Kerry-Lieberman Climate Bill Lines Already-Fat Pockets

Senators John Kerry and Joe Lieberman have unveiled their latest and long-awaited attempt at a climate change bill. The 1,000-page bill covers everything from carbon reduction goals to cap-and-trade to tax breaks for cleaner energy. Unfortunately, it is mostly a concession to conservatives, given the inclusion of “clean coal,” nuclear energy and carbon capture technologies.

“The American Power Act,” says Senator Kerry, “will finally change our nation’s energy policy from a national weakness into a national strength.”

The problem is that the bill itself is fairly weak, resting on compromises to polluting industries rather than promotions for non-polluters. We do need to reduce our carbon emissions by 80 percent by 2050, preferably from 1990 levels. This a point that last year’s Kerry-Boxer bill introduced, that President Obama supports and the American Power Act maintains, although it sets the starting point for reductions at 2005 carbon levels. Recent data suggests that we’ve already reduced emissions 10 percent from 2005 levels, according to Triple Pundit, although the recession may have caused an unusual and temporary downturn, making these goals sound even weaker and arguably pointless.

In order to reach those goals, whether lofty or not, the bill includes the introduction of a “carbon market” system for the buying and selling of pollution credits. Somewhere between a carbon tax and nothing, such cap-and-trade systems tend to be in reality  convoluted, market-based quasi-solutions that leave way too much wiggle room for manipulation and market bubble-building. Cap-and-trade itself is a system devised by the likes of Enron (energy trading) and Goldman Sachs (subprime mortgage crisis).

This cap-and-trade scheme sets a price on carbon credits in one-ton increments between $12 and $25, and only polluters emitting more than 25,000 tons per year are subject to reduction requirements. It puts a cap on carbon emissions and then hands out allowances to polluters, which they can trade on the market. Ideally, businesses would be incentivized to cut emissions so they can trade and profit off excess allowances. But there gets to be all kinds of hang-ups and loopholes. The American Power Act does purport to be a simpler, impossible-to-manipulate version, presumably because it creates rules and markets specific to each polluting sector – heavy industry, transportation and power plants. However, industrial polluters, some of the heaviest, would not be required to reduce emissions until 2016.

For a short, easy-to-follow video on the ups and (mostly) downs of cap-and-trade marketing, see Anne Leonard’s Story of Stuff.

Other very questionable attributes of the bill include taking away the EPA’s ability to regulate carbon emissions and banning states from operating their own cap-and-trade systems.

In reverence to the the ongoing oil spill crisis in the Gulf of Mexico, the bill does give states the right to veto drilling leases up to 75 miles off their coast (the Earth Day spill occurred some 52 miles off the Louisiana coast). However, the bill actually entices them to agree by offering 37.5 percent of federal revenues if they say yes.

The American Power Act also wants to increase incentives for nuclear power to $2 billion per year and give billions for carbon capture and other “clean coal” technologies. There is a hodgepodge of other incentives for transportation, natural gas, renewable power and energy efficiency, the specifics of which are unclear at this point.

Essentially, what I see in the Kerry-Lieberman bill is the creation of a carbon market geared toward and dreamed up by bankers and polluters, coupled with the elimination of all other established modes of regulating carbon emissions. Will the polluters regulate the market as well? Probably. There’s also billions of dollars for unproven, arguably dirty energy technologies with unspecified amounts reserved for unspecified renewable and energy efficient technologies.

I know that we have to do something, a fact that has brought many beleaguered environmental groups on board with this legislation. But I just don’t see it yet. We can only compromise so much before we start actually working against the very goals we started out with. We have been through a year and a half of compromise on climate change legislation, and this is what comes of it? A bill (which hasn’t even passed yet) that seemingly would give control over (and profits from) carbon reduction to carbon producers and redirect billions in resulting revenues toward controversial energy sources like coal, nuclear and offshore oil.

I admit that the bill is not all bad, but we can do a lot better. In fact, we must. And I hate to see us grow complacent over a bill that talks big for 1,000 pages but doesn’t end up doing anything but lining already fat pockets. Meanwhile, people start suffering, beginning with the developing world and ending at our doorstep.

You can read a short summary or the long entirety of the bill via Climate Progress.

Photo Credit: Kate Sheppard & Green Solutions

Posted on May 13th in Solar Politics by Dan.