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Lieberman-Warner moved from morgue to anatomy class

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"Lieberman-Warner moved from morgue to anatomy class"

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greysanatomy_s3.jpgAlthough still dead, the L-W climate bill remains a subject of morbid curiosity. Now that its body has been donated to science, L-W will probably get as much attention as a certain season finale also about anatomy.

Grist has kindly posted the version of the L-W bill that will go to the Senate floor (through the miracle of Scribd here). This is the “substitute amendment” by Senate Environment and Public Works Chair Barbara Boxer (D-CA) to the Climate Security Act.

In dissecting the bill, let’s start with Title V, Subtitle C: Emergency Off-Ramps.

If the price of carbon allowances reaches a certain price range, there is a mechanism that will automatically release additional emission allowances onto the market to lower the price. The additional allowances are borrowed so that the environmental integrity of the caps over the long term is protected.”

We see here that the bill was rushed to the emergency room in a desperate attempt to save the bill from the safety valve. Yes, borrowing is a better idea than the safety valve (see A Better Idea Than the “Safety Valve”), but the patient is left with a medical mystery that would even intrigue the Sherlock Holmes of diagnosticians, Dr. Gregory House –what is meant by “a certain price range”?

If that price range is anywhere near $30 a ton of carbon (and rising each year), then the coroner’s original cause of death, “apathy,” will prove to be well justified (though justifiable homicide would also be a plausible verdict). If it is closer to $30 a ton of carbon dioxide (and rising each year), we may have to look elsewhere. [For a critique of the greenhouse gas target, see A Siegel here.]

Interestingly, with the body still warm, we almost forgot about the deceased’s will. But in a move whose generosity will warm the hearts of everyone but the coldest conservatives, the bill creates the largest bequest in history — $5.6 trillion from now through 2050 — to boost clean energy and to satisfy various interest groups. Let’s look at the astonishing array of beneficiaries Boxer’s amendment provides (all dollars are cumulative through 2050):

  • $190 billion [through 2050] To Funding Energy Efficiency and Renewable Energy Worker Training Program, and a new Climate Change Worker Assistance Program

[Thumbs Up: We will need a lot of skilled workers to make those 14 wedges happen.]

  • Carbon intensive manufacturing industries will receive $213 billion through 2050 to help them adjust to the cap and trade program

[Thumbs Sidewise: Depends on how the money is allocated. Sadly, President Bush has gutted the key federal program aimed at jointly developing and deploying low carbon technologies with the carbon-intensive industries. I'd use part of this money to revive that program.]

  • nearly $800 billion tax relief fund, which will help consumers in need of assistance related to energy costs.

[Thumbs Up: Conservatives are always complaining that carbon policies will hurt the poor, so I can only assume they will embrace this wholeheartedly. Ideally, some of this money will go towards weatherization programs that cut the energy bills of consumers.]

  • $911 billion to consumers through local electricity and gas utilities … to ensure that consumers are protected from increases in energy costs, and to promote low carbon energy, and energy efficiency

[Thumbs Up: What a Rudy-Giuliani-esque amount of money. Since we already have the tax relief fund, most of this should go towards energy efficiency.]

  • $254 billion to states that rely heavily upon manufacturing and coal, to help them transition to a low-carbon economy.

[Thumps Sort of Up: Can't fight the inevitable.]

  • $307 billion in transition assistance for fossil electric utilities to help them transition to the new low-carbon economy
  • $34 billion in transition assistance for petroleum refiners
  • $20 billion in transition assistance for Natural Gas producers

[Thumbs start to wonder if they can get transition assistance.]

  • $171 billion to funding for mass transit.

[Thumbs say "Duh!" (Using American Sign Language).]

  • $300 billion to support agriculture and forestry programs that cut emissions but don’t qualify to be used as offsets

[Thumbs Down: Thumbs can't imagine what such programs would be. The offsets allowed in L-W are more than enough, not even counting the biofuels programs.]

  • $237 billion for state wildlife adaptation programs

[Thumbs wonder if we can set up some luxury condoes for the Grolar Bears.]

  • $ 30.7 billion to reward companies that have taken early action to reduce greenhouse gas emissions

[Thumbs think this is not a bad idea, but can't imagine how anyone could figure out .who deserves this money.]

  • $51 billion for energy-efficient buildings
  • $51 billion for “the superefficient equipment and appliances deployment program”

[Thumbs say "If the polluters get paid, then why not?" (in ASL). ]

  • $51 billion to support manufacturers that achieve high energy efficiency gains

[T.D. Double counting. This is really the same thing as the helping the carbon intensive manufacturing industries.]

  • $150 billion to owners or operators of facilities that deploy renewable energy technologies.
  • $92 billion to assist in deploying low carbon electricity technology, including nuclear power

[Thumbs sideways: Thumbs have no trouble incentivizing emerging technologies that are taken off the list once they achieve, say, 1% of electricity generation. But relatively mature technologies shouldn't need any extra incentive beyond a carbon price -- this means you, nuclear power!]

  • $17 billion thorugh 2050 for advanced energy research

[Thumbs wonder what Shellenberger and Nordhaus will think of such crumbs for breakthroughs.]

  • $15.7 billion for coal with carbon capture and storage
  • $68 billion to help auto companies retool facilities to build advanced vehicles
  • $26 billion four cellulosic biofuels

[Thumbs offer no objection.]

  • $68 billion for deforestation and-prevention activities for countries which are not yet capable of participating in the offset program

[Thumbs are puzzled by this but, being thumbs, they have a very short attention span and can't trouble themselves to figure out what this could possibly refer to.]

  • $342 billion to support international adaptation and to protect national security

[Thumbs like international adaptation funds, but would like to hear more details about this "national security" stuff. Thumbs wonder if this will go to hire border security agents to keep keep the hundreds of millions of dollars of environmental refugees created by climate change out of this country? Or is it to help the Navy figure out how to design ports that can deal with 6 inches of sea level rise per decade for centuries? Inquiring thumbs want to know.]

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6 Responses to Lieberman-Warner moved from morgue to anatomy class

  1. Wonhyo says:

    My thumbs are confused and disappointed. The bill would have been a lot simpler if it addressed just the carbon cap-and-trade.

    The idea of “emergency off-ramps” and “borrowing” is ripe for abuse. In the 1990′s, U.S. car companies essentially disregarded California zero emission mandates and federal fuel efficiency standards by postponing legislative mandates. Putting such devices into the climate bill itself formally accepts the possibility of such procrastinating behavior.

    While cap-and-trade works in theory, I’ve been skeptical that it would work in practice. Cap-and-trade is an economic (“market forces”) model of emissions regulation, and thus, subject to all of the economic shenanigans that are so often exercised in the financial industries (anybody remember subprime mortgages?).

    If we’re going to make cap-and-trade work, we have to eliminate loopholes and make the rules clear and simple.

  2. Amen to that, Wonhyo.

    It looks like those who truly care about a certain result–capping GHGs–have totally lost their souls to the political process. They wanted “cap” but thought they could agree to “CAP and trade.” What harm could that do? But it became “cap and TRADE,” and still they were for it. Relax, just a matter of emphasis. Then it became using the money to help the supply side to build constuencies for “cap and TRADE.” Gotta hold our noses and be realistic–besides we could use some of that money ourselves. Now it has fully evolved into “TRADE and PORK,” and something like this will eventually pass.

    In the 1970s I was chief environmental officer of an energy company that had 4 refineries, including 2 in California. In those days, before they lost their souls, environmentalists and regulatory agencies just set caps and gave us no money to meet them. And you know what? It worked just fine. The job got done, and we didn’t go broke because of it. Also the CAFE standards worked really well as a floor for fuel economy after gasoline prices went way down in the mid-1980s and 1990s. Building efficiency standards and appliance efficiency standards worked well also.

    When government gets away from governing and tries to negotiate financial arrangements with business people, government is going to get its lunch money stolen and be pantsed in the middle of the playground. California electricity deregulation is the model, not the exception.

  3. Alisha says:

    I can see why this bill will get almost as much attention as McDreamy’s eyes in Season 3.

    It really does seem that the bill makes an attempt to satisfy everyone — especially with the emergeny offramp… hmm. WOW almost 2 trillion to consumers! The “double counting” for certain initiatives, as you put it, is a little unsettling and it is amazing to me how they allocated all of the money.

    It is also striking that the renewable energy workforce training program receives almost $200 billion, while research, development & deployment of renewable energy technology is less than $20 billion. Are all of these states and industries supposed to use their hundreds of billions of dollars in transition assistance to switch to using EXISTING low-carbon energy sources/renewables? (this is an honest question, not rhetorical.) If so, could you name what you think they are?

    Also, how lame that CCS receives ALMOST as much money as “advanced energy research.” CCS should be lowest on the totem pole in terms of investment/deployment; it’d be nice to see some more money thrown at weening us off of carbon intense fuels and creating a sustainable future, rather than burying our carbon and continuing the same fossil fuel lifestyle.

  4. Notthatsimple says:

    Simple and elegant?

    First, impose a carbon tax that is greater than the cost of carbon sequestration or capture, or that brings the cost per kw of coal-fired electricity to parity with wind, solar or geothermal. That is a direct market-based model with no room for manipulation. Downside? Persuade consumers to pay two to five times more for electricity. The capital cost per kw of a natural gas plant is about $600 (still emits carbon); the capital cost of a pulverized coal plant is about $1200 (still emits carbon. The capital cost per kw of wind is about $2500, geothermal and solar about $3000. Maybe that cost comes down over time, but it probably doesn’t (the main cost component is construction cost and labor, rather than technology cost, and the last I checked unions were not advocating lower wages for working harder). That fixes electricity.

    Second, you need a separate carbon tax on gas at the pump for tailpipe emissions, so it is cheaper to buy a hybrid and replace the batteries than it is to drive a normal combustion engine. $5-$6/gallon gas should do it, but maybe that’s moderated over time by falling demand for foreign oil.

    Third, you’ll need a carbon tax that pays for capture of CO2 for the other emitting industries – concrete manufacturing, chemical plants and so on. No real way to moderate this.

    Finally, you need to impose a tariff on imported goods from China and India, to level the playing field — so we can all enjoy paying higher prices at Walmart, Target and Amazon.

    Bottom line, a carbon-reduced economy costs money and consumers have to pay for it. Far more efficient for consumers to pay corporations the cost of reducing their carbon footprint than for everyone to pay taxes to the government to be reallocated, at least somewhat arbitrarily.

  5. sesli chat says:

    First, impose a carbon tax that is greater than the cost of carbon sequestration or capture, or that brings the cost per kw of coal-fired electricity to parity with wind, solar or geothermal. That is a direct market-based model with no room for manipulation. Downside? Persuade consumers to pay two to five times more for electricity. The capital cost per kw of a natural gas plant is about $600 (still emits carbon); the capital cost of a pulverized coal plant is about $1200 (still emits carbon. The capital cost per kw of wind is about $2500, geothermal and solar about $3000. Maybe that cost comes down over time, but it probably doesn’t (the main cost component is construction cost and labor, rather than technology cost, and the last I checked unions were not advocating lower wages for working harder). That fixes electricity.

  6. The capital cost per kw of a natural gas plant is about $600 (still emits carbon); the capital cost of a pulverized coal plant is about $1200 (still emits carbon. The capital cost per kw of wind is about $2500, geothermal and solar about $3000. Maybe that cost comes down over time, but it probably doesn’t (the main cost component is construction cost and labor, rather than technology cost, and the last I checked unions were not advocating lower wages for working harder).