soundbite, but the public support remained strong.]

    Once the technology has been demonstrated and a cost for actual CO2 emission reductions established, then it would be time to take a fresh look at a cap-and-trade system. Until then, let’s hear no more about how “we have all the technologies we need.”

  7. Jonah says:

    In response to Gord:

    Wall St will monetize any system which is set up. If the government picks a fixed price on carbon emissions, those emission credits will be monetized and traded whether we like it or not. The question is: since you trust the market to “do its magic”, why don’t you trust the market to set the market’s carbon price? That’s the only difference between what you’ve proposed and cap-and-trade.

  8. Dan says:

    Wilmot– I’m interested in how you intend to prove that “We have all of the technologies we need” is “demonstrably false.”

    Please keep in mind that strong energy efficiency measures could buy us time (likely until 2030 in the W-M scenario), and that fuel switching (biomass and under-utilized natural gas) is another viable option for replacing existing coal.

  9. Ian says:

    Very informative (to me at least). Thank you for this post, Joe.

  10. OregonStream says:

    How about we have some of the technologies we need? I’d think a price on carbon (whether that be a revenue-neutral fee/tax or an actual cap with profit potential to innovators) would still incentivize the installation of more efficient technologies, and further disincentivize things like coal and fossil synfuels. If we think we can safely wait for CCS to be cost-effective and commercially scalable, there may be some nice bridges underwater for sale.

  11. Joan Savage says:

    A lingering perception that degraded support for cap-and-trade was the alleged cost to an individual household. There is still a web-based calculator on cost to a household, but without an explanation of its methodology.

    A more transparent calculator that compares cap-and-trade to a carbon tax would be ambitious, and I don’t have enough information to know if it could even be done with integrity.

    How is the public going to understand the the looming costs of inaction on carbon? Identifying the costs of inaction per household seems an even more ambitious project.

  12. sault says:

    There were another couple of problems with ACES that kept it from passing.

    1. The Healthcare bill took a year to work through congress with an increasingly polarized republican caucus and tea party anger growing the entire time. Notice how Sen. Lindsey Graham was sort of on board with a WEAK climate bill but jumped ship over some nonsense concerning a totally separate immigration reform bill. All the dems political capital from 08 and the little bipartisan support for a climate bill evaporated while the Health Reform sausage making commenced.

    [JR: Yes.]

    2. As the Tea Party grew (supposedly) in influence and the 2010 election looked increasingly to throw control of at least one house of congress to the republicans, climate legislation was no longer inevitable and it looked possible to kick the climate issue down the road for another few years. CEOs tend to stay with companies for a few short years and their time horizon of concern is always way to short to be worried by a far-off climate threat. Accordingly, several large corporations left USCAP in Feb 2010 and the coalitions that could have JUST MAYBE squeaked a climate bill through congress broke down.

    It didn’t help that Sen. Ted Kennedy died before his time and was replaced with Sen. what’s-his-name while Sen. Al Franken was held up for several months through a calculated strategy by the Republicans to preserve their filibuster powers. That way, Sen. Collins or Snowe from Maine were able to play the democrats for fools on the Healthcare bill in order to drag the process out as long as possible.

  13. OregonStream says:

    Correction: I should really say many of the technologies. They may not all be at an ideal stage of development/many have yet to achieve economies of scale, but that can change quickly with the right policy.

  14. Arkitkt says:

    @ Wilmott:

    “Acid rain and the ozone hole showed how a cap-and-trade plan might work, at least on a small scale and with demonstrated technology. CO2, however, is much larger in scale and the technology is not available.”

    I see the myth of the success of cap-and-trade in abating acid rain through the market and through technology lives on…eh? You have to stop reading the fiction Stavins and Hahn fabricate. Try reading the actual legislation and the record of the proceedings through various stages of the program. The success was due to factors other than Stavins’ highly touted “cap-and-trade”.

  15. Joan Savage says:

    Re my pending comment #11, There was/is a highly questionable methodology for calculating effect of cap-and-trade per household. It is a bizarrely simplified calculation of total annual national cap-and-trade allowance divided by number of households, as if all cap-and-trade costs would be borne equally by end-use individual consumers. There might be a previous CP post on this which I haven’t located.

  16. NeilT says:

    For the last decade I’ve been saying the same thing.

    “You simply cannot force people to do something they don’t understand and don’t see as an issue”

    Cap and trade was a worst case compromise which fell apart at the first test of it’s quality. As all worst case compromises do.

    There is only one way to get carbon emissions down. That is to make clean energy a cheaper and more available alternative to carbon based technologies.

    The way you do that is to give tax breaks to clean energy investment. Not subsidies, “incentives”. Something the GOP can’t argue with becuase it’s part of their heartland, invest and accumulate, not tax and waste.

    What we all need to ask ourselves is why this is so abhorrent to the liberal environmentalists? Because that is the crux of this.

    Also, Joe, you can’t mention “the europeans” in the same sentence as “cap and trade”. Because “the europeans” didn’t agree anything. The “European Union” did. The European Union is a left leaning Autocracy appointed by senior politicians from the member “soveriegn” states. Please don’t confuse the (Elected), EU parliament with the EU, they have no power and have minimum influence when the Commission and the European Council can’t agree a consensus. Neither the Commision nor the European Council are elected, they are appointed. Also the Council of Ministers is a body of rotating ministers from the Governments of the member states. Not elected to the EU, elected to each country based on local country priorities.

    It helps when trying to understand this situation. Democracy does not make better decision making in a catstrophe, it just confuses it with personal priorities and greed.

    [JR: The problem with your strategy is you 1) haven't price it out and 2) haven't explained where the money comes from and 3) identified a single member of Congress who Champions it.]

  17. PeakVT says:

    I happen to think that a carbon tax is a better policy, but it was always the case (and still is the case) that a C&T plan has a much better chance of passing. I can’t see why anyone would think otherwise. Americans have a pathological aversion to the word “tax”, the utilities would inevitably get some kind of generous grandfathering clause with C&T, and with a C&T plan there is a chance for finance industry types to skim off billions. Nobody has the opportunity to profit off of a carbon tax.

  18. madcitysmitty says:

    Very helpful analysis and comments.

    Looking ahead, you mentioned Congressional champions. What do expect/recommend our champions to do next time?

  19. Sasparilla says:

    madcitysmitty – that’s an interesting question and it’ll be interesting to see what Joe would think of that.

    My personal take is that there isn’t a viable option at the national level in the U.S. at this time, mainly because 1 of the 2 political parties has made the issue untouchable. Previously it looked like cap-n-trade was possible, two years ago, but that isn’t the case anymore.

    Since there will always be a large number of Democratic turncoats (from coal or whatever states) who won’t go for climate action even filibuster proof majorities and a Democratic President won’t get the job done now – because no Republican can vote for the bill.

    IMHO, we’ll have to wait till the GOP allows the issue to become touchable again before the U.S. can move forward on a pure climate change angle, which could be a very, very long time from now. This is very sad and I don’t see an easy way around it.

  20. Mulga Mumblebrain says:

    NeilT #16, you lose a good deal of credibility in my eyes when you label the European Union ‘Left leaning’, although I do agree that subsidising (I think that your differentiation between ‘subsidy’ and ‘incentive’ is pretty tenuous) low emissions technologies is a good idea, although the market fundamentalist Right rejects that, too. Europe is only ‘left-leaning’ compared with the US and its satellites. Returning to reality, cap-and-trade is, in my humble opinion, bollocks and a dead-end. It will achieve nothing but be a venue for the grifters and banksters of financial capitalism to rig the market and blow up new bubbles, all the while skimming billions in ‘fees’ off the surface. Like all these financial scams it will promote volatility in price, which is more preferable and profitable to the grifters, but poison to business planning for the actual users of energy. It will bring into existence entire new genera of derivatives, all designed to maximise profit for the insiders, and actual carbon reduction will be an ‘externality’. Indeed if profit maximisation leads the ‘market’ that way, carbon emissions could even increase. That of course is one mistake many people make when talking of markets or ‘market magic’. What they mean by the latter is the ‘iron law’ of supply and demand, which is a feature, not of capitalism, but of human production and exchange. Capitalist markets actually operate, primarily, under other imperatives, the greatest being profit maximisation and capital accumulation, and the consequent enrichment of the capital owning class. A carbon tax, leveed by the Government, the supposed (I know-I’m dreaming) expression of the people’s democratic Will, would be the preferable option, giving certainty to business and enterprise, and a real incentive to reduce carbon intensity. If the receipts were hypothecated to compensation for the poor, renewable energy research and distribution and ecological repair to promote natural carbon sequestration, all the better. It sounds to me akin to what you managed in WW2 when faced with the vastly lesser danger of Japanese militarism and imperialism. If you must operate under market rules, then you must find a method that makes de-carbonisation the path to the greater profit maximisation and capital accumulation for the elite, because that is the only language that they understand.

  21. Merrelyn Emery says:

    Joan #11. How is the public to understand the costs of inaction? Every time you hear somebody complain about the crazy weather or talk about the latest disaster, you can just say ‘Its caused by carbon dioxide and you ain’t seen nothing yet.’ If you get a response, you can follow it up. Deniers are exploiting what is really a failure of our education systems in that many have no idea what GHGs are or how they work.

    Anybody who has lost their family, everything they own or have been told their insurance doesn’t cover their losses, is well aware of the cost. People are increasingly making the link in my experience, ME

  22. Carl says:

    Way out in libertarian land, they say we should get rid of the income tax and go back to tariffs and excises. A carbon tax would be a system of tariffs and excises. Hmmmmmm.

  23. Joan Savage says:

    I’ve been mulling over what would be a way to explain Cap & Trade that is accessible and uncomplicated, or to paraphrase Sasparilla, how to make it politically “touchable.” I’d be happy to stand corrected on assumptions.

    Cap and Trade reminds me a lot of hunting and fishing permits.

    Is this even close? I did a web search to see if anyone used a similar comparison.

    There’s a quota on them each year. Not everyone wants to have one.
    There are several ways to get protein / energy, anyway. The ones that use the hunting permits / C&T are not paying the full costs of operating a farm/upgrading a factory to meet emission standards. The general public has a choice about buying from compliant power generation or from non-compliant power generation, just like having a choice about different kinds of food.
    The “trade” part of cap and trade seems like making a deal to hunt on someone’s property.

    Is this homely analogy anywhere near close to how cap and trade might have worked/ might still work?

  24. Fred Teal, Jr says:

    This is an excellent post mortum of our efforts to get a climate bill passed but it gives the impression that if we had just chosen the correct messaging or devised a strategy that somehow did not imply sacrifice by all of us, it might have succeeded.

    This is not really the case. We don’t have a bill and probably won’t get one any time soon because the public is not convinced that there is any significant, immediate danger.

    Yes, I know, there are droughts and wildfires in Russia and Texas and floods in Pakistan, glaciers are melting at a furious clip etc., but none of this affects enough of us in a severe, direct manner like a slap in the face would.

    Once the public is slapped in the face, (as it was when the Japanese bombed Pearl Harbor) we/they will all be begging for some help with a policy solution that is appropriate. Every cab driver and talking head will be making suggestions.

    I think it is only then that we will be willing to make the sacrifices that will be needed to focus all of our economy with laser precision on the goal of reducing emissions and living sustainably.

    I don’t think that policy discussions like this are pointless, however. Every small act we do and every discussion we hold creates greater public awareness and produces the fertile soil that will provide the necessary context for the slap when it comes.

    I think there will be an Aha moment when there is sudden wide-scale acceptance that “This is what global warming means” and action will be demanded. We, the people, must demand it of our government, not the otherway around. At that point, it won’t matter which party is in power. The power of public opinion will be too compelling and all of the fossil fuel money in the world will not be sufficient to delay action.

  25. The cap and trade system that was used to reduce acid rain was an offset credit trading system. In effect it was an indirect market system that set a levy on high SO2 emissions. This levy was used to subsidize low SO2 emissions. Key point it was not a defacto tax since there was no flow of revenue to the government. Australia’s MRET system for driving investment in renewables has at its core is an offset credit trading scheme.
    Most of the other ETS systems have the government selling permits into a market system that sets the price of the permits. Because the sale of permits generates government revenue it is a de-facto tax. In effect it is a complex system for setting the level of a carbon tax.
    The real problem with carbon taxes is that price increases have to include the cost of the tax in addition to any higher cost of the clean alternative. This difference is particularly important at the start of the clean-up process where 100% of the price increase is paying for the tax. (Because clean production has not had time to start.)

  26. Merrelyn Emery says:

    Fred @24. Thank you. You have just filled in the missing words in the comment I have just made in the posting above. Your points about ‘every discussion’ producing the ‘fertile soil’ and the ‘Aha moment’ are the data I ommitted from my comment. There is an external social field of values and ideals out there and it changes constantly as people unconsciously add up what they see happening and how they value it. Every effort, every greenie organization and every scientifically educated conversation contributes to the gathering of perceptions leading to your “Aha moment’.

    I don’t think it will be too long now, the rate of accelaration is just about guaranteeing that, ME

  27. NeilT says:

    [JR: The problem with your strategy is you 1) haven't price it out and 2) haven't explained where the money comes from and 3) identified a single member of Congress who Champions it.]

    Granted. There are always problems with every strategy. However let me look at your arguments against this.

    1) Pricing this out is as much a guessing game as any other in Government. The mechanisms of taxation work towards this solution by companies investing in Making money from lower taxation. Granted there is a cost after companies start to submit their tax returns, but first the companies have to Invest and deliver. The whole point is that the energy market is always in flux with money flowing to areas of investment continuously. This approach is to Divert that flow into another avenue which is more conducive to a low carbon infrastructure by Incentives rather than blunt taxation or direct subsidies.

    I’m well aware that if you don’t actually Give money then Congress and the Senate can’t “divert” some of that money to their own cause. But that is a political issue which can be overcome.

    The key point is you can’t sell guaranteed success but you can control tax breaks. You can’t sell Up Front incentives so well and you can’t guarantee success when you hand the money over. If you make the tax break on the Energy you Sell rather than on the cost of establishing the infrastructure, you can control the cost.

    2) The money comes from two places. First the inwards investment market where companies and wealthy individuals speculate to accumulate. Second from the rise in taxation on the current carbon energy market as viable, cleaner and available low carbon technologies begin to bite into the budget via tax subsidies. Of course there is cross over money, but it is ongoing Cross Over money, not Start Up Investment. Start up investment has come from the place the US claims to be its heartland, the marketplace. As the investment becomes mature and part of the integrated energy solution, the tax incentives are removed and the status quo returns. BUT we have a low energy marketplace.

    3) Why would there be one single person in Congress to support this approach?

    A) Nobody in the Republicans wants to change the status quo and there is plenty of money chasing the status quo

    B) The Democrats are fragmented in self interest and ideology (yes it’s an opposite Republican ideology too) and won’t propose a scheme which is so much to the heartland of the Republicans.

    So how could anyone in Congress champion something which makes sense, is viable, could really work and the ONLY people who could realistically propose it are either more interested in other issues, or ideologically opposed to it? That, I would have thought, is where the Climate lobby comes in and explains the realities of life to these CongressCritturs.

    To read the posts here on this topic is to understand the complete failure of the US to engage in this process. Comments of “I prefer Tax” read to me “I prefer inaction and status quo”.

    Let’s be honest with each other here. Modern democracies do not vote to raise taxes on themselves unless they can see an imminent danger to their own person in the next term of Government. Cynical? Certainly? Incorrect? I don’t think so.

    Joe you asked us for a bumper sticker campaign because Drill Baby Drill is so simple and evocative. Well let me give you another one you cannot avoid.

    Tax and Waste.

    Nothing and I really mean Nothing proposed on the climate change mitigation front must be able to be allied to that slogan.

    My proposal comes under a different slogan.

    Encourage to Invest

    This is a mantra so universally used that it cannot be allied to tax and waste, without being easy to defend. In fact it’s a core Republican tenet.

    Just because tax breaks are usually given to people, which is seen as “waste”, does not mean that the same process applied to companies is viewed the same way. Check your statute books.

    Carbon tax is allied to Tax and Waste in the minds of the population.

    There are two ways to win a war. More people and guns to beat the other. Or take the other person’s gun away and shoot them with it. I prefer the second way; it’s much less wasteful of lives and equipment. I’ve also used it successfully in the business world time and again.

    Mulga Mumblebrain #20

    As a citizen of the oldest continuous democracy in the world (and a fairly right wing one at that), I feel somewhat capable of recognising a Left Leaning administration. Personally I feel they are a neo communist autocracy but I felt that was not conducive to this discussion to present that position and, to be fair, it’s not really the truth. It’s just the way I feel about them……………

    Oh and I’m not a citizen of the US which should be obvious from the way I write my English…..

  28. Raul M. says:

    Trust and Do-
    Really, has the habit of fossil fuels use used up all of our Trust and Do.
    It was trust and do when the nations first started with fossil fuels.
    Is all of the trust and do been used up? How about some trust and do
    being used for the new energys being delivered by the sun each and every
    day that powers the Eaarth and leave those old habits.

  29. David hawkins says:

    John#4
    Trading flexibility in the 1990 Act did not create the market for low-sulfur coal. That happened in 1971 with the first New Source Performance Standards for coal power plants. Those standards were set at a level that could be met by either scrubbers on high-sulfur coal or by low-sulfur coal alone. Congress changed that in 1977 by requiring NSPS to be set at a level that required all new plants to use scrubbers on both high and low- sulfur coal.
    The 1990 acid rain program did increase demand for low-sulfur coal and the biggest growth occurred in the Powder River Basin. As for growth of Appalachian low-sulfur mining and the attendant unacceptable mountain-top removal, if EPA had enforced the law, that could have been avoided. As we know, that fight goes on.

  30. Joan Savage says:

    Merrelyn Emery (#21)

    You wrote:
    “Every time you hear somebody complain about the crazy weather or talk about the latest disaster, you can just say ‘Its caused by carbon dioxide and you ain’t seen nothing yet.’ ”

    Merrelyn,
    Please, don’t run around saying that every “latest disaster” is due to carbon dioxide. Even for disasters in which anthropogenic climate change is a factor, it is seldom the only factor.

    I find I am far more convincing by sticking with the facts, which are bad enough.

  31. John McCormick says:

    David, you and I remember that 1983 meeting with Chairman Waxman when he challenged the National Clean Air Coalition that it had not gotten him any co-sponsors HR 3400 that would have subsidized scrubbers for the 50 largest SO2 emitting plants.

    According to Resources For the Future these plants represented 89 percent of the nation’s pre-New Source Performance Standard coal-fired capacity. Scrubbing would have been applied to about half of the affected capacity and accounted for 70 percent of the SO2 reduction.

    Fuel switching to low-sulfur fuel and other facility improvements would have been required at other facilities. The utilities had already begun shipping Northern Plains low sulfur coal into the Midwest.

    The Coalition’s response to him was ” We never asked Members not to support your bill.” Ask Greg. He was sitting at the table.
    Yes, scrubbing was an alternative to Appalachian compliance coal but it did not fit the business strategy of EDF to let the market decide how to comply. The market figured it out quickly and headed for the hills of Appalachia.

    FERC Form 423 provides the data on shift of high sulfur coal production in Indiana, Illinois and Western Kentucky to low sulfur coal in West Virginia, Virginia and Eastern Kentucky back in the early 90s is evidence of their compliance strategy.

    I had an opportunity to pose this to Bill Chameides about two years ago and he agreed that mountain top mining was an unintended consequence of the Acid Rain program.

    You can put the blame on EPA for its lax enforcement of the Clean Water Act just as I can say those of us who worked on the 1977 strip mining law did not write in a prohibition of mountaintop mining. Then, again, we should have been opposing coal use back in 1977 rather than trying to regulate coal mining.

    All this is water over the dam but there was that moment when Chairman Waxman had a better approach.

    John McCormick

  32. Ric Merritt says:

    When you mentioned early on the baleful effects of the 60-vote rule, I had already decided to comment, so I was pleased to see later that

    “The 41 votes needed to kill anything in the Senate can come from states who comprise far below 40% of the population.”

    Yes, indeed. This indefensible deprivation of the basic human right to have an equal say in one’s own government should be mentioned more often. The constitutional compromise was a pretty bad case of sausage-making in the beginning, but the population imbalance now is far worse than it was when the USA was formed.

  33. Merrelyn Emery says:

    Joan #30, yes of course you are right about multi-factor causation, I know that and everybody knows that it floods in Queensland, but I think you are missing my point.

    I spend a lot of my working time with ordinary people on shop floors, construction sites and community halls rather than in some highly rarified intellectual atmosphere and when you knock around with these people you can see why the deniers are having a field day. If people do not know how GHGs work, they are vulnerable to all the moronic lines such as CO2 is such a small part of the atmosphere, it’s the sun etc.

    People are not stupid. They can see what’s happening and they are increasingly comparing notes, shaking their heards and asking questions. Injecting a little science into these conversations is one way to compensate for what appears to be a dismal failure of science education in our schools.

    Down here, climate change is costing all of us through a flood levy (tax) because of the astronomical price of rebuilding a lot of Queensland. I think people deserve to know why these were not ordinary floods and cyclones and what really lies behind these multiple catastrophic events that they are now paying for. Or would you rather just hand the whole game over to the deniers? ME

  34. Michael Kieschnick says:

    Joe’s list of factors is excellent. Health care reform, whatever one thinks of it, was passed only through so-called budget reconciliation, which simply means a majority vote in the Senate. Key elements of global warming legislation, including cap and trade, could have been enacted with the same majority vote mechanism. Indeed, Sen. Reid knew that reconciliation was the only possible means, and according to published reports, Fred Krupp of EDF helped convince him to avoid that route – a rather searing strategic error. In my mind, the key fight in global warming legislation came when Kent Conrad was allowed to exclude global warming – but not health care – from the budget rules in 2009. The environmental community (and, of course Obama) did not fight at the time and failure became inevitable.

  35. Joan Savage says:

    Merrelyn (#33),

    OK, I’m realizing that you used “you” without meaning me specifically, although it was framed as a reply.

    I’m in a community in which the big employers are a university and regional hospitals, with a cluster of engineering-related enterprises. If I don’t start with the multifactorate view, I’d get nowhere.

    The really disruptive kinds of phenomena like drought or soggy crops may be in the near future, but have not hit.